FACTS:
The Iglesia Filipina Independiente (IFI), represented by its Supreme Bishop Gerardo M. Bayaca, filed a case with the Court of First Instance (CFI) of Manila against Bishop Santiago A. Fonacier. The IFI sought to require Bishop Fonacier to render an accounting of his administration of all the temporal properties in his possession belonging to the church and to recover the properties from him. The IFI claimed that Fonacier had ceased to be its Supreme Bishop.
Bishop Isabelo de los Reyes, Jr., having been elected as Supreme Bishop after the filing of the original complaint, was later made a co-plaintiff in a supplementary complaint.
 
Fonacier claimed in his defense that: (a) he has not been properly removed as Supreme Bishop;(b) his legal successor was Juan Jamias who had been elected in accordance with the church constitution ; (c) Bishop De los Reyes, Jr. formally joined the Protestant Episcopal Church of America and for this reason ceased to be a member of the Iglesia Filipina Independiente; (d) Bishops De los Reyes and Bayaca having abandoned the faith, fundamental doctrines and practices of the Iglesia Filipina Independiente, ceased to be members and consequently, have no personality in filing the complaint.
 
On May 17, 1950, the court rendered judgment declaring Mons. Isabelo de los Reyes, Jr. as the sole and legitimate Supreme Bishop of the Iglesia Filipina Independiente, and ordering Mons. Fonacier to render an accounting of his administration of the properties and funds of the church. The Court of Appeals affirmed the decision of the CFI. Fonacier then filed a petition for review with the Supreme Court.
 
ISSUE:
Whether The Court of Appeals erred “in holding that the ouster of Bishops Manuel Aguilar, Alejandro Remollino, Isabelo de los Reyes Jr., Gerardo Bayaca, Juan Quijano and Pablo Tablante decreed by the Supreme Council and the petitioner as Obispo Maximo was illegal.
 
RULING:
The civil courts have jurisdiction to review the action regarding the ouster.
(A) “Where a decision of an ecclesiastical court plainly violates the law it professes to administer, or is in conflict with the laws of the land, it will not be followed by the civil courts.”
(B) “Expulsion of a member without notice or an opportunity to be heard is not conclusive upon the civil courts when a property right is involved.”
Since it is claimed that the ouster was made by an unauthorized person, or in a manner contrary to the constitution of the church, and that the ousted bishops were not given notice of the charges against them nor were they afforded an opportunity to be heard, the civil courts, have jurisdiction to review the action regarding the ouster.
​

American Bilbe Society v. City of Manila, 181 Phil 386 (1957) 
 

FACTS:
The American Bible Society, is a foreign, non-stock, non-profit, religious, missionary corporation duly registered and doing business in the Philippines through its Philippine agency established in Manila in November 1898. The City of Manila, is a municipal corporation with powers that are to be exercised in conformity with the provisions of Republic Act 409, (Revised Charter of the City of Manila). In the course of its ministry, the Society's Philippine agency has been distributing and selling bibles and/or gospel portions thereof (except during the Japanese occupation) throughout the Philippines and translating the same into several Philippine dialects. On 29 May 1953, the acting City Treasurer of the City of Manila informed the Society that it was conducting the business of general merchandise since November 1945, without providing itself with the necessary Mayor's permit and municipal license, in violation of Ordinance 3000, as amended, and Ordinances 2529, 3028 and 3364, and required the Society to secure, within 3 days, the corresponding permit and license fees, together with compromise covering the period from the 4th quarter of 1945 to the 2nd quarter of 1953, in the total sum of P5,821.45. On 24 October 1953, the Society paid to the City under protest the said permit and license fees, giving at the same time notice to the City Treasurer that suit would be taken in court to question the legality of the ordinances under which the said fees were being collected, which was done on the same date by filing the complaint that gave rise to the present action. After hearing, the lower court dismissed the complaint for lack of merit. The Society appealed to the Court of Appeals, which in turn certified the case to the Supreme Court for the reason that the errors assigned involved only questions of law. 
 
ISSUE:
Whether the City Treasurer may impose permit fee upon the religious organization before the latter may distribute and sell bibles with the City of Manila. 
 
RULING:
​Article III, section 1, clause (7) of the Constitution guarantees the freedom of religious profession and worship. Religion has been spoken of as 'a profession of faith to an active power that binds and elevates man to its Creator. It has reference to one's views of his relations to His Creator and to the obligations they impose of reverence to His being and character, and obedience to His Will. The constitutional guaranty of the free exercise and enjoyment of religious profession and worship carries with it the right to disseminate religious information. Any restraint of such right can only be justified like other restraints of freedom of expression on the grounds that there is a clear and present danger of any substantive evil which the State has the right to prevent. A tax on the income of one who engages in religious activities is different from a tax on property used or employed in connection with those activities. It is one thing to impose a tax on the income or property of a preacher. It is quite another thing to exact a tax from him for the privilege of delivering a sermon. The power to tax the exercise of a privilege is the power to control or suppress its enjoyment. The power to impose a license tax on the exercise of these freedoms is indeed as potent as the power of censorship which this Court has repeatedly struck down. It is not a nominal fee imposed as a regulatory measure to defray the expenses of policing the activities in question. It is in no way apportioned. It is flat license tax levied and collected as a condition to the pursuit of activities whose enjoyment is guaranteed by the constitutional liberties of press and religion and inevitably tends to suppress their exercise. Such is the inherent vice and evil of a flat license tax. Dissemination of religious information cannot be conditioned upon the approval of an official or manager. The right to enjoy freedom of the press and religion occupies a preferred position as against the constitutional right of property owners. Herein, Section 27 (e) of Commonwealth Act 466 (NIRC) -- which exempts corporations or associations organized and operated exclusively for religious, charitable, or educational purposes, Provided however, That the income of whatever kind and character from any of its properties, real or personal, or from any activity conducted for profit, regardless of the disposition made of such income, shall be liable to the tax imposed under the Code -- does not apply to the Society as its act of distributing and selling bibles, etc. is purely religious in nature. Ordinance 2529, as amended, cannot as well be applied to the Society, for in doing so it would impair its free exercise and enjoyment of its religious profession and worship as well as its rights of dissemination of religious beliefs. The fact that the price of the bibles and other religious pamphlets are little higher than the actual cost of the same does not necessarily mean that it is already engaged in the business or occupation of selling said “merchandise” for profit. Lastly, Constitutional Law II, 2005 ( 20 ) Narratives (Berne Guerrero) Ordinance 3000 of the City of Manila, which requires the obtention of the Mayor's permit before any person can engage in any of the businesses, trades or occupations enumerated therein, is not applicable to the Society, as its business, trade or occupation is not particularly mentioned in Section 3 of the Ordinance, and the record does not show that a permit is required therefor under existing laws and ordinances for the proper supervision and enforcement of their provisions governing the sanitation, security and welfare of the public and the health of the employees engaged in the business of the Society. 
 

Ebralinag vs Division Superintendent, GR 95770, 1 March 1993 
 

FACTS:
 
Department of Education Culture and Sports (DECS) Regional Office in Cebu received complaints about teachers and pupils belonging to the Jehovah’s Witness, which refused to sing the Philippine National Anthem, salute the flag and recite the patriotic pledge.
 
Division Superintendent of schools, Susana B. Cabahug of the Cebu Division of DECS directed to remove from service, after due process, teachers and school employees, and to deprive the students and pupils from the benefit of public education, if they do not participate in daily flag ceremony and doesn’t obey flag salute rule.
 
