Republic of the Philippines validity of the challenged "guidelines," the Solicitor General invokes the police power
SUPREME COURT of the Philippine State.
Manila
EN BANC
G.R. No. 81958 June 30, 1988
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., petitioner,
vs.
HON. FRANKLIN M. DRILON as Secretary of Labor and Employment, and
TOMAS D. ACHACOSO, as Administrator of the Philippine Overseas
Employment Administration, respondents.
Gutierrez & Alo Law Offices for petitioner.
SARMIENTO, J.:
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," 1 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;" 2 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 held likewise to be an invalid exercise of the lawmaking power, police
power being legislative, and not executive, in character.
In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the
Constitution, providing for worker participation "in policy and decision-making
processes affecting their rights and benefits as may be provided by law." Department
4 enable an individual citizen or a group of citizens to obstruct unreasonably the
Order No. 1, it is contended, was passed in the absence of prior consultations. It is
claimed, finally, to be in violation of the Charter's non-impairment clause, in addition to
the "great and irreparable injury" that PASEI members face should the Order be
further enforced.
On May 25, 1988, the Solicitor General, on behalf of the respondents Secretary of
Labor and Administrator of the Philippine Overseas Employment Administration, filed
a Comment informing the Court that on March 8, 1988, the respondent Labor
Secretary lifted the deployment ban in the states of Iraq, Jordan, Qatar, Canada,
Hongkong, United States, Italy, Norway, Austria, and Switzerland. * In submitting the
It is admitted that Department Order No. 1 is in the nature of a police power measure.
The only question is whether or not it is valid under the Constitution.
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." As defined, it consists of (1) an
5
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." 6
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
7
of the State "to govern its citizens."8
"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." 9
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
enactment of such salutary measures calculated to ensure communal peace, safety,
good order, and welfare." Significantly, the Bill of Rights itself does not purport to be
10
an absolute guaranty of individual rights and liberties "Even liberty itself, the greatest
of all rights, is not unrestricted license to act according to one's will." It is subject to
11
the far more overriding demands and requirements of the greater number.
Notwithstanding its extensive sweep, police power is not without its own limitations.
For all its awesome consequences, it may not be exercised arbitrarily or unreasonably.
Otherwise, and in that event, it defeats the purpose for which it is exercised, that is, to
advance the public good. Thus, when the power is used to further private interests at
the expense of the citizenry, there is a clear misuse of the power. 12
In the light of the foregoing, the petition must be dismissed.
As a general rule, official acts enjoy a presumed vahdity. In the absence of clear and
13
convincing evidence to the contrary, the presumption logically stands.
The petitioner has shown no satisfactory reason why the contested measure should
be nullified. There is no question that Department Order No. 1 applies only to "female
contract workers," but it does not thereby make an undue discrimination between the
14
sexes. It is well-settled that "equality before the law" under the Constitution does not
15
import a perfect Identity of rights among all men and women. It admits of
classifications, provided that (1) such classifications rest on substantial distinctions; (2)
they are germane to the purposes of the law; (3) they are not confined to existing
conditions; and (4) they apply equally to all members of the same class. 16
The Court is satisfied that the classification made-the preference for female workers —
rests on substantial distinctions.
As a matter of judicial notice, the Court is well aware of the unhappy plight that has
befallen our female labor force abroad, especially domestic servants, amid exploitative
working conditions marked by, in not a few cases, physical and personal abuse. The
sordid tales of maltreatment suffered by migrant Filipina workers, even rape and
various forms of torture, confirmed by testimonies of returning workers, are compelling
motives for urgent Government action. As precisely the caretaker of Constitutional
rights, the Court is called upon to protect victims of exploitation. In fulfilling that duty,
the Court sustains the Government's efforts.
The same, however, cannot be said of our male workers. In the first place, there is no
evidence that, except perhaps for isolated instances, our men abroad have been
afflicted with an Identical predicament. The petitioner has proffered no argument that
the Government should act similarly with respect to male workers. The Court, of
course, is not impressing some male chauvinistic notion that men are superior to
women. What the Court is saying is that it was largely a matter of evidence (that
women domestic workers are being ill-treated abroad in massive instances) and not
upon some fanciful or arbitrary yardstick that the Government acted in this case. It is
evidence capable indeed of unquestionable demonstration and evidence this Court
accepts. The Court cannot, however, say the same thing as far as men are concerned.
There is simply no evidence to justify such an inference. Suffice it to state, then, that
insofar as classifications are concerned, this Court is content that distinctions are
borne by the evidence. Discrimination in this case is justified.
As we have furthermore indicated, executive determinations are generally final on the
Court. Under a republican regime, it is the executive branch that enforces policy. For
their part, the courts decide, in the proper cases, whether that policy, or the manner by
which it is implemented, agrees with the Constitution or the laws, but it is not for them
to question its wisdom. As a co-equal body, the judiciary has great respect for
determinations of the Chief Executive or his subalterns, especially when the legislature
itself has specifically given them enough room on how the law should be effectively
enforced. In the case at bar, there is no gainsaying the fact, and the Court will deal
with this at greater length shortly, that Department Order No. 1 implements the
rule-making powers granted by the Labor Code. But what should be noted is the fact
that in spite of such a fiction of finality, the Court is on its own persuaded that
prevailing conditions indeed call for a deployment ban.
There is likewise no doubt that such a classification is germane to the purpose behind
the measure. Unquestionably, it is the avowed objective of Department Order No. 1 to
"enhance the protection for Filipino female overseas workers" this Court has no
17
quarrel that in the midst of the terrible mistreatment Filipina workers have suffered
abroad, a ban on deployment will be for their own good and welfare.
The Order does not narrowly apply to existing conditions. Rather, it is intended to
apply indefinitely so long as those conditions exist. This is clear from the Order itself
("Pending review of the administrative and legal measures, in the Philippines and in
the host countries . . ." ), meaning to say that should the authorities arrive at a means
18
impressed with a greater degree of permanency, the ban shall be lifted. As a stop-gap
measure, it is possessed of a necessary malleability, depending on the circumstances
of each case. Accordingly, it provides:
9. LIFTING OF SUSPENSION. — The Secretary of Labor and Employment
(DOLE) may, upon recommendation of the Philippine Overseas
Employment Administration (POEA), lift the suspension in countries where
there are:
1. Bilateral agreements or understanding with the Philippines, and/or,
2. Existing mechanisms providing for sufficient safeguards to ensure the
welfare and protection of Filipino workers.19
The Court finds, finally, the impugned guidelines to be applicable to all female
domestic overseas workers. That it does not apply to "all Filipina workers" is not an
20
argument for unconstitutionality. Had the ban been given universal applicability, then it
would have been unreasonable and arbitrary. For obvious reasons, not all of them are
similarly circumstanced. What the Constitution prohibits is the singling out of a select
person or group of persons within an existing class, to the prejudice of such a person
or group or resulting in an unfair advantage to another person or group of persons. To
apply the ban, say exclusively to workers deployed by A, but not to those recruited by
B, would obviously clash with the equal protection clause of the Charter. It would be a
classic case of what Chase refers to as a law that "takes property from A and gives it
to B." It would be an unlawful invasion of property rights and freedom of contract and
21
needless to state, an invalid act. (Fernando says: "Where the classification is based
22
on such distinctions that make a real difference as infancy, sex, and stage of
civilization of minority groups, the better rule, it would seem, is to recognize its validity
only if the young, the women, and the cultural minorities are singled out for favorable
treatment. There would be an element of unreasonableness if on the contrary their
status that calls for the law ministering to their needs is made the basis of
discriminatory legislation against them. If such be the case, it would be difficult to
refute the assertion of denial of equal protection." In the case at bar, the assailed
23
Order clearly accords protection to certain women workers, and not the contrary.)
It is incorrect to say that Department Order No. 1 prescribes a total ban on overseas
deployment. From scattered provisions of the Order, it is evident that such a total ban
has hot been contemplated. We quote:
5. AUTHORIZED DEPLOYMENT-The deployment of domestic helpers and
workers of similar skills defined herein to the following [sic] are authorized under
these guidelines and are exempted from the suspension.
5.1 Hirings by immediate members of the family of Heads of State and
Government;
5.2 Hirings by Minister, Deputy Minister and the other senior government
officials; and
5.3 Hirings by senior officials of the diplomatic corps and duly accredited
international organizations.
5.4 Hirings by employers in countries with whom the Philippines have [sic]
bilateral labor agreements or understanding.
xxx xxx xxx
7. VACATIONING DOMESTIC HELPERS AND WORKERS OF SIMILAR
SKILLS--Vacationing domestic helpers and/or workers of similar skills shall be
allowed to process with the POEA and leave for worksite only if they are
returning to the same employer to finish an existing or partially served
employment contract. Those workers returning to worksite to serve a new
employer shall be covered by the suspension and the provision of these
guidelines.
xxx xxx xxx
9. LIFTING OF SUSPENSION-The Secretary of Labor and Employment (DOLE)
may, upon recommendation of the Philippine Overseas Employment
Administration (POEA), lift the suspension in countries where there are:
1. Bilateral agreements or understanding with the Philippines, and/or,
2. Existing mechanisms providing for sufficient safeguards to ensure the
welfare and protection of Filipino workers. 24
xxx xxx xxx
The consequence the deployment ban has on the right to travel does not impair the
right. The right to travel is subject, among other things, to the requirements of "public
safety," "as may be provided by law." Department Order No. 1 is a valid
25
implementation of the Labor Code, in particular, its basic policy to "afford protection to
labor," pursuant to the respondent Department of Labor's rule-making authority
26
vested in it by the Labor Code. The petitioner assumes that it is unreasonable simply
27
because of its impact on the right to travel, but as we have stated, the right itself is not
absolute. The disputed Order is a valid qualification thereto.
Neither is there merit in the contention that Department Order No. 1 constitutes an
invalid exercise of legislative power. It is true that police power is the domain of the
legislature, but it does not mean that such an authority may not be lawfully delegated.
As we have mentioned, the Labor Code itself vests the Department of Labor and
Employment with rulemaking powers in the enforcement whereof. 28
The petitioners's reliance on the Constitutional guaranty of worker participation "in
policy and decision-making processes affecting their rights and benefits" is not 29
well-taken. The right granted by this provision, again, must submit to the demands and
necessities of the State's power of regulation.
The Constitution declares that:
Sec. 3. The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of
employment opportunities for all. 30
"Protection to labor" does not signify the promotion of employment alone. What
concerns the Constitution more paramountly is that such an employment be above all,
decent, just, and humane. It is bad enough that the country has to send its sons and
daughters to strange lands because it cannot satisfy their employment needs at home.
Under these circumstances, the Government is duty-bound to insure that our toiling
expatriates have adequate protection, personally and economically, while away from
home. In this case, the Government has evidence, an evidence the petitioner cannot
seriously dispute, of the lack or inadequacy of such protection, and as part of its duty,
it has precisely ordered an indefinite ban on deployment.

