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G.R. No. 211356
September 29, 2014
CRISOSTOMO B. AQUINO, Petitioner, vs. MUNICIPALITY OF MALAY,

AKLAN, represented by HON. MAYOR JOHN P. YAP, SANGGUNIANG
BA YAN OF MALAY, AKLAN, represented by HON. EZEL FLORES,
DANTE PASUGUIRON, ROWEN AGUIRRE, WILBEC GELITO, JUPITER
GALLENERO, OFFICE OF THE MUNICIPAL ENGINEER, OFFICE OF THE
MUNICIPAL
TREASURER,
BORACAY
PNP
CHIEF,
BORACAY
FOUNDATION, INC., represented by NENETTE GRAF, MUNICIPAL
AUXILIARY POLICE, and JOHN and JANE DOES, Respondents.
VELASCO, JR., J.:
Nature of the Case
Before the Court is a Petition for Review on Certiorari challenging the
Decision1 and the Resolution of the Court of Appeals (CA) in CA-G.R. SP No.
120042 dated August 13, 2013 and February 3, 2014, respectively. The
assailed rulings denied Crisostomo Aquino's Petition for Certiorari for not
being the proper remedy to question the issuance and implementation of
Executive Order No. 10, Series of 2011 (EO 10), ordering the demolition of
his hotel establishment.
The Facts
Petitioner is the president and chief executive officer of Boracay Island
West Cove Management Philippines, Inc. (Boracay West Cove). On January
7, 2010, the company applied for a zoning compliance with the municipal
government of Malay, Aklan.2 While the company was already operating a
resort in the area, the application sought the issuance of a building permit
covering the construction of a three-storey hotel over a parcel of land
measuring 998 sqm. located in Sitio Diniwid, Barangay Balagab, Boracay
Island, Malay, Aklan,which is covered by a Forest Land Use Agreement for
Tourism Purposes (FLAgT) issued by the Department of Environment and
Natural Resources (DENR) in favor of Boracay West Cove.
Through a Decision on Zoning dated January 20, 2010, the Municipal
Zoning Administrator denied petitioners application on the ground that the
proposed construction site was withinthe "no build zone" demarcated in
Municipal Ordinance 2000-131 (Ordinance).3 As provided in the Ordinance:
SECTION 2. Definition of Terms. Asused in this Ordinance, the following
words, terms and phrases shall mean as follows:
Compiled by: Angel Sy
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(b) No Build Zone the space twenty-five (25) meters from the edge of the
mean high water mark measured inland;
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SECTION 3. No building or structure of any kind whether temporary or
permanent shall be allowed to be set up, erected or constructed on the
beaches around the Island of Boracay and in its offshore waters. During the
conduct of special activities or special events, the Sangguniang Bayan
may, through a Resolution, authorize the Office of the Mayor to issue
Special Permits for construction of temporary structures on the beach for
the duration of the special activity as embodied in the Resolution.
In due time, petitioner appealed the denial action to the Office of the
Mayor on February 1, 2010. On May 13, 2010, petitioner followed up his
appeal through a letter but no action was ever taken by the respondent
mayor. On April 5, 2011, however, a Notice of Assessment was sent to
petitioner asking for the settlement of Boracay West Coves unpaid taxes
and other liabilities under pain of a recommendation for closure in view of
its continuous commercial operation since 2009 sans the necessaryzoning
clearance, building permit, and business and mayors permit. In reply,
petitioner expressed willingness to settle the companys obligations, butthe
municipal treasurer refused to accept the tendered payment. Meanwhile,
petitioner continued with the construction, expansion, and operation of the
resort hotel.
Subsequently, on March 28, 2011, a Cease and Desist Order was issued by
the municipal government, enjoining the expansion of the resort, and on
June 7, 2011, the Office of the Mayor of Malay, Aklan issued the assailed
EO 10, ordering the closure and demolition of Boracay West Coves hotel.
EO 10 was partially implemented on June 10, 2011. Thereafter, two more
instances followed wherein respondents demolished the improvements
introduced by Boracay West Cove, the most recent of which was made in
February 2014.
Alleging that the order was issued and executed with grave abuse of
discretion, petitioner filed a Petition for Certiorari with prayer for injunctive
relief with the CA. He argued that judicial proceedings should first be
conducted before the respondent mayor could order the demolition of the
companys establishment; that Boracay West Cove was granted a FLAgT by
the DENR, which bestowed the company the right to construct permanent
improvements on the area in question; thatsince the area is a forestland, it
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is the DENRand not the municipality of Malay, or any other local
government unit for that matterthat has primary jurisdiction over the
area, and that the Regional Executive Director of DENR-Region 6 had
officially issued an opinion regarding the legal issues involved in the
present case; that the Ordinance admits of exceptions; and lastly, that it is
the mayor who should be blamed for not issuing the necessary clearances
in the companys favor.
In rebuttal, respondents contended that the FLAgT does not excuse the
company from complying with the Ordinance and Presidential Decree No.
1096 (PD 1096), otherwise known as the National Building Code of the
Philippines. Respondents also argued that the demolition needed no court
order because the municipal mayor has the express power under the Local
Government Code (LGC) to order the removal of illegally constructed
buildings.
function when he ordered the closure and demolition of

Boracay West Coves hotel;
2.
Whether or not respondent mayor committed grave abuse of

discretion when he issued EO 10;
a.
Whether or not petitioners right to due process was

violated when the respondent mayor ordered the closure
and demolition of Boracay West Coves hotel without first
conducting judicial proceedings;
b.
Whether or not the LGUs refusal to issue petitioner the

necessary building permit and clearances was justified;
c.
Whether or not petitioners rights under the FLAgT prevail

over the municipal ordinance providing for a no-build zone;
and
d.
Whether or not the DENR has primary jurisdiction over the

controversy, not the LGU.
Ruling of the Court of Appeals

In its assailed Decision dated August 13, 2013, the CA dismissed the
petition solely on procedural ground, i.e., the special writ of certiorari can
only be directed against a tribunal, board, or officer exercising judicial or
quasi-judicial functions and since the issuance of EO 10 was done in the
exercise of executive functions, and not of judicial or quasi-judicial
functions, certiorari will not lie. Instead, the proper remedy for the
petitioner, according to the CA, is to file a petition for declaratory relief
with the Regional Trial Court.
Petitioner sought reconsideration but this was denied by the CA on
February 3, 2014 through the challenged Resolution. Hence, the instant
petition raising arguments on both procedure and substance.
The Issues
Stripped to the essentials, the pivotal issues in the extant case are as
follows:
1.
The propriety under the premises ofthe filing of a petition for

certiorari instead of a petition for declaratory relief;
a.
Whether or not declaratory reliefis still available to

petitioner;
b.
Whether or not the CA correctly ruled that the respondent

mayor was performing neither a judicial nor quasi-judicial
The Courts Ruling

We deny the petition. Certiorari, not declaratory relief, is the proper
remedy
a. Declaratory relief no longer viable
Resolving first the procedural aspect of the case, We find merit in
petitioners contention that the special writ of certiorari, and not
declaratory relief, is the proper remedy for assailing EO 10. As provided
under Sec. 1, Rule 63 of the Rules of Court:
SECTION 1. Who may file petition. Any person interested under a deed,
will, contract or other written instrument, whose rights are affected by a
statute, executive order or regulation, ordinance or any other
governmental regulation may, before breach or violation thereof, bring an
action in the appropriate Regional Trial Court to determine any question of
construction or validity arising, and for a declaration of his rights or duties,
thereunder. x x x (emphasis added)
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An action for declaratory relief presupposes that there has been no actual
breach of the instruments involved or of the rights arising thereunder.
Since the purpose of an action for declaratory relief is to secure an
authoritative statement of the rights and obligations of the parties under a
statute, deed, or contract for their guidance in the enforcement thereof, or
compliance therewith, and not to settle issues arising from an alleged
breach thereof, it may be entertained before the breach or violation of the
statute, deed or contract to which it refers. A petition for declaratory relief
gives a practical remedy for ending controversies that have not reached
the state where another relief is immediately available; and supplies the
need for a form of action that will set controversies at rest before they lead
to a repudiation of obligations, an invasion of rights, and a commission of
wrongs.4
In the case at bar, the petition for declaratory relief became unavailable by
EO 10s enforcement and implementation. The closure and demolition of
the hotel rendered futile any possible guidelines that may be issued by the
trial court for carrying outthe directives in the challenged EO 10.
Indubitably, the CA erred when it ruled that declaratory relief is the proper
remedy given such a situation.
b. Petitioner correctly resorted to certiorari
On the propriety of filing a petition for certiorari, Sec. 1, Rule 65 of the
Rules of Court provides:
Section 1. Petition for certiorari. When any tribunal, board or officer
exercising judicial or quasi-judicial functions has acted without or in excess
of its or his jurisdiction, or with grave abuse of discretion amounting to lack
or excess of jurisdiction, and there is no appeal, or any plain, speedy, and
adequate remedy in the ordinary course of law, a person aggrieved
thereby may file a verified petition in the proper court, alleging the facts
with certainty and praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board or officer, and granting
such incidental reliefs as law and justice may require. x x x
For certiorari to prosper, the petitioner must establish the concurrence of
the following requisites, namely:
1.
The writ is directed against a tribunal, board, or officer

exercising judicial or quasi-judicial functions;
2.
Such tribunal, board, or officer has acted without or in excess

of jurisdiction, or with grave abuse of discretion amounting to
lack or excess of jurisdiction; and
3.
There is no appeal or any plain speedy, and adequate remedy

in the ordinary course of law.5
Guilty of reiteration, the CA immediately dismissed the Petition for

Certiorari upon determining that the first element is wantingthat
respondent mayor was allegedly not exercising judicial or quasi-judicial
functions when he issued EO 10.
We are not persuaded.
The CA fell into a trapwhen it ruled that a mayor, an officer from the
executive department, exercises an executive function whenever he issues
an Executive Order. This is tad too presumptive for it is the nature of the
act to be performed, rather than of the office,board, or body which
performs it, that determines whether or not a particular act is a discharge
of judicial or quasijudicial functions. The first requirement for certiorari is
satisfied if the officers act judicially in making their decision, whatever may
be their public character.6
It is not essential that the challenged proceedings should be strictly and
technically judicial, in the sense in which that word is used when applied to
courts of justice, but it issufficient if they are quasi-judicial. 7 To contrast, a
party is said to be exercising ajudicial function where he has the power to
determine what the law is and what legal rights of the parties are, and then
undertakes to determine these questions and adjudicate upon the rights of
the parties, whereas quasi-judicial functionis "a term which applies to the
actions, discretion, etc., of public administrative officers or bodies x x x
required to investigate facts or ascertain the existence of facts, hold
hearings, and draw conclusions from themas a basis for their official action
and to exercise discretion of a judicial nature."8
In the case at bench, the assailed EO 10 was issued upon the respondent
mayors finding that Boracay West Coves construction, expansion, and
operation of its hotel inMalay, Aklan is illegal. Such a finding of illegality
required the respondent mayors exercise of quasijudicial functions, against
which the special writ of certiorari may lie. Apropos hereto is Our ruling in
City Engineer of Baguio v. Baniqued:9
There is no gainsaying that a city mayor is an executive official nor is the
matter of issuing demolition notices or orders not a ministerial one. In
determining whether or not a structure is illegal or it should be demolished,
property rights are involved thereby needing notices and opportunity to be
heard as provided for in the constitutionally guaranteed right of due
process. In pursuit of these functions, the city mayor has to exercise quasijudicial powers.
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With the foregoing discussion, the CA erred in ruling that the respondent
mayor was merely exercising his executive functions, for clearly, the first
requisite for the special writ has been satisfied.
Aside from the first requisite, We likewise hold that the third element, i.e.,
the unavailability of a plain, speedy,or adequate remedy, is also present
herein. While it may be argued that, under the LGC, Executive Orders
issued by mayors are subject to review by provincial governors, 10 this
cannot be considered as an adequate remedy given the exigencies of
petitioners predicament. In a litany of cases, We have held that it is
inadequacy, not the mere absence of all other legal remedies and the
danger of failure of justice without the writ, that must usually determine
the propriety of certiorari. A remedy is plain, speedy and adequate ifit will
promptly relieve the petitioner from the injurious effects of the judgment,
order, or resolution of the lower court or agency. It is understood, then, that
a litigant need not mark time by resorting to the less speedy remedy of
appeal in order to have an order annulled and set aside for being patently
void for failureof the trial court to comply with the Rules of Court. 11
Before applying this doctrine, it must first be borne in mind that
respondents in this case have already taken measures towards
implementing EO 10. In fact, substantial segments of the hotel have
already been demolished pursuant to the mayors directive. It is then
understandable why petitioner prayed for the issuance ofan injunctive
writa provisional remedy that would otherwise have been unavailable
had he sought a reversal from the office of the provincial governor of
Aklan. Evidently, petitioner correctly saw the urgent need for judicial
intervention via certiorari.
In light of the foregoing, the CA should have proceeded to grab the bull by
its horns and determine the existence of the second element of certiorari
whether or not there was grave abuse of discretion on the part of
respondents.
Upon Our finding that a petition for certiorari under Rule 65 is the
appropriate remedy, We will proceed to resolve the core issues in view of
the urgency of the reliefs prayed for in the petition. Respondents did not
commit grave abuse of discretion
a. The hotels classification as a nuisance
Article 694 of the Civil
establishment, business,
injures or endangers the
the senses; (3) shocks,
Code defines "nuisance" as any act, omission,

condition or property, or anything else that (1)
health or safety of others; (2) annoys or offends
defies or disregards decency or morality; (4)
obstructs or interferes with the free passage of any public highway or

street, or any body of water; or (5) hinders or impairs the use of property. 12
In establishing a no build zone through local legislation, the LGU effectively
made a determination that constructions therein, without first securing
exemptions from the local council, qualify as nuisances for they pose a
threat to public safety. No buildzones are intended for the protection of the
public because the stability ofthe grounds foundation is adversely affected
by the nearby body of water. The ever present threat of high rising storm
surges also justifies the ban on permanent constructions near the
shoreline. Indeed, the areas exposure to potential geo-hazards cannot be
ignored and ample protection to the residents of Malay, Aklan should be
afforded.
Challenging the validity of the public respondents actuations, petitioner
posits that the hotel cannot summarily be abated because it is not a
nuisance per se, given the hundred million peso-worth of capital infused in
the venture. Citing Asilo, Jr. v. People, 13 petitioner also argues that
respondents should have first secured a court order before proceeding with
the demolition. Preliminarily, We agree with petitioners posture that the
property involved cannot be classified as a nuisance per se, but not for the
reason he so offers. Property valuation, after all, is not the litmus test for
such a determination. More controlling is the propertys nature and
conditions, which should be evaluated to see if it qualifies as a nuisance as
defined under the law.
As jurisprudence elucidates, nuisances are of two kinds: nuisanceper se
and nuisanceper accidens. The first is recognized as a nuisance under any
and all circumstances, because it constitutes a direct menace to public
health or safety, and, for that reason, may be abated summarily under the
undefined law of necessity. The second is thatwhich depends upon certain
conditions and circumstances, and its existence being a question of fact, it
cannot be abated without due hearing thereon in a tribunal authorized to
decide whether such a thing does in law constitute a nuisance. 14
In the case at bar, the hotel, in itself, cannot be considered as a nuisance
per sesince this type of nuisance is generally defined as an act, occupation,
or structure, which is a nuisance at all timesand under any circumstances,
regardless of locationor surrounding.15 Here, it is merely the hotels
particular incidentits locationand not its inherent qualities that
rendered it a nuisance. Otherwise stated, had it not been constructed in
the no build zone, Boracay West Cove could have secured the necessary
permits without issue. As such, petitioner is correct that the hotel is not a
nuisance per se, but to Our mind, it is still a nuisance per accidens.
b. Respondent mayor has the power to order the demolition of
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illegal constructions
Generally, LGUs have no power to declare a particular thing as a nuisance
unless such a thing is a nuisance per se. 16 So it was held in AC Enterprises
v. Frabelle Properties Corp:17
We agree with petitioners contention that, under Section 447(a)(3)(i) of
R.A. No. 7160, otherwise known as the Local Government Code, the
Sangguniang Panglungsod is empowered to enact ordinances declaring,
preventing or abating noise and other forms of nuisance. It bears stressing,
however, that the Sangguniang Bayan cannot declare a particular thing as
a nuisance per se and order its condemnation. It does not have the power
to find, as a fact, that a particular thing is a nuisance when such thing is
not a nuisance per se; nor can it authorize the extrajudicial condemnation
and destruction of that as a nuisance which in its nature, situation or use is
not such. Those things must be determined and resolved in the ordinary
courts of law.If a thing, be in fact, a nuisance due to the manner of its
operation, that question cannot be determined by a mere resolution of the
Sangguniang Bayan. (emphasis supplied)
Despite the hotels classification as a nuisance per accidens, however, We
still find in this case that the LGU may nevertheless properly order the
hotels demolition. This is because, in the exercise of police power and the
general welfare clause,18 property rights of individuals may be subjected to
restraints and burdens in order to fulfil the objectives of the government.
Otherwise stated, the government may enact legislation that may interfere
with personal liberty, property, lawfulbusinesses and occupations to
promote the general welfare.19
One such piece of legislation is the LGC, which authorizes city and
municipal governments, acting through their local chief executives, to issue
demolition orders. Under existing laws, the office of the mayor is given
powers not only relative to its function asthe executive official of the town;
it has also been endowed with authorityto hear issues involving property
rights of individuals and to come out with an effective order or resolution
thereon.20 Pertinent herein is Sec. 444 (b)(3)(vi) of the LGC, which
empowered the mayor to order the closure and removal of illegally
constructed establishments for failing tosecure the necessary permits, to
wit:
Section 444.The
Compensation.
Chief
Executive:
Powers,
Duties,
Functions
and
(b) For efficient, effective and economical governance the purpose of which
is the general welfare of the municipality and its inhabitants pursuant to
Section 16 of this Code, the municipal mayor shall:
xxxx
(3) Initiate and maximize the generation of resources and revenues, and
apply the same to the implementation of development plans, program
objectives and priorities as provided for under Section 18 of this Code,
particularly those resources and revenues programmed for agro-industrial
development and country-wide growth and progress, and relative thereto,
shall:
xxxx
(vi) Require owners of illegally constructed houses, buildings or other
structures to obtain the necessary permit, subject to such fines and
penalties as may be imposed by law or ordinance, or to make necessary
changes in the construction of the same when said construction violates
any law or ordinance, or to order the demolition or removal of said house,
building or structure within the period prescribed by law or ordinance.
(emphasis supplied)
c. Requirements for the exercise of the power are present
i. Illegality of structures
In the case at bar, petitioner admittedly failed to secure the necessary
permits, clearances, and exemptions before the construction, expansion,
and operation of Boracay Wet Coves hotel in Malay, Aklan. To recall,
petitioner declared that the application for zoning compliance was still
pending with the office of the mayor even though construction and
operation were already ongoing at the same time. As such, it could no
longer be denied that petitioner openly violated Municipal Ordinance 2000131, which provides:
SECTION 9. Permits and Clearances.
(a) No building or structure shall beallowed to start construction unless a
Building Permit therefore has been duly issued by the Office of the
Municipal Engineer.Once issued, the building owner or any person in
charge of the construction shall display on the lot or on the building
undergoing construction a placard containing the Building Permit Number
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and the date of its issue. The office of the Municipal Engineer shall not
issue any building permit unless:
1. The proposed construction has been duly issued a Zoning
Clearance by the Office of the Municipal Zoning Officer;
2. The proposed construction has been duly endorsed by the
Sangguniang Bayan through a Letter of Endorsement.
(b) Only buildings/structures which has complied with all
the requirements for its construction asverified to by the
Building Inspector and the Sangguniang Bayan shall be
issued a Certificate of Occupancy by the Office of the
Municipal Engineer.
(c) No Business or Mayors Permit shall be issued to
businesses being undertaken on buildings or structures
which were not issued a certificate of Occupancy beginning
January 2001 and thereafter.
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SECTION 10. Penalties.
xxxx
(e) Any building, structure, or contraption erected in any public
place within the Municipality of Malay such as but not limited to
streets, thoroughfares, sidewalks, plazas, beachesor in any other
public place are hereby declared as nuisance and illegal
structure.Such building structure or contraption shall be
demolished by the owner thereof or any of his authorized
representative within ten (10) days from receipt of the notice to
demolish. Failure or refusal on the part of the owner or any of his
authorized representative to demolish the illegal structure within
the period here inabove specified shall automatically authorize the
government of the Municipality of Malay to demolish the same,
gather and keep the construction materials of the demolished
structure. (emphasis supplied)
Petitioner cannot justify his position by passing the blame onto the
respondent mayor and the latters failure to act on his appeal for this does
not, in any way, imply that petitioner can proceed with his infrastructure
projects. On the contrary,this only means that the decision of the zoning
administrator denying theapplication still stands and that petitioner

acquired no right to construct on the no build zone. The illegality of the
construction cannot be cured by merely tendering payment for the
necessary fees and permits since the LGUs refusal rests on valid grounds.
Instead of taking the law into his own hands, petitioner could have filed, as
an alternative, a petition for mandamus to compel the respondent mayor
to exercise discretion and resolve the controversy pending before his
office. There is indeed an exception to the rule that matters involving
judgment and discretion are beyond the reach of a writ of mandamus, for
such writ may be issued to compel action in those matters, when refused.
Whether or not the decision would be for or against petitioner would be for
the respondent mayor to decide, for while mandamus may be invoked to
compel the exercise of discretion, it cannot compel such discretion to be
exercised in a particular way. 21 What would have been important was for
the respondent mayor to immediately resolve the case for petitioner to be
able to go through the motions that the zoning clearance application
process entailed.
Alas, petitioner opted to defy the zoning administrators ruling. He
consciously chose to violate not only the Ordinance but also Sec. 301 of PD
1096, laying down the requirement of building permits, which provides:
Section 301. Building Permits. No person, firm or corporation, including any
agency or instrumentality of the government shall erect, construct, alter,
repair, move, convert or demolish any building or structure or cause the
same to be done without first obtaining a building permit therefor from the
Building Official assigned in the place where the subject building is located
or the building work is to be done.
This twin violation of law and ordinance warranted the LGUs invocation of
Sec. 444 (b)(3)(vi) of the LGC, which power is separate and distinct from
the power to summarily abate nuisances per se. Under the law, insofar as
illegal constructions are concerned, the mayor can, after satisfying the
requirement of due notice and hearing, order their closure and demolition.
ii. Observance of procedural due process rights
In the case at bench, the due process requirement is deemed to have been
sufficiently complied with. First, basic is the rule that public officers enjoy
the presumption of regularity in the performance of their duties. 22 The
burden is on the petitioner herein to prove that Boracay West Cove was
deprived of the opportunity to beheard before EO 10 was issued.
Regrettably, copies of the Cease and Desist Order issued by the LGU and of
the assailed EO 10 itself were never attached to the petition before this
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Court, which documents could have readily shed light on whether or not
petitioner has been accorded the 10-day grace period provided in Section
10 of the Ordinance. In view of this fact, the presumption of regularity must
be sustained. Second, as quoted by petitioner in his petition before the CA,
the assailed EO 10 states that petitioner received notices from the
municipality government on March 7 and 28, 2011, requiring Boracay West
Cove to comply with the zoning ordinance and yet it failed to do so. 23 If
such was the case, the grace period can be deemed observed and the
establishment was already ripe for closure and demolition by the time EO
10 was issued in June. Third, the observance of the 10-day allowance for
the owner to demolish the hotel was never questioned by petitioner so
there is no need to discuss the same. Verily, the only grounds invoked by
petitioner in crying due process violation are (1) the absence of a court
order prior to demolition and (2) the municipal governments exercise of
jurisdiction over the controversy instead of the DENR. Therefore, it can no
longer be belatedly argued that the 10-day grace period was not observed
because to entertain the same would result in the violation of the
respondents own due process rights. Given the presence of the
requirements under Sec. 444 (b)(3)(vi) of the LGC, whether the building
constituted a nuisance per seor a nuisance per accidensbecomes
immaterial. The hotelwas demolished not exactly because it is a nuisance
but because it failed to comply with the legal requirements prior to
construction. It justso happened that, in the case at bar, the hotels
incident that qualified it as a nuisance per accidensits being constructed
within the no build zonefurther resulted in the non-issuance of the
necessary permits and clearances, which is a ground for demolition under
the LGC. Under the premises, a court order that is required under normal
circumstances is hereby dispensed with.
Taken in conjunction with the exceptions laid down in Sections 6 and 8 of

the Ordinance, petitioner argues that Boracay West Cove is exempted from
securing permits from the LGU. Said exceptions read:
d. The FLAgT cannot prevail over the municipal ordinance and PD 1096
Furthermore, the conditions set forth in the FLAgT and the limitations
circumscribed in the ordinance are not mutually exclusive and are, in fact,
cumulative. As sourced from Sec. 447 (a)(5)(i) of the LGC:
Petitioner next directs our attention to the following FLAgT provision:

VII. The SECOND PARTY may construct permanent and/or temporary
improvements or infrastructure in the FLAgT Area necessary and
appropriate for its development for tourism purposes pursuant to the
approved SMP. "Permanent Improvements" refer to access roads, and
buildings or structures which adhere to the ground in a fixed and
permanent manner. On the other hand, "Temporary Improvements" include
those which are detachablefrom the foundation or the ground introduced
by the SECOND PARTY inthe FLAgT Area and which the SECOND PARTY may
remove or dismantle upon expiration or cancellation of this AGREEMENT x
x x.24
SECTION 6. No building or structure shall be allowed to be constructed on

a slope Twenty Five Percent (25%) or higher unless provided with soil
erosion protective structures and authorized by the Department of
Environment and Natural Resources.
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SECTION 8. No building or structure shall be allowed to be constructed on
a swamp or other water-clogged areas unless authorized by the
Department of Environment and Natural Resources.
According to petitioner, the fact that it was issued a FLAgT constitutes
sufficient authorization from the DENR to proceed with the construction of
the three-storey hotel.
The argument does not persuade.
The rights granted to petitioner under the FLAgT are not unbridled.
Forestlands, although under the management of the DENR, are not exempt
from the territorial application of municipal laws, for local government units
legitimately exercise their powers of government over their defined
territorial jurisdiction.
Section 447.Powers, Duties, Functions and Compensation.

(a) The sangguniang bayan, as the legislative body of the
municipality, shall enact ordinances, approve resolutions and
appropriate funds for the general welfare of the municipalityand its
inhabitants pursuant to Section 16 of this Code and in the proper
exercise of the corporate powers of the municipality as provided for
under Section 22 of this Code, and shall:
xxxx
(5) Approve ordinances which shall ensure the efficient and
effective delivery of the basic services and facilities as provided for
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under Section 17 of this Code, and in addition to said services and
facilities, shall:
(2) For a Municipality:

xxxx
(i) Provide for the establishment, maintenance, protection, and

conservation of communal forests and watersheds, tree
parks,greenbelts, mangroves, and other similar forest development
projectsx x x. (emphasis added)
Thus, aside from complying with the provisions in the FLAgT granted by the
DENR, it was incumbent on petitioner to likewise comply with the no build
zone restriction under Municipal Ordinance 2000-131, which was already in
force even before the FLAgT was entered into. On this point, it is well to
stress that Sections 6 and 8 of the Ordinance do not exempt petitioner
from complying with the restrictions since these provisions adverted to
grant exemptions from the ban on constructions on slopes and swamps,
not on the no build zone.
Additionally, the FLAgT does not excuse petitioner from complying with PD
1096. As correctly pointed out by respondents, the agreement cannot and
will not amend or change the law because a legislative act cannot be
altered by mere contractual agreement. Hence, petitioner has no valid
reason for its failure to secure a building permit pursuant to Sec. 301 of the
National Building Code.
e. The DENR does not have primary jurisdiction over the controversy
Lastly, in ascribing grave abuse ofdiscretion on the part of the respondent
mayor, petitioner argued that the hotel site is a forestland under the
primary jurisdiction of the DENR. Assuch, the merits of the case should
have been passed upon by the agency and not by the LGU. In the
alternative, petitioner explains that even if jurisdiction over the matter has
been devolved in favor of the LGU, the DENR still has the power of review
and supervision over the formers rulings. As cited by the petitioner, the
LGC reads:
Section 17.Basic Services and Facilities.
xxxx
(b) Such basic services and facilities include, but are not limited to, the
following:
xxxx
(ii) Pursuant to national policies and subject to supervision, control and

review of the DENR, implementation of community-based forestry projects
which include integrated social forestry programs and similar projects;
management and control of communal forests with an area not exceeding
fifty (50) square kilometers; establishment of tree parks, greenbelts, and
similar forest development projects. (emphasis added)
Petitioner has made much of the fact that in line with this provision, the
DENR Region 6 had issued anopinion favourable to petitioner. 25 To
petitioner, the adverted opinion effectively reversed the findings of the
respondent mayor that the structure introduced was illegally constructed.
We disagree.
In alleging that the case concernsthe development and the proper use of
the countrys environment and natural resources, petitioner is skirting the
principal issue, which is Boracay West Cove's non-compliance with the
permit, clearance, and zoning requirements for building constructions
under national and municipal laws. He downplays Boracay West Cove's
omission in a bid to justify ousting the LGU of jurisdiction over the case and
transferring the same to the DENR. He attempts to blow the issue out of
proportion when it all boils down to whether or not the construction of the
three-storey hotel was supported by the necessary documentary
requirements.
Based on law and jurisprudence, the office of the mayor has quasijudicial
powers to order the closing and demolition of establishments.1wphi1 This
power granted by the LGC, as earlier explained, We believe, is not the
same power devolved in favor of the LGU under Sec. 17 (b )(2)(ii), as
abovequoted, which is subject to review by the DENR. The fact that the
building to be demolished is located within a forestland under the
administration of the DENR is of no moment, for what is involved herein,
strictly speaking, is not an issue on environmental protection, conservation
of natural resources, and the maintenance of ecological balance, but the
legality or illegality of the structure.1wphi1 Rather than treating this as an
environmental issue then, focus should not be diverted from the root cause
of this debacle-compliance.
Ultimately, the purported power of review by a regional office of the DENR
over respondents' actions exercised through an instrumentality of an exparte opinion, in this case, finds no sufficient basis. At best, the legal
8
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opinion rendered, though perhaps informative, is not conclusive on the
courts and should be taken with a grain of salt.
In view whereof, the undersigned requests you to voluntarily open

the points of entry and exit on said street.
WHEREFORE, in view of the foregoing, the petition is hereby DENIED for

lack of merit. The Decision and the Resolution of the Court of Appeals in
CA-G.R. SP No. 120042 dated August 13, 2013 and February 3, 2014,
respectively, are hereby AFFIRMED. SO ORDERED.
Thank you for your cooperation and whatever assistance that may
be extended by your association to the MMDA personnel who will
be directing traffic in the area.
G.R. No. 135962
March 27, 2000
METROPOLITAN MANILA DEVELOPMENT AUTHORITY, petitioner, vs.

BEL-AIR VILLAGE ASSOCIATION, INC., respondent.
Finally, we are furnishing you with a copy of the handwritten

instruction of the President on the matter.
Very truly yours,
PROSPERO I. ORETA
PUNO, J.:
Chairman
Not infrequently, the government is tempted to take legal shortcuts solve
urgent problems of the people. But even when government is armed with
the best of intention, we cannot allow it to run roughshod over the rule of
law. Again, we let the hammer fall and fall hard on the illegal attempt of
the MMDA to open for public use a private road in a private subdivision.
While we hold that the general welfare should be promoted, we stress that
it should not be achieved at the expense of the rule of law.
Petitioner MMDA is a government agency tasked with the delivery of basic
services in Metro Manila. Respondent Bel-Air Village Association, Inc.
(BAVA) is a non-stock, non-profit corporation whose members are
homeowners in Bel-Air Village, a private subdivision in Makati City.
Respondent BAVA is the registered owner of Neptune Street, a road inside
Bel-Air Village.
On December 30, 1995, respondent received from petitioner, through its
Chairman, a notice dated December 22, 1995 requesting respondent to
open Neptune Street to public vehicular traffic starting January 2, 1996.
The notice reads:
SUBJECT: NOTICE of the Opening of Neptune Street to Traffic.
Dear President Lindo,
Please be informed that pursuant to the mandate of the MMDA law
or Republic Act No. 7924 which requires the Authority to rationalize
the use of roads and/or thoroughfares for the safe and convenient
movement of persons, Neptune Street shall be opened to vehicular
traffic effective January 2, 1996.
On the same day, respondent was apprised that the perimeter wall
separating the subdivision from the adjacent Kalayaan Avenue
would be demolished.
On January 2, 1996, respondent instituted against petitioner before the
Regional Trial Court, Branch 136, Makati City, Civil Case No. 96-001 for
injunction. Respondent prayed for the issuance of a temporary restraining
order and preliminary injunction enjoining the opening of Neptune Street
and prohibiting the demolition of the perimeter wall. The trial court issued
a temporary restraining order the following day.
On January 23, 1996, after due hearing, the trial court denied issuance of a
preliminary injunction. 2 Respondent questioned the denial before the Court
of Appeals in CA-G.R. SP No. 39549. The appellate court conducted an
ocular inspection of Neptune Street 3 and on February 13, 1996, it issued a
writ of preliminary injunction enjoining the implementation of the MMDA's
proposed action. 4
On January 28, 1997, the appellate court rendered a Decision on the merits
of the case finding that the MMDA has no authority to order the opening of
Neptune Street, a private subdivision road and cause the demolition of its
perimeter walls. It held that the authority is lodged in the City Council of
Makati by ordinance. The decision disposed of as follows:
WHEREFORE, the Petition is GRANTED; the challenged Order dated
January 23, 1995, in Civil Case No. 96-001, is SET ASIDE and the
Writ of Preliminary Injunction issued on February 13, 1996 is
hereby made permanent.
9
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For want of sustainable substantiation, the Motion to Cite Roberto
L. del Rosario in contempt is denied. 5
No pronouncement as to costs.
SO ORDERED.
The Motion for Reconsideration of the decision was denied on September

28, 1998. Hence, this recourse.
Petitioner MMDA raises the following questions:
I
HAS THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY (MMDA) THE
MANDATE TO OPEN NEPTUNE STREET TO PUBLIC TRAFFIC PURSUANT TO
ITS REGULATORY AND POLICE POWERS?
II
IS THE PASSAGE OF AN ORDINANCE A CONDITION PRECEDENT BEFORE THE
MMDA MAY ORDER THE OPENING OF SUBDIVISION ROADS TO PUBLIC
TRAFFIC?
III
IS RESPONDENT BEL-AIR VILLAGE ASSOCIATION, INC. ESTOPPED FROM
DENYING OR ASSAILING THE AUTHORITY OF THE MMDA TO OPEN THE
SUBJECT STREET?
IV
WAS RESPONDENT DEPRIVED OF DUE PROCESS DESPITE THE SEVERAL
MEETINGS HELD BETWEEN MMDA AND THE AFFECTED EEL-AIR RESIDENTS
AND BAVA OFFICERS?
V
HAS RESPONDENT COME TO COURT WITH UNCLEAN HANDS? 7
Neptune Street is owned by respondent BAVA. It is a private road inside
Bel-Air Village, a private residential subdivision in the heart of the financial
and commercial district of Makati City. It runs parallel to Kalayaan Avenue,

a national road open to the general public. Dividing the two (2) streets is a
concrete perimeter wall approximately fifteen (15) feet high. The western
end of Neptune Street intersects Nicanor Garcia, formerly Reposo Street, a
subdivision road open to public vehicular traffic, while its eastern end
intersects Makati Avenue, a national road. Both ends of Neptune Street are
guarded by iron gates.
Petitioner MMDA claims that it has the authority to open Neptune Street to
public traffic because it is an agent of the state endowed with police power
in the delivery of basic services in Metro Manila. One of these basic
services is traffic management which involves the regulation of the use of
thoroughfares to insure the safety, convenience and welfare of the general
public. It is alleged that the police power of MMDA was affirmed by this
Court in the consolidated cases of Sangalang v. Intermediate Appellate
Court. 8 From the premise that it has police power, it is now urged that
there is no need for the City of Makati to enact an ordinance opening
Neptune street to the public. 9
Police power is an inherent attribute of sovereignty. It has been defined as
the power vested by the Constitution in the legislature 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 for the subjects of the same. 10 The power is plenary
and its scope is vast and pervasive, reaching and justifying measures for
public health, public safety, public morals, and the general welfare. 11
It bears stressing that police power is lodged primarily in the National
Legislature. 12 It cannot be exercised by any group or body of individuals
not possessing legislative power. 13 The National Legislature, however, may
delegatethis power to the President and administrative boards as well as
the lawmaking bodies of municipal corporations or local government
units. 14 Once delegated, the agents can exercise only such legislative
powers as are conferred on them by the national lawmaking body. 15
A local government is a "political subdivision of a nation or state which is
constituted by law and has substantial control of local affairs." 16The Local
Government Code of 1991 defines a local government unit as a "body
politic and corporate." 17 one endowed with powers as a political
subdivision of the National Government and as a corporate entity
representing the inhabitants of its territory. 18 Local government units are
the provinces, cities, municipalities and barangays. 19 They are also the
territorial and political subdivisions of the state. 20
10
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Our Congress delegated police power to the local government units in the
Local Government Code of 1991. This delegation is found in Section 16 of
the same Code, known as the general welfare clause, viz:
Sec. 16. General Welfare. Every local government unit shall
exercise the powers expressly granted, those necessarily implied
therefrom, as well as powers necessary, appropriate, or incidental
for its efficient and effective governance, and those which are
essential to the promotion of the general welfare. Within their
respective territorial jurisdictions, local government units shall
ensure and support, among other things, the preservation and
enrichment of culture, promote health and safety, enhance the
right of the people to a balanced ecology, encourage and support
the development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance
economic prosperity and social justice, promote full employment
among their residents, maintain peace and order, and preserve the
comfort and convenience of their inhabitants. 21
Local government units exercise police power through their respective
legislative bodies. The legislative body of the provincial government is
the sangguniang panlalawigan, that of the city government is
the sangguniang panlungsod, that of the municipal government is
the sangguniang bayan, and that of the barangay is the sangguniang
barangay.
The
Local
Government
Code
of
1991
empowers
the sangguniang panlalawigan, sangguniang panlungsod and sangguniang
bayan to "enact ordinances, approve resolutions and appropriate funds for
the general welfare of the [province, city or municipality, as the case may
be], and its inhabitants pursuant to Section 16 of the Code and in the
proper exercise of the corporate powers of the [province, city municipality]
provided under the Code . . . " 22 The same Code gives the sangguniang
barangay the power to "enact ordinances as may be necessary to
discharge the responsibilities conferred upon it by law or ordinance and to
promote the general welfare of the inhabitants thereon."23
Metropolitan or Metro Manila is a body composed of several local
government units i.e., twelve (12) cities and five (5) municipalities,
namely, the cities of Caloocan, Manila, Mandaluyong, Makati, Pasay, Pasig,
Quezon, Muntinlupa, Las Pinas, Marikina, Paranaque and Valenzuela, and
the municipalities of Malabon, Navotas, Pateros, San Juan and Taguig. With
the passage of Republic Act (R. A.) No. 7924 24 in 1995, Metropolitan
Manila was declared as a "special development and administrative
region" and the Administration of "metro-wide" basic services affecting the
region placed under "a development authority" referred to as the MMDA. 25
1st
"Metro-wide services" are those "services which have metro-wide impact
and transcend local political boundaries or entail huge expenditures such
that it would not be viable for said services to be provided by the individual
local government units comprising Metro Manila." 26 There are seven (7)
basic metro-wide services and the scope of these services cover the
following: (1) development planning; (2) transport and traffic management;
(3) solid waste disposal and management; (4) flood control and sewerage
management; (5) urban renewal, zoning and land use planning, and shelter
services; (6) health and sanitation, urban protection and pollution control;
and (7) public safety. The basic service of transport and traffic
management includes the following:
(b) Transport and traffic management which include the
formulation, coordination, and
monitoring
of
policies,standards, programs and projects to rationalize the
existing transport operations, infrastructure requirements,the use
of thoroughfares, and promotion of safe and convenient movement
of persons and goods; provision for the mass transport system and
the institution of a system to regulate road users; administration
and implementation of all traffic enforcement operations, traffic
engineering services and traffic education programs, including the
institution of a single ticketing system in Metropolitan Manila;" 27
In the delivery of the seven (7) basic services, the MMDA has the following
powers and functions:
Sec. 5. Functions and powers of the Metro Manila Development
Authority. The MMDA shall:
(a) Formulate, coordinate and regulate the implementation of
medium and long-term plans and programs for the delivery of
metro-wide services, land use and physical development within
Metropolitan Manila, consistent with national development
objectives and priorities;
(b) Prepare, coordinate and regulate the implementation of
medium-term investment programs for metro-wide services
which shall indicate sources and uses of funds for priority
programs and projects, and which shall include the packaging
of projects and presentation to funding institutions;
(c) Undertake and manage on its own metro-wide programs and
projects for the delivery of specific services under its
jurisdiction, subject to the approval of the Council. For this
purpose, MMDA can create appropriate project management
offices;
11
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SET
(d) Coordinate and monitor the implementation of such plans,
programs and projects in Metro Manila; identify bottlenecks
and adopt solutions to problems of implementation;
(e) The MMDA shall set the policies concerning traffic in Metro
Manila, and shall coordinate and regulate the implementation
of
all
programs
and
projects
concerning
traffic
management, specifically
pertaining
to
enforcement, engineering and education. Upon request, it shall
be extended assistance and cooperation,including but not
limited to, assignment of personnel, by all other government
agencies and offices concerned;
(f) Install and administer a single ticketing system, fix, impose
and collect fines and penalties for all kinds of violations of
traffic rules and regulations, whether moving or non-moving in
nature, and confiscate and suspend or revoke drivers' licenses
in the enforcement of such traffic laws and regulations, the
provisions of RA 4136 and PD 1605 to the contrary
notwithstanding. For this purpose, the Authority shall impose
all traffic laws and regulations in Metro Manila, through its
traffic operation center, and may deputize members of the
PNP, traffic enforcers of local government units, duly licensed
security
guards, or
members
of
non-governmental
organizations
to
whom
may
be
delegated
certain
authority, subject to such conditions and requirements as the
Authority may impose; and
(g) Perform other related functions required to achieve the
objectives of the MMDA, including the undertaking of delivery
of basic services to the local government units, when deemed
necessary subject to prior coordination with and consent of the
local government unit concerned.
The implementation of the MMDA's plans, programs and projects is
undertaken by the local government units, national government agencies,
accredited people's organizations, non-governmental organizations, and
the private sector as well as by the MMDA itself. For this purpose, the
MMDA has the power to enter into contracts, memoranda of agreement
and other arrangements with these bodies for the delivery of the required
services Metro Manila. 28
The governing board of the MMDA is the Metro Manila Council. The Council
is composed of the mayors of the component 12 cities and 5
municipalities, the president of the Metro Manila Vice-Mayors' League and
the president of the Metro Manila Councilors' League. 29 The Council is
headed by Chairman who is appointed by the President and vested with
the rank of cabinet member. As the policy-making body of the MMDA, the
Metro Manila Council approves metro-wide plans, programs and projects,
and issues the necessary rules and regulations for the implementation of
said plans; it approves the annual budget of the MMDA and promulgate the
rules and regulations for the delivery of basic services, collection of service
and regulatory fees, fines and penalties. These functions are particularly
enumerated as follows:
Sec. 6. Functions of the Metro Manila Council.
(a) The Council shall be the policy-making body of the MMDA;
(b) It shall approve metro-wide plans, programs and projects and
issue rules and regulations deemed necessary by the MMDA to
carry out the purposes of this Act;
(c) It may increase the rate of allowances and per diems of the
members of the Council to be effective during the term of the
succeeding Council. It shall fix the compensation of the officers
and personnel of the MMDA, and approve the annual budget
thereof for submission to the Department of Budget and
Management (DBM);
(d) It shall promulgate rules and regulations and set policies and
standards for metro-wide application governing the delivery of
basic services, prescribe and collect service and regulatory
fees, and impose and collect fines and penalties.
Clearly, the scope of the MMDA's function is limited to the delivery of the
seven (7) basic services. One of these is transport and traffic management
which includes the formulation and monitoring of policies, standards and
projects to rationalize the existing transport operations, infrastructure
requirements, the use of thoroughfares and promotion of the safe
movement of persons and goods. It also covers the mass transport system
and the institution of a system of road regulation, the administration of all
traffic enforcement operations, traffic engineering services and traffic
education programs, including the institution of a single ticketing system in
Metro Manila for traffic violations. Under the service, the MMDA is expressly
authorized "to set the policies concerning traffic" and "coordinate and
regulate the implementation of all traffic management programs." In
addition, the MMDA may "install and administer a single ticketing system,"
fix, impose and collect fines and penalties for all traffic violations.
It will be noted that the powers of the MMDA are limited to the following
acts: formulation, coordination, regulation, implementation, preparation,
management, monitoring, setting of policies, installation of a system and
administration. There is no syllable in R.A. No. 7924 that grants the MMDA
police power, let alone legislative power.Even the Metro Manila Council has
not been delegated any legislative power. Unlike the legislative bodies of
the local government units, there is no provision in R.A. No. 7924 that
empowers the MMDA or its Council to "enact ordinances, approve
resolutions appropriate funds for the general welfare" of the inhabitants of
12
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Metro Manila. The MMDA is, as termed in the charter itself, "development
authority." 30 It is an agency created for the purpose of laying down policies
and coordinating with the various national government agencies, people's
organizations, non-governmental organizations and the private sector for
the efficient and expeditious delivery of basic services in the vast
metropolitan area. All its functions are administrative in nature and these
are actually summed up in the charter itself, viz:
Sec. 2. Creation of the Metropolitan Manila Development Authority.
....
The MMDA shall perform planning, monitoring and coordinative
functions, and in the process exerciseregulatory and supervisory
authority over the delivery of metro-wide services within Metro
Manila, without diminution of the autonomy of the local
government units concerning purely local matters. 31
Petitioner cannot seek refuge in the cases of Sangalang v. Intermediate
Appellate Court 32 where we upheld a zoning ordinance issued by the Metro
Manila Commission (MMC), the predecessor of the MMDA, as an exercise of
police power. The first Sangalang decision was on the merits of the
petition, 33 while the second decision denied reconsideration of the first
case and in addition discussed the case of Yabut v. Court of Appeals. 34
Sangalang v. IAC involved five (5) consolidated petitions filed by
respondent BAVA and three residents of Bel-Air Village against other
residents of the Village and the Ayala Corporation, formerly the Makati
Development Corporation, as the developer of the subdivision. The
petitioners sought to enforce certain restrictive easements in the deeds of
sale over their respective lots in the subdivision. These were the prohibition
on the setting up of commercial and advertising signs on the lots, and the
condition that the lots be used only for residential purposes. Petitioners
alleged that respondents, who were residents along Jupiter Street of the
subdivision, converted their residences into commercial establishments in
violation of the "deed restrictions," and that respondent Ayala Corporation
ushered in the full commercialization" of Jupiter Street by tearing down the
perimeter wall that separated the commercial from the residential section
of the village. 35
The petitions were dismissed based on Ordinance No. 81 of the Municipal
Council of Makati and Ordinance No. 81-01 of the Metro Manila Commission
(MMC). Municipal Ordinance No. 81 classified Bel-Air Village as a Class A
Residential Zone, with its boundary in the south extending to the center
line of Jupiter Street. The Municipal Ordinance was adopted by the MMC
under the Comprehensive Zoning Ordinance for the National Capital Region
and promulgated as MMC Ordinance No. 81-01. Bel-Air Village was
1st
indicated therein as bounded by Jupiter Street and the block adjacent
thereto was classified as a High Intensity Commercial Zone. 36
We ruled that since both Ordinances recognized Jupiter Street as the
boundary between Bel-Air Village and the commercial district, Jupiter Street
was not for the exclusive benefit of Bel-Air residents. We also held that the
perimeter wall on said street was constructed not to separate the
residential from the commercial blocks but simply for security reasons,
hence, in tearing down said wall, Ayala Corporation did not violate the
"deed restrictions" in the deeds of sale.
We upheld the ordinances, specifically MMC Ordinance No. 81-01, as a
legitimate exercise of police power. 37 The power of the MMC and the
Makati Municipal Council to enact zoning ordinances for the general
welfare prevailed over the "deed restrictions".
In the second Sangalang/Yabut decision, we held that the opening of Jupiter
Street was warranted by the demands of the common good in terms of
"traffic decongestion and public convenience." Jupiter was opened by the
Municipal Mayor to alleviate traffic congestion along the public streets
adjacent to the Village. 38 The same reason was given for the opening to
public vehicular traffic of Orbit Street, a road inside the same village. The
destruction of the gate in Orbit Street was also made under the police
power of the municipal government. The gate, like the perimeter wall along
Jupiter, was a public nuisance because it hindered and impaired the use of
property, hence, its summary abatement by the mayor was proper and
legal. 39
Contrary to petitioner's claim, the two Sangalang cases do not apply to the
case at bar. Firstly, both involved zoning ordinances passed by the
municipal council of Makati and the MMC. In the instant case, the basis for
the proposed opening of Neptune Street is contained in the notice of
December 22, 1995 sent by petitioner to respondent BAVA, through its
president. The notice does not cite any ordinance or law, either by the
Sangguniang Panlungsod of Makati City or by the MMDA, as the legal basis
for the proposed opening of Neptune Street. Petitioner MMDA simply relied
on its authority under its charter "to rationalize the use of roads and/or
thoroughfares for the safe and convenient movement of persons."
Rationalizing the use of roads and thoroughfares is one of the acts that fall
within the scope of transport and traffic management. By no stretch of the
imagination, however, can this be interpreted as an express or implied
grant of ordinance-making power, much less police power.
Secondly, the MMDA is not the same entity as the MMC in Sangalang.
Although the MMC is the forerunner of the present MMDA, an examination
of Presidential Decree (P. D.) No. 824, the charter of the MMC, shows that
13
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SET
the latter possessed greater powers which were not bestowed on the
present MMDA.
3.
4.
Metropolitan Manila was first created in 1975 by Presidential Decree (P.D.)

No. 824. It comprised the Greater Manila Area composed of the contiguous
four (4) cities of Manila, Quezon, Pasay and Caloocan, and the thirteen (13)
municipalities of Makati, Mandaluyong, San Juan, Las Pinas, Malabon,
Navotas, Pasig, Pateros, Paranaque, Marikina, Muntinlupa and Taguig in the
province of Rizal, and Valenzuela in the province of Bulacan. 40 Metropolitan
Manila was created as a response to the finding that the rapid growth of
population and the increase of social and economic requirements in these
areas demand a call for simultaneous and unified development; that the
public services rendered by the respective local governments could be
administered more efficiently and economically if integrated under a
system of central planning; and this coordination, "especially in the
maintenance of peace and order and the eradication of social and
economic ills that fanned the flames of rebellion and discontent [were] part
of reform measures under Martial Law essential to the safety and security
of the State." 41
Metropolitan Manila was established as a "public corporation" with the
following powers:
Sec. 1. Creation of the Metropolitan Manila. There is hereby
created a public corporation, to be known as the Metropolitan
Manila, vested with powers and attributes of a corporation
including
the
power
to
make
contracts, sue
and
be
sued, acquire, purchase, expropriate, hold, transfer and dispose of
property and such other powers as are necessary to carry out its
purposes. The Corporation shall be administered by a Commission
created under this Decree. 42
5.
6.
7.
8.
9.
10.
11.
12.
13.
The administration of Metropolitan Manila was placed under the Metro

Manila Commission (MMC) vested with the following powers:
Sec. 4. Powers and Functions of the Commission. The Commission shall
have the following powers and functions:
14.
15.
1.
2.
To act as a central government to establish and administer

programs and provide services common to the area;
To levy and collect taxes and special assessments, borrow and
expend money and issue bonds, revenue certificates, and other
obligations of indebtedness. Existing tax measures should,
however, continue to be operative until otherwise modified or
repealed by the Commission;
To charge and collect fees for the use of public service

facilities;
To appropriate money for the operation of the metropolitan
government and review appropriations for the city and
municipal units within its jurisdiction with authority to
disapprove the same if found to be not in accordance with the
established policies of the Commission, without prejudice to
any contractual obligation of the local government units
involved existing at the time of approval of this Decree;
To review, amend, revise or repeal all ordinances, resolutions
and acts of cities and municipalities within Metropolitan Manila;
To enact or approve ordinances, resolutions and to fix penalties
for any violation thereof which shall not exceed a fine of
P10,000.00 or imprisonment of six years or both such fine and
imprisonment for a single offense;
To perform general administrative, executive and policy-making
functions;
To establish a fire control operation center, which shall direct
the fire services of the city and municipal governments in the
metropolitan area;
To establish a garbage disposal operation center, which shall
direct garbage collection and disposal in the metropolitan area;
To establish and operate a transport and traffic center, which
shall direct traffic activities;
To coordinate and monitor governmental and private activities
pertaining to essential services such as transportation, flood
control and drainage, water supply and sewerage, social,
health
and
environmental
services,
housing,
park
development, and others;
To insure and monitor the undertaking of a comprehensive
social, economic and physical planning and development of the
area;
To study the feasibility of increasing barangay participation in
the affairs of their respective local governments and to propose
to the President of the Philippines definite programs and
policies for implementation;
To submit within thirty (30) days after the close of each fiscal
year an annual report to the President of the Philippines and to
submit a periodic report whenever deemed necessary; and
To perform such other tasks as may be assigned or directed by
the President of the Philippines.
The MMC was the "central government" of Metro Manila for the purpose of
establishing and administering programs providing services common to the
area. As a "central government" it had the power to levy and collect taxes
and special assessments, the power to charge and collect fees; the power
to appropriate money for its operation, and at the same time, review
14
1st
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SET
appropriations for the city and municipal units within its jurisdiction. It was
bestowed the power to enact or approve ordinances, resolutions and fix
penalties for violation of such ordinances and resolutions. It also had the
power to review, amend, revise or repeal all ordinances, resolutions and
acts of any of the four (4) cities and thirteen (13) municipalities comprising
Metro Manila.
to appropriate money, and the power to pass ordinances or resolutions

with penal sanctions were vested exclusively in the MMC.
Thus, Metropolitan Manila had a "central government," i.e., the MMC which
fully possessed legislative police powers. Whatever legislative powers the
component cities and municipalities had were all subject to review and
approval by the MMC.
P.D. No. 824 further provided:

Sec. 9. Until otherwise provided, the governments of the four cities
and thirteen municipalities in the Metropolitan Manila shall
continue to exist in their present form except as may be
inconsistent with this Decree. The members of the existing city and
municipal councils in Metropolitan Manila shall, upon promulgation
of this Decree, and until December 31, 1975, become members of
the Sangguniang Bayan which is hereby created for every city and
municipality of Metropolitan Manila.
In addition, the Sangguniang Bayan shall be composed of as many
barangay captains as may be determined and chosen by the
Commission, and such number of representatives from other
sectors of the society as may be appointed by the President upon
recommendation of the Commission.
xxx
xxx
xxx
The Sangguniang Bayan may recommend to the Commission

ordinances, resolutions or such measures as it may adopt;
Provided, that no such ordinance, resolution or measure shall
become effective, until after its approval by the Commission; and
Provided further, that the power to impose taxes and other levies,
the power to appropriate money and the power to pass ordinances
or resolutions with penal sanctions shall be vested exclusively in
the Commission.
The creation of the MMC also carried with it the creation of the
Sangguniang Bayan. This was composed of the members of the component
city and municipal councils, barangay captains chosen by the MMC and
sectoral representatives appointed by the President. The Sangguniang
Bayan had the power to recommend to the MMC the adoption of
ordinances, resolutions or measures. It was the MMC itself, however, that
possessed legislative powers. All ordinances, resolutions and measures
recommended by the Sangguniang Bayan were subject to the MMC's
approval. Moreover, the power to impose taxes and other levies, the power
After President Corazon Aquino assumed power, there was a clamor to

restore the autonomy of the local government units in Metro Manila.
Hence, Sections 1 and 2 of Article X of the 1987 Constitution provided:
Sec. 1. The territorial and political subdivisions of the Republic of
the Philippines are the provinces, cities, municipalities and
barangays. There shall be autonomous regions in Muslim Mindanao
and the Cordilleras as herein provided.
Sec. 2. The territorial and political subdivisions shall enjoy local
autonomy.
The Constitution, however, recognized the necessity of creating
metropolitan regions not only in the existing National Capital Region but
also in potential equivalents in the Visayas and Mindanao. 43 Section 11 of
the same Article X thus provided:
Sec. 11. The Congress may, by law, create special metropolitan
political subdivisions, subject to a plebiscite as set forth in Section
10 hereof. The component cities and municipalities shall retain
their basic autonomy and shall be entitled to their own local
executives and legislative assemblies. The jurisdiction of the
metropolitan authority that will thereby be created shall be limited
to basic services requiring coordination.
Constitution itself expressly provides that Congress may, by law, create
"special metropolitan political subdivisions" which shall be subject to
approval by a majority of the votes cast in a plebiscite in the political units
directly affected; the jurisdiction of this subdivision shall be limited to basic
services requiring coordination; and the cities and municipalities
comprising this subdivision shall retain their basic services requiring
coordination; and the cities and municipalities comprising this subdivision
shall retain their basic autonomy and their own local executive and
legislative assemblies. 44 Pending enactment of this law, the Transitory
Provisions of the Constitution gave the President of the Philippines the
power to constitute the Metropolitan Authority, viz:
15
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Sec. 8. Until otherwise provided by Congress, the President may
constitute the Metropolitan Authority to be composed of the heads
of all local government units comprising the Metropolitan Manila
area. 45
In 1990, President Aquino issued Executive Order (E. O.) No. 392 and
constituted the Metropolitan Manila Authority (MMA). The powers and
functions of the MMC were devolved to the MMA. 46 It ought to be stressed,
however, that not all powers and functions of the MMC were passed to the
MMA. The MMA's power was limited to the "delivery of basic urban services
requiring coordination in Metropolitan Manila." 47 The MMA's governing
body, the Metropolitan Manila Council, although composed of the mayors
of the component cities and municipalities, was merely given power of: (1)
formulation of policies on the delivery of basic services requiring
coordination and consolidation; and (2) promulgation resolutions and other
issuances, approval of a code of basic services and the exercise of its rulemaking power. 48
Under the 1987 Constitution, the local government units became primarily
responsible for the governance of their respective political subdivisions.
The MMA's jurisdiction was limited to addressing common problems
involving basic services that transcended local boundaries. It did not have
legislative power. Its power was merely to provide the local government
units technical assistance in the preparation of local development plans.
Any semblance of legislative power it had was confined to a "review [of]
legislation proposed by the local legislative assemblies to ensure
consistency among local governments and with the comprehensive
development plan of Metro Manila," and to "advise the local governments
accordingly." 49
When R.A. No. 7924 took effect, Metropolitan Manila became a "special
development and administrative region" and the MMDA a "special
development authority" whose functions were "without prejudice to the
autonomy of the affected local government units." The character of the
MMDA was clearly defined in the legislative debates enacting its charter.
R.A. No. 7924 originated as House Bill No. 14170/11116 and was
introduced by several legislators led by Dante Tinga, Roilo Golez and
Feliciano Belmonte. It was presented to the House of Representatives by
the Committee on Local Governments chaired by Congressman Ciriaco R.
Alfelor. The bill was a product of Committee consultations with the local
government units in the National Capital Region (NCR), with former
Chairmen of the MMC and MMA,50 and career officials of said agencies.
When the bill was first taken up by the Committee on Local Governments,
the following debate took place:
1st
THE CHAIRMAN [Hon. Ciriaco Alfelor]: Okay, Let me explain. This
has been debated a long time ago, you know. It's a special . . . we
can create a special metropolitan political subdivision.
Actually, there are only six (6) political subdivisions provided for in
the Constitution: barangay, municipality, city, province, and we
have the Autonomous Region of Mindanao and we have the
Cordillera. So we have 6. Now. . . . .
HON. [Elias] LOPEZ: May I interrupt, Mr. Chairman. In the case of
the Autonomous Region, that is also specifically mandated by the
Constitution.
THE CHAIRMAN: That's correct. But it is considered to be a political
subdivision. What is the meaning of a political subdivision?
Meaning to say, that it has its own government, it has its own
political personality, it has the power to tax, and all governmental
powers: police power and everything. All right. Authority is
different; because it does not have its own government. It is only a
council, it is an organization of political subdivision, powers, "no,
which is not imbued with any political power.
If you go over Section 6, where the powers and functions of the
Metro Manila Development Authority, it is purely coordinative. And
it provides here that the council is policy-making. All right.
Under the Constitution is a Metropolitan Authority with coordinative
power. Meaning to say, it coordinates all of the different basic
services which have to be delivered to the constituency. All right.
There is now a problem. Each local government unit is given its
respective . . . as a political subdivision. Kalookan has its powers,
as provided for and protected and guaranteed by the Constitution.
All right, the exercise. However, in the exercise of that power, it
might be deleterious and disadvantageous to other local
government units. So, we are forming an authority where all of
these will be members and then set up a policy in order that the
basic services can be effectively coordinated. All right.
Of course, we cannot deny that the MMDA has to survive. We have
to provide some funds, resources. But it does not possess any
political power. We do not elect the Governor. We do not have the
power to tax. As a matter of fact, I was trying to intimate to the
author that it must have the power to sue and be sued because it
coordinates. All right. It coordinates practically all these basic
16
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services so that the flow and the distribution of the basic services
will be continuous. Like traffic, we cannot deny that. It's before our
eyes. Sewerage, flood control, water system, peace and order, we
cannot deny these. It's right on our face. We have to look for a
solution. What would be the right solution? All right, we envision
that there should be a coordinating agency and it is called an
authority. All right, if you do not want to call it an authority, it's
alright. We may call it a council or maybe a management agency.
a plebiscite. That is what I'm trying to avoid. I've been trying to

avoid this kind of predicament. Under the Constitution it states: if it
is a political subdivision, once it is created it has to be subject to a
plebiscite. I'm trying to make this as administrative. That's why we
place the Chairman as a cabinet rank.
xxx
THE CHAIRMAN: In setting up ordinances, it is a political exercise,

Believe me.
xxx
xxx
51
Clearly, the MMDA is not a political unit of government. The power

delegated to the MMDA is that given to the Metro Manila Council to
promulgate administrative rules and regulations in the implementation of
the MMDA's functions. There is no grant of authority to enact ordinances
and regulations for the general welfare of the inhabitants of the metropolis.
This was explicitly stated in the last Committee deliberations prior to the
bill's presentation to Congress. Thus:
THE CHAIRMAN: Yeah, but we have to go over the suggested
revision. I think this was already approved before, but it was
reconsidered in view of the proposals, set-up, to make the MMDA
stronger. Okay, so if there is no objection to paragraph "f". . . And
then next is paragraph "b," under Section 6. "It shall approve
metro-wide plans, programs and projects and issue ordinances or
resolutions deemed necessary by the MMDA to carry out the
purposes of this Act." Do you have the powers? Does the
MMDA... because that takes the form of a local government unit, a
political subdivision.
HON. [Feliciano] BELMONTE: Yes, I believe so, your Honor. When we
say that it has the policies, it's very clear that those policies must
be followed. Otherwise, what's the use of empowering it to come
out with policies. Now, the policies may be in the form of a
resolution or it may be in the form of a ordinance. The term
"ordinance" in this case really gives it more teeth, your honor.
Otherwise, we are going to see a situation where you have the
power to adopt the policy but you cannot really make it stick as in
the case now, and I think here is Chairman Bunye. I think he will
agree that that is the case now. You've got the power to set a
policy, the body wants to follow your policy, then we say let's call it
an ordinance and see if they will not follow it.
THE CHAIRMAN: That's very nice. I like that. However, there is a
constitutional impediment.1wphi1 You are making this MMDA a
political subdivision. The creation of the MMDA would be subject to
HON. BELMONTE: All right, Mr. Chairman, okay, what you are
saying there is . . . . .
HON. [Elias] LOPEZ: Mr. Chairman, it can be changed into issuances

of rules and regulations. That would be . . . it shall also be
enforced.
HON. BELMONTE: Okay, I will . . . .
HON. LOPEZ: And you can also say that violation of such rule, you
impose a sanction. But you know, ordinance has a different legal
connotation.
HON. BELMONTE: All right, I defer to that opinion, your Honor.
THE CHAIRMAN:
regulations.
So
instead
of
ordinances,
say
rules
and
HON. BELMONTE: Or resolutions. Actually, they are actually

considering resolutions now.
THE CHAIRMAN: Rules and resolutions.
HON. BELMONTE: Rules, regulations and resolutions.
52
The draft of H. B. No. 14170/11116 was presented by the Committee to the

House of Representatives. The explanatory note to the bill stated that the
proposed MMDA is a "development authority" which is a "national agency,
not a political government unit." 53 The explanatory note was adopted as
the sponsorship speech of the Committee on Local Governments. No
interpellations or debates were made on the floor and no amendments
introduced. The bill was approved on second reading on the same day it
was presented. 54
17
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1st
When the bill was forwarded to the Senate, several amendments were
made.1wphi1 These amendments, however, did not affect the nature of
the MMDA as originally conceived in the House of Representatives. 55
It is thus beyond doubt that the MMDA is not a local government unit or a
public corporation endowed with legislative power. It is not even a "special
metropolitan political subdivision" as contemplated in Section 11, Article X
of the Constitution. The creation of a "special metropolitan political
subdivision" requires the approval by a majority of the votes cast in a
plebiscite in the political units directly affected." 56 R. A. No. 7924 was not
submitted to the inhabitants of Metro Manila in a plebiscite. The Chairman
of the MMDA is not an official elected by the people, but appointed by the
President with the rank and privileges of a cabinet member. In fact, part of
his function is to perform such other duties as may be assigned to him by
the President, 57 whereas in local government units, the President merely
exercises supervisory authority. This emphasizes the administrative
character of the MMDA.
Clearly then, the MMC under P.D. No. 824 is not the same entity as the
MMDA under R.A. No. 7924. Unlike the MMC, the MMDA has no power to
enact ordinances for the welfare of the community. It is the local
government units, acting through their respective legislative councils, that
possess legislative power and police power. In the case at bar, the
Sangguniang Panlungsod of Makati City did not pass any ordinance or
resolution ordering the opening of Neptune Street, hence, its proposed
opening by petitioner MMDA is illegal and the respondent Court of Appeals
did not err in so ruling. We desist from ruling on the other issues as they
are unnecessary.
We stress that this decision does not make light of the MMDA's noble
efforts to solve the chaotic traffic condition in Metro Manila. Everyday,
traffic jams and traffic bottlenecks plague the metropolis. Even our once
sprawling boulevards and avenues are now crammed with cars while city
streets are clogged with motorists and pedestrians. Traffic has become a
social malaise affecting our people's productivity and the efficient delivery
of goods and services in the country. The MMDA was created to put some
order in the metropolitan transportation system but unfortunately the
powers granted by its charter are limited. Its good intentions cannot justify
the opening for public use of a private street in a private subdivision
without any legal warrant. The promotion of the general welfare is not
antithetical to the preservation of the rule of law.1wphi1.nt
IN VIEW WHEREOF, the petition is denied. The Decision and Resolution of
the Court of Appeals in CA-G.R. SP No. 39549 are affirmed.
SO ORDERED.
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This Court has before it the delicate task of passing upon the validity and
constitutionality of a legislative enactment, fundamental and far-reaching
in significance. The enactment poses questions of due process, police
power and equal protection of the laws. It also poses an important issue of
fact, that is whether the conditions which the disputed law purports to
remedy really or actually exist. Admittedly springing from a deep, militant,
and positive nationalistic impulse, the law purports to protect citizen and
country from the alien retailer. Through it, and within the field of economy
it regulates, Congress attempts to translate national aspirations for
economic independence and national security, rooted in the drive and urge
for national survival and welfare, into a concrete and tangible measures
designed to free the national retailer from the competing dominance of the
alien, so that the country and the nation may be free from a supposed
economic dependence and bondage. Do the facts and circumstances justify
the enactment?
II. Pertinent provisions of Republic Act No. 1180
G.R. No. L-7995
May 31, 1957
LAO H. ICHONG, in his own behalf and in behalf of other alien

residents, corporations and partnerships adversely affected. by
Republic
Act
No.
1180, petitioner,
vs.
JAIME HERNANDEZ, Secretary of Finance, and MARCELINO
SARMIENTO, City Treasurer of Manila,respondents.
LABRADOR, J.:
I. The case and issue, in general
Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business."
In effect it nationalizes the retail trade business. The main provisions of the
Act are: (1) a prohibition against persons, not citizens of the Philippines,
and against associations, partnerships, or corporations the capital of which
are not wholly owned by citizens of the Philippines, from engaging directly
or indirectly in the retail trade; (2) an exception from the above prohibition
in favor of aliens actually engaged in said business on May 15, 1954, who
are allowed to continue to engaged therein, unless their licenses are
forfeited in accordance with the law, until their death or voluntary
retirement in case of natural persons, and for ten years after the approval
of the Act or until the expiration of term in case of juridical persons; (3) an
exception therefrom in favor of citizens and juridical entities of the United
States; (4) a provision for the forfeiture of licenses (to engage in the retail
business) for violation of the laws on nationalization, control weights and
measures and labor and other laws relating to trade, commerce and
industry; (5) a prohibition against the establishment or opening by aliens
actually engaged in the retail business of additional stores or branches of
retail business, (6) a provision requiring aliens actually engaged in the
retail business to present for registration with the proper authorities a
verified statement concerning their businesses, giving, among other
matters, the nature of the business, their assets and liabilities and their
offices and principal offices of judicial entities; and (7) a provision allowing
the heirs of aliens now engaged in the retail business who die, to continue
such business for a period of six months for purposes of liquidation.
III. Grounds upon which petition is based-Answer thereto
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Petitioner, for and in his own behalf and on behalf of other alien residents
corporations and partnerships adversely affected by the provisions of
Republic Act. No. 1180, brought this action to obtain a judicial declaration
that said Act is unconstitutional, and to enjoin the Secretary of Finance and
all other persons acting under him, particularly city and municipal
treasurers, from enforcing its provisions. Petitioner attacks the
constitutionality of the Act, contending that: (1) it denies to alien residents
the equal protection of the laws and deprives of their liberty and property
without due process of law ; (2) the subject of the Act is not expressed or
comprehended in the title thereof; (3) the Act violates international and
treaty obligations of the Republic of the Philippines; (4) the provisions of
the Act against the transmission by aliens of their retail business thru
hereditary succession, and those requiring 100% Filipino capitalization for a
corporation or entity to entitle it to engage in the retail business, violate
the spirit of Sections 1 and 5, Article XIII and Section 8 of Article XIV of the
Constitution.
In answer, the Solicitor-General and the Fiscal of the City of Manila contend
that: (1) the Act was passed in the valid exercise of the police power of the
State, which exercise is authorized in the Constitution in the interest of
national economic survival; (2) the Act has only one subject embraced in
the title; (3) no treaty or international obligations are infringed; (4) as
regards hereditary succession, only the form is affected but the value of
the property is not impaired, and the institution of inheritance is only of
statutory origin.
IV. Preliminary consideration of legal principles involved
a. The police power.
There is no question that the Act was approved in the exercise of the police
power, but petitioner claims that its exercise in this instance is attended by
a violation of the constitutional requirements of due process and equal
protection of the laws. But before proceeding to the consideration and
resolution of the ultimate issue involved, it would be well to bear in mind
certain basic and fundamental, albeit preliminary, considerations in the
determination of the ever recurrent conflict between police power and the
guarantees of due process and equal protection of the laws. What is the
scope of police power, and how are the due process and equal protection
clauses related to it? What is the province and power of the legislature, and
what is the function and duty of the courts? These consideration must be
clearly and correctly understood that their application to the facts of the
case may be brought forth with clarity and the issue accordingly resolved.
It has been said the police power is so far - reaching in scope, that it has
become almost impossible to limit its sweep. As it derives its existence
from the very existence of the State itself, it does not need to be expressed
or defined in its scope; it is said to be co-extensive with self-protection and
survival, and as such it is the most positive and active of all governmental
processes, the most essential, insistent and illimitable. Especially is it so
under a modern democratic framework where the demands of society and
of nations have multiplied to almost unimaginable proportions; the field
and scope of police power has become almost boundless, just as the fields
of public interest and public welfare have become almost all-embracing
and have transcended human foresight. Otherwise stated, as we cannot
foresee the needs and demands of public interest and welfare in this
constantly changing and progressive world, so we cannot delimit
beforehand the extent or scope of police power by which and through
which the State seeks to attain or achieve interest or welfare. So it is that
Constitutions do not define the scope or extent of the police power of the
State; what they do is to set forth the limitations thereof. The most
important of these are the due process clause and the equal protection
clause.
b. Limitations on police power.
The basic limitations of due process and equal protection are found in the
following provisions of our Constitution:
SECTION 1.(1) No person shall be deprived of life, liberty or
property without due process of law, nor any person be denied the
equal protection of the laws. (Article III, Phil. Constitution)
These constitutional guarantees which embody the essence of individual
liberty and freedom in democracies, are not limited to citizens alone but
are admittedly universal in their application, without regard to any
differences of race, of color, or of nationality. (Yick Wo vs. Hopkins, 30, L.
ed. 220, 226.)
c. The, equal protection clause.
The equal protection of the law clause is against undue favor and individual
or class privilege, as well as hostile discrimination or the oppression of
inequality. It is not intended to prohibit legislation, which is limited either in
the object to which it is directed or by territory within which is to operate. It
does not demand absolute equality among residents; it merely requires
that all persons shall be treated alike, under like circumstances and
conditions both as to privileges conferred and liabilities enforced. The
equal protection clause is not infringed by legislation which applies only to
those persons falling within a specified class, if it applies alike to all
persons within such class, and reasonable grounds exists for making a
20
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distinction between those who fall within such class and those who do not.
(2 Cooley, Constitutional Limitations, 824-825.)
courts are not supposed to override legitimate policy, and courts never
inquire into the wisdom of the law.
d. The due process clause.
V. Economic problems sought to be remedied
The due process clause has to do with the reasonableness of legislation

enacted in pursuance of the police power. Is there public interest, a public
purpose; is public welfare involved? Is the Act reasonably necessary for the
accomplishment of the legislature's purpose; is it not unreasonable,
arbitrary or oppressive? Is there sufficient foundation or reason in
connection with the matter involved; or has there not been a capricious
use of the legislative power? Can the aims conceived be achieved by the
means used, or is it not merely an unjustified interference with private
interest? These are the questions that we ask when the due process test is
applied.
With the above considerations in mind, we will now proceed to delve

directly into the issue involved. If the disputed legislation were merely a
regulation, as its title indicates, there would be no question that it falls
within the legitimate scope of legislative power. But it goes further and
prohibits a group of residents, the aliens, from engaging therein. The
problem becomes more complex because its subject is a common, trade or
occupation, as old as society itself, which from the immemorial has always
been open to residents, irrespective of race, color or citizenship.
The conflict, therefore, between police power and the guarantees of due
process and equal protection of the laws is more apparent than real.
Properly related, the power and the guarantees are supposed to coexist.
The balancing is the essence or, shall it be said, the indispensable means
for the attainment of legitimate aspirations of any democratic society.
There can be no absolute power, whoever exercise it, for that would be
tyranny. Yet there can neither be absolute liberty, for that would mean
license and anarchy. So the State can deprive persons of life, liberty and
property, provided there is due process of law; and persons may be
classified into classes and groups, provided everyone is given the equal
protection of the law. The test or standard, as always, is reason. The police
power legislation must be firmly grounded on public interest and welfare,
and a reasonable relation must exist between purposes and means. And if
distinction and classification has been made, there must be a reasonable
basis for said distinction.
In a primitive economy where families produce all that they consume and
consume all that they produce, the dealer, of course, is unknown. But as
group life develops and families begin to live in communities producing
more than what they consume and needing an infinite number of things
they do not produce, the dealer comes into existence. As villages develop
into big communities and specialization in production begins, the dealer's
importance is enhanced. Under modern conditions and standards of living,
in which man's needs have multiplied and diversified to unlimited extents
and proportions, the retailer comes as essential as the producer, because
thru him the infinite variety of articles, goods and needed for daily life are
placed within the easy reach of consumers. Retail dealers perform the
functions of capillaries in the human body, thru which all the needed food
and supplies are ministered to members of the communities comprising
the nation.
e. Legislative discretion not subject to judicial review.