Members of the Jehovah’s Witness sect find such memorandum to be contrary to their religious belief and choose not to obey. Despite a number of appropriate persuasions made by the Cebu officials to let them obey the directives, still they opted to follow their conviction to their belief. As a result, an order was issued by the district supervisor of Daan Bantayan District of Cebu, dated July 24, 1990, ordering the ‘dropping from the list’ in the school register of all Jehovah’s Witness teachers and pupils from Grade 1 to Grade 6 who opted to follow their belief which is against the Flag Salute Law, however, given a chance to be re-accepted if they change their mind.
 
Some Jehovah’s Witness members appealed to the Secretary of Education but the latter did not answer to their letter.
 
Therefore, Petitioners students and their parents filed special civil actions for Mandamus, Certiorari and prohibition, alleging that the respondents acted without or in excess of their jurisdiction and with grave abuse of discretion in ordering their expulsion without prior notice and hearing, hence, in violation of their right to due process, their right to free public education and their right to freedom of speech, religion and worship. Petitioners prayed for the voiding of the order of expulsion or ‘dropping from the rolls’ issued by the District Supervisor
 
On November 27, 1990, Court issued a TRO and writ of preliminary mandatory injunction, commanding the respondents to immediately re-admit the petitioners to their respective classes until further orders.
 
On May 31, the Solicitor General filed a consolidated comment to the petitions defending the expulsion orders issued by the respondents.
 
Petitioners stressed that while they do not take part in the compulsory flag ceremony, they do not engage in ‘external acts’ or behavior that would offend their countrymen who believe in expressing their love of country through observance of the flag ceremony. They quietly stand at attention during the flag ceremony to show their respect for the right of those who choose to participate in the solemn proceedings. Since they do not engage in disruptive behavior, there is no warrant for their expulsion.



ISSUE: 
 
Whether members of Jehovah's Witnesses may be expelled from school (both public and private), for refusing, on account of their religious beliefs, to take part in the flag ceremony or singing the Philippine national anthem, saluting the Philippine flag and reciting the patriotic pledge
 
RULING:
 
No.  They should not be expelled.
 
Before, the 30-year-old ruling of the Court in Gerona case upholding the flag salute law and approving the expulsion of students who refuse to obey it, should be reexamined. The idea that one may be compelled to salute the flag, sing the national anthem, and recite the patriotic pledge, during a flag ceremony on pain of being dismissed from one's job or of being expelled from school, is alien to the conscience of the present generation of Filipinos who cut their teeth on the Bill of Rights which guarantees their rights to free speech and the free exercise of religious profession and worship 
Hence, Exemption may be accorded to the Jehovah's Witnesses with regard to the observance of the flag ceremony out of respect for their religious beliefs, however "bizarre" those beliefs may seem to others. Nevertheless, their right not to participate in the flag ceremony does not give them a right to disrupt such patriotic exercises.
 
Moreover, the expulsion of members of Jehovah's Witnesses from the schools where they are enrolled will violate their right as Philippine citizens, under the 1987 Constitution, to receive free education, for it is the duty of the State to "protect and promote the right of all citizens to quality education x x x and to make such education accessible to all" (Sec. 1, Art. XIV). 
Forcing a small religious group, through the iron hand of the law, to participate in a ceremony that violates their religious beliefs, will hardly be conducive to love of country or respect for duly constituted authorities. 

Imbong v. Ochoa, GR 204819, 8 April 2014, En Banc

FACTS:
Fourteen  petitions and two  petitions-in-intervention were filed against the Republic Act (R.A.) No. 10354, otherwise known as the Responsible Parenthood and Reproductive Health Act of 2012 (RH Law), which was enacted by Congress on December 21, 2012. Petitioners were assailing the constitutionality of RH Law on the grounds that it violates the right to life of the unborn, the right to health and the right to protection against hazardous products, and the right to religious freedom.
They averred that RH Law violates the constitutional guarantee respecting religion as it authorizes the use of public funds for the procurement of contraceptives. In addition, the use of public funds for purposes that are believed to be contrary to their beliefs is included in the constitutional mandate ensuring religious freedom.
Respondents contended that RH Law only seeks to serve the public interest by providing accessible, effective and quality reproductive health services to ensure maternal and child health, in line with the State's duty to bring to reality the social justice health guarantees of the Constitution, and that what the law only prohibits are those acts or practices, which deprive others of their right to reproductive health. They asserted that the assailed law only seeks to guarantee informed choice, which is an assurance that no one will be compelled to violate his religion against his free will. They added that by asserting that only natural family planning should be allowed, the petitioners are effectively going against the constitutional right to religious freedom, the same right they invoked to assail the constitutionality of the RH Law.
 
ISSUE: 
 
Whether or not the RH Law is unconstitutional for violating the right to religious freedom.
 
RULING:
No. The Court held RH Law not unconstitutional except with respect to certain provisions. However, on the issue whether the same violates the right of religious freedom, the Court ruled that it does not have the authority to determine the same.
While the Supreme Court stands without authority to rule on ecclesiastical matters, as vanguard of the Constitution, it does have authority to determine whether the Reproductive Health (RH) Law contravenes the guarantee of religious freedom.
It is not within the province of the Court to determine whether the use of contraceptives or one’s participation in the support of modern reproductive health measures is moral from a religious standpoint or whether the same is right or wrong according to one’s dogma or belief. For the Court has declared that matters dealing with “faith, practice, doctrine, form of worship, ecclesiastical law, custom and rule of a church are unquestionably ecclesiastical matters which are outside the province of the civil courts.” The jurisdiction of the Court extends only to public and secular morality. Whatever pronouncement the Court makes in the case at bench should be understood only in this realm where it has authority. Stated otherwise, while the Court stands without authority to rule on ecclesiastical matters, as vanguard of the Constitution, it does have authority to determine whether the RH Law contravenes the guarantee of religious freedom.
In a situation where the free exercise of religion is allegedly burdened by government legislation or practice, the compelling state interest test in line with the Court’s espousal of the Doctrine of Benevolent Neutrality (Estrada v. Escritor), finds application. In this case, the conscientious objector’s claim to religious freedom would warrant an exemption from obligations under the RH Law, unless the government succeeds in demonstrating a more compelling state interest in the accomplishment of an important secular objective. Necessarily so, the plea of conscientious objectors for exemption from the Reproductive Health Law deserves no less than strict scrutiny. 

Anonymous v. Radam, AM P-07-2333, 19 December 2007, First Division Resolution

FACTS:

• An anonymous letter-complaint was filed against Ma. Victoria Radam, utility worker in the Office of the Clerk of Court of the Regional Trial Court of Alaminos City in Pangasinan, charged her with immorality, alleging that she was unmarried but got pregnant which tainted the image of judiciary.
• In his investigation, Judge Abella found that Radam is single and that she got pregnant and gave birth to a baby boy without being married to the father of the child, albeit she advanced the reason for her remaining unmarried, it being that she and her boyfriend had a mutual plan to migrate to Canada. 
• Judge Abella, then, recommended that the responded be found Guilty of Immoral Conduct or Act Unbecoming a Court of Employee as the said conduct of Radam fell short of the strict standard of the standards of Court personnel and contrary to the Code of Judicial Ethic and the Civil Service Rules. A suspension of one (1) month or a fine of Php5,000.00 is respectfully recommended, with warning that a repetition of the same or similar act in the future will be dealt with more severely.
• However, the Office of the Court Administrator (OCA) recommended the absolution of the charge of immorality as the alleged misconduct did not affect the character and nature of respondent’s position as a utility worker, but a fine of Php 5,000 must be imposed for stating in the birth certificate of her child that the father was “unknown” to her.  

 
ISSUE:  
​Whether or not respondent be dismissed for her conduct.
 
