CASE DIGESTS ON POLICE POWER

NATURE OF POLICE POWER

Phil. Association of Service Exporters, Inc. vs. Hon. Drilon, June 30, 1988

FACTS:

The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for short), a firm "engaged
principally in the recruitment of Filipino workers, male and female, for overseas placement," challenges the
Constitutional validity of Department Order No. 1, Series of 1988, of the Department of Labor and Employment,
in the character of "GUIDELINES GOVERNING THE TEMPORARY SUSPENSION OF DEPLOYMENT OF
FILIPINO DOMESTIC AND HOUSEHOLD WORKERS," in this petition for certiorari and prohibition.
Specifically, the measure is assailed for "discrimination against males or females;" that it "does not apply to all
Filipino workers but only to domestic helpers and females with similar skills;" 3 and that it is violative of the right to
travel. It is admitted that Department Order No. 1 is in the nature of a police power measure.

ISSUE:
Whether or not Department Order No. 1 is constitutional?

HELD:
It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the Charter.
Along with the taxing power and eminent domain, it is inborn in the very fact of statehood and sovereignty. It is a
fundamental attribute of government that has enabled it to perform the most vital functions of governance. Marshall,
to whom the expression has been credited, refers to it succinctly as the plenary power of the State "to govern its
citizens." "The police power of the State is a power coextensive with self- protection, and it is not inaptly termed the
"law of overwhelming necessity." It may be said to be that inherent and plenary power in the State which enables it
to prohibit all things hurtful to the comfort, safety, and welfare of society."
It constitutes an implied limitation on the Bill of Rights. According to Fernando, it is "rooted in the conception that
men in organizing the state and imposing upon its government limitations to safeguard constitutional rights did not
intend thereby to enable an individual citizen or a group of citizens to obstruct unreasonably the enactment of such
salutary measures calculated to ensure communal peace, safety, good order, and welfare

The concept of police power is well-established in this jurisdiction. It has been defined as the "state authority to enact legislation that may
interfere with personal liberty or property in order to promote the general welfare." 5 As defined, it consists of (1) an imposition of restraint
upon liberty or property, (2) in order to foster the common good. It is not capable of an exact definition but has been, purposely, veiled in general
terms to underscore its all-comprehensive embrace.
"Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future where it could be done, provides enough room for
an efficient and flexible response to conditions and circumstances thus assuring the greatest benefits.
Miners Association of the Philippines, Inc. vs. Hon. Factoran, January 16, 1995

FACTS:

President Corazon C. Aquino promulgated Executive Order No. 211 prescribing the interim procedures in the
processing and approval of applications for the exploration, development and utilization of minerals pursuant to the
1987 Constitution in order to ensure the continuity of mining operations and activities and to hasten the development
of mineral resources. She likewise promulgated Executive Order No. 279 authorizing the DENR Secretary to negotiate
and conclude joint venture, co-production, or production-sharing agreements for the exploration, development and
utilization of mineral resources, and prescribing the guidelines for such agreements and those agreements involving
technical or financial assistance by foreign-owned corporations for large-scale exploration, development, and
utilization of minerals.
Pursuant to Section 6 of Executive Order No. 279, the DENR Secretary issued DENR Administrative Order
No. 57, series of 1989, captioned "Guidelines of Mineral Production Sharing Agreement under Executive Order No.
279." Under the transitory provision of said DENR Administrative Order No. 57, all existing mining leases or
agreements which were granted after the effectivity of the 1987 Constitution pursuant to Executive Order No. 211,
shall be converted into production-sharing agreements within one (1) year from the effectivity of these
guidelines. The Secretary of the DENR Administrative Order No. 82, series of 1990, laying down the "Procedural
Guidelines on the Award of Mineral Production Sharing Agreement (MPSA) through Negotiation." Section 3 of the
aforementioned DENR Administrative Order No. 82 enumerates the persons or entities required to submit Letter of
Intent (LOIs) and Mineral Production Sharing Agreement (MPSAs) within two (2) years from the effectivity
of DENR Administrative Order No. 57. Failure to do so within the prescribed period shall cause the
abandonment of mining, quarry and sand and gravel claims

Petitioner Miners Association of the Philippines, Inc. mainly contends that respondent Secretary of DENR
issued both Administrative Order Nos. 57 and 82 in excess of his rule-making power under Section 6 of
Executive Order No. 279. On the assumption that the questioned administrative orders do not conform with
Executive Order Nos. 211 and 279, petitioner contends that both orders violate the non-impairment of
contract provision under Article III, Section 10 of the 1987 Constitution.

ISSUE:

Whether or not AO. Nos. 57 and 82 violated the non-impairment of contracts provision of the Constitution?