The Court finds furthermore that the Government has not indiscriminately made use of
its authority. It is not contested that it has in fact removed the prohibition with respect
to certain countries as manifested by the Solicitor General.

The non-impairment clause of the Constitution, invoked by the petitioner, must yield to
the loftier purposes targetted by the Government. Freedom of contract and enterprise,
31

like all other freedoms, is not free from restrictions, more so in this jurisdiction,
where laissez faire has never been fully accepted as a controlling economic way of
life.

This Court understands the grave implications the questioned Order has on the
business of recruitment. The concern of the Government, however, is not necessarily
to maintain profits of business firms. In the ordinary sequence of events, it is profits
that suffer as a result of Government regulation. The interest of the State is to provide
a decent living to its citizens. The Government has convinced the Court in this case
that this is its intent. We do not find the impugned Order to be tainted with a grave
abuse of discretion to warrant the extraordinary relief prayed for.

WHEREFORE, the petition is DISMISSED. No costs.

SO ORDERED.

Yap, C.J., Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco,

Padilla, Bidin, Cortes and Griño-Aquino, JJ., concur.

Gutierrez, Jr. and Medialdea, JJ., are on leave.

[ 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 the issue, in general
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
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
engage 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, economic 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 juridical
entities; and (7) a provision allowing the heirs of aliens now negated 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
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 them 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 V 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 that 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 boundles3, 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 public 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 shall 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, SO, 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 it 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 distinction between those who fall within such class and those
who do not. (2 Cooley, Constitutional Limitations, 824-825.)
d. The due process clause.
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.
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.
e. Legislative discretion not subject to judicial review.
Now, in this matter of equitable balancing1, 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, courts are not supposed to override legitimate policy, and
courts never inquire into the wisdom of the law.
V. Economic problems sought to be remedied
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 time
immemorial has always been open to residents, irrespective of race, color or
citizenship.
a. Importance of retail trade in the economy of the nation.
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 commodities 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.
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, traits.
The alien retailer must have started plying his trade in this country in the bigger
centers of population (Time there was when he was unknown in provincial towns
and villages). Slowly but gradually he 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. 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 no 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 aver
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 Accfa, 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 racialism
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), official statistics unmistakably
point out to the ever-increasing dominance and control by the alien of the
retail trade, as witness the following tables:
Assets Gross Sales
 No. Per cent Per cent ...
Year and Retailer's
-Establishmen Pesos Distributio Pesos Distributio
Nationality
ts n n

1941 1949
: :

Filipino ............. 200,323,13 174,181,92

106,671 55.82 5174
.. 8 4
Filipino ............. 213,461,60 462,532,90
113,659 60.30 53.47
Chinese ............. 118,348,69 148,8.13,23 . 2 1
15,356 32.98 44.21
. 2 9
Chinese ............. 125,223,88 392,414,87
16,248 35.72 45.36
Others .............. . 6 6
1,646 40,187,090 11.20 13,630,289 4.05
..
Others ..............
486 12,066,365 3.39 10,078,364 1.17
..

1947
:
1951
Filipino ............. 208,658,94 279,583,88 :
111,107 65.05 57.03
. 6 8

Chinese ............. 106,156,21 205,701,13

13,774 33.56 41.96
... 8 4 Filipino ............. 224,053,62 466,058,05
119,362 61.09 53.07
... 0 2
Otters ...............
354 8,761,260 ..49 4,927,168 1.01
. Chinese ............. 134,325,30 404,481,38
17,429 36.60 46.06
. 3 4

Others ............... 347 8,614,026 2.31 7,645,327 .87

1948: (Census)

AVERAGE
213,842,26 467,161,66
Filipino.............. 118,681 67.30 60.51
4 7 ASSETS AND GROSS SALES PER ESTABLISHMENT

Chinese............. 294,894,22
12,087 93,155,459 29.38 38.20
. 7
Item Gross Sales
422 10,514,675 3.32 9,995,402 1.29
Others...............
 Year and ..
Assets (Pesos)
Retailer's
Others ................................................................................ 24,807 20,737
Nationality (Pesos)
1951:
1941:
Filipino...............................................................................
1,877 3,905
Filipino .............................................................................. 1,878 1,638 ..

Chinese.............................................................................. Chinese ..............................................................................

7,707 9,691 7,707 33,207
.. ..

Others................................................................................ Others .............................................................................. 24,824 22,033

24,416 8,281
..

1947:
(Estimated Assets and Gross Sales of Retail Establishments, By Year and Nationality
Filipino............................................................................... of Owners, Benchmark: 1948 Census, issued by the Bureau of Census and Statistics,
1,878 2,516
. Department of Commerce and Industry; pp. 18-19 of Answer.)

Chinese ..............................................................................
7,707 14,934
.. The above statistics do not include corporations and partnerships, while the
figures on Filipino establishments already include mere market vendors, whose
Others ............................................................................... capital is necessarily small.
24,749 13,919
..
The above figures reveal that in percentage distribution of assets and of gross
1948: (Census) 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 aliens more than make
Filipino............................................................................... up for the numerical gap through their assets and gross sales which average
1,878 4,111 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,
Chinese ..............................................................................
7,707 24,398 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
Others................................................................................
24,916 23,686 spread, and the Filipino retailer is practically helpless in matters of capital,
..
credit, price" and supply.

1949: d. Alien control and threat, subject of apprehension in Constitutional Convention.

Filipino...............................................................................
1,878 4,069
. It is this domination and control, which we believe has been sufficiently shown to
exist, that is the legislature's target in the enactment
7,707 24,152 of the disputed nationalization law. If they did not exist as a fact the sweeping
Chinese ..............................................................................
remedy of 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:
"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 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 IS, 1958, 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 retailers 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 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 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 (See. 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
determinetion of the people, thru their authorized representatives, to free 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 cannot 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 Lindsley vs. Natural Carbonic Gas
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 m 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.
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 of 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, intact, in legislation, are universally restraining
acts; as, for example, acts licensing1 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 snipping 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 contradistinguished 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 raider no special constitutional protection which
forbids n 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 of American
citizens. Broadly speaking, the difference in status between
citizens and aliens 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. 1115 (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. SO (Washington, 1922), the business of pawnbroking
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 V. 340 (Oregon,
1924), the court said that aliens are judicially known to have different interests,
knowledge, attitude, psychology and loyalty, hence the prohibition 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 finding 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 persons
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 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 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 these decisions 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 Chinese1 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 operation 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 power 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 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 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 aliens 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 discrimination 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. * * *."
* * * * * * * "In determining" whether a given act of the Legislature, passed in
"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 purposed. The courts are without
authority either to declare such policy, or, when it is declared by the
legislature, to override it. If the laws passed are seen to have a
reasonable relation to a proper legislative purposed, 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 restrictions it imposes on rights secured to
individuals by the Bill of Eights are unreasonable, and not whether
it imposes any restrictions on such rights. * * *."
* * * * * * *
"* * *. 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, pp. 1074-1075.)
In the case of Lawton vs. Steele, 38 L. ed. 385, 388, it was also held:
"* * *. To justify the state in thus interposing1 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 lest of constitutionality:
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 pursuit of happiness
by free men; that it is a gainful and honest occupation and therefore beyond
the power of the legislature to prohibit
and penalize. This argument 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 and 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 own
destiny. All aspects of our life, even our national security, will be at
the mercy of other people.
"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 bo 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' in their Resolution:
" 'That it is the sense of the Convention that the public interest
requires the nationalization of retail trade; but it abstains 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.' " (II Aruego, The Framing
of the Philippine Constitution, 662-663, 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 principal objective is
the conservation of the patrimony of the nation and as corollary thereto 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 a 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 measure 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 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 alians. 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. Besides, 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 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 into 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
apprise 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 AX of
Answer.)
"Within the meaning of the Constitution requiring that the subject
of every act of the Legislature shall he stated in the title, the title
'To regulate the sale of intoxicating liquors, etc." sufficiently
expresses the subject of an act prohibiting 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, Sec. 4803, p. 345.) The above rule was followed
when 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 not
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 not been apprised of the nature of
the law, especially the nationalization and prohibition provisions. The legislators
took active interest in the discussion of the law, and a great many of the persons
affected by the prohibition 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
Human Eights adopted by the United Nations General Assembly. We find no merit
in the above contention. The United 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
from the fact that members of the United Nations Organization, such as Norway
and Denmark, prohibit foreigners from engaging in retail trade, and in most
nations of the world laws against foreigners engaged in domestic trade are adopted.
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
more time should have been given in the law for the liquidation of
existing businesses when the time comes for them to dose. 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 Treaty of Amity between the Republic of the Philippines and the Republic of The petition is hereby denied, with costs against petitioner.
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 Paras, C. J., Bengzon, Reyes, A., Bautista Angela, Concepcion, Reyes, J. B. L.,
same terms as the nationals of any other country." But the nationals of China are Endencia, and Felix, J.J., concur.
not discriminated 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
(Palston vs. Pennsylvania, 58 L. ed. 539.)