RULING:
No. The Court held the dismissal of the administrative complaint against the respondent, but was advised to be more circumspect in her personal and official actuations in the future. In the determination of administrative responsibility, giving birth out of wedlock is not per se immoral under civil service laws.
For such conduct to warrant disciplinary action, the same must be "grossly immoral," that is, it must be so corrupt and false as to constitute a criminal act or so unprincipled as to be reprehensible to a high degree. In Estrada v. Escritor, we emphasized that in determining whether the acts complained of constitute "disgraceful and immoral behavior" under civil service laws, the distinction between public and secular morality on the one hand, and religious morality, on the other should be kept in mind. The distinction between public and secular morality as expressed — albeit not exclusively — in the law, on the one hand, and religious morality, on the other, is important because the jurisdiction of the Court extends only to public and secular morality.14 Thus, government action, including its proscription of immorality as expressed in criminal law like adultery or concubinage, must have a secular purpose.
In the case at bar, it was not disputed that the father of her child was unmarried.  Therefore, the respondent cannot be held liable for disgraceful and immoral conduct simply because she gave birth to the child Christian Jeon out of wedlock. She was indicted only because of giving birth out of wedlock which the investigation focused solely on. Hence, OCA’s recommendation that she be held administratively liable for not stating the name of her child’s father in the birth certificate is like a thief in the night as the respondent was not given any change to explain her side. To hold her liable for a totally different charge of which she was totally unaware will violate her right to due process. The essence of due process in an administrative proceeding is the opportunity to explain one’s side, whether written or verbal

 RE: Letter of Valenciano, AM 10-4-19-SC, 7 March 2017, En Banc Resolution, Mendoza 

​FACTS:
 
This controversy originated from a series of letters written by Valenciano and addressed to the Chief Justice Reynato S. Puno reporting that the basement of the Hall of Justice of Quezon City had been converted into a Roman Catholic Chapel, complete with Catholic religious icons and other instrument for religious activities. He believe that such practice violated the constitutional provisions on the separation of Church and State and the constitutional prohibition against the appropriation of public money and property for the benefit of a sect, church, denomination, or any other system of religion. He further averred that the holding of masses at the basement of Hall of Justice showed that it tended to favor the Catholic litigants; that the rehearsals and other activities caused great disturbance to the employees; and that court functions are affected due to the masses that is being held from 12:00 to 1:15 in the afternoon.
 
ISSUE: 
 
Whether or not the holding of masses at the basement of the Quezon City Hall of Justice violates the constitutional principle of separation of Church and State
 
RULING:
 
No, the holding of masses in the Hall of Justice does not violate the constitutional principle of separation of Church and State
 
The 1987 Constitution provides that the separation of Church and State shall be inviolable; if further provides that the free exercise and enjoyment of religious profession and worship without discrimination or preference shall forever be allowed. Allowing religion to flourish is not contrary to the principle of separation of Church and State. The Roman Catholic expresses their worship through the Holy Mass and to stop these would be tantamount to repressing the right to the free exercise of their religion,
 
The holding of Masses at the basement of Quezon City Hall of Justice is not a case of establishment but merely accommodation wherein the government recognize the reality that some measures may not be imposed on a certain portion of the population for the reason that these measures are contrary to their religious beliefs, as long as it can be shown that the exercise of the right does not impair the public welfare.

Islamic Da'Wah Council of the Philippines Inc. vs Office of the Executive Secretary, GR 153888, 9 July 2003

​FACTS:
Petitioner is a non-governmental organization internationally accredited to issue halal certifications in the Philippines. To carry out its functions, it formulated internal rules and procedures based on the Qur’an and Sunnah for food analysis and inspection, and began to issue certifications to qualified products and food manufacturers for a fee.
Later, respondent Office issued Executive Order 46 which created the Philippine Halal Certification Scheme. Such order vested exclusive authority on the Office on Muslim Affairs (OMA) to issue halal certificates and perform other related regulatory activities. OMA then warned Muslim consumers to buy only products with its official halal certification since those without said certification had not been subjected to careful analysis and therefore could contain pork. It also began to send letters to food manufacturers asking them to secure the halal certification only from OMA lest they violate the order. As a result, the IDCP lost revenues after food manufacturers stopped securing certifications from it.
Hence, petitioner filed a petition to nullify EO 46, contending that it is unconstitutional for the government to formulate policies & guidelines on the halal certification scheme because it is a function that only religious organizations can lawfully & validly perform for the Muslims.
ISSUE: 
Whether or not EO 46 is unconstitutional for violating the non-establishment and free exercise clauses guaranteed under Art. III, Sec. 5 of the 1987 Constitution.
 
RULING:
Classifying a food product as halal is a religious function because the standards used are drawn from the Qur’an & Islamic beliefs. By giving OMA the exclusive power to classify food products as halal, EO 46 encroached on the religious freedom of Muslim organizations to interpret for Filipino Muslims what food products are fit for Muslim consumption; by arrogating to itself the task of issuing halal certifications, the State has in effect forced Muslims to accept its own interpretation of the Qur’an & Sunnah on halal food.
 
Only the prevention of an immediate & grave danger to the security and welfare of the community can justify the infringement of religious freedom. If the government fails to show the seriousness & immediacy of the threat, State intrusion is constitutionally unacceptable.
 
In the case at bar, the Court finds no compelling justification for the government to deprive Muslim organizations, like herein petitioner, of their religious right to classify a product as halal, even on the premise that the health of Muslim Filipinos can be effectively protected by assigning to OMA the exclusive power to issue halal certifications. The protection and promotion of the Muslim Filipinos right to health are already provided for in existing laws and ministered to by government agencies charged with ensuring that food products released in the market are fit for human consumption, properly labeled and safe. Unlike EO 46, these laws do not encroach on the religious freedom of Muslims.

Wallace v. Jeffree, 472 US 38 (1985) 

FACTS:
Ishmael Jeffree, a resident of Mobile County, Alabama, filed an action on behalf of his minor children against the governor, school board and other public officials (Appellants), seeking an injunction restraining appellants from maintaining or allowing regular prayer services in the public schools. The father alleged that his two children were subjected to various acts of religious indoctrination during the school year and that appellants refused to stop the services. The action was later certified as a class action. At trial, appellants relied on three statutes enacted to allow voluntary prayer in the schools. The district court dismissed the father's claim, concluding that the Establishment Clause of U.S. Const. amend. I did not bar the states from establishing a religion. The United States District Court found that the statute was intended to encourage religious activity, but held that it was constitutional because a state has the power to establish a state religion if it chooses to do so; accordingly the district court dismissed the complaint. The United States Court of Appeals reversed, holding that such statute, though permissive in form, was nevertheless state involvement respecting an establishment of religion and was thus unconstitutional. Subsequently, appellants challenged the decision of the appellate court.
 
ISSUE: 
Was the Alabama state statute unconstitutional.
 
RULING:
Yes. On appeal, the Supreme Court of the United States held that Ala. Code § 16-1-20.1 is a law respecting the establishment of religion and thus violates the First Amendment. The Court noted that one of the well-established criteria for determining the constitutionality of a statute under the Establishment Clause is that the statute must have a secular legislative purpose. According to the Court, the First Amendment requires that a statute must be invalidated if it is entirely motivated by a purpose to advance religion. In the case at bar, it has been established that  § 16-1-20.1's purpose was to endorse religion. Furthermore, the Court held that the enactment of the statute was not motivated by any clearly secular purpose. The Court concluded that the State's endorsement, by enactment of § 16-1-20.1, of prayer activities at the beginning of each school day, is not consistent with the established principle that the government must pursue a course of complete neutrality toward religion. 