Now, in this matter of equitable balancing, what is the proper place and
role of the courts? It must not be overlooked, in the first place, that the
legislature, which is the constitutional repository of police power and
exercises the prerogative of determining the policy of the State, is by force
of circumstances primarily the judge of necessity, adequacy or
reasonableness and wisdom, of any law promulgated in the exercise of the
police power, or of the measures adopted to implement the public policy or
to achieve public interest. On the other hand, courts, although zealous
guardians of individual liberty and right, have nevertheless evinced a
reluctance to interfere with the exercise of the legislative prerogative. They
have done so early where there has been a clear, patent or palpable
arbitrary and unreasonable abuse of the legislative prerogative. Moreover,
a. Importance of retail trade in the economy of the nation.
There cannot be any question about the importance of the retailer in the
life of the community. He ministers to the resident's daily needs, food in all
its increasing forms, and the various little gadgets and things needed for
home and daily life. He provides his customers around his store with the
rice or corn, the fish, the salt, the vinegar, the spices needed for the daily
cooking. He has cloths to sell, even the needle and the thread to sew them
or darn the clothes that wear out. The retailer, therefore, from the lowly
peddler, the owner of a small sari-sari store, to the operator of a
department store or, a supermarket is so much a part of day-to-day
existence.
b. The alien retailer's trait.
21
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The alien retailer must have started plying his trades in this country in the
bigger centers of population (Time there was when he was unknown in
provincial towns and villages). Slowly but gradually be invaded towns and
villages; now he predominates in the cities and big centers of population.
He even pioneers, in far away nooks where the beginnings of community
life appear, ministering to the daily needs of the residents and purchasing
their agricultural produce for sale in the towns. It is an undeniable fact that
in many communities the alien has replaced the native retailer. He has
shown in this trade, industry without limit, and the patience and
forbearance of a slave.
1st
official statistics unmistakably point out to the ever-increasing dominance
and control by the alien of the retail trade, as witness the following tables:
Derogatory epithets are hurled at him, but he laughs these off without
murmur; insults of ill-bred and insolent neighbors and customers are made
in his face, but he heeds them not, and he forgets and forgives. The
community takes note of him, as he appears to be harmless and extremely
useful.
c. Alleged alien control and dominance.
There is a general feeling on the part of the public, which appears to be
true to fact, about the controlling and dominant position that the alien
retailer holds in the nation's economy. Food and other essentials, clothing,
almost all articles of daily life reach the residents mostly through him. In
big cities and centers of population he has acquired not only
predominance, but apparent control over distribution of almost all kinds of
goods, such as lumber, hardware, textiles, groceries, drugs, sugar, flour,
garlic, and scores of other goods and articles. And were it not for some
national corporations like the Naric, the Namarco, the Facomas and the
Acefa, his control over principal foods and products would easily become
full and complete.
Petitioner denies that there is alien predominance and control in the retail
trade. In one breath it is said that the fear is unfounded and the threat is
imagined; in another, it is charged that the law is merely the result of
radicalism and pure and unabashed nationalism. Alienage, it is said, is not
an element of control; also so many unmanageable factors in the retail
business make control virtually impossible. The first argument which brings
up an issue of fact merits serious consideration. The others are matters of
opinion within the exclusive competence of the legislature and beyond our
prerogative to pass upon and decide.
The best evidence are the statistics on the retail trade, which put down the
figures in black and white. Between the constitutional convention year
(1935), when the fear of alien domination and control of the retail trade
already filled the minds of our leaders with fears and misgivings, and the
year of the enactment of the nationalization of the retail trade act (1954),
22
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1st
aliens more than make up for the numerical gap through their assests and
gross sales which average between six and seven times those of the very
many Filipino retailers. Numbers in retailers, here, do not imply superiority;
the alien invests more capital, buys and sells six to seven times more, and
gains much more. The same official report, pointing out to the known
predominance of foreign elements in the retail trade, remarks that the
Filipino retailers were largely engaged in minor retailer enterprises. As
observed by respondents, the native investment is thinly spread, and the
Filipino retailer is practically helpless in matters of capital, credit, price and
supply.
d. Alien control and threat, subject of apprehension in Constitutional
convention.
It is this domination and control, which we believe has been sufficiently
shown to exist, that is the legislature's target in the enactment of the
disputed nationalization would never have been adopted. The framers of
our Constitution also believed in the existence of this alien dominance and
control when they approved a resolution categorically declaring among
other things, that "it is the sense of the Convention that the public interest
requires the nationalization of the retail trade; . . . ." (II Aruego, The
Framing of the Philippine Constitution, 662-663, quoted on page 67 of
Petitioner.) That was twenty-two years ago; and the events since then have
not been either pleasant or comforting. Dean Sinco of the University of the
Philippines College of Law, commenting on the patrimony clause of the
Preamble opines that the fathers of our Constitution were merely
translating the general preoccupation of Filipinos "of the dangers from alien
interests that had already brought under their control the commercial and
other economic activities of the country" (Sinco, Phil. Political Law, 10th
ed., p. 114); and analyzing the concern of the members of the
constitutional convention for the economic life of the citizens, in
connection with the nationalistic provisions of the Constitution, he says:
(Estimated Assets and Gross Sales of Retail Establishments, By

Year and Nationality of Owners, Benchmark: 1948 Census, issued
by the Bureau of Census and Statistics, Department of Commerce
and Industry; pp. 18-19 of Answer.)
The above statistics do not include corporations and partnerships, while
the figures on Filipino establishments already include mere market
vendors, whose capital is necessarily small..
The above figures reveal that in percentage distribution of assests and
gross sales, alien participation has steadily increased during the years. It is
true, of course, that Filipinos have the edge in the number of retailers, but
But there has been a general feeling that alien dominance over the
economic life of the country is not desirable and that if such a
situation should remain, political independence alone is no
guarantee to national stability and strength. Filipino private capital
is not big enough to wrest from alien hands the control of the
national economy. Moreover, it is but of recent formation and
hence, largely inexperienced, timid and hesitant. Under such
conditions, the government as the instrumentality of the national
will, has to step in and assume the initiative, if not the leadership,
in the struggle for the economic freedom of the nation in
somewhat the same way that it did in the crusade for political
freedom. Thus . . . it (the Constitution) envisages an organized
movement for the protection of the nation not only against the
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possibilities of armed invasion but also against its economic
subjugation by alien interests in the economic field. (Phil. Political
Law by Sinco, 10th ed., p. 476.)
Belief in the existence of alien control and predominance is felt in other
quarters. Filipino businessmen, manufacturers and producers believe so;
they fear the dangers coming from alien control, and they express
sentiments of economic independence. Witness thereto is Resolution No. 1,
approved on July 18, 1953, of the Fifth National convention of Filipino
Businessmen, and a similar resolution, approved on March 20, 1954, of the
Second National Convention of Manufacturers and Producers. The man in
the street also believes, and fears, alien predominance and control; so our
newspapers, which have editorially pointed out not only to control but to
alien stranglehold. We, therefore, find alien domination and control to be a
fact, a reality proved by official statistics, and felt by all the sections and
groups that compose the Filipino community.
e. Dangers of alien control and dominance in retail.
But the dangers arising from alien participation in the retail trade does not
seem to lie in the predominance alone; there is a prevailing feeling that
such predominance may truly endanger the national interest. With ample
capital, unity of purpose and action and thorough organization, alien
retailers and merchants can act in such complete unison and concert on
such vital matters as the fixing of prices, the determination of the amount
of goods or articles to be made available in the market, and even the
choice of the goods or articles they would or would not patronize or
distribute, that fears of dislocation of the national economy and of the
complete subservience of national economy and of the consuming public
are not entirely unfounded. Nationals, producers and consumers alike can
be placed completely at their mercy. This is easily illustrated. Suppose an
article of daily use is desired to be prescribed by the aliens, because the
producer or importer does not offer them sufficient profits, or because a
new competing article offers bigger profits for its introduction. All that
aliens would do is to agree to refuse to sell the first article, eliminating it
from their stocks, offering the new one as a substitute. Hence, the
producers or importers of the prescribed article, or its consumers, find the
article suddenly out of the prescribed article, or its consumers, find the
article suddenly out of circulation. Freedom of trade is thus curtailed and
free enterprise correspondingly suppressed.
We can even go farther than theoretical illustrations to show the pernicious
influences of alien domination. Grave abuses have characterized the
exercise of the retail trade by aliens. It is a fact within judicial notice, which
courts of justice may not properly overlook or ignore in the interests of
truth and justice, that there exists a general feeling on the part of the
1st
public that alien participation in the retail trade has been attended by a
pernicious and intolerable practices, the mention of a few of which would
suffice for our purposes; that at some time or other they have cornered the
market of essential commodities, like corn and rice, creating artificial
scarcities to justify and enhance profits to unreasonable proportions; that
they have hoarded essential foods to the inconvenience and prejudice of
the consuming public, so much so that the Government has had to
establish the National Rice and Corn Corporation to save the public from
their continuous hoarding practices and tendencies; that they have
violated price control laws, especially on foods and essential commodities,
such that the legislature had to enact a law (Sec. 9, Republic Act No. 1168),
authorizing their immediate and automatic deportation for price control
convictions; that they have secret combinations among themselves to
control prices, cheating the operation of the law of supply and demand;
that they have connived to boycott honest merchants and traders who
would not cater or yield to their demands, in unlawful restraint of freedom
of trade and enterprise. They are believed by the public to have evaded
tax laws, smuggled goods and money into and out of the land, violated
import and export prohibitions, control laws and the like, in derision and
contempt of lawful authority. It is also believed that they have engaged in
corrupting public officials with fabulous bribes, indirectly causing the
prevalence of graft and corruption in the Government. As a matter of fact
appeals to unscrupulous aliens have been made both by the Government
and by their own lawful diplomatic representatives, action which impliedly
admits a prevailing feeling about the existence of many of the above
practices.
The circumstances above set forth create well founded fears that worse
things may come in the future. The present dominance of the alien retailer,
especially in the big centers of population, therefore, becomes a potential
source of danger on occasions of war or other calamity. We do not have
here in this country isolated groups of harmless aliens retailing goods
among nationals; what we have are well organized and powerful groups
that dominate the distribution of goods and commodities in the
communities and big centers of population. They owe no allegiance or
loyalty to the State, and the State cannot rely upon them in times of crisis
or emergency. While the national holds his life, his person and his property
subject to the needs of his country, the alien may even become the
potential enemy of the State.
f. Law enacted in interest of national economic survival and security.
We are fully satisfied upon a consideration of all the facts and
circumstances that the disputed law is not the product of racial hostility,
prejudice or discrimination, but the expression of the legitimate desire and
determination of the people, thru their authorized representatives, to free
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the nation from the economic situation that has unfortunately been
saddled upon it rightly or wrongly, to its disadvantage. The law is clearly in
the interest of the public, nay of the national security itself, and
indisputably falls within the scope of police power, thru which and by which
the State insures its existence and security and the supreme welfare of its
citizens.
VI. The Equal Protection Limitation
a. Objections to alien participation in retail trade. The next question that
now poses solution is, Does the law deny the equal protection of the laws?
As pointed out above, the mere fact of alienage is the root and cause of
the distinction between the alien and the national as a trader. The alien
resident owes allegiance to the country of his birth or his adopted country;
his stay here is for personal convenience; he is attracted by the lure of gain
and profit. His aim or purpose of stay, we admit, is neither illegitimate nor
immoral, but he is naturally lacking in that spirit of loyalty and enthusiasm
for this country where he temporarily stays and makes his living, or of that
spirit of regard, sympathy and consideration for his Filipino customers as
would prevent him from taking advantage of their weakness and exploiting
them. The faster he makes his pile, the earlier can the alien go back to his
beloved country and his beloved kin and countrymen. The experience of
the country is that the alien retailer has shown such utter disregard for his
customers and the people on whom he makes his profit, that it has been
found necessary to adopt the legislation, radical as it may seem.
Another objection to the alien retailer in this country is that he never really
makes a genuine contribution to national income and wealth. He
undoubtedly contributes to general distribution, but the gains and profits
he makes are not invested in industries that would help the country's
economy and increase national wealth. The alien's interest in this country
being merely transient and temporary, it would indeed be ill-advised to
continue entrusting the very important function of retail distribution to his
hands.
The practices resorted to by aliens in the control of distribution, as already
pointed out above, their secret manipulations of stocks of commodities and
prices, their utter disregard of the welfare of their customers and of the
ultimate happiness of the people of the nation of which they are mere
guests, which practices, manipulations and disregard do not attend the
exercise of the trade by the nationals, show the existence of real and
actual, positive and fundamental differences between an alien and a
national which fully justify the legislative classification adopted in the retail
trade measure. These differences are certainly a valid reason for the State
to prefer the national over the alien in the retail trade. We would be doing
violence to fact and reality were we to hold that no reason or ground for a
legitimate distinction can be found between one and the other.
b. Difference in alien aims and purposes sufficient basis for distinction.
The above objectionable characteristics of the exercise of the retail trade
by the aliens, which are actual and real, furnish sufficient grounds for
legislative classification of retail traders into nationals and aliens. Some
may disagree with the wisdom of the legislature's classification. To this we
answer, that this is the prerogative of the law-making power. Since the
Court finds that the classification is actual, real and reasonable, and all
persons of one class are treated alike, and as it cannot be said that the
classification is patently unreasonable and unfounded, it is in duty bound
to declare that the legislature acted within its legitimate prerogative and it
can not declare that the act transcends the limit of equal protection
established by the Constitution.
Broadly speaking, the power of the legislature to make distinctions and
classifications among persons is not curtailed or denied by the equal
protection of the laws clause. The legislative power admits of a wide scope
of discretion, and a law can be violative of the constitutional limitation only
when the classification is without reasonable basis. In addition to the
authorities we have earlier cited, we can also refer to the case of Linsey vs.
Natural Carbonic Fas Co. (1911), 55 L. ed., 369, which clearly and
succinctly defined the application of equal protection clause to a law
sought to be voided as contrary thereto:
. . . . "1. The equal protection clause of the Fourteenth Amendment
does not take from the state the power to classify in the adoption
of police laws, but admits of the exercise of the wide scope of
discretion in that regard, and avoids what is done only when it is
without any reasonable basis, and therefore is purely arbitrary. 2. A
classification having some reasonable basis does not offend
against that clause merely because it is not made with
mathematical nicety, or because in practice it results in some
inequality. 3. When the classification in such a law is called in
question, if any state of facts reasonably can be conceived that
would sustain it, the existence of that state of facts at the time the
law was enacted must be assumed. 4. One who assails the
classification in such a law must carry the burden of showing that it
does not rest upon any reasonable basis but is essentially
arbitrary."
c. Authorities recognizing citizenship as basis for classification.
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The question as to whether or not citizenship is a legal and valid ground for
classification has already been affirmatively decided in this jurisdiction as
well as in various courts in the United States. In the case of Smith Bell &
Co. vs. Natividad, 40 Phil. 136, where the validity of Act No. 2761 of the
Philippine Legislature was in issue, because of a condition therein limiting
the ownership of vessels engaged in coastwise trade to corporations
formed by citizens of the Philippine Islands or the United States, thus
denying the right to aliens, it was held that the Philippine Legislature did
not violate the equal protection clause of the Philippine Bill of Rights. The
legislature in enacting the law had as ultimate purpose the encouragement
of Philippine shipbuilding and the safety for these Islands from foreign
interlopers. We held that this was a valid exercise of the police power, and
all presumptions are in favor of its constitutionality. In substance, we held
that the limitation of domestic ownership of vessels engaged in coastwise
trade to citizens of the Philippines does not violate the equal protection of
the law and due process or law clauses of the Philippine Bill of Rights. In
rendering said decision we quoted with approval the concurring opinion of
Justice Johnson in the case of Gibbons vs. Ogden, 9 Wheat., I, as follows:
"Licensing acts, in fact, in legislation, are universally restraining
acts; as, for example, acts licensing gaming houses, retailers of
spirituous liquors, etc. The act, in this instance, is distinctly of that
character, and forms part of an extensive system, the object of
which is to encourage American shipping, and place them on an
equal footing with the shipping of other nations. Almost every
commercial nation reserves to its own subjects a monopoly of its
coasting trade; and a countervailing privilege in favor of American
shipping is contemplated, in the whole legislation of the United
States on this subject. It is not to give the vessel an American
character, that the license is granted; that effect has been
correctly attributed to the act of her enrollment. But it is to confer
on her American privileges, as contra distinguished from foreign;
and to preserve the Government from fraud by foreigners; in
surreptitiously intruding themselves into the American commercial
marine, as well as frauds upon the revenue in the trade coastwise,
that this whole system is projected."
The rule in general is as follows:
Aliens are under no special constitutional protection which forbids
a classification otherwise justified simply because the limitation of
the class falls along the lines of nationality. That would be requiring
a higher degree of protection for aliens as a class than for similar
classes than for similar classes of American citizens. Broadly
speaking, the difference in status between citizens and aliens
1st
constitutes a basis for reasonable classification in the exercise of
police power. (2 Am., Jur. 468-469.)
In Commonwealth vs. Hana, 81 N. E. 149 (Massachusetts, 1907), a statute
on the licensing of hawkers and peddlers, which provided that no one can
obtain a license unless he is, or has declared his intention, to become a
citizen of the United States, was held valid, for the following reason: It may
seem wise to the legislature to limit the business of those who are
supposed to have regard for the welfare, good order and happiness of the
community, and the court cannot question this judgment and conclusion.
In Bloomfield vs. State, 99 N. E. 309 (Ohio, 1912), a statute which
prevented certain persons, among them aliens, from engaging in the traffic
of liquors, was found not to be the result of race hatred, or in hospitality, or
a deliberate purpose to discriminate, but was based on the belief that an
alien cannot be sufficiently acquainted with "our institutions and our life as
to enable him to appreciate the relation of this particular business to our
entire social fabric", and was not, therefore, invalid. In Ohio ex rel. Clarke
vs. Deckebach, 274 U. S. 392, 71 L. ed. 115 (1926), the U.S. Supreme
Court had under consideration an ordinance of the city of Cincinnati
prohibiting the issuance of licenses (pools and billiard rooms) to aliens. It
held that plainly irrational discrimination against aliens is prohibited, but it
does not follow that alien race and allegiance may not bear in some
instances such a relation to a legitimate object of legislation as to be made
the basis of permitted classification, and that it could not state that the
legislation is clearly wrong; and that latitude must be allowed for the
legislative appraisement of local conditions and for the legislative choice of
methods for controlling an apprehended evil. The case of State vs. Carrol,
124 N. E. 129 (Ohio, 1919) is a parallel case to the one at bar. In Asakura
vs. City of Seattle, 210 P. 30 (Washington, 1922), the business of pawn
brooking was considered as having tendencies injuring public interest, and
limiting it to citizens is within the scope of police power. A similar statute
denying aliens the right to engage in auctioneering was also sustained
in Wright vs. May, L.R.A., 1915 P. 151 (Minnesota, 1914). So also in Anton
vs. Van Winkle, 297 F. 340 (Oregon, 1924), the court said that aliens are
judicially known to have different interests, knowledge, attitude,
psychology and loyalty, hence the prohibitions of issuance of licenses to
them for the business of pawnbroker, pool, billiard, card room, dance hall,
is not an infringement of constitutional rights. In Templar vs. Michigan
State Board of Examiners, 90 N.W. 1058 (Michigan, 1902), a law prohibiting
the licensing of aliens as barbers was held void, but the reason for the
decision was the court's findings that the exercise of the business by the
aliens does not in any way affect the morals, the health, or even the
convenience of the community. In Takahashi vs. Fish and Game
Commission, 92 L. ed. 1479 (1947), a California statute banning the
issuance of commercial fishing licenses to person ineligible to citizenship
was held void, because the law conflicts with Federal power over
immigration, and because there is no public interest in the mere claim of
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ownership of the waters and the fish in them, so there was no adequate
justification for the discrimination. It further added that the law was the
outgrowth of antagonism toward the persons of Japanese ancestry.
However, two Justices dissented on the theory that fishing rights have been
treated traditionally as natural resources. In Fraser vs. McConway & Tarley
Co., 82 Fed. 257 (Pennsylvania, 1897), a state law which imposed a tax on
every employer of foreign-born unnaturalized male persons over 21 years
of age, was declared void because the court found that there was no
reason for the classification and the tax was an arbitrary deduction from
the daily wage of an employee.
d. Authorities contra explained.
It is true that some decisions of the Federal court and of the State courts in
the United States hold that the distinction between aliens and citizens is
not a valid ground for classification. But in this decision the laws declared
invalid were found to be either arbitrary, unreasonable or capricious, or
were the result or product of racial antagonism and hostility, and there was
no question of public interest involved or pursued. In Yu Cong Eng vs.
Trinidad, 70 L. ed. 1059 (1925), the United States Supreme Court declared
invalid a Philippine law making unlawful the keeping of books of account in
any language other than English, Spanish or any other local dialect, but the
main reasons for the decisions are: (1) that if Chinese were driven out of
business there would be no other system of distribution, and (2) that the
Chinese would fall prey to all kinds of fraud, because they would be
deprived of their right to be advised of their business and to direct its
conduct. The real reason for the decision, therefore, is the court's belief
that no public benefit would be derived from the operations of the law and
on the other hand it would deprive Chinese of something indispensable for
carrying on their business. In Yick Wo vs. Hopkins, 30 L. ed 220 (1885) an
ordinance conferring powers on officials to withhold consent in the
operation of laundries both as to persons and place, was declared invalid,
but the court said that the power granted was arbitrary, that there was no
reason for the discrimination which attended the administration and
implementation of the law, and that the motive thereof was mere racial
hostility. In State vs. Montgomery, 47 A. 165 (Maine, 1900), a law
prohibiting aliens to engage as hawkers and peddlers was declared void,
because the discrimination bore no reasonable and just relation to the act
in respect to which the classification was proposed.
The case at bar is radically different, and the facts make them so. As we
already have said, aliens do not naturally possess the sympathetic
consideration and regard for the customers with whom they come in daily
contact, nor the patriotic desire to help bolster the nation's economy,
except in so far as it enhances their profit, nor the loyalty and allegiance
which the national owes to the land. These limitations on the qualifications
of the aliens have been shown on many occasions and instances,

especially in times of crisis and emergency. We can do no better than
borrow the language of Anton vs. Van Winkle, 297 F. 340, 342, to drive
home the reality and significance of the distinction between the alien and
the national, thus:
. . . . It may be judicially known, however, that alien coming into
this country are without the intimate knowledge of our laws,
customs, and usages that our own people have. So it is likewise
known that certain classes of aliens are of different psychology
from our fellow countrymen. Furthermore, it is natural and
reasonable to suppose that the foreign born, whose allegiance is
first to their own country, and whose ideals of governmental
environment and control have been engendered and formed under
entirely different regimes and political systems, have not the same
inspiration for the public weal, nor are they as well disposed toward
the United States, as those who by citizenship, are a part of the
government itself. Further enlargement, is unnecessary. I have said
enough so that obviously it cannot be affirmed with absolute
confidence that the Legislature was without plausible reason for
making the classification, and therefore appropriate discriminations
against aliens as it relates to the subject of legislation. . . . .
VII. The Due Process of Law Limitation.
a. Reasonability, the test of the limitation; determination by legislature
decisive.
We now come to due process as a limitation on the exercise of the police
power. It has been stated by the highest authority in the United States
that:
. . . . And the guaranty of due process, as has often been held,
demands only that the law shall not be unreasonable, arbitrary or
capricious, and that the means selected shall have a real and
substantial relation to the subject sought to be attained. . . . .
xxx
xxx
xxx
So far as the requirement of due process is concerned and in the

absence of other constitutional restriction a state is free to adopt
whatever economic policy may reasonably be deemed to promote
public welfare, and to enforce that policy by legislation adapted to
its purpose. The courts are without authority either to declare such
policy, or, when it is declared by the legislature, to override it. If
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the laws passed are seen to have a reasonable relation to a proper
legislative purpose, and are neither arbitrary nor discriminatory,
the requirements of due process are satisfied, and judicial
determination to that effect renders a court functus officio. . . .
(Nebbia vs. New York, 78 L. ed. 940, 950, 957.)
Another authority states the principle thus:
. . . . Too much significance cannot be given to the word
"reasonable" in considering the scope of the police power in a
constitutional sense, for the test used to determine the
constitutionality of the means employed by the legislature is to
inquire whether the restriction it imposes on rights secured to
individuals by the Bill of Rights are unreasonable, and not whether
it imposes any restrictions on such rights. . . .
xxx
xxx
xxx
. . . . A statute to be within this power must also be reasonable in

its operation upon the persons whom it affects, must not be for the
annoyance of a particular class, and must not be unduly
oppressive. (11 Am. Jur. Sec. 302., 1:1)- 1074-1075.)
In the case of Lawton vs. Steele, 38 L. ed. 385, 388. it was also held:
. . . . To justify the state in thus interposing its authority in behalf of
the public, it must appear, first, that the interests of the public
generally, as distinguished from those of a particular class, require
such interference; and second, that the means are reasonably
necessary for the accomplishment of the purpose, and not unduly
oppressive upon individuals. . . .
Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395,
fixes this test of constitutionality:
In determining whether a given act of the Legislature, passed in
the exercise of the police power to regulate the operation of a
business, is or is not constitutional, one of the first questions to be
considered by the court is whether the power as exercised has a
sufficient foundation in reason in connection with the matter
involved, or is an arbitrary, oppressive, and capricious use of that
power, without substantial relation to the health, safety, morals,
comfort, and general welfare of the public.
b. Petitioner's argument considered.

Petitioner's main argument is that retail is a common, ordinary occupation,
one of those privileges long ago recognized as essential to the orderly
pursuant of happiness by free men; that it is a gainful and honest
occupation and therefore beyond the power of the legislature to prohibit
and penalized. This arguments overlooks fact and reality and rests on an
incorrect assumption and premise, i.e., that in this country where the
occupation is engaged in by petitioner, it has been so engaged by him, by
the alien in an honest creditable and unimpeachable manner, without harm
or injury to the citizens and without ultimate danger to their economic
peace, tranquility and welfare. But the Legislature has found, as we have
also found and indicated, that the privilege has been so grossly abused by
the alien, thru the illegitimate use of pernicious designs and practices, that
he now enjoys a monopolistic control of the occupation and threatens a
deadly stranglehold on the nation's economy endangering the national
security in times of crisis and emergency.
The real question at issue, therefore, is not that posed by petitioner, which
overlooks and ignores the facts and circumstances, but this, Is the
exclusion in the future of aliens from the retail trade unreasonable.
Arbitrary capricious, taking into account the illegitimate and pernicious
form and manner in which the aliens have heretofore engaged therein? As
thus correctly stated the answer is clear. The law in question is deemed
absolutely necessary to bring about the desired legislative objective, i.e.,
to free national economy from alien control and dominance. It is not
necessarily unreasonable because it affects private rights and privileges
(11 Am. Jur. pp. 1080-1081.) The test of reasonableness of a law is the
appropriateness or adequacy under all circumstances of the means
adopted to carry out its purpose into effect (Id.) Judged by this test,
disputed legislation, which is not merely reasonable but actually necessary,
must be considered not to have infringed the constitutional limitation of
reasonableness.
The necessity of the law in question is explained in the explanatory note
that accompanied the bill, which later was enacted into law:
This bill proposes to regulate the retail business. Its purpose is to
prevent persons who are not citizens of the Philippines from having
a strangle hold upon our economic life. If the persons who control
this vital artery of our economic life are the ones who owe no
allegiance to this Republic, who have no profound devotion to our
free institutions, and who have no permanent stake in our people's
welfare, we are not really the masters of our destiny. All aspects of
our life, even our national security, will be at the mercy of other
people.
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In seeking to accomplish the foregoing purpose, we do not propose
to deprive persons who are not citizens of the Philippines of their
means of livelihood. While this bill seeks to take away from the
hands of persons who are not citizens of the Philippines a power
that can be wielded to paralyze all aspects of our national life and
endanger our national security it respects existing rights.
The approval of this bill is necessary for our national survival.
If political independence is a legitimate aspiration of a people, then
economic independence is none the less legitimate. Freedom and liberty
are not real and positive if the people are subject to the economic control
and domination of others, especially if not of their own race or country. The
removal and eradication of the shackles of foreign economic control and
domination, is one of the noblest motives that a national legislature may
pursue. It is impossible to conceive that legislation that seeks to bring it
about can infringe the constitutional limitation of due process. The
attainment of a legitimate aspiration of a people can never be beyond the
limits of legislative authority.
c. Law expressly held by Constitutional Convention to be within the sphere
of legislative action.
The framers of the Constitution could not have intended to impose the
constitutional restrictions of due process on the attainment of such a noble
motive as freedom from economic control and domination, thru the
exercise of the police power. The fathers of the Constitution must have
given to the legislature full authority and power to enact legislation that
would promote the supreme happiness of the people, their freedom and
liberty. On the precise issue now before us, they expressly made their voice
clear; they adopted a resolution expressing their belief that the legislation
in question is within the scope of the legislative power. Thus they declared
the their Resolution:
That it is the sense of the Convention that the public interest
requires the nationalization of retail trade; but it abstain from
approving the amendment introduced by the Delegate for Manila,
Mr. Araneta, and others on this matter because it is convinced that
the National Assembly is authorized to promulgate a law which
limits to Filipino and American citizens the privilege to engage in
the retail trade. (11 Aruego, The Framing of the Philippine
Constitution, quoted on pages 66 and 67 of the Memorandum for
the Petitioner.)
It would do well to refer to the nationalistic tendency manifested in various

provisions of the Constitution. Thus in the preamble, a principle objective is
the conservation of the patrimony of the nation and as corollary the
provision limiting to citizens of the Philippines the exploitation,
development and utilization of its natural resources. And in Section 8 of
Article XIV, it is provided that "no franchise, certificate, or any other form of
authorization for the operation of the public utility shall be granted except
to citizens of the Philippines." The nationalization of the retail trade is only
a continuance of the nationalistic protective policy laid down as a primary
objective of the Constitution. Can it be said that a law imbued with the
same purpose and spirit underlying many of the provisions of the
Constitution is unreasonable, invalid and unconstitutional?
The seriousness of the Legislature's concern for the plight of the nationals
as manifested in the approval of the radical measures is, therefore, fully
justified. It would have been recreant to its duties towards the country and
its people would it view the sorry plight of the nationals with the
complacency and refuse or neglect to adopt a remedy commensurate with
the demands of public interest and national survival. As the repository of
the sovereign power of legislation, the Legislature was in duty bound to
face the problem and meet, through adequate measures, the danger and
threat that alien domination of retail trade poses to national economy.
d. Provisions of law not unreasonable.
A cursory study of the provisions of the law immediately reveals how
tolerant, how reasonable the Legislature has been. The law is made
prospective and recognizes the right and privilege of those already
engaged in the occupation to continue therein during the rest of their lives;
and similar recognition of the right to continue is accorded associations of
aliens. The right or privilege is denied to those only upon conviction of
certain offenses. In the deliberations of the Court on this case, attention
was called to the fact that the privilege should not have been denied to
children and heirs of aliens now engaged in the retail trade. Such provision
would defeat the law itself, its aims and purposes. Beside, the exercise of
legislative discretion is not subject to judicial review. It is well settled that
the Court will not inquire into the motives of the Legislature, nor pass upon
general matters of legislative judgment. The Legislature is primarily the
judge of the necessity of an enactment or of any of its provisions, and
every presumption is in favor of its validity, and though the Court may hold
views inconsistent with the wisdom of the law, it may not annul the
legislation if not palpably in excess of the legislative power. Furthermore,
the test of the validity of a law attacked as a violation of due process, is not
its reasonableness, but its unreasonableness, and we find the provisions
are not unreasonable. These principles also answer various other
arguments raised against the law, some of which are: that the law does not
29
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promote general welfare; that thousands of aliens would be thrown out of
employment; that prices will increase because of the elimination of
competition; that there is no need for the legislation; that adequate
replacement is problematical; that there may be general breakdown; that
there would be repercussions from foreigners; etc. Many of these
arguments are directed against the supposed wisdom of the law which lies
solely within the legislative prerogative; they do not import invalidity.
VIII. Alleged defect in the title of the law
A subordinate ground or reason for the alleged invalidity of the law is the
claim that the title thereof is misleading or deceptive, as it conceals the
real purpose of the bill which is to nationalize the retail business and
prohibit aliens from engaging therein. The constitutional provision which is
claimed to be violated in Section 21 (1) of Article VI, which reads:
No bill which may be enacted in the law shall embrace more than
one subject which shall be expressed in the title of the bill.
What the above provision prohibits is duplicity, that is, if its title completely
fails to appraise the legislators or the public of the nature, scope and
consequences of the law or its operation (I Sutherland, Statutory
Construction, Sec. 1707, p. 297.) A cursory consideration of the title and
the provisions of the bill fails to show the presence of duplicity. It is true
that the term "regulate" does not and may not readily and at first glance
convey the idea of "nationalization" and "prohibition", which terms express
the two main purposes and objectives of the law. But "regulate" is a
broader term than either prohibition or nationalization. Both of these have
always been included within the term regulation.
Under the title of an act to "regulate", the sale of intoxicating
liquors, the Legislature may prohibit the sale of intoxicating liquors.
(Sweet vs. City of Wabash, 41 Ind., 7; quoted in page 41 of
Answer.)
Within the meaning of the Constitution requiring that the subject of
every act of the Legislature shall be stated in the tale, the title to
regulate the sale of intoxicating liquors, etc." sufficiently expresses
the subject of an actprohibiting the sale of such liquors to minors
and to persons in the habit of getting intoxicated; such matters
being properly included within the subject of regulating the sale.
(Williams vs. State, 48 Ind. 306, 308, quoted in p. 42 of Answer.)
The word "regulate" is of broad import, and necessarily implies
some degree of restraint and prohibition of acts usually done in
connection with the thing to be regulated. While word regulate

does not ordinarily convey meaning of prohibit, there is no absolute
reason why it should not have such meaning when used in
delegating police power in connection with a thing the best or only
efficacious regulation of which involves suppression. (State vs.
Morton, 162 So. 718, 182 La. 887, quoted in p. 42 of Answer.)
The general rule is for the use of general terms in the title of a bill; it has
also been said that the title need not be an index to the entire contents of
the law (I Sutherland, Statutory Construction, See. 4803, p. 345.) The
above rule was followed the title of the Act in question adopted the more
general term "regulate" instead of "nationalize" or "prohibit". Furthermore,
the law also contains other rules for the regulation of the retail trade which
may not be included in the terms "nationalization" or "prohibition"; so were
the title changed from "regulate" to "nationalize" or "prohibit", there would
have been many provisions not falling within the scope of the title which
would have made the Act invalid. The use of the term "regulate", therefore,
is in accord with the principle governing the drafting of statutes, under
which a simple or general term should be adopted in the title, which would
include all other provisions found in the body of the Act.
One purpose of the constitutional directive that the subject of a bill should
be embraced in its title is to apprise the legislators of the purposes, the
nature and scope of its provisions, and prevent the enactment into law of
matters which have received the notice, action and study of the legislators
or of the public. In the case at bar it cannot be claimed that the legislators
have been appraised of the nature of the law, especially the nationalization
and the prohibition provisions. The legislators took active interest in the
discussion of the law, and a great many of the persons affected by the
prohibitions in the law conducted a campaign against its approval. It
cannot be claimed, therefore, that the reasons for declaring the law invalid
ever existed. The objection must therefore, be overruled.
IX. Alleged violation of international treaties and obligations
Another subordinate argument against the validity of the law is the
supposed violation thereby of the Charter of the United Nations and of the
Declaration of the Human Rights adopted by the United Nations General
Assembly. We find no merit in the Nations Charter imposes no strict or legal
obligations regarding the rights and freedom of their subjects (Hans Kelsen,
The Law of the United Nations, 1951 ed. pp. 29-32), and the Declaration of
Human Rights contains nothing more than a mere recommendation or a
common standard of achievement for all peoples and all nations (Id. p. 39.)
That such is the import of the United Nations Charter aid of the Declaration
of Human Rights can be inferred the fact that members of the United
Nations Organizations, such as Norway and Denmark, prohibit foreigners
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from engaging in retail trade, and in most nations of the world laws against
foreigners engaged in domestic trade are adopted.
The Treaty of Amity between the Republic of the Philippines and the
Republic of China of April 18, 1947 is also claimed to be violated by the law
in question. All that the treaty guarantees is equality of treatment to the
Chinese nationals "upon the same terms as the nationals of any other
country." But the nationals of China are not discriminating against because
nationals of all other countries, except those of the United States, who are
granted special rights by the Constitution, are all prohibited from engaging
in the retail trade. But even supposing that the law infringes upon the said
treaty, the treaty is always subject to qualification or amendment by a
subsequent law (U. S. vs. Thompson, 258, Fed. 257, 260), and the same
may never curtail or restrict the scope of the police power of the State
(plaston vs. Pennsylvania, 58 L. ed. 539.)
Our legal duty, however, is merely to determine if the law falls within the
scope of legislative authority and does not transcend the limitations of due
process and equal protection guaranteed in the Constitution. Remedies
against the harshness of the law should be addressed to the Legislature;
they are beyond our power and jurisdiction.
The petition is hereby denied, with costs against petitioner.
X. Conclusion
Resuming what we have set forth above we hold that the disputed law was
enacted to remedy a real actual threat and danger to national economy
posed by alien dominance and control of the retail business and free
citizens and country from dominance and control; that the enactment
clearly falls within the scope of the police power of the State, thru which
and by which it protects its own personality and insures its security and
future; that the law does not violate the equal protection clause of the
Constitution because sufficient grounds exist for the distinction between
alien and citizen in the exercise of the occupation regulated, nor the due
process of law clause, because the law is prospective in operation and
recognizes the privilege of aliens already engaged in the occupation and
reasonably protects their privilege; that the wisdom and efficacy of the law
to carry out its objectives appear to us to be plainly evident as a matter
of fact it seems not only appropriate but actually necessary and that in
any case such matter falls within the prerogative of the Legislature, with
whose power and discretion the Judicial department of the Government
may not interfere; that the provisions of the law are clearly embraced in
the title, and this suffers from no duplicity and has not misled the
legislators or the segment of the population affected; and that it cannot be
said to be void for supposed conflict with treaty obligations because no
treaty has actually been entered into on the subject and the police power
may not be curtailed or surrendered by any treaty or any other
conventional agreement.
Some members of the Court are of the opinion that the radical effects of
the law could have been made less harsh in its impact on the aliens. Thus
it is stated that the more time should have been given in the law for the
liquidation of existing businesses when the time comes for them to close.
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Promulgated in 1940, the law in question opens (section 1) with a

declaration of emergency, due to the threat to our industry by the
imminent imposition of export taxes upon sugar as provided in the TydingsMcDuffe Act, and the "eventual loss of its preferential position in the United
States market"; wherefore, the national policy was expressed "to obtain a
readjustment of the benefits derived from the sugar industry by the
component elements thereof" and "to stabilize the sugar industry so as to
prepare it for the eventuality of the loss of its preferential position in the
United States market and the imposition of the export taxes."
In section 2, Commonwealth Act 567 provides for an increase of the
existing tax on the manufacture of sugar, on a graduated basis, on each
picul of sugar manufactured; while section 3 levies on owners or persons in
control of lands devoted to the cultivation of sugar cane and ceded to
others for a consideration, on lease or otherwise
a tax equivalent to the difference between the money value of the
rental or consideration collected and the amount representing 12
per centum of the assessed value of such land.
According to section 6 of the law
SEC. 6. All collections made under this Act shall accrue to a special
fund in the Philippine Treasury, to be known as the 'Sugar
Adjustment and Stabilization Fund,' and shall be paid out only for
any or all of the following purposes or to attain any or all of the
following objectives, as may be provided by law.
G.R. No. L-7859
December 22, 1955
WALTER LUTZ, as Judicial Administrator of the Intestate Estate of

the deceased Antonio Jayme Ledesma,plaintiff-appellant, vs. J.
ANTONIO
ARANETA,
as
the
Collector
of
Internal
Revenue, defendant-appellee.
REYES, J.B L., J.:
This case was initiated in the Court of First Instance of Negros Occidental to
test the legality of the taxes imposed by Commonwealth Act No. 567,
otherwise known as the Sugar Adjustment Act.
First, to place the sugar industry in a position to maintain itself,

despite the gradual loss of the preferntial position of the Philippine
sugar in the United States market, and ultimately to insure its
continued existence notwithstanding the loss of that market and
the consequent necessity of meeting competition in the free
markets of the world;
Second, to readjust the benefits derived from the sugar industry by
all of the component elements thereof the mill, the landowner,
the planter of the sugar cane, and the laborers in the factory and in
the field so that all might continue profitably to engage therein;
Third, to limit the production of sugar to areas more economically
suited to the production thereof; and
Fourth, to afford labor employed in the industry a living wage and
to improve their living and working conditions: Provided, That the
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President of the Philippines may, until the adjourment of the next
regular session of the National Assembly, make the necessary
disbursements from the fund herein created (1) for the
establishment and operation of sugar experiment station or
stations and the undertaking of researchers (a) to increase the
recoveries of the centrifugal sugar factories with the view of
reducing manufacturing costs, (b) to produce and propagate higher
yielding varieties of sugar cane more adaptable to different district
conditions in the Philippines, (c) to lower the costs of raising sugar
cane, (d) to improve the buying quality of denatured alcohol from
molasses for motor fuel, (e) to determine the possibility of utilizing
the other by-products of the industry, (f) to determine what crop or
crops are suitable for rotation and for the utilization of excess cane
lands, and (g) on other problems the solution of which would help
rehabilitate and stabilize the industry, and (2) for the improvement
of living and working conditions in sugar mills and sugar
plantations, authorizing him to organize the necessary agency or
agencies to take charge of the expenditure and allocation of said
funds to carry out the purpose hereinbefore enumerated, and,
likewise, authorizing the disbursement from the fund herein
created of the necessary amount or amounts needed for salaries,
wages, travelling expenses, equipment, and other sundry expenses
of said agency or agencies.
Plaintiff, Walter Lutz, in his capacity as Judicial Administrator of the
Intestate Estate of Antonio Jayme Ledesma, seeks to recover from the
Collector of Internal Revenue the sum of P14,666.40 paid by the estate as
taxes, under section 3 of the Act, for the crop years 1948-1949 and 19491950; alleging that such tax is unconstitutional and void, being levied for
the aid and support of the sugar industry exclusively, which in plaintiff's
opinion is not a public purpose for which a tax may be constitutioally
levied. The action having been dismissed by the Court of First Instance, the
plaintifs appealed the case directly to this Court (Judiciary Act, section 17).
The basic defect in the plaintiff's position is his assumption that the tax
provided for in Commonwealth Act No. 567 is a pure exercise of the taxing
power. Analysis of the Act, and particularly of section 6 (heretofore quoted
in full), will show that the tax is levied with a regulatory purpose, to provide
means for the rehabilitation and stabilization of the threatened sugar
industry. In other words, the act is primarily an exercise of the police power.
This Court can take judicial notice of the fact that sugar production is one
of the great industries of our nation, sugar occupying a leading position
among its export products; that it gives employment to thousands of
laborers in fields and factories; that it is a great source of the state's
wealth, is one of the important sources of foreign exchange needed by our
1st
government, and is thus pivotal in the plans of a regime committed to a
policy of currency stability. Its promotion, protection and advancement,
therefore redounds greatly to the general welfare. Hence it was competent
for the legislature to find that the general welfare demanded that the sugar
industry should be stabilized in turn; and in the wide field of its police
power, the lawmaking body could provide that the distribution of benefits
therefrom be readjusted among its components to enable it to resist the
added strain of the increase in taxes that it had to sustain (Sligh vs.
Kirkwood, 237 U. S. 52, 59 L. Ed. 835; Johnson vs. State ex rel. Marey, 99
Fla. 1311, 128 So. 853; Maxcy Inc. vs. Mayo, 103 Fla. 552, 139 So. 121).
As stated in Johnson vs. State ex rel. Marey, with reference to the citrus
industry in Florida
The protection of a large industry constituting one of the great
sources of the state's wealth and therefore directly or indirectly
affecting the welfare of so great a portion of the population of the
State is affected to such an extent by public interests as to be
within the police power of the sovereign. (128 Sp. 857).
Once it is conceded, as it must, that the protection and promotion of the
sugar industry is a matter of public concern, it follows that the Legislature
may determine within reasonable bounds what is necessary for its
protection and expedient for its promotion. Here, the legislative discretion
must be allowed fully play, subject only to the test of reasonableness; and
it is not contended that the means provided in section 6 of the law (above
quoted) bear no relation to the objective pursued or are oppressive in
character. If objective and methods are alike constitutionally valid, no
reason is seen why the state may not levy taxes to raise funds for their
prosecution and attainment. Taxation may be made the implement of the
state's police power (Great Atl. & Pac. Tea Co. vs. Grosjean, 301 U. S. 412,
81 L. Ed. 1193; U. S. vs. Butler, 297 U. S. 1, 80 L. Ed. 477; M'Culloch vs.
Maryland, 4 Wheat. 316, 4 L. Ed. 579).
That the tax to be levied should burden the sugar producers themselves
can hardly be a ground of complaint; indeed, it appears rational that the
tax be obtained precisely from those who are to be benefited from the
expenditure of the funds derived from it. At any rate, it is inherent in the
power to tax that a state be free to select the subjects of taxation, and it
has been repeatedly held that "inequalities which result from a singling out
of one particular class for taxation, or exemption infringe no constitutional
limitation" (Carmichael vs. Southern Coal & Coke Co., 301 U. S. 495, 81 L.
Ed. 1245, citing numerous authorities, at p. 1251).
From the point of view we have taken it appears of no moment that the
funds raised under the Sugar Stabilization Act, now in question, should be
33
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SET
exclusively spent in aid of the sugar industry, since it is that very
enterprise that is being protected. It may be that other industries are also
in need of similar protection; that the legislature is not required by the
Constitution to adhere to a policy of "all or none." As ruled in Minnesota ex
rel. Pearson vs. Probate Court, 309 U. S. 270, 84 L. Ed. 744, "if the law
presumably hits the evil where it is most felt, it is not to be overthrown
because there are other instances to which it might have been applied;"
and that "the legislative authority, exerted within its proper field, need not
embrace all the evils within its reach" (N. L. R. B. vs. Jones & Laughlin Steel
Corp. 301 U. S. 1, 81 L. Ed. 893).
Even from the standpoint that the Act is a pure tax measure, it cannot be
said that the devotion of tax money to experimental stations to seek
increase of efficiency in sugar production, utilization of by-products and
solution of allied problems, as well as to the improvements of living and
working conditions in sugar mills or plantations, without any part of such
money being channeled directly to private persons, constitutes
expenditure of tax money for private purposes, (compare Everson vs.
Board of Education, 91 L. Ed. 472, 168 ALR 1392, 1400).
The decision appealed from is affirmed, with costs against appellant. So
ordered.
G.R. No. 78742 July 14, 1989

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC.,
JUANITO D. GOMEZ, GERARDO B. ALARCIO, FELIPE A. GUICO, JR.,
BERNARDO M. ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T.
GUICO, FELISA I. LLAMIDO, FAUSTO J. SALVA, REYNALDO G.
ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE, TEODORO B.
MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA
C. ARRESTO, CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO,
CIRILA
A.
JOSE
&
NAPOLEON
S.
FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.
G.R. No. 79310 July 14, 1989
ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS,
DENNIS JEREZA, HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO
and PLANTERS' COMMITTEE, INC., Victorias Mill District, Victorias,
Negros Occidental, petitioners, vs.JOKER ARROYO, PHILIP E. JUICO
and PRESIDENTIAL AGRARIAN REFORM COUNCIL, respondents.
G.R. No. 79744 July 14, 1989
INOCENTES PABICO, petitioner, vs.HON. PHILIP E. JUICO, SECRETARY
OF THE DEPARTMENT OF AGRARIAN REFORM, HON. JOKER ARROYO,
EXECUTIVE SECRETARY OF THE OFFICE OF THE PRESIDENT, and
Messrs. SALVADOR TALENTO, JAIME
ABOGADO, CONRADO
AVANCENA and ROBERTO TAAY, respondents.
G.R. No. 79777 July 14, 1989
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners, vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and
LAND BANK OF THE PHILIPPINES,respondents.
CRUZ, J.:
In ancient mythology, Antaeus was a terrible giant who blocked and
challenged Hercules for his life on his way to Mycenae after performing his
eleventh labor. The two wrestled mightily and Hercules flung his adversary
34
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SET
to the ground thinking him dead, but Antaeus rose even stronger to
resume their struggle. This happened several times to Hercules' increasing
amazement. Finally, as they continued grappling, it dawned on Hercules
that Antaeus was the son of Gaea and could never die as long as any part
of his body was touching his Mother Earth. Thus forewarned, Hercules then
held Antaeus up in the air, beyond the reach of the sustaining soil, and
crushed him to death.
Mother Earth. The sustaining soil. The giver of life, without whose
invigorating touch even the powerful Antaeus weakened and died.
The cases before us are not as fanciful as the foregoing tale. But they also
tell of the elemental forces of life and death, of men and women who, like
Antaeus need the sustaining strength of the precious earth to stay alive.
"Land for the Landless" is a slogan that underscores the acute imbalance in
the distribution of this precious resource among our people. But it is more
than a slogan. Through the brooding centuries, it has become a battle-cry
dramatizing the increasingly urgent demand of the dispossessed among us
for a plot of earth as their place in the sun.
Recognizing this need, the Constitution in 1935 mandated the policy of
social justice to "insure the well-being and economic security of all the
people," 1 especially the less privileged. In 1973, the new Constitution
affirmed this goal adding specifically that "the State shall regulate the
acquisition, ownership, use, enjoyment and disposition of private property
and equitably diffuse property ownership and profits." 2 Significantly, there
was also the specific injunction to "formulate and implement an agrarian
reform program aimed at emancipating the tenant from the bondage of the
soil." 3
The Constitution of 1987 was not to be outdone. Besides echoing these
sentiments, it also adopted one whole and separate Article XIII on Social
Justice and Human Rights, containing grandiose but undoubtedly sincere
provisions for the uplift of the common people. These include a call in the
following words for the adoption by the State of an agrarian reform
program:
SEC. 4. The State shall, by law, undertake an agrarian reform
program founded on the right of farmers and regular farmworkers,
who are landless, to own directly or collectively the lands they till
or, in the case of other farmworkers, to receive a just share of the
fruits thereof. To this end, the State shall encourage and undertake
the just distribution of all agricultural lands, subject to such
priorities and reasonable retention limits as the Congress may
prescribe, taking into account ecological, developmental, or equity

considerations and subject to the payment of just compensation. In
determining retention limits, the State shall respect the right of
small landowners. The State shall further provide incentives for
voluntary land-sharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land
Reform Code, had already been enacted by the Congress of the Philippines
on August 8, 1963, in line with the above-stated principles. This was
substantially superseded almost a decade later by P.D. No. 27, which was
promulgated on October 21, 1972, along with martial law, to provide for
the compulsory acquisition of private lands for distribution among tenantfarmers and to specify maximum retention limits for landowners.
The people power revolution of 1986 did not change and indeed even
energized the thrust for agrarian reform. Thus, on July 17, 1987, President
Corazon C. Aquino issued E.O. No. 228, declaring full land ownership in
favor of the beneficiaries of P.D. No. 27 and providing for the valuation of
still unvalued lands covered by the decree as well as the manner of their
payment. This was followed on July 22, 1987 by Presidential Proclamation
No. 131, instituting a comprehensive agrarian reform program (CARP), and
E.O. No. 229, providing the mechanics for its implementation.
Subsequently, with its formal organization, the revived Congress of the
Philippines took over legislative power from the President and started its
own deliberations, including extensive public hearings, on the
improvement of the interests of farmers. The result, after almost a year of
spirited debate, was the enactment of R.A. No. 6657, otherwise known as
the Comprehensive Agrarian Reform Law of 1988, which President Aquino
signed on June 10, 1988. This law, while considerably changing the earlier
mentioned enactments, nevertheless gives them suppletory effect insofar
as they are not inconsistent with its provisions. 4
The above-captioned cases have been consolidated because they involve
common legal questions, including serious challenges to the
constitutionality of the several measures mentioned above. They will be
the subject of one common discussion and resolution, The different
antecedents of each case will require separate treatment, however, and
will first be explained hereunder.
G.R. No. 79777
Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O.
Nos. 228 and 229, and R.A. No. 6657.
35
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SET
The subjects of this petition are a 9-hectare riceland worked by four
tenants and owned by petitioner Nicolas Manaay and his wife and a 5hectare riceland worked by four tenants and owned by petitioner Augustin
Hermano, Jr. The tenants were declared full owners of these lands by E.O.
No. 228 as qualified farmers under P.D. No. 27.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on
grounds inter alia of separation of powers, due process, equal protection
and the constitutional limitation that no private property shall be taken for
public use without just compensation.
They contend that President Aquino usurped legislative power when she
promulgated E.O. No. 228. The said measure is invalid also for violation of
Article XIII, Section 4, of the Constitution, for failure to provide for retention
limits for small landowners. Moreover, it does not conform to Article VI,
Section 25(4) and the other requisites of a valid appropriation.
In connection with the determination of just compensation, the petitioners
argue that the same may be made only by a court of justice and not by the
President of the Philippines. They invoke the recent cases of EPZA v.
Dulay 5 andManotok v. National Food Authority. 6 Moreover, the just
compensation contemplated by the Bill of Rights is payable in money or in
cash and not in the form of bonds or other things of value.
In considering the rentals as advance payment on the land, the executive
order also deprives the petitioners of their property rights as protected by
due process. The equal protection clause is also violated because the order
places the burden of solving the agrarian problems on the owners only of
agricultural lands. No similar obligation is imposed on the owners of other
properties.
The petitioners also maintain that in declaring the beneficiaries under P.D.
No. 27 to be the owners of the lands occupied by them, E.O. No. 228
ignored judicial prerogatives and so violated due process. Worse, the
measure would not solve the agrarian problem because even the small
farmers are deprived of their lands and the retention rights guaranteed by
the Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has already
been upheld in the earlier cases ofChavez v. Zobel, 7 Gonzales v.
Estrella, 8 and Association of Rice and Corn Producers of the Philippines,
Inc. v. The National Land Reform Council. 9 The determination of just
compensation by the executive authorities conformably to the formula
prescribed under the questioned order is at best initial or preliminary only.
It does not foreclose judicial intervention whenever sought or warranted. At
any rate, the challenge to the order is premature because no valuation of

their property has as yet been made by the Department of Agrarian
Reform. The petitioners are also not proper parties because the lands
owned by them do not exceed the maximum retention limit of 7 hectares.
Replying, the petitioners insist they are proper parties because P.D. No. 27
does not provide for retention limits on tenanted lands and that in any
event their petition is a class suit brought in behalf of landowners with
landholdings below 24 hectares. They maintain that the determination of
just compensation by the administrative authorities is a final
ascertainment. As for the cases invoked by the public respondent, the
constitutionality of P.D. No. 27 was merely assumed in Chavez, while what
was decided in Gonzales was the validity of the imposition of martial law.
In the amended petition dated November 22, 1588, it is contended that
P.D. No. 27, E.O. Nos. 228 and 229 (except Sections 20 and 21) have been
impliedly repealed by R.A. No. 6657. Nevertheless, this statute should itself
also be declared unconstitutional because it suffers from substantially the
same infirmities as the earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by
Vicente Cruz, owner of a 1. 83- hectare land, who complained that the DAR
was insisting on the implementation of P.D. No. 27 and E.O. No. 228 despite
a compromise agreement he had reached with his tenant on the payment
of rentals. In a subsequent motion dated April 10, 1989, he adopted the
allegations in the basic amended petition that the above- mentioned
enactments have been impliedly repealed by R.A. No. 6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the Victorias
Mill District, Victorias, Negros Occidental. Co-petitioner Planters'
Committee, Inc. is an organization composed of 1,400 planter-members.
This petition seeks to prohibit the implementation of Proc. No. 131 and E.O.
No. 229.
The petitioners claim that the power to provide for a Comprehensive
Agrarian Reform Program as decreed by the Constitution belongs to
Congress and not the President. Although they agree that the President
could exercise legislative power until the Congress was convened, she
could do so only to enact emergency measures during the transition
period. At that, even assuming that the interim legislative power of the
President was properly exercised, Proc. No. 131 and E.O. No. 229 would still
have to be annulled for violating the constitutional provisions on just
compensation, due process, and equal protection.
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They also argue that under Section 2 of Proc. No. 131 which provides:
Agrarian Reform Fund.-There is hereby created a special fund, to be known
as the Agrarian Reform Fund, an initial amount of FIFTY BILLION PESOS
(P50,000,000,000.00) to cover the estimated cost of the Comprehensive
Agrarian Reform Program from 1987 to 1992 which shall be sourced from
the receipts of the sale of the assets of the Asset Privatization Trust and
Receipts of sale of ill-gotten wealth received through the Presidential
Commission on Good Government and such other sources as government
may deem appropriate. The amounts collected and accruing to this special
fund shall be considered automatically appropriated for the purpose
authorized in this Proclamation the amount appropriated is in futuro, not in
esse. The money needed to cover the cost of the contemplated
expropriation has yet to be raised and cannot be appropriated at this time.
Furthermore, they contend that taking must be simultaneous with payment
of just compensation as it is traditionally understood, i.e., with money and
in full, but no such payment is contemplated in Section 5 of the E.O. No.
229. On the contrary, Section 6, thereof provides that the Land Bank of the
Philippines "shall compensate the landowner in an amount to be
established by the government, which shall be based on the owner's
declaration of current fair market value as provided in Section 4 hereof, but
subject to certain controls to be defined and promulgated by the
Presidential Agrarian Reform Council." This compensation may not be paid
fully in money but in any of several modes that may consist of part cash
and part bond, with interest, maturing periodically, or direct payment in
cash or bond as may be mutually agreed upon by the beneficiary and the
landowner or as may be prescribed or approved by the PARC.
The petitioners also argue that in the issuance of the two measures, no
effort was made to make a careful study of the sugar planters' situation.
There is no tenancy problem in the sugar areas that can justify the
application of the CARP to them. To the extent that the sugar planters have
been lumped in the same legislation with other farmers, although they are
a separate group with problems exclusively their own, their right to equal
protection has been violated.
A motion for intervention was filed on August 27,1987 by the National
Federation of Sugarcane Planters (NASP) which claims a membership of at
least 20,000 individual sugar planters all over the country. On September
10, 1987, another motion for intervention was filed, this time by Manuel
Barcelona, et al., representing coconut and riceland owners. Both motions
were granted by the Court.
NASP alleges that President Aquino had no authority to fund the Agrarian
Reform Program and that, in any event, the appropriation is invalid
1st
because of uncertainty in the amount appropriated. Section 2 of Proc. No.
131 and Sections 20 and 21 of E.O. No. 229 provide for an initial
appropriation of fifty billion pesos and thus specifies the minimum rather
than the maximum authorized amount. This is not allowed. Furthermore,
the stated initial amount has not been certified to by the National Treasurer
as actually available.
Two additional arguments are made by Barcelona, to wit, the failure to
establish by clear and convincing evidence the necessity for the exercise of
the powers of eminent domain, and the violation of the fundamental right
to own property.
The petitioners also decry the penalty for non-registration of the lands,
which is the expropriation of the said land for an amount equal to the
government assessor's valuation of the land for tax purposes. On the other
hand, if the landowner declares his own valuation he is unjustly required to
immediately pay the corresponding taxes on the land, in violation of the
uniformity rule.
In his consolidated Comment, the Solicitor General first invokes the
presumption of constitutionality in favor of Proc. No. 131 and E.O. No. 229.
He also justifies the necessity for the expropriation as explained in the
"whereas" clauses of the Proclamation and submits that, contrary to the
petitioner's contention, a pilot project to determine the feasibility of CARP
and a general survey on the people's opinion thereon are not indispensable
prerequisites to its promulgation.
On the alleged violation of the equal protection clause, the sugar planters
have failed to show that they belong to a different class and should be
differently treated. The Comment also suggests the possibility of Congress
first distributing public agricultural lands and scheduling the expropriation
of private agricultural lands later. From this viewpoint, the petition for
prohibition would be premature.
The public respondent also points out that the constitutional prohibition is
against the payment of public money without the corresponding
appropriation. There is no rule that only money already in existence can be
the subject of an appropriation law. Finally, the earmarking of fifty billion
pesos as Agrarian Reform Fund, although denominated as an initial
amount, is actually the maximum sum appropriated. The word "initial"
simply means that additional amounts may be appropriated later when
necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on
his own behalf, assailing the constitutionality of E.O. No. 229. In addition to
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the arguments already raised, Serrano contends that the measure is
unconstitutional because:
(1) Only public lands should be included in the CARP;
(2) E.O. No. 229 embraces more than one subject which is not
expressed in the title;
(3) The power of the President to legislate was terminated on July
2, 1987; and
(4) The appropriation of a P50 billion special fund from the
National Treasury did not originate from the House of
Representatives.
The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly
before Congress convened is anomalous and arbitrary, besides violating
the doctrine of separation of powers. The legislative power granted to the
President under the Transitory Provisions refers only to emergency
measures that may be promulgated in the proper exercise of the police
power.
The petitioner also invokes his rights not to be deprived of his property
without due process of law and to the retention of his small parcels of
riceholding as guaranteed under Article XIII, Section 4 of the Constitution.
He likewise argues that, besides denying him just compensation for his
land, the provisions of E.O. No. 228 declaring that:
Lease rentals paid to the landowner by the farmer-beneficiary after
October 21, 1972 shall be considered as advance payment for the
land.
G.R. No. 79744