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 such
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
[ GR No. L-7859, Dec 22, 1955 ]
WALTER LUTZ v. J. ANTONIO ARANETA
DECISION
98 Phil. 148
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.
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 Tydings-MeDuffie 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, oh lease or otherwise
"a tax equivalent to the difference between the money value 6f the
rental or consideration collected and the amount representing 'l2
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.
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
President of the Philippines may, until the adjournment 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 moire 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 utilising
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 1949-1950; 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 constitutionally levied.
The action having been dismissed by the Court of First Instance, the plaintiffs
appealed the ease 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 aiid 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 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
law-making 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 So. 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 full 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 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; but the legislature is not
required by the Constitution to adhere to a policy of "all or none." Aa 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
improvement 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 coats against appellant. So ordered.
Paras, C. J., Bengzon, Padilla, Reyes, A., Jugo, Bautista Angelo,
Labrador, and Concepcion, JJ., concur.
256 Phil. 777
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 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 inthe 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 battlecry 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 onAugust 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
tenant-farmers 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.
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 5-hectare ricelandworked by
four tenants and owned by petitioner Agustin 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] and Manotok 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 of Chavez 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 yetbeen 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, 1988, 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 andnot 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.
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 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 billionpesos 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 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.
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.
The petitioner contends that the issuance of E.O 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 riceholdingas 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.
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
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 tenant-farmers 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 above-quoted 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 The decision
appealed from is affirmed, with coats against appellant. So ordered.
, 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 Tañada 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 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.
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.
It 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
gives 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
x x x 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]
The cases before us categorically raise constitutional questions that this Court must
categorically resolve. And so we shall.
II
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. Estrellaand 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 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 asrequired 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, whichin 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 Tañada 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, mandamuswill 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 the same time
on the same subject. In the case of City of Baguio v. NAWASA,[24] for 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 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 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 229 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 claimedviolations of due process in connection with
our 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 a right guaranteed under Article III of the Constitution is a majority of one
because of the absence of retention limits has also become academic under Section 6 of even as against the rest of the nation who would deny him that right.
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 That right covers the person's life, his liberty and his property under Section 1 of
agrarian reform, an objection also made by the sugar planters on the ground that they Article III of the Constitution. With regard to his property, the owner enjoys the
belong to a particular class with particular interests of their own. However, no added protection of Section 9, which reaffirms the familiar rule that private property
evidence has been submitted to the Court that the requisites of a valid classification shall not be taken for public use without just compensation.
have been violated.
This brings us now to the power of eminent domain.
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 IV
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;
Eminent domain is an inherent power of the State that enables it to forcibly acquire
(3) it must not be limited to existing conditions only; and (4) it must apply equally to
private lands intended for public use upon payment of just compensation to the
all the members of the class.[32] The Court finds that all these requisites have been
owner. Obviously, there is no need to expropriate where the owner is willing to sell
met by the measures here challenged as arbitrary and discriminatory.
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
Equal protection simply means that all persons or things similarly situated must be
to sell, or cannot accept the price or other conditions offered by the vendee, that the
treated alike both as to the rights conferred and the liabilities imposed.[33] The
power of eminent domain will come into play to assert the paramount authority of the
petitioners have not shown that they belong to a different class and entitled to a
State over the interests of the property owner. Private rights must then yield to the
different treatment. The argument that not only landowners but also owners of other
irresistible demands of the public interest on the time-honored justification, as in the
properties must be made to share the burden of implementing land reform must be case of the police power, that the welfare of the people is the supreme law.
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
But for all its primacy and urgency, the power of expropriation is by no means absolute
matter. In any event, the Congress is allowed a wide leeway in providing for a
(as indeed no power is absolute). The limitation is found in the constitutional
valid classification. Its decision is accorded recognition and respect by the courts of
injunction that "private property shall not be taken for public use without just
justice except only where its discretion is abused to the detriment of the Bill of Rights.
compensation" and in the abundant jurisprudence that has evolved from the
interpretation of this principle. Basically, the requirements for a proper exercise of the
It is worth remarking at this juncture that a statute may be sustained under the police power are: (1) public use and (2) just compensation.
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
Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the
particular class require the interference of the State and, no less important, the means
State should first distribute public agricultural lands in the pursuit of agrarian reform
employed are reasonably necessary for the attainment of the purpose sought to be
instead of immediately disturbing property rights by forcibly acquiring private
achieved and not unduly oppressive upon individuals.[34] As the subject and purpose
agricultural lands. Parenthetically, it is not correct to say that only public agricultural
of agrarian reform have been laid down by the Constitution itself, we may say that the
lands may be covered by the CARP as the Constitution calls for "the just distribution of
first requirement has been satisfied. What remains to be examined is the validity of
all agricultural lands." In any event, the decision to redistribute private agricultural
the method employed to achieve the constitutional goal.
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
One of the basic principles of the democratic system is that where the rights of the in reviewing that discretion in the absence of a clear showing that it has been abused.
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
A becoming courtesy admonishes us to respect the decisions of the political
in keeping with the Constitution. Mere expediency will not excuse constitutional
departments when they decide what is known as the political question. As explained
shortcuts. There is no question that not even the strongest moral conviction or the
by Chief Justice Concepcion in the case of Tañada v. Cuenco:[36]
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
 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 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 nojustification 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
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 x x x.
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 entera 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.
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 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 landowners 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 -
x x x 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 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.
x x x
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.
x x x
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 reading of the aforecited Section 16(d) will readily show that it does not suffer from
the arbitrariness that rendered the challenged decrees constitutionally
objectionable. Although the proceedings are described as summary, the landower 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. This refers to Section 18 of the CARP Law providing in full as
follows:
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:
(1) Cash payment, under the following terms and conditions:
(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 financialinstruments
negotiable at any time.
(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;
(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) Acquisition of shares of stock of government-owned or controlled corporations or
shares of stock owned by the government in private corporations;
(iii) Substitution for surety or bail bonds for the provisional release of accused
persons, or for performance bonds;
(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) Payment for various taxes and fees to government: Provided, That the use of these
bonds for these purposes 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) Payment for tuition fees of the immediate family of the original bondholder in
government universities, colleges, trade schools, and other institutions;
(vii) Payment for fees of the immediate family of the original bondholder in
government hospitals; and
(viii) Such other uses as the PARC may from time to time allow.
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.)
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 compensationfor 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 exercise 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 wherever 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, 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 last 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]
On the other hand, there is nothing in the records either that militate 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 afore-quoted 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.
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 of thesaid 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
justcompensation. 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]
x x x 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 x x x 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."
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 x x x. (Emphasis supplied.)
It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as of
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.
When E.O. No. 228, categorically stated in its Section 1 that:
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 consideredas 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.
It is worth stressing at this point that all rights acquired by the tenant-farmer 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 counterbalance 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."
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. 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.
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 re-examined 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 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 tenant-farmers 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.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco,

Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea, andRegalado,
JJ., concur.
EN BANC
[ GR No. 78742, Jul 14, 1989 ]
ASSOCIATION OF SMALL LANDOWNERS IN PHILIPPINES v.
SECRETARY OF AGRARIAN REFORM
DECISION
256 Phil. 777
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 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 inthe 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 battlecry 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 onAugust 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
tenant-farmers 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.
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 5-hectare ricelandworked by
four tenants and owned by petitioner Agustin 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] and Manotok 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 of Chavez 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 yetbeen 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, 1988, 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 andnot 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.
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 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 billionpesos 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 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.
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.
The petitioner contends that the issuance of E.O 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 riceholdingas 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.
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
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 tenant-farmers 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 above-quoted 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 Tañada 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 It must be stressed that despite the inhibitions pressing upon the Court when
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 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.
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.
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
gives 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
x x x 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]
The cases before us categorically raise constitutional questions that this Court must
categorically resolve. And so we shall.
II
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. Estrellaand 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 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 asrequired 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, whichin 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 Tañada 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, mandamuswill 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 the same time
on the same subject. In the case of City of Baguio v. NAWASA,[24] for 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 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 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 229 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 claimedviolations of due process in connection with
our 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.
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 Tañada 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 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 nojustification 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
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 x x x.
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 entera 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.
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 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 landowners 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 -
x x x 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 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.
x x x
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.
x x x
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 reading of the aforecited Section 16(d) will readily show that it does not suffer from
the arbitrariness that rendered the challenged decrees constitutionally
objectionable. Although the proceedings are described as summary, the landower 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. This refers to Section 18 of the CARP Law providing in full as
follows:
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:
(1) Cash payment, under the following terms and conditions:
(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 financialinstruments
negotiable at any time.
(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;
(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) Acquisition of shares of stock of government-owned or controlled corporations or
shares of stock owned by the government in private corporations;
(iii) Substitution for surety or bail bonds for the provisional release of accused
persons, or for performance bonds;
(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) Payment for various taxes and fees to government: Provided, That the use of these
bonds for these purposes 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) Payment for tuition fees of the immediate family of the original bondholder in
government universities, colleges, trade schools, and other institutions;
(vii) Payment for fees of the immediate family of the original bondholder in
government hospitals; and
(viii) Such other uses as the PARC may from time to time allow.
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.)
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 compensationfor 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 exercise 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 wherever 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, 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 last 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]
On the other hand, there is nothing in the records either that militate 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 afore-quoted 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.
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 of thesaid 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
justcompensation. 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]
x x x 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 x x x 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."
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 x x x. (Emphasis supplied.)
It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as of
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.
When E.O. No. 228, categorically stated in its Section 1 that:
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 consideredas 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.
It is worth stressing at this point that all rights acquired by the tenant-farmer 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 counterbalance 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."
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. 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.
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 re-examined 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 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 tenant-farmers 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.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco,

Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea, andRegalado,
JJ., concur.
EN BANC
[ GR No. 63419, Dec 18, 1986 ]
FLORENTINA A. LOZANO v. ANTONIO M. MARTINEZ
DECISION
230 Phil. 406
YAP, J.:
The constitutionality of Batas Pambansa Bilang 22 (BP 22 for short), popularly known
as the Bouncing Check Law, which was approved on April 3, 1979, is the sole issue
presented by these petitions for decision. The question is definitely one of first
impression in our jurisdiction.
These petitions arose from cases involving prosecution of offenses under the
statute. The defendants in those cases moved seasonably to quash the informations
on the ground that the acts charged did not constitute an offense, the statute being
unconstitutional. The motions were denied by the respondent trial courts, except in
one case, which is the subject of G.R. No. 75789, wherein the trial court declared the
law unconstitutional and dismissed the case. The parties adversely affected have
come to us for relief.
As a threshold issue the former Solicitor General, in his comment on the petitions,
maintained the posture that it was premature for the accused to elevate to this Court
the orders denying their motions to quash, these orders being interlocutory. While
this is correct as a general rule, we have in justifiable cases intervened to review the
lower court's denial of a motion to quash.[1] In view of the importance of the issue
involved here, there is no doubt in our mind that the instant petitions should be
entertained and the constitutional challenge to BP 22 resolved promptly, one way or
the other, in order to put to rest the doubts and uncertainty that exist in legal and
judicial circles and the general public which have unnecessarily caused a delay in the
disposition of cases involving the enforcement of the statute.
For the purpose of resolving the constitutional issue presented here, we do not find it
necessary to delve into the specifics of the informations involved in the cases which are
the subject of the petitions before us.[2] The language of BP 22 is broad enough to
cover all kinds of checks, whether present dated or postdated, or whether issued in
payment of pre-existing obligations or given in mutual or simultaneous exchange for
something of value.
I
BP 22 punishes a person "who makes or draws and issues any check on account or for
value, knowing at the time of issue that he does not have sufficient funds in or credit
with the drawee bank for the payment of said check in full upon presentment, which
check is subsequently dishonored by the drawee bank for insufficiency of funds or
credit or would have been dishonored for the same reason had not the drawer, without
any valid reason, ordered the bank to stop payment." The penalty prescribed for the
offense is imprisonment of not less than 30 days nor more than one year or a fine of
not less than the amount of the check nor more than double said amount, but in no
case to exceed P200,000.00, or both such fine and imprisonment at the discretion of
the court.[3]
The statute likewise imposes the same penalty on "any person who, having sufficient
funds in or credit with the drawee bank when he makes or draws and issues a check,
shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the
check if presented within a period of ninety (90) days from the date appearing thereon,
for which reason it is dishonored by the drawee bank.[4]
An essential element of the offense is "knowledge" on the part of the maker or drawer
of the check of the insufficiency of his funds in or credit with the bank to cover the
check upon its presentment. Since this involves a state of mind difficult to establish,
the statute itself creates a prima facie presumption of such knowledge where payment
of the check "is refused by the drawee because of insufficient funds in or credit with
such bank when presented within ninety (90) days from the date of the check.[5] To
mitigate the harshness of the law in its application, the statute provides that such
presumption shall not arise if within five (5) banking days from receipt of the notice of
dishonor, the maker or drawer makes arrangements for payment of the check by the
bank or pays the holder the amount of the check.
Another provision of the statute, also in the nature of a rule of evidence, provides that
the introduction in evidence of the unpaid and dishonored check with the drawee
bank's refusal to pay "stamped or written thereon or attached thereto, giving the
reason therefor," shall constitute prima facie proof of "the making or issuance of said
check, and the due presentment to the drawee for payment and the dishonor
thereof . . . for the reason written, stamped or attached by the drawee on such
dishonored check."[6]
The presumptions being merely prima facie, it is open to the accused of course to
present proof to the contrary to overcome the said presumptions.
II
BP 22 is aimed at putting a stop to or curbing the practice of issuing checks that are
worthless, i.e. checks that end up being rejected or dishonored for payment. The
practice, as discussed later, is proscribed by the state because of the injury it causes to
the public interests. power, influence, qualifications, property, credit, agency, business
or imaginary transactions, or by means of other similar deceits;
Before the enactment of BP 22, provisions already existed in our statute books which
penalize the issuance of bouncing or rubber checks. Criminal law has dealt with the
problem within the context of crimes against property punished as "estafa" or crimes xxx xxx xxx
involving fraud and deceit. The focus of these penal provisions is on the damage
caused to the property rights of the victim.
d. By postdating a check, or issuing a check in payment of an
The Penal Code of Spain, which was in force in the Philippines from 1887 until it was obligation the offender knowing that at the time he had no funds in
replaced by the Revised Penal Code in 1932, contained provisions penalizing, among the bank, or the funds deposited by him were not sufficient to cover
others, the act of defrauding another through false pretenses. Art. 335 punished a the amount of the check without informing the payee of such
person who defrauded another "by falsely pretending to possess any power, influence, circumstances."
qualification, property, credit, agency or business, or by means of similar deceit."
The scope of paragraph 2 (d), however, was deemed to exclude checks issued in
Although no explicit mention was made therein regarding checks, this provision was
payment of pre-existing obligations.[10] The rationale of this interpretation is that in
deemed to cover within its ambit the issuance of worthless or bogus checks in
estafa, the deceit causing the defraudation must be prior to or simultaneous with the
exchange for money.[7]
commission of the fraud. In issuing a check as payment for a pre-existing debt, the
drawer does not derive any material benefit in return or as consideration for its
In 1926, an amendment was introduced by the Philippine Legislature, which added a
issuance. On the part of the payee, he had already parted with his money or property
new clause (paragraph 10) to Article 335 of the old Penal Code, this time referring in
before the check is issued to him, hence, he is not defrauded by means of any "prior" or
explicit terms to the issuance of worthless checks. The amendment penalized any
"simultaneous" deceit perpetrated on him by the drawer of the check.
person who: 1) issues a check in payment of a debt or for other valuable consideration,
knowing at the time of its issuance that he does not have sufficient funds in the bank to
With the intention of remedying the situation and solving the problem of how to bring
cover its amount, or 2) maliciously signs the check differently from his authentic
checks issued in payment of pre-existing debts within the ambit of Art. 315, an
signature as registered at the bank in order that the latter would refuse to honor it; or 3)
amendment was introduced by the Congress of the Philippines in 1967[11], which was
issues a postdated check and, at the date set for its payment, does not have sufficient
enacted into law as Republic Act No. 4885, revising the aforesaid proviso to read as
deposit to cover the same.[8]
follows:
In 1932, as already adverted to, the old Penal Code was superseded by the Revised
"(d) By postdating a check, or issuing a check in payment of an
Penal Code.[9] The above provisions, in amended form, were incorporated in Article
obligation when the offender had no funds in the bank, or his funds
315 of the Revised Penal Code defining the crime of estafa. The revised text of the
deposited therein were lot sufficient to cover the amount of the
provision read as follows:
check. The failure of the drawer of the check to deposit the amount
necessary to cover his check within three (3) days from receipt of
"Art. 315. Swindling (estafa). - Any person who shall defraud
notice from the bank and/or the payee or holder that said check has
another by any of the means mentioned herein-below shall be
been dishonored for lack or insufficiency of funds shall be prima
punished by:
facie evidence of deceit constituting false pretense or fraudulent
act."
xxx xxx xxx
However, the adoption of the amendment did not alter the situation materially. A
divided Court held in People vs. Sabio, Jr.[12] that Article 315, as amended by
2. By means of any of the following false pretenses or fraudulent Republic Act 4885, does not cover checks issued in payment of pre-existing
acts executed prior to or simultaneously with the commission of the obligations, again relying on the concept underlying the crime of estafa through false
fraud: pretenses or deceit - which is, that the deceit or false pretenses must be prior to or
simultaneous with the commission of the fraud.
a. By using fictitious name, or falsely pretending to possess
Since statistically it had been shown that the greater bulk of dishonored checks
consisted of those issued in payment of pre-existing debts,[13] the amended provision
evidently failed to cope with the real problem and to deal effectively with the evil that it
was intended to eliminate or minimize.
With the foregoing factual and legal antecedents as a backdrop, the then Interim
Batasan confronted the problem squarely. It opted to take a bold step and decided to
enact a law dealing with the problem of bouncing or worthless checks, without
attaching the law's umbilical cord to the existing penal provisions on estafa. BP 22
addresses the problem directly and frontally and makes the act of issuing a worthless
check malum prohibitum.[14]
The question now arises: Is BP 22 a valid law?
Previous efforts to deal with the problem of bouncing checks within the ambit of the
law on estafa did not evoke any constitutional challenge. In contrast, BP 22 was
challenged promptly.
Those who question the constitutionality of BP 22 insist that: (1) it offends the
constitutional provision forbidding imprisonment for debt; (2) it impairs freedom of
contract; (3) it contravenes the equal protection clause; (4) it unduly delegates
legislative and executive powers; and (5) its enactment is flawed in that during its
passage the Interim Batasan violated the constitutional provision prohibiting
amendments to a bill on Third Reading.
The constitutional challege to BP 22 posed by petitioners deserves a searching and
thorough scrutiny and the most deliberate consideration by the Court, involving as it
does the exercise of what has been described as "the highest and most delicate function
which belongs to the judicial department of the government."[15]
As we enter upon the task of passing on the validity of an act of a co-equal and
coordinate branch of the government, we need not be reminded of the time-honored
principle, deeply ingrained in our jurisprudence, that a statute is presumed to be
valid. Every presumption must be indulged in favor of its constitutionality. This is
not to say that we approach our task with diffidence or timidity. Where it is clear that
the legislature has overstepped the limits of its authority under the constitution, we
should not hesitate to wield the axe and let it fall heavily, as fall it must, on the
offending statute.
III
Among the constitutional objections raised against BP 22, the most serious is the
alleged conflict between the statute and the constitutional provision forbidding
imprisonment for debt. It is contended that the statute runs counter to the inhibition
in the Bill of Rights which states, "No person shall be imprisoned for debt or
non-payment of a poll tax."[16] Petitioners insist that, since the offense under BP 22 is
consummated only upon the dishonor or non-payment of the check when it is
presented to the drawee bank, the statute is really a "bad debt law" rather than a "bad
check law". What it punishes is the non-payment of the check, not the act of issuing
it. The statute, it is claimed, is nothing more than a veiled device to coerce payment of
a debt under the threat of penal sanction.
First of all, it is essential to grasp the essence and scope of the constitutional inhibition
invoked by petitioners. Viewed in its historical context, the constitutional prohibition
against imprisonment for debt is a safeguard that evolved gradually during the early
part of the nineteenth century in the various states of the American Union as a result
of the people's revulsion at the cruel and inhumane practice, sanctioned by common
law, which permitted creditors to cause the incarceration of debtors who could not pay
their debts. At common law, money judgments arising from actions for the recovery
of a debt or for damages from breach of a contract could be enforced against the
person or body of the debtor by writ of capias ad satisfaciendum. By means of this
writ, a debtor could be seized and imprisoned at the instance of the creditor until he
makes the satisfaction awarded. As a consequence of the popular ground swell
against such a barbarous practice, provisions forbidding imprisonment for debt came
to be generally enshrined in the constitutions of various states of the Union.[17]
This humanitarian provision was transported to our shores by the Americans at the
turn of the century and embodied in our organic laws.[18] Later, our fundamental law
outlawed not only imprisonment for debt, but also the infamous practice, native to our
shore, of throwing people in jail for non-payment of the cedula or poll tax.[19]
The reach and scope of this constitutional safeguard have been the subject of judicial
definition, both by our Supreme Court[20] and by American state courts.[21] Mr.
Justice Malcolm, speaking for the Supreme Court in Ganaway vs.
Quillen,[22] stated: "The 'debt' intended to be covered by the constitutional guaranty