Lemon vs Krutzman, 403 US 602 (1971)

FACTS:
The Rhode Island Salary Supplement Act was enacted in 1969. It rests on the legislative finding that the quality of education available in nonpublic elementary schools has been jeopardized by the rapidly rising salaries needed to attract competent and dedicated teachers. The Act authorizes state officials to supplement the salaries of teachers of secular subjects in nonpublic elementary schools by paying directly to a teacher an amount not in excess of 15% of his current annual salary. As supplemented, however, a nonpublic school teacher's salary cannot exceed the maximum paid to teachers in the State's public schools, and the recipient must be certified by the state board of education in substantially the same manner as public school teachers. In order to be eligible for the Rhode Island salary supplement, the recipient must teach in a nonpublic school at which the average per-pupil expenditure on secular education is less than the average in the State's public schools during a specified period. The State Commissioner of Education also requires eligible schools to submit financial data. If this information indicates a per-pupil expenditure in excess of the statutory limitation, the records of the school in question must be examined in order to assess how much of the expenditure is attributable to secular education and how much to religious activity. The Act also requires that teachers eligible for salary supplements must teach only those subjects that are offered in the State's public schools. They must use "only teaching materials which are used in the public schools." Finally, any teacher applying for a salary supplement must first agree in writing "not to teach a course in religion for so long as or during such time as he or she receives any salary supplements" under the Act. Certain citizens and taxpayers of Rhode Island brought the suit to have the Rhode Island Salary Supplement Act declared unconstitutional and its operation enjoined on the ground that it violates the Establishment and Free Exercise Clauses of the First Amendment. The District Court concluded that the Act violated the Establishment Clause, holding that it fostered "excessive entanglement" between government and religion. In addition two judges thought that the Act had the impermissible effect of giving "significant aid to a religious enterprise." 
 
Pennsylvania has adopted a program that has some but not all of the features of the Rhode Island program. The Pennsylvania Nonpublic Elementary and Secondary Education Act was passed in 1968 in response to a crisis that the Pennsylvania Legislature found existed in the State's nonpublic schools due to rapidly rising costs. The statute affirmatively reflects the legislative conclusion that the State's educational goals could appropriately be fulfilled by government support of "those purely secular educational objectives achieved through nonpublic education." The statute authorizes the state Superintendent of Public Instruction to "purchase" specified "secular educational services" from nonpublic schools. Under the "contracts" authorized by the statute, the State directly reimburses nonpublic schools solely for their actual expenditures for teachers' salaries, textbooks, and instructional materials. A school seeking reimbursement must maintain prescribed accounting procedures that identify the "separate" cost of the "secular educational service." These accounts are subject to state audit. The funds for this program were originally derived from a new tax on horse and harness racing, but the Act is now financed by a portion of the state tax on cigarettes. There are several significant statutory restrictions on state aid. Reimbursement is limited to courses "presented in the curricula of the public schools." It is further limited "solely" to courses in the following "secular" subjects: mathematics, modern foreign languages, physical science, and physical education. Textbooks and instructional materials included in the program must be approved by the state Superintendent of Public Instruction. Finally, the statute prohibits reimbursement for any course that contains "any subject matter expressing religious teaching, or the morals or forms of worship of any sect." The Act went into effect on 1 July 1968, and the first reimbursement payments to schools were made on 2 September 1969. Some $5 million has been expended annually under the Act. The State has now entered into contracts with some 1,181 nonpublic elementary and secondary schools with a student population of some 535,215 pupils - more than 20% of the total number of students in the State. More than 96% of these pupils attend church-related schools, and most of these schools are affiliated with the Roman Catholic church. Associations of persons resident in Pennsylvania declaring belief in the separation of church and state; and other citizens and taxpayers of Pennsylvania, including Lemon (a parent of a child attending public school in Pennsylvania) brought an action in the District Court to challenge the constitutionality of the Pennsylvania statute. The District Court held that the Act violated neither the Establishment nor the Free Exercise Clause.
 
ISSUE: 
Whether the Rhode Island and Pennsylvania statutes violate the Establishment clause
 
RULING:
In the absence of precisely stated constitutional prohibitions, the Court must draw lines with reference to the three main evils against which the Establishment Clause was intended to afford protection: "sponsorship, financial support, and active involvement of the sovereign in religious activity." Every analysis in this area must begin with consideration of the cumulative criteria developed by the Court over many years. Three such tests may be gleaned from cases. First, the statute must have a secular legislative purpose; second, its principal or primary effect must be one that neither advances nor inhibits religion, finally, the statute must not foster "an excessive government entanglement with religion." Inquiry into the legislative purposes of the Pennsylvania and Rhode Island statutes affords no basis for a conclusion that the legislative intent was to advance religion. On the contrary, the statutes themselves clearly state that they are intended to enhance the quality of the secular education in all schools covered by the compulsory attendance laws. There is no reason to believe the legislatures meant anything else. A State always has a legitimate concern for maintaining minimum standards in all schools it allows to operate. As there is nothing here that undermines the stated legislative intent; it must therefore be accorded appropriate deference. Still, its hould be determined whether the government entanglement with religion is excessive. The Court thus must examine the character and purposes of the institutions that are benefited, the nature of the aid that the State provides, and the resulting relationship between the government and the religious authority. Herein, both statutes foster an impermissible degree of entanglement. 
The church schools involved in the Rhode Island program are located close to parish churches. This understandably permits convenient access for religious exercises since instruction in faith and morals is part of the total educational process. The school buildings contain identifying religious symbols such as crosses on the exterior and crucifixes, and religious paintings and statues either in the classrooms or hallways. Although only approximately 30 minutes a day are devoted to direct religious instruction, there are religiously oriented extracurricular activities. Approximately two-thirds of the teachers in these schools are nuns of various religious orders. Their dedicated efforts provide an atmosphere in which religious instruction and religious vocations are natural and proper parts of life in such schools. The parochial schools constituted "an integral part of the religious mission of the Catholic Church." The various characteristics of the schools make them "a powerful vehicle for transmitting the Catholic faith to the next generation." This process of inculcating religious doctrine is, of course, enhanced by the impressionable age of the pupils, in primary schools particularly. In short, parochial schools involve substantial religious activity and purpose. The substantial religious character of these church-related schools gives rise to entangling church-state relationships of the kind the Religion Clauses sought to avoid. Although the District Court found that concern for religious values did not inevitably or necessarily intrude into the content of secular subjects, the considerable religious activities of these schools led the legislature to provide for careful governmental controls and surveillance by state authorities in order to ensure that state aid supports only secular education. The dangers and corresponding entanglements are enhanced by the particular form of aid that the Rhode Island Act provides. Teachers have a substantially different ideological character from books. In terms of potential for involving some aspect of faith or morals in secular subjects, a textbook's content is ascertainable, but a teacher's handling of a subject is not. The Court cannot ignore the danger that a teacher under religious control and discipline poses to the separation of the religious from the purely secular aspects of pre-college education. The conflict of functions inheres in the situation. A comprehensive, discriminating, and continuing state surveillance will inevitably be required to ensure that these restrictions are obeyed and the First Amendment otherwise respected. Unlike a book, a teacher cannot be inspected once so as to determine the extent and intent of his or her personal beliefs and subjective acceptance of the limitations imposed by the First Amendment. These prophylactic contacts will involve excessive and enduring entanglement between state and church. There is another area of entanglement in the Rhode Island program that gives concern. The statute excludes teachers employed by nonpublic schools whose average per-pupil expenditures on secular education equal or exceed the comparable figures for public schools. In the event that the total expenditures of an otherwise eligible school exceed this norm, the program requires the government to examine the school's records in order to determine how much of the total expenditures is attributable to secular education and how much to religious activity. This kind of state inspection and evaluation of the religious content of a religious organization is fraught with the sort of entanglement that the Constitution forbids. It is a relationship pregnant with dangers of excessive government direction of church schools and hence of churches. There is danger that pervasive modern governmental power will ultimately intrude on religion and thus conflict with the Religion Clauses.
The Pennsylvania statute also provides state aid to church-related schools for teachers' salaries. The complaint describes an educational system that is very similar to the one existing in Rhode Island. Reimbursement is not only limited to courses offered in the public schools and materials approved by state officials, but the statute excludes "any subject matter expressing religious teaching, or the morals or forms of worship of any sect." In addition, schools seeking reimbursement must maintain accounting procedures that require the State to establish the cost of the secular as distinguished from the religious instruction. The Pennsylvania statute, moreover, has the further defect of providing state financial aid directly to the church-related school. The history of government grants of a continuing cash subsidy indicates that such programs have almost always been accompanied by varying measures of control and surveillance. The government cash grants provide no basis for predicting that comprehensive measures of surveillance and controls will not follow. In particular the government's post-audit power to inspect and evaluate a church-related school's financial records and to determine which expenditures are religious and which are secular creates an intimate and continuing relationship between church and state.
The potential for political divisiveness related to religious belief and practice is aggravated in these two statutory programs by the need for continuing annual appropriations and the likelihood of larger and larger demands as costs and populations grow. The Rhode Island District Court found that the parochial school system's "monumental and deepening financial crisis" would "inescapably" require larger annual appropriations subsidizing greater percentages of the salaries of lay teachers. Although no facts have been developed in this respect in the Pennsylvania case, it appears that such pressures for expanding aid have already required the state legislature to include a portion of the state revenues from cigarette taxes in the program. 