The petitioner alleges that the then Secretary of Department of Agrarian
Reform, in violation of due process and the requirement for just
compensation, placed his landholding under the coverage of Operation
Land Transfer. Certificates of Land Transfer were subsequently issued to the
private respondents, who then refused payment of lease rentals to him.
On September 3, 1986, the petitioner protested the erroneous inclusion of
his small landholding under Operation Land transfer and asked for the
recall and cancellation of the Certificates of Land Transfer in the name of
the private respondents. He claims that on December 24, 1986, his petition
was denied without hearing. On February 17, 1987, he filed a motion for
reconsideration, which had not been acted upon when E.O. Nos. 228 and
229 were issued. These orders rendered his motion moot and academic
because they directly effected the transfer of his land to the private
respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of
the Philippines.
(2) The said executive orders are violative of the constitutional
provision that no private property shall be taken without due
process or just compensation.
(3) The petitioner is denied the right of maximum retention
provided for under the 1987 Constitution.
is an unconstitutional taking of a vested property right. It is also his

contention that the inclusion of even small landowners in the program
along with other landowners with lands consisting of seven hectares or
more is undemocratic.
In his Comment, the Solicitor General submits that the petition is
premature because the motion for reconsideration filed with the Minister of
Agrarian Reform is still unresolved. As for the validity of the issuance of
E.O. Nos. 228 and 229, he argues that they were enacted pursuant to
Section 6, Article XVIII of the Transitory Provisions of the 1987 Constitution
which reads:
The incumbent president shall continue to exercise legislative powers until
the first Congress is convened.
On the issue of just compensation, his position is that when P.D. No. 27 was
promulgated on October 21. 1972, the tenant-farmer of agricultural land
was deemed the owner of the land he was tilling. The leasehold rentals
paid after that date should therefore be considered amortization payments.
In his Reply to the public respondents, the petitioner maintains that the
motion he filed was resolved on December 14, 1987. An appeal to the
Office of the President would be useless with the promulgation of E.O. Nos.
228 and 229, which in effect sanctioned the validity of the public
respondent's acts.
G.R. No. 78742
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The petitioners in this case invoke the right of retention granted by P.D. No.
27 to owners of rice and corn lands not exceeding seven hectares as long
as they are cultivating or intend to cultivate the same. Their respective
lands do not exceed the statutory limit but are occupied by tenants who
are actually cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation of
P.D. No. 27:
No tenant-farmer in agricultural lands primarily devoted to rice and
corn shall be ejected or removed from his farmholding until such
time as the respective rights of the tenantfarmers and the
landowner shall have been determined in accordance with the
rules and regulations implementing P.D. No. 27.
The petitioners claim they cannot eject their tenants and so are unable to
enjoy their right of retention because the Department of Agrarian Reform
has so far not issued the implementing rules required under the abovequoted decree. They therefore ask the Court for a writ of mandamus to
compel the respondent to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been
amended by LOI 474 removing any right of retention from persons who
own other agricultural lands of more than 7 hectares in aggregate area or
lands used for residential, commercial, industrial or other purposes from
which they derive adequate income for their family. And even assuming
that the petitioners do not fall under its terms, the regulations
implementing P.D. No. 27 have already been issued, to wit, the
Memorandum dated July 10, 1975 (Interim Guidelines on Retention by
Small Landowners, with an accompanying Retention Guide Table),
Memorandum Circular No. 11 dated April 21, 1978, (Implementation
Guidelines of LOI No. 474), Memorandum Circular No. 18-81 dated
December 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and
Retention by Small Landowners), and DAR Administrative Order No. 1,
series of 1985 (Providing for a Cut-off Date for Landowners to Apply for
Retention and/or to Protest the Coverage of their Landholdings under
Operation Land Transfer pursuant to P.D. No. 27). For failure to file the
corresponding applications for retention under these measures, the
petitioners are now barred from invoking this right.
The public respondent also stresses that the petitioners have prematurely
initiated this case notwithstanding the pendency of their appeal to the
President of the Philippines. Moreover, the issuance of the implementing
rules, assuming this has not yet been done, involves the exercise of
discretion which cannot be controlled through the writ of mandamus. This
is especially true if this function is entrusted, as in this case, to a separate

department of the government.
In their Reply, the petitioners insist that the above-cited measures are not
applicable to them because they do not own more than seven hectares of
agricultural land. Moreover, assuming arguendo that the rules were
intended to cover them also, the said measures are nevertheless not in
force because they have not been published as required by law and the
ruling of this Court in Tanada v. Tuvera. 10 As for LOI 474, the same is
ineffective for the additional reason that a mere letter of instruction could
not have repealed the presidential decree.
I
Although holding neither purse nor sword and so regarded as the weakest
of the three departments of the government, the judiciary is nonetheless
vested with the power to annul the acts of either the legislative or the
executive or of both when not conformable to the fundamental law. This is
the reason for what some quarters call the doctrine of judicial supremacy.
Even so, this power is not lightly assumed or readily exercised. The
doctrine of separation of powers imposes upon the courts a proper
restraint, born of the nature of their functions and of their respect for the
other departments, in striking down the acts of the legislative and the
executive as unconstitutional. The policy, indeed, is a blend of courtesy
and caution. To doubt is to sustain. The theory is that before the act was
done or the law was enacted, earnest studies were made by Congress or
the President, or both, to insure that the Constitution would not be
breached.
In addition, the Constitution itself lays down stringent conditions for a
declaration of unconstitutionality, requiring therefor the concurrence of a
majority of the members of the Supreme Court who took part in the
deliberations and voted on the issue during their session en banc. 11 And as
established by judge made doctrine, the Court will assume jurisdiction over
a constitutional question only if it is shown that the essential requisites of a
judicial inquiry into such a question are first satisfied. Thus, there must be
an actual case or controversy involving a conflict of legal rights susceptible
of judicial determination, the constitutional question must have been
opportunely raised by the proper party, and the resolution of the question
is unavoidably necessary to the decision of the case itself. 12
With particular regard to the requirement of proper party as applied in the
cases before us, we hold that the same is satisfied by the petitioners and
intervenors because each of them has sustained or is in danger of
sustaining an immediate injury as a result of the acts or measures
complained of. 13 And even if, strictly speaking, they are not covered by the
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definition, it is still within the wide discretion of the Court to waive the
requirement and so remove the impediment to its addressing and resolving
the serious constitutional questions raised.
The cases before us categorically raise constitutional questions that this

Court must categorically resolve. And so we shall.
II
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers

were allowed to question the constitutionality of several executive orders
issued by President Quirino although they were invoking only an indirect
and general interest shared in common with the public. The Court
dismissed the objection that they were not proper parties and ruled that
"the transcendental importance to the public of these cases demands that
they be settled promptly and definitely, brushing aside, if we must,
technicalities of procedure." We have since then applied this exception in
many other cases. 15
The other above-mentioned requisites have also been met in the present
petitions.
In must be stressed that despite the inhibitions pressing upon the Court
when confronted with constitutional issues like the ones now before it, it
will not hesitate to declare a law or act invalid when it is convinced that
this must be done. In arriving at this conclusion, its only criterion will be
the Constitution as God and its conscience give it the light to probe its
meaning and discover its purpose. Personal motives and political
considerations are irrelevancies that cannot influence its decision.
Blandishment is as ineffectual as intimidation.
For all the awesome power of the Congress and the Executive, the Court
will not hesitate to "make the hammer fall, and heavily," to use Justice
Laurel's pithy language, where the acts of these departments, or of any
public official, betray the people's will as expressed in the Constitution.
It need only be added, to borrow again the words of Justice Laurel, that
... when the judiciary mediates to allocate constitutional
boundaries, it does not assert any superiority over the other
departments; it does not in reality nullify or invalidate an act of the
Legislature, but only asserts the solemn and sacred obligation
assigned to it by the Constitution to determine conflicting claims of
authority under the Constitution and to establish for the parties in
an actual controversy the rights which that instrument secures and
guarantees to them. This is in truth all that is involved in what is
termed "judicial supremacy" which properly is the power of judicial
review under the Constitution. 16
We proceed first to the examination of the preliminary issues before

resolving the more serious challenges to the constitutionality of the several
measures involved in these petitions.
The promulgation of P.D. No. 27 by President Marcos in the exercise of his
powers under martial law has already been sustained in Gonzales v.
Estrella and we find no reason to modify or reverse it on that issue. As for
the power of President Aquino to promulgate Proc. No. 131 and E.O. Nos.
228 and 229, the same was authorized under Section 6 of the Transitory
Provisions of the 1987 Constitution, quoted above.
The said measures were issued by President Aquino before July 27, 1987,
when the Congress of the Philippines was formally convened and took over
legislative power from her. They are not "midnight" enactments intended
to pre-empt the legislature because E.O. No. 228 was issued on July 17,
1987, and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were
both issued on July 22, 1987. Neither is it correct to say that these
measures ceased to be valid when she lost her legislative power for, like
any statute, they continue to be in force unless modified or repealed by
subsequent law or declared invalid by the courts. A statute does not ipso
facto become inoperative simply because of the dissolution of the
legislature that enacted it. By the same token, President Aquino's loss of
legislative power did not have the effect of invalidating all the measures
enacted by her when and as long as she possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected
but in fact substantially affirmed the challenged measures and has
specifically provided that they shall be suppletory to R.A. No. 6657
whenever not inconsistent with its provisions. 17 Indeed, some portions of
the said measures, like the creation of the P50 billion fund in Section 2 of
Proc. No. 131, and Sections 20 and 21 of E.O. No. 229, have been
incorporated by reference in the CARP Law.18
That fund, as earlier noted, is itself being questioned on the ground that it
does not conform to the requirements of a valid appropriation as specified
in the Constitution. Clearly, however, Proc. No. 131 is not an appropriation
measure even if it does provide for the creation of said fund, for that is not
its principal purpose. An appropriation law is one the primary and specific
purpose of which is to authorize the release of public funds from the
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treasury. 19 The creation of the fund is only incidental to the main objective
of the proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked, to wit,
Section 24 and Section 25(4) of Article VI, are not applicable. With
particular reference to Section 24, this obviously could not have been
complied with for the simple reason that the House of Representatives,
which now has the exclusive power to initiate appropriation measures, had
not yet been convened when the proclamation was issued. The legislative
power was then solely vested in the President of the Philippines, who
embodied, as it were, both houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O. No.
229 should be invalidated because they do not provide for retention limits
as required by Article XIII, Section 4 of the Constitution is no longer
tenable. R.A. No. 6657 does provide for such limits now in Section 6 of the
law, which in fact is one of its most controversial provisions. This section
declares:
Retention Limits. Except as otherwise provided in this Act, no
person may own or retain, directly or indirectly, any public or
private agricultural land, the size of which shall vary according to
factors governing a viable family-sized farm, such as commodity
produced, terrain, infrastructure, and soil fertility as determined by
the Presidential Agrarian Reform Council (PARC) created hereunder,
but in no case shall retention by the landowner exceed five (5)
hectares. Three (3) hectares may be awarded to each child of the
landowner, subject to the following qualifications: (1) that he is at
least fifteen (15) years of age; and (2) that he is actually tilling the
land or directly managing the farm; Provided, That landowners
whose lands have been covered by Presidential Decree No. 27 shall
be allowed to keep the area originally retained by them
thereunder, further, That original homestead grantees or direct
compulsory heirs who still own the original homestead at the time
of the approval of this Act shall retain the same areas as long as
they continue to cultivate said homestead.
The argument that E.O. No. 229 violates the constitutional requirement
that a bill shall have only one subject, to be expressed in its title, deserves
only short attention. It is settled that the title of the bill does not have to be
a catalogue of its contents and will suffice if the matters embodied in the
text are relevant to each other and may be inferred from the title. 20
The Court wryly observes that during the past dictatorship, every
presidential issuance, by whatever name it was called, had the force and
effect of law because it came from President Marcos. Such are the ways of
despots. Hence, it is futile to argue, as the petitioners do in G.R. No. 79744,

that LOI 474 could not have repealed P.D. No. 27 because the former was
only a letter of instruction. The important thing is that it was issued by
President Marcos, whose word was law during that time.
But for all their peremptoriness, these issuances from the President Marcos
still had to comply with the requirement for publication as this Court held
in Tanada v. Tuvera. 21 Hence, unless published in the Official Gazette in
accordance with Article 2 of the Civil Code, they could not have any force
and effect if they were among those enactments successfully challenged in
that case. LOI 474 was published, though, in the Official Gazette dated
November 29,1976.)
Finally, there is the contention of the public respondent in G.R. No. 78742
that the writ of mandamus cannot issue to compel the performance of a
discretionary act, especially by a specific department of the government.
That is true as a general proposition but is subject to one important
qualification. Correctly and categorically stated, the rule is that mandamus
will lie to compel the discharge of the discretionary duty itself but not to
control the discretion to be exercised. In other words, mandamus can issue
to require action only but not specific action.
Whenever a duty is imposed upon a public official and an
unnecessary and unreasonable delay in the exercise of such duty
occurs, if it is a clear duty imposed by law, the courts will intervene
by the extraordinary legal remedy of mandamus to compel action.
If the duty is purely ministerial, the courts will require specific
action. If the duty is purely discretionary, the courts
by mandamus will require action only. For example, if an inferior
court, public official, or board should, for an unreasonable length of
time, fail to decide a particular question to the great detriment of
all parties concerned, or a court should refuse to take jurisdiction of
a cause when the law clearly gave it jurisdiction mandamus will
issue, in the first case to require a decision, and in the second to
require that jurisdiction be taken of the cause. 22
And while it is true that as a rule the writ will not be proper as long as there
is still a plain, speedy and adequate remedy available from the
administrative authorities, resort to the courts may still be permitted if the
issue raised is a question of law. 23
III
There are traditional distinctions between the police power and the power
of eminent domain that logically preclude the application of both powers at
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the same time on the same subject. In the case of City of Baguio v.
NAWASA, 24for example, where a law required the transfer of all municipal
waterworks systems to the NAWASA in exchange for its assets of
equivalent value, the Court held that the power being exercised was
eminent domain because the property involved was wholesome and
intended for a public use. Property condemned under the police power is
noxious or intended for a noxious purpose, such as a building on the verge
of collapse, which should be demolished for the public safety, or obscene
materials, which should be destroyed in the interest of public morals. The
confiscation of such property is not compensable, unlike the taking of
property under the power of expropriation, which requires the payment of
just compensation to the owner.
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down
the limits of the police power in a famous aphorism: "The general rule at
least is that while property may be regulated to a certain extent, if
regulation goes too far it will be recognized as a taking." The regulation
that went "too far" was a law prohibiting mining which might cause the
subsidence of structures for human habitation constructed on the land
surface. This was resisted by a coal company which had earlier granted a
deed to the land over its mine but reserved all mining rights thereunder,
with the grantee assuming all risks and waiving any damage claim. The
Court held the law could not be sustained without compensating the
grantor. Justice Brandeis filed a lone dissent in which he argued that there
was a valid exercise of the police power. He said:
Every restriction upon the use of property imposed in the exercise
of the police power deprives the owner of some right theretofore
enjoyed, and is, in that sense, an abridgment by the State of rights
in property without making compensation. But restriction imposed
to protect the public health, safety or morals from dangers
threatened is not a taking. The restriction here in question is
merely the prohibition of a noxious use. The property so restricted
remains in the possession of its owner. The state does not
appropriate it or make any use of it. The state merely prevents the
owner from making a use which interferes with paramount rights of
the public. Whenever the use prohibited ceases to be noxious as
it may because of further changes in local or social conditions
the restriction will have to be removed and the owner will again be
free to enjoy his property as heretofore.
Recent trends, however, would indicate not a polarization but a mingling of
the police power and the power of eminent domain, with the latter being
used as an implement of the former like the power of taxation. The
employment of the taxing power to achieve a police purpose has long been
accepted. 26 As for the power of expropriation, Prof. John J. Costonis of the
1st
University of Illinois College of Law (referring to the earlier case of Euclid v.
Ambler Realty Co., 272 US 365, which sustained a zoning law under the
police power) makes the following significant remarks:
Euclid, moreover, was decided in an era when judges located the
Police and eminent domain powers on different planets. Generally
speaking, they viewed eminent domain as encompassing public
acquisition of private property for improvements that would be
available for public use," literally construed. To the police power, on
the other hand, they assigned the less intrusive task of preventing
harmful externalities a point reflected in the Euclid opinion's
reliance on an analogy to nuisance law to bolster its support of
zoning. So long as suppression of a privately authored harm bore a
plausible relation to some legitimate "public purpose," the
pertinent measure need have afforded no compensation whatever.
With the progressive growth of government's involvement in land
use, the distance between the two powers has contracted
considerably. Today government often employs eminent domain
interchangeably with or as a useful complement to the police
power-- a trend expressly approved in the Supreme Court's 1954
decision in Berman v. Parker, which broadened the reach of
eminent domain's "public use" test to match that of the police
power's standard of "public purpose." 27
The Berman case sustained a redevelopment project and the improvement
of blighted areas in the District of Columbia as a proper exercise of the
police power. On the role of eminent domain in the attainment of this
purpose, Justice Douglas declared:
If those who govern the District of Columbia decide that the
Nation's Capital should be beautiful as well as sanitary, there is
nothing in the Fifth Amendment that stands in the way.
Once the object is within the authority of Congress, the right to
realize it through the exercise of eminent domain is clear.
For the power of eminent domain is merely the means to the
end. 28
In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3
vote in 1978, the U.S Supreme Court sustained the respondent's
Landmarks Preservation Law under which the owners of the Grand Central
Terminal had not been allowed to construct a multi-story office building
over the Terminal, which had been designated a historic landmark.
Preservation of the landmark was held to be a valid objective of the police
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power. The problem, however, was that the owners of the Terminal would
be deprived of the right to use the airspace above it although other
landowners in the area could do so over their respective properties. While
insisting that there was here no taking, the Court nonetheless recognized
certain compensatory rights accruing to Grand Central Terminal which it
said would "undoubtedly mitigate" the loss caused by the regulation. This
"fair compensation," as he called it, was explained by Prof. Costonis in this
wise:
In return for retaining the Terminal site in its pristine landmark status, Penn
Central was authorized to transfer to neighboring properties the authorized
but unused rights accruing to the site prior to the Terminal's designation as
a landmark the rights which would have been exhausted by the 59-story
building that the city refused to countenance atop the Terminal. Prevailing
bulk restrictions on neighboring sites were proportionately relaxed,
theoretically enabling Penn Central to recoup its losses at the Terminal site
by constructing or selling to others the right to construct larger, hence
more profitable buildings on the transferee sites. 30
The cases before us present no knotty complication insofar as the question
of compensable taking is concerned. To the extent that the measures under
challenge merely prescribe retention limits for landowners, there is an
exercise of the police power for the regulation of private property in
accordance with the Constitution. But where, to carry out such regulation,
it becomes necessary to deprive such owners of whatever lands they may
own in excess of the maximum area allowed, there is definitely a taking
under the power of eminent domain for which payment of just
compensation is imperative. The taking contemplated is not a mere
limitation of the use of the land. What is required is the surrender of the
title to and the physical possession of the said excess and all beneficial
rights accruing to the owner in favor of the farmer-beneficiary. This is
definitely an exercise not of the police power but of the power of eminent
domain.
Whether as an exercise of the police power or of the power of eminent
domain, the several measures before us are challenged as violative of the
due process and equal protection clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground
that no retention limits are prescribed has already been discussed and
dismissed. It is noted that although they excited many bitter exchanges
during the deliberation of the CARP Law in Congress, the retention limits
finally agreed upon are, curiously enough, not being questioned in these
petitions. We therefore do not discuss them here. The Court will come to
the other claimed violations of due process in connection with our
1st
examination of the adequacy of just compensation as required under the
power of expropriation.
The argument of the small farmers that they have been denied equal
protection because of the absence of retention limits has also become
academic under Section 6 of R.A. No. 6657. Significantly, they too have not
questioned the area of such limits. There is also the complaint that they
should not be made to share the burden of agrarian reform, an objection
also made by the sugar planters on the ground that they belong to a
particular class with particular interests of their own. However, no evidence
has been submitted to the Court that the requisites of a valid classification
have been violated.
Classification has been defined as the grouping of persons or things similar
to each other in certain particulars and different from each other in these
same particulars. 31 To be valid, it must conform to the following
requirements: (1) it must be based on substantial distinctions; (2) it must
be germane to the purposes of the law; (3) it must not be limited to
existing conditions only; and (4) it must apply equally to all the members
of the class. 32 The Court finds that all these requisites have been met by
the measures here challenged as arbitrary and discriminatory.
Equal protection simply means that all persons or things similarly situated
must be treated alike both as to the rights conferred and the liabilities
imposed. 33 The petitioners have not shown that they belong to a different
class and entitled to a different treatment. The argument that not only
landowners but also owners of other properties must be made to share the
burden of implementing land reform must be rejected. There is a
substantial distinction between these two classes of owners that is clearly
visible except to those who will not see. There is no need to elaborate on
this matter. In any event, the Congress is allowed a wide leeway in
providing for a valid classification. Its decision is accorded recognition and
respect by the courts of justice except only where its discretion is abused
to the detriment of the Bill of Rights.
It is worth remarking at this juncture that a statute may be sustained under
the police power only if there is a concurrence of the lawful subject and the
lawful method. Put otherwise, the interests of the public generally as
distinguished from those of a particular class require the interference of
the State and, no less important, the means employed are reasonably
necessary for the attainment of the purpose sought to be achieved and not
unduly oppressive upon individuals. 34 As the subject and purpose of
agrarian reform have been laid down by the Constitution itself, we may say
that the first requirement has been satisfied. What remains to be examined
is the validity of the method employed to achieve the constitutional goal.
43
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One of the basic principles of the democratic system is that where the
rights of the individual are concerned, the end does not justify the means.
It is not enough that there be a valid objective; it is also necessary that the
means employed to pursue it be in keeping with the Constitution. Mere
expediency will not excuse constitutional shortcuts. There is no question
that not even the strongest moral conviction or the most urgent public
need, subject only to a few notable exceptions, will excuse the bypassing
of an individual's rights. It is no exaggeration to say that a, person invoking
a right guaranteed under Article III of the Constitution is a majority of one
even as against the rest of the nation who would deny him that right.
That right covers the person's life, his liberty and his property under
Section 1 of Article III of the Constitution. With regard to his property, the
owner enjoys the added protection of Section 9, which reaffirms the
familiar rule that private property shall not be taken for public use without
just compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that enables it to
forcibly acquire private lands intended for public use upon
payment of just compensation to the owner. Obviously, there is no
need to expropriate where the owner is willing to sell under terms
also acceptable to the purchaser, in which case an ordinary deed of
sale may be agreed upon by the parties. 35 It is only where the
owner is unwilling to sell, or cannot accept the price or other
conditions offered by the vendee, that the power of eminent
domain will come into play to assert the paramount authority of
the State over the interests of the property owner. Private rights
must then yield to the irresistible demands of the public interest on
the time-honored justification, as in the case of the police power,
that the welfare of the people is the supreme law.
But for all its primacy and urgency, the power of expropriation is by no
means absolute (as indeed no power is absolute). The limitation is found in
the constitutional injunction that "private property shall not be taken for
public use without just compensation" and in the abundant jurisprudence
that has evolved from the interpretation of this principle. Basically, the
requirements for a proper exercise of the power are: (1) public use and (2)
just compensation.
Let us dispose first of the argument raised by the petitioners in G.R. No.
79310 that the State should first distribute public agricultural lands in the
pursuit of agrarian reform instead of immediately disturbing property rights

by forcibly acquiring private agricultural lands. Parenthetically, it is not
correct to say that only public agricultural lands may be covered by the
CARP as the Constitution calls for "the just distribution of all agricultural
lands." In any event, the decision to redistribute private agricultural lands
in the manner prescribed by the CARP was made by the legislative and
executive departments in the exercise of their discretion. We are not
justified in reviewing that discretion in the absence of a clear showing that
it has been abused.
A becoming courtesy admonishes us to respect the decisions of the
political departments when they decide what is known as the political
question. As explained by Chief Justice Concepcion in the case of Taada v.
Cuenco: 36
The term "political question" connotes what it means in ordinary
parlance, namely, a question of policy. It refers to "those questions
which, under the Constitution, are to be decided by the people in
their sovereign capacity; or in regard to which full discretionary
authority has been delegated to the legislative or executive branch
of the government." It is concerned with issues dependent upon
the wisdom, not legality, of a particular measure.
It is true that the concept of the political question has been constricted
with the enlargement of judicial power, which now includes the authority of
the courts "to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government." 37 Even so, this should not
be construed as a license for us to reverse the other departments simply
because their views may not coincide with ours.
The legislature and the executive have been seen fit, in their wisdom, to
include in the CARP the redistribution of private landholdings (even as the
distribution of public agricultural lands is first provided for, while also
continuing apace under the Public Land Act and other cognate laws). The
Court sees no justification to interpose its authority, which we may assert
only if we believe that the political decision is not unwise, but illegal. We do
not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:
Congress having determined, as it did by the Act of March 3,1909
that the entire St. Mary's river between the American bank and the
international line, as well as all of the upland north of the present
ship canal, throughout its entire length, was "necessary for the
44
Consti 2
SET
purpose of navigation of said waters, and the waters connected
therewith," that determination is conclusive in condemnation
proceedings instituted by the United States under that Act, and
there is no room for judicial review of the judgment of Congress ... .
As earlier observed, the requirement for public use has already been
settled for us by the Constitution itself No less than the 1987 Charter calls
for agrarian reform, which is the reason why private agricultural lands are
to be taken from their owners, subject to the prescribed maximum
retention limits. The purposes specified in P.D. No. 27, Proc. No. 131 and
R.A. No. 6657 are only an elaboration of the constitutional injunction that
the State adopt the necessary measures "to encourage and undertake the
just distribution of all agricultural lands to enable farmers who are landless
to own directly or collectively the lands they till." That public use, as
pronounced by the fundamental law itself, must be binding on us.
The second requirement, i.e., the payment of just compensation, needs a
longer and more thoughtful examination.
Just compensation is defined as the full and fair equivalent of the property
taken from its owner by the expropriator. 39 It has been repeatedly stressed
by this Court that the measure is not the taker's gain but the owner's
loss. 40 The word "just" is used to intensify the meaning of the word
"compensation" to convey the idea that the equivalent to be rendered for
the property to be taken shall be real, substantial, full, ample. 41
It bears repeating that the measures challenged in these petitions
contemplate more than a mere regulation of the use of private lands under
the police power. We deal here with an actual taking of private agricultural
lands that has dispossessed the owners of their property and deprived
them of all its beneficial use and enjoyment, to entitle them to the just
compensation mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is compensable
taking when the following conditions concur: (1) the expropriator must
enter a private property; (2) the entry must be for more than a momentary
period; (3) the entry must be under warrant or color of legal authority; (4)
the property must be devoted to public use or otherwise informally
appropriated or injuriously affected; and (5) the utilization of the property
for public use must be in such a way as to oust the owner and deprive him
of beneficial enjoyment of the property. All these requisites are envisioned
in the measures before us.
1st
compensation is a public charge, the good faith of the public is pledged for
its payment, and all the resources of taxation may be employed in raising
the amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that:
Upon receipt by the landowner of the corresponding
payment or, in case of rejection or no response from the
landowner, upon the deposit with an accessible bank
designated by the DAR of the compensation in cash or in
LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the
proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines.
The DAR shall thereafter proceed with the redistribution of
the land to the qualified beneficiaries.
Objection is raised, however, to the manner of fixing the just
compensation, which it is claimed is entrusted to the administrative
authorities in violation of judicial prerogatives. Specific reference is made
to Section 16(d), which provides that in case of the rejection or disregard
by the owner of the offer of the government to buy his land... the DAR shall conduct summary administrative proceedings to
determine the compensation for the land by requiring the
landowner, the LBP and other interested parties to submit evidence
as to the just compensation for the land, within fifteen (15) days
from the receipt of the notice. After the expiration of the above
period, the matter is deemed submitted for decision. The DAR shall
decide the case within thirty (30) days after it is submitted for
decision.
To be sure, the determination of just compensation is a function addressed
to the courts of justice and may not be usurped by any other branch or
official of the government. EPZA v. Dulay 44 resolved a challenge to several
decrees promulgated by President Marcos providing that the just
compensation for property under expropriation should be either the
assessment of the property by the government or the sworn valuation
thereof by the owner, whichever was lower. In declaring these decrees
unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:
The method of ascertaining just compensation under the aforecited
decrees constitutes impermissible encroachment on judicial
prerogatives. It tends to render this Court inutile in a matter which
under this Constitution is reserved to it for final determination.
Where the State itself is the expropriator, it is not necessary for it to make
a deposit upon its taking possession of the condemned property, as "the
45
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Thus, although in an expropriation proceeding the court technically
would still have the power to determine the just compensation for
the property, following the applicable decrees, its task would be
relegated to simply stating the lower value of the property as
declared either by the owner or the assessor. As a necessary
consequence, it would be useless for the court to appoint
commissioners under Rule 67 of the Rules of Court. Moreover, the
need to satisfy the due process clause in the taking of private
property is seemingly fulfilled since it cannot be said that a judicial
proceeding was not had before the actual taking. However, the
strict application of the decrees during the proceedings would be
nothing short of a mere formality or charade as the court has only
to choose between the valuation of the owner and that of the
assessor, and its choice is always limited to the lower of the two.
The court cannot exercise its discretion or independence in
determining what is just or fair. Even a grade school pupil could
substitute for the judge insofar as the determination of
constitutional just compensation is concerned.
constitutionally objectionable. Although the proceedings are described as

summary, the landowner and other interested parties are nevertheless
allowed an opportunity to submit evidence on the real value of the
property. But more importantly, the determination of the just compensation
by the DAR is not by any means final and conclusive upon the landowner
or any other interested party, for Section 16(f) clearly provides:
Any party who disagrees with the decision may bring the matter to
the court of proper jurisdiction for final determination of just
compensation.
The determination made by the DAR is only preliminary unless accepted by
all parties concerned. Otherwise, the courts of justice will still have the
right to review with finality the said determination in the exercise of what is
admittedly a judicial function.
The second and more serious objection to the provisions on just
compensation is not as easily resolved.
xxx
This refers to Section 18 of the CARP Law providing in full as follows:
In the present petition, we are once again confronted with the
same question of whether the courts under P.D. No. 1533, which
contains the same provision on just compensation as its
predecessor decrees, still have the power and authority to
determine just compensation, independent of what is stated by the
decree and to this effect, to appoint commissioners for such
purpose.
This time, we answer in the affirmative.
SEC. 18. Valuation and Mode of Compensation. The LBP shall

compensate the landowner in such amount as may be agreed upon
by the landowner and the DAR and the LBP, in accordance with the
criteria provided for in Sections 16 and 17, and other pertinent
provisions hereof, or as may be finally determined by the court, as
the just compensation for the land.
The compensation shall be paid in one of the following modes, at
the option of the landowner:
xxx
(1) Cash payment, under the following terms and conditions:
It is violative of due process to deny the owner the opportunity to
prove that the valuation in the tax documents is unfair or wrong.
And it is repulsive to the basic concepts of justice and fairness to
allow the haphazard work of a minor bureaucrat or clerk to
absolutely prevail over the judgment of a court promulgated only
after expert commissioners have actually viewed the property,
after evidence and arguments pro and con have been presented,
and after all factors and considerations essential to a fair and just
determination have been judiciously evaluated.
(a) For lands above fifty (50) hectares, insofar as the excess
hectarage is concerned Twenty-five percent (25%) cash, the
balance to be paid in government financial instruments
negotiable at any time.
(b) For lands above twenty-four (24) hectares and up to fifty (50)
hectares Thirty percent (30%) cash, the balance to be paid
in government financial instruments negotiable at any time.
A reading of the aforecited Section 16(d) will readily show that it does not
suffer from the arbitrariness that rendered the challenged decrees
46
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(c) For lands twenty-four (24) hectares and below Thirty-five
percent (35%) cash, the balance to be paid in government
financial instruments negotiable at any time.
(2) Shares of stock in government-owned or controlled corporations, LBP
preferred shares, physical assets or other qualified investments in
accordance with guidelines set by the PARC;
will be limited to a certain percentage of the outstanding

balance of the financial instruments; Provided, further, That
the PARC shall determine the percentages mentioned
above;
vi.
(vi) Payment for tuition fees of the immediate family of the

original bondholder in government universities, colleges,
trade schools, and other institutions;
vii.
(vii) Payment for fees of the immediate family of the

original bondholder in government hospitals; and
viii.
(viii) Such other uses as the PARC may from time to time
allow.
(3) Tax credits which can be used against any tax liability;
(4) LBP bonds, which shall have the following features:
(a) Market interest rates aligned with 91-day treasury bill rates.
Ten percent (10%) of the face value of the bonds shall mature
every year from the date of issuance until the tenth (10th)
year: Provided, That should the landowner choose to forego the
cash portion, whether in full or in part, he shall be paid
correspondingly in LBP bonds;
(b) Transferability and negotiability. Such LBP bonds may be used
by the landowner, his successors-in- interest or his assigns, up
to the amount of their face value, for any of the following:
i.
Acquisition of land or other real properties of the

government, including assets under the Asset Privatization
Program and other assets foreclosed by government
financial institutions in the same province or region where
the lands for which the bonds were paid are situated;
ii.
(ii) Acquisition of shares of stock of government-owned or

controlled corporations or shares of stock owned by the
government in private corporations;
iii.
(iii) Substitution for surety or bail bonds for the provisional

release of accused persons, or for performance bonds;
iv.
(iv) Security for loans with any government financial

institution, provided the proceeds of the loans shall be
invested in an economic enterprise, preferably in a small
and medium- scale industry, in the same province or region
as the land for which the bonds are paid;
v.
(v) Payment for various taxes and fees to government:

Provided, That the use of these bonds for these purposes
The contention of the petitioners in G.R. No. 79777 is that the above
provision is unconstitutional insofar as it requires the owners of the
expropriated properties to accept just compensation therefor in less than
money, which is the only medium of payment allowed. In support of this
contention, they cite jurisprudence holding that:
The fundamental rule in expropriation matters is that the owner of
the property expropriated is entitled to a just compensation, which
should be neither more nor less, whenever it is possible to make
the assessment, than the money equivalent of said property. Just
compensation has always been understood to be the just and
complete equivalent of the loss which the owner of the thing
expropriated
has
to
suffer
by
reason
of
the
expropriation . 45 (Emphasis supplied.)
In J.M. Tuazon Co. v. Land Tenure Administration,
46
this Court held:
It is well-settled that just compensation means the equivalent for

the value of the property at the time of its taking. Anything beyond
that is more, and anything short of that is less, than just
compensation. It means a fair and full equivalent for the loss
sustained, which is the measure of the indemnity, not whatever
gain would accrue to the expropriating entity. The market value of
the land taken is the just compensation to which the owner of
condemned property is entitled, the market value being that sum
of money which a person desirous, but not compelled to buy, and
an owner, willing, but not compelled to sell, would agree on as a
price to be given and received for such property. (Emphasis
supplied.)
47
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In the United States, where much of our jurisprudence on the subject has
been derived, the weight of authority is also to the effect that just
compensation for property expropriated is payable only in money and not
otherwise. Thus
The medium of payment of compensation is ready money or cash.
The condemnor cannot compel the owner to accept anything but
money, nor can the owner compel or require the condemnor to pay
him on any other basis than the value of the property in money at
the time and in the manner prescribed by the Constitution and the
statutes. When the power of eminent domain is resorted to, there
must be a standard medium of payment, binding upon both
parties, and the law has fixed that standard as money in
cash. 47 (Emphasis supplied.)
Part cash and deferred payments are not and cannot, in the nature
of things, be regarded as a reliable and constant standard of
compensation. 48
"Just compensation" for property taken by condemnation means a
fair equivalent in money, which must be paid at least within a
reasonable time after the taking, and it is not within the power of
the Legislature to substitute for such payment future obligations,
bonds, or other valuable advantage. 49 (Emphasis supplied.)
It cannot be denied from these cases that the traditional medium for the
payment of just compensation is money and no other. And so, conformably,
has just compensation been paid in the past solely in that medium.
However, we do not deal here with the traditional excercise of the power of
eminent domain. This is not an ordinary expropriation where only a specific
property of relatively limited area is sought to be taken by the State from
its owner for a specific and perhaps local purpose.
What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever
found and of whatever kind as long as they are in excess of the maximum
retention limits allowed their owners. This kind of expropriation is intended
for the benefit not only of a particular community or of a small segment of
the population but of the entire Filipino nation, from all levels of our
society, from the impoverished farmer to the land-glutted owner. Its
purpose does not cover only the whole territory of this country but goes
beyond in time to the foreseeable future, which it hopes to secure and
edify with the vision and the sacrifice of the present generation of Filipinos.
Generations yet to come are as involved in this program as we are today,
1st
although hopefully only as beneficiaries of a richer and more fulfilling life
we will guarantee to them tomorrow through our thoughtfulness today.
And, finally, let it not be forgotten that it is no less than the Constitution
itself that has ordained this revolution in the farms, calling for "a just
distribution" among the farmers of lands that have heretofore been the
prison of their dreams but can now become the key at least to their
deliverance.
Such a program will involve not mere millions of pesos. The cost will be
tremendous. Considering the vast areas of land subject to expropriation
under the laws before us, we estimate that hundreds of billions of pesos
will be needed, far more indeed than the amount of P50 billion initially
appropriated, which is already staggering as it is by our present standards.
Such amount is in fact not even fully available at this time.
We assume that the framers of the Constitution were aware of this
difficulty when they called for agrarian reform as a top priority project of
the government. It is a part of this assumption that when they envisioned
the expropriation that would be needed, they also intended that the just
compensation would have to be paid not in the orthodox way but a less
conventional if more practical method. There can be no doubt that they
were aware of the financial limitations of the government and had no
illusions that there would be enough money to pay in cash and in full for
the lands they wanted to be distributed among the farmers. We may
therefore assume that their intention was to allow such manner of payment
as is now provided for by the CARP Law, particularly the payment of the
balance (if the owner cannot be paid fully with money), or indeed of the
entire amount of the just compensation, with other things of value. We may
also suppose that what they had in mind was a similar scheme of payment
as that prescribed in P.D. No. 27, which was the law in force at the time
they deliberated on the new Charter and with which they presumably
agreed in principle.
The Court has not found in the records of the Constitutional Commission
any categorical agreement among the members regarding the meaning to
be given the concept of just compensation as applied to the
comprehensive agrarian reform program being contemplated. There was
the suggestion to "fine tune" the requirement to suit the demands of the
project even as it was also felt that they should "leave it to Congress" to
determine how payment should be made to the landowner and
reimbursement required from the farmer-beneficiaries. Such innovations as
"progressive compensation" and "State-subsidized compensation" were
also proposed. In the end, however, no special definition of the just
compensation for the lands to be expropriated was reached by the
Commission. 50
48
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On the other hand, there is nothing in the records either that militates
against the assumptions we are making of the general sentiments and
intention of the members on the content and manner of the payment to be
made to the landowner in the light of the magnitude of the expenditure
and the limitations of the expropriator.
With these assumptions, the Court hereby declares that the content and
manner of the just compensation provided for in the aforequoted Section
18 of the CARP Law is not violative of the Constitution. We do not mind
admitting that a certain degree of pragmatism has influenced our decision
on this issue, but after all this Court is not a cloistered institution removed
from the realities and demands of society or oblivious to the need for its
enhancement. The Court is as acutely anxious as the rest of our people to
see the goal of agrarian reform achieved at last after the frustrations and
deprivations of our peasant masses during all these disappointing decades.
We are aware that invalidation of the said section will result in the
nullification of the entire program, killing the farmer's hopes even as they
approach realization and resurrecting the spectre of discontent and dissent
in the restless countryside. That is not in our view the intention of the
Constitution, and that is not what we shall decree today.
Accepting the theory that payment of the just compensation is not always
required to be made fully in money, we find further that the proportion of
cash payment to the other things of value constituting the total payment,
as determined on the basis of the areas of the lands expropriated, is not
unduly oppressive upon the landowner. It is noted that the smaller the
land, the bigger the payment in money, primarily because the small
landowner will be needing it more than the big landowners, who can afford
a bigger balance in bonds and other things of value. No less importantly,
the government financial instruments making up the balance of the
payment are "negotiable at any time." The other modes, which are likewise
available to the landowner at his option, are also not unreasonable
because payment is made in shares of stock, LBP bonds, other properties
or assets, tax credits, and other things of value equivalent to the amount
of just compensation.
Admittedly, the compensation contemplated in the law will cause the
landowners, big and small, not a little inconvenience. As already remarked,
this cannot be avoided. Nevertheless, it is devoutly hoped that these
countrymen of ours, conscious as we know they are of the need for their
forebearance and even sacrifice, will not begrudge us their indispensable
share in the attainment of the ideal of agrarian reform. Otherwise, our
pursuit of this elusive goal will be like the quest for the Holy Grail.
1st
of the said Order has been superseded by Section 14 of the CARP Law. This
repeats the requisites of registration as embodied in the earlier measure
but does not provide, as the latter did, that in case of failure or refusal to
register the land, the valuation thereof shall be that given by the provincial
or city assessor for tax purposes. On the contrary, the CARP Law says that
the just compensation shall be ascertained on the basis of the factors
mentioned in its Section 17 and in the manner provided for in Section 16.
The last major challenge to CARP is that the landowner is divested of his
property even before actual payment to him in full of just compensation, in
contravention of a well- accepted principle of eminent domain.
The recognized rule, indeed, is that title to the property expropriated shall
pass from the owner to the expropriator only upon full payment of the just
compensation. Jurisprudence on this settled principle is consistent both
here and in other democratic jurisdictions. Thus:
Title to property which is the subject of condemnation proceedings does
not vest the condemnor until the judgment fixing just compensation is
entered and paid, but the condemnor's title relates back to the date on
which the petition under the Eminent Domain Act, or the commissioner's
report under the Local Improvement Act, is filed. 51
... although the right to appropriate and use land taken for a canal is
complete at the time of entry, title to the property taken remains in the
owner until payment is actually made. 52 (Emphasis supplied.)
In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases
holding that title to property does not pass to the condemnor until just
compensation had actually been made. In fact, the decisions appear to be
uniformly to this effect. As early as 1838, in Rubottom v. McLure, 54 it was
held that "actual payment to the owner of the condemned property was a
condition precedent to the investment of the title to the property in the
State" albeit "not to the appropriation of it to public use." In Rexford v.
Knight, 55 the Court of Appeals of New York said that the construction upon
the statutes was that the fee did not vest in the State until the payment of
the compensation although the authority to enter upon and appropriate
the land was complete prior to the payment. Kennedy further said that
"both on principle and authority the rule is ... that the right to enter on and
use the property is complete, as soon as the property is actually
appropriated under the authority of law for a public use, but that the title
does not pass from the owner without his consent, until just compensation
has been made to him."
The complaint against the effects of non-registration of the land under E.O.
No. 229 does not seem to be viable any more as it appears that Section 4
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Our own Supreme Court has held in Visayan Refining Co. v. Camus and
Paredes, 56 that:
If the laws which we have exhibited or cited in the preceding
discussion are attentively examined it will be apparent that the
method of expropriation adopted in this jurisdiction is such as to
afford absolute reassurance that no piece of land can be finally and
irrevocably taken from an unwilling owner until compensation is
paid ... . (Emphasis supplied.)
It is worth stressing at this point that all rights acquired by the tenantfarmer under P.D. No. 27, as recognized under E.O. No. 228, are retained by
him even now under R.A. No. 6657. This should counter-balance the
express provision in Section 6 of the said law that "the landowners whose
lands have been covered by Presidential Decree No. 27 shall be allowed to
keep the area originally retained by them thereunder, further, That original
homestead grantees or direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall retain the same
areas as long as they continue to cultivate said homestead."
It is true that P.D. No. 27 expressly ordered the emancipation of tenantfarmer as October 21, 1972 and declared that he shall "be deemed the
owner" of a portion of land consisting of a family-sized farm except that "no
title to the land owned by him was to be actually issued to him unless and
until he had become a full-fledged member of a duly recognized farmers'
cooperative." It was understood, however, that full payment of the just
compensation also had to be made first, conformably to the constitutional
requirement.
In connection with these retained rights, it does not appear in G.R. No.
78742 that the appeal filed by the petitioners with the Office of the
President has already been resolved. Although we have said that the
doctrine of exhaustion of administrative remedies need not preclude
immediate resort to judicial action, there are factual issues that have yet to
be examined on the administrative level, especially the claim that the
petitioners are not covered by LOI 474 because they do not own other
agricultural lands than the subjects of their petition.
When E.O. No. 228, categorically stated in its Section 1 that:
Obviously, the Court cannot resolve these issues. In any event, assuming
that the petitioners have not yet exercised their retention rights, if any,
under P.D. No. 27, the Court holds that they are entitled to the new
retention rights provided for by R.A. No. 6657, which in fact are on the
whole more liberal than those granted by the decree.
All qualified farmer-beneficiaries are now deemed full owners as of

October 21, 1972 of the land they acquired by virtue of Presidential
Decree No. 27. (Emphasis supplied.)
it was obviously referring to lands already validly acquired under the said
decree, after proof of full-fledged membership in the farmers' cooperatives
and full payment of just compensation. Hence, it was also perfectly proper
for the Order to also provide in its Section 2 that the "lease rentals paid to
the landowner by the farmer- beneficiary after October 21, 1972 (pending
transfer of ownership after full payment of just compensation), shall be
considered as advance payment for the land."
The CARP Law, for its part, conditions the transfer of possession and
ownership of the land to the government on receipt by the landowner of
the corresponding payment or the deposit by the DAR of the compensation
in cash or LBP bonds with an accessible bank. Until then, title also remains
with the landowner. 57 No outright change of ownership is contemplated
either.
Hence, the argument that the assailed measures violate due process by
arbitrarily transferring title before the land is fully paid for must also be
rejected.
V
The CARP Law and the other enactments also involved in these cases have
been the subject of bitter attack from those who point to the shortcomings
of these measures and ask that they be scrapped entirely. To be sure, these
enactments are less than perfect; indeed, they should be continuously reexamined and rehoned, that they may be sharper instruments for the
better protection of the farmer's rights. But we have to start somewhere. In
the pursuit of agrarian reform, we do not tread on familiar ground but
grope on terrain fraught with pitfalls and expected difficulties. This is
inevitable. The CARP Law is not a tried and tested project. On the contrary,
to use Justice Holmes's words, "it is an experiment, as all life is an
experiment," and so we learn as we venture forward, and, if necessary, by
our own mistakes. We cannot expect perfection although we should strive
for it by all means. Meantime, we struggle as best we can in freeing the
farmer from the iron shackles that have unconscionably, and for so long,
fettered his soul to the soil.
By the decision we reach today, all major legal obstacles to the
comprehensive agrarian reform program are removed, to clear the way for
the true freedom of the farmer. We may now glimpse the day he will be
50
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released not only from want but also from the exploitation and disdain of
the past and from his own feelings of inadequacy and helplessness. At last
his servitude will be ended forever. At last the farm on which he toils will be
his farm. It will be his portion of the Mother Earth that will give him not only
the staff of life but also the joy of living. And where once it bred for him
only deep despair, now can he see in it the fruition of his hopes for a more
fulfilling future. Now at last can he banish from his small plot of earth his
insecurities and dark resentments and "rebuild in it the music and the
dream."
WHEREFORE, the Court holds as follows:
1.
R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos.
228 and 229 are SUSTAINED against all the
constitutional objections raised in the herein petitions.
2.
Title to all expropriated properties shall be transferred

to the State only upon full payment of compensation to
their respective owners.
3.
All rights previously acquired by the tenantfarmers

under P.D. No. 27 are retained and recognized.
4.
Landowners who were unable to exercise their rights of

retention under P.D. No. 27 shall enjoy the retention
rights granted by R.A. No. 6657 under the conditions
therein prescribed.
5.
Subject to the above-mentioned rulings all the petitions

are DISMISSED, without pronouncement as to costs.
SO ORDERED.
51
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1st
The private respondent is a graduate of the University of the East with a
degree of Bachelor of Science in Zoology. The petitioner claims that he
took the NMAT three times and flunked it as many times. 1 When he applied
to take it again, the petitioner rejected his application on the basis of the
aforesaid rule. He then went to the Regional Trial Court of Valenzuela,
Metro Manila, to compel his admission to the test.
In his original petition for mandamus, he first invoked his constitutional
rights to academic freedom and quality education. By agreement of the
parties, the private respondent was allowed to take the NMAT scheduled on
April 16, 1989, subject to the outcome of his petition. 2 In an amended
petition filed with leave of court, he squarely challenged the
constitutionality of MECS Order No. 12, Series of 1972, containing the
above-cited rule. The additional grounds raised were due process and
equal protection.
G.R. No. 89572 December 21, 1989

DEPARTMENT OF EDUCATION, CULTURE AND SPORTS (DECS) and
DIRECTOR
OF
CENTER
FOR
EDUCATIONAL
MEASUREMENT, petitioners, vs. ROBERTO REY C. SAN DIEGO and
JUDGE TERESITA DIZON-CAPULONG, in her capacity as Presiding
Judge of the Regional Trial Court of Valenzuela, Metro Manila,
Branch 172, respondents.
CRUZ, J.:
The issue before us is mediocrity. The question is whether a person who
has thrice failed the National Medical Admission Test (NMAT) is entitled to
take it again.
The petitioner contends he may not, under its rule thath) A student shall be allowed only three (3) chances to take the
NMAT. After three (3) successive failures, a student shall not be
allowed to take the NMAT for the fourth time.
The private respondent insists he can, on constitutional grounds.
But first the facts.
After hearing, the respondent judge rendered a decision on July 4, 1989,

declaring the challenged order invalid and granting the petition. Judge
Teresita Dizon-Capulong held that the petitioner had been deprived of his
right to pursue a medical education through an arbitrary exercise of the
police power. 3
We cannot sustain the respondent judge. Her decision must be reversed.
In Tablarin v. Gutierrez, 4 this Court upheld the constitutionality of the NMAT
as a measure intended to limit the admission to medical schools only to
those who have initially proved their competence and preparation for a
medical education. Justice Florentino P. Feliciano declared for a unanimous
Court:
Perhaps the only issue that needs some consideration is whether
there is some reasonable relation between the prescribing of
passing the NMAT as a condition for admission to medical school on
the one hand, and the securing of the health and safety of the
general community, on the other hand. This question is perhaps
most usefully approached by recalling that the regulation of the
pratice of medicine in all its branches has long been recognized as
a reasonable method of protecting the health and safety of the
public. That the power to regulate and control the practice of
medicine includes the power to regulate admission to the ranks of
those authorized to practice medicine, is also well recognized.
Thus, legislation and administrative regulations requiring those
who wish to practice medicine first to take and pass medical board
examinations have long ago been recognized as valid exercises of
governmental power. Similarly, the establishment of minimum
medical educational requirements-i.e., the completion of
52
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prescribed courses in a recognized medical school-for admission to
the medical profession, has also been sustained as a legitimate
exercise of the regulatory authority of the state. What we have
before us in the instant case is closely related: the regulation of
access to medical schools. MECS Order No. 52, s. 1985, as noted
earlier, articulates the rationale of regulation of this type: the
improvement of the professional and technical quality of the
graduates of medical schools, by upgrading the quality of those
admitted to the student body of the medical schools. That
upgrading is sought by selectivity in the process of admission,
selectivity consisting, among other things, of limiting admission to
those who exhibit in the required degree the aptitude for medical
studies and eventually for medical practice. The need to maintain,
and the difficulties of maintaining, high standards in our
professional schools in general, and medical schools in particular,
in the current state of our social and economic development, are
widely known.
We believe that the government is entitled to prescribe an
admission test like the NMAT as a means of achieving its stated
objective of "upgrading the selection of applicants into [our]
medical schools" and of "improv[ing] the quality of medical
education in the country." Given the widespread use today of such
admission tests in, for instance, medical schools in the United
States of America (the Medical College Admission Test [MCAT] and
quite probably, in other countries with far more developed
educational resources than our own, and taking into account the
failure or inability of the petitioners to even attempt to prove
otherwise, we are entitled to hold that the NMAT is reasonably
related to the securing of the ultimate end of legislation and
regulation in this area. That end, it is useful to recall, is the
protection of the public from the potentially deadly effects of
incompetence and ignorance in those who would undertake to
treat our bodies and minds for disease or trauma.
However, the respondent judge agreed with the petitioner that the said
case was not applicable. Her reason was that it upheld only the
requirement for the admission test and said nothing about the so-called
"three-flunk rule."
We see no reason why the rationale in the Tablarin case cannot apply to
the case at bar. The issue raised in both cases is the academic preparation
of the applicant. This may be gauged at least initially by the admission test
and, indeed with more reliability, by the three-flunk rule. The latter cannot
be regarded any less valid than the former in the regulation of the medical
profession.
1st
There is no need to redefine here the police power of the State. Suffice it to
repeat that the power is validly exercised if (a) the interests of the public
generally, as distinguished from those of a particular class, require the
interference of the State, and (b) the means employed are reasonably
necessary to the attainment of the object sought to be accomplished and
not unduly oppressive upon individuals. 5
In other words, the proper exercise of the police power requires the
concurrence of a lawful subject and a lawful method.
The subject of the challenged regulation is certainly within the ambit of the
police power. It is the right and indeed the responsibility of the State to
insure that the medical profession is not infiltrated by incompetents to
whom patients may unwarily entrust their lives and health.
The method employed by the challenged regulation is not irrelevant to the
purpose of the law nor is it arbitrary or oppressive. The three-flunk rule is
intended to insulate the medical schools and ultimately the medical
profession from the intrusion of those not qualified to be doctors.
While every person is entitled to aspire to be a doctor, he does not have a
constitutional right to be a doctor. This is true of any other calling in which
the public interest is involved; and the closer the link, the longer the bridge
to one's ambition. The State has the responsibility to harness its human
resources and to see to it that they are not dissipated or, no less worse, not
used at all. These resources must be applied in a manner that will best
promote the common good while also giving the individual a sense of
satisfaction.
A person cannot insist on being a physician if he will be a menace to his
patients. If one who wants to be a lawyer may prove better as a plumber,
he should be so advised and adviced. Of course, he may not be forced to
be a plumber, but on the other hand he may not force his entry into the
bar. By the same token, a student who has demonstrated promise as a
pianist cannot be shunted aside to take a course in nursing, however
appropriate this career may be for others.
The right to quality education invoked by the private respondent is not
absolute. The Constitution also provides that "every citizen has the right to
choose a profession or course of study, subject to fair, reasonable and
equitable admission and academic requirements. 6
The private respondent must yield to the challenged rule and give way to
those better prepared. Where even those who have qualified may still not
be accommodated in our already crowded medical schools, there is all the
53
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more reason to bar those who, like him, have been tested and found
wanting.
The contention that the challenged rule violates the equal protection
clause is not well-taken. A law does not have to operate with equal force on
all persons or things to be conformable to Article III, Section 1 of the
Constitution.
There can be no question that a substantial distinction exists between
medical students and other students who are not subjected to the NMAT
and the three-flunk rule. The medical profession directly affects the very
lives of the people, unlike other careers which, for this reason, do not
require more vigilant regulation. The accountant, for example, while
belonging to an equally respectable profession, does not hold the same
delicate responsibility as that of the physician and so need not be similarly
treated.
1st
It is time indeed that the State took decisive steps to regulate and enrich
our system of education by directing the student to the course for which he
is best suited as determined by initial tests and evaluations. Otherwise, we
may be "swamped with mediocrity," in the words of Justice Holmes, not
because we are lacking in intelligence but because we are a nation of
misfits.
WHEREFORE, the petition is GRANTED. The decision of the respondent
court dated January 13, 1989, is REVERSED, with costs against the private
respondent. It is so ordered.
There would be unequal protection if some applicants who have passed the
tests are admitted and others who have also qualified are denied entrance.
In other words, what the equal protection requires is equality among
equals.
The Court feels that it is not enough to simply invoke the right to quality
education as a guarantee of the Constitution: one must show that he is
entitled to it because of his preparation and promise. The private
respondent has failed the NMAT five times. 7 While his persistence is
noteworthy, to say the least, it is certainly misplaced, like a hopeless love.
No depreciation is intended or made against the private respondent. It is
stressed that a person who does not qualify in the NMAT is not an absolute
incompetent unfit for any work or occupation. The only inference is that he
is a probably better, not for the medical profession, but for another calling
that has not excited his interest.
In the former, he may be a bungler or at least lackluster; in the latter, he is
more likely to succeed and may even be outstanding. It is for the
appropriate calling that he is entitled to quality education for the full
harnessing of his potentials and the sharpening of his latent talents toward
what may even be a brilliant future.
We cannot have a society of square pegs in round holes, of dentists who
should never have left the farm and engineers who should have studied
banking and teachers who could be better as merchants.
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SET
G.R. No. 74457 March 20, 1987
RESTITUTO YNOT, petitioner, vs. INTERMEDIATE APPELLATE COURT,

THE STATION COMMANDER, INTEGRATED NATIONAL POLICE,
BAROTAC NUEVO, ILOILO and THE REGIONAL DIRECTOR, BUREAU
OF ANIMAL INDUSTRY, REGION IV, ILOILO CITY, respondents.
CRUZ, J.:
The essence of due process is distilled in the immortal cry of Themistocles
to Alcibiades "Strike but hear me first!" It is this cry that the petitioner in
effect repeats here as he challenges the constitutionality of Executive
Order No. 626-A.
The said executive order reads in full as follows:
WHEREAS, the President has given orders prohibiting the
interprovincial movement of carabaos and the slaughtering of
carabaos not complying with the requirements of Executive Order
No. 626 particularly with respect to age;
WHEREAS, it has been observed that despite such orders the
violators still manage to circumvent the prohibition against interprovincial movement of carabaos by transporting carabeef instead;
and
WHEREAS, in order to achieve the purposes and objectives of
Executive Order No. 626 and the prohibition against interprovincial
movement of carabaos, it is necessary to strengthen the said
Executive Order and provide for the disposition of the carabaos and
carabeef subject of the violation;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the
Constitution, do hereby promulgate the following:
SECTION 1. Executive Order No. 626 is hereby amended such that
henceforth, no carabao regardless of age, sex, physical condition
or purpose and no carabeef shall be transported from one province
to another. The carabao or carabeef transported in violation of this
Executive Order as amended shall be subject to confiscation and
forfeiture by the government, to be distributed to charitable
55
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institutions and other similar institutions as the Chairman of the
National Meat Inspection Commission may ay see fit, in the case of
carabeef, and to deserving farmers through dispersal as the
Director of Animal Industry may see fit, in the case of carabaos.
SECTION 2. This Executive Order shall take effect immediately.
Done in the City of Manila, this 25th day of October, in the year of
Our Lord, nineteen hundred and eighty.
(SGD.)
FERDINAND
MARCOS
E.
constitutionality of Executive Order No. 626-A. That is an entirely different

matter.
This Court has declared that while lower courts should observe a becoming
modesty in examining constitutional questions, they are nonetheless not
prevented from resolving the same whenever warranted, subject only to
review by the highest tribunal. 6 We have jurisdiction under the
Constitution to "review, revise, reverse, modify or affirm on appeal
or certiorari, as the law or rules of court may provide," final judgments and
orders of lower courts in, among others, all cases involving the
constitutionality of certain measures. 7 This simply means that the
resolution of such cases may be made in the first instance by these lower
courts.
The petitioner had transported six carabaos in a pump boat from Masbate
to Iloilo on January 13, 1984, when they were confiscated by the police
station commander of Barotac Nuevo, Iloilo, for violation of the above
measure. 1 The petitioner sued for recovery, and the Regional Trial Court of
Iloilo City issued a writ of replevin upon his filing of a supersedeas bond of
P12,000.00. After considering the merits of the case, the court sustained
the confiscation of the carabaos and, since they could no longer be
produced, ordered the confiscation of the bond. The court also declined to
rule on the constitutionality of the executive order, as raise by the
petitioner, for lack of authority and also for its presumed validity. 2
And while it is true that laws are presumed to be constitutional, that

presumption is not by any means conclusive and in fact may be rebutted.
Indeed, if there be a clear showing of their invalidity, and of the need to
declare them so, then "will be the time to make the hammer fall, and
heavily," 8 to recall Justice Laurel's trenchant warning. Stated otherwise,
courts should not follow the path of least resistance by simply presuming
the constitutionality of a law when it is questioned. On the contrary, they
should probe the issue more deeply, to relieve the abscess, paraphrasing
another distinguished jurist, 9 and so heal the wound or excise the
affliction.
The petitioner appealed the decision to the Intermediate Appellate

Court,* 3 which upheld the trial court, ** and he has now come before us in
this petition for review on certiorari.
Judicial power authorizes this; and when the exercise is demanded, there
should be no shirking of the task for fear of retaliation, or loss of favor, or
popular censure, or any other similar inhibition unworthy of the bench,
especially this Court.
The thrust of his petition is that the executive order is unconstitutional

insofar as it authorizes outright confiscation of the carabao or carabeef
being transported across provincial boundaries. His claim is that the
penalty is invalid because it is imposed without according the owner a right
to be heard before a competent and impartial court as guaranteed by due
process. He complains that the measure should not have been presumed,
and so sustained, as constitutional. There is also a challenge to the
improper exercise of the legislative power by the former President under
Amendment No. 6 of the 1973 Constitution. 4
While also involving the same executive order, the case of Pesigan v.
Angeles 5 is not applicable here. The question raised there was the
necessity of the previous publication of the measure in the Official Gazette
before it could be considered enforceable. We imposed the requirement
then on the basis of due process of law. In doing so, however, this Court did
not, as contended by the Solicitor General, impliedly affirm the
The challenged measure is denominated an executive order but it is really

presidential decree, promulgating a new rule instead of merely
implementing an existing law. It was issued by President Marcos not for the
purpose of taking care that the laws were faithfully executed but in the
exercise of his legislative authority under Amendment No. 6. It was
provided thereunder that whenever in his judgment there existed a grave
emergency or a threat or imminence thereof or whenever the legislature
failed or was unable to act adequately on any matter that in his judgment
required immediate action, he could, in order to meet the exigency, issue
decrees, orders or letters of instruction that were to have the force and
effect of law. As there is no showing of any exigency to justify the exercise
of that extraordinary power then, the petitioner has reason, indeed, to
question the validity of the executive order. Nevertheless, since the
determination of the grounds was supposed to have been made by the
President "in his judgment, " a phrase that will lead to protracted
discussion not really necessary at this time, we reserve resolution of this
56
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matter until a more appropriate occasion. For the nonce, we confine
ourselves to the more fundamental question of due process.
It is part of the art of constitution-making that the provisions of the charter
be cast in precise and unmistakable language to avoid controversies that
might arise on their correct interpretation. That is the Ideal. In the case of
the due process clause, however, this rule was deliberately not followed
and the wording was purposely kept ambiguous. In fact, a proposal to
delineate it more clearly was submitted in the Constitutional Convention of
1934, but it was rejected by Delegate Jose P. Laurel, Chairman of the
Committee on the Bill of Rights, who forcefully argued against it. He was
sustained by the body. 10
The due process clause was kept intentionally vague so it would remain
also conveniently resilient. This was felt necessary because due process is
not, like some provisions of the fundamental law, an "iron rule" laying down
an implacable and immutable command for all seasons and all persons.
Flexibility must be the best virtue of the guaranty. The very elasticity of the
due process clause was meant to make it adapt easily to every situation,
enlarging or constricting its protection as the changing times and
circumstances may require.
Aware of this, the courts have also hesitated to adopt their own specific
description of due process lest they confine themselves in a legal
straitjacket that will deprive them of the elbow room they may need to
vary the meaning of the clause whenever indicated. Instead, they have
preferred to leave the import of the protection open-ended, as it were, to
be "gradually ascertained by the process of inclusion and exclusion in the
course of the decision of cases as they arise." 11 Thus, Justice Felix
Frankfurter of the U.S. Supreme Court, for example, would go no farther
than to define due process and in so doing sums it all up as nothing
more and nothing less than "the embodiment of the sporting Idea of fair
play."12
When the barons of England extracted from their sovereign liege the
reluctant promise that that Crown would thenceforth not proceed against
the life liberty or property of any of its subjects except by the lawful
judgment of his peers or the law of the land, they thereby won for
themselves and their progeny that splendid guaranty of fairness that is
now the hallmark of the free society. The solemn vow that King John made
at Runnymede in 1215 has since then resounded through the ages, as a
ringing reminder to all rulers, benevolent or base, that every person, when
confronted by the stern visage of the law, is entitled to have his say in a
fair and open hearing of his cause.
1st
The closed mind has no place in the open society. It is part of the sporting
Idea of fair play to hear "the other side" before an opinion is formed or a
decision is made by those who sit in judgment. Obviously, one side is only
one-half of the question; the other half must also be considered if an
impartial verdict is to be reached based on an informed appreciation of the
issues in contention. It is indispensable that the two sides complement
each other, as unto the bow the arrow, in leading to the correct ruling after
examination of the problem not from one or the other perspective only but
in its totality. A judgment based on less that this full appraisal, on the
pretext that a hearing is unnecessary or useless, is tainted with the vice of
bias or intolerance or ignorance, or worst of all, in repressive regimes, the
insolence of power.
The minimum requirements of due process are notice and
hearing 13 which, generally speaking, may not be dispensed with because
they are intended as a safeguard against official arbitrariness. It is a
gratifying commentary on our judicial system that the jurisprudence of this
country is rich with applications of this guaranty as proof of our fealty to
the rule of law and the ancient rudiments of fair play. We have consistently
declared that every person, faced by the awesome power of the State, is
entitled to "the law of the land," which Daniel Webster described almost
two hundred years ago in the famous Dartmouth College Case, 14 as "the
law which hears before it condemns, which proceeds upon inquiry and
renders judgment only after trial." It has to be so if the rights of every
person are to be secured beyond the reach of officials who, out of mistaken
zeal or plain arrogance, would degrade the due process clause into a worn
and empty catchword.
This is not to say that notice and hearing are imperative in every case for,
to be sure, there are a number of admitted exceptions. The conclusive
presumption, for example, bars the admission of contrary evidence as long
as such presumption is based on human experience or there is a rational
connection between the fact proved and the fact ultimately presumed
therefrom. 15 There are instances when the need for expeditions action
will justify omission of these requisites, as in the summary abatement of a
nuisance per se, like a mad dog on the loose, which may be killed on sight
because of the immediate danger it poses to the safety and lives of the
people. Pornographic materials, contaminated meat and narcotic drugs are
inherently pernicious and may be summarily destroyed. The passport of a
person sought for a criminal offense may be cancelled without hearing, to
compel his return to the country he has fled. 16 Filthy restaurants may be
summarily padlocked in the interest of the public health and bawdy houses
to protect the public morals. 17 In such instances, previous judicial hearing
may be omitted without violation of due process in view of the nature of
the property involved or the urgency of the need to protect the general
welfare from a clear and present danger.
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The protection of the general welfare is the particular function of the police
power which both restraints and is restrained by due process. The police
power is simply defined as the power inherent in the State to regulate
liberty and property for the promotion of the general welfare. 18 By reason
of its function, it extends to all the great public needs and is described as
the most pervasive, the least limitable and the most demanding of the
three inherent powers of the State, far outpacing taxation and eminent
domain. The individual, as a member of society, is hemmed in by the police
power, which affects him even before he is born and follows him still after
he is dead from the womb to beyond the tomb in practically
everything he does or owns. Its reach is virtually limitless. It is a ubiquitous
and often unwelcome intrusion. Even so, as long as the activity or the
property has some relevance to the public welfare, its regulation under the
police power is not only proper but necessary. And the justification is found
in the venerable Latin maxims, Salus populi est suprema lex and Sic utere
tuo ut alienum non laedas, which call for the subordination of individual
interests to the benefit of the greater number.
It is this power that is now invoked by the government to justify Executive
Order No. 626-A, amending the basic rule in Executive Order No. 626,
prohibiting the slaughter of carabaos except under certain conditions. The
original measure was issued for the reason, as expressed in one of its
Whereases, that "present conditions demand that the carabaos and the
buffaloes be conserved for the benefit of the small farmers who rely on
them for energy needs." We affirm at the outset the need for such a
measure. In the face of the worsening energy crisis and the increased
dependence of our farms on these traditional beasts of burden, the
government would have been remiss, indeed, if it had not taken steps to
protect and preserve them.
A similar prohibition was challenged in United States v. Toribio, 19 where a
law regulating the registration, branding and slaughter of large cattle was
claimed to be a deprivation of property without due process of law. The
defendant had been convicted thereunder for having slaughtered his own
carabao without the required permit, and he appealed to the Supreme
Court. The conviction was affirmed. The law was sustained as a valid police
measure to prevent the indiscriminate killing of carabaos, which were then
badly needed by farmers. An epidemic had stricken many of these animals
and the reduction of their number had resulted in an acute decline in
agricultural output, which in turn had caused an incipient famine.
Furthermore, because of the scarcity of the animals and the consequent
increase in their price, cattle-rustling had spread alarmingly, necessitating
more effective measures for the registration and branding of these
animals. The Court held that the questioned statute was a valid exercise of
the police power and declared in part as follows:
1st
To justify the State in thus interposing its authority in
behalf of the public, it must appear, first, that the interests
of the public generally, as distinguished from those of a
particular class, require such interference; and second, that
the
means
are
reasonably
necessary
for
the
accomplishment of the purpose, and not unduly oppressive
upon individuals. ...
From what has been said, we think it is clear that the
enactment of the provisions of the statute under
consideration was required by "the interests of the public
generally, as distinguished from those of a particular class"
and that the prohibition of the slaughter of carabaos for
human consumption, so long as these animals are fit for
agricultural work or draft purposes was a "reasonably
necessary" limitation on private ownership, to protect the
community from the loss of the services of such animals by
their slaughter by improvident owners, tempted either by
greed of momentary gain, or by a desire to enjoy the
luxury of animal food, even when by so doing the
productive power of the community may be measurably
and dangerously affected.
In the light of the tests mentioned above, we hold with the Toribio Case
that the carabao, as the poor man's tractor, so to speak, has a direct
relevance to the public welfare and so is a lawful subject of Executive
Order No. 626. The method chosen in the basic measure is also reasonably
necessary for the purpose sought to be achieved and not unduly
oppressive upon individuals, again following the above-cited doctrine.
There is no doubt that by banning the slaughter of these animals except
where they are at least seven years old if male and eleven years old if
female upon issuance of the necessary permit, the executive order will be
conserving those still fit for farm work or breeding and preventing their
improvident depletion.
But while conceding that the amendatory measure has the same lawful
subject as the original executive order, we cannot say with equal certainty
that it complies with the second requirement, viz., that there be a lawful
method. We note that to strengthen the original measure, Executive Order
No. 626-A imposes an absolute ban not on theslaughter of the carabaos
but on their movement, providing that "no carabao regardless of age, sex,
physical condition or purpose (sic) and no carabeef shall be transported
from one province to another." The object of the prohibition escapes us.
The reasonable connection between the means employed and the purpose
sought to be achieved by the questioned measure is missing
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We do not see how the prohibition of the inter-provincial transport of
carabaos can prevent their indiscriminate slaughter, considering that they
can be killed anywhere, with no less difficulty in one province than in
another. Obviously, retaining the carabaos in one province will not prevent
their slaughter there, any more than moving them to another province will
make it easier to kill them there. As for the carabeef, the prohibition is
made to apply to it as otherwise, so says executive order, it could be easily
circumvented by simply killing the animal. Perhaps so. However, if the
movement of the live animals for the purpose of preventing their slaughter
cannot be prohibited, it should follow that there is no reason either to
prohibit their transfer as, not to be flippant dead meat.
Even if a reasonable relation between the means and the end were to be
assumed, we would still have to reckon with the sanction that the measure
applies for violation of the prohibition. The penalty is outright confiscation
of the carabao or carabeef being transported, to be meted out by the
executive authorities, usually the police only. In the Toribio Case, the
statute was sustained because the penalty prescribed was fine and
imprisonment, to be imposed by the court after trial and conviction of the
accused. Under the challenged measure, significantly, no such trial is
prescribed, and the property being transported is immediately impounded
by the police and declared, by the measure itself, as forfeited to the
government.
In the instant case, the carabaos were arbitrarily confiscated by the police
station commander, were returned to the petitioner only after he had filed
a complaint for recovery and given a supersedeas bond of P12,000.00,
which was ordered confiscated upon his failure to produce the carabaos
when ordered by the trial court. The executive order defined the
prohibition, convicted the petitioner and immediately imposed punishment,
which was carried out forthright. The measure struck at once and pounced
upon the petitioner without giving him a chance to be heard, thus denying
him the centuries-old guaranty of elementary fair play.
It has already been remarked that there are occasions when notice and
hearing may be validly dispensed with notwithstanding the usual
requirement for these minimum guarantees of due process. It is also
conceded that summary action may be validly taken in administrative
proceedings as procedural due process is not necessarily judicial only. 20 In
the exceptional cases accepted, however. there is a justification for the
omission of the right to a previous hearing, to wit, the immediacy of the
problem sought to be corrected and the urgency of the need to correct it.
In the case before us, there was no such pressure of time or action calling
for the petitioner's peremptory treatment. The properties involved were not
even inimical per se as to require their instant destruction. There certainly
1st
was no reason why the offense prohibited by the executive order should
not have been proved first in a court of justice, with the accused being
accorded all the rights safeguarded to him under the Constitution.
Considering that, as we held inPesigan v. Angeles, 21 Executive Order No.
626-A is penal in nature, the violation thereof should have been
pronounced not by the police only but by a court of justice, which alone
would have had the authority to impose the prescribed penalty, and only
after trial and conviction of the accused.
We also mark, on top of all this, the questionable manner of the disposition
of the confiscated property as prescribed in the questioned executive
order. It is there authorized that the seized property shall "be distributed to
charitable institutions and other similar institutions as the Chairman of the
National Meat Inspection Commission may see fit, in the case of carabeef,
and to deserving farmers through dispersal as the Director of Animal
Industry may see fit, in the case of carabaos." (Emphasis supplied.) The
phrase "may see fit" is an extremely generous and dangerous condition, if
condition it is. It is laden with perilous opportunities for partiality and
abuse, and even corruption. One searches in vain for the usual standard
and the reasonable guidelines, or better still, the limitations that the said
officers must observe when they make their distribution. There is none.
Their options are apparently boundless. Who shall be the fortunate
beneficiaries of their generosity and by what criteria shall they be chosen?
Only the officers named can supply the answer, they and they alone may
choose the grantee as they see fit, and in their own exclusive discretion.
Definitely, there is here a "roving commission," a wide and sweeping
authority that is not "canalized within banks that keep it from overflowing,"
in short, a clearly profligate and therefore invalid delegation of legislative
powers.
To sum up then, we find that the challenged measure is an invalid exercise
of the police power because the method employed to conserve the
carabaos is not reasonably necessary to the purpose of the law and, worse,
is unduly oppressive. Due process is violated because the owner of the
property confiscated is denied the right to be heard in his defense and is
immediately condemned and punished. The conferment on the
administrative authorities of the power to adjudge the guilt of the
supposed offender is a clear encroachment on judicial functions and
militates against the doctrine of separation of powers. There is, finally, also
an invalid delegation of legislative powers to the officers mentioned therein
who are granted unlimited discretion in the distribution of the properties
arbitrarily taken. For these reasons, we hereby declare Executive Order No.
626-A unconstitutional.
We agree with the respondent court, however, that the police station
commander who confiscated the petitioner's carabaos is not liable in
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1st
damages for enforcing the executive order in accordance with its mandate.
The law was at that time presumptively valid, and it was his obligation, as
a member of the police, to enforce it. It would have been impertinent of
him, being a mere subordinate of the President, to declare the executive
order unconstitutional and, on his own responsibility alone, refuse to
execute it. Even the trial court, in fact, and the Court of Appeals itself did
not feel they had the competence, for all their superior authority, to
question the order we now annul.
The Court notes that if the petitioner had not seen fit to assert and protect
his rights as he saw them, this case would never have reached us and the
taking of his property under the challenged measure would have become
a faitaccompli despite its invalidity. We commend him for his spirit. Without
the present challenge, the matter would have ended in that pump boat in
Masbate and another violation of the Constitution, for all its obviousness,
would have been perpetrated, allowed without protest, and soon forgotten
in the limbo of relinquished rights.
The strength of democracy lies not in the rights it guarantees but in the
courage of the people to invoke them whenever they are ignored or
violated. Rights are but weapons on the wall if, like expensive tapestry, all
they do is embellish and impress. Rights, as weapons, must be a promise
of protection. They become truly meaningful, and fulfill the role assigned to
them in the free society, if they are kept bright and sharp with use by those
who are not afraid to assert them.
WHEREFORE, Executive Order No. 626-A is hereby declared
unconstitutional. Except as affirmed above, the decision of the Court of
Appeals is reversed. The supersedeas bond is cancelled and the amount
thereof is ordered restored to the petitioner. No costs.
SO ORDERED.
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1st
immediately be developed and should be open for operation not
later than six months from the date of approval of the application.
For several years, the aforequoted section of the Ordinance was not
enforced by city authorities but seven years after the enactment of the
ordinance, the Quezon City Council passed the following resolution:
RESOLVED by the council of Quezon assembled, to request, as it
does hereby request the City Engineer, Quezon City, to stop any
further selling and/or transaction of memorial park lots in Quezon
City where the owners thereof have failed to donate the required
6% space intended for paupers burial.
Pursuant to this petition, the Quezon City Engineer notified respondent
Himlayang Pilipino, Inc. in writing that Section 9 of Ordinance No. 6118, S64 would be enforced
G.R. No. L-34915 June 24, 1983