has a well-defined meaning. Organic provisions relieving from imprisonment for debt,
were intended to prevent commitment of debtors to prison for liabilities arising from
actions ex contractu. The inhibition was never meant to include damages arising in
actions ex delicto, for the reason that damages recoverable therein do not arise from
any contract entered into between the parties but are imposed upon the defendant for
the wrong he has done and are considered as punishment, nor to fines and penalties
imposed by the courts in criminal proceedings as punishments for crime."
The law involved in Ganaway was not a criminal statute but the Code of Procedure in
Civil Actions (1909) which authorized the arrest of the defendant in a civil case on
grounds akin to those which justify the issuance of a writ of attachment under our
present Rules of Court, such as imminent departure of the defendant from the
Philippines with intent to defraud his creditors, or concealment, removal or
disposition of properties in fraud of creditors, etc. The Court, in that case, declared
the detention of the defendant unlawful, being violative of the constitutional inhibition
against imprisonment for debt, and ordered his release. The Court, however,
refrained from declaring the statutory provision in question unconstitutional.
Closer to the case at bar is People v. Vera Reyes,[23] wherein a statutory provision
which made illegal and punishable the refusal of an employer to pay, when he can do
so, the salaries of his employees or laborers on the fifteenth or last day of every month
or on Saturday every week, was challenged for being violative of the constitutional
prohibition against imprisonment for debt. The constitutionality of the law in
question was upheld by the Court, it being within the authority of the legislature to
enact such a law in the exercise of the police power. It was held that "one of the
purposes of the law is to suppress possible abuses on the part of the employers who
hire laborers or employees without paying them the salaries agreed upon for their
services, thus causing them financial difficulties." The law was viewed not as a
measure to coerce payment of an obligation, although obviously such could be its
effect, but to banish a practice considered harmful to public welfare.
IV
Has BP 22 transgressed the constitutional inhibition against imprisonment for
debt? To answer the question, it is necessary to examine what the statute prohibits
and punishes as an offense. Is it the failure of the maker of the check to pay a
debt? Or is it the making and issuance of a worthless check in payment of a
debt? What is the gravamen of the offense? This question lies at the heart of the
issue before us.
The gravamen of the offense punished by BP 22 is the act of making and issuing a
worthless check or a check that is dishonored upon its presentation for payment. It is
not the non-payment of an obligation which the law punishes. The law is not intended
or designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit,
under pain of penal sanctions, the making of worthless checks and putting them in
circulation. Because of its deleterious effects on the public interest, the practice is
proscribed by the law. The law punishes the act not as an offense against property,
but an offense against public order.
Admittedly, the distinction may seem at first blush to appear elusive and difficult to
conceptualize. But precisely in the failure to perceive the vital distinction lies the
error of those who challenge the validity of BP 22.
It may be constitutionally impermissible for the legislature to penalize a person for
non-payment of a debt ex contractu. But certainly it is within the prerogative of the
lawmaking body to proscribe certain acts deemed pernicious and inimical to public
welfare. Acts mala in se are not the only acts which the law can punish. An act may
not be considered by society as inherently wrong, hence not malum in se, but because
of the harm that it inflicts on the community, it can be outlawed and criminally
punished as malum prohibitum. The state can do this in the exercise of its police
power.
The police power of the state has been described as "the most essential, insistent and
illimitable of powers" which enables it to prohibit all things hurtful to the comfort,
safety and welfare of society.[24] It is a power not emanating from or conferred by the
constitution, but inherent in the state, plenary, "suitably vague and far from precisely
defined, rooted in the conception that man in organizing the state and imposing upon
the government limitations to safeguard constitutional rights did not intend thereby to
enable individual citizens or group of citizens to obstruct unreasonably the enactment
of such salutary measures to ensure communal peace, safety, good order and
welfare."[25]
The enactment of BP 22 is a declaration by the legislature that, as a matter of public
policy, the making and issuance of a worthless check is deemed a public nuisance to be
abated by the imposition of penal sanctions.
It is not for us to question the wisdom or impolicy of the statute. It is sufficient that a
reasonable nexus exists between means and end. Considering the factual and legal
antecedents that led to the adoption of the statute, it is not difficult to understand the
public concern which prompted its enactment. It had been reported that the
approximate value of bouncing checks per day was close to 200 million pesos, and
thereafter when overdrafts were banned by the Central Bank, it averaged between 50
million to 80 million pesos a day.[26]
By definition, a check is a bill of exchange drawn on a bank and payable on
demand.[27] It is a written order on a bank, purporting to be drawn against a deposit
of funds for the payment at all events, of a sum of money to a certain person therein
named or to his order or to cash, and payable on demand.[28]Unlike a promissory
note, a check is not a mere undertaking to pay an amount of money. It is an order
addressed to a bank and partakes of a representation that the drawer has funds on
deposit against which the check is drawn, sufficient to ensure payment upon its
presentation to the bank. There is therefore an element of certainty or assurance that
the instrument will be paid upon presentation. For this reason, checks have become
widely accepted as a medium of payment in trade and commerce. Although not legal
tender, checks have come to be perceived as convenient substitutes for currency in
commercial and financial transactions. The basis or foundation of such perception is
confidence. If such confidence is shaken, the usefulness of checks as currency
substitutes would be greatly diminished or may become nil. Any practice therefore
tending to destroy that confidence should be deterred, for the proliferation of
worthless checks can only create havoc in trade circles and the banking community.
Recent statistics of the Central Bank show that one-third of the entire money supply of
the country, roughly totalling P32.3 billion, consists of peso demand deposits; the
remaining two-thirds consists of currency in circulation.[29] These demand deposits
in the banks constitute the funds against which, among others, commercial papers like
checks, are drawn. The magnitute of the amount involved amply justifies the
legitimate concern of the state in preserving the integrity of the banking
system. Flooding the system with worthless checks is like pouring garbage into the
bloodstream of the nation's economy.
The effects of the issuance of a worthless check transcends the private interests of the
parties directly involved in the transaction and touches the interests of the community
at large. The mischief it creates is not only a wrong to the payee or holder, but also an
injury to the public. The harmful practice of putting valueless commercial papers in
circulation, multiplied a thousandfold, can very well pollute the channels of trade and
commerce, injure the banking system and eventually hurt the welfare of society and
the public interest. As aptly stated -[30]
"The 'check flasher' does a great deal more than contract a debt; he
shakes the pillars of business; and to my mind, it is a mistaken
charity of judgment to place him in the same category with the
honest man who is unable to pay his debts, and for whom the
constitutional inhibition against 'imprisonment for debt, except in
cases of fraud' was intended as a shield and not a sword."
In sum, we find the enactment of BP 22 a valid exercise of the police power and is not
repugnant to the constitutional inhibition against imprisonment for debt.
This Court is not unaware of the conflicting jurisprudence obtaining in the various
states of the United States on the constitutionality of the "worthless check" acts.[31] It
is needless to warn that foreign jurisprudence must be taken with abundant
caution. A caveat to be observed is that substantial differences exist between our
statute and the worthless check acts of those states where the jurisprudence have
evolved. One thing to remember is that BP 22 was not lifted bodily from any existing
statute. Furthermore, we have to consider that judicial decisions must be read in the
context of the facts and the law involved and, in a broader sense, of the social,
economic and political environment - - in short, the milieu - - under which they were
made. We recognize the wisdom of the old saying that what is sauce for the goose may
not be sauce for the gander.
As stated elsewhere, police power is a dynamic force that enables the state to meet the
exigencies of changing times. There are occasions when the police power of the state
may even override a constitutional guaranty. For example, there have been cases
wherein we held that the constitutional provision on non-impairment of contracts
must yield to the police power of the state.[32] Whether the police power may override
the constitutional inhibition against imprisonment for debt is an issue we do not have
to address. This bridge has not been reached, so there is no occasion to cross it.
We hold that BP 22 does not conflict with the constitutional inhibition against
imprisonment for debt.
V
We need not detain ourselves lengthily in the examination of the other constitutional
objections raised by petitioners, some of which are rather flimsy.
We find no valid ground to sustain the contention that BP 22 impairs freedom of
contract. The freedom of contract which is constitutionally protected is freedom to
enter into "lawful" contracts. Contracts which contravene public policy are not
lawful.[33] Besides, we must bear in mind that checks can not be categorized as mere
contracts. It is a commercial instrument which, in this modern day and age, has
become a convenient substitute for money; it forms part of the banking system and
therefore not entirely free from the regulatory power of the state.
Neither do we find substance in the claim that the statute in question denies equal
protection of the laws or is discriminatory, since it penalizes the drawer of the check,
but not the payee. It is contended that the payee is just as responsible for the crime as
the drawer of the check, since without the indispensable participation of the payee by
his acceptance of the check there would be no crime. This argument is tantamount to
saying that, to give equal protection, the law should punish both the swindler and the
swindled. The petitioners' posture ignores the well-accepted meaning of the clause
"equal protection of the laws". The clause does not preclude classification of
individuals, who may be accorded different treatment under the law as long as the
classification is not unreasonable or arbitrary.[34]
It is also suggested that BP 22 constitutes undue or improper delegation of legislative
powers, on the theory that the offense is not completed by the sole act of the maker or
drawer but is made to depend on the will of the payee. If the payee does not present
the check to the bank for payment but instead keeps it, there would be no crime. The
logic of the argument stretches to absurdity the meaning of "delegation of legislative
power". What cannot be delegated is the power to legislate, or the power to make
laws,[35] which means, as applied to the present case, the power to define the offense
sought to be punished and to prescribe the penalty. By no stretch of logic or
imagination can it be said that the power to define the crime and prescribe the penalty
therefor has been in any manner delegated to the payee. Neither is there any
provision in the statute that can be construed, no matter how remotely, as undue
delegation of executive power. The suggestion that the statute unlawfully delegates its
enforcement to the offended party is farfetched.
Lastly, the objection has been raised that Section 9 (2) of Article VII of the 1973
Constitution was violated by the legislative body when it enacted BP 22 into law. This
constitutional provision prohibits the introduction of amendments to a bill during the
Third Reading. It is claimed that during its Third Reading, the bill which eventually
became BP 22 was amended in that the text of the second paragraph of Section 1 of the
bill as adopted on Second Reading was altered or changed in the printed text of the bill
submitted for approval on Third Reading.
A careful review of the record of the proceedings of the Interim Batasan on this matter
shows that, indeed, there was some confusion among Batasan Members on what was
the exact text of the paragraph in question which the body approved on Second
Reading.[36] Part of the confusion was due apparently to the fact that during the
deliberations on Second Reading (the amendment period), amendments were
proposed orally and approved by the body or accepted by the sponsor, hence, some
members might not have gotten the complete text of the provisions of the bill as
amended and approved on Second Reading. However, it is clear from the records that
the text of the second paragraph of Section 1 of BP 22 is the text which was actually
approved by the body on Second Reading on February 7, 1979, as reflected in the
approved Minutes for that day. In any event, before the bill was submitted for final
approval on Third Reading, the Interim Batasan created a Special Committee to
investigate the matter, and the Committee in its report, which was approved by the
entire body on March 22, 1979, stated that "the clause in question was . . . an
authorized amendment of the bill and the printed copy thereof reflects accurately the
provision in question as approved on Second Reading.[37] We therefore find no merit
in the petitioners' claim that in the enactment of BP 22 the provisions of Section 9 (2)
of Article VIII of the 1973 Constitution were violated.