FACTS:
A Minnesota statute that provides a tax deduction for parents of school aged children for school related expenses is alleged to be unconstitutional under the Establishment Clause of the First Amendment of the Constitution as it applies not just to public schools, but to private schools as well. The appeals court ruled that statute did not violate the Establishment Clause of the Constitution and the Supreme Court of the United States (Supreme Court) affirmed. The Supreme Court stated that it rejects the argument that any government program that in some manner aids an institution with a religious affiliation violates the Establishment Clause. The Supreme Court instead stated the rule in Lemon, whether the statute has the primary effect of advancing the sectarian aim of the non-public schools was the more appropriate test. The Supreme Court found the Minnesota statute in question did not have a primary effect of advancing sectarian aims, as the deduction is available for educational expenses incurred by all parents, applying to those whose children that attend pubic schools and those who attend nonsectarian private schools and those who attend sectarian private schools. The Supreme Court also stated that there was not excessive government entanglement in religion under the third inquiry of the Lemon test.

ISSUE: 
Whether a Minnesota income tax deduction available for expenses incurred in sending children to public as well as non-public schools violates the Establishment Clause of the Constitution.

RULING:
Affirmed. The statute does not violate the Establishment Clause of the First Amendment of the Constitution.
 
The Establishment Clause of the First Amendment of the Constitution prohibits the government from establishing laws that promote religion. If the law just generally promotes religion, not favoring one sect over another, the law will be valid under the Lemon test if it (a) has a secular purpose; (b) the law has a primary effect that neither advances nor inhibits religion; and (iii) does not produce excessive government entanglement in religion.

​FACTS:
Sydell Stone et al., members of the Kentucky Civil Liberties Union, brought an action in a Kentucky trial court challenging the validity, under the First Amendment, of a Kentucky statute requiring the posting of a copy of the Ten Commandments on the wall of each public school classroom in the Commonwealth.
The trial court upheld the statute, which provided that each of the required 16 by 20 inch copies of the Commandments was to bear a notation in small print stating that the "secular application of the Ten Commandments is clearly seen in its adoption as the fundamental legal code of Western Civilization and the Common Law of the United States."
It was also provided that the posted copies were to be purchased with private voluntary contributions. The trial court found that its avowed purpose was secular, not religious, and that the law would neither advance nor inhibit any religion or religious group, nor involve the state excessively in religious matters.
The Supreme Court of Kentucky, on appeal, affirmed the judgment by an equally divided court.
Aggrieved, petitioner elevated the case to the United States Supreme Court certiorari review.
 
ISSUE/S:
Whether or not the Kentucky statute requiring posting of Ten Commandments in public schools violate the First Amendment?
 
RULING:
Yes.
 
The United States Supreme Court held that the statute had no secular legislative purpose and was, therefore, unconstitutional. The pre-eminent purpose for posting the Ten Commandments on schoolroom walls was plainly religious in nature. The Ten Commandments were undeniably a sacred text in the Jewish and Christian faiths and no legislative recitation of a supposed secular purpose could blind the Court to that fact. 
 
It did not matter that the posted copies were financed by voluntary contributions where the mere posting under the auspices of the legislature provided the official support of the state. 
 
The statute blatantly fails the first and second test, therefore, unconstitutional.
 

 
FACTS:
Edward Lewis Schempp, his wife, and two of their children, who attended public schools in Pennsylvania, filed suit in U.S. district court in Philadelphia, alleging that their religious rights under the First Amendment had been violated by a state law that required public schools to begin each school day with a reading of at least 10 passages from the Bible. The Schempps, who were Unitarians, claimed that the law was an unconstitutional establishment of religion and that it interfered with the free exercise of their religious faith, in violation of the First Amendment’s free-exercise clause. They asked the court to declare the law unconstitutional and to issue an injunction against its enforcement and to strike down the school district’s additional requirement that students recite the Lord’s Prayer at the beginning of each school day.
 
After the district court found in favor of the Schempps, the school district and the state’s superintendent of schools appealed to the Supreme Court. Before the case was heard, however, the Pennsylvania General Assembly amended the law to permit students to be excused from Bible readings upon the written request of a parent. The Supreme Court then vacated and remanded the district court’s judgment for further consideration in light of the amended law. After the district court held that the law remained in violation of the establishment clause, the Supreme Court agreed to hear a new appeal, consolidating it with a similar case that had arisen in Baltimore, Maryland, Murray v. Curlett, in which the lower court had found that Bible reading in public schools is constitutional. 
 
ISSUE/S:
Whether the mandatory reading of bible is constitutional
 
RULING:
​Legislation mandating the reading of religious scripture as part of a public school curriculum violates the Religion Clauses of the First Amendment.
The Fourteenth Amendment makes the First Amendment applicable to the states. The Establishment Clause prohibits the government from manufacturing its own religion, and it also forbids the government from passing any law that affords a preference to one religion over any other. In order to avoid violating the Establishment Clause, legislation must serve a secular governmental purpose and the primary effect of the legislation must not be to advance or inhibit religion. The Free Exercise Clause prohibits the government from imposing any restrictions upon the individual freedom to engage in religious practices. Legislation violates the Free Exercise Clause if it imposes coercive limitations upon the practice of religion. By contrast, coercion is not a necessary element for legislation to violate the Establishment Clause. The legislation before us does not necessarily require students to participate in religious practices, but it does require students to endure the exercise of religion as part of the regular public school curriculum. The readings take place in public facilities under the oversight of public employees. The readings are religious in nature and the laws in both cases make these religious exercises mandatory. The argument that these exercises seek to advance the secular goals of promoting moral values and the teaching of literature is belied by admissions of the religious character of the exercises. The states argue that forbidding religious exercises in schools works the result of imposing a state-sponsored religion of secularism. Although we agree that the government may not impose laws hostile to the exercise of religion, we do not agree that invalidating these laws amounts to a state-sanctioned preference for those who do not endorse religion over those who embrace a particular ideology. Study of religious scriptures may be presented as a secular aspect of an academic curriculum, but the laws at issue here impose a mandatory exercise of religion. The doctrine of state neutrality does not infringe upon the free exercise of religion by its prohibition against laws that mandate its public exercise, irrespective of the fact that the majority may support its public exercise.