CITY GOVERNMENT OF QUEZON CITY and CITY COUNCIL OF
QUEZON CITY, petitioners, vs. HON. JUDGE VICENTE G. ERICTA as
Judge of the Court of First Instance of Rizal, Quezon City, Branch
XVIII; HIMLAYANG PILIPINO, INC., respondents.
GUTIERREZ, JR., J.:
This is a petition for review which seeks the reversal of the decision of the
Court of First Instance of Rizal, Branch XVIII declaring Section 9 of
Ordinance No. 6118, S-64, of the Quezon City Council null and void.
Section 9 of Ordinance No. 6118, S-64, entitled "ORDINANCE REGULATING
THE ESTABLISHMENT, MAINTENANCE AND OPERATION OF PRIVATE
MEMORIAL TYPE CEMETERY OR BURIAL GROUND WITHIN THE JURISDICTION
OF QUEZON CITY AND PROVIDING PENALTIES FOR THE VIOLATION
THEREOF" provides:
Sec. 9. At least six (6) percent of the total area of the memorial
park cemetery shall be set aside for charity burial of deceased
persons who are paupers and have been residents of Quezon City
for at least 5 years prior to their death, to be determined by
competent City Authorities. The area so designated shall
Respondent Himlayang Pilipino reacted by filing with the Court of First

Instance of Rizal Branch XVIII at Quezon City, a petition for declaratory
relief, prohibition and mandamus with preliminary injunction (Sp. Proc. No.
Q-16002) seeking to annul Section 9 of the Ordinance in question The
respondent alleged that the same is contrary to the Constitution, the
Quezon City Charter, the Local Autonomy Act, and the Revised
Administrative Code.
There being no issue of fact and the questions raised being purely legal
both petitioners and respondent agreed to the rendition of a judgment on
the pleadings. The respondent court, therefore, rendered the decision
declaring Section 9 of Ordinance No. 6118, S-64 null and void.
A motion for reconsideration having been denied, the City Government and
City Council filed the instant petition.
Petitioners argue that the taking of the respondent's property is a valid and
reasonable exercise of police power and that the land is taken for a public
use as it is intended for the burial ground of paupers. They further argue
that the Quezon City Council is authorized under its charter, in the exercise
of local police power, " to make such further ordinances and resolutions not
repugnant to law as may be necessary to carry into effect and discharge
the powers and duties conferred by this Act and such as it shall deem
necessary and proper to provide for the health and safety, promote the
prosperity, improve the morals, peace, good order, comfort and
convenience of the city and the inhabitants thereof, and for the protection
of property therein."
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On the other hand, respondent Himlayang Pilipino, Inc. contends that the
taking or confiscation of property is obvious because the questioned
ordinance permanently restricts the use of the property such that it cannot
be used for any reasonable purpose and deprives the owner of all
beneficial use of his property.
The respondent also stresses that the general welfare clause is not
available as a source of power for the taking of the property in this case
because it refers to "the power of promoting the public welfare by
restraining and regulating the use of liberty and property." The respondent
points out that if an owner is deprived of his property outright under the
State's police power, the property is generally not taken for public use but
is urgently and summarily destroyed in order to promote the general
welfare. The respondent cites the case of a nuisance per se or the
destruction of a house to prevent the spread of a conflagration.
We find the stand of the private respondent as well as the decision of the
respondent Judge to be well-founded. We quote with approval the lower
court's ruling which declared null and void Section 9 of the questioned city
ordinance:
The issue is: Is Section 9 of the ordinance in question a valid
exercise of the police power?
An examination of the Charter of Quezon City (Rep. Act No. 537),
does not reveal any provision that would justify the ordinance in
question except the provision granting police power to the City.
Section 9 cannot be justified under the power granted to Quezon
City to tax, fix the license fee, and regulate such other business,
trades, and occupation as may be established or practised in the
City.' (Subsections 'C', Sec. 12, R.A. 537).
The power to regulate does not include the power to prohibit
(People vs. Esguerra, 81 PhiL 33, Vega vs. Municipal Board of Iloilo,
L-6765, May 12, 1954; 39 N.J. Law, 70, Mich. 396). A fortiori, the
power to regulate does not include the power to confiscate. The
ordinance in question not only confiscates but also prohibits the
operation of a memorial park cemetery, because under Section 13
of said ordinance, 'Violation of the provision thereof is punishable
with a fine and/or imprisonment and that upon conviction thereof
the permit to operate and maintain a private cemetery shall be
revoked or cancelled.' The confiscatory clause and the penal
provision in effect deter one from operating a memorial park
cemetery. Neither can the ordinance in question be justified under
subsection "t", Section 12 of Republic Act 537 which authorizes
the City Council to-
1st
'prohibit the burial of the dead within the center of
population of the city and provide for their burial in
such proper place and in such manner as the
council may determine, subject to the provisions of
the general law regulating burial grounds and
cemeteries and governing funerals and disposal of
the dead.' (Sub-sec. (t), Sec. 12, Rep. Act No. 537).
There is nothing in the above provision which authorizes
confiscation or as euphemistically termed by the respondents,
'donation'
We now come to the question whether or not Section 9 of the
ordinance in question is a valid exercise of police power. The police
power of Quezon City is defined in sub-section 00, Sec. 12, Rep. Act
537 which reads as follows:
(00) To make such further ordinance and
regulations not repugnant to law as may be
necessary to carry into effect and discharge the
powers and duties conferred by this act and such
as it shall deem necessary and proper to provide
for the health and safety, promote, the prosperity,
improve the morals, peace, good order, comfort
and convenience of the city and the inhabitants
thereof, and for the protection of property therein;
and enforce obedience thereto with such lawful
fines or penalties as the City Council may prescribe
under the provisions of subsection (jj) of this
section.
We start the discussion with a restatement of certain basic
principles. Occupying the forefront in the bill of rights is the
provision which states that 'no person shall be deprived of life,
liberty or property without due process of law' (Art. Ill, Section 1
subparagraph 1, Constitution).
On the other hand, there are three inherent powers of government
by which the state interferes with the property rights, namely-. (1)
police power, (2) eminent domain, (3) taxation. These are said to
exist independently of the Constitution as necessary attributes of
sovereignty.
Police power is defined by Freund as 'the power of promoting the
public welfare by restraining and regulating the use of liberty and
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property' (Quoted in Political Law by Tanada and Carreon, V-11, p.
50). It is usually exerted in order to merely regulate the use and
enjoyment of property of the owner. If he is deprived of his
property outright, it is not taken for public use but rather to destroy
in order to promote the general welfare. In police power, the owner
does not recover from the government for injury sustained in
consequence thereof (12 C.J. 623). It has been said that police
power is the most essential of government powers, at times the
most insistent, and always one of the least limitable of the powers
of government (Ruby vs. Provincial Board, 39 PhiL 660; Ichong vs.
Hernandez, 1,7995, May 31, 1957). This power embraces the whole
system of public regulation (U.S. vs. Linsuya Fan, 10 PhiL 104). The
Supreme Court has said that police power is so far-reaching in
scope that it has almost become impossible to limit its sweep. As it
derives its existence from the very existence of the state itself, it
does not need to be expressed or defined in its scope. Being
coextensive with self-preservation and survival itself, it is the most
positive and active of all governmental processes, the most
essential insistent and illimitable Especially it is so under the
modern democratic framework where the demands of society and
nations have multiplied to almost unimaginable proportions. The
field and scope of police power have become almost boundless,
just as the fields of public interest and public welfare have become
almost all embracing and have transcended human foresight. Since
the Courts cannot foresee the needs and demands of public
interest and welfare, they cannot delimit beforehand the extent or
scope of the police power by which and through which the state
seeks to attain or achieve public interest and welfare. (Ichong vs.
Hernandez, L-7995, May 31, 1957).
The police power being the most active power of the government
and the due process clause being the broadest station on
governmental power, the conflict between this power of
government and the due process clause of the Constitution is
oftentimes inevitable.
It will be seen from the foregoing authorities that police power is
usually exercised in the form of mere regulation or restriction in the
use of liberty or property for the promotion of the general welfare.
It does not involve the taking or confiscation of property with the
exception of a few cases where there is a necessity to confiscate
private property in order to destroy it for the purpose of protecting
the peace and order and of promoting the general welfare as for
instance, the confiscation of an illegally possessed article, such as
opium and firearms.
1st
It seems to the court that Section 9 of Ordinance No. 6118, Series
of 1964 of Quezon City is not a mere police regulation but an
outright confiscation. It deprives a person of his private property
without due process of law, nay, even without compensation.
In sustaining the decision of the respondent court, we are not unmindful of
the heavy burden shouldered by whoever challenges the validity of duly
enacted legislation whether national or local As early as 1913, this Court
ruled in Case v. Board of Health (24 PhiL 250) that the courts resolve every
presumption in favor of validity and, more so, where the ma corporation
asserts that the ordinance was enacted to promote the common good and
general welfare.
In the leading case of Ermita-Malate Hotel and Motel Operators Association
Inc. v. City Mayor of Manila (20 SCRA 849) the Court speaking through the
then Associate Justice and now Chief Justice Enrique M. Fernando stated
Primarily what calls for a reversal of such a decision is the a of any
evidence to offset the presumption of validity that attaches to a
statute or ordinance. As was expressed categorically by Justice
Malcolm 'The presumption is all in favor of validity. ... The action of
the elected representatives of the people cannot be lightly set
aside. The councilors must, in the very nature of things, be familiar
with the necessities of their particular ... municipality and with all
the facts and lances which surround the subject and necessitate
action. The local legislative body, by enacting the ordinance, has in
effect given notice that the regulations are essential to the wellbeing of the people. ... The Judiciary should not lightly set aside
legislative action when there is not a clear invasion of personal or
property rights under the guise of police regulation. (U.S. v.
Salaveria (1918], 39 Phil. 102, at p. 111. There was an affirmation
of the presumption of validity of municipal ordinance as announced
in the leading Salaveria decision in Ebona v. Daet, [1950]85 Phil.
369.)
We have likewise considered the principles earlier stated in Case v.
Board of Health supra :
... Under the provisions of municipal charters which are known as
the general welfare clauses, a city, by virtue of its police power,
may adopt ordinances to the peace, safety, health, morals and the
best and highest interests of the municipality. It is a well-settled
principle, growing out of the nature of well-ordered and society,
that every holder of property, however absolute and may be his
title, holds it under the implied liability that his use of it shall not be
injurious to the equal enjoyment of others having an equal right to
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the enjoyment of their property, nor injurious to the rights of the
community. An property in the state is held subject to its general
regulations, which are necessary to the common good and general
welfare. Rights of property, like all other social and conventional
rights, are subject to such reasonable limitations in their enjoyment
as shall prevent them from being injurious, and to such reasonable
restraints and regulations, established by law, as the legislature,
under the governing and controlling power vested in them by the
constitution, may think necessary and expedient. The state, under
the police power, is possessed with plenary power to deal with all
matters relating to the general health, morals, and safety of the
people, so long as it does not contravene any positive inhibition of
the organic law and providing that such power is not exercised in
such a manner as to justify the interference of the courts to
prevent positive wrong and oppression.
but find them not applicable to the facts of this case.
There is no reasonable relation between the setting aside of at least six (6)
percent of the total area of an private cemeteries for charity burial grounds
of deceased paupers and the promotion of health, morals, good order,
safety, or the general welfare of the people. The ordinance is actually a
taking without compensation of a certain area from a private cemetery to
benefit paupers who are charges of the municipal corporation. Instead of
building or maintaining a public cemetery for this purpose, the city passes
the burden to private cemeteries.
The expropriation without compensation of a portion of private cemeteries
is not covered by Section 12(t) of Republic Act 537, the Revised Charter of
Quezon City which empowers the city council to prohibit the burial of the
dead within the center of population of the city and to provide for their
burial in a proper place subject to the provisions of general law regulating
burial grounds and cemeteries. When the Local Government Code, Batas
Pambansa Blg. 337 provides in Section 177 (q) that a Sangguniang
panlungsod may "provide for the burial of the dead in such place and in
such manner as prescribed by law or ordinance" it simply authorizes the
city to provide its own city owned land or to buy or expropriate private
properties to construct public cemeteries. This has been the law and
practise in the past. It continues to the present. Expropriation, however,
requires payment of just compensation. The questioned ordinance is
different from laws and regulations requiring owners of subdivisions to set
aside certain areas for streets, parks, playgrounds, and other public
facilities from the land they sell to buyers of subdivision lots. The
necessities of public safety, health, and convenience are very clear from
said requirements which are intended to insure the development of
communities with salubrious and wholesome environments. The
beneficiaries of the regulation, in turn, are made to pay by the subdivision

developer when individual lots are sold to home-owners.
As a matter of fact, the petitioners rely solely on the general welfare clause
or on implied powers of the municipal corporation, not on any express
provision of law as statutory basis of their exercise of power. The clause
has always received broad and liberal interpretation but we cannot stretch
it to cover this particular taking. Moreover, the questioned ordinance was
passed after Himlayang Pilipino, Inc. had incorporated. received necessary
licenses and permits and commenced operating. The sequestration of six
percent of the cemetery cannot even be considered as having been
impliedly acknowledged by the private respondent when it accepted the
permits to commence operations.
WHEREFORE, the petition for review is hereby DISMISSED. The decision of
the respondent court is affirmed. SO ORDERED.
G.R. No. L-14355
October 31, 1919
THE CITY OF MANILA, plaintiff-appellant, vs. CHINESE COMMUNITY OF

MANILA, ET AL., defendants-appellees.
JOHNSON, J.:
The important question presented by this appeal is: In expropriation
proceedings by the city of Manila, may the courts inquire into, and hear
proof upon, the necessity of the expropriation?
That question arose in the following manner:
On the 11th day of December, 1916, the city of Manila presented a petition
in the Court of First Instance of said city, praying that certain lands, therein
particularly described, be expropriated for the purpose of constructing a
public improvement. The petitioner, in the second paragraph of the
petition, alleged:
That for the purpose of constructing a public improvement,
namely, the extension of Rizal Avenue, Manila, it is necessary for
the plaintiff to acquire ownership in fee simple of certain parcels of
land situated in the district of Binondo of said city within Block 83
of said district, and within the jurisdiction of this court.
The defendant, the Comunidad de Chinos de Manila [Chinese Community
of Manila], answering the petition of the plaintiff, alleged that it was a
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corporation organized and existing under and by virtue of the laws of the
Philippine Islands, having for its purpose the benefit and general welfare of
the Chinese Community of the City of Manila; that it was the owner of
parcels one and two of the land described in paragraph 2 of the complaint;
that it denied that it was either necessary or expedient that the said
parcels be expropriated for street purposes; that existing street and roads
furnished ample means of communication for the public in the district
covered by such proposed expropriation; that if the construction of the
street or road should be considered a public necessity, other routes were
available, which would fully satisfy the plaintiff's purposes, at much less
expense and without disturbing the resting places of the dead; that it had a
Torrens title for the lands in question; that the lands in question had been
used by the defendant for cemetery purposes; that a great number of
Chinese were buried in said cemetery; that if said expropriation be carried
into effect, it would disturb the resting places of the dead, would require
the expenditure of a large sum of money in the transfer or removal of the
bodies to some other place or site and in the purchase of such new sites,
would involve the destruction of existing monuments and the erection of
new monuments in their stead, and would create irreparable loss and
injury to the defendant and to all those persons owning and interested in
the graves and monuments which would have to be destroyed; that the
plaintiff was without right or authority to expropriate said cemetery or any
part or portion thereof for street purposes; and that the expropriation, in
fact, was not necessary as a public improvement.
The defendant Ildefonso Tambunting, answering the petition, denied each
and every allegation of the complaint, and alleged that said expropriation
was not a public improvement; that it was not necessary for the plaintiff to
acquire the parcels of land in question; that a portion of the lands in
question was used as a cemetery in which were the graves of his
ancestors; that monuments and tombstones of great value were found
thereon; that the land had becomequasi-public property of a benevolent
association, dedicated and used for the burial of the dead and that many
dead were buried there; that if the plaintiff deemed it necessary to extend
Rizal Avenue, he had offered and still offers to grant a right of way for the
said extension over other land, without cost to the plaintiff, in order that
the sepulchers, chapels and graves of his ancestors may not be disturbed;
that the land so offered, free of charge, would answer every public
necessity on the part of the plaintiff.
The defendant Feliza Concepcion de Delgado, with her husband, Jose Maria
Delgado, and each of the other defendants, answering separately,
presented substantially the same defense as that presented by
the Comunidad de Chinos de Manila and Ildefonso Tambunting above
referred to.
1st
The foregoing parts of the defense presented by the defendants have been
inserted in order to show the general character of the defenses presented
by each of the defendants. The plaintiff alleged that the expropriation was
necessary. The defendants each alleged (a) that no necessity existed for
said expropriation and (b) that the land in question was a cemetery, which
had been used as such for many years, and was covered with sepulchres
and monuments, and that the same should not be converted into a street
for public purposes.
Upon the issue thus presented by the petition and the various answers, the
Honorable Simplicio del Rosario, judge, in a very elucidated opinion, with
very clear and explicit reasons, supported by ambulance of authorities,
decided that there was no necessity for the expropriation of the particular
strip of land in question, and absolved each and all of the defendants from
all liability under the complaint, without any finding as to costs.
From that judgment the plaintiff appealed and presented the above
question as its principal ground of appeal.
The theory of the plaintiff is, that once it has established the fact, under
the law, that it has authority to expropriate land, it may expropriate any
land it may desire; that the only function of the court in such proceedings
is to ascertain the value of the land in question; that neither the court nor
the owners of the land can inquire into the advisible purpose of purpose of
the expropriation or ask any questions concerning the necessities therefor;
that the courts aremere appraisers of the land involved in expropriation
proceedings, and, when the value of the land is fixed by the method
adopted by the law, to render a judgment in favor of the defendant for its
value.
That the city of Manila has authority to expropriate private lands
for public purposes, is not denied. Section 2429 of Act No. 2711 (Charter of
the city of Manila) provides that "the city (Manila) . . . may
condemn private property forpublic use."
The Charter of the city of Manila contains no procedure by which the said
authority may be carried into effect. We are driven, therefore, to the
procedure marked out by Act No. 190 to ascertain how the said authority
may be exercised. From an examination of Act No. 190, in its section 241,
we find how the right of eminent domain may be exercised. Said section
241 provides that, "The Government of the Philippine Islands, or of any
province or department thereof, or of any municipality, and any person, or
public or private corporation having, by law, the rightto condemn private
property for public use, shall exercise that right in the manner hereinafter
prescribed."
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Section 242 provides that a complaint in expropriation proceeding shall be
presented; that the complaint shall state with certainty the right of
condemnation, with a description of the property sought to be condemned
together with the interest of each defendant separately.
Section 243 provides that if the court shall find upon trial that the right to
expropriate the land in question exists, it shall then appoint
commissioners.
Sections 244, 245 and 246 provide the method of procedure and duty of
the commissioners. Section 248 provides for an appeal from the judgment
of the Court of First Instance to the Supreme Court. Said section 248 gives
the Supreme Court authority to inquire into the right of expropriation on
the part of the plaintiff. If the Supreme Court on appeal shall determine
that no right of expropriation existed, it shall remand the cause to the
Court of First Instance with a mandate that the defendant be replaced in
the possession of the property and that he recover whatever damages he
may have sustained by reason of the possession of the plaintiff.
It is contended on the part of the plaintiff that the phrase in said section,
"and if the court shall find the right to expropriate exists," means simply
that, if the court finds that there is some law authorizing the plaintiff to
expropriate, then the courts have no other function than to authorize the
expropriation and to proceed to ascertain the value of the land involved;
that the necessity for the expropriation is a legislative and not a judicial
question.
Upon the question whether expropriation is a legislative function
exclusively, and that the courts cannot intervene except for the purpose of
determining the value of the land in question, there is much legal
legislature. Much has been written upon both sides of that question. A
careful examination of the discussions pro and con will disclose the fact
that the decisions depend largely upon particular constitutional or
statutory provisions. It cannot be denied, if the legislature under proper
authority should grant the expropriation of a certain or particular parcel of
land for some specified public purpose, that the courts would be without
jurisdiction to inquire into the purpose of that legislation.
If, upon the other hand, however, the Legislature should grant general
authority to
a
municipal
corporation
to
expropriate private
land for public purposes, we think the courts have ample authority in this
jurisdiction, under the provisions above quoted, to make inquiry and to
hear proof, upon an issue properly presented, concerning whether or not
the lands were private and whether the purpose was, in fact, public. In
other words, have no the courts in this jurisdiction the right, inasmuch as
the questions relating to expropriation must be referred to them (sec. 241,
1st
Act No. 190) for final decision, to ask whether or not the law has been
complied with? Suppose in a particular case, it should be denied that the
property is not private property but public, may not the courts hear proof
upon that question? Or, suppose the defense is, that the purpose of the
expropriation is not public but private, or that there exists no public
purpose at all, may not the courts make inquiry and hear proof upon that
question?
The city of Manila is given authority to expropriate private lands
for public purposes. Can it be possible that said authority confers the right
to determine for itself that the land is private and that the purpose is
public, and that the people of the city of Manila who pay the taxes for its
support, especially those who are directly affected, may not question one
or the other, or both, of these questions? Can it be successfully contended
that the phrase used in Act No. 190, "and if the court upon trial shall find
that such right exists," means simply that the court shall examine
thestatutes simply for the purpose of ascertaining whether a law exists
authorizing the petitioner to exercise the right of eminent domain? Or,
when the case arrives in the Supreme Court, can it be possible that the
phrase, "if the Supreme Court shall determine that no right of expropriation
exists," that that simply means that the Supreme Court shall also examine
the enactments of the legislature for the purpose of determining whether
or not a law exists permitting the plaintiff to expropriate?
We are of the opinion that the power of the court is not limited to that
question. The right of expropriation is not an inherent power in a municipal
corporation, and before it can exercise the right some law must exist
conferring the power upon it. When the courts come to determine the
question, they must only find (a) that a law or authority exists for the
exercise of the right of eminent domain, but (b) also that the right or
authority is being exercised in accordance with the law. In the present case
there are two conditions imposed upon the authority conceded to the City
of Manila: First, the land must be private; and, second, the purpose must
be public. If the court, upon trial, finds that neither of these conditions
exists or that either one of them fails, certainly it cannot be contended that
the right is being exercised in accordance with law.
Whether the purpose for the exercise of the right of eminent domain is
public, is a question of fact. Whether the land is public, is a question of
fact; and, in our opinion, when the legislature conferred upon the courts of
the
Philippine
Islands
the right to
ascertain
upon trial whether
the right exists for the exercise of eminent domain, it intended that the
courts should inquire into, and hear proof upon, those questions. Is it
possible that the owner of valuable land in this jurisdiction is compelled to
stand mute while his land is being expropriated for a use not public, with
the right simply to beg the city of Manila to pay him the value of his land?
66
Consti 2
SET
Does the law in this jurisdiction permit municipalities to expropriate lands,
without question, simply for the purpose of satisfying the aesthetic sense
of those who happen for the time being to be in authority? Expropriation of
lands usually calls for public expense. The taxpayers are called upon to pay
the costs. Cannot the owners of land question the public use or the public
necessity?
As was said above, there is a wide divergence of opinion upon the
authority of the court to question the necessity or advisability of the
exercise of the right of eminent domain. The divergence is usually found to
depend upon particular statutory or constitutional provisions.
It has been contended and many cases are cited in support of that
contention, and section 158 of volume 10 of Ruling Case Law is cited as
conclusive that the necessity for taking property under the right of
eminent domain is not a judicial question. But those who cited said section
evidently overlooked the section immediately following (sec. 159), which
adds: "But it is obvious that if the property is taken in the ostensible behalf
of a public improvementwhich it can never by any possibility serve, it is
being taken for a use not public, and the owner's constitutional rightscall
for protection by the courts. While many courts have used sweeping
expression in the decisions in which they have disclaimed the power of
supervising the power of supervising the selection of the sites of public
improvements, it may be safely said that the courts of the various states
would feel bound to interfere to prevent an abuse of the discretion
delegated by the legislature, by an attempted appropriation of land in utter
disregard of the possible necessity of its use, or when the alleged purpose
was a cloak to some sinister scheme." (Norwich City vs. Johnson, 86 Conn.,
151; Bell vs. Mattoon Waterworks, etc. Co., 245 Ill., 544; Wheeling, etc. R.
R. Co. vs. Toledo Ry. etc. Co., 72 Ohio St., 368; State vs. Stewart, 74 Wis.,
620.)
Said section 158 (10 R. C. L., 183) which is cited as conclusive authority in
support of the contention of the appellant, says:
The legislature, in providing for the exercise of the power of
eminent domain, may directly determine the necessity for
appropriating private property for a particular improvement for
public use, and it may select the exact location of the
improvement. In such a case, it is well settled that the utility of the
proposed improvement, the extent of the public necessity for its
construction, the expediency of constructing it, the suitableness of
the location selected and the consequent necessity of taking the
land selected for its site, are all questions exclusively for the
legislature to determine, and the courts have no power to interfere,
1st
or to substitute their own views for those of the representatives of
the people.
Practically every case cited in support of the above doctrine has been
examined, and we are justified in making the statement that in each case
the legislature directly determined the necessity for the exercise of the
right of eminent domain in the particular case. It is not denied that if the
necessity for the exercise of the right of eminent domain is presented to
the legislative department of the government and that department decides
that there exists a necessity for the exercise of the right in a particular
case, that then and in that case, the courts will not go behind the action of
the legislature and make inquiry concerning the necessity. But, in the case
of Wheeling, etc. R. R. Co. vs. Toledo, Ry, etc., Co. (72 Ohio St., 368 [106
Am. St. rep., 622, 628]), which was cited in support of the doctrine laid
down in section 158 above quoted, the court said:
But when the statute does not designate the property to be taken
nor how may be taken, then the necessity of taking particular
property is a question for the courts. Where the application to
condemn or appropriate is made directly to the court, the question
(of necessity) should be raised and decided in limene.
The legislative department of the government was rarely undertakes to
designate the precise property which should be taken for public use. It has
generally, like in the present case, merely conferred general authority to
take land for public use when a necessity exists therefor. We believe that it
can be confidently asserted that, under such statute, the allegation of the
necessity for the appropriation is an issuable allegation which it is
competent for the courts to decide. (Lynch vs. Forbes, 161 Mass., 302 [42
Am. St. Rep., 402, 407].)
There is a wide distinction between a legislative declaration that a
municipality is given authority to exercise the right of eminent domain, and
a decision by the municipality that there exist a necessity for the exercise
of that right in a particular case. The first is a declaration simply that there
exist reasons why the right should be conferred upon municipal
corporation, while the second is the application of the right to a particular
case. Certainly, the legislative declaration relating to the advisability of
granting the power cannot be converted into a declaration that a necessity
exists for its exercise in a particular case, and especially so when, perhaps,
the land in question was not within the territorial authority was granted.
Whether it was wise, advisable, or necessary to confer upon a municipality
the power to exercise the right of eminent domain, is a question with which
the courts are not concerned. But when that right or authority is exercised
for the purpose of depriving citizens of their property, the courts are
67
Consti 2
SET
authorized, in this jurisdiction, to make inquiry and to hear proof upon the
necessity in the particular case, and not the general authority.
Volume 15 of the Cyclopedia of Law and Procedure (Cyc.), page 629, is
cited as a further conclusive authority upon the question that the necessity
for the exercise of the right of eminent domain is a legislative and not a
judicial question. Cyclopedia, at the page stated, says:
In the absence of some constitutional or statutory provision to the
contrary, the necessity and expediency of exercising the right of
eminent domain are questions essentially political and not judicial
in their character. The determination of those questions (the
necessity and the expediency) belongs to the sovereign power; the
legislative department is final and conclusive, and the courts have
no power to review it (the necessity and the expediency) . . . . It
(the legislature) may designate the particular property to be
condemned, and its determination in this respect cannot be
reviewed by the courts.
The volume of Cyclopedia, above referred to, cites many cases in support
of the doctrine quoted. While time has not permitted an examination of all
of said citations, many of them have been examined, and it can be
confidently asserted that said cases which are cited in support of the
assertion that, "the necessity and expediency of exercising the right of
eminent domain are questions essentially political and not judicial," show
clearly and invariably that in each case the legislature itself usually, by a
special law, designated the particular case in which the right of eminent
domain might be exercised by the particular municipal corporation or
entity within the state. (Eastern R. Co. vs.Boston, etc., R. Co., 11 Mass., 125
[15 Am. Rep., 13]; Brooklyn Park Com'rs vs. Armstrong, 45 N.Y., 234 [6 Am.
Rep., 70]; Hairston vs. Danville, etc. Ry. Co., 208 U. S. 598;
Cincinnati vs. Louisville, etc. Ry. Co., 223 U. S., 390; U.S. vs. ChandlerDunbar Water Power Co., 229 U. S., 53; U.S. vs. Gettysburg, etc. Co., 160 U.
S., 668; Traction Co. vs. Mining Co., 196 U.S., 239; Sears vs. City of Akron,
246 U.S., 351 [erroneously cited as 242 U.S.].)
In the case of Traction Co. vs. Mining Co. (196 U.S., 239), the Supreme
Court of the United States said: "It is erroneous to suppose that the
legislature is beyond the control of the courts in exercising the power of
eminent domain, either as to the nature of the use or the necessity to the
use of any particular property. For if the use be not public or no necessity
for the taking exists, the legislature cannot authorize the taking of private
property against the will of the owner, notwithstanding compensation may
be required."
1st
In the case of School Board of Carolina vs. Saldaa (14 Porto Rico, 339,
356), we find the Supreme Court of Porto Rico, speaking through Justice
MacLeary, quoting approvingly the following, upon the question which we
are discussing: "It is well settled that although the legislature must
necessarily determine in the first instance whether the use for which they
(municipalities, etc.) attempt to exercise the power is a public one or not,
their (municipalities, etc.) determination is not final, but is subject to
correction by the courts, who may undoubtedly declare the statute
unconstitutional, if it shall clearly appear that the use for which it is
proposed to authorize the taking of private property is in reality not public
but private." Many cases are cited in support of that doctrine.
Later, in the same decision, we find the Supreme Court of Porto Rico says:
"At any rate, the rule is quite well settled that in the cases under
consideration the determination of the necessity of taking a particular
piece or a certain amount of land rests ultimately with the courts." (Spring
Valley etc. Co. vs. San Mateo, etc. Co., 64 Cal., 123.) .
In the case of Board of Water Com'rs., etc. vs. Johnson (86 Conn., 571 [41
L. R. A., N. S., 1024]), the Supreme Court of Connecticut approvingly
quoted the following doctrine from Lewis on Eminent Domain (3d ed.),
section 599: "In all such cases the necessity of public utility of the
proposed work or improvement is a judicial question. In all such cases,
where the authority is to take property necessary for the purpose, the
necessity of taking particular property for a particular purpose is a judicial
one, upon which the owner is entitled to be heard." (Riley vs.Charleston,
etc. Co., 71 S. C., 457, 489 [110 Am. St. Rep., 579];
Henderson vs. Lexington 132 Ky., 390, 403.)
The taking of private property for any use which is not required by the
necessities or convenience of the inhabitants of the state, is an
unreasonable exercise of the right of eminent domain, and beyond the
power of the legislature to delegate. (Bennett vs. Marion, 106 Iowa, 628,
633; Wilson vs. Pittsburg, etc. Co., 222 Pa. St., 541, 545; Greasy, etc.
Co. vs. Ely, etc. Co., 132 Ky., 692, 697.)
In the case of New Central Coal Co. vs. George's etc. Co. (37 Md., 537,
564), the Supreme Court of the State of Maryland, discussing the question
before us, said: "To justify the exercise of this extreme power (eminent
domain) where the legislature has left it to depend upon the necessity that
may be found to exist, in order to accomplish the purpose of the
incorporation, as in this case, the party claiming the right to the exercise of
the power should be required to show at least a reasonable degree of
necessity for its exercise. Any rule less strict than this, with the large and
almost indiscriminate delegation of the right to corporations, would likely
lead to oppression and the sacrifice of private right to corporate power."
68
Consti 2
SET
In the case of Dewey vs. Chicago, etc. Co. (184 Ill., 426, 433), the court
said: "Its right to condemn property is not a general power of
condemnation, but is limited to cases where a necessity for resort to
private property is shown to exist. Such necessity must appear upon the
face of the petition to condemn. If the necessary is denied the burden is
upon the company (municipality) to establish it." (Highland, etc.
Co. vs. Strickley, 116 Fed., 852, 856; Kiney vs.Citizens' Water & Light Co.,
173 Ind., 252, 257 ; Bell vs. Mattoon Waterworks, etc. Co., 245 Ill., 544
[137 Am. St. Rep. 338].)
It is true that naby decisions may be found asserting that what is a public
use is a legislative question, and many other decisions declaring with equal
emphasis that it is a judicial question. But, as long as there is a
constitutional or statutory provision denying the right to take land for any
use other than a public use, it occurs to us that the question whether
any particular use is a public one or not is ultimately, at least, a judicial
question. The legislative may, it is true, in effect declare certain uses to be
public, and, under the operation of the well-known rule that a statute will
not be declared to be unconstitutional except in a case free, or
comparatively free, from doubt, the courts will certainly sustain the action
of the legislature unless it appears that the particular use is clearly not of a
public nature. The decisions must be understood with this limitation; for,
certainly, no court of last resort will be willing to declare that any and
every purpose which the legislative might happen to designate as a public
use shall be conclusively held to be so, irrespective of the purpose in
question and of its manifestly private character Blackstone in his
Commentaries on the English Law remarks that, so great is the regard of
the law for private property that it will not authorize the least violation of it,
even for the public good, unless there exists a very great necessity
therefor.
In the case of Wilkinson vs. Leland (2 Pet. [U.S.], 657), the Supreme Court
of the United States said: "That government can scarcely be deemed free
where the rights of property are left solely defendant on the legislative
body, without restraint. The fundamental maxims of free government seem
to require that the rights of personal liberty and private property should be
held sacred. At least no court of justice in this country would be warranted
in assuming that the power to violate and disregard them a power so
repugnant to the common principles of justice and civil liberty lurked in
any general grant of legislature authority, or ought to be implied from any
general expression of the people. The people ought no to be presumed to
part with rights so vital to their security and well-being without very strong
and direct expression of such intention." (Lewis on Eminent Domain, sec.
603; Lecoul vs.Police Jury 20 La. Ann., 308; Jefferson vs. Jazem, 7 La. Ann.,
182.)
1st
Blackstone, in his Commentaries on the English Law said that the right to
own and possess land a place to live separate and apart from others
to retain it as a home for the family in a way not to be molested by others
is one of the most sacred rights that men are heirs to. That right has
been written into the organic law of every civilized nation. The Acts of
Congress of July 1, 1902, and of August 29, 1916, which provide that "no
law shall be enacted in the Philippine Islands which shall deprive any
person of his property without due process of law," are but a restatement
of the time-honored protection of the absolute right of the individual to his
property. Neither did said Acts of Congress add anything to the law already
existing in the Philippine Islands. The Spaniard fully recognized the
principle and adequately protected the inhabitants of the Philippine Islands
against the encroachment upon the private property of the individual.
Article 349 of the Civil Code provides that: "No one may be deprived of his
property unless it be by competent authority, for some purpose
of proven public utility, and after payment of the proper compensation
Unless this requisite (proven public utility and payment) has been complied
with, it shall be theduty of the courts to protect the owner of such property
in its possession or to restore its possession to him , as the case may be."
The exercise of the right of eminent domain, whether directly by the State,
or by its authorized agents, is necessarily in derogation of private rights,
and the rule in that case is that the authority must be strictly construed.
No species of property is held by individuals with greater tenacity, and
none is guarded by the constitution and laws more sedulously, than the
right to the freehold of inhabitants. When the legislature interferes with
that right, and, for greater public purposes, appropriates the land of an
individual without his consent, the plain meaning of the law should not be
enlarged by doubtly interpretation. (Bensely vs. Mountainlake Water Co.,
13 Cal., 306 and cases cited [73 Am. Dec., 576].)
The statutory power of taking property from the owner without his consent
is one of the most delicate exercise of government authority. It is to be
watched with jealous scrutiny. Important as the power may be to the
government, the inviolable sanctity which all free constitutions attach to
the right of property of the citizens, constrains the strict observance of the
substantial provisions of the law which are prescribed as modes of the
exercise of the power, and to protect it from abuse. Not only must the
authority of municipal corporations to take property be expressly conferred
and the use for which it is taken specified, but the power, with all
constitutional limitation and directions for its exercise, must be strictly
pursued. (Dillon on Municipal Corporations [5th Ed.], sec. 1040, and cases
cited; Tenorio vs. Manila Railroad Co., 22 Phil., 411.)
It can scarcely be contended that a municipality would be permitted to
take property for some public use unless some public necessity existed
69
Consti 2
SET
therefor. The right to take private property for public use originates in the
necessity, and the taking must be limited by such necessity. The appellant
contends that inasmuch as the legislature has given it general authority to
take private property for public use, that the legislature has, therefore,
settled the question of the necessity in every case and that the courts are
closed to the owners of the property upon that question. Can it be
imagined, when the legislature adopted section 2429 of Act No. 2711, that
it thereby declared that it was necessary to appropriate the property of
Juan de la Cruz, whose property, perhaps, was not within the city limits at
the time the law was adopted? The legislature, then, not having declared
the necessity, can it be contemplated that it intended that a municipality
should be the sole judge of the necessity in every case, and that the
courts, in the face of the provision that "if upon trial they shall find that a
right exists," cannot in that trial inquire into and hear proof upon the
necessity for the appropriation in a particular case?
The Charter of the city of Manila authorizes the taking of private property
for public use. Suppose the owner of the property denies and successfully
proves that the taking of his property serves no public use: Would the
courts not be justified in inquiring into that question and in finally denying
the petition if no public purpose was proved? Can it be denied that the
courts have a right to inquire into that question? If the courts can ask
questions and decide, upon an issue properly presented, whether the use
is public or not, is not that tantamount to permitting the courts to inquire
into the necessity of the appropriation? If there is no public use, then there
is no necessity, and if there is no necessity, it is difficult to understand how
a public use can necessarily exist. If the courts can inquire into the
question whether a public use exists or not, then it seems that it must
follow that they can examine into the question of the necessity.
The very foundation of the right to exercise eminent domain is a genuine
necessity, and that necessity must be of a public character. The
ascertainment of the necessity must precede or accompany, and not
follow, the taking of the land. (Morrison vs. Indianapolis, etc. Ry. Co., 166
Ind., 511; Stearns vs. Barre, 73 Vt., 281; Wheeling, etc. R. R. Co.vs. Toledo,
Ry. etc. Co., 72 Ohio St., 368.)
The general power to exercise the right of eminent domain must not be
confused with the right to exercise it in aparticular case. The power of the
legislature to confer, upon municipal corporations and other entities within
the State, general authority to exercise the right of eminent domain cannot
be questioned by the courts, but that general authority of municipalities or
entities must not be confused with the right to exercise it in particular
instances. The moment the municipal corporation or entity attempts to
exercise the authority conferred, it must comply with the conditions
accompanying
the
authority. The
necessity for conferring
the
1st
authority upon a municipal corporation to exercise the right of eminent
domain is admittedly within the power of the legislature. But whether or
not the municipal corporation or entity is exercising the right in a particular
case under the conditions imposed by the general authority, is a question
which the courts have the right to inquire into.
The conflict in the authorities upon the question whether the necessity for
the exercise of the right of eminent domain is purely legislative and not
judicial, arises generally in the wisdom and propriety of the legislature in
authorizing the exercise of the right of eminent domain instead of in the
question of the right to exercise it in a particular case. (Creston Waterworks
Co. vs. McGrath, 89 Iowa, 502.)
By the weight of authorities, the courts have the power of restricting the
exercise of eminent domain to the actual reasonable necessities of the
case and for the purposes designated by the law. (Fairchild vs. City of St.
Paul. 48 Minn., 540.)
And, moreover, the record does not show conclusively that the plaintiff has
definitely decided that their exists a necessity for the appropriation of the
particular land described in the complaint. Exhibits 4, 5, 7, and E clearly
indicate that the municipal board believed at one time that other land
might be used for the proposed improvement, thereby avoiding the
necessity of distributing the quiet resting place of the dead.
Aside from insisting that there exists no necessity for the alleged
improvements, the defendants further contend that the street in question
should not be opened through the cemetery. One of the defendants alleges
that said cemetery is public property. If that allegations is true, then, of
course, the city of Manila cannot appropriate it for public use. The city of
Manila can only expropriate private property.
It is a well known fact that cemeteries may be public or private. The former
is a cemetery used by the general community, or neighborhood, or church,
while the latter is used only by a family, or a small portion of the
community or neighborhood. (11 C. J., 50.)
Where a cemetery is open to public, it is a public use and no part of the
ground can be taken for other public uses under a general authority. And
this immunity extends to the unimproved and unoccupied parts which are
held in good faith for future use. (Lewis on Eminent Domain, sec. 434, and
cases cited.)
70
1st
Consti 2
SET
The cemetery in question seems to have been established under
governmental authority. The Spanish Governor-General, in an order
creating the same, used the following language:
The cemetery and general hospital for indigent Chinese having
been founded and maintained by the spontaneous and fraternal
contribution of their protector, merchants and industrials,
benefactors of mankind, in consideration of their services to the
Government of the Islands its internal administration, government
and regime must necessarily be adjusted to the taste and
traditional practices of those born and educated in China in order
that the sentiments which animated the founders may be
perpetually effectuated.
It is alleged, and not denied, that the cemetery in question may be used by
the general community of Chinese, which fact, in the general acceptation
of the definition of a public cemetery, would make the cemetery in
question public property. If that is true, then, of course, the petition of the
plaintiff must be denied, for the reason that the city of Manila has no
authority or right under the law to expropriate public property.
But, whether or not the cemetery is public or private property, its
appropriation for the uses of a public street, especially during the lifetime
of those specially interested in its maintenance as a cemetery, should be a
question of great concern, and its appropriation should not be made for
such purposes until it is fully established that the greatest necessity exists
therefor.
While we do not contend that the dead must not give place to the living,
and while it is a matter of public knowledge that in the process of time
sepulchres may become the seat of cities and cemeteries traversed by
streets and daily trod by the feet of millions of men, yet, nevertheless such
sacrifices and such uses of the places of the dead should not be made
unless and until it is fully established that there exists an eminent
necessity therefor. While cemeteries and sepulchres and the places of the
burial
of
the
dead
are
still
within
the memory and command of the active care of the living; while they are
still devoted to pious uses and sacred regard, it is difficult to believe that
even the legislature would adopt a law expressly providing that such
places, under such circumstances, should be violated.
In such an appropriation, what, we may ask, would be the measure of
damages at law, for the wounded sensibilities of the living, in having the
graves of kindred and loved ones blotted out and desecrated by a common
highway or street for public travel? The impossibility of measuring the
damage and inadequacy of a remedy at law is too apparent to admit of
argument. To disturb the mortal remains of those endeared to us in life

sometimes becomes the sad duty of the living; but, except in cases
of necessity, or for laudable purposes, the sanctity of the grave, the last
resting place of our friends, should be maintained, and the preventative aid
of the courts should be invoked for that object. (Railroad
Company vs. Cemetery Co., 116 Tenn., 400; Evergreen Cemetery
Association vs. The
City
of
New
Haven,
43
Conn.,
234;
Anderson vs. Acheson, 132 Iowa, 744; Beatty vs. Kurtz, 2 Peters, 566.)
In the present case, even granting that a necessity exists for the opening
of the street in question, the record contains no proof of the necessity of
opening the same through the cemetery. The record shows that adjoining
and adjacent lands have been offered to the city free of charge, which will
answer every purpose of the plaintiff.
For all of the foregoing, we are fully persuaded that the judgment of the
lower court should be and is hereby affirmed, with costs against the
appellant. So ordered.
G.R. No. L-18841
January 27, 1969
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant, vs. PHILIPPINE

LONG DISTANCE TELEPHONE COMPANY, defendant-appellant.
REYES, J.B.L., J.:
Direct appeals, upon a joint record on appeal, by both the plaintiff and the
defendant from the dismissal, after hearing, by the Court of First Instance
of Manila, in its Civil Case No. 35805, of their respective complaint and
counterclaims, but making permanent a preliminary mandatory injunction
theretofore issued against the defendant on the interconnection of
telephone facilities owned and operated by said parties.
The plaintiff, Republic of the Philippines, is a political entity exercising
governmental powers through its branches and instrumentalities, one of
which is the Bureau of Telecommunications. That office was created on 1
July 1947, under Executive Order No. 94, with the following powers and
duties, in addition to certain powers and duties formerly vested in the
Director of Posts: 1awphil.t
71
Consti 2
SET
SEC. 79. The Bureau of Telecommunications shall exercise the following
powers and duties:
(a) To operate and maintain existing wire-telegraph and radiotelegraph offices, stations, and facilities, and those to be
established to restore the pre-war telecommunication service
under the Bureau of Posts, as well as such additional offices or
stations as may hereafter be established to provide
telecommunication service in places requiring such service;
(b) To investigate, consolidate, negotiate for, operate and maintain
wire-telephone or radio telephone communication service
throughout the Philippines by utilizing such existing facilities in
cities, towns, and provinces as may be found feasible and
under such terms and conditions or arrangements with the
present owners or operators thereof as may be agreed upon to
the satisfaction of all concerned;
(c) To prescribe, subject to approval by the Department Head,
equitable rates of charges for messages handled by the system
and/or for time calls and other services that may be rendered
by said system;
(d) To establish and maintain coastal stations to serve ships at sea
or aircrafts and, when public interest so requires, to engage in
the international telecommunication service in agreement with
other countries desiring to establish such service with the
Republic of the Philippines; and
(e) To abide by all existing rules and regulations prescribed by the
International Telecommunication Convention relative to the
accounting, disposition and exchange of messages handled in
the international service, and those that may hereafter be
promulgated by said convention and adhered to by the
Government of the Republic of the Philippines. 1
The defendant, Philippine Long Distance Telephone Company (PLDT for
short), is a public service corporation holding a legislative franchise, Act
3426, as amended by Commonwealth Act 407, to install, operate and
maintain a telephone system throughout the Philippines and to carry on
the business of electrical transmission of messages within the Philippines
and between the Philippines and the telephone systems of other
countries. 2 The RCA Communications, Inc., (which is not a party to the
present case but has contractual relations with the parties) is an American
corporation authorized to transact business in the Philippines and is the
1st
grantee, by assignment, of a legislative franchise to operate a domestic
station for the reception and transmission of long distance wireless
messages (Act 2178) and to operate broadcasting and radio-telephone and
radio-telegraphic communications services (Act 3180). 3
Sometime in 1933, the defendant, PLDT, and the RCA Communications,
Inc., entered into an agreement whereby telephone messages, coming
from the United States and received by RCA's domestic station, could
automatically be transferred to the lines of PLDT; and vice-versa, for calls
collected by the PLDT for transmission from the Philippines to the United
States. The contracting parties agreed to divide the tolls, as follows: 25%
to PLDT and 75% to RCA. The sharing was amended in 1941 to 30% for
PLDT and 70% for RCA, and again amended in 1947 to a 50-50 basis. The
arrangement was later extended to radio-telephone messages to and from
European and Asiatic countries. Their contract contained a stipulation that
either party could terminate it on a 24-month notice to the other. 4 On 2
February 1956, PLDT gave notice to RCA to terminate their contract on 2
February 1958. 5
Soon after its creation in 1947, the Bureau of Telecommunications set up
its own Government Telephone System by utilizing its own appropriation
and equipment and by renting trunk lines of the PLDT to enable
government offices to call private parties. 6 Its application for the use of
these trunk lines was in the usual form of applications for telephone
service, containing a statement, above the signature of the applicant, that
the latter will abide by the rules and regulations of the PLDT which are on
file with the Public Service Commission. 7 One of the many rules prohibits
the public use of the service furnished the telephone subscriber for his
private use. 8 The Bureau has extended its services to the general public
since 1948, 9 using the same trunk lines owned by, and rented from, the
PLDT, and prescribing its (the Bureau's) own schedule of rates. 10 Through
these trunk lines, a Government Telephone System (GTS) subscriber could
make a call to a PLDT subscriber in the same way that the latter could
make a call to the former.
On 5 March 1958, the plaintiff, through the Director of
Telecommunications,
entered
into
an
agreement
with
RCA
Communications, Inc., for a joint overseas telephone service whereby the
Bureau would convey radio-telephone overseas calls received by RCA's
station to and from local residents. 11 Actually, they inaugurated this joint
operation on 2 February 1958, under a "provisional" agreement. 12
On 7 April 1958, the defendant Philippine Long Distance Telephone
Company, complained to the Bureau of Telecommunications that said
bureau was violating the conditions under which their Private Branch
Exchange (PBX) is inter-connected with the PLDT's facilities, referring to the
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rented trunk lines, for the Bureau had used the trunk lines not only for the
use of government offices but even to serve private persons or the general
public, in competition with the business of the PLDT; and gave notice that if
said violations were not stopped by midnight of 12 April 1958, the PLDT
would sever the telephone connections. 13 When the PLDT received no
reply, it disconnected the trunk lines being rented by the Bureau at
midnight on 12 April 1958. 14 The result was the isolation of the Philippines,
on telephone services, from the rest of the world, except the United
States. 15
At that time, the Bureau was maintaining 5,000 telephones and had 5,000
pending applications for telephone connection. 16 The PLDT was also
maintaining 60,000 telephones and had also 20,000 pending
applications. 17Through the years, neither of them has been able to fill up
the demand for telephone service.
The Bureau of Telecommunications had proposed to the PLDT on 8
January 1958 that both enter into an interconnecting agreement, with the
government paying (on a call basis) for all calls passing through the
interconnecting facilities from the Government Telephone System to the
PLDT. 18 The PLDT replied that it was willing to enter into an agreement on
overseas telephone service to Europe and Asian countries provided that
the Bureau would submit to the jurisdiction and regulations of the Public
Service Commission and in consideration of 37 1/2% of the gross
revenues. 19 In its memorandum in lieu of oral argument in this Court dated
9 February 1964, on page 8, the defendant reduced its offer to 33 1/3 %
(1/3) as its share in the overseas telephone service. The proposals were not
accepted by either party.
On 12 April 1958, plaintiff Republic commenced suit against the
defendant, Philippine Long Distance Telephone Company, in the Court of
First Instance of Manila (Civil Case No. 35805), praying in its complaint for
judgment commanding the PLDT to execute a contract with plaintiff,
through the Bureau, for the use of the facilities of defendant's telephone
system throughout the Philippines under such terms and conditions as the
court might consider reasonable, and for a writ of preliminary injunction
against the defendant company to restrain the severance of the existing
telephone connections and/or restore those severed.
Government Telephone System, including its overseas telephone

services, and the facilities of defendant; (2) to refrain from carrying
into effect its threat to sever the existing telephone communication
between the Bureau of Telecommunications and defendant, and
not to make connection over its telephone system of telephone
calls coming to the Philippines from foreign countries through the
said Bureau's telephone facilities and the radio facilities of RCA
Communications, Inc.; and (3) to accept and connect through its
telephone system all such telephone calls coming to the Philippines
from foreign countries until further order of this Court.
On 28 April 1958, the defendant company filed its answer, with
counterclaims.
It denied any obligation on its part to execute a contrary of services with
the Bureau of Telecommunications; contested the jurisdiction of the Court
of First Instance to compel it to enter into interconnecting agreements, and
averred that it was justified to disconnect the trunk lines heretofore leased
to the Bureau of Telecommunications under the existing agreement
because its facilities were being used in fraud of its rights. PLDT further
claimed that the Bureau was engaging in commercial telephone operations
in excess of authority, in competition with, and to the prejudice of, the
PLDT, using defendants own telephone poles, without proper accounting of
revenues.
After trial, the lower court rendered judgment that it could not compel the
PLDT to enter into an agreement with the Bureau because the parties were
not in agreement; that under Executive Order 94, establishing the Bureau
of Telecommunications, said Bureau was not limited to servicing
government offices alone, nor was there any in the contract of lease of the
trunk lines, since the PLDT knew, or ought to have known, at the time that
their use by the Bureau was to be public throughout the Islands, hence the
Bureau was neither guilty of fraud, abuse, or misuse of the poles of the
PLDT; and, in view of serious public prejudice that would result from the
disconnection of the trunk lines, declared the preliminary injunction
permanent, although it dismissed both the complaint and the
counterclaims.
Both parties appealed.
Acting on the application of the plaintiff, and on the ground that the
severance of telephone connections by the defendant company would
isolate the Philippines from other countries, the court a quo, on 14 April
1958, issued an order for the defendant:
(1) to forthwith reconnect and restore the seventy-eight (78) trunk
lines that it has disconnected between the facilities of the
Taking up first the appeal of the Republic, the latter complains of the
action of the trial court in dismissing the part of its complaint seeking to
compel the defendant to enter into an interconnecting contract with it,
because the parties could not agree on the terms and conditions of the
interconnection, and of its refusal to fix the terms and conditions therefor.
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We agree with the court below that parties can not be coerced to enter
into a contract where no agreement is had between them as to the
principal terms and conditions of the contract. Freedom to stipulate such
terms and conditions is of the essence of our contractual system, and by
express provision of the statute, a contract may be annulled if tainted by
violence, intimidation, or undue influence (Articles 1306, 1336, 1337, Civil
Code of the Philippines). But the court a quo has apparently overlooked
that while the Republic may not compel the PLDT to celebrate a contract
with it, the Republic may, in the exercise of the sovereign power of eminent
domain, require the telephone company to permit interconnection of the
government telephone system and that of the PLDT, as the needs of the
government service may require, subject to the payment of just
compensation to be determined by the court. Nominally, of course, the
power of eminent domain results in the taking or appropriation of title to,
and possession of, the expropriated property; but no cogent reason
appears why the said power may not be availed of to impose only a burden
upon the owner of condemned property, without loss of title and
possession. It is unquestionable that real property may, through
expropriation, be subjected to an easement of right of way. The use of the
PLDT's lines and services to allow inter-service connection between both
telephone systems is not much different. In either case private property is
subjected to a burden for public use and benefit. If, under section 6, Article
XIII, of the Constitution, the State may, in the interest of national welfare,
transfer utilities to public ownership upon payment of just compensation,
there is no reason why the State may not require a public utility to render
services in the general interest, provided just compensation is paid
therefor. Ultimately, the beneficiary of the interconnecting service would be
the users of both telephone systems, so that the condemnation would be
for public use.
The Bureau of Telecommunications, under section 78 (b) of Executive
Order No. 94, may operate and maintain wire telephone or radio telephone
communications throughout the Philippines by utilizing existing facilities in
cities, towns, and provinces under such terms and conditions or
arrangement with present owners or operators as may be agreed upon to
the satisfaction of all concerned; but there is nothing in this section that
would exclude resort to condemnation proceedings where unreasonable or
unjust terms and conditions are exacted, to the extent of crippling or
seriously hampering the operations of said Bureau.
A perusal of the complaint shows that the Republic's cause of action is
predicated upon the radio telephonic isolation of the Bureau's facilities
from the outside world if the severance of interconnection were to be
carried out by the PLDT, thereby preventing the Bureau of
Telecommunications from properly discharging its functions, to the
prejudice of the general public. Save for the prayer to compel the PLDT to
enter into a contract (and the prayer is no essential part of the pleading),
1st
the averments make out a case for compulsory rendering of interconnecting services by the telephone company upon such terms and
conditions as the court may determine to be just. And since the lower court
found that both parties "are practically at one that defendant (PLDT) is
entitled to reasonable compensation from plaintiff for the reasonable use of
the former's telephone facilities" (Decision, Record on Appeal, page 224),
the lower court should have proceeded to treat the case as one of
condemnation of such services independently of contract and proceeded to
determine the just and reasonable compensation for the same, instead of
dismissing the petition.
This view we have taken of the true nature of the Republic's petition
necessarily results in overruling the plea of defendant-appellant PLDT that
the court of first instance had no jurisdiction to entertain the petition and
that the proper forum for the action was the Public Service Commission.
That body, under the law, has no authority to pass upon actions for the
taking of private property under the sovereign right of eminent domain.
Furthermore, while the defendant telephone company is a public utility
corporation whose franchise, equipment and other properties are under the
jurisdiction, supervision and control of the Public Service Commission (Sec.
13, Public Service Act), yet the plaintiff's telecommunications network is a
public service owned by the Republic and operated by an instrumentality of
the National Government, hence exempt, under Section 14 of the Public
Service Act, from such jurisdiction, supervision and control. The Bureau of
Telecommunications was created in pursuance of a state policy
reorganizing the government offices
to meet the exigencies attendant upon the establishment of the
free and independent Government of the Republic of the
Philippines, and for the purpose of promoting simplicity, economy
and efficiency in its operation (Section 1, Republic Act No. 51)
and the determination of state policy is not vested in the Commission
(Utilities Com. vs. Bartonville Bus Line, 290 Ill. 574; 124 N.E. 373).
Defendant PLDT, as appellant, contends that the court below was in error
in not holding that the Bureau of Telecommunications was not empowered
to engage in commercial telephone business, and in ruling that said
defendant was not justified in disconnecting the telephone trunk lines it
had previously leased to the Bureau. We find that the court a quo ruled
correctly in rejecting both assertions.
Executive Order No. 94, Series of 1947, reorganizing the Bureau of
Telecommunications, expressly empowered the latter in its Section 79,
subsection (b), to "negotiate for, operate and maintain wire telephone or
radio telephone communication service throughout the Philippines", and, in
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subsection (c), "to prescribe, subject to approval by the Department Head,
equitable rates of charges for messages handled by the system and/or for
time calls and other services that may be rendered by the system".
Nothing in these provisions limits the Bureau to non-commercial activities
or prevents it from serving the general public. It may be that in its original
prospectuses the Bureau officials had stated that the service would be
limited to government offices: but such limitations could not block future
expansion of the system, as authorized by the terms of the Executive
Order, nor could the officials of the Bureau bind the Government not to
engage in services that are authorized by law. It is a well-known rule that
erroneous application and enforcement of the law by public officers do not
block subsequent correct application of the statute (PLDT vs. Collector of
Internal Revenue, 90 Phil. 676), and that the Government is never
estopped by mistake or error on the part of its agents (Pineda vs. Court of
First Instance of Tayabas, 52 Phil. 803, 807; Benguet Consolidated Mining
Co. vs. Pineda, 98 Phil. 711, 724).
The theses that the Bureau's commercial services constituted unfair
competition, and that the Bureau was guilty of fraud and abuse under its
contract, are, likewise, untenable.
First, the competition is merely hypothetical, the demand for telephone
service being very much more than the supposed competitors can supply.
As previously noted, the PLDT had 20,000 pending applications at the time,
and the Bureau had another 5,000. The telephone company's inability to
meet the demands for service are notorious even now. Second, the charter
of the defendant expressly provides:
SEC. 14. The rights herein granted shall not be exclusive, and the
rights and power to grant to any corporation, association or person
other than the grantee franchise for the telephone or electrical
transmission of message or signals shall not be impaired or
affected by the granting of this franchise: (Act 3436)
And third, as the trial court correctly stated, "when the Bureau of
Telecommunications subscribed to the trunk lines, defendant knew or
should have known that their use by the subscriber was more or less public
and all embracing in nature, that is, throughout the Philippines, if not
abroad" (Decision, Record on Appeal, page 216).
The acceptance by the defendant of the payment of rentals, despite its
knowledge that the plaintiff had extended the use of the trunk lines to
commercial purposes, continuously since 1948, implies assent by the
defendant to such extended use. Since this relationship has been
maintained for a long time and the public has patronized both telephone
systems, and their interconnection is to the public convenience, it is too
1st
late for the defendant to claim misuse of its facilities, and it is not now at
liberty to unilaterally sever the physical connection of the trunk lines.
..., but there is high authority for the position that, when such
physical connection has been voluntarily made, under a fair and
workable arrangement and guaranteed by contract and the
continuous line has come to be patronized and established as a
great public convenience, such connection shall not in breach of
the agreement be severed by one of the parties. In that case, the
public is held to have such an interest in the arrangement that its
rights must receive due consideration. This position finds approval
in State ex rel. vs. Cadwaller, 172 Ind. 619, 636, 87 N.E. 650, and is
stated in the elaborate and learned opinion of Chief Justice Myers
as follows: "Such physical connection cannot be required as of
right, but if such connection is voluntarily made by contract, as is
here alleged to be the case, so that the public acquires an interest
in its continuance, the act of the parties in making such connection
is equivalent to a declaration of a purpose to waive the primary
right of independence, and it imposes upon the property such a
public status that it may not be disregarded" citing Mahan v.
Mich. Tel. Co., 132 Mich. 242, 93 N.W. 629, and the reasons upon
which it is in part made to rest are referred to in the same opinion,
as follows: "Where private property is by the consent of the owner
invested with a public interest or privilege for the benefit of the
public, the owner can no longer deal with it as private property
only, but must hold it subject to the right of the public in the
exercise of that public interest or privilege conferred for their
benefit." Allnut v. Inglis (1810) 12 East, 527. The doctrine of this
early case is the acknowledged law. (Clinton-Dunn Tel. Co. v.
Carolina Tel. & Tel. Co., 74 S.E. 636, 638).
It is clear that the main reason for the objection of the PLDT lies in the
fact that said appellant did not expect that the Bureau's telephone system
would expand with such rapidity as it has done; but this expansion is no
ground for the discontinuance of the service agreed upon.
The last issue urged by the PLDT as appellant is its right to compensation
for the use of its poles for bearing telephone wires of the Bureau of
Telecommunications. Admitting that section 19 of the PLDT charter
reserves to the Government
the privilege without compensation of using the poles of the
grantee to attach one ten-pin cross-arm, and to install, maintain
and operate wires of its telegraph system thereon; Provided,
however, That the Bureau of Posts shall have the right to place
additional cross-arms and wires on the poles of the grantee by
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paying a compensation, the rate of which is to be agreed upon by
the Director of Posts and the grantee;
G.R. No. L-12172
the defendant counterclaimed for P8,772.00 for the use of its poles by the
plaintiff, contending that what was allowed free use, under the aforequoted
provision, was one ten-pin cross-arm attachment and only for plaintiff's
telegraph system, not for its telephone system; that said section could not
refer to the plaintiff's telephone system, because it did not have such
telephone system when defendant acquired its franchise. The implication
of the argument is that plaintiff has to pay for the use of defendant's poles
if such use is for plaintiff's telephone system and has to pay also if it
attaches more than one (1) ten-pin cross-arm for telegraphic purposes.
As there is no proof that the telephone wires strain the poles of the PLDT
more than the telegraph wires, nor that they cause more damage than the
wires of the telegraph system, or that the Government has attached to the
poles more than one ten-pin cross-arm as permitted by the PLDT charter,
we see no point in this assignment of error. So long as the burden to be
borne by the PLDT poles is not increased, we see no reason why the
reservation in favor of the telegraph wires of the government should not be
extended to its telephone lines, any time that the government decided to
engage also in this kind of communication.
In the ultimate analysis, the true objection of the PLDT to continue the
link between its network and that of the Government is that the latter
competes "parasitically" (sic) with its own telephone services. Considering,
however, that the PLDT franchise is non-exclusive; that it is well-known
that defendant PLDT is unable to adequately cope with the current
demands for telephone service, as shown by the number of pending
applications therefor; and that the PLDT's right to just compensation for
the services rendered to the Government telephone system and its users is
herein recognized and preserved, the objections of defendant-appellant are
without merit. To uphold the PLDT's contention is to subordinate the needs
of the general public to the right of the PLDT to derive profit from the
future expansion of its services under its non-exclusive franchise.
WHEREFORE, the decision of the Court of First Instance, now under
appeal, is affirmed, except in so far as it dismisses the petition of the
Republic of the Philippines to compel the Philippine Long Distance
Telephone Company to continue servicing the Government telephone
system upon such terms, and for a compensation, that the trial court may
determine to be just, including the period elapsed from the filing of the
original complaint or petition. And for this purpose, the records are ordered
returned to the court of origin for further hearings and other proceedings
not inconsistent with this opinion. No costs.
August 29, 1958
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