WHEREFORE, judgment is rendered granting the petition in G.R. No. 75789 and
setting aside the order of the respondent Judge dated August 19, 1986. The petitions
in G.R. Nos. 63419, 66839-42, 71654, 74524-25, 75122-49, 75812-13 and 75765-67 are
hereby dismissed and the temporary restraining order issued in G.R. Nos. 74524-25 is
lifted. With costs against private petitioners.

SO ORDERED.

Teehankee, C.J., Feria, Fernan, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr.,

Cruz, Paras, and Feliciano, JJ., concur.
EN BANC
[ GR No. 89572, Dec 21, 1989 ]
DEPARTMENT OF EDUCATION v. ROBERTO REY C. SAN DIEGO
DECISION
259 Phil. 1016
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 that -
h). 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.
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.
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 practice
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 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.
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 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.
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 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.

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.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco,

Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea, andRegalado, JJ., concur.

[1] A check with the Department of Education showed that the private respondent had
actually taken and flunked four tests already and was applying to
take a fifth examination.

[2] He also failed this fifth test.

[5] US v. Toribio, 15 Phil. 85; Fabie v. City of Manila, 21 Phil. 486; Ynot v.
Intermediate Appellate Court, 148 SCRA 659.

[6] Article XIV, Section 5(3).

[7] See Footnote Nos. 1& 2.

EN BANC institutions and other similar institutions as the Chairman of the
National Meat Inspection Commission may see fit, in the case of
[ GR No. 74457, Mar 20, 1987 ] carabeef, and to deserving farmers through dispersal as the Director
of Animal Industry may see fit, in the case of carabaos.
RESTITUTO YNOT v. IAC
"SECTION 2. This Executive Order shall take effect immediately.

DECISION
"Done in the City of Manila, this 25th day of October, in the year of
Our Lord, nineteen hundred and eighty.
232 Phil. 615

(SGD.) FERDINAND E.
CRUZ, J.:
MARCOS

The essence of due process is distilled in the immortal cry of Themistocles to President
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.
Republic of the Philippines"

The said executive order reads in full as follows:

"WHEREAS, the President has given orders prohibiting the

The petitioner had transported six carabaos in a pump boat from Masbate to Iloilo on
interprovincial movement of carabaos and the slaughtering of
January 13, 1984, when they were confiscated by the police station commander of
carabaos not complying with the requirements of Executive Order
Barotac Nuevo, Iloilo, for violation of the above measure.[1] The petitioner sued for
No. 626 particularly with respect to age;
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,
"WHEREAS, it has been observed that despite such orders the
the court sustained the confiscation of the carabaos and, since they could no longer be
violators still manage to circumvent the prohibition against
produced, ordered the confiscation of the bond. The court also declined to rule on the
interprovincial movement of carabaos by transporting carabeef
constitutionality of the executive order, as raised by the petitioner, for lack of authority
instead; and
and also for its presumed validity.[2]
"WHEREAS, in order to achieve the purposes and objectives of
The petitioner appealed the decision to the Intermediate Appellate Court,[*] [3] which
Executive Order No. 626 and the prohibition against interprovincial
upheld the trial court,[**] and he has now come before us in this petition for review
movement of carabaos, it is necessary to strengthen the said
on certiorari.
Executive Order and provide for the disposition of the carabaos and
carabeef subject of the violation.
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
"NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
provincial boundaries. His claim is that the penalty is invalid because it is imposed
Philippines, by virtue of the powers vested in me by the Constitution,
without according the owner a right to be heard before a competent and impartial
do hereby promulgate the following:
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
"SECTION 1. Executive Order No. 626 is hereby amended such that
improper exercise of the legislative power by the former President under Amendment
henceforth, no carabao regardless of age, sex, physical condition or
No. 6 of the 1973 Constitution.[4]
purpose and no carabeef shall be transported from one province to
another. The carabao or carabeef transported in violation of this
While also involving the same executive order, the case of Pesigan v. Angeles[5] is not
Executive Order as amended shall be subject to confiscation and
applicable here. The question raised there was the necessity of the previous
forfeiture by the government, to be distributed to charitable
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 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.
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.
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 challenged measure is denominated an executive order but it is really a
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 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 the 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.
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
expeditious 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 canceled 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.
The protection of the general welfare is the particular function of the police power
which both restrains 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:
"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. x x x x x.
"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
the slaughter 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.
We do not see how the prohibition of the interprovincial 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 centuriesfold 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 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 in Pesigan 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 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 fait accompli 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.

Teehankee, C.J., Yap, Fernan, Narvasa, Gutierrez, Jr., Paras, Gancayco, Padilla, Bidin,
Sarmiento, and Cortes, JJ., concur.

Melencio-Herrera and Feliciano, JJ., on leave.

DIVISION
[ GR No. L-34915, Jun 24, 1983 ]
CITY GOVERNMENT OF QUEZON CITY v. JUDGE VICENTE G. ERICTA
AS JUDGE OF COURT OF FIRST INSTANCE OF RIZAL
DECISION
207 Phil. 648
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 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 resolution, the Quezon City Engineer notified respondent Himlayang
Pilipino, Inc. in writing that Section 9 of Ordinance No. 6118, S-64 would be enforced.
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."
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
(Sub-sections '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 sub-section 't',
Section 12 of Republic Act 537 which authorizes the City Council to
"'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. III, 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 powers of promoting the
public welfare by restraining and regulating the use of liberty and
property' (Quoted in Political Law by Tañada and Carreon, V-II, 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,
L-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 democractic
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 limitation 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.
"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 municipal 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 absence
of any evidence to offset the presumption of validity that attaches to
a challenged statute or ordinance. As was express 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 circumstances 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 well-being 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 Eboña 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 secure 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 civilized
society, 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, nor
injurious to the rights of the community. All 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. Teehankee (Chairman), Melencio-Herrera, Plana, Vasquez and Relova, JJ., concur.

There is no reasonable relation between the setting aside of at least six (6) percent of
the total area of all 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
homeowners.

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.
 EN BANC
G.R. No. L-14355 October 31, 1919
THE CITY OF MANILA, plaintiff-appellant,
vs.
CHINESE COMMUNITY OF MANILA, ET AL., defendants-appellees.
City Fiscal Diaz for appellant.
Crossfield and O'Brien, Williams, Ferrier and Sycip, Delgado and Delgado, Filemon
Sotto, and Ramon Salinas for 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 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.
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 are mere 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 right to condemn private
property for public use, shall exercise that right in the manner hereinafter prescribed."
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, 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? 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
rights call 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, 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 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. Chandler-Dunbar 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."
In the case of School Board of Carolina vs. Saldaña (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."
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.)
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 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 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.)
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.

Arellano, C.J., Torres, Araullo and Avanceña, JJ., concur.

[ GR No. L-18841, Jan 27, 1969 ]
REPUBLIC v. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
DECISION
136 Phil. 20
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 infer-connection 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:
"SEC. 79. The Bureau of Telecommunications shall exercise the
following powers and duties:
"(a) To operate and maintain existing wire-telegraph and
radio-telegraph 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 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 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.[17] Through 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.
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
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 contract 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 defendant's 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.
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.
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. Normally, 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 interservice 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), 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 commu-
nication service throughout the Philippines", and, in 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 messages 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 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 rights 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 paying a
compensation, the rate of which is to be agreed upon by the Director
of Posts and the grantee; - - -"
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.

Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando,

Capistrano, Teehankee, and Barredo, JJ., concur.
[ GR No. L-12172, Aug 29, 1958 ]
PEOPLE v. JUAN F. FAJARDO
DECISION
104 Phil. 443
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 defendant-appellant
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 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 to others; to
refuse the application of one landowner or lessee and to grant that
of another, when for all material purposes, the two are 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
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
The validity of the ordinance in question was justified by the court below under section
modern tendency is to regard the beautification of neighborhoods as conducive to the
2243, par. (c), of the Revised Administrative Code, as amended. This section provides:
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 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).
"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) 352 111.
212, 185 N.E. 827) (Italics supplied.)
"SEC. 2243. Certain legislative powers of discretionary
character. The municipal council shall have authority to exercise the
following discretionary powers:
***
(c) To establish fire limits in populous centers, prescribe the kinds of
buildings that may be constructed or repaired within them, and
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, howeverv 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.

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.

Paras, C. J., Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo, Concepcion,
Endencia, and Felix, JJ., concur.