FACTS:

• The Board of Education of Union Free School District of New York, directed the School District's principal to cause the following prayer to be said aloud by each class in the presence of a teacher at the beginning of each school day: "Almighty God, we acknowledge our dependence upon Thee, and we beg Thy blessings upon us, our parents, our teachers and our Country." This daily procedure was adopted on the recommendation of the State Board of Regents, which supervises the State's public school system. The parents of 10 pupils brought the action in a New York State Court insisting that use of this official prayer in the public schools was contrary to the beliefs, religions, or religious practices of both themselves and their children. They argued that the School cannot order the recitation of the prayer because it violates that part of the First Amendment of the Federal Constitution which commands that "Congress shall make no law respecting an establishment of religion".  The school contended that the prayer is “non-denominational” and does not require all students to recite the prayer. Those who wish to opt from reciting may remain silent.

 
ISSUE/S:           
   Whether the New York law adopting the practice of reciting the Regent’s prayer in public schools violates the (Non)Establishment Clause.
 
RULING:  
 - YES.          The majority, via Justice Black, held that school-sponsored prayer violates the Establishment Clause of the First Amendment There can be no doubt that New York's state prayer program officially establishes the religious beliefs embodied in the Regents' prayer. The argument to the contrary, which is largely based upon the contention that the Regents' prayer is "non-denominational" and the fact that the program does not require all pupils to recite the prayer but permits those who wish to do so to remain silent or be excused from the room, ignores the essential nature of the program's constitutional defects. The New York laws officially prescribing the Regents' prayer are inconsistent both with the purposes of the Establishment Clause and with the Establishment Clause itself.

​Aglipay v. Ruiz, 64 Phil 201 (1937) 

FACTS:  Petitioner seeks the issuance of a writ of prohibition against respondent Director of Posts from issuing and selling postage stamps commemorative of the 33rd International Eucharistic Congress. Petitioner contends that such act is a violation of the Constitutional provision stating that no public funds shall be appropriated or used in the benefit of any church, system of religion, etc. This provision is a result of the principle of the separation of church and state, for the purpose of avoiding the occasion wherein the state will use the church, or vice versa, as a weapon to further their ends and aims. Respondent contends that such issuance is in accordance to Act No. 4052, providing for the appropriation funds to respondent for the production and issuance of postage stamps as would be advantageous to the government.
 
ISSUE:
Whether or Not there was a violation of the freedom to religion.
 
               
RULING:
​What is guaranteed by our Constitution is religious freedom and not mere religious toleration. It is however not an inhibition of profound reverence for religion and is not a denial of its influence in human affairs. Religion as a profession of faith to an active power that binds and elevates man to his Creator is recognized. And in so far as it instills into the minds the purest principles of morality, its influence is deeply felt and highly appreciated. The phrase in Act No. 4052 “advantageous to the government” does not authorize violation of the Constitution. The issuance of the stamps was not inspired by any feeling to favor a particular church or religious denomination. They were not sold for the benefit of the Roman Catholic Church. The postage stamps, instead of showing a Catholic chalice as originally planned, contains a map of the Philippines and the location of Manila, with the words “Seat XXXIII International Eucharistic Congress.” The focus of the stamps was not the Eucharistic Congress but the city of Manila, being the seat of that congress. This was to “to advertise the Philippines and attract more tourists,” the officials merely took advantage of an event considered of international importance. Although such issuance and sale may be inseparably linked with the Roman Catholic Church, any benefit and propaganda incidentally resulting from it was no the aim or purpose of the Government.

Ortigas & Co. v. CA, GR 126102, 4 December 2000 
 
 FACTS: 

• August 25 1976: Petitioner Ortigas & Co sold a parcel of land located in Greenhills Subdivision IV, San Juan, Metro Manila to Emilia Hermoso, of which the contract of sale provided that: 1. (1) be used exclusively for residential purposes only, and not more than one single-family residential building will be constructed thereon; 6. The BUYER shall not erect any sign or billboard on the roof for advertising purposes; 11. No single-family residential building shall be erected until the building plans, specification have been approved by the SELLER; 14....restrictions shall run with the land and shall be construed as real covenants until December 31, 2025 when they shall cease and terminate.
• 1981: MMC Ordinance No. 81-01 also known Comprehensive Zoning Area for the National Capital region was enacted by the Metropolitan Manila Commission (now Metropolitan Development Authority) to classify as a commercial area a portion of Ortigas Avenue from Madison to Roosevelt Streets of Greenhills subdivision where the lot is located
• June 8, 1984: private respondent Ismael Mathay III leased a lot from Hermoso and constructed a single-story commercial building for Greenhills Autohaus Inc., a car sales company which was not stated in the lease contract
• January 18, 1995: Ortigas & Co filed a complaint against Hermoso seeking the demolition of the said construction as it violated the conditions in the contract and prohibiting Mathay from constructing the commercial building and or engaging in commercial activity, which later on Mathay was impleaded as he has a 10% interest in the lot. But he denied knowledge about the restrictions.
• Mathay then filed with the CA a special civil action for certiorari asserting that MMC Ordinance No. 81-01 classified the area where the lot was located as commercial area and said ordinance must be read into the Deed of Sale as a concrete exercise of police power. But Ortigas and Company averred on the contrary.
• The CA then held that the said ordinance effectively nullified the contract’s restrictions allowing only residential use of the property in question.
• The petitioner then moved for reconsideration, but was then. Hence the petition.

 
ISSUE/S: 
Whether or not the ordinance impaired the stipulated restrictions in the contract prior to its effectivity
 
RULING: 
YES. The court held that statutes in exercise of valid police power must be read into every contract. Noteworthy, in Sangalang vs. Intermediate Appellate Court,13 we already upheld MMC Ordinance No. 81-01 as a legitimate police power measure. chanrobles virtual law library
The trial courts reliance on the Co vs. IAC,14 is misplaced. In Co, the disputed area was agricultural and Ordinance No. 81-01 did not specifically provide that it shall have retroactive effect so as to discontinue all rights previously acquired over lands located within the zone which are neither residential nor light industrial in nature,[15 and stated with respect to agricultural areas covered that the zoning ordinance should be given prospective operation only.16 The area in this case involves not agricultural but urban residential land. Ordinance No. 81-01 retroactively affected the operation of the zoning ordinance in Greenhills by reclassifying certain locations therein as commercial. Moreover, statutes in exercise of valid police power must be read into every contract.
 

​ Chavez v. Romulo, GR 157036, 9 June 2004, En Banc, Sandoval-Gutierrez [J] 

FACTS:

• In January 2003, President Gloria Macapagal-Arroyo delivered a speech before the members of the PNP stressing the need for a nationwide gun ban in all public places to avert the rising crime incidents.
• Directing respondent PNP Chief Ebdane to suspend the issuance of Permits to Carry Firearms Outside of Residence (PTCFOR), Ebdane issued the Guidelines in the Implementation of the Ban on the Carrying of Firearms Outside of Residence  (Guidelines) as provided for in the Implementing Rules and Regulations, Presidential Decree No. 1866, dated June 29, 1983 and as directed by PGMA. 
• The Guidelines revokes all PTCFOR and prescribes that authorized holders of licensed firearms covered with valid PTCFOR may re-apply for a new PTCFOR and that all holders of licensed or government firearms are prohibited from carrying firearms outside their residence except those covered with mission/letter orders and duty detail orders issued by competent authority. Said exception shall pertain only to organic and regular employees.
• A petition for prohibition and injunction seeking to enjoin the implementation of the Guidelines was filed by Petitioner Francisco I. Chavez, a licensed gun owner to whom a PTCFOR has been issued, as a violation to his right to property.