Held:

No, both orders do not violate the non-impairment of contracts provision of the Constitution. Well -
settled is the rule, however, that regardless of the reservation clause, mining leases or agreements granted by the State,
such as those granted pursuant to Executive Order No. 211 referred to this petition, are subject to alterations through
a reasonable exercise of the police power of the State. The prohibition contained in constitutional provisions
against: impairing the obligation of contracts is not an absolute one and it is not to be read with literal exactness
like a mathematical formula. Such provisions are restricted to contracts which respect property, or some object
or value, and confer rights which may be asserted in a court of justice, and have no application to statute
relating to public subjects within the domain of the general legislative powers of the State, and involving the
public rights and public welfare of the entire community affected by it. They do not prevent a proper exercise
by the State of its police powers. By enacting regulations reasonably necessary to secure the health, safety, morals,
comfort, or general welfare of the community, even the contracts may thereby be affected; for such matter can not be
placed by contract beyond the power of the State shall regulates and control them.
Gancayno vs. City Government of Quezon City, October 11, 2011

FACTS:

Retired Justice Emilio Gancayno is an owner of a parcel of land located in EDSA, Quezon City. The Quezon
City council issued Ordinance No. 2904, entitled An Ordinance Requiring the Construction of Arcades, for
Commercial Buildings to be Constructed in Zones Designated as Business Zones in the Zoning Plan of
Quezon City, and Providing Penalties in Violation Thereof. Under this particular ordinance, the city council
required that the arcade is to be created by constructing the wall of the ground floor facing the sidewalk a few
meters away from the property line. Thus, the building owner is not allowed to construct his wall up to the edge of
the property line, thereby creating a space or shelter under the first floor. In effect, property owners relinquish the
use of the space for use as an arcade for pedestrians, instead of using it for their own purposes. The petitioner
requested that he be exempted from this and was later on granted with the request.

Decades after, the Metropolitan Manila Development Authority (MMDA) conducted operations to clear
obstructions along the sidewalk of EDSA in Quezon City pursuant to Metro Manila Councils (MMC) Resolution
No. 02-28, Series of 2002. The resolution authorized the MMDA and local government units to clear the sidewalks,
streets, avenues, alleys, bridges, parks and other public places in Metro Manila of all illegal structures and
obstructions. The MMDA sent a notice of demolition to Justice Gancayco alleging that a portion of his building
violated the National Building Code of the Philippines (Building Code) in relation to Ordinance No. 2904 and gave
the petitioner 15 days to comply. The petitioner failed to comply thereby giving MMDA the greenlight to proceed
with the demolition.

The petitioner, then, sought for the nullity of the Ordinance No. 2904 for being unconstitutional. The City
Government of Quezon City claimed that the ordinance was a valid exercise of police power, regulating the use of
property in a business zone.

ISSUE:

Whether or not Ordinance No. 2904 is a valid exercise of police power?

Held:

Yes. It is clear that the primary objectives of the city council of Quezon City when it issued the questioned
ordinance ordering the construction of arcades were the health and safety of the city and its inhabitants; the
promotion of their prosperity; and the improvement of their morals, peace, good order, comfort, and the
convenience. These arcades provide safe and convenient passage along the sidewalk for commuters and
pedestrians, not just the residents of Quezon City. More especially so because the contested portion of the building
is located on a busy segment of the city, in a business zone along EDSA
MMDA vs. Viron Transportation Co., Inc., August 15, 2007

FACTS:

President Gloria Arroyo issued Executive Order No. 179 Providing for the Establishment of Greater
Manila Mass Transport System. The same EO designated MMDA as the implementing agency for the project.
Pursuant to the E.O., the Metro Manila Council (MMC), the governing board and policymaking body of the
MMDA, issued Resolution No. 03-07 series of 20037 expressing full support of the Project. Recognizing the
imperative to integrate the different transport modes via the establishment of common bus parking terminal areas,
the MMC cited the need to remove the bus terminals located along major thoroughfares of Metro Manila.

Viron Transport Co., Inc. (Viron), a domestic corporation engaged in the business of public transportation with
a provincial bus operation, filed a petition for declaratory relief. Alleging that the MMDAs authority does not include
the power to direct provincial bus operators to abandon their existing bus terminals to thus deprive them of the use of
their property, Viron asked the court to construe the scope, extent and limitation of the power of the MMDA to regulate
traffic under R.A. No. 7924, "An Act Creating the Metropolitan Manila Development Authority, Defining its Powers
and Functions, Providing Funds Therefor and For Other Purpose.
Mencorp Transportation System, Inc. (Mencorp), another provincial bus operator, later filed a similar petition
for declaratory relief. Mencorp asked the court to declare the E.O. unconstitutional and illegal for transgressing the
possessory rights of owners and operators of public land transportation units over their respective terminals.

ISSUE:

Whether or not the EO 179 is a valid exercise of police power.

