In the assailed decision, the CA noted that the action, although denominated as one for prohibition,

seeks the declaration of the unconstitutionality of Section 4(a) of R.A. No. 9257 and Section 32 of
R.A. No.9442. It held that in such a case, the proper remedy is not a special civil 1 action but a
petition for declaratory relief, which falls under the exclusive original jurisdiction of the RTC, in the
first instance, and of the Supreme Court, on appeal. 17

The Court clarifies.

Generally, the office of prohibition is to prevent the unlawful and oppressive exercise of authority and
is directed against proceedings that are done without or in excess of jurisdiction, or with grave abuse
of discretion, there being no appeal or other plain, speedy, and adequate remedy in the ordinary
course of law. It is the remedy to prevent inferior courts, corporations, boards, or persons from
usurping or exercising a jurisdiction or power with which they have not been vested by law. This is,
18

however, not the lone office of an action for prohibition. In Diaz, et al. v. The Secretary of Finance, et
al., prohibition was also recognized as a proper remedy to prohibit or nullify acts of executive
19

officials that amount to usurpation of legislative authority. And, in a number of jurisprudence,

prohibition was allowed as a proper action to assail the constitutionality of a law or prohibit its
implementation.

In Social Weather Stations, Inc. v. Commission on Elections, therein petitioner filed a petition for
21

prohibition to assail the constitutionality of Section 5.4 of R.A. No. 9006, or the "Fair Elections
Act," which prohibited the publication of surveys within 15 days before an election for national
candidates, and seven days for local candidates. Included in the petition is a prayer to prohibit the
Commission on Elections from enforcing the said provision. The Court granted the Petition and
struck down the assailed provision for being unconstitutional. 22

In Social Justice Society (SJS) v. Dangerous Drugs Board, et al., therein petitioner assailed the
23

constitutionality of paragraphs (c ), (d), (f) and (g) of Section 36 of R.A. No. 9165, otherwise known
as the "Comprehensive Dangerous Drugs Act of 2002," on the ground that they constitute undue
delegation of legislative power for granting unbridled discretion to schools and private employers in
determining the manner of drug 'testing of their employees, and that the law constitutes a violation of
the right against unreasonable searches and seizures. It also sought to enjoin the Dangerous Drugs
Board and the Philippine Drug Enforcement Agency from enforcing the challenged provision. The 24

Court partially granted the petition by declaring Section 36(f) and (g) of R.A. No. 9165
unconstitutional, and permanently enjoined the concerned agencies from implementing them. 25

In another instance, consolidated petitions for prohibitions questioning the constitutionality of the
26

Priority Development Assistance Fund were deliberated upon by this Court which ultimately granted
the same.

Clearly, prohibition has been found an appropriate remedy to challenge the constitutionality of
various laws, rules, and regulations.

There is also no question regarding the jurisdiction of the CA to hear and decide a petition for
prohibition. By express provision of the law, particularly Section 9(1) of Batas Pambansa Bilang
129, the CA was granted "original jurisdiction to issue writs of mandamus, prohibition, certiorari,
27

habeas corpus, and quo warranto, and auxiliary writs or I processes, whether or not in aid of its
appellate jurisdiction." This authority· the CA enjoys concurrently with RTCs and this Court.

In the same manner, the supposed violation of the principle of the ·. hierarchy of courts does not
pose any hindrance to the full deliberation of the issues at hand. It is well to remember that "the
judicial hierarchy of courts is not an iron-clad rule. It generally applies to cases involving warring
factual allegations. For this reason, litigants are required to [refer] to the trial courts at the first
instance to determine the truth or falsity of these contending allegations on the basis of the evidence
of the parties. Cases which depend on disputed facts for decision cannot be brought immediately
before appellate courts as they are not triers of facts. Therefore, a strict application of the rule of
hierarchy of courts is not necessary when the cases brought before the appellate courts do not
involve factual but legal questions." 28

Moreover, the principle of hierarchy of courts may be set aside for special and important reasons,
such as when dictated by public welfare and ' the advancement of public policy, or demanded by the
broader interest of justice. Thus, when based on the good judgment of the court, the urgency and
29

significance of the issues presented calls for its intervention, it should not hesitate to exercise its
duty to resolve.

The instant petition presents an exception to the principle as it basically raises a legal question on
the constitutionality of the mandatory discount and the breadth of its rightful beneficiaries. More
importantly, the resolution of the issues will redound to the benefit of the public as it will put to rest
the questions on the propriety of the granting of discounts to senior citizens and PWDs amid the
fervent insistence of affected establishments that the measure transgresses their property rights.
The Court, therefore, finds it to the best interest of justice that the instant petition be resolved.