Accused acquitted.
EN BANC
[ GR No. L-20620, Aug 15, 1974 ]
REPUBLIC v. CARMEN M. VDA. DE CASTELLVI
DECISION
157 Phil. 329
ZALDIVAR, J.:
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 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 Deeds of Pampanga x x x…";
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 of Lot 1-B, 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 x x x", 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, x x x".
In its complaint, the Republic alleged, among other things, that the fair market 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 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 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], 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 of 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 Toledo-Gozun 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 filed by defendant Castellvi as having been filed out of time, thereby dismissing
both appeals.
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 emended.
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 on 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 Alfredo 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;
2. In holding that the "taking" of the properties under
expropriation commenced with the filing of this action;
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.
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 than 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 condemnor 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]
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.
"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) x x x
"5. The LESSEE may, at anytime 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
erect additions . . . which facilities or fixtures x x x 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 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.
"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 x x x
"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 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,
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;
"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 nonpayment 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.
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 vs. Rizal Park Co., Inc., 53 Phil.
515, 525); Magdalena Estate, Inc. vs. 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.
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 Castellvi'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 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 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.
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 Toledo-Gozun 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 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;"
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. 8 Castellvi). 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 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 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 basis for fixing the fair market value of the
lands of Castellvi and Toledo-Gozun.
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, 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 an
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 exproriation 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 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 a 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:
"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. If 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 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.
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.
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; x x x…"
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 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.
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 newly discovered evidence. We do not 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 at
P.14 per square meter.
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. 16-1345, 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 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 that this document passed through the Office of the Register of
Deeds for the purpose of transfering 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 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.
"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 had 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.x x x
 "It is also recalled that during the hearing before the Court of the per annum from July 10, 1959 until the day full payment is made or deposited in court;
Report and Recommendation of the Commissioners and objection
thereto, Solicitor Padua made the observation: (e) the attorney's lien of Atty. Alberto Cacnio is enforced; and

I understand, Your Honor, that there was a sale (f) the costs should be paid by appellant Republic of the Philippines, as provided in
that took place in this place of land recently where Section 12, Rule 67, and in Section 13, Rule 141, of the Rules of Court.
the land was sold for P0.20 which is contiguous to
this land.' IT IS SO ORDERED

"The Court gave him permission to submit said document subject to

the approval of the Court. x x x This was before the decision was Makalintal, C.J., Barredo, Antonio, Esguerra, Fernandez, Muñoz Palma, and Aquino,
rendered, and later promulgated on May 26, 1961 or more than one JJ., concur.
month after Solicitor Padua made the above observation. He could Castro, Fernando, Teehankee, and Makasiar, JJ., took no part.
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
newly-discovered evidence, because under the circumstances, the
correct qualification that can be given is 'forgotten
evidence'. Forgotten evidence, however, is not newly-discovered
evidence."[33]

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 her 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%
[ GR No. L-26400, Feb 29, 1972 ]
VICTORIA AMIGABLE v. NICOLAS CUENCA
DECISION
150 Phil. 422
MAKALINTAL, J.:
This is an appeal from the decision of the Court of First Instance of Cebu in its Civil
Case No. R-5977, dismissing the plaintiffs complaint.
Victoria Amigable, the appellant herein, is the registered owner of Lot No. 639 of the
Banilad Estate in Cebu City as shown by Transfer Certificate of Title No. T-18060,
which superseded Transfer Certificate of Title No. RT- 3272 (T-3435) issued to her by
the Register of Deeds of Cebu on February 1, 1924. No annotation in favor of the
government of any right or interest in the property appears at the back of the
certificate. Without prior expropriation or negotiated sale, the government used a
portion of said lot, with an area of 6,167 square meters, for the construction of the
Mango and Gorordo Avenues.
It appears that said avenues were already existing in 1921 although "they were in bad
condition and very narrow, unlike the wide and beautiful avenues that they are now,"
and "that the tracing of said roads was begun in 1924 and the formal construction in
1925."[*]
On March 27, 1958 Amigable's counsel wrote the President of the Philippines
requesting payment of the portion of her lot which had been appropriated by the
government. The claim was indorsed to the Auditor General, who disallowed it in his
9th Indorsement dated December 9, 1958. A Copy of said indorsement was
transmitted to Amigable's counsel by the Office of the President on January 7, 1959.
On February 6, 1959 Amigable filer in the court a quo a complaint which was later
amended on April 17, 1959 upon motion of the defendants, against the Republic of the
Philippines and Nicolas Cuenca, in his capacity as Commissioner of Public Highways,
for the recovery of ownership and possession of the 6,167 square meters of land
traversed by the Mango and Gorordo Avenues. She also sought the payment of
compensatory damages in the sum of P50,000.00 for the illegal occupation of her land,
moral damages in the sum of P25,000.00, attorney's fees in the sum of P5,000.00 and
the costs of the suit.
Within the reglementary period the defendants filed a joint answer denying the
material allegations of the complaint and interposing the following affirmative
defenses, to wit: (1) that the action was premature, the claim not having been filed
first with the Office of the Auditor General; (2) that the right of action for the recovery
of any amount which might be due the plaintiff, if any, had already prescribed; (3) that
the action being a suit against the Government, the claim for moral damages,
attorney's fees and costs had no valid basis since as to these items the Government had
not given its consent to be sued; (4) that inasmuch as it was the province of Cebu that
appropriated and used the area involved in the construction of Mango Avenue,
plaintiff had no cause of action against the defendants.
During the scheduled hearings nobody appeared for the defendants notwithstanding
due notice, so the trial court proceeded to receive the plaintiff's evidence ex parte. On
July 29, 1959 said court rendered its decision holding that it had no jurisdiction over
the plaintiff's cause of action for the recovery of possession and ownership of the
portion of her lot in question on the ground that the government cannot be sued
without its consent; that it had neither original nor appellate jurisdiction to hear, try
and decide plaintiff's claim for compensatory damages in the sum of P50,000.00, the
same being a money claim against the government; and that the claim for moral
damages had long prescribed, nor did it have jurisdiction over said claim because the
government had not given its consent to be sued. Accordingly, the complaint was
dismissed. Unable to secure a reconsideration, the plaintiff appealed to the Court of
Appeals, which subsequently certified the case to Us, there being no question of fact
involved.
The issue here is whether or not the appellant may properly sue the government under
the facts of the case.
In the case of Ministerio vs. Court of First Instance of Cebu,[1] involving a claim for
payment of the value of a portion of land used for the widening of the Gorordo Avenue
in Cebu City, this Court, through Mr. Justice Enrique M. Fernando, held that where
the government takes away property from a private landowner for public use without
going through the legal process of expropriation or negotiated sale, the aggrieved party
may properly maintain a suit against the government without thereby violating the
doctrine of governmental immunity from suit without its consent. We there said:
"* * * If the constitutional mandate that the owner be compensated
for property taken for public use were to be respected, as it should,
then a suit of this character should not be summarily
dismissed. The doctrine of governmental immunity from suit
cannot serve as an instrument for perpetrating an injustice on a
citizen. Had the government followed the procedure indicated by
the governing law at the time, a complaint would have been filed by
it, and only upon payment of the compensation fixed by the
judgment, or after tender to the party entitled to such payment of
the amount fixed, may it 'have the right to enter in and upon the
land so condemned, to appropriate the same to the public use
 defined in the judgment.' If there were an observance of procedural
regularity petitioners would not be in the sad plaint they are now. It
is unthinkable then that precisely because there was a failure to
abide by what the law requires, the government would stand to
benefit. It is just as important, if not more so, that there be fidelity
to legal norms on the part of officialdom if the rule of law were to be
maintained. It is not too much to say that when the government
takes any property for public use, which is conditioned upon the
payment of just compensation, to be judicially ascertained, it makes
manifest that it submits to the jurisdiction of a court. There is no
thought then that the doctrine of immunity from suit could still be
appropriately invoked."

Considering that no annotation in favor of the government appears at the back of her
certificate of title and that she has not executed any deed of conveyance of any portion
of her lot to the government, the appellant remains the owner of the whole lot. As
registered owner, she could bring an action to recover possession of the portion of land
in question at anytime because possession is one of the attributes of
ownership. However, since restoration of possession of said portion by the
government is neither convenient or feasible at this time because it is now and has
been used for road purposes, the only relief available is for the government to make
due compensation which it could and should have done years ago. To determine the
due compensation for the land, the basis should be the price or value thereof at the
time of the taking.[2]

As regards the claim for damages, the plaintiff is entitled thereto in the form of legal
interest on the price of the land from the time it was taken up to the time that payment
is made by the government.[3] In addition, the government should pay for attorney's
fees, the amount of which should be fixed by the trial court after hearing.

WHEREFORE , the decision appealed from is hereby set aside and the case
remanded to the court a quo for the determination of the compensation, including
attorney's fees, to which the appellant is entitled as above indicated. No
pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Zaldivar, Castro, Fernando, Teehankee, Barredo,