Held:
No. EO is not a valid exercise of police power. Aside from that the exercise of police power was not delegated
to MMDA, its exercise of police power does not satisfy the two tests of a valid police power measure, viz: (1) the
interest of the public generally, as distinguished from that of a particular class, requires its exercise; and (2) the means
employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon
individuals.Stated differently, the police power legislation must be firmly grounded on public interest and welfare and
a reasonable relation must exist between the purposes and the means Notably, the parties herein concede that traffic
congestion is a public concern that needs to be addressed immediately. Indeed, the E.O. was issued due to the felt
need to address the worsening traffic congestion in Metro Manila which, the MMDA so determined, is caused by the
increasing volume of buses plying the major thoroughfares and the inefficient connectivity of existing transport
systems. It is thus beyond cavil that the motivating force behind the issuance of the E.O. is the interest of the public
in general.
This Court fails to see how the prohibition against the existence of respondents terminals can be considered
a reasonable necessity to ease traffic congestion in the metropolis. On the contrary, the elimination of respondents
bus terminals brings forth the distinct possibility and the equally harrowing reality of traffic congestion in the common
parking areas, a case of transference from one site to another.
Less intrusive measures such as curbing the proliferation of "colorum" buses, vans and taxis entering Metro
Manila and using the streets for parking and passenger pick-up points, as respondents suggest, might even be more
effective in easing the traffic situation. So would the strict enforcement of traffic rules and the removal of obstructions
from major thoroughfares.
As to the alleged confiscatory character of the E.O., it need only to be stated that respondents certificates of public
convenience confer no property right, and are mere licenses or privileges.As such, these must yield to legislation
safeguarding the interest of the people.
Even then, for reasons which bear reiteration, the MMDA cannot order the closure of respondents terminals
not only because no authority to implement the Project has been granted nor legislative or police power been delegated
to it, but also because the elimination of the terminals does not satisfy the standards of a valid police power measure.

.
TESTS ON POLICE POWER

Hon. Fernando vs. St. Scholasticas College, March 12, 2013

FACTS:

Respondent SSC is the owner of four (4) parcels of land measuring a total of 56,306.80 square meters,
located in Marikina Heights. The property is enclosed by a tall concrete perimeter fence built some thirty (30) years
ago. Abutting the fence along the West Drive are buildings, facilities, and other improvements

The petitioners are the officials of the City Government of Marikina. the Sangguniang Panlungsod of Marikina
City enacted Ordinance No. 192,4 entitled "Regulating the Construction of Fences and Walls in the Municipality of
Marikina. the City Government of Marikina sent a letter to the respondents ordering them to demolish and replace the
fence of their Marikina property to make it 80% see-thru, and, at the same ime, to move it back about six (6) meters
to provide parking space for vehicles to park. The respondents requested for an extension of time to comply with the
directive. In response, the petitioners, through then City Mayor Bayani F. Fernando, insisted on the enforcement of
the subject ordinance. The respondents argued that the petitioners were acting in excess of jurisdiction in enforcing
Ordinance No. 192, asserting that such contravenes Section 1, Article III of the 1987 Constitution. That demolishing
their fence and constructing it six (6) meters back would result in the loss of at least 1,808.34 square meters, worth
aboutP9,041,700.00, along West Drive, and at least 1,954.02 square meters, worth roughly P9,770,100.00, resulting
in the permanent loss of their beneficial use.
The petitioners, on the other hand, countered that the ordinance was a valid exercise of police power, by virtue
of which, they could restrain property rights for the protection of public safety, health, morals, or the promotion of
public convenience and general prosperity.

ISSUE:
Whether Sections 3.1 and 5 of Ordinance No. 192 are valid exercises of police power by the City Government of
Marikina.

HELD:

No. Sections 3.1 and 5 of Ordinance No. 192 are not valid exercises of police power.
Ordinance No. 192 was passed by the City Council of Marikina in the apparent exercise of its police power. To
successfully invoke the exercise of police power as the rationale for the enactment of an ordinance and to free it from
the imputation of constitutional infirmity, two tests have been used by the Court the rational relationship test and
the strict scrutiny test:
We ourselves have often applied the rational basis test mainly in analysis of equal protection challenges. Using the
rational basis examination, laws or ordinances are upheld if they rationally further a legitimate governmental interest.
Under intermediate review, governmental interest is extensively examined and the availability of less restrictive
measures is considered. Applying strict scrutiny, the focus is on the presence of compelling, rather than substantial,
governmental interest and on the absence of less restrictive means for achieving that interest.
Even without going to a discussion of the strict scrutiny test, Ordinance No. 192, series of 1994 must be struck down
for not being reasonably necessary to accomplish the Citys purpose. More importantly, it is oppressive of private
rights.
Under the rational relationship test, an ordinance must pass the following requisites as discussed in Social Justice
Society (SJS) v. Atienza, Jr.:
As with the State, local governments may be considered as having properly exercised their police power only if the
following requisites are met: (1) the interests of the public generally, as distinguished from those of a particular
class, require its exercise and (2) the means employed are reasonably necessary for the accomplishment of the
purpose and not unduly oppressive upon individuals. In short, there must be a concurrence of a lawful subject and
lawful method.
The Court joins the CA in finding that the real intent of the setback requirement was to make the parking space free
for use by the public, considering that it would no longer be for the exclusive use of the respondents as it would also
be available for use by the general public. Section 9 of Article III of the 1987 Constitution, a provision on eminent
domain, provides that private property shall not be taken for public use without just compensation.
The petitioners cannot justify the setback by arguing that the ownership of the property will continue to remain with
the respondents. It is a settled rule that neither the acquisition of title nor the total destruction of value is essential to
taking. In fact, it is usually in cases where the title remains with the private owner that inquiry should be made to
determine whether the impairment of a property is merely regulated or amounts to a compensable taking.32 The Court
is of the view that the implementation of the setback requirement would be tantamount to a taking of a total of 3,762.36
square meters of the respondents private property for public use without just compensation, in contravention to the
Constitution.
Regarding the beautification purpose of the setback requirement, it has long been settled that the State may not, under
the guise of police power, permanently divest owners of the beneficial use of their property solely to preserve or
enhance the aesthetic appearance of the community.33 The Court, thus, finds Section 5 to be unreasonable and
oppressive as it will substantially divest the respondents of the beneficial use of their property solely for aesthetic
purposes. Accordingly, Section 5 of Ordinance No. 192 is invalid.
For Section 3.1 to pass the rational relationship test, the petitioners must show the reasonable relation between the
purpose of the police power 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.36
The principal purpose of Section 3.1 is "to discourage, suppress or prevent the concealment of prohibited or unlawful
acts." The ultimate goal of this objective is clearly the prevention of crime to ensure public safety and security. The
means employed by the petitioners, however, is not reasonably necessary for the accomplishment of this purpose and
is unduly oppressive to private rights. The petitioners have not adequately shown, and it does not appear obvious to
this Court, that an 80% see-thru fence would provide better protection and a higher level of security, or serve as a
more satisfactory criminal deterrent, than a tall solid concrete wall. It may even be argued that such exposed premises
could entice and tempt would-be criminals to the property, and that a see-thru fence would be easier to bypass and
breach. It also appears that the respondents concrete wall has served as more than sufficient protection over the last
40 years. `
As to the beautification purpose of the assailed ordinance, as previously discussed, the State may not, under the guise
of police power, infringe on private rights solely for the sake of the aesthetic appearance of the community. Similarly,
the Court cannot perceive how a see-thru fence will foster "neighborliness" between members of a community.
Planters Products, Inc. vs. FERTIPHIL Corporation, March 14, 2008

Facts:

Petitioner PPI and private respondent Fertiphil are private corporations incorporated under Philippine
laws.[3] They are both engaged in the importation and distribution of fertilizers, pesticides and agricultural
chemicals. President Ferdinand Marcos, exercising his legislative powers, issued LOI No. 1465 which provided,
among others, for the imposition of a capital recovery component (CRC) on the domestic sale of all grades of
fertilizers in the Philippines. Pursuant to the LOI, Fertiphil paid P10 for every bag of fertilizer it sold in the domestic
market to the Fertilizer and Pesticide Authority (FPA). FPA then remitted the amount collected to the Far East Bank
and Trust Company, the depositary bank of PPI. Fertiphil paid P6,689,144 to FPA from July 8, 1985 to January 24,
1986. After the 1986 Edsa Revolution, FPA voluntarily stopped the imposition of the P10 levy. With the return of
democracy, Fertiphil demanded from PPI a refund of the amounts it paid under LOI No. 1465, but PPI refused to
accede to the demand. In its Answer,[10] FPA, through the Solicitor General, countered that the issuance of LOI No.
1465 was a valid exercise of the police power of the State in ensuring the stability of the fertilizer industry in the
country

Issues:

Whether or not LOI 1465 is a valid exercise of police power?

Held:

No. LOI 1465 is not a valid exercise of police power. It had failed to comply with the test of lawful subjects
and lawful means. Jurisprudence states the test as follows: (1) the interest of the public generally, as distinguished
from those of particular class, requires its exercise; and (2) the means employed are reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon individuals.