 
ISSUE/S: 
 
Whether the revocation of petitioner’s PTCFOR pursuant to the assailed Guidelines is a violation of his right to property - NO
 
RULING:
 
No, petitioner cannot find solace to the above-quoted Constitutional provision. In evaluating a due process claim, the first and foremost consideration must be whether life, liberty or property interest exists. The bulk of jurisprudence is that a license authorizing a person to enjoy a certain privilege is neither a property nor property right. In Tan vs. The Director of Forestry, the Court ruled that “a license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract between the authority granting it and the person to whom it is granted; neither is it property or a property right, nor does it create a vested right.” In a more emphatic pronouncement, it was held in Oposa vs. Factoran, Jr. that: “Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract, property or a property right protected by the due process clause of the Constitution.”
 
Consequently, a PTCFOR, just like ordinary licenses in other regulated fields, may be revoked any time. It does not confer an absolute right, but only a personal privilege to be exercised under existing restrictions, and such as may thereafter be reasonably imposed.

​ 
Presley v. Bel-Air Village Association, 201 SCRA 13
 

FACTS:
Spouses Almendras were the registered owners of the property while Presley as lessee of the property, is the owner and operator of Hot Pan de Sal Store. A complaint for specific performance was filed by Bel-Air Village Association, Inc. against the spouses (deceased, substituted by petitioner) for violating a Bel - Air Subdivision restriction that the subject house and lot shall be used only for residential and not for commercial purposes, and for non-payment of association dues to them.
 
The RTC rendered decision in favor of respondent which was affirmed by the CA Motion for reconsideration was denied hence this petition.
 
ISSUE/S: 
Whether or not the deed of restriction can be enforced by BAVA against the petitioner.
 
RULING:
No. The contractual stipulations on the use of the land even if said conditions are annotated on the torrens title can be impaired if necessary, to reconcile with the legitimate exercise of police power. Like all contracts, subject to the overriding demands, needs, and interests of the greater number as the State may determine in the legitimate exercise of police power. The jurisdiction of the court guarantees sanctity of contract and is said to be the 'law between the contracting parties,' (Civil Code, supra, art. 1159) but while it is so, it cannot contravene 'law, morals, good customs, public order, or public policy.' (supra, art. 1306). Above all, it cannot be raised as a deterrent to police power, designed precisely to promote health, safety, peace, and enhance the common good, at the expense of contractual rights, whenever necessary.
Jupiter Street has been highly commercialized since the passage of Ordinance No. 81-01. The records indicate that commercial buildings, offices, restaurants, and stores have already sprouted in the area. The Court saw no reason why the petitioner should be singled out and prohibited from putting up her hot pan de sal store.

Rutter v. Esteban, 93 Phil 68 (1953) ​
  
FACTS:
On 20 August 1941, Royal L. Rutter sold to Placido J. Esteban 2 parcels of land situated in the City of Manila. To secure the payment of said balance of P4,800, a first mortgage over the same parcels of land has been constituted in favor of Rutter. The deed of sale having been registered, a new title was issued in favor of Placido J. Esteban with the mortgage duly annotated on the back thereof. Esteban failed to pay the two installments as agreed upon, as well as the interest that had accrued thereon, and so on 2 August 1949, Rutter instituted an action in the Court of First Instance (CFI) Manila to recover the balance due, the interest due thereon, and the attorney's fees stipulated in the contract. The complaint also contains a prayer for the sale of the properties mortgaged in accordance with law. Esteban admitted averments of the complaint but set up defense on the moratorium clause embodied in RA 342 (approved 26 July 1948), allowing a war sufferer 8 years from the settlement of his claim by the Philippine War Damage Commission. After a motion for summary judgment has been presented by Esteban, and the requisite evidence submitted covering the relevant facts, the court rendered judgment dismissing the complaint holding that the obligation which Rutter seeks to enforce is not yet demandable under the moratorium law. Rutter filed a motion for reconsideration wherein he raised for the first time the constitutionality of the moratorium law, but the motion was denied. Rutter appealed.
 
ISSUE/S: 
 
Whether Republic Act 342 is unconstitutional for being violative of the constitutional provision forbidding the impairment of the obligation of contracts. 
 
RULING:
 
The decision was appealed from will be reversed, without pronouncement as to costs. Statutes declaring a moratorium on the enforcement of monetary obligations are not of recent enactment. These moratorium laws are not new. Moratorium laws have been adopted "during times of financial distress, especially when incident to, or caused by, a war." The Moratorium Law is a valid exercise by the State of its police power, being an emergency measure. Although conceding that the obligations of the contract were impaired, the impairment was within the police power of the State as that power was called into exercise by the public economic emergency which the legislature had found to exist. Not only is the constitutional provision (contract clause) qualified by the measure of control which the State retains over remedial processes, but the State also continues to possess authority to safeguard the vital interest of its people. It does not matter that legislation appropriate to that end "has the result of modifying or abrogating contracts already in effect." Not only are existing laws read into contracts in order to fix obligations as between the parties, but the reservation of essential attributes of sovereign power is also read into contracts as a postulate of the legal order. The policy of protecting contracts against impairment presupposes the maintenance of a government by virtue of which contractual relations are worth while, a government which retains adequate authority to secure the peace and good order of society. Some of these laws, however, have also been declared "void as to contracts made before their passage where the suspension of remedies prescribed is indefinite or unreasonable in duration." The true test, therefore, of the constitutionality of a moratorium statute lies in the determination of the period of suspension of the remedy. It is required that such suspension be definite and reasonable, otherwise it would be violative of the constitution. Herein, obligations had been pending since 1945 as a result of the issuance of Executive Orders 25 and 32 and at present their enforcement is still inhibited because of the enactment of Republic Act 342 and would continue to be unenforceable during the 8-year period granted to prewar debtors to afford them an opportunity to rehabilitate themselves, which in plain language means that the creditors would have to observe a vigil of at least 12 years before they could effect a liquidation of their investment dating as far back as 1941. This period seems to be unreasonable, if not oppressive. While the purpose of Congress is plausible, and should be commended, the relief accorded works injustice to creditors who are practically left at the mercy of the debtors. Their hope to effect collection becomes extremely remote, more so if the credits are unsecured. And the injustice is more patent when, under the law, the debtor is not even required to pay interest during the operation of the relief. Thus, the Court declared that the continued operation and enforcement of Republic Act 342 at the present time is unreasonable and oppressive, and should not be prolonged a minute longer, and the same should be declared null and void and without effect. This also holds true as regards Executive Orders 25 and 32, considering that said Orders contain no limitation whatsoever in point of time as regards the suspension of the enforcement and effectivity of monetary obligations. This pronouncement is most especially needed in view of the revival clause embodied in said Act if and when it is declared unconstitutional or invalid

 PNB v. Palma, GR 157279, 9 August 2004 
  
FACTS: 

• Salary Standardization Law took effect on 01 July 1989. The Department of Budget and Management (DBM) issued Corporate Compensation Circular No. 10 (DBM-CCC No. 10) to implement R.A. 6758 otherwise known as ‘An Act Prescribing a Revised Compensation and Position Classification System in the Government and For Other Purposes,’. It enumerated the other allowances/fringe benefits which are not integrated into the basic salary rates prescribed under R.A. 6758, but were allowed to be continued only for incumbents as of 30 June 1989.

 

• The same was ruled ineffective due to non-publication. Respondents filed a petition for mandamus alleging that they were deprived of the said allowances enjoyed by other employees. They contend that the withholding of their entitlement to the same benefits is an unfair discrimination and a violation of their equal protection clause of the Constitution.

 
ISSUE/S:
  Whether or not unconstitutionality of RA 6758 on the ground of violation of equal protection clause be attacked collaterally?
 