FAJARDO, ET AL., defendants-appellants.
vs. JUAN F.
REYES, J. B. L., J.:

Appeal from the decision of the Court of First Instance of Camarines Sur
convicting defendants-appellants Juan F. Fajardo and Pedro Babilonia of a
violation of Ordinance No. 7, Series of 1950, of the Municipality of Baao,
Camarines Sur, for having constructed without a permit from the municipal
mayor a building that destroys the view of the public plaza.
It appears that on August 15, 1950, during the incumbency of defendantappellant Juan F. Fajardo as mayor of the municipality of Baao, Camarines
Sur, the municipal council passed the ordinance in question providing as
follows:
SECTION 1. Any person or persons who will construct or repair a
building should, before constructing or repairing, obtain a written
permit from the Municipal Mayor.
SEC. 2. A fee of not less than P2.00 should be charged for each
building permit and P1.00 for each repair permit issued.
SEC. 3. PENALTY Any violation of the provisions of the above,
this ordinance, shall make the violation liable to pay a fine of not
less than P25 nor more than P50 or imprisonment of not less than
12 days nor more than 24 days or both, at the discretion of the
court. If said building destroys the view of the Public Plaza or
occupies any public property, it shall be removed at the expense of
the owner of the building or house.
SEC. 4. EFFECTIVITY This ordinance shall take effect on its
approval. (Orig. Recs., P. 3)
Four years later, after the term of appellant Fajardo as mayor had expired,
he and his son in-law, appellant Babilonia, filed a written request with the
incumbent municipal mayor for a permit to construct a building adjacent to
their gasoline station on a parcel of land registered in Fajardo's name,
located along the national highway and separated from the public plaza by
a creek (Exh. D). On January 16, 1954, the request was denied, for the
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reason among others that the proposed building would destroy the view or
beauty of the public plaza (Exh. E). On January 18, 1954, defendants
reiterated their request for a building permit (Exh. 3), but again the request
was turned down by the mayor. Whereupon, appellants proceeded with the
construction of the building without a permit, because they needed a place
of residence very badly, their former house having been destroyed by a
typhoon and hitherto they had been living on leased property.
On February 26, 1954, appellants were charged before and convicted by
the justice of the peace court of Baao, Camarines Sur, for violation of the
ordinance in question. Defendants appealed to the Court of First Instance,
which affirmed the conviction, and sentenced appellants to pay a fine of
P35 each and the costs, as well as to demolish the building in question
because it destroys the view of the public plaza of Baao, in that "it hinders
the view of travelers from the National Highway to the said public plaza."
From this decision, the accused appealed to the Court of Appeals, but the
latter forwarded the records to us because the appeal attacks the
constitutionality of the ordinance in question.
We find that the appealed conviction can not stand.
A first objection to the validity of the ordinance in question is that under it
the mayor has absolute discretion to issue or deny a permit. The ordinance
fails to state any policy, or to set up any standard to guide or limit the
mayor's action. No purpose to be attained by requiring the permit is
expressed; no conditions for its grant or refusal are enumerated. It is not
merely a case of deficient standards; standards are entirely lacking. The
ordinance thus confers upon the mayor arbitrary and unrestricted power to
grant or deny the issuance of building permits, and it is a settled rule that
such an undefined and unlimited delegation of power to allow or prevent
an activity, per se lawful, is invalid (People vs. Vera, 65 Phil., 56;
Primicias vs. Fugoso, 80 Phil., 71; Schloss Poster Adv. Co. vs. Rock Hill, 2 SE
(2d) 392)
The ordinance in question in no way controls or guides the
discretion vested thereby in the respondents. It prescribes no
uniform rule upon which the special permission of the city is to be
granted. Thus the city is clothed with the uncontrolled power to
capriciously grant the privilege to some and deny it others; to
refuse the application of one landowner or lessee and to grant that
of another, when for all material purposes, the two applying for
precisely the same privileges under the same circumstances. The
danger of such an ordinance is that it makes possible arbitrary
discriminations and abuses in its execution, depending upon no
conditions or qualifications whatever, other than the unregulated
arbitrary will of the city authorities as the touchstone by which its
1st
validity is to be tested. Fundamental rights under our government
do not depend for their existence upon such a slender and
uncertain thread. Ordinances which thus invest a city council with a
discretion which is purely arbitrary, and which may be exercised in
the interest of a favored few, are unreasonable and invalid. The
ordinance should have established a rule by which its impartial
enforcement could be secured. All of the authorities cited above
sustain this conclusion.
As was said in City of Richmond vs. Dudley, 129 Ind. 112,28 N. E.
312, 314 13 L. R. A. 587, 28 Am. St. Rep. 180: "It seems from the
foregoing authorities to be well established that municipal
ordinances placing restrictions upon lawful conduct or the lawful
use of property must, in order to be valid, specify the rules and
conditions to be observed in such conduct or business; and must
admit of the exercise of the privilege of all citizens alike who will
comply with such rules and conditions; and must not admit of the
exercise, or of an opportunity for the exercise, of any arbitrary
discrimination by the municipal authorities between citizens who
will so comply. (Schloss Poster Adv. Co., Inc. vs. City of Rock Hill, et
al., 2 SE (2d), pp. 394-395).
It is contended, on the other hand, that the mayor can refuse a permit
solely in case that the proposed building "destroys the view of the public
plaza or occupies any public property" (as stated in its section 3); and in
fact, the refusal of the Mayor of Baao to issue a building permit to the
appellant was predicated on the ground that the proposed building would
"destroy the view of the public plaza" by preventing its being seen from the
public highway. Even thus interpreted, the ordinance is unreasonable and
oppressive, in that it operates to permanently deprive appellants of the
right to use their own property; hence, it oversteps the bounds of police
power, and amounts to a taking of appellants property without just
compensation. We do not overlook that the modern tendency is to regard
the beautification of neighborhoods as conducive to the comfort and
happiness of residents. But while property may be regulated in the interest
of the general welfare, and in its pursuit, the State may prohibit structures
offensive to the sight (Churchill and Tait vs. Rafferty, 32 Phil. 580), the
State may not, under the guise of police power, permanently divest owners
of the beneficial use of their property and practically confiscate them solely
to preserve or assure the aesthetic appearance of the community. As the
case now stands, every structure that may be erected on appellants' land,
regardless of its own beauty, stands condemned under the ordinance in
question, because it would interfere with the view of the public plaza from
the highway. The appellants would, in effect, be constrained to let their
land remain idle and unused for the obvious purpose for which it is best
suited, being urban in character. To legally achieve that result, the
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municipality must give appellants just compensation and an opportunity to
be heard.
An ordinance which permanently so restricts the use of property
that it can not be used for any reasonable purpose goes, it is plain,
beyond regulation and must be recognized as a taking of the
property. The only substantial difference, in such case, between
restriction and actual taking, is that the restriction leaves the
owner subject to the burden of payment of taxation, while outright
confiscation would relieve him of that burden. (Arverne Bay Constr.
Co. vs. Thatcher (N.Y.) 117 ALR. 1110, 1116).
A regulation which substantially deprives an owner of all beneficial
use of his property is confiscation and is a deprivation within the
meaning of the 14th Amendment. (Sundlum vs. Zoning Bd., 145
Atl. 451; also Eaton vs. Sweeny, 177 NE 412; Taylor vs. Jacksonville,
133 So. 114).
issue permits for the creation or repair thereof, charging a fee

which shall be determined by the municipal council and which shall
not be less than two pesos for each building permit and one peso
for each repair permit issued. The fees collected under the
provisions of this subsection shall accrue to the municipal school
fund.
Under the provisions of the section above quoted, however, the power of
the municipal council to require the issuance of building permits rests upon
its first establishing fire limits in populous parts of the town and prescribing
the kinds of buildings that may be constructed or repaired within them. As
there is absolutely no showing in this case that the municipal council had
either established fire limits within the municipality or set standards for the
kind or kinds of buildings to be constructed or repaired within them before
it passed the ordinance in question, it is clear that said ordinance was not
conceived and promulgated under the express authority of sec. 2243 (c)
aforequoted.
Zoning which admittedly limits property to a use which can not

reasonably be made of it cannot be said to set aside such property
to a use but constitutes the taking of such property without just
compensation. Use of property is an element of ownership therein.
Regardless of the opinion of zealots that property may properly, by
zoning, be utterly destroyed without compensation, such principle
finds no support in the genius of our government nor in the
principles of justice as we known them. Such a doctrine shocks the
sense of justice. If it be of public benefit that property remain open
and unused, then certainly the public, and not the private
individuals, should bear the cost of reasonable compensation for
such property under the rules of law governing the condemnation
of private property for public use. (Tews vs. Woolhiser (1933) 352
I11. 212, 185 N.E. 827) (Emphasis supplied.)
We rule that the regulation in question, Municipal Ordinance No. 7, Series

of 1950, of the Municipality of Baao, Camarines Sur, was beyond the
authority of said municipality to enact, and is therefore null and void.
Hence, the conviction of herein appellants is reversed, and said accused
are acquitted, with costs de oficio. So ordered.
The validity of the ordinance in question was justified by the court below
under section 2243, par. (c), of the Revised Administrative Code, as
amended. This section provides:
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant, vs. CARMEN M.

VDA. DE CASTELLVI, ET AL., defendants-appellees.
SEC. 2243. Certain legislative powers of discretionary character.

The municipal council shall have authority to exercise the following
discretionary powers:
xxx
xxx
xxx
(c) To establish fire limits in populous centers, prescribe the kinds

of buildings that may be constructed or repaired within them, and
G.R. No. L-20620 August 15, 1974
ZALDIVAR, J.:p
Appeal from the decision of the Court of First Instance of Pampanga in its
Civil Case No. 1623, an expropriation proceeding.
Plaintiff-appellant, the Republic of the Philippines, (hereinafter referred to
as the Republic) filed, on June 26, 1959, a complaint for eminent domain
against defendant-appellee, Carmen M. Vda. de Castellvi, judicial
administratrix of the estate of the late Alfonso de Castellvi (hereinafter
78
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SET
referred to as Castellvi), over a parcel of land situated in the barrio of San
Jose, Floridablanca, Pampanga, described as follows:
A parcel of land, Lot No. 199-B Bureau of Lands Plan Swo 23666.
Bounded on the NE by Maria Nieves Toledo-Gozun; on the SE by
national road; on the SW by AFP reservation, and on the NW by AFP
reservation. Containing an area of 759,299 square meters, more or
less, and registered in the name of Alfonso Castellvi under TCT No.
13631 of the Register of Pampanga ...;
and against defendant-appellee Maria Nieves Toledo Gozun (hereinafter
referred to as Toledo-Gozun over two parcels of land described as follows:
A parcel of land (Portion Lot Blk-1, Bureau of Lands Plan Psd,
26254. Bounded on the NE by Lot 3, on the SE by Lot 3; on the SW
by Lot 1-B, Blk. 2 (equivalent to Lot 199-B Swo 23666; on the NW
by AFP military reservation. Containing an area of 450,273 square
meters, more or less and registered in the name of Maria Nieves
Toledo-Gozun under TCT No. 8708 of the Register of Deeds of
Pampanga. ..., and
A parcel of land (Portion of lot 3, Blk-1, Bureau of Lands Plan Psd
26254. Bounded on the NE by Lot No. 3, on the SE by school lot
and national road, on the SW by Lot 1-B Blk 2 (equivalent to Lot
199-B Swo 23666), on the NW by Lot 1-B, Blk-1. Containing an area
of 88,772 square meters, more or less, and registered in the name
of Maria Nieves Toledo Gozun under TCT No. 8708 of the Register of
Deeds of Pampanga, ....
In its complaint, the Republic alleged, among other things, that the fair
market value of the above-mentioned lands, according to the Committee
on Appraisal for the Province of Pampanga, was not more than P2,000 per
hectare, or a total market value of P259,669.10; and prayed, that the
provisional value of the lands be fixed at P259.669.10, that the court
authorizes plaintiff to take immediate possession of the lands upon deposit
of that amount with the Provincial Treasurer of Pampanga; that the court
appoints three commissioners to ascertain and report to the court the just
compensation for the property sought to be expropriated, and that the
court issues thereafter a final order of condemnation.
On June 29, 1959 the trial court issued an order fixing the provisional value
of the lands at P259,669.10.
In her "motion to dismiss" filed on July 14, 1959, Castellvi alleged, among
other things, that the land under her administration, being a residential
1st
land, had a fair market value of P15.00 per square meter, so it had a total
market value of P11,389,485.00; that the Republic, through the Armed
Forces of the Philippines, particularly the Philippine Air Force, had been,
despite repeated demands, illegally occupying her property since July 1,
1956, thereby preventing her from using and disposing of it, thus causing
her damages by way of unrealized profits. This defendant prayed that the
complaint be dismissed, or that the Republic be ordered to pay her P15.00
per square meter, or a total of P11,389,485.00, plus interest thereon at 6%
per annum from July 1, 1956; that the Republic be ordered to pay her
P5,000,000.00 as unrealized profits, and the costs of the suit.
By order of the trial court, dated August, 1959, Amparo C. Diaz, Dolores G.
viuda de Gil, Paloma Castellvi, Carmen Castellvi, Rafael Castellvi, Luis
Castellvi, Natividad Castellvi de Raquiza, Jose Castellvi and Consuelo
Castellvi were allowed to intervene as parties defendants. Subsequently,
Joaquin V. Gozun, Jr., husband of defendant Nieves Toledo Gozun, was also
allowed by the court to intervene as a party defendant.
After the Republic had deposited with the Provincial Treasurer of Pampanga
the amount of P259,669.10, the trial court ordered that the Republic be
placed in possession of the lands. The Republic was actually placed in
possession
of
the
lands
on
August
10,
1959. 1
In her "motion to dismiss", dated October 22, 1959, Toledo-Gozun alleged,
among other things, that her two parcels of land were residential lands, in
fact a portion with an area of 343,303 square meters had already been
subdivided into different lots for sale to the general public, and the
remaining portion had already been set aside for expansion sites of the
already completed subdivisions; that the fair market value of said lands
was P15.00 per square meter, so they had a total market value of
P8,085,675.00; and she prayed that the complaint be dismissed, or that
she be paid the amount of P8,085,675.00, plus interest thereon at the rate
of 6% per annum from October 13, 1959, and attorney's fees in the
amount of P50,000.00.
Intervenors Jose Castellvi and Consuelo Castellvi in their answer, filed on
February 11, 1960, and also intervenor Joaquin Gozun, Jr., husband of
defendant Maria Nieves Toledo-Gozun, in his motion to dismiss, dated May
27, 1960, all alleged that the value of the lands sought to be expropriated
was at the rate of P15.00 per square meter.
On November 4, 1959, the trial court authorized the Provincial Treasurer of
Pampanga to pay defendant Toledo-Gozun the sum of P107,609.00 as
provisional value of her lands. 2 On May 16, 1960 the trial Court authorized
the Provincial Treasurer of Pampanga to pay defendant Castellvi the
79
1st
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SET
amount of P151,859.80 as provisional value of the land under her
administration, and ordered said defendant to deposit the amount with the
Philippine National Bank under the supervision of the Deputy Clerk of
Court. In another order of May 16, 1960 the trial Court entered an order of
condemnation.3
The trial Court appointed three commissioners: Atty. Amadeo Yuzon, Clerk
of Court, as commissioner for the court; Atty. Felicisimo G. Pamandanan,
counsel of the Philippine National Bank Branch at Floridablanca, for the
plaintiff; and Atty. Leonardo F. Lansangan, Filipino legal counsel at Clark Air
Base, for the defendants. The Commissioners, after having qualified
themselves, proceeded to the performance of their duties.
On March 15,1961 the Commissioners submitted their report and
recommendation, wherein, after having determined that the lands sought
to be expropriated were residential lands, they recommended unanimously
that the lowest price that should be paid was P10.00 per square meter, for
both the lands of Castellvi and Toledo-Gozun; that an additional P5,000.00
be paid to Toledo-Gozun for improvements found on her land; that legal
interest on the compensation, computed from August 10, 1959, be paid
after deducting the amounts already paid to the owners, and that no
consequential damages be awarded. 4 The Commissioners' report was
objected to by all the parties in the case by defendants Castellvi and
Toledo-Gozun, who insisted that the fair market value of their lands should
be fixed at P15.00 per square meter; and by the Republic, which insisted
that the price to be paid for the lands should be fixed at P0.20 per square
meter. 5
After the parties-defendants and intervenors had filed their respective
memoranda, and the Republic, after several extensions of time, had
adopted as its memorandum its objections to the report of the
Commissioners, the trial court, on May 26, 1961, rendered its decision 6 the
dispositive portion of which reads as follows:
WHEREFORE, taking into account all the foregoing circumstances,
and that the lands are titled, ... the rising trend of land values ...,
and the lowered purchasing power of the Philippine peso, the court
finds that the unanimous recommendation of the commissioners of
ten (P10.00) pesos per square meter for the three lots of the
defendants subject of this action is fair and just.
xxx xxx xxx
The plaintiff will pay 6% interest per annum on the total value of
the lands of defendant Toledo-Gozun since (sic) the amount
deposited as provisional value from August 10, 1959 until full

payment is made to said defendant or deposit therefor is made in
court.
In respect to the defendant Castellvi, interest at 6% per annum will
also be paid by the plaintiff to defendant Castellvi from July 1, 1956
when plaintiff commenced its illegal possession of the Castellvi
land when the instant action had not yet been commenced to July
10, 1959 when the provisional value thereof was actually deposited
in court, on the total value of the said (Castellvi) land as herein
adjudged. The same rate of interest shall be paid from July 11,
1959 on the total value of the land herein adjudged minus the
amount deposited as provisional value, or P151,859.80, such
interest to run until full payment is made to said defendant or
deposit therefor is made in court. All the intervenors having failed
to produce evidence in support of their respective interventions,
said interventions are ordered dismissed.
The costs shall be charged to the plaintiff.
On June 21, 1961 the Republic filed a motion for a new trial and/or
reconsideration, upon the grounds of newly-discovered evidence, that the
decision was not supported by the evidence, and that the decision was
against the law, against which motion defendants Castellvi and ToledoGozun filed their respective oppositions. On July 8, 1961 when the motion
of the Republic for new trial and/or reconsideration was called for hearing,
the Republic filed a supplemental motion for new trial upon the ground of
additional newly-discovered evidence. This motion for new trial and/or
reconsideration was denied by the court on July 12, 1961.
On July 17, 1961 the Republic gave notice of its intention to appeal from
the decision of May 26, 1961 and the order of July 12, 1961. Defendant
Castellvi also filed, on July 17, 1961, her notice of appeal from the decision
of the trial court.
The Republic filed various ex-parte motions for extension of time within
which to file its record on appeal. The Republic's record on appeal was
finally submitted on December 6, 1961.
Defendants Castellvi and Toledo-Gozun filed not only a joint opposition to
the approval of the Republic's record on appeal, but also a joint
memorandum in support of their opposition. The Republic also filed a
memorandum in support of its prayer for the approval of its record on
appeal. On December 27, 1961 the trial court issued an order declaring
both the record on appeal filed by the Republic, and the record on appeal
80
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SET
filed by defendant Castellvi as having been filed out of time, thereby
dismissing both appeals.
2.
In holding that the "taking" of the properties

expropriation commenced with the filing of this action;
On January 11, 1962 the Republic filed a "motion to strike out the order of
December 27, 1961 and for reconsideration", and subsequently an
amended record on appeal, against which motion the defendants Castellvi
and Toledo-Gozun filed their opposition. On July 26, 1962 the trial court
issued an order, stating that "in the interest of expediency, the questions
raised may be properly and finally determined by the Supreme Court," and
at the same time it ordered the Solicitor General to submit a record on
appeal containing copies of orders and pleadings specified therein. In an
order dated November 19, 1962, the trial court approved the Republic's
record on appeal as amended.
3.
In ordering plaintiff-appellant to pay 6% interest on the

adjudged value of the Castellvi property to start from July of
1956;
4.
In denying plaintiff-appellant's motion for new trial based on

newly discovered evidence.
Defendant Castellvi did not insist on her appeal. Defendant Toledo-Gozun

did not appeal.
The motion to dismiss the Republic's appeal was reiterated by appellees
Castellvi and Toledo-Gozun before this Court, but this Court denied the
motion.
In her motion of August 11, 1964, appellee Castellvi sought to increase the
provisional value of her land. The Republic, in its comment on Castellvi's
motion, opposed the same. This Court denied Castellvi's motion in a
resolution dated October 2,1964.
The motion of appellees, Castellvi and Toledo-Gozun, dated October 6,
1969, praying that they be authorized to mortgage the lands subject of
expropriation, was denied by this Court or October 14, 1969.
On February 14, 1972, Attys. Alberto Cacnio, and Associates, counsel for
the estate of the late Don Alfonso de Castellvi in the expropriation
proceedings, filed a notice of attorney's lien, stating that as per agreement
with the administrator of the estate of Don Alfonso de Castellvi they shall
receive by way of attorney's fees, "the sum equivalent to ten per centum
of whatever the court may finally decide as the expropriated price of the
property subject matter of the case."
--------Before this Court, the Republic contends that the lower court erred:
1.
In finding the price of P10 per square meter of the lands

subject of the instant proceedings as just compensation;
under
In its brief, the Republic discusses the second error assigned as the first
issue to be considered. We shall follow the sequence of the Republic's
discussion.
1. In support of the assigned error that the lower court erred in holding that
the "taking" of the properties under expropriation commenced with the
filing of the complaint in this case, the Republic argues that the "taking"
should be reckoned from the year 1947 when by virtue of a special lease
agreement between the Republic and appellee Castellvi, the former was
granted the "right and privilege" to buy the property should the lessor wish
to terminate the lease, and that in the event of such sale, it was stipulated
that the fair market value should be as of the time of occupancy; and that
the permanent improvements amounting to more that half a million pesos
constructed during a period of twelve years on the land, subject of
expropriation, were indicative of an agreed pattern of permanency and
stability of occupancy by the Philippine Air Force in the interest of national
Security. 7
Appellee Castellvi, on the other hand, maintains that the "taking" of
property under the power of eminent domain requires two essential
elements, to wit: (1) entrance and occupation by condemn or upon the
private property for more than a momentary or limited period, and (2)
devoting it to a public use in such a way as to oust the owner and deprive
him of all beneficial enjoyment of the property. This appellee argues that in
the instant case the first element is wanting, for the contract of lease relied
upon provides for a lease from year to year; that the second element is
also wanting, because the Republic was paying the lessor Castellvi a
monthly rental of P445.58; and that the contract of lease does not grant
the Republic the "right and privilege" to buy the premises "at the value at
the time of occupancy." 8
Appellee Toledo-Gozun did not comment on the Republic's argument in
support of the second error assigned, because as far as she was concerned
the Republic had not taken possession of her lands prior to August 10,
1959.9
81
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SET
In order to better comprehend the issues raised in the appeal, in so far as
the Castellvi property is concerned, it should be noted that the Castellvi
property had been occupied by the Philippine Air Force since 1947 under a
contract of lease, typified by the contract marked Exh. 4-Castellvi, the
pertinent portions of which read:
CONTRACT OF LEASE
This AGREEMENT OF LEASE MADE AND ENTERED into by and
between INTESTATE ESTATE OF ALFONSO DE CASTELLVI,
represented by CARMEN M. DE CASTELLVI, Judicial Administratrix ...
hereinafter called the LESSOR and THE REPUBLIC OF THE
PHILIPPINES represented by MAJ. GEN. CALIXTO DUQUE, Chief of
Staff of the ARMED FORCES OF THE PHILIPPINES, hereinafter called
the LESSEE,
WITNESSETH:
1. For and in consideration of the rentals hereinafter reserved and
the mutual terms, covenants and conditions of the parties, the
LESSOR has, and by these presents does, lease and let unto the
LESSEE the following described land together with the
improvements thereon and appurtenances thereof, viz:
Un Terreno, Lote No. 27 del Plano de subdivision Psu 34752, parte
de la hacienda de Campauit, situado en el Barrio de San Jose,
Municipio de Floridablanca Pampanga. ... midiendo una extension
superficial de cuatro milliones once mil cuatro cientos trienta y
cinco (4,001,435) [sic] metros cuadrados, mas o menos.
Out of the above described property, 75.93 hectares thereof are
actually occupied and covered by this contract. .
Above lot is more particularly described in TCT No. 1016, province
of
Pampanga ...
of which premises, the LESSOR warrants that he/she/they/is/are the
registered owner(s) and with full authority to execute a contract of this
nature.
1st
2. The term of this lease shall be for the period beginning July 1,
1952 the date the premises were occupied by the PHILIPPINE AIR
FORCE, AFP until June 30, 1953, subject to renewal for another year
at the option of the LESSEE or unless sooner terminated by the
LESSEE as hereinafter provided.
3. The LESSOR hereby warrants that the LESSEE shall have quiet,
peaceful and undisturbed possession of the demised premises
throughout the full term or period of this lease and the LESSOR
undertakes without cost to the LESSEE to eject all trespassers, but
should the LESSOR fail to do so, the LESSEE at its option may
proceed to do so at the expense of the LESSOR. The LESSOR
further agrees that should he/she/they sell or encumber all or any
part of the herein described premises during the period of this
lease, any conveyance will be conditioned on the right of the
LESSEE hereunder.
4. The LESSEE shall pay to the LESSOR as monthly rentals under
this lease the sum of FOUR HUNDRED FIFTY-FIVE PESOS & 58/100
(P455.58) ...
5. The LESSEE may, at any time prior to the termination of this
lease, use the property for any purpose or purposes and, at its own
costs and expense make alteration, install facilities and fixtures
and errect additions ... which facilities or fixtures ... so placed in,
upon or attached to the said premises shall be and remain property
of the LESSEE and may be removed therefrom by the LESSEE prior
to the termination of this lease. The LESSEE shall surrender
possession of the premises upon the expiration or termination of
this lease and if so required by the LESSOR, shall return the
premises in substantially the same condition as that existing at the
time same were first occupied by the AFP, reasonable and ordinary
wear and tear and damages by the elements or by circumstances
over which the LESSEE has no control excepted: PROVIDED, that if
the LESSOR so requires the return of the premises in such
condition, the LESSOR shall give written notice thereof to the
LESSEE at least twenty (20) days before the termination of the
lease and provided, further, that should the LESSOR give notice
within the time specified above, the LESSEE shall have the right
and privilege to compensate the LESSOR at the fair value or the
equivalent, in lieu of performance of its obligation, if any, to restore
the premises. Fair value is to be determined as the value at the
time of occupancy less fair wear and tear and depreciation during
the period of this lease.
82
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SET
6. The LESSEE may terminate this lease at any time during the
term hereof by giving written notice to the LESSOR at least thirty
(30) days in advance ...
7. The LESSEE should not be responsible, except under special
legislation for any damages to the premises by reason of combat
operations, acts of GOD, the elements or other acts and deeds not
due to the negligence on the part of the LESSEE.
8. This LEASE AGREEMENT supersedes and voids any and all
agreements and undertakings, oral or written, previously entered
into between the parties covering the property herein leased, the
same having been merged herein. This AGREEMENT may not be
modified or altered except by instrument in writing only duly
signed by the parties. 10
It was stipulated by the parties, that "the foregoing contract of lease (Exh.
4, Castellvi) is 'similar in terms and conditions, including the date', with the
annual contracts entered into from year to year between defendant
Castellvi and the Republic of the Philippines (p. 17, t.s.n., Vol. III)". 11 It is
undisputed, therefore, that the Republic occupied Castellvi's land from July
1, 1947, by virtue of the above-mentioned contract, on a year to year basis
(from July 1 of each year to June 30 of the succeeding year) under the
terms and conditions therein stated.
Before the expiration of the contract of lease on June 30, 1956 the Republic
sought to renew the same but Castellvi refused. When the AFP refused to
vacate the leased premises after the termination of the contract, on July
11, 1956, Castellvi wrote to the Chief of Staff, AFP, informing the latter that
the heirs of the property had decided not to continue leasing the property
in question because they had decided to subdivide the land for sale to the
general public, demanding that the property be vacated within 30 days
from receipt of the letter, and that the premises be returned in
substantially the same condition as before occupancy (Exh. 5 Castellvi).
A follow-up letter was sent on January 12, 1957, demanding the delivery
and return of the property within one month from said date (Exh. 6
Castellvi). On January 30, 1957, Lieutenant General Alfonso Arellano, Chief
of Staff, answered the letter of Castellvi, saying that it was difficult for the
army to vacate the premises in view of the permanent installations and
other facilities worth almost P500,000.00 that were erected and already
established on the property, and that, there being no other recourse, the
acquisition of the property by means of expropriation proceedings would
be recommended to the President (Exhibit "7" Castellvi).
Defendant Castellvi then brought suit in the Court of First Instance of
Pampanga, in Civil Case No. 1458, to eject the Philippine Air Force from the
1st
land. While this ejectment case was pending, the Republic instituted these
expropriation proceedings, and, as stated earlier in this opinion, the
Republic was placed in possession of the lands on August 10, 1959, On
November 21, 1959, the Court of First Instance of Pampanga, dismissed
Civil Case No. 1458, upon petition of the parties, in an order which, in part,
reads as follows:
1. Plaintiff has agreed, as a matter of fact has already signed an
agreement with defendants, whereby she has agreed to receive
the rent of the lands, subject matter of the instant case from June
30, 1966 up to 1959 when the Philippine Air Force was placed in
possession by virtue of an order of the Court upon depositing the
provisional amount as fixed by the Provincial Appraisal Committee
with the Provincial Treasurer of Pampanga;
2. That because of the above-cited agreement wherein the
administratrix decided to get the rent corresponding to the rent
from 1956 up to 1959 and considering that this action is one of
illegal detainer and/or to recover the possession of said land by
virtue of non-payment of rents, the instant case now has become
moot and academic and/or by virtue of the agreement signed by
plaintiff, she has waived her cause of action in the above-entitled
case. 12
The Republic urges that the "taking " of Castellvi's property should be
deemed as of the year 1947 by virtue of afore-quoted lease agreement. In
American Jurisprudence, Vol. 26, 2nd edition, Section 157, on the subject of
"Eminent Domain, we read the definition of "taking" (in eminent domain)
as follows:
Taking' under the power of eminent domain may be defined
generally as entering upon private property for more than a
momentary period, and, under the warrant or color of legal
authority, devoting it to a public use, or otherwise informally
appropriating or injuriously affecting it in such a way as
substantially to oust the owner and deprive him of all beneficial
enjoyment thereof. 13
Pursuant to the aforecited authority, a number of circumstances must be
present in the "taking" of property for purposes of eminent domain.
First, the expropriator must enter a private property. This circumstance is
present in the instant case, when by virtue of the lease agreement the
Republic, through the AFP, took possession of the property of Castellvi.
83
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SET
Second, the entrance into private property must be for more than a
momentary period. "Momentary" means, "lasting but a moment; of but a
moment's duration" (The Oxford English Dictionary, Volume VI, page 596);
"lasting a very short time; transitory; having a very brief life; operative or
recurring at every moment" (Webster's Third International Dictionary, 1963
edition.) The word "momentary" when applied to possession or occupancy
of (real) property should be construed to mean "a limited period" not
indefinite or permanent. The aforecited lease contract was for a period of
one year, renewable from year to year. The entry on the property, under
the lease, is temporary, and considered transitory. The fact that the
Republic, through the AFP, constructed some installations of a permanent
nature does not alter the fact that the entry into the land was transitory, or
intended to last a year, although renewable from year to year by consent
of 'The owner of the land. By express provision of the lease agreement the
Republic, as lessee, undertook to return the premises in substantially the
same condition as at the time the property was first occupied by the AFP. It
is claimed that the intention of the lessee was to occupy the land
permanently, as may be inferred from the construction of permanent
improvements. But this "intention" cannot prevail over the clear and
express terms of the lease contract. Intent is to be deduced from the
language employed by the parties, and the terms 'of the contract, when
unambiguous, as in the instant case, are conclusive in the absence of
averment and proof of mistake or fraud the question being not what the
intention was, but what is expressed in the language used. (City of Manila
v. Rizal Park Co., Inc., 53 Phil. 515, 525); Magdalena Estate, Inc. v. Myrick,
71 Phil. 344, 348). Moreover, in order to judge the intention of the
contracting parties, their contemporaneous and subsequent acts shall be
principally considered (Art. 1371, Civil Code). If the intention of the lessee
(Republic) in 1947 was really to occupy permanently Castellvi's property,
why was the contract of lease entered into on year to year basis? Why was
the lease agreement renewed from year to year? Why did not the Republic
expropriate this land of Castellvi in 1949 when, according to the Republic
itself, it expropriated the other parcels of land that it occupied at the same
time as the Castellvi land, for the purpose of converting them into a jet air
base? 14 It might really have been the intention of the Republic to
expropriate the lands in question at some future time, but certainly mere
notice - much less an implied notice of such intention on the part of the
Republic to expropriate the lands in the future did not, and could not, bind
the landowner, nor bind the land itself. The expropriation must be actually
commenced in court (Republic vs. Baylosis, et al., 96 Phil. 461, 484).
Third, the entry into the property should be under warrant or color of legal
authority. This circumstance in the "taking" may be considered as present
in the instant case, because the Republic entered the Castellvi property as
lessee.
1st
Fourth, the property must be devoted to a public use or otherwise
informally appropriated or injuriously affected. It may be conceded that the
circumstance of the property being devoted to public use is present
because the property was used by the air force of the AFP.
Fifth, the utilization of the property for public use must be in such a way as
to oust the owner and deprive him of all beneficial enjoyment of the
property. In the instant case, the entry of the Republic into the property
and its utilization of the same for public use did not oust Castellvi and
deprive her of all beneficial enjoyment of the property. Castellvi remained
as owner, and was continuously recognized as owner by the Republic, as
shown by the renewal of the lease contract from year to year, and by the
provision in the lease contract whereby the Republic undertook to return
the property to Castellvi when the lease was terminated. Neither was
Castellvi deprived of all the beneficial enjoyment of the property, because
the Republic was bound to pay, and had been paying, Castellvi the agreed
monthly rentals until the time when it filed the complaint for eminent
domain on June 26, 1959.
It is clear, therefore, that the "taking" of Catellvi's property for purposes of
eminent domain cannot be considered to have taken place in 1947 when
the Republic commenced to occupy the property as lessee thereof. We find
merit in the contention of Castellvi that two essential elements in the
"taking" of property under the power of eminent domain, namely: (1) that
the entrance and occupation by the condemnor must be for a permanent,
or indefinite period, and (2) that in devoting the property to public use the
owner was ousted from the property and deprived of its beneficial use,
were not present when the Republic entered and occupied the Castellvi
property in 1947.
Untenable also is the Republic's contention that although the contract
between the parties was one of lease on a year to year basis, it was "in
reality a more or less permanent right to occupy the premises under the
guise of lease with the 'right and privilege' to buy the property should the
lessor wish to terminate the lease," and "the right to buy the property is
merged as an integral part of the lease relationship ... so much so that the
fair market value has been agreed upon, not, as of the time of purchase,
but as of the time of occupancy" 15 We cannot accept the Republic's
contention that a lease on a year to year basis can give rise to a
permanent right to occupy, since by express legal provision a lease made
for a determinate time, as was the lease of Castellvi's land in the instant
case, ceases upon the day fixed, without need of a demand (Article 1669,
Civil Code). Neither can it be said that the right of eminent domain may be
exercised by simply leasing the premises to be expropriated (Rule 67,
Section 1, Rules of Court). Nor can it be accepted that the Republic would
enter into a contract of lease where its real intention was to buy, or why
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the Republic should enter into a simulated contract of lease ("under the
guise of lease", as expressed by counsel for the Republic) when all the time
the Republic had the right of eminent domain, and could expropriate
Castellvi's land if it wanted to without resorting to any guise whatsoever.
Neither can we see how a right to buy could be merged in a contract of
lease in the absence of any agreement between the parties to that effect.
To sustain the contention of the Republic is to sanction a practice whereby
in order to secure a low price for a land which the government intends to
expropriate (or would eventually expropriate) it would first negotiate with
the owner of the land to lease the land (for say ten or twenty years) then
expropriate the same when the lease is about to terminate, then claim that
the "taking" of the property for the purposes of the expropriation be
reckoned as of the date when the Government started to occupy the
property under the lease, and then assert that the value of the property
being expropriated be reckoned as of the start of the lease, in spite of the
fact that the value of the property, for many good reasons, had in the
meantime increased during the period of the lease. This would be
sanctioning what obviously is a deceptive scheme, which would have the
effect of depriving the owner of the property of its true and fair market
value at the time when the expropriation proceedings were actually
instituted in court. The Republic's claim that it had the "right and privilege"
to buy the property at the value that it had at the time when it first
occupied the property as lessee nowhere appears in the lease contract.
What was agreed expressly in paragraph No. 5 of the lease agreement was
that, should the lessor require the lessee to return the premises in the
same condition as at the time the same was first occupied by the AFP, the
lessee would have the "right and privilege" (or option) of paying the lessor
what it would fairly cost to put the premises in the same condition as it was
at the commencement of the lease, in lieu of the lessee's performance of
the undertaking to put the land in said condition. The "fair value" at the
time of occupancy, mentioned in the lease agreement, does not refer to
the value of the property if bought by the lessee, but refers to the cost of
restoring the property in the same condition as of the time when the lessee
took possession of the property. Such fair value cannot refer to the
purchase price, for purchase was never intended by the parties to the
lease contract. It is a rule in the interpretation of contracts that "However
general the terms of a contract may be, they shall not be understood to
comprehend things that are distinct and cases that are different from those
upon which the parties intended to agree" (Art. 1372, Civil Code).
We hold, therefore, that the "taking" of the Castellvi property should not be
reckoned as of the year 1947 when the Republic first occupied the same
pursuant to the contract of lease, and that the just compensation to be
paid for the Castellvi property should not be determined on the basis of the
value of the property as of that year. The lower court did not commit an
error when it held that the "taking" of the property under expropriation
commenced with the filing of the complaint in this case.
1st
Under Section 4 of Rule 67 of the Rules of Court, 16 the "just compensation"
is to be determined as of the date of the filing of the complaint. This Court
has ruled that when the taking of the property sought to be expropriated
coincides with the commencement of the expropriation proceedings, or
takes place subsequent to the filing of the complaint for eminent domain,
the just compensation should be determined as of the date of the filing of
the complaint. (Republic vs. Philippine National Bank, L-14158, April 12,
1961, 1 SCRA 957, 961-962). In the instant case, it is undisputed that the
Republic was placed in possession of the Castellvi property, by authority of
the court, on August 10, 1959. The "taking" of the Castellvi property for the
purposes of determining the just compensation to be paid must, therefore,
be reckoned as of June 26, 1959 when the complaint for eminent domain
was filed.
Regarding the two parcels of land of Toledo-Gozun, also sought to be
expropriated, which had never been under lease to the Republic, the
Republic was placed in possession of said lands, also by authority of the
court, on August 10, 1959, The taking of those lands, therefore, must also
be reckoned as of June 26, 1959, the date of the filing of the complaint for
eminent domain.
2. Regarding the first assigned error discussed as the second issue
the Republic maintains that, even assuming that the value of the
expropriated lands is to be determined as of June 26, 1959, the price of
P10.00 per square meter fixed by the lower court "is not only exhorbitant
but also unconscionable, and almost fantastic". On the other hand, both
Castellvi and Toledo-Gozun maintain that their lands are residential lands
with a fair market value of not less than P15.00 per square meter.
The lower court found, and declared, that the lands of Castellvi and ToledoGozun are residential lands. The finding of the lower court is in consonance
with the unanimous opinion of the three commissioners who, in their report
to the court, declared that the lands are residential lands.
The Republic assails the finding that the lands are residential, contending
that the plans of the appellees to convert the lands into subdivision for
residential purposes were only on paper, there being no overt acts on the
part of the appellees which indicated that the subdivision project had been
commenced, so that any compensation to be awarded on the basis of the
plans would be speculative. The Republic's contention is not well taken. We
find evidence showing that the lands in question had ceased to be devoted
to the production of agricultural crops, that they had become adaptable for
residential purposes, and that the appellees had actually taken steps to
convert their lands into residential subdivisions even before the Republic
filed the complaint for eminent domain. In the case of City of Manila vs.
Corrales (32 Phil. 82, 98) this Court laid down basic guidelines in
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determining the value of the property expropriated for public purposes.
This Court said:
In determining the value of land appropriated for public
purposes, the same consideration are to be regarded as in a sale
of property between private parties. The inquiry, in such cases,
must be what is the property worth in the market, viewed not
merely with reference to the uses to which it is at the time applied,
but with reference to the uses to which it is plainly adapted, that is
to say, What is it worth from its availability for valuable uses?
So many and varied are the circumstances to be taken into account
in determining the value of property condemned for public
purposes, that it is practically impossible to formulate a rule to
govern its appraisement in all cases. Exceptional circumstances
will modify the most carefully guarded rule, but, as a general thing,
we should say that the compensation of the owner is to be
estimated by reference to the use for which the property is
suitable, having regard to the existing business or wants of the
community, or such as may be reasonably expected in the
immediate future. (Miss. and Rum River Boom Co. vs. Patterson, 98
U.S., 403).
In expropriation proceedings, therefore, the owner of the land has the right
to its value for the use for which it would bring the most in the
market. 17 The owner may thus show every advantage that his property
possesses, present and prospective, in order that the price it could be sold
for in the market may be satisfactorily determined. 18 The owner may also
show that the property is suitable for division into village or town lots. 19
The trial court, therefore, correctly considered, among other
circumstances, the proposed subdivision plans of the lands sought to be
expropriated in finding that those lands are residential lots. This finding of
the lower court is supported not only by the unanimous opinion of the
commissioners, as embodied in their report, but also by the Provincial
Appraisal Committee of the province of Pampanga composed of the
Provincial Treasurer, the Provincial Auditor and the District Engineer. In the
minutes of the meeting of the Provincial Appraisal Committee, held on May
14, 1959 (Exh. 13-Castellvi) We read in its Resolution No. 10 the following:
3. Since 1957 the land has been classified as residential in view of
its proximity to the air base and due to the fact that it was not
being devoted to agriculture. In fact, there is a plan to convert it
into a subdivision for residential purposes. The taxes due on the
property have been paid based on its classification as residential
land;
1st
The evidence shows that Castellvi broached the idea of subdividing her
land into residential lots as early as July 11, 1956 in her letter to the Chief
of Staff of the Armed Forces of the Philippines. (Exh. 5-Castellvi) As a
matter of fact, the layout of the subdivision plan was tentatively approved
by the National Planning Commission on September 7, 1956. (Exh. 8Castellvi). The land of Castellvi had not been devoted to agriculture since
1947 when it was leased to the Philippine Army. In 1957 said land was
classified as residential, and taxes based on its classification as residential
had been paid since then (Exh. 13-Castellvi). The location of the Castellvi
land justifies its suitability for a residential subdivision. As found by the trial
court, "It is at the left side of the entrance of the Basa Air Base and
bounded on two sides by roads (Exh. 13-Castellvi), paragraphs 1 and 2,
Exh. 12-Castellvi), the poblacion, (of Floridablanca) the municipal building,
and the Pampanga Sugar Mills are closed by. The barrio schoolhouse and
chapel are also near (T.S.N. November 23,1960, p. 68)." 20
The lands of Toledo-Gozun (Lot 1-B and Lot 3) are practically of the same
condition as the land of Castellvi. The lands of Toledo-Gozun adjoin the
land of Castellvi. They are also contiguous to the Basa Air Base, and are
along the road. These lands are near the barrio schoolhouse, the barrio
chapel, the Pampanga Sugar Mills, and the poblacion of Floridablanca
(Exhs. 1, 3 and 4-Toledo-Gozun). As a matter of fact, regarding lot 1-B it
had already been surveyed and subdivided, and its conversion into a
residential subdivision was tentatively approved by the National Planning
Commission on July 8, 1959 (Exhs. 5 and 6 Toledo-Gozun). As early as June,
1958, no less than 32 man connected with the Philippine Air Force among
them commissioned officers, non-commission officers, and enlisted men
had requested Mr. and Mrs. Joaquin D. Gozun to open a subdivision on their
lands in question (Exhs. 8, 8-A to 8-ZZ-Toledo-Gozun). 21
We agree with the findings, and the conclusions, of the lower court that the
lands that are the subject of expropriation in the present case, as of August
10, 1959 when the same were taken possession of by the Republic, were
residential lands and were adaptable for use as residential subdivisions.
Indeed, the owners of these lands have the right to their value for the use
for which they would bring the most in the market at the time the same
were taken from them. The most important issue to be resolved in the
present case relates to the question of what is the just compensation that
should be paid to the appellees.
The Republic asserts that the fair market value of the lands of the
appellees is P.20 per square meter. The Republic cites the case of Republic
vs. Narciso, et al., L-6594, which this Court decided on May 18, 1956. The
Narciso case involved lands that belonged to Castellvi and Toledo-Gozun,
and to one Donata Montemayor, which were expropriated by the Republic
in 1949 and which are now the site of the Basa Air Base. In the Narciso
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case this Court fixed the fair market value at P.20 per square meter. The
lands that are sought to be expropriated in the present case being
contiguous to the lands involved in the Narciso case, it is the stand of the
Republic that the price that should be fixed for the lands now in question
should also be at P.20 per square meter.
We can not sustain the stand of the Republic. We find that the price of P.20
per square meter, as fixed by this Court in the Narciso case, was based on
the allegation of the defendants (owners) in their answer to the complaint
for eminent domain in that case that the price of their lands was P2,000.00
per hectare and that was the price that they asked the court to pay them.
This Court said, then, that the owners of the land could not be given more
than what they had asked, notwithstanding the recommendation of the
majority of the Commission on Appraisal which was adopted by the trial
court that the fair market value of the lands was P3,000.00 per hectare.
We also find that the price of P.20 per square meter in the Narciso case was
considered the fair market value of the lands as of the year 1949 when the
expropriation proceedings were instituted, and at that time the lands were
classified as sugar lands, and assessed for taxation purposes at around
P400.00 per hectare, or P.04 per square meter. 22 While the lands involved
in the present case, like the lands involved in the Narciso case, might have
a fair market value of P.20 per square meter in 1949, it can not be denied
that ten years later, in 1959, when the present proceedings were
instituted, the value of those lands had increased considerably. The
evidence shows that since 1949 those lands were no longer cultivated as
sugar lands, and in 1959 those lands were already classified, and assessed
for taxation purposes, as residential lands. In 1959 the land of Castellvi
was assessed at P1.00 per square meter. 23
The Republic also points out that the Provincial Appraisal Committee of
Pampanga, in its resolution No. 5 of February 15, 1957 (Exhibit D),
recommended the sum of P.20 per square meter as the fair valuation of the
Castellvi property. We find that this resolution was made by the Republic
the basis in asking the court to fix the provisional value of the lands sought
to be expropriated at P259,669.10, which was approved by the court. 24 It
must be considered, however, that the amount fixed as the provisional
value of the lands that are being expropriated does not necessarily
represent the true and correct value of the land. The value is only
"provisional" or "tentative", to serve as the basis for the immediate
occupancy of the property being expropriated by the condemnor. The
records show that this resolution No. 5 was repealed by the same Provincial
Committee on Appraisal in its resolution No. 10 of May 14, 1959 (Exhibit
13-Castellvi). In that resolution No. 10, the appraisal committee stated that
"The Committee has observed that the value of the land in this locality has
increased since 1957 ...", and recommended the price of P1.50 per square
meter. It follows, therefore, that, contrary to the stand of the Republic, that
resolution No. 5 of the Provincial Appraisal Committee can not be made the
1st
basis for fixing the fair market value of the lands of Castellvi and ToledoGozun.
The Republic further relied on the certification of the Acting Assistant
Provincial Assessor of Pampanga, dated February 8, 1961 (Exhibit K), to the
effect that in 1950 the lands of Toledo-Gozun were classified partly as
sugar land and partly as urban land, and that the sugar land was assessed
at P.40 per square meter, while part of the urban land was assessed at P.40
per square meter and part at P.20 per square meter; and that in 1956 the
Castellvi land was classified as sugar land and was assessed at P450.00
per hectare, or P.045 per square meter. We can not also consider this
certification of the Acting Assistant Provincial Assessor as a basis for fixing
the fair market value of the lands of Castellvi and Toledo-Gozun because,
as the evidence shows, the lands in question, in 1957, were already
classified and assessed for taxation purposes as residential lands. The
certification of the assessor refers to the year 1950 as far as the lands of
Toledo-Gozun are concerned, and to the year 1956 as far as the land of
Castellvi is concerned. Moreover, this Court has held that the valuation
fixed for the purposes of the assessment of the land for taxation purposes
can not bind the landowner where the latter did not intervene in fixing it. 25
On the other hand, the Commissioners, appointed by the court to appraise
the lands that were being expropriated, recommended to the court that the
price of P10.00 per square meter would be the fair market value of the
lands. The commissioners made their recommendation on the basis of their
observation after several ocular inspections of the lands, of their own
personal knowledge of land values in the province of Pampanga, of the
testimonies of the owners of the land, and other witnesses, and of
documentary evidence presented by the appellees. Both Castellvi and
Toledo-Gozun testified that the fair market value of their respective land
was at P15.00 per square meter. The documentary evidence considered by
the commissioners consisted of deeds of sale of residential lands in the
town of San Fernando and in Angeles City, in the province of Pampanga,
which were sold at prices ranging from P8.00 to P20.00 per square meter
(Exhibits 15, 16, 17, 18, 19, 20, 21, 22, 23-Castellvi). The commissioners
also considered the decision in Civil Case No. 1531 of the Court of First
Instance of Pampanga, entitled Republic vs. Sabina Tablante, which was
expropriation case filed on January 13, 1959, involving a parcel of land
adjacent to the Clark Air Base in Angeles City, where the court fixed the
price at P18.00 per square meter (Exhibit 14-Castellvi). In their report, the
commissioners, among other things, said:
... This expropriation case is specially pointed out, because the
circumstances and factors involved therein are similar in many
respects to the defendants' lands in this case. The land in Civil
Case No. 1531 of this Court and the lands in the present case (Civil
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Case No. 1623) are both near the air bases, the Clark Air Base and
the Basa Air Base respectively. There is a national road fronting
them and are situated in a first-class municipality. As added
advantage it may be said that the Basa Air Base land is very near
the sugar mill at Del Carmen, Floridablanca, Pampanga, owned by
the Pampanga Sugar Mills. Also just stone's throw away from the
same lands is a beautiful vacation spot at Palacol, a sitio of the
town of Floridablanca, which counts with a natural swimming pool
for vacationists on weekends. These advantages are not found in
the case of the Clark Air Base. The defendants' lands are nearer to
the poblacion of Floridablanca then Clark Air Base is nearer (sic) to
the poblacion of Angeles, Pampanga.
The deeds of absolute sale, according to the undersigned
commissioners, as well as the land in Civil Case No. 1531 are
competent evidence, because they were executed during the year
1959 and before August 10 of the same year. More specifically so
the land at Clark Air Base which coincidentally is the subject matter
in the complaint in said Civil Case No. 1531, it having been filed on
January 13, 1959 and the taking of the land involved therein was
ordered by the Court of First Instance of Pampanga on January 15,
1959, several months before the lands in this case were taken by
the plaintiffs ....
From the above and considering further that the lowest as well as
the highest price per square meter obtainable in the market of
Pampanga relative to subdivision lots within its jurisdiction in the
year 1959 is very well known by the Commissioners, the
Commission finds that the lowest price that can be awarded to the
lands in question is P10.00 per square meter. 26
The lower court did not altogether accept the findings of the
Commissioners based on the documentary evidence, but it considered the
documentary evidence as basis for comparison in determining land values.
The lower court arrived at the conclusion that "the unanimous
recommendation of the commissioners of ten (P10.00) pesos per square
meter for the three lots of the defendants subject of this action is fair and
just". 27 In arriving at its conclusion, the lower court took into consideration,
among other circumstances, that the lands are titled, that there is a rising
trend of land values, and the lowered purchasing power of the Philippine
peso.
In the case of Manila Railroad Co. vs. Caligsihan, 40 Phil. 326, 328, this
Court said:
1st
A court of first instance or, on appeal, the Supreme Court, may
change or modify the report of the commissioners by increasing or
reducing the amount of the award if the facts of the case so justify.
While great weight is attached to the report of the commissioners,
yet a court may substitute therefor its estimate of the value of the
property as gathered from the record in certain cases, as, where
the commissioners have applied illegal principles to the evidence
submitted to them, or where they have disregarded a clear
preponderance of evidence, or where the amount allowed is either
palpably inadequate or excessive. 28
The report of the commissioners of appraisal in condemnation proceedings
are not binding, but merely advisory in character, as far as the court is
concerned. 29 In our analysis of the report of the commissioners, We find
points that merit serious consideration in the determination of the just
compensation that should be paid to Castellvi and Toledo-Gozun for their
lands. It should be noted that the commissioners had made ocular
inspections of the lands and had considered the nature and similarities of
said lands in relation to the lands in other places in the province of
Pampanga, like San Fernando and Angeles City. We cannot disregard the
observations of the commissioners regarding the circumstances that make
the lands in question suited for residential purposes their location near
the Basa Air Base, just like the lands in Angeles City that are near the Clark
Air Base, and the facilities that obtain because of their nearness to the big
sugar central of the Pampanga Sugar mills, and to the flourishing first class
town of Floridablanca. It is true that the lands in question are not in the
territory of San Fernando and Angeles City, but, considering the facilities of
modern communications, the town of Floridablanca may be considered
practically adjacent to San Fernando and Angeles City. It is not out of place,
therefore, to compare the land values in Floridablanca to the land values in
San Fernando and Angeles City, and form an idea of the value of the lands
in Floridablanca with reference to the land values in those two other
communities.
The important factor in expropriation proceeding is that the owner is
awarded the just compensation for his property. We have carefully studied
the record, and the evidence, in this case, and after considering the
circumstances attending the lands in question We have arrived at the
conclusion that the price of P10.00 per square meter, as recommended by
the commissioners and adopted by the lower court, is quite high. It is Our
considered view that the price of P5.00 per square meter would be a fair
valuation of the lands in question and would constitute a just
compensation to the owners thereof. In arriving at this conclusion We have
particularly taken into consideration the resolution of the Provincial
Committee on Appraisal of the province of Pampanga informing, among
others, that in the year 1959 the land of Castellvi could be sold for from
P3.00 to P4.00 per square meter, while the land of Toledo-Gozun could be
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1st
sold for from P2.50 to P3.00 per square meter. The Court has weighed all
the circumstances relating to this expropriations proceedings, and in fixing
the price of the lands that are being expropriated the Court arrived at a
happy medium between the price as recommended by the commissioners
and approved by the court, and the price advocated by the Republic. This
Court has also taken judicial notice of the fact that the value of the
Philippine peso has considerably gone down since the year
1959. 30 Considering that the lands of Castellvi and Toledo-Gozun are
adjoining each other, and are of the same nature, the Court has deemed it
proper to fix the same price for all these lands.
same time be entitled to the payment of interest during the same period
on the amount awarded her as the just compensation of her land. The
Republic, therefore, should pay Castellvi interest at the rate of 6% per
annum on the value of her land, minus the provisional value that was
deposited, only from July 10, 1959 when it deposited in court the
provisional value of the land.
3. The third issue raised by the Republic relates to the payment of

interest. The Republic maintains that the lower court erred when it
ordered the Republic to pay Castellvi interest at the rate of 6% per
annum on the total amount adjudged as the value of the land of
Castellvi, from July 1, 1956 to July 10, 1959. We find merit in this
assignment of error.
After the lower court had decided this case on May 26, 1961, the Republic
filed a motion for a new trial, supplemented by another motion, both based
upon the ground of newly discovered evidence. The alleged newly
discovered evidence in the motion filed on June 21, 1961 was a deed of
absolute sale-executed on January 25, 1961, showing that a certain Serafin
Francisco had sold to Pablo L. Narciso a parcel of sugar land having an area
of 100,000 square meters with a sugar quota of 100 piculs, covered by P.A.
No. 1701, situated in Barrio Fortuna, Floridablanca, for P14,000, or P.14 per
square meter.
In ordering the Republic to pay 6% interest on the total value of the land of
Castellvi from July 1, 1956 to July 10, 1959, the lower court held that the
Republic had illegally possessed the land of Castellvi from July 1, 1956,
after its lease of the land had expired on June 30, 1956, until August 10,
1959 when the Republic was placed in possession of the land pursuant to
the writ of possession issued by the court. What really happened was that
the Republic continued to occupy the land of Castellvi after the expiration
of its lease on June 30, 1956, so much so that Castellvi filed an ejectment
case against the Republic in the Court of First Instance of
Pampanga. 31 However, while that ejectment case was pending, the
Republic filed the complaint for eminent domain in the present case and
was placed in possession of the land on August 10, 1959, and because of
the institution of the expropriation proceedings the ejectment case was
later dismissed. In the order dismissing the ejectment case, the Court of
First Instance of Pampanga said:
Plaintiff has agreed, as a matter of fact has already signed an
agreement with defendants, whereby she had agreed to receive
the rent of the lands, subject matter of the instant case from June
30, 1956 up to 1959 when the Philippine Air Force was placed in
possession by virtue of an order of the Court upon depositing the
provisional amount as fixed by the Provincial Appraisal Committee
with
the
Provincial
Treasurer
of
Pampanga; ...
If Castellvi had agreed to receive the rentals from June 30, 1956 to August
10, 1959, she should be considered as having allowed her land to be
leased to the Republic until August 10, 1959, and she could not at the
4. The fourth error assigned by the Republic relates to the denial by the
lower court of its motion for a new trial based on nearly discovered
evidence. We do not find merit in this assignment of error.
In the supplemental motion, the alleged newly discovered evidence were:

(1) a deed of sale of some 35,000 square meters of land situated at
Floridablanca for P7,500.00 (or about P.21 per square meter) executed in
July, 1959, by the spouses Evelyn D. Laird and Cornelio G. Laird in favor of
spouses Bienvenido S. Aguas and Josefina Q. Aguas; and (2) a deed of
absolute sale of a parcel of land having an area of 4,120,101 square
meters, including the sugar quota covered by Plantation Audit No. 161
1345, situated at Floridablanca, Pampanga, for P860.00 per hectare (a little
less than P.09 per square meter) executed on October 22, 1957 by Jesus
Toledo y Mendoza in favor of the Land Tenure Administration.
We find that the lower court acted correctly when it denied the motions for
a new trial.
To warrant the granting of a new trial based on the ground of newly
discovered evidence, it must appear that the evidence was discovered
after the trial; that even with the exercise of due diligence, the evidence
could not have been discovered and produced at the trial; and that the
evidence is of such a nature as to alter the result of the case if
admitted. 32 The lower court correctly ruled that these requisites were not
complied with.
The lower court, in a well-reasoned order, found that the sales made by
Serafin Francisco to Pablo Narciso and that made by Jesus Toledo to the
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Land Tenure Administration were immaterial and irrelevant, because those
sales covered sugarlands with sugar quotas, while the lands sought to be
expropriated in the instant case are residential lands. The lower court also
concluded that the land sold by the spouses Laird to the spouses Aguas
was a sugar land.
We agree with the trial court. In eminent domain proceedings, in order that
evidence as to the sale price of other lands may be admitted in evidence to
prove the fair market value of the land sought to be expropriated, the
lands must, among other things, be shown to be similar.
But even assuming, gratia argumenti, that the lands mentioned in those
deeds of sale were residential, the evidence would still not warrant the
grant of a new trial, for said evidence could have been discovered and
produced at the trial, and they cannot be considered newly discovered
evidence as contemplated in Section 1(b) of Rule 37 of the Rules of Court.
Regarding this point, the trial court said:
The Court will now show that there was no reasonable diligence
employed.
The land described in the deed of sale executed by Serafin
Francisco, copy of which is attached to the original motion, is
covered by a Certificate of Title issued by the Office of the Register
of Deeds of Pampanga. There is no question in the mind of the
court but this document passed through the Office of the Register
of Deeds for the purpose of transferring the title or annotating the
sale on the certificate of title. It is true that Fiscal Lagman went to
the Office of the Register of Deeds to check conveyances which
may be presented in the evidence in this case as it is now sought
to be done by virtue of the motions at bar, Fiscal Lagman, one of
the lawyers of the plaintiff, did not exercise reasonable diligence as
required by the rules. The assertion that he only went to the office
of the Register of Deeds 'now and then' to check the records in that
office only shows the half-hazard [sic] manner by which the plaintiff
looked for evidence to be presented during the hearing before the
Commissioners, if it is at all true that Fiscal Lagman did what he is
supposed to have done according to Solicitor Padua. It would have
been the easiest matter for plaintiff to move for the issuance of a
subpoena duces tecum directing the Register of Deeds of
Pampanga to come to testify and to bring with him all documents
found in his office pertaining to sales of land in Floridablanca
adjacent to or near the lands in question executed or recorded
from 1958 to the present. Even this elementary precaution was not
done by plaintiff's numerous attorneys.
1st
The same can be said of the deeds of sale attached to the
supplementary motion. They refer to lands covered by certificate of
title issued by the Register of Deeds of Pampanga. For the same
reason they could have been easily discovered if reasonable
diligence has been exerted by the numerous lawyers of the plaintiff
in this case. It is noteworthy that all these deeds of sale could be
found in several government offices, namely, in the Office of the
Register of Deeds of Pampanga, the Office of the Provincial
Assessor of Pampanga, the Office of the Clerk of Court as a part of
notarial reports of notaries public that acknowledged these
documents, or in the archives of the National Library. In respect to
Annex 'B' of the supplementary motion copy of the document could
also be found in the Office of the Land Tenure Administration,
another government entity. Any lawyer with a modicum of ability
handling this expropriation case would have right away though
[sic] of digging up documents diligently showing conveyances of
lands near or around the parcels of land sought to be expropriated
in this case in the offices that would have naturally come to his
mind such as the offices mentioned above, and had counsel for the
movant really exercised the reasonable diligence required by the
Rule' undoubtedly they would have been able to find these
documents and/or caused the issuance of subpoena duces
tecum. ...
It is also recalled that during the hearing before the Court of the
Report and Recommendation of the Commissioners and objection
thereto, Solicitor Padua made the observation:
I understand, Your Honor, that there was a sale that took place in
this place of land recently where the land was sold for P0.20 which
is contiguous to this land.
The Court gave him permission to submit said document subject to
the approval of the Court. ... This was before the decision was
rendered, and later promulgated on May 26, 1961 or more than
one month after Solicitor Padua made the above observation. He
could have, therefore, checked up the alleged sale and moved for a
reopening to adduce further evidence. He did not do so. He forgot
to present the evidence at a more propitious time. Now, he seeks
to introduce said evidence under the guise of newly-discovered
evidence. Unfortunately the Court cannot classify it as newlydiscovered evidence, because tinder the circumstances, the correct
qualification that can be given is 'forgotten evidence'. Forgotten
however,
is
not
newly-discovered
evidence. 33
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The granting or denial of a motion for new trial is, as a general rule,
discretionary with the trial court, whose judgment should not be disturbed
unless there is a clear showing of abuse of discretion. 34 We do not see any
abuse of discretion on the part of the lower court when it denied the
motions for a new trial.
WHEREFORE, the decision appealed from is modified, as follows:
(a) the lands of appellees Carmen Vda. de Castellvi and Maria
Nieves Toledo-Gozun, as described in the complaint, are declared
expropriated for public use;
(b) the fair market value of the lands of the appellees is fixed at
P5.00 per square meter;
(c) the Republic must pay appellee Castellvi the sum of
P3,796,495.00 as just compensation for her one parcel of land that
has an area of 759,299 square meters, minus the sum of
P151,859.80 that she withdrew out of the amount that was
deposited in court as the provisional value of the land, with interest
at the rate of 6% per annum from July 10, 1959 until the day full
payment is made or deposited in court;
(d) the Republic must pay appellee Toledo-Gozun the sum of
P2,695,225.00 as the just compensation for her two parcels of land
that have a total area of 539,045 square meters, minus the sum of
P107,809.00 that she withdrew out of the amount that was
deposited in court as the provisional value of her lands, with
interest at the rate of 6%, per annum from July 10, 1959 until the
day full payment is made or deposited in court; (e) the attorney's
lien of Atty. Alberto Cacnio is enforced; and
(f) the costs should be paid by appellant Republic of the
Philippines, as provided in Section 12, Rule 67, and in Section 13,
Rule 141, of the Rules of Court.
IT IS SO ORDERED
G.R. No. L-119694 May 22, 1995