It is upon applying this established tests that We sustain the trial courts
holding LOI 1465 unconstitutional. To be sure, ensuring the continued supply and
distribution of fertilizer in the country is an undertaking imbued with public interest.
However, the method by which LOI 1465 sought to achieve this is by no means a
measure that will promote the public welfare. The governments commitment to
support the successful rehabilitation and continued viability of PPI, a private
corporation, is an unmistakable attempt to mask the subject statutes
impartiality. There is no way to treat the self-interest of a favored entity, like PPI,
as identical with the general interest of the countrys farmers or even the Filipino
people in general. Well to stress, substantive due process exacts fairness and equal
protection disallows distinction where none is needed. When a statutes public
purpose is spoiled by private interest, the use of police power becomes a travesty
which must be struck down for being an arbitrary exercise of government power. To
rule in favor of appellant would contravene the general principle that revenues
derived from taxes cannot be used for purely private purposes or for the exclusive
benefit of private individuals.
City of Manila vs. Hon. Laguio, Jr., April 12, 2005

FACTS:

Private respondent Malate Tourist Development Corporation (MTDC) is a corporation engaged in the business
of operating hotels, motels, hostels and lodging houses. It built and opened Victoria Court in Malate which was
licensed as a motel although duly accredited with the Department of Tourism as a hotel. MTDC filed a Petition for
Declaratory Relief with Prayer for a Writ of Preliminary Injunction and/or Temporary Restraining Order7 (RTC
Petition) with the lower court impleading as defendants, herein petitioners City of Manila, Hon. Alfredo S. Lim (Lim),
Hon. Joselito L. Atienza, and the members of the City Council of Manila (City Council). MTDC prayed that
the Ordinance, insofar as it includes motels and inns as among its prohibited establishments, be declared invalid and
unconstitutional. Enacted by the City Council9 on 9 March 1993 and approved by petitioner City Mayor on 30 March
1993, the said Ordinance is entitled AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION
OF BUSINESSES PROVIDING CERTAIN FORMS OF AMUSEMENT, ENTERTAINMENT, SERVICES AND
FACILITIES IN THE ERMITA-MALATE AREA, PRESCRIBING PENALTIES FOR VIOLATION THEREOF,
AND FOR OTHER PURPOSES.
MTDC further advanced that The Ordinance does not constitute a proper exercise of police power as the
compulsory closure of the motel business has no reasonable relation to the legitimate municipal interests sought to be
protected.

ISSUE:

Whether or not the Ordinance constitute a proper exercise of police power?

Held:
No. The Ordinance did not constitute a proper exercise of police power. 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.
The object of the Ordinance was, accordingly, the promotion and protection of the social and moral values of
the community. Granting for the sake of argument that the objectives of the Ordinance are within the scope of the
City Council's police powers, the means employed for the accomplishment thereof were unreasonable and unduly
oppressive.
It is undoubtedly one of the fundamental duties of the City of Manila to make all reasonable regulations
looking to the promotion of the moral and social values of the community. However, the worthy aim of fostering
public morals and the eradication of the community's social ills can be achieved through means less restrictive of
private rights; it can be attained by reasonable restrictions rather than by an absolute prohibition. The closing down
and transfer of businesses or their conversion into businesses "allowed" under the Ordinance have no reasonable
relation to the accomplishment of its purposes. Otherwise stated, the prohibition of the enumerated establishments
will not per se protect and promote the social and moral welfare of the community; it will not in itself eradicate the
alluded social ills of prostitution, adultery, fornication nor will it arrest the spread of sexual disease in Manila.
Lucena Grand Central Terminal, Inc. vs. Jac Liner Inc., February 23, 2005

FACTS:

Respondent, JAC Liner, Inc., a common carrier operating buses which ply various routes to and from
Lucena City, assailed, via a petition for prohibition and injunction against the City of Lucena, its Mayor, and the
Sangguniang Panlungsod of Lucena before the Regional Trial Court (RTC) of Lucena City, City Ordinance Nos.
1631 and 1778 as unconstitutional on the ground that, inter alia, the same constituted an invalid exercise of police
power, an undue taking of private property, and a violation of the constitutional prohibition against monopolies.
Ordinance 1631: AN ORDINANCE GRANTING THE LUCENA GRAND CENTRAL TERMINAL, INC., A
FRANCHISE TO CONSTRUCT, FINANCE, ESTABLISH, OPERATE AND MAINTAIN A COMMON BUS-
JEEPNEY TERMINAL FACILITY IN THE CITY OF LUCENA.

Ordinance 1778: AN ORDINANCE REGULATING THE ENTRANCE TO THE CITY OF LUCENA OF ALL
BUSES, MINI-BUSES AND OUT-OF-TOWN PASSENGER JEEPNEYS AND FOR THIS PURPOSE,
AMENDING ORDINACE NO. 1420, SERIES OF 1993, AND ORDINANCE NO. 1557, SERIES OF 1995

ISSUE:
Whether the City of Lucena properly exercised its police power when it enacted the subject ordinances.