The instant case is not barred by

The petitioner contends that the CA erred in holding that the ruling in Carlos Superdrug constitutes
as stare decisis or law of the case which bars the relitigation of the issues that had been resolved
therein and had been raised anew in the instant petition. It argues that there are substantial
differences between Carlos Superdrug and the circumstances in the instant case which take it out
from the operation of the doctrine of stare decisis. It cites that in Carlos Superdrug, the Court denied
the petition because the petitioner therein failed to prove the confiscatory effect of the tax deduction
scheme as no proof of actual loss was submitted. It believes that its submission of financial
statements for the years 2006 and 2007 to prove the confiscatory effect of the law is a material fact
that distinguishes the instant case from that of Carlos Superdrug. 30

The Court agrees that the ruling in Carlos Superdrug does not constitute stare decisis to the instant
case, not because of the petitioner's submission of financial statements which were wanting in the
first case, but because it had the good sense of including questions that had not been raised or
deliberated in the former case of Carlos Superdrug, i.e., validity of the 20% discount granted to
PWDs, the supposed vagueness of the provisions of R.A. No. 9442 and violation of the equal
protection clause.

Nonetheless, the Court finds nothing in the instant case that merits a reversal of the earlier ruling of
the Court in Carlos Superdrug. Contrary to the petitioner's claim, there is a very slim difference
between the issues in Carlos Superdrug and the instant case with respect to the nature of the senior
citizen discount. A perfunctory reading of the circumstances of the two cases easily discloses
marked similarities in the issues and the arguments raised by the petitioners in both cases that
semantics nor careful play of words can hardly obscure.

In both cases, it is apparent that what the petitioners are ultimately questioning is not the grant of the
senior citizen discount per se, but the manner by which they were allowed to recoup the said
discount. In particular, they are protesting the change in the tax treatment of the senior citizen
discount from tax credit to being merely a deduction from gross income which they claimed to have
significantly reduced their profits.
This question had been settled in Carlos Superdrug, where the Court ruled that the change in the
tax treatment of the discount was a valid exercise of police power, thus:

Theoretically, the treatment of the discount as a deduction reduces the net income of the private
establishments concerned. The discounts given would have entered the coffers and formed part of
the gross sales of the private establishments, were it not for R.A. No. 9257.

xxxx

A tax deduction does not offer full reimbursement of the senior citizen discount. As such, it would not
meet the definition of just compensation.

Having said that, this raises the question of whether the State, in promoting the health and welfare of
a special group of citizens, can impose upon private establishments the burden of partly subsidizing
a government program.

The Court believes so.

The Senior Citizens Act was enacted primarily to maximize the contribution of senior citizens to
nation-building, and to grant benefits and privileges to them for their improvement and well-being as
the State considers them an integral part of our society.

The priority given to senior citizens finds its basis in the Constitution as set forth in the law itself.
Thus, the Act provides:

SEC. 2. [R.A.] No. 7432 is hereby amended to read as follows:

SEC. 1. Declaration of Policies and Objectives.- Pursuant to Article XV, Section 4 of the
Constitution, it is the duty of the family to take care of its elderly members while the State may
design programs of social security for them. In addition to this, Section 10 in the Declaration of
Principles and State Policies provides: "The State shall provide social justice in all phases of national
development." Further, Article XIII, Section 11, provides: "The State shall adopt an integrated and
comprehensive approach to health development which shall endeavor to make essential goods,
health and other social services available to all the people at affordable cost. There shall be priority
for the needs of the underprivileged sick, elderly, disabled, women and children." Consonant with
these constitutional principles the following are the declared policies of this Act:

xxxx

(f) To recognize the important role of the private sector in the improvement of the welfare of
senior citizens and to actively seek their partnership.

To implement the above policy, the law grants a twenty percent discount to senior citizens for
medical and dental services, and diagnostic and laboratory fees; admission fees charged by
theaters, concert halls, circuses, carnivals, and other similar places of culture, leisure and
amusement; fares for domestic land, air and sea travel; utilization of services in hotels and similar
lodging establishments, restaurants and recreation centers; and purchases of medicines for the
exclusive use or enjoyment of senior citizens. As a form of reimbursement, the law provides that
business establishments extending the twenty percent discount to senior citizens may claim the
discount as a tax deduction.
The law is a legitimate exercise of police power which, similar to the power of eminent domain, has
general welfare for its object. Police power is not capable of an exact definition, but has been
purposely veiled in general terms to underscore its comprehensiveness to meet all exigencies and
provide enough room for an efficient and flexible response to conditions and circumstances, thus
assuring the greatest benefits. Accordingly, it has been described as "the most essential, insistent
and the least limitable of powers, extending as it does to all the great public needs." It is "[t]he power
vested in the legislature by the constitution to make, ordain, and establish all manner of wholesome
and reasonable laws, statutes, and ordinances, either with penalties or without, not repugnant to the
constitution, as they shall judge to be for the good and welfare of the commonwealth, and of the
subjects of the same."

