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DESTILERIA LIMTUACO v. ADVERTISING BOARD OF PHILIPPINES

FACTS:

Destileria Limtuaco & Co., Inc. (Destileria) is a former member of the Philippine Association of National Advertisers (PANA), and it applied for a clearance of a radio advertisement through its advertising agency, SLG Advertising, a member of the Association of Accredited Advertising Agencies Philippines (4As). The Advertising Board of the Philippines (AdBoard), a non-stock, non-profit corporation composed of several national organizations in the advertising industry, issued a clearance for the advertisement. However, AdBoard later received complaints from the public regarding the advertisement and requested SLG Advertising for a replacement, which was ignored. As a result, AdBoard recalled the clearance and informed SLG Advertising and its members-organizations.

In response to AdBoard's decision, the petitioners protested and filed a complaint seeking the revocation/cancellation of AdBoard's registration and its dissolution. AdBoard then issued a circular reminding its members of the prohibition on airing materials not duly screened by them. The petitioners, dissatisfied with AdBoard's actions, filed a complaint against AdBoard's officers and subsequently filed a petition for prohibition and preliminary injunction. They argued that their right to advertise is constitutionally protected, and AdBoard's requirement of clearance amounts to a deprivation of property without due process of law.

AdBoard, on the other hand, contends that it has authority derived from the voluntary submission of its members. They argue that there is no law prohibiting AdBoard from assuming self-regulatory functions.

ISSUES:

  1. Whether AdBoard has the power to require its clearance prior to commercial advertising and to impose sanctions on its members who broadcast advertisements without its clearance.

  2. Whether requiring a clearance from AdBoard before advertisements can be aired amounts to a deprivation of property without due process of law.

  3. Whether AdBoard's regulation is an exercise of police power subject to constitutional proscriptions.

  4. Whether the petition should be dismissed for failure to observe the rule on hierarchy of courts and failure to comply with certain requirements for the filing of the petition.

RULING:

  1. AdBoard has the power to require its clearance prior to commercial advertising and to impose sanctions on its members who broadcast advertisements without its clearance.

  2. Requiring a clearance from AdBoard before advertisements can be aired does not amount to a deprivation of property without due process of law.

  3. AdBoard's regulation is not an exercise of police power subject to constitutional proscriptions.

  4. The petition is bereft of merit.

PRINCIPLES:

  • AdBoard derives its authority from the voluntary submission of its members to its jurisdiction.

  • There is no law that prohibits AdBoard from assuming self-regulatory functions or from issuing clearances prior to advertising.