HELD:
Respecting the issue of whether police power was properly exercised when the subject ordinances were
enacted: As with the State, the local government may be considered as having properly exercised its police power
only if the following requisites are met: (1) the interests of the public generally, as distinguished from those of a
particular class, require the interference of the State, and (2) the means employed are reasonably necessary for the
attainment of the object sought to be accomplished and not unduly oppressive upon individuals. Otherwise stated,
there must be a concurrence of a lawful subject and lawful method. The questioned ordinances having been enacted
with the objective of relieving traffic congestion in the City of Lucena, they involve public interest warranting the
interference of the State. The first requisite for the proper exercise of police power is thus present.
This leaves for determination the issue of whether the means employed by the Lucena Sangguniang Panlungsod
to attain its professed objective were reasonably necessary and not unduly oppressive upon individuals.
With the aim of localizing the source of traffic congestion in the city to a single location,the subject ordinances
prohibit the operation of all bus and jeepney terminals within Lucena, including those already existing, and allow the
operation of only one common terminal located outside the city proper, the franchise for which was granted to
petitioner. The common carriers plying routes to and from Lucena City are thus compelled to close down their existing
terminals and use the facilities of petitioner.
From the memorandum filed before this Court by petitioner, it is gathered that the Sangguniang Panlungsod had
identified the cause of traffic congestion to be the indiscriminate loading and unloading of passengers by buses on the
streets of the city proper, hence, the conclusion that the terminals contributed to the proliferation of buses obstructing
traffic on the city streets.
Bus terminals per se do not, however, impede or help impede the flow of traffic. How the outright proscription
against the existence of all terminals, apart from that franchised to petitioner, can be considered as reasonably
necessary to solve the traffic problem, this Court has not been enlightened. If terminals lack adequate space such that
bus drivers are compelled to load and unload passengers on the streets instead of inside the terminals, then reasonable
specifications for the size of terminals could be instituted, with permits to operate the same denied those which are
unable to meet the specifications.
In the subject ordinances, however, the scope of the proscription against the maintenance of terminals is so broad
that even entities which might be able to provide facilities better than the franchised terminal are barred from operating
at all.
While the Sangguniang Panlungsod, via Ordinance No. 1557, previously directed bus owners and operators to
put up their terminals outside the poblacion of Lucena City, petitioner informs that said ordinance only resulted in the
relocation of terminals to other well-populated barangays, thereby giving rise to traffic congestion in those
areas. Assuming that information to be true, the Sangguniang Panlungsod was not without remedy. It could have
defined, among other considerations, in a more precise manner, the area of relocation to avoid such consequences.
As for petitioners claim that the challenged ordinances have actually been proven effective in easing traffic
congestion: Whether an ordinance is effective is an issue different from whether it is reasonably necessary. It is its
reasonableness, not its effectiveness, which bears upon its constitutionality. If the constitutionality of a law were
measured by its effectiveness, then even tyrannical laws may be justified whenever they happen to be effective
COMPARISON

Gerochi vs. DOE, July 17, 2007

FACTS:

Petitioners Romeo P. Gerochi, Katulong Ng Bayan (KB), and Environmentalist Consumers Network, Inc.
(ECN) (petitioners), come before this Court in this original action praying that Section 34 of Republic Act (RA) 9136,
otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA), imposing the Universal Charge,[1] and
Rule 18 of the Rules and Regulations (IRR)[2] which seeks to implement the said imposition, be declared
unconstitutional. Congress enacted the EPIRA on June 8, 2001; on June 26, 2001, it took effect.[7]

On April 5, 2002, respondent National Power Corporation-Strategic Power Utilities Group[8] (NPC-SPUG)
filed with respondent Energy Regulatory Commission (ERC) a petition for the availment from the Universal Charge
of its share for Missionary Electrification, docketed as ERC Case No. 2002-165.

Petitioners contend that the Universal Charge has the characteristics of a tax and is collected to fund the
operations of the NPC. They argue that the cases invoked by the respondents clearly show the regulatory purpose of
the charges imposed therein, which is not so in the case at bench. In said cases, the respective funds were created in
order to balance and stabilize the prices of oil and sugar, and to act as buffer to counteract the changes and adjustments
in prices, peso devaluation, and other variables which cannot be adequately and timely monitored by the
legislature. Thus, there was a need to delegate powers to administrative bodies. Petitioners posit that the Universal
Charge is imposed not for a similar purpose.

On the other hand, respondent PSALM through the Office of the Government Corporate Counsel (OGCC)
contends that unlike a tax which is imposed to provide income for public purposes, such as support of the government,
administration of the law, or payment of public expenses, the assailed Universal Charge is levied for a specific
regulatory purpose, which is to ensure the viability of the country's electric power industry. Thus, it is exacted by the
State in the exercise of its inherent police power. On this premise, PSALM submits that there is no undue delegation
of legislative power to the ERC since the latter merely exercises a limited authority or discretion as to the execution
and implementation of the provisions of the EPIRA.