For this reason, when the conditions so demand as determined by the legislature, property rights
must bow to the primacy of police power because proper rights, though sheltered by due process,
must yield to general welfare. (Citations omitted and emphasis in the original)
31

Verily, it is the bounden duty of the State to care for the elderly as they reach the point in their lives
when the vigor of their youth has diminished and resources have become scarce. Not much because
of choice, they become needing of support from the society for whom they presumably spent their
productive days and for whose betterment they' exhausted their energy, know-how and experience
to make our days better to live.

In the same way, providing aid for the disabled persons is an equally important State responsibility.
Thus, the State is obliged to give full support to the improvement of the total well-being of disabled
persons and their integration into the mainstream of society. This entails the creation of
32

opportunities for them and according them privileges if only to balance the playing field which had
been unduly tilted against them because of their limitations.

The duty to care for the elderly and the disabled lies not only upon the State, but also on the
community and even private entities. As to the State, the duty emanates from its role as parens
patriae which holds it under obligation to provide protection and look after the welfare of its people
especially those who cannot tend to themselves. Parens patriae means parent of his or her country,
and refers to the State in its role as "sovereign", or the State in its capacity as a provider of
protection to those unable to care for themselves. In fulfilling this duty, the State may resort to the
33

exercise of its inherent powers: police power, eminent domain and power of taxation.

In Gerochi v. Department of Energy, the Court passed upon one of the inherent powers of the state,
34

the police power, where it emphasized, thus:

[P]olice power is the power of the state to promote public welfare by restraining and regulating the
use of liberty and property. It is the most pervasive, the least limitable, and the most demanding of
the three fundamental powers of the State. The justification is found in the Latin maxim salus populi
est suprema lex (the welfare of the people is the supreme law) and sic utere tuo ut alienum non
laedas (so use your property as not to injure the property of others). As an inherent attribute of
sovereignty which virtually extends to all public needs, police power grants a wide panoply of
instruments through which the State, as parens patriae, gives effect to a host of its regulatory
powers. We have held that the power to "regulate" means the power to protect, foster, promote,
preserve, and control, with due regard for the interests, first and foremost, of the public, then of the
utility and of its patrons. (Citations omitted)
35

It is in the exercise of its police power that the Congress enacted R.A. Nos. 9257 and 9442, the laws
mandating a 20% discount on purchases of medicines made by senior citizens and PWDs. It is also
in further exercise of this power that the legislature opted that the said discount be claimed as tax
deduction, rather than tax credit, by covered establishments.

The petitioner, however, claims that the change in the tax treatment of the discount is illegal as it
constitutes taking without just compensation. It even submitted financial statements for the years
2006 and 2007 to support its claim of declining profits when the change in the policy was
implemented.

The Court is not swayed.

To begin with, the issue of just compensation finds no relevance in the instant case as it had already
been made clear in Carlos Superdrug that the power being exercised by the State in the imposition
of senior citizen discount was its police power. Unlike in the exercise of the power of eminent
domain, just compensation is not required in wielding police power. This is precisely because there
is no taking involved, but only an imposition of burden.

In Manila Memorial Park, Inc., et al. v. Secretary of the DSWD, et al., the Court ruled that by
36

examining the nature and the effects of R.A. No. 9257, it becomes apparent that the challenged
governmental act was an exercise of police power. It was held, thus:

[W]e now look at the nature and effects of the 20% discount to determine if it constitutes an exercise
of police power or eminent domain.

The 20% discount is intended to improve the welfare of senior citizens who, at their age, are less
likely to be gainfully employed, more prone to illnesses and other disabilities, and, thus, in need of
subsidy in purchasing basic commodities. It may not be amiss to mention also that the discount
serves to honor senior citizens who presumably spent the productive years of their lives on
contributing to the development and progress of the nation. This distinct cultural Filipino practice of
honoring the elderly is an integral part of this law.

As to its nature and effects, the 20% discount is a regulation affecting the ability of private
establishments to price their products and services relative to a special class of individuals, senior
citizens, for which the Constitution affords preferential concern. In turn, this affects the amount of
profits or income/gross sales that a private establishment can derive from senior citizens. In other
words, the subject regulation affects the pricing, and, hence, the profitability of a private
establishment. However, it does not purport to appropriate or burden specific properties, used in the
operation or conduct of the business of private establishments, for the use or benefit of the public, or
senior citizens for that matter, but merely regulates the pricing of goods and services relative to, and
the amount of profits or income/gross sales that such private establishments may derive from, senior
citizens.

The subject regulation may be said to be similar to, but with substantial distinctions from, price
control or rate of 'return on investment control laws which are traditionally regarded as police power
measures. x x x. (Citations omitted)
37