PHILIPPINE PRESS INSTITUTE, INC., for and in behalf of 139
members, represented by its President, Amado P. Macasaet and its
Executive
Director
Ermin
F.
Garcia,
Jr., petitioner,
vs. COMMISSION ON ELECTIONS, respondent.
FELICIANO, J.:
The Philippine Press Institute, Inc. ("PPI") is before this Court assailing the
constitutional validity of Resolution No. 2772 issued by respondent
Commission on Elections ("Comelec") and its corresponding Comelec
directive dated 22 March 1995, through a Petition for Certiorari and
Prohibition. Petitioner PPI is a non-stock, non-profit organization of
newspaper and magazine publishers.
On 2 March 1995, Comelec promulgated Resolution No. 2772, which reads
in part:
91
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xxx xxx xxx
Sec. 2. Comelec Space. The Commission shall procure free print
space of not less than one half (1/2) page in at least one
newspaper of general circulation in every province or city for use
as "Comelec Space" from March 6, 1995 in the case of candidates
for senator and from March 21, 1995 until May 12, 1995. In the
absence of said newspaper, "Comelec Space" shall be obtained
from any magazine or periodical of said province or city.
Sec. 3. Uses of Comelec Space. "Comelec Space" shall be
allocated by the Commission, free of charge, among all
candidates within the area in which the newspaper, magazine or
periodical is circulated to enable the candidates to make known
their qualifications, their stand on public issues and their platforms
and programs of government.
"Comelec Space" shall also be used by the Commission for
dissemination of vital election information.
Sec. 4. Allocation of Comelec Space. (a) "Comelec Space" shall
also be available to all candidatesduring the periods stated in
Section 2 hereof. Its allocation shall be equal and impartial among
all candidates for the same office. All candidates concerned shall
be furnished a copy of the allocation of "Comelec Space" for their
information, guidance and compliance.
(b) Any candidate desiring to avail himself of "Comelec Space"
from newspapers or publications based in the Metropolitan Manila
Area shall submit an application therefor, in writing, to the
Committee on Mass Media of the Commission. Any candidate
desiring to avail himself of "Comelec Space" in newspapers or
publications based in the provinces shall submit his application
therefor, in writing, to the Provincial Election Supervisor concerned.
Applications for availment of "Comelec Space" maybe filed at any
time from the date of effectivity of this Resolution.
(c) The Committee on Mass Media and the Provincial Election
Supervisors shall allocate available"Comelec Space" among the
candidates concerned by lottery of which said candidates shall be
notified in advance, in writing, to be present personally or by
representative to witness the lottery at the date, time and place
specified in the notice. Any party objecting to the result of the
lottery may appeal to the Commission.
(d) The candidates concerned shall be notified by the Committee

on Mass Media or the Provincial Election Supervisor, as the case
maybe, sufficiently in advance and in writing of the date of issue
and the newspaper or publication allocated to him, and the time
within which he must submit the written material for publication in
the "Comelec Space".
xxx xxx xxx
Sec. 8. Undue Reference to Candidates/Political Parties in
Newspapers. No newspaper or publication shall allow to be
printed or published in the news, opinion, features, or other
sections of the newspaper or publication accounts or comments
which manifestly favor or oppose any candidate or political party
by unduly or repeatedly referring to or including therein said
candidate or political party. However, unless the facts and
circumstances clearly indicate otherwise, the Commission will
respect the determination by the publisher and/or editors of the
newspapers or publications that the accounts or views published
are significant, newsworthy and of public interest. (Emphasis
supplied)
Apparently in implementation of this Resolution, Comelec through
Commissioner Regalado E. Maambong sent identical letters, dated 22
March 1995, to various publishers of newspapers like the Business World,
the Philippine Star, the Malaya and the Philippine Times Journal, all
members of PPI. These letters read as follows:
This is to advise you that pursuant to Resolution No. 2772 of the
Commission on Elections, you aredirected to provide free print
space of not less than one half (1/2) page for use as "Comelec
Space" or similar to the print support which you have extended
during the May 11, 1992 synchronized elections which was 2 full
pages for each political party fielding senatorial candidates, from
March 6, 1995 to May 6, 1995, to make known their qualifications,
their stand on public issues and their platforms and programs of
government.
We shall be informing the political parties and candidates to submit
directly to you their pictures, biographical data, stand on key
public issues and platforms of government either as raw data or in
the form of positives or camera-ready materials.
92
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Please be reminded that the political parties/candidates may be
accommodated in your publication any day upon receipt of their
materials until May 6, 1995 which is the last day for campaigning.
We trust you to extend your full support and cooperation in this
regard. (Emphasis supplied)
In this Petition for Certiorari and Prohibition with prayer for the issuance of
a Temporary Restraining Order, PPI asks us to declare Comelec Resolution
No. 2772 unconstitutional and void on the ground that it violates the
prohibition imposed by the Constitution upon the government, and any of
its agencies, against the taking of private property for public use without
just compensation. Petitioner also contends that the 22 March 1995 letter
directives of Comelec requiring publishers to give free "Comelec Space"
and at the same time process raw data to make it camera-ready, constitute
impositions of involuntary servitude, contrary to the provisions of Section
18 (2), Article III of the 1987 Constitution. Finally, PPI argues that Section 8
of Comelec Resolution No. 2772 is violative of the constitutionally
guaranteed freedom of speech, of the press and of expression. 1
On 20 April 1995, this Court issued a Temporary Restraining Order
enjoining Comelec from enforcing and implementing Section 2 of
Resolution No. 2772, as well as the Comelec directives addressed to
various print media enterprises all dated 22 March 1995. The Court also
required the respondent to file a Comment on the Petition.
The Office of the Solicitor General filed its Comment on behalf of
respondent Comelec alleging that Comelec Resolution No. 2772
does not impose upon the publishers any obligation to provide free print
space in the newspapers as it does not provide any criminal or
administrative sanction for non-compliance with that Resolution. According
to the Solicitor General, the questioned Resolution merely established
guidelines to be followed in connection with the procurement of "Comelec
space," the procedure for and mode of allocation of such space to
candidates and the conditions or requirements for the candidate's
utilization of the "Comelec space" procured. At the same time, however,
the Solicitor General argues that even if the questioned Resolution and its
implementing letter directives are viewed as mandatory, the same would
nevertheless be valid as an exercise of the police power of the State. The
Solicitor General also maintains that Section 8 of Resolution No. 2772 is a
permissible exercise of the power of supervision or regulation of the
Comelec over the communication and information operations of print
media enterprises during the election period to safeguard and ensure a
fair, impartial and credible election. 2
At the oral hearing of this case held on 28 April 1995, respondent Comelec
through its Chairman, Hon. Bernardo Pardo, in response to inquiries from
the Chief Justice and other Members of the Court, stated that Resolution
No. 2772, particularly Section 2 thereof and the 22 March 1995 letters
dispatched to various members of petitioner PPI, were not intended to
compel those members to supply Comelec with free print space. Chairman
Pardo represented to the Court that Resolution and the related letterdirectives were merely designed to solicit from the publishers the same
free print space which many publishers had voluntarily given to Comelec
during the election period relating to the 11 May 1992 elections. Indeed,
the Chairman stated that the Comelec would, that very afternoon, meet
and adopt an appropriate amending or clarifying resolution, a certified true
copy of which would forthwith be filed with the Court.
On 5 May 1995, the Court received from the Office of the Solicitor General
a manifestation which attached a copy of Comelec Resolution No. 2772-A
dated 4 May 1995. The operative portion of this Resolution follows:
NOW THEREFORE, pursuant to the powers vested in it by the
Constitution, the Omnibus Election Code, Republic Acts No. 6646
and 7166 and other election laws, the Commission on Elections
RESOLVED to clarify Sections 2 and 8 of Res. No. 2772 as follows:
1.
Section 2 of Res. No. 2772 shall not be construed to mean as

requiring publishers of the different mass media print
publications to provide print space under pain of prosecution,
whether administrative, civil or criminal, there being no
sanction or penalty for violation of said Section provided for
either in said Resolution or in Section 90 of Batas Pambansa
Blg. 881, otherwise known as the Omnibus Election Code, on
the grant of "Comelec space."
2.
Section 8 of Res. No. 2772 shall not be construed to mean as

constituting prior restraint on the part of publishers with
respect to the printing or publication of materials in the news,
opinion, features or other sections of their respective
publications or other accounts or comments, it being clear from
the last sentence of said Section 8 that the Commission shall,
"unless the facts and circumstances clearly indicate otherwise .
. . respect the determination by the publisher and/or editors of
the newspapers or publications that the accounts or views
published are significant, newsworthy and of public interest."
This Resolution shall take effect upon approval. (Emphasis in the

original)
93
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SET
While, at this point, the Court could perhaps simply dismiss the Petition
for Certiorari and Prohibition as having become moot and academic, we
consider it not inappropriate to pass upon the first constitutional issue
raised in this case. Our hope is to put this issue to rest and prevent its
resurrection.
Section 2 of Resolution No. 2772 is not a model of clarity in expression.
Section 1 of Resolution No. 2772-A did not try to redraft Section 2;
accordingly, Section 2 of Resolution No. 2772 persists in its original form.
Thus, we must point out that, as presently worded, and in particular as
interpreted and applied by the Comelec itself in its 22 March 1995 letterdirectives to newspaper publishers, Section 2 of Resolution No. 2772 is
clearly susceptible of the reading that petitioner PPI has given it. That
Resolution No. 2772 does not, in express terms, threaten publishers who
would disregard it or its implementing letters with some criminal or other
sanction, does not by itself demonstrate that the Comelec's original
intention was simply to solicit or request voluntary donations of print space
from publishers. A written communication officially directing a print media
company to supply free print space, dispatched by a government (here a
constitutional) agency and signed by a member of the Commission
presumably legally authorized to do so, is bound to produce a coercive
effect upon the company so addressed. That the agency may not be legally
authorized to impose, or cause the imposition of, criminal or other
sanctions for disregard of such directions, only aggravates the
constitutional difficulties inhearing in the present situation. The enactment
or addition of such sanctions by the legislative authority itself would be
open to serious constitutional objection.
To compel print media companies to donate "Comelec-space" of the
dimensions specified in Section 2 of Resolution No. 2772 (not less than
one-half page), amounts to "taking" of private personal property for public
use or purposes. Section 2 failed to specify the intended frequency of such
compulsory "donation:" only once during the period from 6 March 1995 (or
21 March 1995) until 12 May 1995? or everyday or once a week? or as
often as Comelec may direct during the same period? The extent of the
taking or deprivation is not insubstantial; this is not a case of a de
minimistemporary limitation or restraint upon the use of private property.
The monetary value of the compulsory "donation," measured by the
advertising rates ordinarily charged by newspaper publishers whether in
cities or in non-urban areas, may be very substantial indeed.
The taking of print space here sought to be effected may first be appraised
under the rubric of expropriation of private personal property for public
use. The threshold requisites for a lawful taking of private property for
public use need to be examined here: one is the necessity for the taking;
another is the legal authority to effect the taking. The element of necessity
1st
for the taking has not been shown by respondent Comelec. It has not been
suggested that the members of PPI are unwilling to sell print space at their
normal rates to Comelec for election purposes. Indeed, the unwillingness or
reluctance of Comelec to buy print space lies at the heart of the
problem. 3 Similarly, it has not been suggested, let alone demonstrated,
that Comelec has been granted the power of eminent domain either by the
Constitution or by the legislative authority. A reasonable relationship
between that power and the enforcement and administration of election
laws by Comelec must be shown; it is not casually to be assumed.
That the taking is designed to subserve "public use" is not contested by
petitioner PPI. We note only that, under Section 3 of Resolution No. 2772,
the free "Comelec space" sought by the respondent Commission would be
used not only for informing the public about the identities, qualifications
and programs of government of candidates for elective office but also for
"dissemination of vital election information" (including, presumably,
circulars, regulations, notices, directives, etc. issued by Comelec). It seems
to the Court a matter of judicial notice that government offices and
agencies (including the Supreme Court) simply purchase print space, in the
ordinary course of events, when their rules and regulations, circulars,
notices and so forth need officially to be brought to the attention of the
general public.
The taking of private property for public use is, of course, authorized by the
Constitution, but not without payment of "just compensation" (Article III,
Section 9). And apparently the necessity of paying compensation for
"Comelec space" is precisely what is sought to be avoided by respondent
Commission, whether Section 2 of Resolution No. 2772 is read as petitioner
PPI reads it, as an assertion of authority to require newspaper publishers to
"donate" free print space for Comelec purposes, or as an exhortation, or
perhaps an appeal, to publishers to donate free print space, as Section 1 of
Resolution No. 2772-A attempts to suggest. There is nothing at all to
prevent newspaper and magazine publishers from voluntarily giving free
print space to Comelec for the purposes contemplated in Resolution No.
2772. Section 2 of Resolution No. 2772 does not, however, provide a
constitutional basis for compelling publishers, against their will, in the kind
of factual context here present, to provide free print space for Comelec
purposes. Section 2 does not constitute a valid exercise of the power of
eminent domain.
We would note that the ruling here laid down by the Court is entirely in line
with the theory of democratic representative government. The economic
costs of informing the general public about the qualifications and programs
of those seeking elective office are most appropriately distributed as
widely as possible throughout our society by the utilization of public funds,
especially funds raised by taxation, rather than cast solely on one small
94
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sector of society, i.e., print media enterprises. The benefits which flow from
a heightened level of information on and the awareness of the electoral
process are commonly thought to be community-wide; the burdens should
be allocated on the same basis.
As earlier noted, the Solicitor General also contended that Section 2 of
Resolution No. 2772, even if read as compelling publishers to "donate"
"Comelec space, " may be sustained as a valid exercise of the police power
of the state. This argument was, however, made too casually to require
prolonged consideration on our part. Firstly, there was no effort (and
apparently no inclination on the part of Comelec) to show that the police
power essentially a power of legislation has been constitutionally
delegated to respondent Commission. 4 Secondly, while private property
may indeed be validly taken in the legitimate exercise of the police power
of the state, there was no attempt to show compliance in the instant case
with the requisites of a lawful taking under the police power. 5
Section 2 of Resolution No. 2772 is a blunt and heavy instrument that
purports, without a showing of existence of a national emergency or other
imperious public necessity, indiscriminately and without regard to the
individual business condition of particular newspapers or magazines
located in differing parts of the country, to take private property of
newspaper or magazine publishers. No attempt was made to demonstrate
that a real and palpable or urgent necessity for the taking of print space
confronted the Comelec and that Section 2 of Resolution No. 2772 was
itself the only reasonable and calibrated response to such necessity
available to the Comelec. Section 2 does not constitute a valid exercise of
the police power of the State.
We turn to Section 8 of Resolution No. 2772, which needs to be quoted in
full again:
Sec. 8. Undue Reference to Candidates/Political Parties in
Newspapers. No newspaper or publication shall allow to be
printed or published in the news, opinion, features, or other
sections of the newspaper or publication accounts or comments
which manifestly favor or oppose any candidate or political party
by unduly or repeatedly referring to or including therein said
candidate or political party. However, unless the facts and
circumstances clearly indicate otherwise, the Commission will
respect the determination by the publisher and/or editors of the
newspapers or publications that the accounts or views published
are significant, newsworthy and of public interest.
It is not easy to understand why Section 8 was included at all in Resolution
No. 2772. In any case, Section 8 should be viewed in the context of our
1st
decision in National Press Club v. Commission on Elections. 6 There the
Court sustained the constitutionality of Section 11 (b) of R.A. No. 6646,
known as the Electoral Reforms Law of 1987, which prohibits the sale or
donation of print space and airtime for campaign or other political
purposes, except to the Comelec. In doing so, the Court carefully
distinguished (a) paid political advertisements which are reached by the
prohibition of Section 11 (b), from (b) the reporting of news, commentaries
and expressions of belief or opinion by reporters, broadcasters, editors,
commentators or columnists which fall outside the scope of Section 11 (b)
and which are protected by the constitutional guarantees of freedom of
speech and of the press:
Secondly, and more importantly, Section 11 (b) is limited in its
scope of application. Analysis of Section 11 (b) shows that
it purports to apply only to the purchase and sale, including
purchase and sale disguised as a donation, of print space and air
time for campaign or other political purposes. Section 11 (b) does
not
purport in
any
way to
restrict the reporting
by
newspapers or radio or television stations of news or news-worthy
events relating to candidates, their qualifications, political parties
and programs of government. Moreover, Section 11 (b) does not
reach commentaries and expressions of belief or opinion by
reporters or broadcaster or editors or commentators or columnists
in respect of candidates, their qualifications, and programs and so
forth, so long at least as such comments, opinions and beliefs are
not in fact advertisements for particular candidates covertly paid
for. In sum, Section 11 (b) is not to be read as reaching any report
or commentary or other coverage that, in responsible media, is not
paid for by candidates for political office. We read Section 11 (b) as
designed to cover only paid political advertisements of particular
candidates.
The above limitation in scope of application of Section 11 (b)
that it does not restrict either the reporting of or the expression of
belief or opinion or comment upon the qualifications and programs
and activities of any and all candidates for office constitutes the
critical distinction which must be made between the instant case
and that of Sanidad v. Commission on Elections. . . . 7 (Citations
omitted; emphasis supplied)
Section 8 of Resolution No. 2772 appears to represent the effort of the
Comelec to establish a guideline for implementation of the above-quoted
distinction and doctrine in National Press Club an effort not blessed with
evident success. Section 2 of Resolution No. 2772-A while possibly helpful,
does not add substantially to the utility of Section 8 of Resolution No. 2772.
The distinction between paid political advertisements on the one hand and
95
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news reports, commentaries and expressions of belief or opinion by
reporters, broadcasters, editors, etc. on the other hand, can realistically be
given operative meaning only in actual cases or controversies, on a caseto-case basis, in terms of very specific sets of facts.
LORENZO SUMULONG and EMILIA VIDANES-BALAOING, petitioners,

vs. HON. BUENAVENTURA GUERRERO and NATIONAL HOUSING
AUTHORITY, respondents.
CORTES, J.:
At all events, the Court is bound to note that PPI has failed to allege any
specific affirmative action on the part of Comelec designed to enforce or
implement Section 8. PPI has not claimed that it or any of its members has
sustained actual or imminent injury by reason of Comelec action under
Section 8. Put a little differently, the Court considers that the precise
constitutional issue here sought to be raised whether or not Section 8 of
Resolution No. 2772 constitutes a permissible exercise of the Comelec's
power under Article IX, Section 4 of the Constitution to
supervise or regulate the enjoyment or utilization of all franchise or
permits for the operation of media of communication or
information [for the purpose of ensuring] equal opportunity, time
and space, and the right of reply, including reasonable, equal rates
therefore, for public information campaigns and forums among
candidates in connection with the objective of holding free, orderly
honest, peaceful and credible elections
is not ripe for judicial review for lack of an actual case or controversy
involving, as the very lis mota thereof, the constitutionality of Section 8.
Summarizing our conclusions:
1.
2.
Section 2 of Resolution No. 2772, in its present form and as

interpreted by Comelec in its 22 March 1995 letter directives,
purports to require print media enterprises to "donate" free print
space to Comelec. As such, Section 2 suffers from a fatal
constitutional vice and must be set aside and nullified.
To the extent it pertains to Section 8 of Resolution No. 2772, the
Petition for Certiorari and Prohibition must be dismissed for lack of
an actual, justiciable case or controversy.
WHEREFORE, for all the foregoing, the Petition for Certiorari and Prohibition
is GRANTED in part and Section 2 of Resolution No. 2772 in its present form
and the related letter-directives dated 22 March 1995 are hereby SET
ASIDE as null and void, and the Temporary Restraining Order is hereby
MADE PERMANENT. The Petition is DISMISSED in part, to the extent it
relates to Section 8 of Resolution No. 2772. No pronouncement as to costs.
On December 5, 1977 the National Housing Authority (NIIA) filed a

complaint for expropriation of parcels of land covering approximately
twenty five (25) hectares, (in Antipolo, Rizal) including the lots of
petitioners Lorenzo Sumulong and Emilia Vidanes-Balaoing with an area of
6,667 square meters and 3,333 square meters respectively. The land
sought to be expropriated were valued by the NHA at one peso (P1.00) per
square meter adopting the market value fixed by the provincial assessor in
accordance with presidential decrees prescribing the valuation of property
in expropriation proceedings.
Together with the complaint was a motion for immediate possession of the
properties. The NHA deposited the amount of P158,980.00 with the
Philippine National Bank, representing the "total market value" of the
subject twenty five hectares of land, pursuant to Presidential Decree No.
1224 which defines "the policy on the expropriation of private property for
socialized housing upon payment of just compensation."
On January 17, 1978, respondent Judge issued the following Order:
Plaintiff having deposited with the Philippine National Bank, Heart
Center Extension Office, Diliman, Quezon City, Metro Manila, the
amount of P158,980.00 representing the total market value of the
subject parcels of land, let a writ of possession be issued.
SO ORDERED.
Pasig, Metro Manila, January 17, 1978
ENTURA S. GUERRERO
Je
Petitioners filed a motion for reconsideration on the ground that they had
been deprived of the possession of their property without due process of
law. This was however, denied.
G.R. No. L-48685 September 30, 1987
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Hence, this petition challenging the orders of respondent Judge and
assailing the constitutionality of Pres. Decree No. 1224, as amended.
Petitioners argue that:
1) Respondent Judge acted without or in excess of his jurisdiction
or with grave abuse of discretion by issuing the Order of
January 17, 1978 without notice and without hearing and in
issuing the Order dated June 28, 1978 denying the motion for
reconsideration.
2) Pres. Decree l224, as amended, is unconstitutional for being
violative of the due process clause, specifically:
a) The Decree would allow the taking of property
regardless of size and no matter how small the area to
be expropriated;
b) "Socialized housing" for the purpose of condemnation
proceeding, as defined in said Decree, is not really for a
public purpose;
c)
The Decree violates procedural due process as it allows

immediate taking of possession, control and disposition
of property without giving the owner his day in court;
d) The Decree would allow the taking of private property

upon payment of unjust and unfair valuations
arbitrarily fixed by government assessors;
e) The Decree would deprive the courts of their judicial
discretion to determine what would be the "just
compensation"
in
each
and
every
raise
of
expropriation.
Indeed, the exercise of the power of eminent domain is subject to certain
limitations imposed by the constitution, to wit:
Private property shall not be taken for public use without just
compensation (Art. IV, Sec. 9);
No person shall be deprived of life, liberty, or property without due
process of law, nor shall any person be denied the equal protection
of the laws (Art. IV, sec. 1).
Nevertheless, a clear case of constitutional infirmity has to be established

for this Court to nullify legislative or executive measures adopted to
implement specific constitutional provisions aimed at promoting the
general welfare.
Petitioners' objections to the taking of their property subsumed under the
headings of public use, just compensation, and due process have to be
balanced against competing interests of the public recognized and sought
to be served under declared policies of the constitution as implemented by
legislation.
1. Public use
a) Socialized Housing
Petitioners contend that "socialized housing" as defined in Pres. Decree No.
1224, as amended, for the purpose of condemnation proceedings is not
"public use" since it will benefit only "a handful of people, bereft of public
character."
"Socialized housing" is defined as, "the construction of dwelling units for
the middle and lower class members of our society, including the
construction of the supporting infrastructure and other facilities" (Pres.
Decree No. 1224, par. 1). This definition was later expanded to include
among others:
a) The construction and/or improvement of dwelling units for the
middle and lower income groups of the society, including the
construction of the supporting infrastructure and other
facilities;
b) Slum clearance, relocation and resettlement of squatters and
slum dwellers as well as the provision of related facilities and
services;
c)
Slum improvement which consists basically of allocating

homelots to the dwellers in the area or property involved,
rearrangemeant and re-alignment of existing houses and other
dwelling structures and the construction and provision of basic
community facilities and services, where there are none, such
as roads, footpaths, drainage, sewerage, water and power
system schools, barangay centers, community centers, clinics,
open spaces, parks, playgrounds and other recreational
facilities;
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d) The provision of economic opportunities, including the
development of commercial and industrial estates and such
other facilities to enhance the total community growth; and
e) Such other activities undertaken in pursuance of the objective
to provide and maintain housing for the greatest number of
people under Presidential Decree No, 757, (Pres. Decree No.
1259, sec. 1)
The "public use" requirement for a and exercise of the power of eminent
domain is a flexible and evolving concept influenced by changing
conditions. In this jurisdiction, the statutory and judicial trend has been
summarized as follows:
The taking to be valid must be for public use. There was a time
when it was felt that a literal meaning should be attached to such a
requirement. Whatever project is undertaken must be for the public
to enjoy, as in the case of streets or parks. Otherwise,
expropriation is not allowable. It is not anymore. As long as the
purpose of the taking is public, then the power of eminent domain
comes into play. As just noted, the constitution in at least two
cases, to remove any doubt, determines what is public use. One is
the expropriation of lands to be subdivided into small lots for resale
at cost to individuals. The other is in the transfer, through the
exercise of this power, of utilities and other private enterprise to
the government. It is accurate to state then that at present
whatever may be beneficially employed for the general welfare
satisfies the requirement of public use [Heirs of Juancho Ardona v.
Reyes, G.R. Nos. 60549, 60553-60555 October 26, 1983, 125 SCRA
220 (1983) at 234-5 quoting E. FERNANDO, THE CONSTITUTION OF
THE PHILIPPINES 523-4, (2nd ed., 1977) Emphasis supplied].
The term "public use" has acquired a more comprehensive coverage. To
the literal import of the term signifying strict use or employment by the
public has been added the broader notion of indirect public benefit or
advantage. As discussed in the above cited case of Heirs of Juancho
Ardona:
The restrictive view of public use may be appropriate for a nation
which circumscribes the scope of government activities and public
concerns and which possesses big and correctly located public
lands that obviate the need to take private property for public
purposes. Neither circumstance applies to the Philippines. We have
never been a laissez faire State. And the necessities which impel
the exertion of sovereign power are all too often found in areas of
scarce public land or limited government resources. (p. 231)
1st
Specifically, urban renewal or redevelopment and the construction of lowcost housing is recognized as a public purpose, not only because of the
expanded concept of public use but also because of specific provisions in
the Constitution. The 1973 Constitution made it incumbent upon the State
to establish, maintain and ensure adequate social services including
housing [Art. 11, sec. 7]. The 1987 Constitution goes even further by
providing that:
The State shall promote a just and dynamic social order that will
ensure the prosperity and independence of the nation and free the
people from poverty through policies that provide adequate social
services, promote full employment, a rising standard of living and
an improved quality of life for all. [Art. II, sec. 9]
The state shall by law, and for the common good, undertake, in
cooperation with the private sector, a continuing program of urban
land reform and housing which will make available at affordable
cost decent housing and basic services to underprivileged and
homeless citizens in urban centers and resettlement areas. It shall
also promote adequate employment opportunities to such citizens.
In the implementation of such program the State shall respect the
rights of small property owners. (Art. XIII, sec. 9, Emphaisis
supplied)
Housing is a basic human need. Shortage in housing is a matter of state
concern since it directly and significantly affects public health, safety, the
environment and in sum, the general welfare. The public character of
housing measures does not change because units in housing projects
cannot be occupied by all but only by those who satisfy prescribed
qualifications. A beginning has to be made, for it is not possible to provide
housing for are who need it, all at once.
Population growth, the migration to urban areas and the mushrooming of
crowded makeshift dwellings is a worldwide development particularly in
developing countries. So basic and urgent are housing problems that the
United Nations General Assembly proclaimed 1987 as the "International
Year of Shelter for the Homeless" "to focus the attention of the
international community on those problems". The General Assembly is
Seriously concerned that, despite the efforts of Governments at the
national and local levels and of international organizations, the driving
conditions of the majority of the people in slums and squatter areas and
rural settlements, especially in developing countries, continue to
deteriorate in both relative and absolute terms." [G.A. Res. 37/221,
Yearbook of the United Nations 1982, Vol. 36, p. 1043-4]
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In the light of the foregoing, this Court is satisfied that "socialized housing"
fans within the confines of "public use". It is, particularly important to draw
attention to paragraph (d) of Pres. Dec. No. 1224 which opportunities
inextricably linked with low-cost housing, or slum clearance, relocation and
resettlement, or slum improvement emphasize the public purpose of the
project.
In the case at bar, the use to which it is proposed to put the subject parcels
of land meets the requisites of "public use". The lands in question are
being expropriated by the NHA for the expansion of Bagong Nayon Housing
Project to provide housing facilities to low-salaried government employees.
Quoting respondents:
1. The Bagong Nayong Project is a housing and community
development undertaking of the National Housing Authority. Phase
I covers about 60 hectares of GSIS property in Antipolo, Rizal;
Phase II includes about 30 hectares for industrial development and
the rest are for residential housing development.
According to the National Economic and Development Authority at the time

of the expropriation in question, about "50 per cent of urban families,
cannot afford adequate shelter even at reduced rates and will need
government support to provide them with social housing, subsidized either
partially or totally" [NEDA, FOUR YEAR DEVELOPMENT PLAN For 1974-1977,
p. 357]. Up to the present, housing some remains to be out of the reach of
a sizable proportion of the population" [NEDA, MEDIUM-TERM PHILIPPINE
DEVELOPMENT PLAN 1987-1992, p. 240].
The mushrooming of squatter colonies in the Metropolitan Manila area as
well as in other cities and centers of population throughout the country,
and, the efforts of the government to initiate housing and other projects
are matters of public knowledge [See NEDA, FOUR YEAR DEVELOPMENT
PLAN For 1974-1977, pp. 357-361; NEDA, FIVE-YEAR PHILIPPINE
DEVELOPMENT PLAN 1978-1982, pp. 215-228 NEDA, FIVE YEAR PHILIPPINE
DEVELOPMENT PLAN 1983-1987, pp. 109-117; NEDA, MEDIUM TERM
PHILIPPINE DEVELOPMENT PLAN 1987-1992, pp. 240-254].
b) Size of Property
It is intended for low-salaried government employees and aims to

provide housing and community services for about 2,000 families
in Phase I and about 4,000 families in Phase II.
It is situated on rugged terrain 7.5 kms. from Marikina Town proper;
22 Kms. east of Manila; and is within the Lungs Silangan Townsite
Reservation (created by Presidential Proclamation No. 1637 on April
18, 1977).
Petitioners further contend that Pres. Decree 1224, as amended, would

allow the taking of "any private land" regardless of the size and no matter
how small the area of the land to be expropriated. Petitioners claim that
"there are vast areas of lands in Mayamot, Cupang, and San Isidro,
Antipolo, Rizal hundred of hectares of which are owned by a few
landowners only. It is surprising [therefore] why respondent National
Housing Authority [would] include [their] two man lots ..."
The lands involved in the present petitions are parts of the

expanded/additional areas for the Bagong Nayon Project totalling
25.9725 hectares. They likewise include raw, rolling hills. (Rollo, pp.
266-7)
In J.M. Tuason Co., Inc. vs. Land Tenure Administration [G. R. No. L-21064,
February 18, 1970, 31 SCRA 413 (1970) at 428] this Court earlier ruled that
expropriation is not confined to landed estates. This Court, quoting the
dissenting opinion of Justice J.B.L. Reyes in Republic vs. Baylosis, [96 Phil.
461 (1955)], held that:
The acute shortage of housing units in the country is of public knowledge.

Official data indicate that more than one third of the households
nationwide do not own their dwelling places. A significant number live in
dwellings of unacceptable standards, such as shanties, natural shelters,
and structures intended for commercial, industrial, or agricultural
purposes. Of these unacceptable dwelling units, more than one third is
located within the National Capital Region (NCR) alone which lies proximate
to and is expected to be the most benefited by the housing project
involved in the case at bar [See, National Census and Statistics Office,
1980 Census of Population and Housing].
The propriety of exercising the power of eminent domain under

Article XIII, section 4 of our Constitution cannot be determined on a
purely quantitative or area basis. Not only does the constitutional
provision speak of lands instead of landed estates, but I see no
cogent reason why the government, in its quest for social justice
and peace, should exclusively devote attention to conflicts of large
proportions, involving a considerable number of individuals, and
eschew small controversies and wait until they grow into a major
problem before taking remedial action.
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The said case of J.M. Tuason Co., Inc. departed from the ruling in Guido vs.
Rural Progress Administration [84 Phil. 847 (1949)] which held that the test
to be applied for a valid expropriation of private lands was the area of the
land and not the number of people who stood to be benefited. Since then
"there has evolved a clear pattern of adherence to the "number of people
to be benefited test" " [Mataas na Lupa Tenants Association, Inc. v.
Dimayuga, G.R. No. 32049, June 25,1984, 130 SCRA 30 (1984) at 39]. Thus,
in Pulido vs. Court of Appeals [G.R. No. 57625, May 3, 1983, 122 SCRA 63
(1983) at 73], this Court stated that, "[i]t is unfortunate that the petitioner
would be deprived of his landholdings, but his interest and that of his
family should not stand in the way of progress and the benefit of the
greater may only of the inhabitants of the country."
The State acting through the NHA is vested with broad discretion to
designate the particular property/properties to be taken for socialized
housing purposes and how much thereof may be expropriated. Absent a
clear showing of fraud, bad faith, or gross abuse of discretion, which
petitioners herein failed to demonstrate, the Court will give due weight to
and leave undisturbed the NHA's choice and the size of the site for the
project. The property owner may not interpose objections merely because
in their judgment some other property would have been more suitable, or
just as suitable, for the purpose. The right to the use, enjoyment and
disposal of private property is tempered by and has to yield to the
demands of the common good. The Constitutional provisions on the subject
are clear:
The State shall promote social justice in all phases of national
development. (Art. II, sec. 10)
The Congress shall give highest priority to the enactment of
measures that protect and enhance the right of all the people to
human dignity, reduce social, economic, and political inequalities,
and remove cultural inequities by equitably diffusing wealth and
political power for the common good. To this end, the State shall
regulate the acquisition, ownership, use and disposition of property
and its increments. (Art, XIII, sec. 1)
Indeed, the foregoing provisions, which are restatements of the provisions
in the 1935 and 1973 Constitutions, emphasize:
...the stewardship concept, under which private property is
supposed to be held by the individual only as a trustee for the
people in general, who are its real owners. As a mere steward, the
individual must exercise his rights to the property not for his own
exclusive and selfish benefit but for the good of the entire
community or nation [Mataas na Lupa Tenants Association,
Inc. supra at 42-3 citing I. CRUZ, PHILIPPINE POLITICAL LAW, 70

(1983 ed.)].
2. Just Compensation
Petitioners maintain that Pres. Decree No. 1224, as amended, would allow
the taking of private property upon payment of unjust and unfair
valuations arbitrarily fixed by government assessors. In addition, they
assert that the Decree would deprive the courts of their judicial discretion
to determine what would be "just compensation".
The foregoing contentions have already been ruled upon by this Court in
the case of Ignacio vs. Guerrero (G.R. No. L-49088, May 29, 1987) which,
incidentally, arose from the same expropriation complaint that led to this
instant petition. The provisions on just compensation found in Presidential
Decree Nos. 1224, 1259 and 1313 are the same provisions found in
Presidential Decree Nos. 76, 464, 794 and 1533 which were declared
unconstitutional in Export Processing Zone All thirty vs. Dulay (G.R. No.
5960 April 29, 1987) for being encroachments on prerogatives.
This Court abandoned the ruling in National Housing Authority vs.
Reyes [G.R. No. 49439, June 29,1983, 123 SCRA 245 (1983)] which upheld
Pres. Decree No. 464, as amended by - Presidential Decree Nos. 794, 1224
and 1259.
In said case of Export Processing Zone Authority, this Court pointed out
that:
The basic unfairness of the decrees is readily apparent.
Just compensation means the value of the property at the time of
the taking. It means a fair and full equivalent for the loss sustained.
ALL the facts as to the condition of the property and its
surroundings, its improvements and capabilities, should be
considered.
xxx xxx xxx
Various factors can come into play in the valuation of specific
properties singled out for expropriation. The values given by
provincial assessors are usually uniform for very wide areas
covering several barrios or even an entire total with the exception
of the poblacion. Individual differences are never taken into
account. The value of land is based on such generalities as its
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possible cultivation for rice, corn, coconuts, or other crops. Very
often land described as directional has been cultivated for
generations. Buildings are described in terms of only two or three
classes of building materials and estimates of areas are more often
inaccurate than correct. Tax values can serve as guides but cannot
be absolute substitutes for just compensation.
To say that the owners are estopped to question the valuations
made by assessors since they had the opportunity to protest is
illusory. The overwhelming mass of landowners accept
unquestioningly what is found in the tax declarations prepared by
local assessors or municipal clerks for them. They do not even look
at, much less analyze, the statements. The Idea of expropriation
simply never occurs until a demand is made or a case filed by an
agency authorized to do so. (pp. 12-3)
3. Due Process
Petitioners assert that Pres. Decree 1224, as amended, violates procedural
due process as it allows immediate taking of possession, control and
disposition of property without giving the owner his day in court.
Respondent Judge ordered the issuance of a writ of possession without
notice and without hearing.
made by the trial court on the basis of judicial (not legislative or

executive) discretion; and (3) The deposit requirement under
Section 2, Rule 67 must be complied with. (p. 14)
This Court holds that "socialized housing" defined in Pres. Decree No. 1224,
as amended by Pres. Decree Nos. 1259 and 1313, constitutes "public use"
for purposes of expropriation. However, as previously held by this Court,
the provisions of such decrees on just compensation are unconstitutional;
and in the instant case the Court finds that the Orders issued pursuant to
the corollary provisions of those decrees authorizing immediate taking
without notice and hearing are violative of due process.
WHEREFORE, the Orders of the lower court dated January 17, 1978 and
June 28, 1978 issuing the writ of possession on the basis of the market
value appearing therein are annulled for having been issued in excess of
jurisdiction. Let this case be remanded to the court of origin for further
proceedings to determine the compensation the petitioners are entitled to
be paid. No costs.
SO ORDERED.
The constitutionality of this procedure has also been ruled upon in

the Export Processing Zone Authority case, viz:
It is violative of due process to deny to the owner the opportunity
to prove that the valuation in the tax documents is unfair or wrong.
And it is repulsive to basic concepts of justice and fairness to allow
the haphazard work of minor bureaucrat or clerk to absolutely
prevail over the judgment of a court promulgated only after expert
commissioners have actually viewed the property, after evidence
and arguments pro and con have been presented, and after all
factors and considerations essential to a fair and just determination
have been judiciously evaluated. (p. 13)
On the matter of the issuance of a writ of possession, the ruling in
the Ignacio case is reiterated, thus:
[I]t is imperative that before a writ of possession is issued by the
Court in expropriation proceedings, the following requisites must
be met: (1) There must be a Complaint for expropriation sufficient
in form and in substance; (2) A provisional determination of just
compensation for the properties sought to be expropriated must be
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VITUG, J.:
In this appeal, via a petition for review on certiorari, from the decision1 of
the Court of Appeals, dated 15 January 1992, in CA-G.R. SP No. 24969
(entitled "Alejandro Manosca, et al. v. Hon. Benjamin V. Pelayo, et al."), this
Court is asked to resolve whether or not the "public use" requirement of
Eminent Domain is extant in the attempted expropriation by the Republic
of a 492-square-meter parcel of land so declared by the National Historical
Institute ("NHI") as a national historical landmark.
The facts of the case are not in dispute.
Petitioners inherited a piece of land located at P. Burgos Street, Calzada,
Taguig. Metro Manila, with an area of about four hundred ninety-two (492)
square meters. When the parcel was ascertained by the NHI to have been
the birthsite of Felix Y. Manalo, the founder of Iglesia Ni Cristo, it passed
Resolution No. 1, Series of 1986, pursuant to Section 4 2 of Presidential
Decree No. 260, declaring the land to be a national historical landmark.
The resolution was, on 06 January 1986, approved by the Minister of
Education, Culture and Sports. Later, the opinion of the Secretary of Justice
was asked on the legality of the measure. In his Opinion No. 133, Series of
1987, the Secretary of Justice replied in the affirmative; he explained:
According to your guidelines, national landmarks are places or
objects that are associated with an event, achievement,
characteristic, or modification that makes a turning point or stage
in Philippine history. Thus, the birthsite of the founder of the Iglesia
ni Cristo, the late Felix Y. Manalo, who, admittedly, had made
contributions to Philippine history and culture has been declared as
a national landmark. It has been held that places invested with
unusual historical interest is a public use for which the power of
eminent domain may be authorized . . . .
G.R. No. 106440
January 29, 1996
ALEJANDRO MANOSCA, ASUNCION MANOSCA and LEONICA

MANOSCA, petitioners,
vs. HON. COURT OF APPEALS, HON. BENJAMIN V. PELAYO, Presiding
Judge, RTC-Pasig, Metro Manila, Branch 168, HON. GRADUACION A.
REYES CLARAVAL, Presiding Judge, RTC-Pasig, Metro Manila,
Branch 71, and REPUBLIC OF THE PHILIPPINES, respondents.
In view thereof, it is believed that the National Historical Institute

as an agency of the Government charged with the maintenance
and care of national shrines, monuments and landmarks and the
development of historical sites that may be declared as national
shrines, monuments and/or landmarks, may initiate the institution
of condemnation proceedings for the purpose of acquiring the lot in
question in accordance with the procedure provided for in Rule 67
of the Revised Rules of Court. The proceedings should be instituted
by the Office of the Solicitor General in behalf of the Republic.
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Accordingly, on 29 May 1989, the Republic, through the Office of the
Solicitor-General, instituted a complaint for expropriation 3 before the
Regional Trial Court of Pasig for and in behalf of the NHI alleging, inter alia,
that:
Pursuant to Section 4 of Presidential Decree No. 260, the National
Historical Institute issued Resolution No. 1, Series of 1986, which
was approved on January, 1986 by the then Minister of Education,
Culture and Sports, declaring the above described parcel of land
which is the birthsite of Felix Y. Manalo, founder of the "Iglesia ni
Cristo," as a National Historical Landrnark. The plaintiff perforce
needs the land as such national historical landmark which is a
public purpose.
At the same time, respondent Republic filed an urgent motion for the
issuance of an order to permit it to take immediate possession of the
property. The motion was opposed by petitioners. After a hearing, the trial
court issued, on 03 August 1989, 4 an order fixing the provisional market
(P54,120.00) and assessed (P16,236.00) values of the property and
authorizing the Republic to take over the property once the required sum
would have been deposited with the Municipal Treasurer of Taguig, Metro
Manila.
Petitioners moved to dismiss the complaint on the main thesis that the
intended expropriation was not for a public purpose and, incidentally, that
the act would constitute an application of public funds, directly or
indirectly, for the use, benefit, or support of Iglesia ni Cristo, a religious
entity, contrary to the provision of Section 29(2), Article VI, of the 1987
Constitution.5 Petitioners sought, in the meanwhile, a suspension in the
implementation of the 03rd August 1989 order of the trial court.
On 15 February 1990, following the filing by respondent Republic of its
reply to petitioners' motion seeking the dismissal of the case, the trial
court issued its denial of said motion to dismiss. 6 Five (5) days later, or on
20 February 1990,7 another order was issued by the trial court, declaring
moot and academic the motion for reconsideration and/or suspension of
the order of 03 August 1989 with the rejection of petitioners' motion to
dismiss. Petitioners' motion for the reconsideration of the 20th February
1990 order was likewise denied by the trial court in its 16th April 1991
order.8
Petitioners then lodged a petition for certiorari and prohibition with the
Court of Appeals. In its now disputed 15th January 1992 decision, the
appellate court dismissed the petition on the ground that the remedy of
appeal in the ordinary course of law was an adequate remedy and that the
petition itself, in any case, had failed to show any grave abuse of discretion
or lack of jurisdictional competence on the part of the trial court. A motion

for the reconsideration of the decision was denied in the 23rd July 1992
resolution of the appellate court.
We begin, in this present recourse of petitioners, with a few known
postulates.
Eminent domain, also often referred to as expropriation and, with less
frequency, as condemnation, is, like police power and taxation, an inherent
power of sovereignty. It need not be clothed with any constitutional gear to
exist; instead, provisions in our Constitution on the subject are meant more
to regulate, rather than to grant, the exercise of the power. Eminent
domain is generally so described as "the highest and most exact idea of
property remaining in the government" that may be acquired for some
public purpose through a method in the nature of a forced purchase by the
State.9 It is a right to take or reassert dominion over property within the
state for public use or to meet a public exigency. It is said to be an
essential part of governance even in its most primitive form and thus
inseparable from sovereignty. 10 The only direct constitutional qualification
is that "private property shall not be taken for public use without just
compensation." 11 This proscription is intended to provide a safeguard
against possible abuse and so to protect as well the individual against
whose property the power is sought to be enforced.
Petitioners assert that the expropriation has failed to meet the guidelines
set by this Court in the case of Guido v.Rural Progress Administration, 12 to
wit: (a) the size of the land expropriated; (b) the large number of people
benefited; and, (c) the extent of social and economic reform. 13 Petitioners
suggest that we confine the concept of expropriation only to the following
public uses, 14 i.e., the
. . . taking of property for military posts, roads, streets, sidewalks,
bridges, ferries, levees, wharves, piers, public buildings including
schoolhouses, parks, playgrounds, plazas, market places, artesian
wells, water supply and sewerage systems, cemeteries,
crematories, and railroads.
This view of petitioners is much too limitative and restrictive.
The court, in Guido, merely passed upon the issue of the extent of the
President's power under Commonwealth Act No. 539 to, specifically,
acquire private lands for subdivision into smaller home lots or farms for
resale to bona fidetenants or occupants. It was in this particular context of
the statute that the Court had made the pronouncement. The guidelines
in Guido were not meant to be preclusive in nature and, most certainly, the
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power of eminent domain should not now be understood as being confined
only to the expropriation of vast tracts of land and landed estates. 15
The term "public use," not having been otherwise defined by the
constitution, must be considered in its general concept of meeting a public
need or a public exigency. 16 Black summarizes the characterization given
by various courts to the term; thus:
Public Use. Eminent domain. The constitutional and statutory basis
for taking property by eminent domain. For condemnation
purposes, "public use" is one which confers same benefit or
advantage to the public; it is not confined to actual use by public. It
is measured in terms of right of public to use proposed facilities for
which condemnation is sought and, as long as public has right of
use, whether exercised by one or many members of public, a
"public advantage" or "public benefit" accrues sufficient to
constitute a public use. Montana Power Co. vs. Bokma, Mont. 457 P.
2d 769, 772, 773.
Public use, in constitutional provisions restricting the exercise of
the right to take private property in virtue of eminent domain,
means a use concerning the whole community as distinguished
from particular individuals. But each and every member of society
need not be equally interested in such use, or be personally and
directly affected by it; if the object is to satisfy a great public want
or exigency, that is sufficient. Rindge Co. vs. Los Angeles County,
262 U.S. 700, 43 S.Ct. 689, 692, 67 L.Ed. 1186. The term may be
said to mean public usefulness, utility, or advantage, or what is
productive of general benefit. It may be limited to the inhabitants
of a small or restricted locality, but must be in common, and not for
a particular individual. The use must be a needful one for the
public, which cannot be surrendered without obvious general loss
and inconvenience. A "public use" for which land may be taken
defies absolute definition for it changes with varying conditions of
society, new appliances in the sciences, changing conceptions of
scope and functions of government, and other differing
circumstances brought about by an increase in population and new
modes of communication and transportation. Katz v. Brandon, 156
Conn., 521, 245 A.2d 579,586. 17
The validity of the exercise of the power of eminent domain for traditional
purposes is beyond question; it is not at all to be said, however, that public
use should thereby be restricted to such traditional uses. The idea that
"public use" is strictly limited to clear cases of "use by the public" has long
been discarded. This Court in Heirs of Juancho Ardona v. Reyes,18 quoting
from Berman v. Parker (348 U.S. 25; 99 L. ed. 27), held:
We do not sit to determine whether a particular housing project is

or is not desirable. The concept of the public welfare is broad and
inclusive. See DayBrite Lighting, Inc. v. Missouri, 342 US 421, 424,
96 L. Ed. 469, 472, 72 S Ct 405. The values it represents are
spiritual as well as physical, aesthetic as well as monetary. It is
within the power of the legislature to determine that the
community should be beautiful as well as healthy, spacious as well
as clean, well-balanced as well as carefully patrolled. In the present
case, the Congress and its authorized agencies have made
determinations that take into account a wide variety of values. It is
no for us to reappraise them. If those who govern the District of
Columbia decide that the Nation's Capital should be beautiful as
well as sanitary, there is nothing in the Fifth Amendment that
stands in the way.
Once the object is within the authority of Congress, the right to
realize it through the exercise of eminent domain is clear. For the
power of eminent domain is merely the means to the end. See
Luxton v. North River Bridge Co. 153 US 525, 529, 530, 38 L. ed.
808, 810, 14 S Ct 891; United States v. Gettysburg Electric R. Co.
160 US 668, 679, 40 L. ed. 576, 580, 16 S Ct 427.
It has been explained as early as Sea v. Manila Railroad Co.,
19
that:
. . . A historical research discloses the meaning of the term "public

use" to be one of constant growth. As society advances, its
demands upon the individual increase and each demand is a new
use to which the resources of the individual may be devoted. . . .
for "whatever is beneficially employed for the community is a
public use.
Chief Justice Enrique M. Fernando states:
The taking to be valid must be for public use. There was a time
when it was felt that a literal meaning should be attached to such a
requirement. Whatever project is undertaken must be for the public
to enjoy, as in the case of streets or parks. Otherwise,
expropriation is not allowable. It is not so any more. As long as the
purpose of the taking is public, then the power of eminent domain
comes into play. As just noted, the constitution in at least two
cases, to remove any doubt, determines what is public use. One is
the expropriation of lands to be subdivided into small lots for resale
at cost to individuals. The other is the transfer, through the
exercise of this power, of utilities and other private enterprise to
the government. It is accurate to state then that at present
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whatever may be beneficially employed for the general welfare
satisfies the requirement of public use. 20
WHEREFORE, the petition is DENIED. No costs.

SO ORDERED.
Chief Justice Fernando, writing the ponencia in J.M. Tuason & Co. vs. Land
Tenure Administration, 21 has viewed the Constitution a dynamic
instrument and one that "is not to be construed narrowly or pedantically"
so as to enable it "to meet adequately whatever problems the future has in
store." Fr. Joaquin Bernas, a noted constitutionalist himself, has aptly
observed that what, in fact, has ultimately emerged is a concept of public
use which is just as broad as "public welfare." 22
Petitioners ask: But "(w)hat is the so-called unusual interest that the
expropriation of (Felix Manalo's) birthplace become so vital as to be a
public use appropriate for the exercise of the power of eminent domain"
when only members of the Iglesia ni Cristo would benefit? This attempt to
give some religious perspective to the case deserves little consideration,
for what should be significant is the principal objective of, not the casual
consequences that might follow from, the exercise of the power. The
purpose in setting up the marker is essentially to recognize the distinctive
contribution of the late Felix Manalo to the culture of the Philippines, rather
than to commemorate his founding and leadership of the Iglesia ni Cristo.
The practical reality that greater benefit may be derived by
members of the Iglesia ni Cristo than by most others could well be
true but such a peculiar advantage still remains to be merely
incidental and secondary in nature. Indeed, that only a few would
actually benefit from the expropriation of property does not
necessarily diminish the essence and character of public use. 23
Petitioners contend that they have been denied due process in the fixing of
the provisional value of their property. Petitioners need merely to be
reminded that what the law prohibits is the lack of opportunity to be
heard;24 contrary to petitioners' argument, the records of this case are
replete with pleadings 25 that could have dealt, directly or indirectly, with
the provisional value of the property.
Petitioners, finally, would fault respondent appellate court in sustaining the
trial court's order which considered inapplicable the case of Noble v. City of
Manila. 26 Both courts held correctly. The Republic was not a party to the
alleged contract of exchange between the Iglesia ni Cristo and petitioners
which (the contracting parties) alone, not the Republic, could properly be
bound.
All considered, the Court finds the assailed decision to be in accord with
law and jurisprudence.
G.R. No. L-59603
April 29, 1987
EXPORT
PROCESSING
ZONE
AUTHORITY, petitioner,
vs. HON. CEFERINO E. DULAY, in his capacity as the Presiding
Judge, Court of First Instance of Cebu, Branch XVI, Lapu-Lapu City,
and SAN ANTONIO DEVELOPMENT CORPORATION, respondents.
Elena M. Cuevas for respondents.
GUTIERREZ, JR., J.:
The question raised in this petition is whether or not Presidential Decrees
Numbered 76, 464, 794 and 1533 have repealed and superseded Sections
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5 to 8 of Rule 67 of the Revised Rules of Court, such that in determining the
just compensation of property in an expropriation case, the only basis
should be its market value as declared by the owner or as determined by
the assessor, whichever is lower.
On January 15, 1979, the President of the Philippines, issued Proclamation
No. 1811, reserving a certain parcel of land of the public domain situated in
the City of Lapu-Lapu, Island of Mactan, Cebu and covering a total area of
1,193,669 square meters, more or less, for the establishment of an export
processing zone by petitioner Export Processing Zone Authority (EPZA).
Not all the reserved area, however, was public land. The proclamation
included, among others, four (4) parcels of land with an aggregate area of
22,328 square meters owned and registered in the name of the private
respondent. The petitioner, therefore, offered to purchase the parcels of
land from the respondent in acccordance with the valuation set forth in
Section 92, Presidential Decree (P.D.) No. 464, as amended. The parties
failed to reach an agreement regarding the sale of the property.
The petitioner filed with the then Court of First Instance of Cebu, Branch
XVI, Lapu-Lapu City, a complaint for expropriation with a prayer for the
issuance of a writ of possession against the private respondent, to
expropriate the aforesaid parcels of land pursuant to P.D. No. 66, as
amended, which empowers the petitioner to acquire by condemnation
proceedings any property for the establishment of export processing zones,
in relation to Proclamation No. 1811, for the purpose of establishing the
Mactan Export Processing Zone.
On October 21, 1980, the respondent judge issued a writ of possession
authorizing the petitioner to take immediate possession of the premises.
On December 23, 1980, the private respondent flied its answer.
At the pre-trial conference on February 13, 1981, the respondent judge
issued an order stating that the parties have agreed that the only issue to
be resolved is the just compensation for the properties and that the pretrial is thereby terminated and the hearing on the merits is set on April 2,
1981.
On February 17, 1981, the respondent judge issued the order of
condemnation declaring the petitioner as having the lawful right to take
the properties sought to be condemned, upon the payment of just
compensation to be determined as of the filing of the complaint. The
respondent judge also issued a second order, subject of this petition,
appointing certain persons as commissioners to ascertain and report to the
court the just compensation for the properties sought to be expropriated.
1st
On June 19, 1981, the three commissioners submitted their consolidated
report recommending the amount of P15.00 per square meter as the fair
and reasonable value of just compensation for the properties.
On July 29, 1981, the petitioner Med a Motion for Reconsideration of the
order of February 19, 1981 and Objection to Commissioner's Report on the
grounds that P.D. No. 1533 has superseded Sections 5 to 8 of Rule 67 of
the Rules of Court on the ascertainment of just compensation through
commissioners; and that the compensation must not exceed the maximum
amount set by P.D. No. 1533.
On November 14, 1981, the trial court denied the petitioner's motion for
reconsideration and gave the latter ten (10) days within which to file its
objection to the Commissioner's Report.
On February 9, 1982, the petitioner flied this present petition for certiorari
and mandamus with preliminary restraining order, enjoining the trial court
from enforcing the order dated February 17, 1981 and from further
proceeding with the hearing of the expropriation case.
The only issue raised in this petition is whether or not Sections 5 to 8, Rule
67 of the Revised Rules of Court had been repealed or deemed amended
by P.D. No. 1533 insofar as the appointment of commissioners to determine
the just compensation is concerned. Stated in another way, is the exclusive
and mandatory mode of determining just compensation in P.D. No. 1533
valid and constitutional?
The petitioner maintains that the respondent judge acted in excess of his
jurisdiction and with grave abuse of discretion in denying the petitioner's
motion for reconsideration and in setting the commissioner's report for
hearing because under P.D. No. 1533, which is the applicable law herein,
the basis of just compensation shall be the fair and current market value
declared by the owner of the property sought to be expropriated or such
market value as determined by the assessor, whichever is lower. Therefore,
there is no more need to appoint commissioners as prescribed by Rule 67
of the Revised Rules of Court and for said commissioners to consider other
highly variable factors in order to determine just compensation. The
petitioner further maintains that P.D. No. 1533 has vested on the assessors
and the property owners themselves the power or duty to fix the market
value of the properties and that said property owners are given the full
opportunity to be heard before the Local Board of Assessment Appeals and
the Central Board of Assessment Appeals. Thus, the vesting on the
assessor or the property owner of the right to determine the just
compensation in expropriation proceedings, with appropriate procedure for
appeal to higher administrative boards, is valid and constitutional.
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Prior to the promulgation of P.D. Nos. 76, 464, 794 and 1533, this Court has
interpreted the eminent domain provisions of the Constitution and
established the meaning, under the fundametal law, of just compensation
and who has the power to determine it. Thus, in the following cases,
wherein the filing of the expropriation proceedings were all commenced
prior to the promulgation of the aforementioned decrees, we laid down the
doctrine onjust compensation:
Municipality of Daet v. Court of Appeals (93 SCRA 503, 516),
xxx
xxx
xxx
"And in the case of J.M. Tuason & Co., Inc. v. Land Tenure Administration, 31
SCRA 413, the Court, speaking thru now Chief Justice Fernando, reiterated
the 'well-settled (rule) that just compensation means the equivalent for the
value of the property at the time of its taking. Anything beyond that is
more and anything short of that is less, than just compensation. It means a
fair and full equivalent for the loss sustained, which is the measure of the
indemnity, not whatever gain would accrue to the expropriating entity."
Garcia v. Court ofappeals (102 SCRA 597, 608),
xxx
xxx
xxx
"Hence, in estimating the market value, all the capabilities of the

property and all the uses to which it may be applied or for which it
is adapted are to be considered and not merely the condition it is
in the time and the use to which it is then applied by the owner. All
the facts as to the condition of the property and its surroundings,
its improvements and capabilities may be shown and considered in
estimating its value."
Republic v. Santos (141 SCRA 30, 35-36),
"According to section 8 of Rule 67, the court is not bound by the
commissioners' report. It may make such order or render such
judgment as shall secure to the plaintiff the property essential to
the exercise of his right of condemnation, and to the defendant just
compensation for the property expropriated. This Court may
substitute its own estimate of the value as gathered from the
record (Manila Railroad Company v. Velasquez, 32 Phil. 286)."
However, the promulgation of the aforementioned decrees practically set
aside the above and many other precedents hammered out in the course
of evidence-laden, well argued, fully heard, studiously deliberated, and

judiciously considered court proceedings. The decrees categorically and
peremptorily limited the definition of just compensation thus:
P.D. No. 76:
xxx
xxx
xxx
"For purposes of just compensation in cases of private property

acquired by the government for public use, the basis shall be the
current and fair market value declared by the owner or
administrator, or such market value as determined by the
Assessor, whichever is lower."
P.D. No. 464:
"Section 92. Basis for payment of just compensation in
expropriation proceedings. In determining just compensation
which private property is acquired by the government for public
use, the basis shall be the market value declared by the owner or
administrator or anyone having legal interest in the property, or
such market value as determined by the assessor, whichever is
lower."
P.D. No. 794:
"Section 92. Basis for payment of just compensation in
expropriation proceedings. In determining just compensation
when private property is acquired by the government for public
use, the same shall not exceed the market value declared by the
owner or administrator or anyone having legal interest in the
property, or such market value as determined by the assessor,
whichever is lower."
P.D. No. 1533:
"Section 1. In determining just compensation for private property
acquired through eminent domain proceedings, the compensation
to be paid shall not exceed the value declared by the owner or
administrator or anyone having legal interest in the property or
determined by the assessor, pursuant to the Real Property Tax
Code, whichever value is lower, prior to the recommendation or
decision of the appropriate Government office to acquire the
property."
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We are constrained to declare the provisions of the Decrees on just
compensation unconstitutional and void and accordingly dismiss the
instant petition for lack of merit.
The method of ascertaining just compensation under the aforecited
decrees constitutes impermissible encroachment on judicial prerogatives. It
tends to render this Court inutile in a matter which under the Constitution
is reserved to it for final determination.
Thus, although in an expropriation proceeding the court technically would
still have the power to determine the just compensation for the property,
following the applicable decrees, its task would be relegated to simply
stating the lower value of the property as declared either by the owner or
the assessor. As a necessary consequence, it would be useless for the
court to appoint commissioners under Rule 67 of the Rules of Court.
Moreover, the need to satisfy the due process clause in the taking of
private property is seemingly fulfilled since it cannot be said that a judicial
proceeding was not had before the actual taking. However, the strict
application of the decrees during the proceedings would be nothing short
of a mere formality or charade as the court has only to choose between the
valuation of the owner and that of the assessor, and its choice is always
limited to the lower of the two. The court cannot exercise its discretion or
independence in determining what is just or fair. Even a grade school pupil
could substitute for the judge insofar as the determination of constitutional
just compensation is concerned.
In the case of National Housing Authority v. Reyes (123 SCRA 245), this
Court upheld P.D. No. 464, as further amended by P.D. Nos. 794, 1224 and
1259. In this case, the petitioner National Housing Authority contended
that the owner's declaration at P1,400.00 which happened to be lower than
the assessor's assessment, is the just compensation for the respondent's
property under section 92 of P.D. No. 464. On the other hand, the private
respondent stressed that while there may be basis for the allegation that
the respondent judge did not follow the decree, the matter is still subject to
his final disposition, he having been vested with the original and
competent authority to exercise his judicial discretion in the light of the
constitutional clauses on due process and equal protection.
To these opposing arguments, this Court ruled ihat under the conceded
facts, there should be a recognition that the law as it stands must be
applied; that the decree having spoken so clearly and unequivocably calls
for obedience; and that on a matter where the applicable law speaks in no
uncertain language, the Court has no choice except to yield to its
command. We further stated that "the courts should recognize that the rule
introduced by P.D. No. 76 and reiterated in subsequent decrees does not
upset the established concepts of justice or the constitutional provision on
just compensation for, precisely, the owner is allowed to make his own
valuation of his property."
While the Court yielded to executive prerogative exercised in the form of
absolute law-making power, its members, nonetheless, remained
uncomfortable with the implications of the decision and the abuse and
unfairness which might follow in its wake. For one thing, the President
himself did not seem assured or confident with his own enactment. It was
not enough to lay down the law on determination of just compensation in
P.D. 76. It had to be repeated and reiterated in P.D. 464, P.D. 794, and P.D.
1533. The provision is also found in P.D. 1224, P.D. 1259 and P.D. 1313.
Inspite of its effectivity as general law and the wide publicity given to it,
the questioned provision or an even stricter version had to be embodied in
cases of specific expropriations by decree as in P.D. 1669 expropriating the
Tambunting Estate and P.D. 1670 expropriating the Sunog Apog area in
Tondo, Manila.
In the present petition, we are once again confronted with the same
question of whether the courts under P.D. 1533, which contains the same
provision on just compensation as its predecessor decrees, still have the
power and authority to determine just compensation, independent of what
is stated by the decree and to this effect, to appoint commissioners for
such purpose.
This time, we answer in the affirmative.
In overruling the petitioner's motion for reconsideration and objection to
the commissioner's report, the trial court said:
"Another consideration why the Court is empowered to appoint
commissioners to assess the just compensation of these properties
under eminent domain proceedings, is the well-entrenched ruling
that 'the owner of property expropriated is entitled to recover from
expropriating authority the fair and full value of the lot, as of the
time when possession thereof was actually taken by the province,
plus consequential damages including attorney's fees from
which the consequential benefits, if any should be deducted, with
interest at the legal rate, on the aggregate sum due to the owner
from and after the date of actual taking.' (Capitol Subdivision, Inc.
v. Province of Negros Occidental, 7 SCRA 60). In fine, the decree
only establishes a uniform basis for determining just compensation
which the Court may consider as one of the factors in arriving at
'just compensation,' as envisage in the Constitution. In the words
of Justice Barredo, "Respondent court's invocation of General Order
No. 3 of September 21, 1972 is nothing short of an unwarranted
abdication of judicial authority, which no judge duly imbued with
108
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the implications of the paramount principle of independence of the
judiciary should ever think of doing." (Lina v. Purisima, 82 SCRA
344, 351; Cf. Prov. of Pangasinan v. CFI Judge of Pangasinan, Br.
VIII, 80 SCRA 117) Indeed, where this Court simply follows PD 1533,
thereby limiting the determination of just compensation on the
value declared by the owner or administrator or as determined by
the Assessor, whichever is lower, it may result in the deprivation of
the landowner's right of due process to enable it to prove its claim
to just compensation, as mandated by the Constitution. (Uy v.
Genato, 57 SCRA 123). The tax declaration under the Real Property
Tax Code is, undoubtedly, for purposes of taxation."
We are convinced and so rule that the trial court correctly stated that the
valuation in the decree may only serve as a guiding principle or one of the
factors in determining just compensation but it may not substitute the
court's own judgment as to what amount should be awarded and how to
arrive at such amount. A return to the earlier well-established doctrine, to
our mind, is more in keeping with the principle that the judiciary should live
up to its mission "by vitalizing and not denigrating constitutional rights."
(See Salonga v. Cruz Pao, 134 SCRA 438, 462; citing Mercado v. Court of
First Instance of Rizal, 116 SCRA 93.) The doctrine we enunciated
in National Housing Authority v. Reyes, supra, therefore, must necessarily
be abandoned if we are to uphold this Court's role as the guardian of the
fundamental rights guaranteed by the due process and equal protection
clauses and as the final arbiter over transgressions committed against
constitutional rights.
1st
usually uniform for very wide areas covering several barrios or even an
entire town with the exception of the poblacion. Individual differences are
never taken into account. The value of land is based on such generalities
as its possible cultivation for rice, corn, coconuts, or other crops. Very often
land described as "cogonal" has been cultivated for generations. Buildings
are described in terms of only two or three classes of building materials
and estimates of areas are more often inaccurate than correct. Tax values
can serve as guides but cannot be absolute substitutes for just
compensation.
To say that the owners are estopped to question the valuations made by
assessors since they had the opportunity to protest is illusory. The
overwhelming mass of land owners accept unquestioningly what is found in
the tax declarations prepared by local assessors or municipal clerks for
them. They do not even look at, much less analyze, the statements. The
Idea of expropriation simply never occurs until a demand is made or a case
filed by an agency authorized to do so.
It is violative of due process to deny to the owner the opportunity to prove
that the valuation in the tax documents is unfair or wrong. And it is
repulsive to basic concepts of justice and fairness to allow the haphazard
work of a minor bureaucrat or clerk to absolutely prevail over the judgment
of a court promulgated only after expert commissioners have actually
viewed the property, after evidence and arguments pro and con have been
presented, and after all factors and considerations essential to a fair and
just determination have been judiciously evaluated.
The basic unfairness of the decrees is readily apparent.
As was held in the case of Gideon v. Wainwright (93 ALR 2d,733,742):
Just compensation means the value of the property at the time of the
taking. It means a fair and full equivalent for the loss sustained. All the
facts as to the condition of the property and its surroundings, its
improvements and capabilities, should be considered.
"In the light of these and many other prior decisions of this Court, it is not
surprising that the Betts Court, when faced with the contention that 'one
charged with crime, who is unable to obtain counsel must be furnished
counsel by the State,' conceded that '[E]xpressions in the opinions of this
court lend color to the argument. . .' 316 U.S., at 462, 463, 86 L ed. 1602,
62 S Ct. 1252. The fact is that in deciding as it did-that "appointment of
counsel is not a fundamental right, essential to a fair trial" the Court in
Betts v. Brady made an ubrupt brake with its own well-considered
precedents. In returning to these old precedents, sounder we believe than
the new, we but restore constitutional principles established to achieve a
fair system of justice. . ."
In this particular case, the tax declarations presented by the petitioner as

basis for just compensation were made by the Lapu-Lapu municipal, later
city assessor long before martial law, when land was not only much
cheaper but when assessed values of properties were stated in figures
constituting only a fraction of their true market value. The private
respondent was not even the owner of the properties at the time. It
purchased the lots for development purposes. To peg the value of the lots
on the basis of documents which are out of date and at prices below the
acquisition cost of present owners would be arbitrary and confiscatory.
We return to older and more sound precedents. This Court has the duty to
formulate guiding and controlling constitutional principles, precepts,
doctrines, or rules. (See Salonga v. Cruz Pano, supra).
Various factors can come into play in the valuation of specific properties
singled out for expropriation. The values given by provincial assessors are
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The determination of "just compensation" in eminent domain cases is a
judicial function. The executive department or the legislature may make
the initial determinations but when a party claims a violation of the
guarantee in the Bill of Rights that private property may not be taken for
public use without just compensation, no statute, decree, or executive
order can mandate that its own determination shall prevail over the court's
findings. Much less can the courts be precluded from looking into the "justness" of the decreed compensation.
We, therefore, hold that P.D. No. 1533, which eliminates the court's
discretion to appoint commissioners pursuant to Rule 67 of the Rules of
Court, is unconstitutional and void. To hold otherwise would be to
undermine the very purpose why this Court exists in the first place.
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby
DISMISSED. The temporary restraining order issued on February 16, 1982 is
LIFTED and SET ASIDE.
These principles are applied by this Court in resolving this petition for
review on certiorari of the July 22, 1996 Decision 1 of the Court of
Appeals 2 in CA GR CV No. 48048, which affirmed in toto 3 the Regional Trial
Court's August 9, 1994 Resolution. 4 The trial court dismissed the
expropriation suit as follows:
Assuming that plaintiff has a cause of action, the same is barred by

a prior judgment. On September 29, 1987, the plaintiff filed a
complaint for expropriation involving the same parcels of land
which was docketed as Civil Case No. 17939 of this Court (page 26,
record). Said case was dismissed with prejudice on May 18, 1988
(page 39, record). The order of dismissal was not appealed, hence,
the same became final. The plaintiff can not be allowed to pursue
the present action without violating the principle of [r]es [j]udicata.
While defendant in Civil Case No. 17939 was Limpan Investment
Corporation, the doctrine of res judicata still applies because the
judgment in said case (C.C. No. 17939) is conclusive between the
parties and their successors-in-interest (Vda. de Buncio vs. Estate
of the late Anita de Leon). The herein defendant is the successorin-interest of Limpan Investment Corporation as shown by the
"Deed of Assignment Exchange" executed on June 13, 1990.
G.R. No. 127820 July 20, 1998
PANGANIBAN, J.:
Statement of the Case
The right of the plaintiff to exercise the power of eminent domain is

not disputed. However, such right may be exercised only pursuant
to an Ordinance (Sec. 19, R.A No. 7160). In the instant case, there
is no such ordinance passed by the Municipal Council of Paraaque
enabling the Municipality, thru its Chief Executive, to exercise the
power of eminent domain. The complaint, therefore, states no
cause of action.
SO ORDERED.
MUNICIPALITY
OF
PARAAQUE, petitioner,vs.
CORPORATION, respondent.
A local government unit (LGU), like the Municipality of Paraaque, cannot

authorize an expropriation of private property through a mere resolution of
its lawmaking body. The Local Government Code expressly and clearly
requires an ordinance or a local law for the purpose. A resolution that
merely expresses the sentiment or opinion of the Municipal Council will not
suffice. On the other hand, the principle of res judicata does not bar
subsequent proceedings for the expropriation of the same property when
all the legal requirements for its valid exercise are complied with.
V.M.
REALTY
WHEREFORE, defendant's motion for reconsideration is hereby
granted. The order dated February 4, 1994 is vacated and set
aside.
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This case is hereby dismissed. No pronouncement as to costs.
SO ORDERED.
1.
Whether or not the Resolution of the Paraaque Municipal

Council No. 93-95, Series of 1993 is a substantial compliance of
the statutory requirement of Section 19, R.A. 7180 [sic] in the
exercise of the power of eminent domain by the plaintiffappellant.
2.
Whether or not the complaint in this case states no cause of

action.
3.
Whether or not the strict adherence to the literal observance to

the rule of procedure resulted in technicality standing in the
way of substantial justice.
4.
Whether or not the principle of res judicata is applicable to the

present case. 18
Factual Antecedents
Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993, 6 the
Municipality of Paraaque filed on September 20, 1993, a Complaint for
expropriation 7 against Private Respondent V.M. Realty Corporation over
two parcels of land (Lots 2-A-2 and 2-B-1 of Subdivision Plan Psd-17917),
with a combined area of about 10,000 square meters, located at Wakas,
San Dionisio, Paraaque, Metro Manila, and covered by Torrens Certificate
of Title No. 48700. Allegedly, the complaint was filed "for the purpose of
alleviating the living conditions of the underprivileged by providing homes
for the homeless through a socialized housing project." 8 Parenthetically, it
was also for this stated purpose that petitioner, pursuant to
its Sangguniang Bayan Resolution No. 577, Series of 1991, 9 previously
made an offer to enter into a negotiated sale of the property with private
respondent, which the latter did not accept. 10
Finding the Complaint sufficient in form and substance, the Regional Trial
Court of Makati, Branch 134, issued an Order dated January 10,
1994, 11 giving it due course. Acting on petitioner's motion, said court
issued an Order dated February 4, 1994, 12 authorizing petitioner to take
possession of the subject property upon deposit with its clerk of court of an
amount equivalent to 15 percent of its fair market value based on its
current tax declaration.
On February 21, 1994, private respondent filed its Answer containing
affirmative defenses and a counterclaim, 13alleging in the main that (a) the
complaint failed to state a cause of action because it was filed pursuant to
a resolution and not to an ordinance as required by RA 7160 (the Local
Government Code); and (b) the cause of action, if any, was barred by a
prior judgment or res judicata. On private respondent's motion, its Answer
was treated as a motion to dismiss. 14 On March 24, 1991, 15 petitioner filed
its opposition, stressing that the trial court's Order dated February 4, 1994
was in accord with Section 19 of RA 7160, and that the principle of res
judicata was not applicable.
As previously mentioned, the Court of Appeals affirmed in toto the trial

court's Decision. Respondent Court, in its assailed Resolution promulgated
on January 8, 1997, 19 denied petitioner's Motion for Reconsideration for
lack of merit.
Hence, this appeal.
20
The Issues
Before this Court, petitioner posits two issues, viz.:
1.
A resolution duly approved by the municipal council has the same force
and effect of an ordinance and will not deprive an expropriation case of
a valid cause of action.
2.
The principle of res judicata as a ground for dismissal of case is not

applicable when public interest is primarily involved. 21
The Court's Ruling
The petition is not meritorious.