Respondents Department of Energy (DOE), ERC, and NPC, through the Office of the Solicitor General (OSG),
share the same view that the Universal Charge is not a tax because it is levied for a specific regulatory purpose, which
is to ensure the viability of the country's electric power industry, and is, therefore, an exaction in the exercise of the
State's police power. Respondents further contend that said Universal Charge does not possess the essential
characteristics of a tax, that its imposition would redound to the benefit of the electric power industry and not to the
public, and that its rate is uniformly levied on electricity end-users, unlike a tax which is imposed based on the
individual taxpayer's ability to pay. Moreover, respondents deny that there is undue delegation of legislative power to
the ERC since the EPIRA sets forth sufficient determinable standards which would guide the ERC in the exercise of
the powers granted to it. Lastly, respondents argue that the imposition of the Universal Charge is not oppressive and
confiscatory since it is an exercise of the police power of the State and it complies with the requirements of due
process

ISSUE:

Whether or not, the Universal Charge imposed under Sec. 34 of the EPIRA is a tax
HELD:

To resolve the first issue, it is necessary to distinguish the States power of taxation from the police power.

The power to tax is an incident of sovereignty and is unlimited in its range, acknowledging in its very
nature no limits, so that security against its abuse is to be found only in the responsibility of the legislature
which imposes the tax on the constituency that is to pay it.It is based on the principle that taxes are the lifeblood
of the government, and their prompt and certain availability is an imperious need. Thus, the theory behind the exercise
of the power to tax emanates from necessity; without taxes, government cannot fulfill its mandate of promoting the
general welfare and well-being of the people.

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

The conservative and pivotal distinction between these two powers rests in the purpose for which the
charge is made. If generation 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 revenue is incidentally raised does
not make the imposition a tax.

In exacting the assailed Universal Charge through Sec. 34 of the EPIRA, the State's police power, particularly
its regulatory dimension, is invoked. Such can be deduced from Sec. 34 which enumerates the purposes for which the
Universal Charge is imposed and which can be amply discerned as regulatory in character.
Commonwealth vs. Alger, 61 Mass. (7 Cush) 53 (1851)

RULING:
Sources of Regulatory Power
Justice Shaw held it is settled principle that, "every holder of property...holds it under the implied liability that his use
of it may be so regulated, that it shall not be injurious to the equal enjoyment of others having an equal right to the
enjoyment of their property, not injurious to the rights of the community." Id. at 84.

Police power today is, "generally, but vaguely understood in American jurisprudence to refer to state regulatory
power," but really encompasses more. 58 U. Miami L. Rev. 471, 473(2004). In an attempt to define police power,
Shaw stated, "the government's power to enact such regulations for the good and welfare of the community as
it sees fit, subject to the limitations that the regulation be both reasonable and constitutional." Id. at 479-80.
Shaw goes on to explain that, "It is much easier to perceive and realize the existence and sources of this power,
then to mark its boundaries, or prescribe limits to its exercise." 61 Mass 53, 85(1851).

Eminent Domain vs. Police Power

Most notably, the court also attempts to differentiate between eminent domain and police power. In what is often
referred to as the most important paragraph of the opinion, the court explains that police power, "is very different
from the right of eminent domain, the right of a government to take and appropriate private property to public
use, whenever the public exigency requires it; which can be done only on condition of providing a reasonable
compensation therefore. The power we allude to is rather the police power, the power vested in the legislature
by the constitution, to make, ordain, and establish all manner of wholesome and reasonable laws, statutes and
ordinance, either with penalties or without, not repugnant to the constitution, as they shall judge to be for the
good and welfare of the commonwealth, and of the subjects of the same." Id.

It is often hard to distinguish between police power and eminent domain, Professor Benjamin Barros states, "Shaw's
attempt to make a principled distinction between eminent domain and the police power was understandable. In the
19th century, it was widely accepted that just compensation was required only for physical takings, and regulatory
restraints on property were generally considered to be outside of the scope of the Takings clause. Categorizing the
law that prohibited Alger from building his wharf as a regulation allowed Shaw to deny Alger's claim for
compensation. By using the new term 'police power,' Shaw tried to explain this rule in terms of two distinct
government powers, each serving a different purpose." 58 U. Miami L. Rev. 471, 480-81(2004). Shaw provides
obvious uses of police power, such as prohibiting the use of warehouses for the storage of gunpowder when the
warehouses are located near homes or highways, placing restraints on the height of wooden buildings in crowded
areas and requiring them to be covered with incombustible material, and prohibiting buildings from being used as
hospitals for contagious diseases or carrying on of noxious or offensive trades. 61 Mass. 53, 85-86(1851).