RULING:
No. Respondents further argue that upholding the distinction among the employees on the basis of the date of their hiring is violative of the equal protection clause of the Constitution. For reasons of public policy, the constitutionality of a law cannot be attacked in a collateral way. A law is deemed valid unless declared null and void by a competent court; more so when the issue has not been duly pleaded in the trial court. The question of constitutionality must be raised at the earliest opportunity. Respondents not only failed to challenge the constitutionality of RA 6758; worse, they used it in seeking compensation from petitioners. The settled rule is that courts will not anticipate a question of constitutional law in advance of the necessity of deciding it. A valid classification was made by the law in segregating other employees from the incumbents who were already receiving the benefits on July 1, 1989.
This Court sympathizes with the plight of respondents. In these tough economic times, it understands their difficult situation. But as a court, even as the highest one, it can only apply the letter and the spirit of the law; it cannot reinvent or modify it. Unfortunately, law and jurisprudence are ranged against their stance. The Supreme Court has no choice but to apply them accordingly, if it must be true to its mission under the rule of law.
 

Sameer Overseas Placement Agency Inc. v. Cabiles, GR 170139, 5 August 2014, En Banc, 


FACTS: 

•  Joy Cabiles (“Cabiles”) was contracted by Sameer Overseas Placement Agency, Inc. (“Sameer”), with whom she signed a one-year employment contract for a monthly salary of New Taiwan Dollar (NT$) 15,360.00. Cabiles also alleged that she was required to pay a placement fee of P70,000 upon signing.  
• She started working for Taiwan Wacoal (“Wacoal”) on June 26, 1997. Whereas she alleged that she agreed to work as quality control for one year, she was instead asked to work as a cutter. 
•  On July 14, 1997, or barely a month into her work, a certain Mr. Huwang from Wacoal, without prior notice, terminated her contract. She was asked to immediately report to their office to gather her salary and passport, and to prepare for immediate repatriation.  
• From June 26, 1997 to July 14, 1997, Cabiles alleged that she received only NT$9,000 and that Wacoal deducted NT$3,000 to cover her plane ticket to Manila.  
• On October 15, 1997, Cabiles filed a Complaint for Illegal Dismissal with the National Labor Relations Commission (“NLRC”) against Sameer and Wacoal. She asked for (a) the return of her placement fee [P70,000], (b) the amount withheld for her plane ticket [NT$3,000], (c) payment for her salary for 23 months, and (d) moral and exemplary damages. She identified Wacoal as Sameer’s foreign principal. 
•  For its part, Sameer contended that Cabiles was terminated due to her (a) inefficiency, (b) negligence in her duties, and (c) failure to comply with the work requirements of Wacoal. Sameer also denied asking for a placement fee by showing an Official Receipt dated June 10,1997 bearing the amount P20,360. 
• In addition, Sameer claimed that Wacoal’s accreditation with it (Sameer) was already transferred to Pacific Manpower & Management Services, Inc. (“Pacific”); thus, as Sameer claimed, it has already been substituted by Pacific.  
• Pacific moved for the dismissal of Cabiles’s complaint against it, alleging the absence of an employer employee relationship between them, thereby making the claims outside the Labor Arbiter’s jurisdiction.
• LABOR ARBITER: On July 29, 1998, Acting Executive Labor Arbiter Pedro Ramos (“Ramos”) dismissed Cabiles’s complaint, ruling that her complaint was based on mere allegations and that there was no excess payment of placement fees. 
• Cabiles thus appealed to the NLRC.  NLRC: On March 31, 2004, the NLRC reversed and ruled that Cabiles was illegally dismissed, reiterating the rule that the burden of proof to show that the dismissal was based on a just or valid cause rests on the employer. 
• The NLRC found that there was no sufficient proof that Cabiles was inefficient or non-compliant with company requirements. In addition, the NLRC found that Sameer violated procedural due process in terminating Cabiles.  
• The NLRC awarded Cabiles (a) 3 months worth of salary or NT$46,080, (b) the reimbursement of the withheld NT$3,000, and (c) attorney’s fees of NT$300. NLRC denied Sameer’s Motion for Reconsideration, prompting the latter to petition for certiorari with the Court of Appeals.  
• COURT OF APPEALS: On June 27, 2005, the CA affirmed the NLRC’s decision with respect to the (a) finding of illegal dismissal, (b) award of 3 months’ worth of salary or NT$46,080, (c) reimbursement of the NT$3,000 repatriation expense, and (d) attorney’s fees of NT$300. Still, the CA remanded the case to the NLRC for the sole purpose of addressing the validity of Sameer’s third-party complaint against Pacific. Nevertheless, Sameer filed a petition for review on certiorari with the Supreme Court.

ISSUE/S:  WON equal protection clause was violated - YES. 
 
RULING:
“ Sameer failed to present any just cause for Cabiles’s dismissal. The employer, Wacoal, also failed to observe due process of law. 
 
Employers have the prerogative to impose productivity and quality standards at work and impose reasonable rules to ensure compliance with such standards. They cannot be compelled to retain the services of employees who are guilty of acts inimical to the employer’s interests. However, this prerogative must not be abused and must be tempered with the employee’s right to security of tenure (guaranteed by Article XIII, Section 3 of the 1987 Constitution); employees may not be terminated without a valid or just cause (substantive due process) and without observing proper procedure (procedural due process). 
 
Meanwhile, the Court emphasized that employees have the right to security of tenure even though they move to work at a different jurisdiction, following the principle of lex loci contractus (law of the land where the contract is made), as cited in Triple Eight Integrated Services v. NLRC2 and PCL Shipping Philippines v. NLRC3. Thus, since the contract of employment of Cabiles was perfected in the Philippines, the Labor Code, its IRR, other labor laws, and most especially the constitutional guarantee of security of tenure all apply, both with respect to substantive and procedural rights. 
 
Under the Labor Code therefore, Sameer’s contention that Cabiles was inefficient and negligent in her duties may constitute a just cause under Article 282(b) thereof [gross and habitual neglect by the employee of his duties], but only if Sameer was able to prove it, since the burden of proof is on the employer. 
 
Thus, to show that dismissal resulting from inefficiency in work is valid, the following requisites must concur: 1. The employer has set standards of conduct and workmanship against which the employee will be judged; 2. The standards of conduct and workmanship must have been communicated to the employee; and, 3. The communication was made at a reasonable time prior to the employee's performance assessment. In this case, Sameer failed to present evidence to prove that Cabiles fell short of Wacoal’s work requirements. Moreover, Sameer never specified which requirements or standards Cabiles failed to meet or what acts constituted inefficiency. Neither was there any showing that Cabiles was sufficiently informed of the standards of efficiency and performance of Wacoal. The fact that there was conflict as to what Cabiles’s position was showed that even that basic matter was unclear. Since there is no proof that Cabiles was terminated under a just cause, her termination is thus illegal, as violative of substantive due process. 
 
WHEREFORE, the petition is DENIED. The decision of the Court of Appeals is  AFFIRMED  with modification. Petitioner Sameer Overseas Placement Agency is ORDERED to pay respondent Joy C. Cabiles the amount equivalent to her salary for the unexpired portion of her employment contract at an interest of 6% per annum from the finality of this judgment. Petitioner is also ORDERED to reimburse respondent the withheld NT$3,000.00 salary and pay respondent attorney's fees of NT$300.00 at an interest of 6% per annum from the finality of this judgment. The clause, ‘ or for three (3) months for every year of the unexpired term, whichever is
Less  in Section 7 of Republic Act No. 10022 amending Section 10 of Republic Act No. 8042 is
Declared unconstitutional  and, therefore, null and void. SO ORDERED.

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