Thereafter, the trial court issued its August 9, 1994 Resolution 16 nullifying
its February 4, 1994 Order and dismissing the case. Petitioner's motions for
reconsideration and transfer of venue were denied by the trial court in a
Resolution dated December 2, 1994. 17 Petitioner then appealed to
Respondent Court, raising the following issues:
First Issue:
Resolution Different from an Ordinance
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Petitioner contends that a resolution approved by the municipal council for
the purpose of initiating an expropriation case "substantially complies with
the requirements of the law" 22 because the terms "ordinance" and
"resolution" are synonymous for "the purpose of bestowing authority [on]
the local government unit through its chief executive to initiate the
expropriation proceedings in court in the exercise of the power of eminent
domain." 23 Petitioner seeks to bolster this contention by citing Article 36,
Rule VI of the Rules and Regulations Implementing the Local Government
Code, which provides. "If the LGU fails to acquire a private property for
public use, purpose, or welfare through purchase, the LGU may expropriate
said property through a resolution of the Sanggunian authorizing its chief
executive to initiate expropriation proceedings." 24 (Emphasis supplied.)
The Court disagrees. The power of eminent domain is lodged in the
legislative branch of government, which may delegate the exercise thereof
to LGUs, other public entities and public utilities. 25 An LGU may therefore
exercise the power to expropriate private property only when authorized by
Congress and subject to the latter's control and restraints, imposed
"through the law conferring the power or in other legislations." 26 In this
case, Section 19 of RA 7160, which delegates to LGUs the power of
eminent domain, also lays down the parameters for its exercise. It provides
as follows:
Sec. 19. Eminent Domain. A local government unit may, through its
chief executive and acting pursuant to an ordinance, exercise the
power of eminent domain for public use, or purpose, or welfare for
the benefit of the poor and the landless, upon payment of just
compensation, pursuant to the provisions of the Constitution and
pertinent laws: Provided, however, That the power of eminent
domain may not be exercised unless a valid and definite offer has
been previously made to the owner, and such offer was not
accepted: Provided, further, That the local government unit may
immediately take possession of the property upon the filing of the
expropriation proceedings and upon making a deposit with the
proper court of at least fifteen percent (15%) of the fair market
value of the property based on the current tax declaration of the
property to be expropriated: Provided, finally, That, the amount to
be paid for the expropriated property shall be determined by the
proper court, based on the fair market value at the time of the
taking of the property. (Emphasis supplied)
Thus, the following essential requisites must concur before an LGU can
exercise the power of eminent domain:
1.
An ordinance is enacted by the local legislative council

authorizing the local chief executive, in behalf of the LGU, to
exercise the power of eminent domain or pursue expropriation

proceedings over a particular private property.
2.
The power of eminent domain is exercised for public use,

purpose or welfare, or for the benefit of the poor and the
landless.
3.
There is payment of just compensation, as required under

Section 9, Article III of the Constitution, and other pertinent
laws.
4.
A valid and definite offer has been previously made to the

owner of the property sought to be expropriated, but said offer
was not accepted. 27
In the case at bar, the local chief executive sought to exercise the power of
eminent domain pursuant to a resolution of the municipal council. Thus,
there was no compliance with the first requisite that the mayor be
authorized through an ordinance. Petitioner cites Camarines Sur vs. Court
of Appeals 28 to show that a resolution may suffice to support the exercise
of eminent domain by an LGU. 29 This case, however, is not in point
because the applicable law at that time was BP 337, 30 the previous Local
Government Code, which had provided that a mere resolution would
enable an LGU to exercise eminent domain. In contrast, RA 7160, 31 the
present Local Government Code which was already in force when the
Complaint for expropriation was filed, explicitly required an ordinance for
this purpose.
We are not convinced by petitioner's insistence that the terms "resolution"
and "ordinance" are synonymous. A municipal ordinance is different from a
resolution. An ordinance is a law, but a resolution is merely a declaration of
the sentiment or opinion of a lawmaking body on a specific matter. 32 An
ordinance possesses a general and permanent character, but a resolution
is temporary in nature. Additionally, the two are enacted differently a
third reading is necessary for an ordinance, but not for a resolution, unless
decided otherwise by a majority of all the Sanggunian members.33
If Congress intended to allow LGUs to exercise eminent domain through a
mere resolution, it would have simply adopted the language of the
previous Local Government Code. But Congress did not. In a clear
divergence from the previous Local Government Code, Section 19 of RA
7160 categorically requires that the local chief executive act pursuant to
an ordinance. Indeed, "[l]egislative intent is determined principally from
the language of a statute. Where the language of a statute is clear and
unambiguous, the law is applied according to its express terms, and
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interpretation would be resorted to only where a literal interpretation would
be resorted to only where a literal interpretation would be either impossible
or absurd or would lead to an injustice." 34 In the instant case, there is no
reason to depart from this rule, since the law requiring an ordinance is not
at all impossible, absurd, or unjust.
Moreover, the power of eminent domain necessarily involves a derogation
of a fundamental or private right of the people. 35 Accordingly, the manifest
change in the legislative language from "resolution" under BP 337 to
"ordinance" under RA 7160 demands a strict construction. "No species of
property is held by individuals with greater tenacity, and is guarded by the
Constitution and laws more sedulously, than the right to the freehold of
inhabitants. When the legislature interferes with that right and, for greater
public purposes, appropriates the land of an individual without his consent,
the plain meaning of the law should not be enlarged by doubtful
interpretation." 36
Petitioner relies on Article 36, Rule VI of the Implementing Rules, which
requires only a resolution to authorize an LGU to exercise eminent domain.
This is clearly misplaced, because Section 19 of RA 7160, the law itself,
surely prevails over said rule which merely seeks to implement it. 37 It is
axiomatic that the clear letter of the law is controlling and cannot be
amended by a mere administrative rule issued for its implementation.
Besides, what the discrepancy seems to indicate is a mere oversight in the
wording of the implementing rules, since Article 32, Rule VI thereof, also
requires that, in exercising the power of eminent domain, the chief
executive of the LGU act pursuant to an ordinance.
In this ruling, the Court does not diminish the policy embodied in Section 2,
Article X of the Constitution, which provides that "territorial and political
subdivisions shall enjoy local autonomy." It merely upholds the law as
worded in RA 7160. We stress that an LGU is created by law and all its
powers and rights are sourced therefrom. It has therefore no power to
amend or act beyond the authority given and the limitations imposed on it
by law. Strictly speaking, the power of eminent domain delegated to an
LGU is in reality not eminent but "inferior" domain, since it must conform to
the limits imposed by the delegation, and thus partakes only of a share in
eminent domain. 38Indeed, "the national legislature is still the principal of
the local government units, which cannot defy its will or modify or violate
it." 39
Complaint Does Not
State a Cause of Action
In its Brief filed before Respondent Court, petitioner argues that

its Sangguniang Bayan passed an ordinance on October 11, 1994 which
reiterated its Resolution No. 93-35, Series of 1993, and ratified all the acts
of its mayor regarding the subject expropriation. 40
This argument is bereft of merit. In the first place, petitioner merely alleged
the existence of such an ordinance, but it did not present any certified true
copy thereof. In the second place, petitioner did not raise this point before
this Court. In fact, it was mentioned by private respondent, and only in
passing. 41 In any event, this allegation does not cure the inherent defect of
petitioner's Complaint for expropriation filed on September 23, 1993. It is
hornbook doctrine that
. . . in a motion to dismiss based on the ground that the complaint
fails to state a cause of action, the question submitted before the
court for determination is the sufficiency of the allegations in the
complaint itself. Whether those allegations are true or not is beside
the point, for their truth is hypothetically admitted by the motion.
The issue rather is: admitting them to be true, may the court
render a valid judgment in accordance with the prayer of the
complaint? 42
The fact that there is no cause of action is evident from the face of the
Complaint for expropriation which was based on a mere resolution. The
absence of an ordinance authorizing the same is equivalent to lack of
cause of action. Consequently, the Court of Appeals committed no
reversible error in affirming the trial court's Decision which dismissed the
expropriation suit.
Second Issue:
Eminent Domain Not Barred by Res Judicata
As correctly found by the Court of Appeals 43 and the trial court, 44 all the
requisites for the application of res judicata are present in this case. There
is a previous final judgment on the merits in a prior expropriation case
involving identical interests, subject matter and cause of action, which has
been rendered by a court having jurisdiction over it.
Be that as it may, the Court holds that the principle of res judicata, which
finds application in generally all cases and proceedings, 45 cannot bar
the right of the State or its agent to expropriate private property. The very
nature of eminent domain, as an inherent power of the State, dictates that
the right to exercise the power be absolute and unfettered even by a prior
judgment or res judicata. The scope of eminent domain is plenary and, like
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1st
police power, can "reach every form of property which the State might
need for public use." 46 "All separate interests of individuals in property are
held of the government under this tacit agreement or implied reservation.
Notwithstanding the grant to individuals, the eminent domain, the highest
and most exact idea of property, remains in the government, or in the
aggregate body of the people in their sovereign capacity; and they have
the right to resume the possession of the property whenever the public
interest requires it." 47 Thus, the State or its authorized agent cannot be
forever barred from exercising said right by reason alone of previous noncompliance with any legal requirement.
While the principle of res judicata does not denigrate the right of the State
to exercise eminent domain, it does apply to specific issues decided in a
previous case. For example, a final judgment dismissing an expropriation
suit on the ground that there was no prior offer precludes another suit
raising the same issue; it cannot, however, bar the State or its agent from
thereafter complying with this requirement, as prescribed by law, and
subsequently exercising its power of eminent domain over the same
property. 48 By the same token, our ruling that petitioner cannot exercise its
delegated power of eminent domain through a mere resolution will not bar
it from reinstituting similar proceedings, once the said legal requirement
and, for that matter, all others are properly complied with. Parenthetically
and by parity of reasoning, the same is also true of the principle of "law of
the case." In Republic vs. De Knecht, 49 the Court ruled that the power of
the State or its agent to exercise eminent domain is not diminished by the
mere fact that a prior final judgment over the property to be expropriated
has become the law of the case as to the parties. The State or its
authorized agent may still subsequently exercise its right to expropriate
the same property, once all legal requirements are complied with. To rule
otherwise will not only improperly diminish the power of eminent domain,
but also clearly defeat social justice.
WHEREFORE, the petition is hereby DENIED without prejudice to
petitioner's proper exercise of its power of eminent domain over subject
property. Costs against petitioner.
SO ORDERED.
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As their demand remained unheeded, respondents filed a Complaint 9 for

recovery of possession with damages against petitioners, praying that they
be restored to the possession of the subject parcel of land and that they be
paid attorneys fees.10 Respondents claimed that the subject parcel of land
was assessed at P2,543,800.00.11
G.R. No. 179334
July 1, 2013
SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS

HIGHWAYS
and
DISTRICT
ENGINEER
CELESTINO
CONTRERAS, Petitioners,
vs. SPOUSES HERACLEO and RAMONA TECSON, Respondents.
AND
R.
PERALTA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of
Court, assailing the Court of Appeals (CA) Decision 1 dated July 31, 2007 in
CA-G.R. CV No. 77997. The assailed decision affirmed with modification the
Regional Trial Court (RTC)2 Decision3 dated March 22, 2002 in Civil Case No.
208-M-95.
The case stemmed from the following factual and procedural antecedents:
Respondent spouses Heracleo and Ramona Tecson (respondents) are coowners of a parcel of land with an area of 7,268 square meters located in
San Pablo, Malolos, Bulacan and covered by Transfer Certificate of Title
(TCT) No. T-430064 of the Register of Deeds of Bulacan. Said parcel of land
was among the properties taken by the government sometime in 1940
without the owners consent and without the necessary expropriation
proceedings and used for the construction of the MacArthur Highway. 5
In a letter6 dated December 15, 1994, respondents demanded the payment
of the fair market value of the subject parcel of land. Petitioner Celestino R.
Contreras (petitioner Contreras), then District Engineer of the First Bulacan
Engineering District of petitioner Department of Public Works and Highways
(DPWH), offered to pay the subject land at the rate of P0.70 per square
meter per Resolution of the Provincial Appraisal Committee (PAC) of
Bulacan.7Unsatisfied with the offer, respondents demanded for the return
of their property or the payment of compensation at the current fair market
value.8
Instead of filing their Answer, petitioners moved for the dismissal of the
complaint on the following grounds: (1) that the suit is against the State
which may not be sued without its consent; (2) that the case has already
prescribed; (3) that respondents have no cause of action for failure to
exhaust administrative remedies; and (4) if respondents are entitled to
compensation, they should be paid only the value of the property in 1940
or 1941.12
On June 28, 1995, the RTC issued an Order 13 granting respondents motion
to dismiss based on the doctrine of state immunity from suit. As
respondents claim includes the recovery of damages, there is no doubt
that the suit is against the State for which prior waiver of immunity is
required. When elevated to the CA,14 the appellate court did not agree with
the RTC and found instead that the doctrine of state immunity from suit is
not applicable, because the recovery of compensation is the only relief
available to the landowner. To deny such relief would undeniably cause
injustice to the landowner. Besides, petitioner Contreras, in fact, had earlier
offered the payment of compensation although at a lower rate.Thus, the
CA reversed and set aside the dismissal of the complaint and,
consequently, remanded the case to the trial court for the purpose of
determining the just compensation to which respondents are entitled to
recover from the government.15 With the finality of the aforesaid decision,
trial proceeded in the RTC.
The Branch Clerk of Court was initially appointed as the Commissioner and
designated as the Chairman of the Committee that would determine just
compensation,16 but the case was later referred to the PAC for the
submission of a recommendation report on the value of the subject
property.17 In PAC Resolution No. 99-007, 18 the PAC recommended the
amount of P1,500.00 per square meter as the just compensation for the
subject property.
On March 22, 2002, the RTC rendered a Decision, 19 the dispositive portion
of which reads:
WHEREFORE, premises considered, the Department of Public Works and
Highways or its duly assigned agencies are hereby directed to pay said
Complainants/Appellants the amount of One Thousand Five Hundred Pesos
(P1,500.00) per square meter for the lot subject matter of this case in
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accordance with the Resolution of the Provincial Appraisal Committee
dated December 19, 2001.
SO ORDERED.20
On appeal, the CA affirmed the above decision with the modification that
the just compensation stated above should earn interest of six percent
(6%) per annum computed from the filing of the action on March 17, 1995
until full payment.21
In its appeal before the CA, petitioners raised the issues of prescription and
laches, which the CA brushed aside on two grounds: first, that the issue
had already been raised by petitioners when the case was elevated before
the CA in CA-G.R. CV No. 51454. Although it was not squarely ruled upon
by the appellate court as it did not find any reason to delve further on such
issues, petitioners did not assail said decision barring them now from
raising exactly the same issues; and second, the issues proper for
resolution had been laid down in the pre-trial order which did not include
the issues of prescription and laches. Thus, the same can no longer be
further considered. As to the propriety of the propertys valuation as
determined by the PAC and adopted by the RTC, while recognizing the rule
that the just compensation should be the reasonable value at the time of
taking which is 1940, the CA found it necessary to deviate from the general
rule. It opined that it would be obviously unjust and inequitable if
respondents would be compensated based on the value of the property in
1940 which is P0.70 per sq m, but the compensation would be paid only
today. Thus, the appellate court found it just to award compensation based
on the value of the property at the time of payment. It, therefore, adopted
the RTCs determination of just compensation of P1,500.00 per sq m as
recommended by the PAC. The CA further ordered the payment of interest
at the rate of six percent (6%) per annum reckoned from the time of
taking, which is the filing of the complaint on March 17, 1995.
Aggrieved, petitioners come before the Court assailing the CA decision
based on the following grounds:
I.
THE COURT OF APPEALS GRAVELY ERRED IN GRANTING JUST
COMPENSATION TO RESPONDENTS CONSIDERING THE HIGHLY DUBIOUS
AND QUESTIONABLE CIRCUMSTANCES OF THEIR ALLEGED OWNERSHIP OF
THE SUBJECT PROPERTY.
II.
THE COURT OF APPEALS GRAVELY ERRED IN AWARDING JUST

COMPENSATION TO RESPONDENTS BECAUSE THEIR COMPLAINT FOR
RECOVERY OF POSSESSION AND DAMAGES IS ALREADY BARRED BY
PRESCRIPTION AND LACHES.
III.
THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE TRIAL COURTS
DECISION ORDERING THE PAYMENT OF JUST COMPENSATION BASED ON
THE CURRENT MARKET VALUE OF THE ALLEGED PROPERTY OF
RESPONDENTS.22
Petitioners insist that the action is barred by prescription having been filed
fifty-four (54) years after the accrual of the action in 1940. They explain
that the court can motu proprio dismiss the complaint if it shows on its face
that the action had already prescribed. Petitioners likewise aver that
respondents slept on their rights for more than fifty years; hence, they are
guilty of laches. Lastly, petitioners claim that the just compensation should
be based on the value of the property at the time of taking in 1940 and not
at the time of payment.23
The petition is partly meritorious.
The instant case stemmed from an action for recovery of possession with
damages filed by respondents against petitioners. It, however, revolves
around the taking of the subject lot by petitioners for the construction of
the MacArthur Highway. There is taking when the expropriator enters
private property not only for a momentary period but for a permanent
duration, or for the purpose of devoting the property to public use in such a
manner as to oust the owner and deprive him of all beneficial enjoyment
thereof.24
It is undisputed that the subject property was taken by petitioners without
the benefit of expropriation proceedings for the construction of the
MacArthur Highway. After the lapse of more than fifty years, the property
owners sought recovery of the possession of their property. Is the action
barred by prescription or laches? If not, are the property owners entitled to
recover possession or just compensation?
As aptly noted by the CA, the issues of prescription and laches are not
proper issues for resolution as they were not included in the pre-trial order.
We quote with approval the CAs ratiocination in this wise:
Procedurally, too, prescription and laches are no longer proper issues in
this appeal. In the pre-trial order issued on May 17, 2001, the RTC
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summarized the issues raised by the defendants, to wit: (a) whether or not
the plaintiffs were entitled to just compensation; (b) whether or not the
valuation would be based on the corresponding value at the time of the
taking or at the time of the filing of the action; and (c) whether or not the
plaintiffs were entitled to damages. Nowhere did the pre-trial order indicate
that prescription and laches were to be considered in the adjudication of
the RTC.25
To be sure, the pre-trial order explicitly defines and limits the issues to be
tried and controls the subsequent course of the action unless modified
before trial to prevent manifest injustice.26
Even if we squarely deal with the issues of laches and prescription, the
same must still fail. Laches is principally a doctrine of equity which is
applied to avoid recognizing a right when to do so would result in a clearly
inequitable situation or in an injustice. 27 This doctrine finds no application
in this case, since there is nothing inequitable in giving due course to
respondents claim. Both equity and the law direct that a property owner
should be compensated if his property is taken for public use. 28 Neither
shall prescription bar respondents claim following the long-standing rule
"that where private property is taken by the Government for public use
without first acquiring title thereto either through expropriation or
negotiated sale, the owners action to recover the land or the value thereof
does not prescribe."29
When a property is taken by the government for public use, jurisprudence
clearly provides for the remedies available to a landowner. The owner may
recover his property if its return is feasible or, if it is not, the aggrieved
owner may demand payment of just compensation for the land taken. 30 For
failure of respondents to question the lack of expropriation proceedings for
a long period of time, they are deemed to have waived and are estopped
from assailing the power of the government to expropriate or the public
use for which the power was exercised. What is left to respondents is the
right of compensation.31 The trial and appellate courts found that
respondents are entitled to compensation. The only issue left for
determination is the propriety of the amount awarded to respondents.
Just compensation is "the fair value of the property as between one who
receives, and one who desires to sell, x x x fixed at the time of the actual
taking by the government." This rule holds true when the property is taken
before the filing of an expropriation suit, and even if it is the property
owner who brings the action for compensation.32
The issue in this case is not novel.
1st
In Forfom Development Corporation [Forfom] v. Philippine National
Railways [PNR],33 PNR entered the property of Forfom in January 1973 for
public use, that is, for railroad tracks, facilities and appurtenances for use
of the Carmona Commuter Service without initiating expropriation
proceedings.34 In 1990, Forfom filed a complaint for recovery of possession
of real property and/or damages against PNR. In Eusebio v.
Luis,35 respondents parcel of land was taken in 1980 by the City of Pasig
and used as a municipal road now known as A. Sandoval Avenue in Pasig
City without the appropriate expropriation proceedings. In 1994,
respondent demanded payment of the value of the property, but they
could not agree on its valuation prompting respondent to file a complaint
for reconveyance and/or damages against the city government and the
mayor. In Manila International Airport Authority v. Rodriguez, 36in the early
1970s, petitioner implemented expansion programs for its runway
necessitating the acquisition and occupation of some of the properties
surrounding its premises. As to respondents property, no expropriation
proceedings were initiated.1wphi1 In 1997, respondent demanded the
payment of the value of the property, but the demand remained unheeded
prompting him to institute a case for accion reivindicatoria with damages
against petitioner. In Republic v. Sarabia, 37 sometime in 1956, the Air
Transportation Office (ATO) took possession and control of a portion of a lot
situated in Aklan, registered in the name of respondent, without initiating
expropriation proceedings. Several structures were erected thereon
including the control tower, the Kalibo crash fire rescue station, the Kalibo
airport terminal and the headquarters of the PNP Aviation Security Group.
In 1995, several stores and restaurants were constructed on the remaining
portion of the lot. In 1997, respondent filed a complaint for recovery of
possession with damages against the storeowners where ATO intervened
claiming that the storeowners were its lessees.
The Court in the above-mentioned cases was confronted with common
factual circumstances where the government took control and possession
of the subject properties for public use without initiating expropriation
proceedings and without payment of just compensation, while the
landowners failed for a long period of time to question such government
act and later instituted actions for recovery of possession with damages.
The Court thus determined the landowners right to the payment of just
compensation and, more importantly, the amount of just compensation.
The Court has uniformly ruled that just compensation is the value of the
property at the time of taking that is controlling for purposes of
compensation. In Forfom, the payment of just compensation was reckoned
from the time of taking in 1973; in Eusebio, the Court fixed the just
compensation by determining the value of the property at the time of
taking in 1980; in MIAA, the value of the lot at the time of taking in 1972
served as basis for the award of compensation to the owner; and in
Republic, the Court was convinced that the taking occurred in 1956 and
was thus the basis in fixing just compensation. As in said cases, just
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compensation due respondents in this case should, therefore, be fixed not
as of the time of payment but at the time of taking, that is, in 1940.
interest at six percent ( 6o/o) per annum from the date of taking in 1940
instead of March 17, 1995, until full payment.
The reason for the rule has been clearly explained in Republic v. Lara, et
al.,38 and repeatedly held by the Court in recent cases, thus:
SO ORDERED.
x x x "The value of the property should be fixed as of the date when it was
taken and not the date of the filing of the proceedings." For where property
is taken ahead of the filing of the condemnation proceedings, the value
thereof may be enhanced by the public purpose for which it is taken; the
entry by the plaintiff upon the property may have depreciated its value
thereby; or, there may have been a natural increase in the value of the
property from the time it is taken to the time the complaint is filed, due to
general economic conditions. The owner of private property should be
compensated only for what he actually loses; it is not intended that his
compensation shall extend beyond his loss or injury. And what he loses is
only the actual value of his property at the time it is taken x x x. 39
G.R. No. 210551
June 30, 2015
JOSE J. FERRER, JR., Petitioner, vs. CITY MAYOR HERBERT BAUTISTA,

CITY COUNCIL OF QUEZON CITY, CITY TREASURER OF QUEZON CITY,
and CITY ASSESSOR OF QUEZON CITY, Respondents.
PERALTA, J.:
Both the RTC and the CA recognized that the fair market value of the
subject property in 1940 was P0.70/sq m.40Hence, it should, therefore, be
used in determining the amount due respondents instead of the higher
value which isP1,500.00. While disparity in the above amounts is obvious
and may appear inequitable to respondents as they would be receiving
such outdated valuation after a very long period, it is equally true that they
too are remiss in guarding against the cruel effects of belated claim. The
concept of just compensation does not imply fairness to the property
owner alone. Compensation must be just not only to the property owner,
but also to the public which ultimately bears the cost of expropriation. 41
Clearly, petitioners had been occupying the subject property for more than
fifty years without the benefit of expropriation proceedings. In taking
respondents property without the benefit of expropriation proceedings and
without payment of just compensation, petitioners clearly acted in utter
disregard of respondents proprietary rights which cannot be countenanced
by the Court.42 For said illegal taking, respondents are entitled to adequate
compensation in the form of actual or compensatory damages which in this
case should be the legal interest of six percent (6%) per annum on the
value of the land at the time of taking in 1940 until full payment. 43 This is
based on the principle that interest runs as a matter of law and follows
from the right of the landowner to be placed in as good position as money
can accomplish, as of the date of taking.44
WHEREFORE, premises considered, the pet1t10n is PARTIALLY GRANTED.
The Court of Appeals Decision dated July 31, 2007 in CAG.R. CV No. 77997
is MODIFIED, in that the valuation of the subject property owned by
respondents shall be F0.70 instead of P1,500.00 per square meter, with
Before this Court is a petition for certiorari under Rule 65 of the Rules of
Court with prayer for the issuance of a temporary restraining order (TRO)
seeking to declare unconstitutional and illegal Ordinance Nos. SP-2095, S2011 and SP-2235, S-2013 on the Socialized Housing Tax and Garbage Fee,
respectively, which are being imposed by the respondents.
The Case
On October 17, 2011,1 respondent Quezon City Council enacted Ordinance
No. SP-2095, S-2011,2 or the Socialized Housing Tax of Quezon City, Section
3 of which provides:
SECTION 3. IMPOSITION. A special assessment equivalent to one-half
percent (0.5%) on the assessed value of land in excess of One Hundred
Thousand Pesos (Php100,000.00) shall be collected by the City Treasurer
which shall accrue to the Socialized Housing Programs of the Quezon City
Government. The special assessment shall accrue to the General Fund
under a special account to be established for the purpose.
Effective for five (5) years, the Socialized Housing Tax ( SHT ) shall be
utilized by the Quezon City Government for the following projects: (a) land
purchase/land banking; (b) improvement of current/existing socialized
housing facilities; (c) land development; (d) construction of core houses,
sanitary cores, medium-rise buildings and other similar structures; and (e)
financing of public-private partners hip agreement of the Quezon City
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Government and National Housing Authority ( NHA ) with the private
sector.3
Under certain conditions, a tax credit shall be enjoyed by taxpayers
regularly paying the special assessment:
SECTION 7. TAX CREDIT. Taxpayers dutifully paying the special assessment
tax as imposed by this ordinance shall enjoy a tax credit. The tax credit
may be availed of only after five (5) years of continue[d] payment. Further,
the taxpayer availing this tax credit must be a taxpayer in good standing
as certified by the City Treasurer and City Assessor.
The tax credit to be granted shall be equivalent to the total amount of the
special assessment paid by the property owner, which shall be given as
follows:
1.
2.
3.
4.
5.
On all condominium unit and socialized housing projects/units in Quezon

City;
6th year - 20%

7th year - 20%
8th year - 20%
9th year - 20%
10th year - 20%
Furthermore, only the registered owners may avail of the tax credit and
may not be continued by the subsequent property owners even if they are
buyers in good faith, heirs or possessor of a right in whatever legal
capacity over the subject property.4
On high-rise Condominium Units
On the other hand, Ordinance No. SP-2235, S-2013 5 was enacted on

December 16, 2013 and took effect ten days after when it was approved by
respondent City Mayor.6 The proceeds collected from the garbage fees on
residential properties shall be deposited solely and exclusively in an
earmarked special account under the general fund to be utilized for
garbage collections.7 Section 1 of the Ordinance se t forth the schedule and
manner for the collection of garbage fees:
a) High-rise Condominium The Homeowners Association of highrise condominiums shall pay the annual garbage fee on the
total size of the entire condominium and socialized Housing
Unit and an additional garbage fee shall be collected based on
area occupied for every unit already so ld or being amortized.
b) High-rise apartment units Owners of high-rise apartment
units shall pay the annual garbage fee on the total lot size of
the entire apartment and an additional garbage fee based on
the schedule prescribed herein for every unit occupied.
SECTION 1. The City Government of Quezon City in conformity with and in

relation to Republic Act No. 7160, otherwise known as the Local
Government Code of 1991 HEREBY IMPOSES THE FOLLOWING SCHEDULE
AND MANNER FOR THE ANNUAL COLLECTION OF GARBAGE FEES, AS
FOLLOWS: On all domestic households in Quezon City;
The collection of the garbage fee shall accrue on the first day of January
and shall be paid simultaneously with the payment of the real property tax,
but not later than the first quarter installment. 8 In case a household owner
refuses to pay, a penalty of 25% of the garbage fee due, plus an interest of
2% per month or a fraction thereof, shall be charged.9
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Petitioner alleges that he is a registered co-owner of a 371-square-meter
residential property in Quezon City which is covered by Transfer Certificate
of Title (TCT ) No. 216288, and that, on January 7, 2014, he paid his realty
tax which already included the garbage fee in the sum of Php100.00. 10
The instant petition was filed on January 17, 2014. We issued a TRO on
February 5, 2014, which enjoined the enforcement of Ordinance Nos. SP2095 and SP-2235 and required respondents to comment on the petition
without necessarily giving due course thereto. 11
Respondents filed their Comment12 with urgent motion to dissolve the TRO
on February 17, 2014. Thereafter, petitioner filed a Reply and a
Memorandum on March 3, 2014 and September 8, 2014, respectively.
Procedural Matters
A. Propriety of a Petition for Certiorari
Respondents are of the view that this petition for certiorari is improper
since they are not tribunals, boards or officers exercising judicial or quasijudicial functions. Petitioner, however, counters that in enacting Ordinance
Nos. SP-2095 and SP-2235, the Quezon City Council exercised quasi-judicial
function because the ordinances ruled against the property owners who
must pay the SHT and the garbage fee, exacting from them funds for basic
essential public services that they should not be held liable. Even if a Rule
65 petition is improper, petitioner still asserts that this Court, in a number
of cases like in Rosario v. Court of Appeals, 13 has taken cognizance of an
improper remedy in the interest of justice.
We agree that respondents neither acted in any judicial or quasi-judicial
capacity nor arrogated unto themselves any judicial or quasi-judicial
prerogatives.
A respondent is said to be exercising judicial function where he has the
power to determine what the law is and what the legal rights of the parties
are, and then undertakes to determine these questions and adjudicate
upon the rights of the parties.
Quasi-judicial function, on the other hand, is "a term which applies to the
actions, discretion, etc., of public administrative officers or bodies
required to investigate facts or ascertain the existence of facts, hold
hearings, and draw conclusions from them as a basis for their official action
and to exercise discretion of a judicial nature."
1st
Before a tribunal, board, or officer may exercise judicial or quasi-judicial
acts, it is necessary that there be a law that gives rise to some specific
rights of person s or property under which adverse claims to such rights
are made, and the controversy en suing therefrom is brought before a
tribunal, board, or officer clothed with power and authority to determine
the law and adjudicate the respective rights of the contending parties. 14
For a writ of certiorari to issue, the following requisites must concur: (1) it
must be directed against a tribunal, board, or officer exercising judicial or
quasi-judicial functions; (2) the tribunal, board, or officer must have acted
without or in excess of jurisdiction or with grave abuse of discretion
amounting to lack or excess of jurisdiction; and (3) there is no appeal or
any plain, speedy, and adequate remedy in the ordinary course of law. The
enactment by the Quezon City Council of the assailed ordinances was done
in the exercise of its legislative, not judicial or quasi-judicial, function.
Under Republic Act (R.A.) No.7160, or the Local Government Code of 1991
(LGC), local legislative power shall be exercised by the Sangguniang
Panlungsod for the city.15Said law likewise is specific in providing that the
power to impose a tax, fee, or charge , or to generate revenue shall be
exercised by the sanggunian of the local government unit concerned
through an appropriate ordinance.16
Also, although the instant petition is styled as a petition for certiorari, it
essentially seeks to declare the unconstitutionality and illegality of the
questioned ordinances. It, thus, partakes of the nature of a petition for
declaratory relief, over which this Court has only appellate, not original,
jurisdiction.17
Despite these, a petition for declaratory relief may be treated as one for
prohibition or mandamus, over which we exercise original jurisdiction, in
cases with far-reaching implications or one which raises transcendental
issues or questions that need to be resolved for the public good. 18The
judicial policy is that this Court will entertain direct resort to it when the
redress sought cannot be obtained in the proper courts or when
exceptional and compelling circumstances warrant availment of a remedy
within and calling for the exercise of Our primary jurisdiction. 19
Section 2, Rule 65 of the Rules of Court lay down under what
circumstances a petition for prohibition may be filed:
SEC. 2. Petition for prohibition. - When the proceedings of any tribunal,
corporation, board, officer or person, whether exercising judicial, quasijudicial or ministerial functions, are without or in excess of its or his
jurisdiction, or with grave abuse of discretion amounting to lack or excess
of jurisdiction, and there is no appeal or any other plain, speedy, and
adequate remedy in the ordinary course of law, a person aggrieved
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thereby may file a verified petition in the proper court, alleging the facts
with certainty and praying that judgment be rendered commanding the
respondent to desist from further proceeding in the action or matter
specified therein, or otherwise granting such incidental reliefs as law and
justice may require.
In a petition for prohibition against any tribunal, corporation, board, or
person whether exercising judicial, quasi-judicial, or ministerial functions
who has acted without or in excess of jurisdiction or with grave abuse of
discretion, the petitioner prays that judgment be rendered, commanding
the respondents to desist from further proceeding in the action or matter
specified in the petition. In this case, petitioner's primary intention is to
prevent respondents from implementing Ordinance Nos. SP-2095 and SP2235. Obviously, the writ being sought is in the nature of a prohibition,
commanding desistance.
We consider that respondents City Mayor, City Treasurer, and City Assessor
are performing ministerial functions. A ministerial function is one that an
officer or tribunal performs in the context of a given set of facts, in a
prescribed manner and without regard for the exercise of his or its own
judgment, upon the propriety or impropriety of the act done. 20 Respondent
Mayor, as chief executive of the city government, exercises such powers
and performs such duties and functions as provided for by the LGC and
other laws.21 Particularly, he has the duty to ensure that all taxes and other
revenues of the city are collected, and that city funds are applied to the
payment of expenses and settlement of obligations of the city, in
accordance with law or ordinance.22 On the other hand, under the LGC, all
local taxes, fees, and charges shall be collected by the provincial, city,
municipal, or barangay treasurer, or their duly-authorized deputies, while
the assessor shall take charge, among others, of ensuring that all laws and
policies governing the appraisal and assessment of real properties for
taxation purposes are properly executed. 23 Anent the SHT, the Department
of Finance (DOF) Local Finance Circular No. 1-97, dated April 16, 1997, is
more specific:
6.3 The Assessors office of the Identified LGU shall:
a.
b.
c.
immediately undertake an inventory of lands within its

jurisdiction which shall be subject to the levy of the Social
Housing Tax (SHT) by the local sanggunian concerned;
inform the affected registered owners of the effectivity of
the SHT; a list of the lands and registered owners shall also
be posted in 3 conspicuous places in the city/municipality;
furnish the Treasurers office and the local sanggunian
concerned of the list of lands affected;
6.4 The Treasurers office shall:

d.
e.
collect the Social Housing Tax on top of the Real Property

Tax, SEF Tax and other special assessments;
report to the DOF, thru the Bureau of Local Government
Finance, and the Mayors office the monthly collections on
Social Housing Tax (SHT). An annual report should likewise
be submitted to the HUDCC on the total revenues raised
during the year pursuant to Sec. 43, R.A. 7279 and the
manner in which the same was disbursed.
Petitioner has adduced special and important reasons as to why direct

recourse to us should be allowed. Aside from presenting a novel question
of law, this case calls for immediate resolution since the challenged
ordinances adversely affect the property interests of all paying
constituents of Quezon City. As well, this petition serves as a test case for
the guidance of other local government units (LGUs).Indeed, the petition at
bar is of transcendental importance warranting a relaxation of the doctrine
of hierarchy of courts. In Social Justice Society (SJS) Officers, et al. v. Lim ,
24
the Court cited the case of Senator Jaworski v. Phil. Amusement & Gaming
Corp.,25 where We ratiocinated:
Granting arguendo that the present action cannot be properly treated as a
petition for prohibition, the transcendental importance of the issues
involved in this case warrants that we set aside the technical defects and
take primary jurisdiction over the petition at bar . x x x This is in
accordance with the well entrenched principle that rules of procedure are
not inflexible tools designed to hinder or delay, but to facilitate and
promote the administration of justice. Their strict and rigid application,
which would result in technicalities that tend to frustrate, rather than
promote substantial justice, must always be eschewed. 26
B. Locus Standi of Petitioner
Respondents challenge petitioners legal standing to file this case on the
ground that, in relation to Section 3 of Ordinance No. SP-2095, petitioner
failed to allege his ownership of a property that has an assessed value of
more than Php100,000.00 and, with respect to Ordinance No. SP-2335, by
what standing or personality he filed the case to nullify the same.
According to respondents, the petition is not a class suit, and that, for not
having specifically alleged that petitioner filed the case as a taxpayer, it
could only be surmised whether he is a party-in-interest who stands to be
directly benefited or injured by the judgment in this case.
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It is a general rule that every action must be prosecuted or defended in the
name of the real party-in-interest, who stands to be benefited or injured by
the judgment in the suit, or the party entitled to the avails of the suit.
Jurisprudence defines interest as "material interest, an interest in issue and
to be affected by the decree, as distinguished from mere interest in the
question involved, or a mere incidental interest. By real interest is meant a
present substantial interest, as distinguished from a mere expectancy or a
future, contingent, subordinate, or consequential interest." "To qualify a
person to be a real party-in-interest in whose name an action must be
prosecuted, he must appear to be the present real owner of the right
sought to be enforced."27
"Legal standing" or locus standi calls for more than just a generalized
grievance.28 The concept has been define d as a personal and substantial
interest in the case such that the party has sustained or will sustain direct
injury as a result of the government al act that is being challenged. 29 The
gist of the question of standing is whether a party alleges such personal
stake in the outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon which the
court depends for illumination of difficult constitutional questions. 30
A party challenging the constitutionality of a law, act, or statute must show
"not only that the law is invalid, but also that he has sustained or is in
immediate, or imminent danger of sustaining some direct injury as a result
of its enforcement, and not merely that he suffers thereby in some
indefinite way." It must be shown that he has been, or is about to be,
denied some right or privilege to which he is lawfully entitled, or that he is
about to be subjected to some burdens or penalties by reason of the
statute complained of.31
Tested by the foregoing, petitioner in this case clearly has legal standing to
file the petition. He is a real party-in-interest to assail the constitutionality
and legality of Ordinance Nos. SP-2095 and SP-2235 because respondents
did not dispute that he is a registered co-owner of a residential property in
Quezon City an d that he paid property tax which already included the SHT
and the garbage fee. He has substantial right to seek a refund of the
payments he made and to stop future imposition. While he is a lone
petitioner, his cause of action to declare the validity of the subject
ordinances is substantial and of paramount interest to similarly situated
property owners in Quezon City.
C. Litis Pendentia
Respondents move for the dismissal of this petition on the ground of litis
pendentia. They claim that, as early as February 22, 2012, a case entitled
Alliance of Quezon City Homeowners, Inc., et al., v. Hon. Herbert Bautista,
et al. , docketed as Civil Case No. Q-12- 7-820, has been pending in the
Quezon City Regional Trial Court, Branch 104, which assails the legality of
Ordinance No. SP-2095. Relying on City of Makati, et al. v. Municipality
(now City) of Taguig, et al., 32 respondents assert that there is substantial
identity of parties between the two cases because petitioner herein and
plaintiffs in the civil case filed their respective cases as taxpayers of
Quezon City.
For petitioner, however, respondents contention is untenable since he is
not a party in Alliance and does not even have the remotest identity or
association with the plaintiffs in said civil case. Moreover, respondents
arguments would deprive this Court of its jurisdiction to determine the
constitutionality of laws under Section 5, Article VIII of the 1987
Constitution.33
Litis pendentia is a Latin term which literally means "a pending suit" and is
variously referred to in some decisions as lis pendens and auter action
pendant.34 While it is normally connected with the control which the court
has on a property involved in a suit during the continuance proceedings, it
is more interposed as a ground for the dismissal of a civil action pending in
court.35 In Film Development Council of the Philippines v. SM Prime
Holdings, Inc.,36 We elucidated:
Litis pendentia, as a ground for the dismissal of a civil action, refers to a
situation where two actions are pending between the same parties for the
same cause of action, so that one of them becomes unnecessary and
vexatious. It is based on the policy against multiplicity of suit and
authorizes a court to dismiss a case motu proprio.
xxxx
The requisites in order that an action may be dismissed on the ground of
litis pendentia are: (a) the identity of parties, or at least such as
representing the same interest in both actions; (b) the identity of rights
asserted and relief prayed for, the relief being founded on the same facts,
and (c) the identity of the two cases such that judgment in one, regardless
of which party is successful, would amount to res judicata in the other.
The underlying principle of litis pendentia is the theory that a party is not
allowed to vex another more than once regarding the same subject matter
and for the same cause of action. This theory is founded on the public
policy that the same subject matter should not be the subject of
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controversy in courts more than once, in order that possible conflicting
judgments may be avoided for the sake of the stability of the rights and
status of persons, and also to avoid the costs and expenses incident to
numerous suits.
Among the several tests resorted to in ascertaining whether two suits
relate to a single or common cause of action are: (1) whether the same
evidence would support and sustain both the first and second causes of
action; and (2) whether the defenses in one case may be used to
substantiate the complaint in the other.
The determination of whether there is an identity of causes of action for
purposes of litis pendentia is inextricably linked with that of res judicata ,
each constituting an element of the other. In either case, both relate to the
sound practice of including, in a single litigation, the disposition of all
issues relating to a cause of action that is before a court. 37
There is substantial identity of the parties when there is a community of
interest between a party in the first case and a party in the second case
albeit the latter was not impleaded in the first case. 38Moreover, the fact
that the positions of the parties are reversed, i.e., the plaintiffs in the first
case are the defendants in the second case or vice-versa, does not negate
the identity of parties for purposes of determining whether the case is
dismissible on the ground of litis pendentia .39
In this case, it is notable that respondents failed to attach any pleading
connected with the alleged civil case pending before the Quezon City trial
court.1wphi1 Granting that there is substantial identity of parties between
said case and this petition, dismissal on the ground of litis pendentia still
cannot be had in view of the absence of the second and third requisites.
There is no way for us to determine whether both cases are based on the
same set of facts that require the presentation of the same evidence. Even
if founded on the same set of facts, the rights asserted and reliefs prayed
for could be different. Moreover, there is no basis to rule that the two cases
are intimately related and/or intertwined with one another such that the
judgment that may be rendered in one, regardless of which party would be
successful, would amount to res judicata in the other.
D. Failure to Exhaust Administrative Remedies
Respondents contend that petitioner failed to exhaust administrative
remedies for his non-compliance with Section 187 of the LGC, which
mandates:
1st
Section 187. Procedure for Approval and Effectivity of Tax Ordinances and
Revenue Measures; Mandatory Public Hearings. The procedure for
approval of local tax ordinances and revenue measures shall be in
accordance with the provisions of this Code: Provided, That public hearings
shall be conducted for the purpose prior to the enactment thereof:
Provided, further, That any question on the constitutionality or legality of
tax ordinances or revenue measures may be raised on appeal within thirty
(30) days from the effectivity thereof to the Secretary of Justice who shall
render a decision within sixty (60) days from the date of receipt of the
appeal: Provided, however, That such appeal shall not have the effect of
suspending the effectivity of the ordinance and the accrual and payment of
the tax, fee, or charge levied therein: Provided, finally, That within thirty
(30) days after receipt of the decision or the lapse of the sixty-day period
without the Secretary of Justice acting upon the appeal, the aggrieved
party may file appropriate proceedings with a court of competent
jurisdiction.
The provision, the constitutionality of which was sustained in Drilon v. Lim ,
40
has been construed as mandatory41 considering that
A municipal tax ordinance empowers a local government unit to impose
taxes. The power to tax is the most effective instrument to raise needed
revenues to finance and support the myriad activities of local government
units for the delivery of basic services essential to the promotion of the
general welfare and enhancement of peace, progress, and prosperity of the
people. Consequently, any delay in implementing tax measures would be
to the detriment of the public. It is for this reason that protests over tax
ordinances are required to be done within certain time frames. x x x. 42
The obligatory nature of Section 187 was underscored in Hagonoy Market
Vendor Asso. v. Municipality of Hagonoy:43
x x x [T]he timeframe fixed by law fo r parties to avail of their legal
remedies before competent courts is not a "mere technicality" that can be
easily brushed aside. The periods stated in Section 187 of the Local
Government Code are mandatory. x x x Being its lifeblood, collection of
revenues by the government is of paramount importance. The funds for
the operation of its agencies and provision of basic services to its
inhabitants are largely derived from its revenues and collections. Thus, it is
essential that the validity of revenue measures is not left uncertain for a
considerable length of time. Hence, the law provided a time limit for an
aggrieved party to assail the legality of revenue measures and tax
ordinances."44
Despite these cases, the Court, in Ongsuco, et al. v. Hon. Malones, 45held
that there was no need for petitioners therein to exhaust administrative
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remedies before resorting to the courts, considering that there was only a
pure question of law, the parties did not dispute any factual matter on
which they had to present evidence. Likewise, in Cagayan Electric Power
and Light Co., Inc. v. City of Cagayan de Oro, 46 We relaxed the application
of the rules in view of the more substantive matters. For the same reasons,
this petition is an exception to the general rule.
Substantive Issues
Petitioner asserts that the protection of real properties from informal
settlers and the collection of garbage are basic and essential duties and
functions of the Quezon City Government. By imposing the SHT and the
garbage fee, the latter has shown a penchant and pattern to collect taxes
to pay for public services that could be covered by its revenues from taxes
imposed on property, idle land, business, transfer, amusement, etc., as
well as the Internal Revenue Allotment (IRA ) from the National
Government. For petitioner, it is noteworthy that respondents did not raise
the issue that the Quezon City Government is in dire financial state and
desperately needs money to fund housing for informal settlers and to pay
for garbage collection. In fact, it has not denied that its revenue collection
in 2012 is in the sum of P13.69 billion.
Moreover, the imposition of the SHT and the garbage fee cannot be
justified by the Quezon City Government as an exercise of its power to
create sources of income under Section 5, Article X of the 1987
Constitution.47 According to petitioner, the constitutional provision is not a
carte blanche for the LGU to tax everything under its territorial and political
jurisdiction as the provision itself admits of guidelines and limitations.
Petitioner further claims that the annual property tax is an ad valorem tax,
a percentage of the assessed value of the property, which is subject to
revision every three (3) years in order to reflect an increase in the market
value of the property. The SHT and the garbage fee are actually increases
in the property tax which are not based on the assessed value of the
property or its reassessment every three years; hence, in violation of
Sections 232 and 233 of the LGC.48
For their part, respondents relied on the presumption in favor of the
constitutionality of Ordinance Nos. SP-2095 and SP-2235, invoking Victorias
Milling Co., Inc. v. Municipality of Victorias, etc., 49 People v. Siton, et
al.,50 and Hon. Ermita v. Hon. Aldecoa-Delorino . 51 They argue that the
burden of establishing the invalidity of an ordinance rests heavily upon the
party challenging its constitutionality. They insist that the questioned
ordinances are proper exercises of police power similar to Telecom. &
Broadcast Attys. of the Phils., Inc. v. COMELEC52 and Social Justice Society
(SJS), et al. v. Hon. Atienza, Jr.53 and that their enactment finds basis in the
social justice principle enshrined in Section 9, 54 Article II of the 1987

Constitution.
As to the issue of publication, respondents argue that where the law
provides for its own effectivity, publication in the Official Gazette is not
necessary so long as it is not punitive in character, citing Balbuna, et al. v.
Hon. Secretary of Education, et al. 55 and Askay v. Cosalan .[56]] Thus,
Ordinance No. SP-2095 took effect after its publication, while Ordinance No.
SP-2235 became effective after its approval on December 26, 2013.
Additionally, the parties articulate the following positions:
On the Socialized Housing Tax
Respondents emphasize that the SHT is pursuant to the social justice
principle found in Sections 1 and 2, Article XIII 57 of the 1987 Constitution
and Sections 2 (a)58 and 4359 of R.A. No. 7279, or the "Urban Development
and Housing Act of 1992 ( UDHA ).
Relying on Manila Race Horse Trainers Assn., Inc. v. De La Fuente, 60and
Victorias Milling Co., Inc. v. Municipality of Victorias, etc., 61respondents
assert that Ordinance No. SP-2095 applies equally to all real property
owners without discrimination. There is no way that the ordinance could
violate the equal protection clause because real property owners and
informal settlers do not belong to the same class.
Ordinance No. SP-2095 is also not oppressive since the tax rate being
imposed is consistent with the UDHA. While the law authorizes LGUs to
collect SHT on properties with an assessed value of more than P50,000.00,
the questioned ordinance only covers properties with an assessed value
exceeding P100,000.00. As well, the ordinance provides for a tax credit
equivalent to the total amount of the special assessment paid by the
property owner beginning in the sixth (6th) year of the effectivity of the
ordinance.
On the contrary, petitioner claims that the collection of the SHT is
tantamount to a penalty imposed on real property owners due to the
failure of respondent Quezon City Mayor and Council to perform their duty
to secure and protect real property owners from informal settlers, thereby
burdening them with the expenses to provide funds for housing. For
petitioner, the SHT cannot be viewed as a "charity" from real property
owners since it is forced, not voluntary.
Also, petitioner argues that the collection of the SHT is a kind of class
legislation that violates the right of property owners to equal protection of
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the laws since it favors informal settlers who occupy property not their own
and pay no taxes over law-abiding real property owners w ho pay income
and realty taxes.
based on its assessed value, while the garbage fee is required on the
domestic household. The only reference to the property is the
determination of the applicable rate and the facility of collection.
Petitioner further contends that respondents characterization of the SHT

as "nothing more than an advance payment on the real property tax" has
no statutory basis. Allegedly, property tax cannot be collected before it is
due because, under the LGC, chartered cities are authorized to impose
property tax based on the assessed value and the general revision of
assessment that is made every three (3) years.
Petitioner argues, however, that Ordinance No. S-2235 cannot be justified

as an exercise of police power. The cases of Calalang v.
Williams,65 Patalinghug v. Court of Appeals,66 and Social Justice Society
(SJS), et al. v. Hon. Atienza, Jr.,67 which were cited by respondents, are
inapplicable since the assailed ordinance is a revenue measure and does
not regulate the disposal or other aspect of garbage.
As to the rationale of SHT stated in Ordinance No. SP-2095, which, in turn,

was based on Section 43 of the UDHA, petitioner asserts that there is no
specific provision in the 1987 Constitution stating that the ownership and
enjoyment of property bear a social function. And even if there is, it is
seriously doubtful and far-fetched that the principle means that property
owners should provide funds for the housing of informal settlers and for
home site development. Social justice and police power, petitioner
believes, does not mean imposing a tax on one, or that one has to give up
something, for the benefit of another. At best, the principle that property
ownership and enjoyment bear a social function is but a reiteration of the
Civil Law principle that property should not be enjoyed and abused to the
injury of other properties and the community, and that the use of the
property may be restricted by police power, the exercise of which is not
involved in this case.
The subject ordinance, for petitioner, is discriminatory as it collects

garbage fee only from domestic households and not from restaurants, food
courts, fast food chains, and other commercial dining places that spew
garbage much more than residential property owners.
Finally, petitioner alleges that 6 Bistekvilles will be constructed out of the

SHT collected. Bistek is the monicker of respondent City Mayor. The
Bistekvilles makes it clear, therefore, that politicians will take the credit for
the tax imposed on real property owners.
On the Garbage Fee
Respondents claim that Ordinance No. S-2235, which is an exercise of
police power, collects on the average from every household a garbage fee
in the meager amount of thirty-three (33) centavos per day compared with
the sum of P1,659.83 that the Quezon City Government annually spends
for every household for garbage collection and waste management. 62
In addition, there is no double taxation because the ordinance involves a
fee. Even assuming that the garbage fee is a tax, the same cannot be a
direct duplicate tax as it is imposed on a different subject matter and is of
a different kind or character. Based on Villanueva, et al. v. City of
Iloilo63 and Victorias Milling Co., Inc. v. Municipality of Victorias, etc., 64 there
is no "taxing twice" because the real property tax is imposed on ownership
Petitioner likewise contends that the imposition of garbage fee is

tantamount to double taxation because garbage collection is a basic and
essential public service that should be paid out from property tax, business
tax, transfer tax, amusement tax, community tax certificate, other taxes,
and the IRA of the Quezon City Government. To bolster the claim, he states
that the revenue collection of the Quezon City Government reached
Php13.69 billion in 2012. A small portion of said amount could be spent for
garbage collection and other essential services.
It is further noted that the Quezon City Government already collects
garbage fee under Section 47 68 of R.A. No. 9003, or the Ecological Solid
Waste Management Act of 2000, which authorizes LGUs to impose fees in
amounts sufficient to pay the costs of preparing, adopting, and
implementing a solid waste management plan, and that LGUs have access
to the Solid Waste Management (SWM) Fund created under Section 46 69 of
the same law. Also, according to petitioner, it is evident that Ordinance No.
S2235 is inconsistent with R.A. No. 9003 for whil e the law encourages
segregation, composting, and recycling of waste, the ordinance only
emphasizes the collection and payment of garbage fee; while the law calls
for an active involvement of the barangay in the collection, segregation,
and recycling of garbage, the ordinance skips such mandate. Lastly, in
challenging the ordinance, petitioner avers that the garbage fee was
collected even if the required publication of its approval had not yet
elapsed. He notes that on January 7, 2014, he paid his realty tax which
already included the garbage fee.
The Court's Ruling
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Respondents correctly argued that an ordinance, as in every law, is
presumed valid.
An ordinance carries with it the presumption of validity. The question of
reasonableness though is open to judicial inquiry. Much should be left thus
to the discretion of municipal authorities. Courts will go slow in writing off
an ordinance as unreasonable unless the amount is so excessive as to be
prohibitive, arbitrary, unreasonable, oppressive, or confiscatory. A rule
which has gained acceptance is that factors relevant to such an inquiry are
the municipal conditions as a whole and the nature of the business made
subject to imposition.70
For an ordinance to be valid though, it must not only be within the
corporate powers of the LGU to enact and must be passed according to the
procedure prescribed by law, it should also conform to the following
requirements: (1) not contrary to the Constitution or any statute; (2) not
unfair or oppressive; (3) not partial or discriminatory; (4) not prohibit but
may regulate trade; (5) general and consistent with public policy; and (6)
not unreasonable.71 As jurisprudence indicates, the tests are divided into
the formal (i.e., whether the ordinance was enacted within the corporate
powers of the LGU and whether it was passed in accordance with the
procedure prescribed by law), and the substantive ( i.e., involving inherent
merit, like the conformity of the ordinance with the limitations under the
Constitution and the statutes, as well as with the requirements of fairness
and reason, and its consistency with public policy). 72
An ordinance must pass muster under the test of constitutionality and the
test of consistency with the prevailing laws.73 If not, it is void.74
Ordinance should uphold the principle of the supremacy
Constitution.75 As to conformity with existing statutes,
of
the
The rationale of the requirement that the ordinances should not contravene
a statute is obvious. Municipal governments are only agents of the national
government. Local councils exercise only delegated legislative powers
conferred on them by Congress as the national lawmaking body. The
delegate cannot be superior to the principal or exercise powers higher than
those of the latter. It is a heresy to suggest that the local government units
can undo the acts of Congress, from which they have derived their power
in the first place, and negate by mere ordinance the mandate of the
statute.
Municipal corporations owe their origin to, and derive their powers and
rights wholly from the legislature. It breathes into them the breath of life,
without which they cannot exist. As it creates, so it may destroy. As it may
destroy, it may abridge and control. Unless there is some constitutional
limitation on the right, the legislature might, by a single act, and if we can
suppose it capable of so great a folly and so great a wrong, sweep from
existence all of the municipal corporations in the State, and the corporation
could not prevent it. We know of no limitation on the right so far as to the
corporation themselves are concerned. They are so to phrase it, the mere
tenants at will of the legislature.
This basic relationship between the national legislature and the local
government units has not been enfeebled by the new provisions in the
Constitution strengthening the policy of local autonomy. Without meaning
to detract from that policy, we here confirm that Congress retains control
of the local government units although in significantly reduced degree now
than under our previous Constitutions. The power to create still includes
the power to destroy. The power to grant still includes the power to
withhold or recall. True, there are certain notable innovations in the
Constitution, like the direct conferment on the local government units of
the power to tax, which cannot now be withdrawn by mere statute. By and
large, however, the national legislature is still the principal of the local
government units, which cannot defy its will or modify or violate it. 77
Batangas CATV, Inc. v. Court of Appeals76 has this to say:

It is a fundamental principle that municipal ordinances are inferior in status
and subordinate to the laws of the state. An ordinance in conflict with a
state law of general character and statewide application is universally held
to be invalid. The principle is frequently expressed in the declaration that
municipal authorities, under a general grant of power, cannot adopt
ordinances which infringe the spirit of a state law or repugnant to the
general policy of the state. In every power to pass ordinances given to a
municipality, there is an implied restriction that the ordinances shall be
consistent with the general law. In the language of Justice Isagani Cruz
(ret.), this Court, in Magtajas vs. Pryce Properties Corp., Inc., ruled that:
LGUs must be reminded that they merely form part of the whole; that the
policy of ensuring the autonomy of local governments was never intended
by the drafters of the 1987 Constitution to create an imperium in imperio
and install an intra-sovereign political subdivision independent of a single
sovereign state.78
"[M]unicipal corporations are bodies politic and corporate, created not only
as local units of local self-government, but as governmental agencies of
the state. The legislature, by establishing a municipal corporation, does not
divest the State of any of its sovereignty; absolve itself from its right and
duty to administer the public affairs of the entire state; or divest itself of
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any power over the inhabitants of the district which it possesses before the
charter was granted."79
LGUs are able to legislate only by virtue of a valid delegation of legislative
power from the national legislature; they are mere agents vested with what
is called the power of subordinate legislation. 80 "Congress enacted the LGC
as the implementing law for the delegation to the various LGUs of the
States great powers, namely: the police power, the power of eminent
domain, and the power of taxation. The LGC was fashioned to delineate the
specific parameters and limitations to be complied with by each LGU in the
exercise of these delegated powers with the view of making each LGU a
fully functioning subdivision of the State subject to the constitutional and
statutory limitations."81
Specifically, with regard to the power of taxation, it is indubitably the most
effective instrument to raise needed revenues in financing and supporting
myriad activities of the LGUs for the delivery of basic services essential to
the promotion of the general welfare and the enhancement of peace,
progress, and prosperity of the people. 82 As this Court opined in National
Power Corp. v. City of Cabanatuan:83
In recent years, the increasing social challenges of the times expanded the
scope of state activity, and taxation has become a tool to realize social
justice and the equitable distribution of wealth, economic progress and the
protection of local industries as well as public welfare and similar
objectives. Taxation assume s even greater significance with the
ratification of the 1987 Constitution. Thenceforth, the power to tax is no
longer vested exclusively on Congress; local legislative bodies are now
given direct authority to levy taxes, fees and other charges pursuant to
Article X, Section 5 of the 1987 Constitution, viz: "Section 5. Each Local
Government unit shall have the power to create its own sources of
revenue, to levy taxes, fees and charges subject to such guidelines and
limitations as the Congress may provide, consistent with the basic policy of
local autonomy. Such taxes, fees and charges shall accrue exclusively to
the local governments."
This paradigm shift results from the realization that genuine development
can be achieved only by strengthening local autonomy and promoting
decentralization of governance. For a long time, the countrys highly
centralized government structure has bred a culture of dependence among
local government leaders upon the national leadership. It has also
"dampened the spirit of initiative, innovation and imaginative resilience in
matters of local development on the part of local government leaders." The
only way to shatter this culture of dependence is to give the LGUs a wider
role in the delivery of basic services, and confer them sufficient powers to
generate their own sources for the purpose. To achieve this goal, Section 3
of Article X of the 1987 Constitution mandates Congress to enact a local

government code that will, consistent with the basic policy of local
autonomy , set the guidelines and limitations to this grant of taxing powers
x x x84
Fairly recently, We also stated in Pelizloy Realty Corporation v. Province of
Benguet85 that:
The rule governing the taxing power of provinces, cities, municipalities and
barangays is summarized in Icard v. City Council of Baguio :
It is settled that a municipal corporation unlike a sovereign state is clothed
with no inherent power of taxation. The charter or statute must plainly
show an intent to confer that power or the municipality, cannot assume it.
And the power when granted is to be construed in strictissimi juris . Any
doubt or ambiguity arising out of the term used in granting that power
must be resolved against the municipality. Inferences, implications,
deductions all these have no place in the interpretation of the taxing
power of a municipal corporation. [Underscoring supplied]
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Per Section 5, Article X of the 1987 Constitution, "the power to tax is no
longer vested exclusively on Congress; local legislative bodies are now
given direct authority to levy taxes, fees and other charges." Nevertheless,
such authority is "subject to such guidelines and limitations as the
Congress may provide."
In conformity with Section 3, Article X of the 1987 Constitution, Congress
enacted Republic Act No. 7160, otherwise known as the Local Government
Code of 1991. Book II of the LGC governs local taxation and fiscal
matters.86
Indeed, LGUs have no inherent power to tax except to the extent that such
power might be delegated to them either by the basic law or by the
statute.87 "Under the now prevailing Constitution , where there is neither a
grant nor a prohibition by statute , the tax power must be deemed to exist
although Congress may provide statutory limitations and guidelines. The
basic rationale for the current rule is to safeguard the viability and selfsufficiency of local government units by directly granting them general and
broad tax powers. Nevertheless, the fundamental law did not intend the
delegation to be absolute and unconditional; the constitutional objective
obviously is to ensure that, while the local government units are being
strengthened and made more autonomous , the legislature must still see to
it that (a) the taxpayer will not be over-burdened or saddled with multiple
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and unreasonable impositions; (b) each local government unit will have its
fair share of available resources; (c) the resources of the national
government will not be unduly disturbed; and (d) local taxation will be fair,
uniform, and just."88
Subject to the provisions of the LGC and consistent with the basic policy of
local autonomy, every LGU is now empowered and authorized to create its
own sources of revenue and to levy taxes, fees, and charges which shall
accrue exclusively to the local government unit as well as to apply its
resources and assets for productive, developmental, or welfare purposes,
in the exercise or furtherance of their governmental or proprietary powers
and functions.89 The relevant provisions of the LGC which establish the
parameters of the taxing power of the LGUs are as follows:
SECTION 130. Fundamental Principles. The following fundamental
principles shall govern th e exercise of the taxing and other revenue-raising
powers of local government units:
(a) Taxation shall be uniform in each local government unit;
(b) Taxes, fees, charges and other impositions shall:
(1) be equitable and based as far as practicable on the
taxpayers ability to pay;
(2) be levied and collected only for public purposes;
(3) not be unjust, excessive, oppressive, or confiscatory;
(4) not be contrary to law, public policy, national economic
policy, or in restraint of trade;
(c) The collection of local taxes, fees, charges and other
impositions shall in no case be left to any private person;
(d) The revenue collected pursuant to the provisions of this Code
shall inure solely to the benefit of, and be subject to the
disposition by, the local government unit levying the tax, fee,
charge or other imposition unless otherwise specifically
provided herein; and,
(e) Each local government unit shall, as far as practicable, evolve
a progressive system of taxation.
SECTION 133. Common Limitations on the Taxing Powers of Local
Government Units. Unless otherwise provided herein, the exercise of the
taxing powers of provinces, cities, municipalities, and barangays shall not
extend to the levy of the following:
(a) Income tax, except when levied on banks and other financial
institutions;
(b) Documentary stamp tax;
(c) Taxes on estates, inheritance, gifts, legacies and other
acquisitions mortis causa, except as otherwise provided herein;
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(d) Customs duties, registration fees of vessel and wharage on
wharves, tonnage dues, and all other kinds of customs fees,
charges and dues except wharfage on wharves constructed
and maintained by the local government unit concerned;
(e) Taxes, fees, and charges and other impositions upon goods
carried into or out of, or passing through, the territorial
jurisdictions of local government units in the guise of charges
for wharfage, tolls for bridges or otherwise, or other taxes,
fees, or charges in any form whatsoever upon such goods or
merchandise;
(f) Taxes, fees or charges on agricultural and aquatic products
when sold by marginal farmers or fishermen;
(g) Taxes on business enterprises certified to by the Board of
Investments as pioneer or non-pioneer for a period of six (6)
and four (4) years, respectively from the date of registration;
(h) Excise taxes on articles enumerated under the National
Internal Revenue Code, as amended, and taxes, fees or
charges on petroleum products;
(i) Percentage or value-added tax (VAT) on sales, barters or
exchanges or similar transactions on goods or services except
as otherwise provided herein;
(j) Taxes on the gross receipts of transportation contractors and
persons engaged in the transportation of passengers or freight
by hire and common carriers by air, land or water, except as
provided in this Code;
(k) Taxes on premiums paid by way of reinsurance or retrocession;
(l) Taxes, fees or charges for the registration of motor vehicles
and for the issuance of all kinds of licenses or permits for the
driving thereof, except tricycles;
(m) Taxes, fees, or other charges on Philippine products actually
exported, except as otherwise provided herein;
(n) Taxes, fees, or charges, on Countryside and Barangay Business
Enterprises and cooperatives duly registered under R.A. No.
6810 and Republic Act Numbered Sixty-nine hundred thirtyeight (R.A. No. 6938) otherwise known as the "Cooperative
Code of the Philippines" respectively; and
(o) Taxes, fees or charges of any kind on the National Government,
its agencies and instrumentalities, and local government units.
SECTION 151. Scope of Taxing Powers. Except as otherwise provided in
this Code, the city, may levy the taxes, fees, and charges which the
province or municipality may impose: Provided, however, That the taxes,
fees and charges levied and collected by highly urbanized and independent
component cities shall accrue to them and distributed in accordance with
the provisions of this Code.
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The rates of taxes that the city may levy may exceed the maximum rates
allowed for the province or municipality by not more than fifty percent
(50%) except the rates of professional and amusement taxes.
SECTION 186. Power to Levy Other Taxes, Fees or Charges. Local
government units may exercise the power to levy taxes, fees or charges on
any base or subject not otherwise specifically enumerated herein or taxed
under the provisions of the National Internal Revenue Code, as amended,
or other applicable laws: Provided, That the taxes, fees, or charges shall
not be unjust, excessive, oppressive, confiscatory or contrary to declared
national policy: Provided, further, That the ordinance levying such taxes,
fees or charges shall not be enacted without any prior public hearing
conducted for the purpose.
On the Socialized Housing Tax
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Police power, which flows from the recognition that salus populi est
suprema lex (the welfare of the people is the supreme law), is the plenary
power vested in the legislature to make statutes and ordinances to
promote the health, morals, peace, education, good order or safety and
general welfare of the people.93 Property rights of individuals may be
subjected to restraints and burdens in order to fulfill the objectives of the
government in the exercise of police power. 94 In this jurisdiction, it is wellentrenched that taxation may be made the implement of the states police
power.95
Ordinance No. SP-2095 imposes a Socialized Housing Tax equivalent to
0.5% on the assessed value of land in excess of Php100,000.00. This
special assessment is the same tax referred to in R.A. No. 7279 or the
UDHA.96 The SHT is one of the sources of funds for urban development and
housing program.97 Section 43 of the law provides:
Contrary to petitioners submission, the 1987 Constitution explicitly

espouses the view that the use of property bears a social function and that
all economic agents shall contribute to the common good. 90 The Court
already recognized this in Social Justice Society (SJS), et al. v. Hon. Atienza,
Jr.:91
Sec. 43. Socialized Housing Tax . Consistent with the constitutional

principle that the ownership and enjoyment of property bear a social
function and to raise funds for the Program, all local government units are
hereby authorized to impose an additional one-half percent (0.5%) tax on
the assessed value of all lands in urban areas in excess of Fifty thousand
pesos (P50,000.00).
Property has not only an individual function, insofar as it has to provide for
the needs of the owner, but also a social function insofar as it has to
provide for the needs of the other members of society. The principle is this:
The rationale of the SHT is found in the preambular clauses of the subject
ordinance, to wit:
Police power proceeds from the principle that every holder of property,
however absolute and unqualified may be his title, holds it under the
implied liability that his use of it shall not be injurious to the equal
enjoyment of others having an equal right to the enjoyment of their
property, no r injurious to the right of the community. Rights of property,
like all other social and conventional rights, are subject to reasonable
limitations in their enjoyment as shall prevent them from being injurious,
and to such reasonable restraints and regulations established by law as the
legislature, under the governing an d controlling power vested in them by
the constitution, may think necessary and expedient.92
WHEREAS, the imposition of additional tax is intended to provide the City