Justice Shaw reasoned the Massachusetts statute was, "not an appropriation of the property to a public use, but the
restraint of an injurious private use by the owner, and is therefore not within the principle of property taken under the
right of eminent domain." Id. at 86. Shaw also thought the court's holding in this case would promote certainty, "Things
done may or may not be wrong in themselves, or necessarily injurious and punishable as such at common law; but
laws are passed declaring them offenses, and making them punishable, because they tend to injurious consequences;
but more especially for the sake of having a definite, known and authoritative rule which all can understand and obey."
58 U. Miami L. Rev. 471, 481 (2004). Shaw gave an example of the certainty outcome he expected to obtain with this
holding: "The trade man needs to know, before incurring expenses, how near he may build his works without violating
the law or committing a nuisance; builders of houses to know, to what distance they must keep from the obnoxious
works already erected, in order to be sure of the protection of the law for their habitations. This requisite certainty and
precision can only be obtained by a positive enactment...enforcing the rule thus fixed, by penalties." 61 Mass. 53, 96-
97 (1851). Applying this reasoning to the facts in Alger, Professor Barros concluded that, "the law challenged in Alger
thus legitimately established a point beyond which wharves could not be built, and Alger's wharf was subject to such
regulation even though it was not intrinsically harmful." 58 U. Miami L. Rev. 471, 482 (2004).

Compensation

Justice Shaw states that even though these prohibitions and restraints resulting from the Massachusetts statute may
diminish the profits of the owner, the owners are not entitled to compensation because they are exercises of police
power. (61 Mass. 53, 86). Justice Shaw's statement regarding compensation was generally accepted doctrine at the
time, namely that the obligation to compensate was limited to exercises of eminent domain. 58 U. Miami L. Rev 471,
480(2004). However, passage of time "would show this rule to be flawed." Id. at 481.
Manila Memorial Park, Inc. vs. Secretary of Social Welfare and Development, December

FACTS:

Petitioners Manila Memorial Park, Inc. and La Funeraria Paz-Sucat, Inc., domestic corporations engaged in
the business of providing funeral and burial services, against public respondents Secretaries of the Department of
Social Welfare and Development (DSWD) and the Department of Finance (DOF).

Petitioners assail the constitutionality of Section 4 of Republic Act (RA) No. 7432,3 as amended by RA 9257,4 and
the implementing rules and regulations issued by the DSWD and DOF insofar as these allow business
establishments to claim the 20% discount given to senior citizens as a tax deduction.

Issue:

Whether or not 20% senior citizen discount as provided in Sec 4 of RA 9257 is an exercise of police power?

Held:

Yes. The 20% senior citizen discount is an exercise of police power

Police power is the inherent power of the State to regulate or to restrain the use of liberty and property for
public welfare.58 The only limitation is that the restriction imposed should be reasonable, not oppressive.59 In other
words, to be a valid exercise of police power, it must have a lawful subject or objective and a lawful method of
accomplishing the goal.60 Under the police power of the State, property rights of individuals may be subjected to
restraints and burdens in order to fulfill the objectives of the government.61 The State may interfere with personal
liberty, property, lawful businesses and occupations to promote the general welfare [as long as] the interference [is]
reasonable and not arbitrary.62 Eminent domain, on the other hand, is the inherent power of the State to take or
appropriate private property for public use.63 The Constitution, however, requires that private property shall not be
taken without due process of law and the payment of just compensation.64

Traditional distinctions exist between police power and eminent domain.

In the exercise of police power, a property right is impaired by regulation,65 or the use of property is
merely prohibited, regulated or restricted66 to promote public welfare. In such cases, there is no compensable
taking, hence, payment of just compensation is not required. Examples of these regulations are property condemned
for being noxious or intended for noxious purposes (e.g., a building on the verge of collapse to be demolished for
public safety, or obscene materials to be destroyed in the interest of public morals)67 as well as zoning ordinances
prohibiting the use of property for purposes injurious to the health, morals or safety of the community (e.g., dividing
a citys territory into residential and industrial areas).68 It has, thus, been observed that, in the exercise of police
power (as distinguished from eminent domain), although the regulation affects the right of ownership, none of the
bundle of rights which constitute ownership is appropriated for use by or for the benefit of the public.69

On the other hand, in the exercise of the power of eminent domain, property interests are appropriated and
applied to some public purpose which necessitates the payment of just compensation therefor. Normally, the title to
and possession of the property are transferred to the expropriating authority. Examples include the acquisition of
lands for the construction of public highways as well as agricultural lands acquired by the government under the
agrarian reform law for redistribution to qualified farmer beneficiaries. However, it is a settled rule that the
acquisition of title or total destruction of the property is not essential for taking under the power of eminent
domain to be present.70 Examples of these include establishment of easements such as where the land owner is
perpetually deprived of his proprietary rights because of the hazards posed by electric transmission lines constructed
above his property71 or the compelled interconnection of the telephone system between the government and a
private company.72 In these cases, although the private property owner is not divested of ownership or possession,
payment of just compensation is warranted because of the burden placed on the property for the use or benefit of the
public.