Government with sufficient funds to initiate, implement and undertake
Socialized Housing Projects and other related preliminary activities;
WHEREAS, the imposition of 0.5% tax will benefit the Socialized Housing
Programs and Projects of the City Government, specifically the
marginalized sector through the acquisition of properties for human
settlements;
WHEREAS, the removal of the urban blight will definitely increase fair
market value of properties in the city[.]
The above-quoted are consistent with the UDHA, which the LGUs are
charged to implement in their respective localities in coordination with the
Housing and Urban Development Coordinating Council, the national
housing agencies, the Presidential Commission for the Urban Poor, the
private sector, and other non-government organizations. 98 It is the declared
policy of the State to undertake a comprehensive and continuing urban
development and housing program that shall, among others, uplift the
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conditions of the underprivileged and homeless citizens in urban areas and
in resettlement areas, and provide for the rational use and development of
urban land in order to bring a bout, among others, reduction in urban
dysfunctions, particularly those that adversely affect public health, safety
and ecology, and access to land and housing by the underprivileged and
homeless citizens.99 Urban renewal and resettlement shall include the
rehabilitation and development of blighted and slum areas 100 and the
resettlement of program beneficiaries in accordance with the provisions of
the UDHA.101 Under the UDHA, socialized housing102 shall be the primary
strategy in providing shelter for the underprivileged and homeless. 103 The
LGU or the NHA, in cooperation with the private developers and concerned
agencies, shall provide socialized housing or re settlement areas with basic
services and facilities such as potable water, power and electricity, and an
adequate power distribution system, sewerage facilities, and an efficient
and adequate solid waste disposal system; and access to primary roads
and transportation facilities.104 The provisions for health, education,
communications, security, recreation, relief and welfare shall also be
planned and be given priority for implementation by the LGU and
concerned agencies in cooperation with the private sector and the
beneficiaries themselves.105
Moreover, within two years from the effectivity of the UDHA, the LGUs, in
coordination with the NHA, are directed to implement the relocation and
resettlement of persons living in danger areas such as esteros , railroad
tracks, garbage dumps, riverbanks, shorelines, waterways, and other
public places like sidewalks, roads, parks, and playgrounds. 106 In
coordination with the NHA, the LG Us shall provide relocation or
resettlement sites with basic services and facilities and access to
employment and livelihood opportunities sufficient to meet the basic needs
of the affected families.107
Clearly, the SHT charged by the Quezon City Government is a tax which is
within its power to impose. Aside from the specific authority vested by
Section 43 of the UDHA, cities are allowed to exercise such other powers
and discharge such other functions and responsibilities as are necessary,
appropriate, or incidental to efficient and effective provision of the basic
services and facilities which include, among others, programs and projects
for low-cost housing and other mass dwellings. 108 The collections made
accrue to its socialized housing programs and projects.
The tax is not a pure exercise of taxing power or merely to raise revenue; it
is levied with a regulatory purpose. The levy is primarily in the exercise of
the police power for the general welfare of the entire city. It is greatly
imbued with public interest. Removing slum areas in Quezon City is not
only beneficial to the underprivileged and homeless constituents but
advantageous to the real property owners as well. The situation will
improve the value of the their property investments, fully enjoying the
same in view of an orderly, secure, and safe community, and will enhance
the quality of life of the poor, making them law-abiding constituents and
better consumers of business products.
Though broad and far-reaching, police power is subordinate to
constitutional limitations and is subject to the requirement that its exercise
must be reasonable and for the public good.109 In the words of City of
Manila v. Hon. Laguio, Jr.:110
The police power granted to local government units must always be
exercised with utmost observance of the rights of the people to due
process and equal protection of the law. Such power cannot be exercised
whimsically, arbitrarily or despotically as its exercise is subject to a
qualification, limitation or restriction demanded by the respect and regard
due to the prescription of the fundamental law, particularly those forming
part of the Bill of Rights. Individual rights, it bears emphasis, may be
adversely affected only to the extent that may fairly be required by the
legitimate demands of public interest or public welfare. Due process
requires the intrinsic validity of the law in interfering with the rights of the
person to his life, liberty and property.
xxxx
To successfully invoke the exercise of police power as the rationale for the
enactment of the Ordinance, and to free it from the imputation of
constitutional infirmity, not only must it appear that the interests of the
public generally, as distinguished from those of a particular class, require
an interference with private rights, but the means adopted must be
reasonably necessary for the accomplishment of the purpose and not
unduly oppressive upon individuals. It must be evident that no other
alternative for the accomplishment of the purpose less intrusive of private
rights can work. A reasonable relation must exist between the purposes of
the police measure and the means employed for its accomplishment, for
even under the guise of protecting the public interest, personal rights and
those pertaining to private property will not be permitted to be arbitrarily
invaded.
Lacking a concurrence of these two requisites, the police measure shall be
struck down as an arbitrary intrusion into private rights a violation of the
due process clause.111
As with the State, LGUs may be considered as having properly exercised
their police power only if there is a lawful subject and a lawful method or,
to be precise, if the following requisites are met: (1) the interests of the
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public generally, as distinguished from those of a particular class, require
its exercise and (2) the mean s employed are reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon
individuals.112
In this case, petitioner argues that the SHT is a penalty imposed on real
property owners because it burdens them with expenses to provide funds
for the housing of informal settlers, and that it is a class legislation since it
favors the latter who occupy properties which is not their own and pay no
taxes.
We disagree.
Equal protection requires that all persons or things similarly situated
should be treated alike, both as to rights conferred and responsibilities
imposed.113 The guarantee means that no person or class of persons shall
be denied the same protection of laws which is enjoyed by other persons or
other classes in like circumstances. 114 Similar subjects should not be
treated differently so as to give undue favor to some and unjustly
discriminate against others.115 The law may, therefore, treat and regulate
one class differently from another class provided there are real and
substantial differences to distinguish one class from another. 116
An ordinance based on reasonable classification does not violate the
constitutional guaranty of the equal protection of the law. The
requirements for a valid and reasonable classification are: (1) it must rest
on substantial distinctions; (2) it must be germane to the purpose of the
law; (3) it must not be limited to existing conditions only; and (4) it must
apply equally to all members of the same class. 117For the purpose of
undertaking a comprehensive and continuing urban development and
housing program, the disparities between a real property owner and an
informal settler as two distinct classes are too obvious and need not be
discussed at length. The differentiation conforms to the practical dictates
of justice and equity and is not discriminatory within the meaning of the
Constitution. Notably, the public purpose of a tax may legally exist even if
the motive which impelled the legislature to impose the tax was to favor
one over another.118 It is inherent in the power to tax that a State is free to
select the subjects of taxation. 119Inequities which result from a singling out
of one particular class for taxation or exemption infringe no constitutional
limitation.120
Further, the reasonableness of Ordinance No. SP-2095 cannot be disputed.
It is not confiscatory or oppressive since the tax being imposed therein is
below what the UDHA actually allows. As pointed out by respondents, while
the law authorizes LGUs to collect SHT on lands with an assessed value of
more than P50,000.00, the questioned ordinance only covers lands with an
assessed value exceeding P100,000.00. Even better, on certain conditions,

the ordinance grants a tax credit equivalent to the total amount of the
special assessment paid beginning in the sixth (6th) year of its effectivity.
Far from being obnoxious, the provisions of the subject ordinance are fair
and just.
On the Garbage Fee
In the United States of America, it has been held that the authority of a
municipality to regulate garbage falls within its police power to protect
public health, safety, and welfare.121 As opined, the purposes and policy
underpinnings of the police power to regulate the collection and disposal of
solid waste are: (1) to preserve and protect the public health and welfare
as well as the environment by minimizing or eliminating a source of
disease and preventing and abating nuisances; and (2) to defray costs and
ensure financial stability of the system for the benefit of the entire
community, with the sum of all charges marshalled and designed to pay for
the expense of a systemic refuse disposal scheme. 122
Ordinances regulating waste removal carry a strong presumption of
validity.123 Not surprisingly, the overwhelming majority of U.S. cases
addressing a city's authority to impose mandatory garbage service and
fees have upheld the ordinances against constitutional and statutory
challenges.124
A municipality has an affirmative duty to supervise and control the
collection of garbage within its corporate limits. 125The LGC specifically
assigns the responsibility of regulation and oversight of solid waste to local
governing bodies because the Legislature determined that such bodies
were in the best position to develop efficient waste management
programs.126 To impose on local governments the responsibility to regulate
solid waste but not grant them the authority necessary to fulfill the same
would lead to an absurd result."127 As held in one U.S. case:
x x x When a municipality has general authority to regulate a particular
subject matter, the manner and means of exercising those powers, where
not specifically prescribed by the legislature, are left to the discretion of
the municipal authorities. x x x Leaving the manner of exercising municipal
powers to the discretion of municipal authorities "implies a range of
reasonableness within which a municipality's exercise of discretion will not
be interfered with or upset by the judiciary."128
In this jurisdiction, pursuant to Section 16 of the LGC and in the proper
exercise of its corporate powers under Section 22 of the same, the
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Sangguniang Panlungsod of Quezon City, like other local legislative bodies,
is empowered to enact ordinances, approve resolutions, and appropriate
funds for the genera l welfare of the city and its inhabitants. 129Section 16 of
the LGC provides:
SECTION 16. General Welfare . Every local government unit shall exercise
the powers expressly granted, those necessarily implied therefrom, as well
as powers necessary, appropriate, or incidental for its efficient and
effective governance, and those which are essential to the promotion of
the general welfare. Within their respective territorial jurisdictions, local
government units shall ensure and support, among other things, the
preservation and enrichment of culture, promote health and safety,
enhance the right of the people to a balanced ecology, encourage and
support the development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance economic
prosperity and social justice, promote full employment among their
residents, maintain peace and order, and preserve the comfort and
convenience of their inhabitants.
The general welfare clause is the delegation in statutory form of the police
power of the State to LGUs. 130 The provisions related thereto are liberally
interpreted to give more powers to LGUs in accelerating economic
development and upgrading the quality of life for the people in the
community.131 Wide discretion is vested on the legislative authority to
determine not only what the interests of the public require but also what
measures are necessary for the protection of such interests since the
Sanggunian is in the best position to determine the needs of its
constituents.132
One of the operative principles of decentralization is that, subject to the
provisions of the LGC and national policies, the LGUs shall share with the
national government the responsibility in the management and
maintenance of ecological balance within their territorial jurisdiction. 133 In
this regard, cities are allowed to exercise such other powers and discharge
such other functions and responsibilities as are necessary, appropriate, or
incidental to efficient and effective provision of the basic services and
facilities which include, among others, solid waste disposal system or
environmental management system and services or facilities related to
general hygiene and sanitation.134R.A. No. 9003, or the Ecological Solid
Waste Management Act of 2000,135 affirms this authority as it expresses
that the LGUs shall be primarily responsible for the implementation and
enforcement of its provisions within their respective jurisdictions while
establishing a cooperative effort among the national government, other
local government units, non-government organizations, and the private
sector.136
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Necessarily, LGUs are statutorily sanctioned to impose and collect such
reasonable fees and charges for services rendered. 137 "Charges" refer to
pecuniary liability, as rents or fees against persons or property, while "Fee"
means a charge fixed by law or ordinance for the regulation or inspection
of a business or activity.138
The fee imposed for garbage collections under Ordinance No. SP-2235 is a
charge fixed for the regulation of an activity. The basis for this could be
discerned from the foreword of said Ordinance, to wit:
WHEREAS, Quezon City being the largest and premiere city in the
Philippines in terms of population and urban geographical areas, apart
from being competent and efficient in the delivery of public service,
apparently requires a big budgetary allocation in order to address the
problems relative and connected to the prompt and efficient delivery of
basic services such as the effective system of waste management, public
information programs on proper garb age and proper waste disposal,
including the imposition of waste regulatory measures;
WHEREAS, to help augment the funds to be spent for the citys waste
management system, the City Government through the Sangguniang
Panlungsod deems it necessary to impose a schedule of reasonable fees or
charges for the garbage collection services for residential (domestic
household) that it renders to the public.
Certainly, as opposed to petitioners opinion, the garbage fee is not a tax.
In Smart Communications, Inc. v. Municipality of Malvar, Batangas , 139the
Court had the occasion to distinguish these two concepts:
In Progressive Development Corporation v. Quezon City, the Court declared
that "if the generating of revenue is the primary purpose and regulation is
merely incidental, the imposition is a tax; but if regulation is the primary
purpose, the fact that incidentally revenue is also obtained does not make
the imposition a tax."
In Victorias Milling Co., Inc. v. Municipality of Victorias, the Court reiterated
that the purpose and effect of the imposition determine whether it is a tax
or a fee, and that the lack of any standards for such imposition gives the
presumption that the same is a tax.
We accordingly say that the designation given by the municipal authorities
does not decide whether the imposition is properly a license tax or a
license fee.1awp++i1 The determining factors are the purpose and effect
of the imposition as may be apparent from the provisions of the ordinance.
Thus, "[w]hen no police inspection, supervision, or regulation is provided,
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nor any standard set for the applicant to establish, or that he agrees to
attain or maintain, but any and all persons engaged in the business
designated, without qualification or hindrance, may come, and a license on
payment of the stipulated sum will issue, to do business, subject to no
prescribed rule of conduct and under no guardian eye, but according to the
unrestrained judgment or fancy of the applicant and licensee, the
presumption is strong that the power of taxation, and not the police power,
is being exercised."
In Georgia, U.S.A., assessments for garbage collection services have been
consistently treated as a fee and not a tax.140
In another U.S. case,141 the garbage fee was considered as a "service
charge" rather than a tax as it was actually a fee for a service given by the
city which had previously been provided at no cost to its citizens.
Hence, not being a tax, the contention that the garbage fee under
Ordinance No. SP-2235 violates the rule on double taxation 142 must
necessarily fail.
Nonetheless, although a special charge, tax, or assessment may be
imposed by a municipal corporation, it must be reasonably commensurate
to the cost of providing the garbage service. 143 To pass judicial scrutiny, a
regulatory fee must not produce revenue in excess of the cost of the
regulation because such fee will be construed as an illegal tax when the
revenue generated by the regulation exceeds the cost of the regulation. 144
Petitioner argues that the Quezon City Government already collects
garbage fee under Section 47 of R.A. No. 9003, which authorizes LGUs to
impose fees in amounts sufficient to pay the costs of preparing, adopting,
and implementing a solid waste management plan, and that it has access
to the SWM Fund under Section 46 of the same law. Moreover, Ordinance
No. S-2235 is inconsistent with R.A. No. 9003, because the ordinance
emphasizes the collection and payment of garbage fee with no concern for
segregation, composting and recycling of wastes. It also skips the mandate
of the law calling for the active involvement of the barangay in the
collection, segregation, and recycling of garbage.
in ecological waste management.145 The law provides that segregation and

collection of solid waste shall be conducted at the barangay level,
specifically for biodegradable, compostable and reusable wastes, while the
collection of non-recyclable materials and special wastes shall be the
responsibility of the municipality or city. 146Mandatory segregation of solid
wastes shall primarily be conducted at the source, to include household,
institutional, industrial, commercial and agricultural sources. 147 Segregation
at source refers to a solid waste management practice of separating, at the
point of origin, different materials found in soli d waste in order to promote
recycling and re-use of resources and to reduce the volume of waste for
collection and disposal.148 Based on Rule XVII of the Department of
Environment and Natural Resources (DENR) Administrative Order No. 200134, Series of 2001,149which is the Implementing Rules and Regulations ( IRR
) of R.A. No. 9003, barangays shall be responsible for the collection,
segregation, and recycling of biodegradable, recyclable , compostable and
reusable wastes.150
For the purpose, a Materials Recovery Facility (MRF), which shall receive
biodegradable wastes for composting and mixed non-biodegradable wastes
for final segregation, re-use and recycling, is to be established in every
barangay or cluster of barangays.151
According to R.A. 9003, an LGU, through its local solid waste management
board, is mandated by law to prepare a 10-year solid waste management
plan
consistent
with
the
National
Solid
Waste
Management
Framework.152 The plan shall be for the re-use, recycling and composting of
wastes generated in its jurisdiction; ensure the efficient management of
solid waste generated within its jurisdiction; and place primary emphasis
on implementation of all feasible re-use, recycling, and composting
programs while identifying the amount of landfill and transformation
capacity that will be needed for solid waste which cannot be re-used,
recycled, or composted.153 One of the components of the so lid waste
management plan is source reduction:
(e) Source reduction The source reduction component shall include a
program and implementation schedule which shows the methods by which
the LGU will, in combination with the recycling and composting
components, reduce a sufficient amount of solid waste disposed of in
accordance with the diversion requirements of Section 20.
We now turn to the pertinent provisions of R.A. No. 9003.

The source reduction component shall describe the following:
Under R.A. No. 9003, it is the declared policy of the State to adopt a
systematic, comprehensive and ecological solid waste management
program which shall, among others, ensure the proper segregation,
collection, transport, storage, treatment and disposal of solid waste
through the formulation and adoption of the best environmental practices
(1) strategies in reducing the volume of solid waste generated at

source;
(2) measures for implementing such strategies and the resources
necessary to carry out such activities;
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(3) other appropriate waste reduction technologies that may also be
considered, provide d that such technologies conform with the
standards set pursuant to this Act;
(4) the types of wastes to be reduced pursuant to Section 15 of this
Act;
(5) the methods that the LGU will use to determine the categories of
solid wastes to be diverted from disposal at a disposal facility
through re-use , recycling and composting; and
(6) new facilities and of expansion of existing facilities which will be
needed to implement re-use, recycling and composting.
SEC. 47. Authority to Collect Solid Waste Management Fees The local
government unit shall impose fees in amounts sufficient to pay the costs of
preparing, adopting, and implementing a solid waste management plan
prepared pursuant to this Act. The fees shall be based on the following
minimum factors:
The LGU source reduction component shall include the evaluation and
identification of rate structures and fees for the purpose of reducing the
amount of waste generated, and other source reduction strategies,
including but not limited to, program s and economic incentives provided
under Sec. 45 of this Act to reduce the use of non-recyclable materials,
replace disposable materials and products with reusable materials and
products, reduce packaging, and increase the efficiency of the use of
paper, cardboard, glass, metal, and other materials. The waste reduction
activities of the community shall al so take into account, among others,
local capability, economic viability, technical requirements, social
concerns, disposition of residual waste and environmental impact: Provided
, That, projection of future facilities needed and estimated cost shall be
incorporated in the plan. x x x154
The fees shall be used to pay the actual costs incurred by the LGU in
collecting the local fees. In determining the amounts of the fees, an LGU
shall include only those costs directly related to the adoption and
implementation of the plan and the setting and collection of the local fees.
The solid waste management pl an shall also include an implementation

schedule for solid waste diversion:
SEC. 20. Establishing Mandatory Solid Waste Diversion. Each LGU plan
shall include an implementation schedule which shows that within five (5)
years after the effectivity of this Act, the LGU shall divert at least 25% of all
solid waste from waste disposal facilities through re-use, recycling, and
composting activities and other resource recovery activities: Provided ,
That the waste diversion goals shall be increased every three (3) years
thereafter: Provided , further, That nothing in this Section prohibits a local
government unit from implementing re-use, recycling, and composting
activities designed to exceed the goal.
The baseline for the twenty-five percent (25%) shall be derived from the
waste characterization result155 that each LGU is mandated to
undertake.156In accordance with Section 46 of R.A. No. 9003, the LGUs are
entitled to avail of the SWM Fund on the basis of their approved solid waste
management plan. Aside from this, they may also impose SWM Fees under
Section 47 of the law, which states:
(a) types of solid waste;

(b) amount/volume of waste; and
(c) distance of the transfer station to the waste management
facility.
Rule XVII of the IRR of R.A. No. 9003 sets forth the details:
Section 1. Power to Collect Solid Waste Management Fees . The Local
SWM Board/Local SWM Cluster Board shall impose fees on the SWM
services provided for by the LGU and/or any authorized organization or
unit. In determining the amounts of the fees, a Local SWM Board/Local
SWM Cluster Board shall include only those costs directly related to the
adoption and implementation of the SWM Plan and the setting and
collection of the local fees. This power to impose fees may be ceded to the
private sector and civil society groups which have been duly accredited by
the Local SWM Boar d/Local SWM Cluster Board; provided, the SWM fees
shall be covered by a Contract or Memorandum of Agreement between the
respective boa rd and the private sector or civil society group.
The fees shall pay for the costs of preparing, adopting and implementing a
SWM Plan prepared pursuant to the Act. Further, the fees shall also be used
to pay the actual costs incurred in collecting the local fees and for project
sustainability.
Section 2. Basis of SWM Service Fees
Reasonable SWM service fees shall be computed based on but not limited
to the following minimum factors:
a) Types of solid waste to include special waste
b) amount/volume of waste
c) distance of the transfer station to the waste management
facility
d) capacity or type of LGU constituency
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e) cost of construction
f) cost of management
g) type of technology
Section 3. Collection of Fees. Fees may be collected corresponding to the
following levels:
a) Barangay The Barangay may impose fees for collection and
segregation of biodegradable, compostable and reusable
wastes from households, commerce, other sources of domestic
wastes, and for the use of Barangay MRFs. The computation of
the fees shall be established by the respective SWM boards.
The manner of collection of the fees shall be dependent on the
style of administration of respective Barangay Councils.
However, all transactions shall follow the Commission on Audit
rules on collection of fees.
b) Municipality The municipal and city councils may impose fees
on the barangay MRFs for the collection and transport of nonrecyclable and special wastes and for the disposal of these into
the sanitary landfill. The level and procedure for exacting fees
shall be defined by the Local SWM Board/Local SWM Cluster
Board and supported by LGU ordinances; however, payments
shall be consistent with the accounting system of government.
c) Private Sector/Civil Society Group On the basis of the
stipulations of contract or Memorandum of Agreement, the
private sector or civil society group shall impose fees for
collection, transport and tipping in their SLFs. Receipts and
invoices shall be issued to the paying public or to the
government.
Quezon City, which purportedly stands at 0.66 kilogram per day, and the
increasing
trend
of
waste
generation
for
the
past
three
years.157 Respondents
did not elaborate any further. The figure presented does not reflect the
specific types of wastes generated whether residential, market,
commercial, industrial, construction/demolition, street waste, agricultural,
agro-industrial, institutional, etc. It is reasonable, therefore, for the Court to
presume that such amount pertains to the totality of wastes, without any
distinction, generated by Quezon City constituents. To reiterate, however,
the authority of a municipality or city to impose fees extends only to those
related to the collection and transport of non-recyclable and special
wastes.
Granting, for the sake of argument, that the 0.66 kilogram of solid waste
per day refers only to non-recyclable and special wastes, still, We cannot
sustain the validity of Ordinance No. S-2235. It violates the equal
protection clause of the Constitution and the provisions of the LGC that an
ordinance must be equitable and based as far as practicable on the
taxpayers ability to pay, and not unjust, excessive, oppressive,
confiscatory.158
In the subject ordinance, the rates of the imposable fee depend on land or
floor area and whether the payee is an occupant of a lot, condominium,
social housing project or apartment. For easy reference, the relevant
provision is again quoted below:
On all domestic households in Quezon City;
From the afore-quoted provisions, it is clear that the authority of a

municipality or city to impose fees is limited to the collection and transport
of non-recyclable and special wastes and for the disposal of these into the
sanitary landfill. Barangays, on the other hand, have the authority to
impose fees for the collection and segregation of biodegradable,
compostable and reusable wastes from households, commerce, other
sources of domestic wastes, and for the use of barangay MRFs. This is but
consistent with
Section 10 of R.A. No. 9003 directing that segregation and collection of
biodegradable, compostable and reusable wastes shall be conducted at the
barangay level, while the collection of non-recyclable materials and special
wastes shall be the responsibility of the municipality or city.
On all condominium unit and socialized housing projects/units in Quezon

City;
In this case, the alleged bases of Ordinance No. S-2235 in imposing the
garbage fee is the volume of waste currently generated by each person in
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On high-rise Condominium Units

a) High-rise Condominium The Homeowners Association of high
rise condominiums shall pay the annual garbage fee on the total
size of the entire condominium and socialized Housing Unit and an
additional garbage fee shall be collected based on area occupied
for every unit already so ld or being amortized.
b) High-rise apartment units Owners of high-rise apartment units
shall pay the annual garbage fee on the total lot size of the entire
apartment and an additional garbage fee based on the schedule
prescribed herein for every unit occupied.
For the purpose of garbage collection, there is, in fact, no substantial
distinction between an occupant of a lot, on one hand, and an occupant of
a unit in a condominium, socialized housing project or apartment, on the
other hand. Most likely, garbage output produced by these types of
occupants is uniform and does not vary to a large degree; thus, a similar
schedule of fee is both just and equitable.159
The rates being charged by the ordinance are unjust and inequitable: a
resident of a 200 sq. m. unit in a condominium or socialized housing
project has to pay twice the amount than a resident of a lot similar in size;
unlike unit occupants, all occupants of a lot with an area of 200 sq. m. and
less have to pay a fixed rate of Php100.00; and the same amount of
garbage fee is imposed regardless of whether the resident is from a
condominium or from a socialized housing project.
Indeed, the classifications under Ordinance No. S-2235 are not germane to
its declared purpose of "promoting shared responsibility with the residents
to attack their common mindless attitude in over-consuming the present
resources and in generating waste."160 Instead of simplistically categorizing
the payee into land or floor occupant of a lot or unit of a condominium,
socialized housing project or apartment, respondent City Council should
have considered factors that could truly measure the amount of wastes
1st
generated and the appropriate fee for its collection. Factors include, among
others, household age and size, accessibility to waste collection,
population density of the barangay or district, capacity to pay, and actual
occupancy of the property. R.A. No. 9003 may also be looked into for
guidance. Under said law, WM service fees may be computed based on
minimum factors such as type s of solid waste to include special waste,
amount/volume of waste, distance of the transfer station to the waste
management facility, capacity or type of LGU constituency, cost of
construction, cost of management, and type of technology. With respect to
utility rates set by municipalities, a municipality has the right to classify
consumers under reasonable classifications based upon factors such as the
cost of service, the purpose for which the service or the product is
received, the quantity or the amount received, the different character of
the service furnished, the time of its use or any other matter which
presents a substantial difference as a ground of distinction. 161[A] lack of
uniformity in the rate charged is not necessarily unlawful discrimination.
The establishment of classifications and the charging of different rates for
the several classes is not unreasonable and does not violate the
requirements of equality and uniformity. Discrimination to be unlawful must
draw an unfair line or strike an unfair balance between those in like
circumstances having equal rights and privileges. Discrimination with
respect to rates charged does not vitiate unless it is arbitrary and without a
reasonable fact basis or justification.162
On top of an unreasonable classification, the penalty clause of Ordinance
No. SP-2235, which states:
SECTION 3. Penalty Clause A penalty of 25% of the garbage fee due plus
an interest of 2% per month or a fraction thereof (interest) shall be charged
against a household owner who refuses to pay the garbage fee herein
imposed. lacks the limitation required by Section 168 of the LGC, which
provides:
SECTION 168. Surcharges and Penalties on Unpaid Taxes, Fees, or Charges.
The sanggunian may impose a surcharge not exceeding twenty-five
(25%) of the amount of taxes, fees or charges not paid on time and an
interest at the rate not exceeding two percent (2%) per month of the
unpaid taxes, fees or charges including surcharges, until such amount is
fully paid but in no case shall the total interest on the unpaid amount or
portion thereof exceed thirty-six (36) months. (Emphasis supplied)
Finally, on the issue of publication of the two challenged ordinances.
Petitioner argues that the garbage fee was collected even if the required
publication of its approval had not yet elapsed. He notes that he paid his
realty tax on January 7, 2014 which already included the garbage fee.
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Respondents counter that if the law provides for its own effectivity,
publication in the Official Gazette is not necessary so long as it is not penal
in nature. Allegedly, Ordinance No. SP-2095 took effect after its publication
while Ordinance No. SP-2235 became effective after its approval on
December 26, 2013.
The pertinent provisions of the LGC state:
SECTION 59. Effectivity of Ordinances or Resolutions. (a) Unless otherwise
stated in the ordinance or the resolution approving the local development
plan and public investment program, the same shall take effect after ten
(10) days from the date a copy thereof is posted in a bulletin board at the
entrance of the provincial capital or city, municipal, or barangay hall, as
the case may be, and in at least two (2) other conspicuous places in the
local government unit concerned.
(b) The secretary to the sanggunian concerned shall cause the
posting of an ordinance or resolution in the bulletin board at the
entrance of the provincial capital and the city, municipal, or
barangay hall in at least two
(2) conspicuous places in the local government unit concerned not
later than five (5) days after approval thereof.
The text of the ordinance or resolution shall be disseminated and
posted in Filipino or English and in the language or dialect
understood by the majority of the people in the local government
unit concerned, and the secretary to the sanggunian shall record
such fact in a book kept for the purpose, stating the dates of
approval and posting.
(c) The gist of all ordinances with penal sanctions shall be
published in a newspaper of general circulation within the province
where the local legislative body concerned belongs. In the absence
of any newspaper of general circulation within the province,
posting of such ordinances shall be made in all municipalities and
cities of the province where the sanggunian of origin is situated.
SECTION 188. Publication of Tax Ordinances and Revenue Measures.

Within ten (10) days after their approval, certified true copies of all
provincial, city, and municipal tax ordinances or revenue measures shall be
published in full for three (3) consecutive days in a newspaper of local
circulation: Provided, however, That in provinces, cities and municipalities
where there are no newspapers of local circulation, the same may be
posted in at least two (2) conspicuous and publicly accessible places.
(Emphasis supplied)
On October 17, 2011, respondent Quezon City Council enacted Ordinance
No. SP-2095, which provides that it would take effect after its publication in
a newspaper of general circulation. 163 On the other hand, Ordinance No. SP2235, which was passed by the City Council on December 16, 2013,
provides that it would be effective upon its approval. 164
Ten (10) days after its enactment, or on December 26, 2013, respondent
City Mayor approved the same.165
The case records are bereft of any evidence to prove petitioners negative
allegation that respondents did not comply with the posting and
publication requirements of the law. Thus, We are constrained not to give
credit to his unsupported claim.
WHEREFORE, the petition is PARTIALLY GRANTED. The constitutionality and
legality of Ordinance No. SP-2095, S-2011, or the "Socialized Housing Tax
of Quezon City," is SUSTAINED for being consistent with Section43 of
Republic Act No. 7279. On the other hand, Ordinance No. SP-2235, S-2013,
which collects an annual garbage fee on all domestic households in Quezon
City, is hereby declared as UNCONSTITUTIONAL AND ILLEGAL. Respondents
are DIRECTED to REFUND with reasonable dispatch the sums of money
collected relative to its enforcement. The temporary restraining order
issued by the Court on February 5, 2014 is LIFTED with respect to
Ordinance No. SP-2095. In contrast, respondents are PERMANENTLY
ENJOINED from taking any further action to enforce Ordinance No. SP.
2235.
SO ORDERED.
(d) In the case of highly urbanized and independent component

cities, the main features of the ordinance or resolution duly
enacted or adopted shall, in addition to being posted, be published
once in a local newspaper of general circulation within the city:
Provided, That in the absence thereof the ordinance or resolution
shall be published in any newspaper of general circulation.
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construction of a new Catholic Church in the locality. The total amount was
actually spent for the purpose intended.
On March 3, 1958, the donor M.B. Estate, Inc., filed the donor's gift tax
return. Under date of April 29, 1960, the respondent Commissioner of
Internal Revenue issued an assessment for donee's gift tax against the
Catholic Parish of Victorias, Negros Occidental, of which petitioner was the
priest. The tax amounted to P1,370.00 including surcharges, interests of
1% monthly from May 15, 1958 to June 15, 1960, and the compromise for
the late filing of the return.
Petitioner lodged a protest to the assessment and requested the
withdrawal thereof. The protest and the motion for reconsideration
presented to the Commissioner of Internal Revenue were denied. The
petitioner appealed to the Court of Tax Appeals on November 2, 1960. In
the petition for review, the Rev. Fr. Casimiro Lladoc claimed, among others,
that at the time of the donation, he was not the parish priest in Victorias;
that there is no legal entity or juridical person known as the "Catholic
Parish Priest of Victorias," and, therefore, he should not be liable for the
donee's gift tax. It was also asserted that the assessment of the gift tax,
even against the Roman Catholic Church, would not be valid, for such
would be a clear violation of the provisions of the Constitution.
After hearing, the CTA rendered judgment, the pertinent portions of which
are quoted below:
... . Parish priests of the Roman Catholic Church under canon laws
are similarly situated as its Archbishops and Bishops with respect
to the properties of the church within their parish. They are the
guardians, superintendents or administrators of these properties,
with the right of succession and may sue and be sued.
xxx
G.R. No. L-19201
xxx
June 16, 1965
REV. FR. CASIMIRO LLADOC, petitioner, vs. The COMMISSIONER OF

INTERNAL REVENUE and The COURT of TAX APPEALS, respondents.
PAREDES, J.:
Sometime in 1957, the M.B. Estate, Inc., of Bacolod City, donated
P10,000.00 in cash to Rev. Fr. Crispin Ruiz, then parish priest of Victorias,
Negros Occidental, and predecessor of herein petitioner, for the
xxx
The petitioner impugns the, fairness of the assessment with the

argument that he should not be held liable for gift taxes on
donation which he did not receive personally since he was not yet
the parish priest of Victorias in the year 1957 when said donation
was given. It is intimated that if someone has to pay at all, it
should be petitioner's predecessor, the Rev. Fr. Crispin Ruiz, who
received the donation in behalf of the Catholic parish of Victorias or
the Roman Catholic Church. Following petitioner's line of thinking,
we should be equally unfair to hold that the assessment now in
question should have been addressed to, and collected from, the
Rev. Fr. Crispin Ruiz to be paid from income derived from his
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present parish where ever it may be. It does not seem right to
indirectly burden the present parishioners of Rev. Fr. Ruiz for
donee's gift tax on a donation to which they were not benefited.
the singular issue of whether or not petitioner should be liable for the
assessed donee's gift tax on the P10,000.00 donated for the construction
of the Victorias Parish Church.
xxx
Section 22 (3), Art. VI of the Constitution of the Philippines, exempts from

taxation cemeteries, churches and parsonages or convents, appurtenant
thereto, and all lands, buildings, and improvements used exclusively for
religious purposes. The exemption is only from the payment of taxes
assessed on such properties enumerated, as property taxes, as contra
distinguished from excise taxes. In the present case, what the Collector
assessed was a donee's gift tax; the assessment was not on the properties
themselves. It did not rest upon general ownership; it was an excise upon
the use made of the properties, upon the exercise of the privilege of
receiving the properties (Phipps vs. Com. of Int. Rec. 91 F 2d 627).
Manifestly, gift tax is not within the exempting provisions of the section
just mentioned. A gift tax is not a property tax, but an excise tax imposed
on the transfer of property by way of giftinter vivos, the imposition of
which on property used exclusively for religious purposes, does not
constitute an impairment of the Constitution. As well observed by the
learned respondent Court, the phrase "exempt from taxation," as employed
in the Constitution (supra) should not be interpreted to mean exemption
from all kinds of taxes. And there being no clear, positive or express grant
of such privilege by law, in favor of petitioner, the exemption herein must
be denied.
xxx
xxx
We saw no legal basis then as we see none now, to include within

the Constitutional exemption, taxes which partake of the nature of
an excise upon the use made of the properties or upon the exercise
of the privilege of receiving the properties. (Phipps vs.
Commissioner of Internal Revenue, 91 F [2d] 627; 1938, 302 U.S.
742.)
It is a cardinal rule in taxation that exemptions from payment
thereof are highly disfavored by law, and the party claiming
exemption must justify his claim by a clear, positive, or express
grant of such privilege by law. (Collector vs. Manila Jockey Club,
G.R. No. L-8755, March 23, 1956; 53 O.G. 3762.)
The phrase "exempt from taxation" as employed in Section 22(3),
Article VI of the Constitution of the Philippines, should not be
interpreted to mean exemption from all kinds of taxes. Statutes
exempting charitable and religious property from taxation should
be construed fairly though strictly and in such manner as to give
effect to the main intent of the lawmakers. (Roman Catholic Church
vs. Hastrings 5 Phil. 701.)
xxx
xxx
xxx
WHEREFORE, in view of the foregoing considerations, the decision

of the respondent Commissioner of Internal Revenue appealed
from, is hereby affirmed except with regard to the imposition of the
compromise penalty in the amount of P20.00 (Collector of Internal
Revenue v. U.S.T., G.R. No. L-11274, Nov. 28, 1958); ..., and the
petitioner, the Rev. Fr. Casimiro Lladoc is hereby ordered to pay to
the respondent the amount of P900.00 as donee's gift tax, plus the
surcharge of five per centum (5%) as ad valorem penalty under
Section 119 (c) of the Tax Code, and one per centum (1%) monthly
interest from May 15, 1958 to the date of actual payment. The
surcharge of 25% provided in Section 120 for failure to file a return
may not be imposed as the failure to file a return was not due to
willful neglect.( ... ) No costs.
The above judgment is now before us on appeal, petitioner assigning two
(2) errors allegedly committed by the Tax Court, all of which converge on
The next issue which readily presents itself, in view of petitioner's thesis,
and Our finding that a tax liability exists, is, who should be called upon to
pay the gift tax? Petitioner postulates that he should not be liable, because
at the time of the donation he was not the priest of Victorias. We note the
merit of the above claim, and in order to put things in their proper light,
this Court, in its Resolution of March 15, 1965, ordered the parties to show
cause why the Head of the Diocese to which the parish of Victorias
pertains, should not be substituted in lieu of petitioner Rev. Fr. Casimiro
Lladoc it appearing that the Head of such Diocese is the real party in
interest. The Solicitor General, in representation of the Commissioner of
Internal Revenue, interposed no objection to such a substitution. Counsel
for the petitioner did not also offer objection thereto.
On April 30, 1965, in a resolution, We ordered the Head of the Diocese to
present whatever legal issues and/or defenses he might wish to raise, to
which resolution counsel for petitioner, who also appeared as counsel for
the Head of the Diocese, the Roman Catholic Bishop of Bacolod,
manifested that it was submitting itself to the jurisdiction and orders of this
Court and that it was presenting, by reference, the brief of petitioner Rev.
Fr. Casimiro Lladoc as its own and for all purposes.
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In view here of and considering that as heretofore stated, the assessment
at bar had been properly made and the imposition of the tax is not a
violation of the constitutional provision exempting churches, parsonages or
convents, etc. (Art VI, sec. 22 [3], Constitution), the Head of the Diocese, to
which the parish Victorias Pertains, is liable for the payment thereof.
The decision appealed from should be, as it is hereby affirmed insofar as
tax liability is concerned; it is modified, in the sense that petitioner herein
is not personally liable for the said gift tax, and that the Head of the
Diocese, herein substitute petitioner, should pay, as he is presently ordered
to pay, the said gift tax, without special, pronouncement as to costs.
G.R. No. L-39086 June 15, 1988

ABRA VALLEY COLLEGE, INC., represented by PEDRO V.
BORGONIA, petitioner,
vs HON. JUAN P. AQUINO, Judge, Court of First Instance, Abra;
ARMIN M. CARIAGA, Provincial Treasurer, Abra; GASPAR V.
BOSQUE, Municipal Treasurer, Bangued, Abra; HEIRS OF PATERNO
MILLARE,respondents.
PARAS, J.:
This is a petition for review on certiorari of the decision * of the defunct
Court of First Instance of Abra, Branch I, dated June 14, 1974, rendered in
Civil Case No. 656, entitled "Abra Valley Junior College, Inc., represented by
Pedro V. Borgonia, plaintiff vs. Armin M. Cariaga as Provincial Treasurer of
Abra, Gaspar V. Bosque as Municipal Treasurer of Bangued, Abra and
Paterno Millare, defendants," the decretal portion of which reads:
IN VIEW OF ALL THE FOREGOING, the Court hereby declares:
That the distraint seizure and sale by the Municipal Treasurer of
Bangued, Abra, the Provincial Treasurer of said province against the
lot and building of the Abra Valley Junior College, Inc., represented
by Director Pedro Borgonia located at Bangued, Abra, is valid;
That since the school is not exempt from paying taxes, it should
therefore pay all back taxes in the amount of P5,140.31 and back
taxes and penalties from the promulgation of this decision;
That the amount deposited by the plaintaff him the sum of
P60,000.00 before the trial, be confiscated to apply for the
payment of the back taxes and for the redemption of the property
in question, if the amount is less than P6,000.00, the remainder
must be returned to the Director of Pedro Borgonia, who represents
the plaintiff herein;
140
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That the deposit of the Municipal Treasurer in the amount of
P6,000.00 also before the trial must be returned to said Municipal
Treasurer of Bangued, Abra;
And finally the case is hereby ordered dismissed with costs against
the plaintiff.
SO ORDERED. (Rollo, pp. 22-23)
Petitioner, an educational corporation and institution of higher learning
duly incorporated with the Securities and Exchange Commission in 1948,
filed a complaint (Annex "1" of Answer by the respondents Heirs of Paterno
Millare; Rollo, pp. 95-97) on July 10, 1972 in the court a quo to annul and
declare void the "Notice of Seizure' and the "Notice of Sale" of its lot and
building located at Bangued, Abra, for non-payment of real estate taxes
and penalties amounting to P5,140.31. Said "Notice of Seizure" of the
college lot and building covered by Original Certificate of Title No. Q-83
duly registered in the name of petitioner, plaintiff below, on July 6, 1972,
by respondents Municipal Treasurer and Provincial Treasurer, defendants
below, was issued for the satisfaction of the said taxes thereon. The
"Notice of Sale" was caused to be served upon the petitioner by the
respondent treasurers on July 8, 1972 for the sale at public auction of said
college lot and building, which sale was held on the same date. Dr. Paterno
Millare, then Municipal Mayor of Bangued, Abra, offered the highest bid of
P6,000.00 which was duly accepted. The certificate of sale was
correspondingly issued to him.
On August 10, 1972, the respondent Paterno Millare (now deceased) filed
through counstel a motion to dismiss the complaint.
On August 23, 1972, the respondent Provincial Treasurer and Municipal
Treasurer, through then Provincial Fiscal Loreto C. Roldan, filed their answer
(Annex "2" of Answer by the respondents Heirs of Patemo Millare; Rollo, pp.
98-100) to the complaint. This was followed by an amended answer (Annex
"3," ibid, Rollo, pp. 101-103) on August 31, 1972.
On September 1, 1972 the respondent Paterno Millare filed his answer
(Annex "5," ibid; Rollo, pp. 106-108).
On October 12, 1972, with the aforesaid sale of the school premises at
public auction, the respondent Judge, Hon. Juan P. Aquino of the Court of
First Instance of Abra, Branch I, ordered (Annex "6," ibid; Rollo, pp. 109110) the respondents provincial and municipal treasurers to deliver to the
Clerk of Court the proceeds of the auction sale. Hence, on December 14,
1972, petitioner, through Director Borgonia, deposited with the trial court
the sum of P6,000.00 evidenced by PNB Check No. 904369.
On April 12, 1973, the parties entered into a stipulation of facts adopted
and embodied by the trial court in its questioned decision. Said Stipulations
reads:
STIPULATION OF FACTS
COME NOW the parties, assisted by counsels, and to this Honorable
Court respectfully enter into the following agreed stipulation of
facts:
1. That the personal circumstances of the parties as stated in
paragraph 1 of the complaint is admitted; but the particular person
of Mr. Armin M. Cariaga is to be substituted, however, by anyone
who is actually holding the position of Provincial Treasurer of the
Province of Abra;
2. That the plaintiff Abra Valley Junior College, Inc. is the owner of
the lot and buildings thereon located in Bangued, Abra under
Original Certificate of Title No. 0-83;
3. That the defendant Gaspar V. Bosque, as Municipal treasurer of
Bangued, Abra caused to be served upon the Abra Valley Junior
College, Inc. a Notice of Seizure on the property of said school
under Original Certificate of Title No. 0-83 for the satisfaction of
real property taxes thereon, amounting to P5,140.31; the Notice of
Seizure being the one attached to the complaint as Exhibit A;
4. That on June 8, 1972 the above properties of the Abra Valley
Junior College, Inc. was sold at public auction for the satisfaction of
the unpaid real property taxes thereon and the same was sold to
defendant Paterno Millare who offered the highest bid of P6,000.00
and a Certificate of Sale in his favor was issued by the defendant
Municipal Treasurer.
5. That all other matters not particularly and specially covered by
this stipulation of facts will be the subject of evidence by the
parties.
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1st
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SET
WHEREFORE, it is respectfully prayed of the Honorable Court to
consider and admit this stipulation of facts on the point agreed
upon by the parties.
from the payment of taxes." (Annexes "B," "B-1" of Petition; Rollo, pp. 2449; 44 and 49).
Nonetheless, the trial court disagreed because of the use of the second
floor by the Director of petitioner school for residential purposes. He thus
ruled for the government and rendered the assailed decision.
Bangued, Abra, April 12, 1973.

Sgd. Agripino Brillantes
Typ AGRIPINO BRILLANTES
Attorney for Plaintiff
Sgd. Loreto Roldan
Typ LORETO ROLDAN
Provincial Fiscal
Counsel for Defendants
Provincial Treasurer of
Abra and the Municipal
Treasurer of Bangued, Abra
After having been granted by the trial court ten (10) days from August 6,
1974 within which to perfect its appeal (Per Order dated August 6, 1974;
Annex "G" of Petition; Rollo, p. 57) petitioner instead availed of the instant
petition for review on certiorari with prayer for preliminary injunction
before this Court, which petition was filed on August 17, 1974 (Rollo, p.2).
In the resolution dated August 16, 1974, this Court resolved to give DUE
COURSE to the petition (Rollo, p. 58). Respondents were required to answer
said petition (Rollo, p. 74).
Petitioner raised the following assignments of error:
Sgd. Demetrio V. Pre

Typ. DEMETRIO V. PRE
Attorney for Defendant
Paterno Millare (Rollo, pp. 17-18)
Aside from the Stipulation of Facts, the trial court among others, found the
following: (a) that the school is recognized by the government and is
offering Primary, High School and College Courses, and has a school
population of more than one thousand students all in all; (b) that it is
located right in the heart of the town of Bangued, a few meters from the
plaza and about 120 meters from the Court of First Instance building; (c)
that the elementary pupils are housed in a two-storey building across the
street; (d) that the high school and college students are housed in the main
building; (e) that the Director with his family is in the second floor of the
main building; and (f) that the annual gross income of the school reaches
more than one hundred thousand pesos.
I
THE COURT A QUO ERRED IN SUSTAINING AS VALID THE SEIZURE AND
SALE OF THE COLLEGE LOT AND BUILDING USED FOR EDUCATIONAL
PURPOSES OF THE PETITIONER.
II
THE COURT A QUO ERRED IN DECLARING THAT THE COLLEGE LOT AND
BUILDING OF THE PETITIONER ARE NOT USED EXCLUSIVELY FOR
EDUCATIONAL PURPOSES MERELY BECAUSE THE COLLEGE PRESIDENT
RESIDES IN ONE ROOM OF THE COLLEGE BUILDING.
III
From all the foregoing, the only issue left for the Court to determine and as
agreed by the parties, is whether or not the lot and building in question
are used exclusively for educational purposes. (Rollo, p. 20)
THE COURT A QUO ERRED IN DECLARING THAT THE COLLEGE LOT AND
BUILDING OF THE PETITIONER ARE NOT EXEMPT FROM PROPERTY TAXES
AND IN ORDERING PETITIONER TO PAY P5,140.31 AS REALTY TAXES.
The succeeding Provincial Fiscal, Hon. Jose A. Solomon and his Assistant,
Hon. Eustaquio Z. Montero, filed a Memorandum for the Government on
March 25, 1974, and a Supplemental Memorandum on May 7, 1974,
wherein they opined "that based on the evidence, the laws applicable,
court decisions and jurisprudence, the school building and school lot used
for educational purposes of the Abra Valley College, Inc., are exempted
IV
THE COURT A QUO ERRED IN ORDERING THE CONFISCATION OF THE

P6,000.00 DEPOSIT MADE IN THE COURT BY PETITIONER AS PAYMENT OF
THE P5,140.31 REALTY TAXES. (See Brief for the Petitioner, pp. 1-2)
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SET
The main issue in this case is the proper interpretation of the phrase "used
exclusively for educational purposes."
Petitioner contends that the primary use of the lot and building for
educational purposes, and not the incidental use thereof, determines and
exemption from property taxes under Section 22 (3), Article VI of the 1935
Constitution. Hence, the seizure and sale of subject college lot and
building, which are contrary thereto as well as to the provision of
Commonwealth Act No. 470, otherwise known as the Assessment Law, are
without legal basis and therefore void.
On the other hand, private respondents maintain that the college lot and
building in question which were subjected to seizure and sale to answer for
the unpaid tax are used: (1) for the educational purposes of the college; (2)
as the permanent residence of the President and Director thereof, Mr.
Pedro V. Borgonia, and his family including the in-laws and grandchildren;
and (3) for commercial purposes because the ground floor of the college
building is being used and rented by a commercial establishment, the
Northern Marketing Corporation (See photograph attached as Annex "8"
(Comment; Rollo, p. 90]).
Due to its time frame, the constitutional provision which finds application in
the case at bar is Section 22, paragraph 3, Article VI, of the then 1935
Philippine Constitution, which expressly grants exemption from realty taxes
for "Cemeteries, churches and parsonages or convents appurtenant
thereto, and all lands, buildings, and improvements used exclusively for
religious, charitable or educational purposes ...
Relative thereto, Section 54, paragraph c, Commonwealth Act No. 470 as
amended by Republic Act No. 409, otherwise known as the Assessment
Law, provides:
The following are exempted from real property tax under
the Assessment Law:
xxx xxx xxx
(c) churches and parsonages or convents appurtenant
thereto, and all lands, buildings, and improvements used
exclusively for
religious,
charitable,
scientific
or
educational purposes.
In this regard petitioner argues that the primary use of the school lot and
building is the basic and controlling guide, norm and standard to determine
tax exemption, and not the mere incidental use thereof.
As early as 1916 in YMCA of Manila vs. Collector of lnternal Revenue, 33
Phil. 217 [1916], this Court ruled that while it may be true that the YMCA
keeps a lodging and a boarding house and maintains a restaurant for its
members, still these do not constitute business in the ordinary acceptance
of the word, but an institution used exclusively for religious, charitable and
educational purposes, and as such, it is entitled to be exempted from
taxation.
In the case of Bishop of Nueva Segovia v. Provincial Board of Ilocos Norte,
51 Phil. 352 [1972], this Court included in the exemption a vegetable
garden in an adjacent lot and another lot formerly used as a cemetery. It
was clarified that the term "used exclusively" considers incidental use also.
Thus, the exemption from payment of land tax in favor of the convent
includes, not only the land actually occupied by the building but also the
adjacent garden devoted to the incidental use of the parish priest. The lot
which is not used for commercial purposes but serves solely as a sort of
lodging place, also qualifies for exemption because this constitutes
incidental use in religious functions.
The phrase "exclusively used for educational purposes" was further
clarified by this Court in the cases of Herrera vs. Quezon City Board of
assessment Appeals, 3 SCRA 186 [1961] and Commissioner of Internal
Revenue vs. Bishop of the Missionary District, 14 SCRA 991 [1965], thus
Moreover, the exemption in favor of property used exclusively for
charitable or educational purposes is 'not limited to property
actually indispensable' therefor (Cooley on Taxation, Vol. 2, p.
1430), but extends to facilities which are incidental to and
reasonably necessary for the accomplishment of said purposes,
such as in the case of hospitals, "a school for training nurses, a
nurses' home, property use to provide housing facilities for interns,
resident doctors, superintendents, and other members of the
hospital staff, and recreational facilities for student nurses, interns,
and residents' (84 CJS 6621), such as "Athletic fields" including "a
firm used for the inmates of the institution. (Cooley on Taxation,
Vol. 2, p. 1430).
xxx xxx xxx
The test of exemption from taxation is the use of the property for purposes
mentioned in the Constitution (Apostolic Prefect v. City Treasurer of Baguio,
71 Phil, 547 [1941]).
143
1st
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SET
It must be stressed however, that while this Court allows a more liberal and
non-restrictive interpretation of the phrase "exclusively used for
educational purposes" as provided for in Article VI, Section 22, paragraph 3
of the 1935 Philippine Constitution, reasonable emphasis has always been
made that exemption extends to facilities which are incidental to and
reasonably necessary for the accomplishment of the main purposes.
Otherwise stated, the use of the school building or lot for commercial
purposes is neither contemplated by law, nor by jurisprudence. Thus, while
the use of the second floor of the main building in the case at bar for
residential purposes of the Director and his family, may find justification
under the concept of incidental use, which is complimentary to the main or
primary purposeeducational, the lease of the first floor thereof to the
Northern Marketing Corporation cannot by any stretch of the imagination
be considered incidental to the purpose of education.
SO ORDERED.
It will be noted however that the aforementioned lease appears to have

been raised for the first time in this Court. That the matter was not taken
up in the to court is really apparent in the decision of respondent Judge. No
mention thereof was made in the stipulation of facts, not even in the
description of the school building by the trial judge, both embodied in the
decision nor as one of the issues to resolve in order to determine whether
or not said properly may be exempted from payment of real estate taxes
(Rollo, pp. 17-23). On the other hand, it is noteworthy that such fact was
not disputed even after it was raised in this Court.
Indeed, it is axiomatic that facts not raised in the lower court cannot be
taken up for the first time on appeal. Nonetheless, as an exception to the
rule, this Court has held that although a factual issue is not squarely raised
below, still in the interest of substantial justice, this Court is not prevented
from considering a pivotal factual matter. "The Supreme Court is clothed
with ample authority to review palpable errors not assigned as such if it
finds that their consideration is necessary in arriving at a just decision."
(Perez vs. Court of Appeals, 127 SCRA 645 [1984]).
Under the 1935 Constitution, the trial court correctly arrived at the
conclusion that the school building as well as the lot where it is built,
should be taxed, not because the second floor of the same is being used by
the Director and his family for residential purposes, but because the first
floor thereof is being used for commercial purposes. However, since only a
portion is used for purposes of commerce, it is only fair that half of the
assessed tax be returned to the school involved.
PREMISES CONSIDERED, the decision of the Court of First Instance of Abra,
Branch I, is hereby AFFIRMED subject to the modification that half of the
assessed tax be returned to the petitioner.
144
Consti 2
SET
RULE 67 Expropriation
Section 1. The complaint. The right of eminent domain shall be
exercised by the filing of a verified complaint which shall state with
certainty the right and purpose of expropriation, describe the real or
personal property sought to be expropriated, and join as defendants all
persons owning or claiming to own, or occupying, any part thereof or
interest therein, showing, so far as practicable, the separate interest of
each defendant. If the title to any property sought to be expropriated
appears to be in the Republic of the Philippines, although occupied by
private individuals, or if the title is otherwise obscure or doubtful so that
the plaintiff cannot with accuracy or certainty specify who are the real
owners, averment to that effect shall be made in the complaint. (1a)
Section 2. Entry of plaintiff upon depositing value with authorized
government depositary. Upon the filing of the complaint or at any time
thereafter and after due notice to the defendant, the plaintiff shall have the
right to take or enter upon the possession of the real property involved if
he deposits with the authorized government depositary an amount
equivalent to the assessed value of the property for purposes of taxation to
be held by such bank subject to the orders of the court. Such deposit shall
be in money, unless in lieu thereof the court authorizes the deposit of a
certificate of deposit of a government bank of the Republic of the
Philippines payable on demand to the authorized government depositary.
If personal property is involved, its value shall be provisionally ascertained
and the amount to be deposited shall be promptly fixed by the court.
After such deposit is made the court shall order the sheriff or other proper
officer to forthwith place the plaintiff in possession of the property involved
and promptly submit a report thereof to the court with service of copies to
the parties. (2a)
Section 3. Defenses and objections. If a defendant has no objection or
defense to the action or the taking of his property, he may file and serve a
notice of appearance and a manifestation to that effect, specifically
designating or identifying the property in which he claims to be interested,
within the time stated in the summons. Thereafter, he shall be entitled to
notice of all proceedings affecting the same.
1st
If a defendant has any objection to the filing of or the allegations in the
complaint, or any objection or defense to the taking of his property, he
shall serve his answer within the time stated in the summons. The answer
shall specifically designate or identify the property in which he claims to
have an interest, state the nature and extent of the interest claimed, and
adduce all his objections and defenses to the taking of his property. No
counterclaim, cross-claim or third-party complaint shall be alleged or
allowed in the answer or any subsequent pleading.
A defendant waives all defenses and objections not so alleged but the
court, in the interest of justice, may permit amendments to the answer to
be made not later than ten (10) days from the filing thereof. However, at
the trial of the issue of just compensation whether or not a defendant has
previously appeared or answered, he may present evidence as to the
amount of the compensation to be paid for his property, and he may share
in the distribution of the award. (n)
Section 4. Order of expropriation. If the objections to and the defenses
against the right of the plaintiff to expropriate the property are overruled,
or when no party appears to defend as required by this Rule, the court may
issue an order of expropriation declaring that the plaintiff has a lawful right
to take the property sought to be expropriated, for the public use or
purpose described in the complaint, upon the payment of just
compensation to be determined as of the date of the taking of the property
or the filing of the complaint, whichever came first.
A final order sustaining the right to expropriate the property may be
appealed by any party aggrieved thereby. Such appeal, however, shall not
prevent the court from determining the just compensation to be paid.
After the rendition of such an order, the plaintiff shall not be permitted to
dismiss or discontinue the proceeding except on such terms as the court
deems just and equitable. (4a)
Section 5. Ascertainment of compensation. Upon the rendition of the
order of expropriation, the court shall appoint not more than three (3)
competent and disinterested persons as commissioners to ascertain and
report to the court the just compensation for the property sought to be
taken. The order of appointment shall designate the time and place of the
first session of the hearing to be held by the commissioners and specify
the time within which their report shall be submitted to the court.
Copies of the order shall be served on the parties. Objections to the
appointment of any of the commissioners shall be filed with the court
within ten (10) days from service, and shall be resolved within thirty (30)
145
Consti 2
SET
days after all the commissioners shall have received copies of the
objections. (5a)
Section 6. Proceedings by commissioners. Before entering upon the
performance of their duties, the commissioners shall take and subscribe an
oath that they will faithfully perform their duties as commissioners, which
oath shall be filed in court with the other proceedings in the case. Evidence
may be introduced by either party before the commissioners who are
authorized to administer oaths on hearings before them, and the
commissioners shall, unless the parties consent to the contrary, after due
notice to the parties, to attend, view and examine the property sought to
be expropriated and its surroundings, and may measure the same, after
which either party may, by himself or counsel, argue the case. The
commissioners shall assess the consequential damages to the property not
taken and deduct from such consequential damages the consequential
benefits to be derived by the owner from the public use or purpose of the
property taken, the operation of its franchise by the corporation or the
carrying on of the business of the corporation or person taking the
property. But in no case shall the consequential benefits assessed exceed
the consequential damages assessed, or the owner be deprived of the
actual value of his property so taken. (6a)
Section 7. Report by commissioners and judgment thereupon. The
court may order the commissioners to report when any particular portion of
the real estate shall have been passed upon by them, and may render
judgment upon such partial report, and direct the commissioners to
proceed with their work as to subsequent portions of the property sought
to be expropriated, and may from time to time so deal with such property.
The commissioners shall make a full and accurate report to the court of all
their proceedings, and such proceedings shall not be effectual until the
court shall have accepted their report and rendered judgment in
accordance with their recommendations. Except as otherwise expressly
ordered by the court, such report shall be filed within sixty (60) days from
the date the commissioners were notified of their appointment, which time
may be extended in the discretion of the court. Upon the filing of such
report, the clerk of the court shall serve copies thereof on all interested
parties, with notice that they are allowed ten (10) days within which to file
objections to the findings of the report, if they so desire. (7a)
Section 8. Action upon commissioners' report. Upon the expiration of
the period of ten (10) days referred to in the preceding section, or even
before the expiration of such period but after all the interested parties
have filed their objections to the report or their statement of agreement
therewith, the court may, after hearing, accept the report and render
judgment in accordance therewith, or, for cause shown, it may recommit
the same to the commissioners for further report of facts, or it may set
1st
aside the report and appoint new commissioners; or it may accept the
report in part and reject it in part and it may make such order or render
such judgment as shall secure to the plaintiff the property essential to the
exercise of his right of expropriation, and to the defendant just
compensation for the property so taken. (8a)
Section 9. Uncertain ownership; conflicting claims. If the ownership of
the property taken is uncertain, or there are conflicting claims to any part
thereof, the court may order any sum or sums awarded as compensation
for the property to be paid to the court for the benefit of the person
adjudged in the same proceeding to be entitled thereto. But the judgment
shall require the payment of the sum or sums awarded to either the
defendant or the court before the plaintiff can enter upon the property, or
retain it for the public use or purpose if entry has already been made. (9a)
Section 10. Rights of plaintiff after judgment and payment. Upon
payment by the plaintiff to the defendant of the compensation fixed by the
judgment, with legal interest thereon from the taking of the possession of
the property, or after tender to him of the amount so fixed and payment of
the costs, the plaintiff shall have the right to enter upon the property
expropriated and to appropriate it for the public use or purpose defined in
the judgment, or to retain it should he have taken immediate possession
thereof under the provisions of section 2 hereof. If the defendant and his
counsel absent themselves from the court, or decline to receive the
amount tendered, the same shall be ordered to be deposited in court and
such deposit shall have the same effect as actual payment thereof to the
defendant or the person ultimately adjudged entitled thereto. (10a)
Section 11. Entry not delayed by appeal; effect of reversal. The right of
the plaintiff to enter upon the property of the defendant and appropriate
the same for public use or purpose shall not be delayed by an appeal from
the judgment. But if the appellate court determines that plaintiff has no
right of expropriation, judgment shall be rendered ordering the Regional
Trial Court to forthwith enforce the restoration to the defendant of the
possession of the property, and to determine the damages which the
defendant sustained and may recover by reason of the possession taken by
the plaintiff. (11a)
Section 12. Costs, by whom paid. The fees of the commissioners shall
be taxed as a part of the costs of the proceedings. All costs, except those
of rival claimants litigating their claims, shall be paid by the plaintiff, unless
an appeal is taken by the owner of the property and the judgment is
affirmed, in which event the costs of the appeal shall be paid by the owner.
(12a)
146
Consti 2
SET
Section 13. Recording judgment, and its effect. The judgment entered
in expropriation proceedings shall state definitely, by an adequate
description, the particular property or interest therein expropriated, and
the nature of the public use or purpose for which it is expropriated. When
real estate is expropriated, a certified copy of such judgment shall be
recorded in the registry of deeds of the place in which the property is
situated, and its effect shall be to vest in the plaintiff the title to the real
estate so described for such public use or purpose. (13a)
1st
judicially declared to be incompetent, which such minor or person judicially
declared to be incompetent could do in such proceedings if he were of age
or competent. (14a)
Section 14. Power of guardian in such proceedings. The guardian or

guardian ad litem of a minor or of a person judicially declared to be
incompetent may, with the approval of the court first had, do and perform
on behalf of his ward any act, matter, or thing respecting the expropriation
for public use or purpose of property belonging to such minor or person
147

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1st

September 29, 2014

CRISOSTOMO B. AQUINO, Petitioner, vs. MUNICIPALITY OF MALAY,

Compiled by: Angel Sy

function when he ordered the closure and demolition of

Whether or not respondent mayor committed grave abuse of

Whether or not petitioners right to due process was

Whether or not the LGUs refusal to issue petitioner the

Whether or not petitioners rights under the FLAgT prevail

Whether or not the DENR has primary jurisdiction over the

Ruling of the Court of Appeals

The propriety under the premises ofthe filing of a petition for

Whether or not declaratory reliefis still available to

Whether or not the CA correctly ruled that the respondent

Compiled by: Angel Sy

The Courts Ruling

The writ is directed against a tribunal, board, or officer

Such tribunal, board, or officer has acted without or in excess

Compiled by: Angel Sy

There is no appeal or any plain speedy, and adequate remedy

Guilty of reiteration, the CA immediately dismissed the Petition for

Code defines "nuisance" as any act, omission,

Compiled by: Angel Sy

obstructs or interferes with the free passage of any public highway or

Compiled by: Angel Sy

Compiled by: Angel Sy

administrator denying theapplication still stands and that petitioner

Taken in conjunction with the exceptions laid down in Sections 6 and 8 of

Petitioner next directs our attention to the following FLAgT provision:

SECTION 6. No building or structure shall be allowed to be constructed on

Section 447.Powers, Duties, Functions and Compensation.

Compiled by: Angel Sy

(2) For a Municipality:

(i) Provide for the establishment, maintenance, protection, and

Compiled by: Angel Sy

(ii) Pursuant to national policies and subject to supervision, control and

In view whereof, the undersigned requests you to voluntarily open

WHEREFORE, in view of the foregoing, the petition is hereby DENIED for

G.R. No. 135962

March 27, 2000

METROPOLITAN MANILA DEVELOPMENT AUTHORITY, petitioner, vs.

Finally, we are furnishing you with a copy of the handwritten

Compiled by: Angel Sy

The Motion for Reconsideration of the decision was denied on September

Compiled by: Angel Sy

and commercial district of Makati City. It runs parallel to Kalayaan Avenue,

Compiled by: Angel Sy

Compiled by: Angel Sy

Compiled by: Angel Sy

Metropolitan Manila was first created in 1975 by Presidential Decree (P.D.)

The administration of Metropolitan Manila was placed under the Metro

To act as a central government to establish and administer

Compiled by: Angel Sy

To charge and collect fees for the use of public service

to appropriate money, and the power to pass ordinances or resolutions

P.D. No. 824 further provided:

The Sangguniang Bayan may recommend to the Commission

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After President Corazon Aquino assumed power, there was a clamor to

Compiled by: Angel Sy

a plebiscite. That is what I'm trying to avoid. I've been trying to

THE CHAIRMAN: In setting up ordinances, it is a political exercise,

Clearly, the MMDA is not a political unit of government. The power

Compiled by: Angel Sy