Villamor, and Makasiar, JJ., concur.
EN BANC
[ GR No. 119694, May 22, 1995 ]
PHILIPPINE PRESS INSTITUTE v. COMELEC
RESOLUTION
314 Phil. 131
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:
"x x x 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 Commission
for dissemination of vital election information.
Sec. 4. Allocation of Comelec Space. - (a)
'Comelec Space' shall be available to all
candidates during 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' may be 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
candidatesconcerned 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 may be,
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." (Underscoring 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 are directed 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.
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." (Underscoring 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 that Resolution and the related
letter-directives 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 xxx 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." (Underscoring in the original)
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 letter-directives 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 inhering 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 minimis temporary
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 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 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 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 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
broadcasters 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. x x x"[7](Citations
omitted; underscoring 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 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
case-to-case basis, in terms of very specific sets of facts.
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. 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.
2. 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.
Narvasa, C.J., Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug,
Kapunan, Mendoza, and Francisco, JJ., concur.
Quiason, J., on leave.
[1] Petition, pp. 6-11; Rollo, pp. 7-12.
[2] Comment, pp. 5-15; Rollo, pp. 70-80.
[3] As I.A. Cruz, Constitutional Law, p. 59 (1991 ed.), citing Noble v. City of Manila, 67
Phil. 1 (1938), stressed:
"[w]here private property is needed for conversion to some public use, the first thing
obviously that the government should do is to offer to buy it. If the owner is willing
to sell and the parties can agree on the price and the other conditions of the sale, a
voluntary transaction can then be concluded and the transfer effected without the
necessity of judicial action.
But if the owner of the private property is unwilling to part with it, or, being willing,
cannot agree to the conditions of the transfer, then it will be necessary for the
government to use its coercive authority. By its power of eminent domain, it can then,
upon payment of just compensation, forcibly acquire the needed property in order to
devote it to the intended public use." (Emphases supplied)
[4] See, in this connection, Cruz, supra note 3 at pp. 44-45. The police power may be
delegated by the legislative authority to local governments under the general welfare
clause (Section 16, R.A. No. 7160, "Local Government Code of 1991"), to the President
and administrative agencies. See also Binay v. Domingo, 201 SCRA 508 (1991);
Philippine Association of Service Exporters, Inc. v. Drilon, 163 SCRA 386 (1988);
Villacosta v. Bernardo, 143 SCRA 480 (1986).
EN BANC
[ GR No. L-48685, Sep 30, 1987 ]
LORENZO SUMULONG v. BUENAVENTURA GUERRERO
DECISION
238 Phil. 462
CORTES, J.:
On December 5, 1977 the National Housing Authority (NHA) 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.
(SGD) BUENAVENTURA S. GUERRERO
Judge
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.
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 1224, 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 case 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, rearrangement 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;
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 valid 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 m
ay be beneficially employed for the general welfare satisfies the requ
irementof 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) Underscoring 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)
Specifically, urban renewal or redevelopment and the construction of low-cost
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. II, 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, arising 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 coo
peration with the private sector, a continuing program of urban lan
d reformand housing which will make available at affordable cost de
cent housing and basic services to underpriveleged and homeless cit
izens in urbancenters 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, Underscoring 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 all 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 "(s)eriously concerned that, despite the efforts of Governments at the
national and local levels and of international organizations, the living 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]
In the light of the foregoing, this Court is satisfied that "socialized housing" falls within
the confines of "public use". It is, particularly important to draw attention to
paragraph (d) of Pres. Dec. No. 1224 which should be construed in relation with the
preceding three paragraphs. Provisions on economic 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 Nayon 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.
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 Lungsod Silangan TownsiteReservation (created by Presidential
Proclamation No. 1637 on April 18, 1977).
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)
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].
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 FY 1974-1977, p. 357]. Up to the present, housing "still
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 FY 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
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, Rizalhundred of hectares of which are
owned by a few landowners only. It is surprising [therefore] why respondent National
Housing Authority [would] include [their] two small lots . . ."
In J.M. Tuason Co., Inc. v. 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 v Baylosis, [96 Phil. 461 (1955)], held that:
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.
The said case of J.M. Tuason Co., Inc. departed from the ruling
in Guido v. 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 v. 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 majority
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 housingpurposes 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 Constitution's, 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 v. 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 Authority v. Dulay (G.R. No. 59603, April 29, 1987) for
being encroachments on judicial prerogatives.
This Court abandoned the ruling in National Housing Authority v. 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 after expert commissioners have actually viewed the property,
time of the taking. It means a fair and full equivalent for the loss after evidence and arguments pro and con have been presented, and
sustained. All the facts as to the condition of the property and its after all factors and considerations essential to a fair and just
surroundings, its improvements and capabilities, should be determination have been judiciously evaluated. (p. 13)
considered.
On the matter of the issuance of a writ of possession, the ruling in the Ignacio case is
* * * reiterated, thus:

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 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 thay 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)
[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
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.

3. Due Process
SO ORDERED.

Petitioners assert that Pres. Decree 1224, as amended, violates procedural due process
Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,
as it allows immediate taking of possession, control and disposition of property
Feliciano, Gancayco, Padilla, Bidin, and Sarmiento, JJ., concur.
without giving the owner his day in court. Respondent Judge ordered the issuance of a
writ of possession without notice and without hearing.

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 a minor bureaucrat or clerk to
absolutely prevail over the judgment of a court promulgated only
DIVISION
[ GR No. 106440, Jan 29, 1996 ]
ALEJANDRO MANOSCA v. CA
DECISION
322 Phil. 442
VITUG, J.:
In this appeal, via a petition for review on certiorari, from the decision[1] 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 x x x.
"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."
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 Landmark. 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 -
"x x x 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 fide tenants 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 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 not 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 Seña v. Manila Railroad Co.,[19] that:
"x x x 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. x x x 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 whatever may be beneficially
employed for the general welfare satisfies the requirement of public
use."[20]
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.
WHEREFORE, the petition is DENIED. No costs.
SO ORDERED.
[16] See U.S. vs. Toribio, 15 Phil. 85.
Padilla, Bellosillo, Kapunan, and Hermosisima, Jr., JJ., concur.
[17] Black's Law Dictionary, p. 1232.

[18] 125 SCRA 220.

[1] Penned by Justice Nathanael De Pano, Jr., with the concurrence of Justices Luis
Victor and Fortunato Vailoces. [19] 42 Phil. 102.

[2] "The National Museum and the National Historical Commission are hereby vested
with the right to declare other such historical and cultural sites as National Shrines,
Monuments, and/or Landmarks, in accordance with the guidelines set forth in R.A.
4846 and the spirit of this Decree."
[3] Rollo, pp. 77-82.
[20] Enrique Fernando, The Constitution of the Philippines, 2nd ed., pp. 523-524.
[21] 31 SCRA 413.
[22] Joaquin Bernas, The Constitution of the Republic of the Philippines, Vol. 1, 1987
ed., p. 282.

[4] Rollo, pp. 66-67. [23] Philippine Columbian Association v. Panis, 228 SCRA 668.

[5] Sec. 29. xxx. [24] Capuno v. Jaramillo, 234 SCRA 212.

(2) No public money or property shall be appropriated, applied, paid, or employed,
directly or indirectly, for the use, benefit, or support of any sect, church, denomination,
sectarian institution, or system of religion, or of any priest, preacher, minister, or
other religious teacher, or dignitary as such, except when such priest, preacher,
minister, or dignitary is assigned to the armed forces, or to any penal institution, or
government orphanage or leprosarium.
[25] Those pleadings include:
(a) An urgent motion that the hearing on the fixing of the property's provisional value
and the taking of possession by the Republic over the same be held in abeyance until
after petitioners shall have received a copy of the complaint and summons (Rollo, pp.
86-88;

[6] Rollo, pp. 68-69. (b) A motion to dismiss, dated 08 August 1989, seeking to dismiss the complaint
instituted by the Republic on the ground that the expropriation in question is not for a
[7] Rollo, p. 70. public purpose and contrary to Section 29(a), Article VI, of the 1987 Constitution
(Rollo, pp. 90-91);
[8] Rollo, pp. 71-76.
(c) A motion for reconsideration and/or suspension of the implementation of the 03
[9] Black's Law Dictionary, 6th ed., p. 523. August 1989 Order (Rollo, pp. 93-95); and

[10] Visayan Refining Company vs. Camus, 40 Phil. 550. (d) A motion for reconsideration of the orders dated 15 and 20 February, 1990 (Rollo,
pp. 103-111).
[11] Sec. 9, Art. III, 1987 Constitution.
[26] The Noble case holds that where there is a valid and subsisting contract between
[12] 84 Phil. 847. the owners of the property and the expropriating authority, there is no need or reason
for expropriation (67 Phil. 1).
[13] Rollo, pp. 38-39.

[14] Rollo, p.42.

[15] See Province of Camarines Sur vs. Court of Appeals, 222 SCRA 173.
EN BANC
[ GR No. 59603, Apr 29, 1987 ]
EXPORT PROCESSING ZONE AUTHORITY v. CEFERINO E. DULAY
DECISION
233 Phil. 313
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 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 accordance 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 filed 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 pre-trial 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.
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 filed 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 filed 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.
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 fundamental 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 on just compensation:
Municipality of Daet v. Court of Appeals (93 SCRA 503, 516),
xxx xxx xxx
"x x x 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 of Appeals (102 SCRA 597, 608),
xxx xxx xxx
"x x x 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."
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 that 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
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 Pano, 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.
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.
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.
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 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.
As was held in the case of Gideon v. Wainwright (93 ALR 2d, 733, 742):
"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 abrupt 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. x x x."
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).
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 "just-ness" 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.

SO ORDERED.

Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla,

Bidin, Sarmiento, and Cortes, JJ., concur.
Teehankee, C.J., in the result.
Yap, J., on leave.
DIVISION
[ GR No. 127820, Jul 20, 1998 ]
MUNICIPALITY OF PARAÑAQUE v. V.M. REALTY CORPORATION
DECISION
354 Phil. 684
PANGANIBAN, J.:
A local government unit (LGU), like the Municipality of Parañaque, 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.
Statement of the Case
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:
"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 Parañaque
enabling the Municipality, thru its Chief Executive, to exercise the
power of eminent domain. The complaint, therefore, states no cause
of action.
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
successor-in-interest of Limpan Investment Corporation as shown
by the 'Deed of Assignment Exchange' executed on June 13, 1990.
WHEREFORE, defendant's motion for reconsideration is hereby
granted. The order dated February 4, 1994 is vacated and set aside.
This case is hereby dismissed. No pronouncement as to costs.
SO ORDERED."[5]
Factual Antecedents
Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993,[6] the
Municipality of Parañaque 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, Parañaque, 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,[13] alleging 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,
1994,[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.

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:
"1. Whether or not the Resolution of the Parañaque 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 plaintiff-appellant.
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]
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.
First Issue:
Resolution Different from an Ordinance
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] (Italics 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:
"Section 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 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 must 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.[38] Indeed, "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 Sanguniang 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:
" x x x 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.
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.
Davide, Jr., (Chairman), Bellosillo, Vitug, and Quisumbing, JJ., concur.

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 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 non-compliance 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,
EN BANC
[ GR NO. 161656, Jun 29, 2005 ]
REPUBLIC v. VICENTE G. LIM
RESOLUTION
500 Phil. 652
SANDOVAL-GUTIERREZ, J.:
Justice is the first virtue of social institutions.[1] When the state wields its power of
eminent domain, there arises a correlative obligation on its part to pay the owner of
the expropriated property a just compensation. If it fails, there is a clear case of
injustice that must be redressed. In the present case, fifty-seven (57) years have
lapsed from the time the Decision in the subject expropriation proceedings became
final, but still the Republic of the Philippines, herein petitioner, has not compensated
the owner of the property. To tolerate such prolonged inaction on its part is to
encourage distrust and resentment among our people the very vices that corrode the
ties of civility and tempt men to act in ways they would otherwise shun.
A revisit of the pertinent facts in the instant case is imperative.
On September 5, 1938, the Republic of the Philippines (Republic) instituted a special
civil action for expropriation with the Court of First Instance (CFI) of Cebu, docketed
as Civil Case No. 781, involving Lots 932 and 939 of the Banilad Friar Land Estate,
Lahug, Cebu City, for the purpose of establishing a military reservation for the
Philippine Army. Lot 932 was registered in the name of Gervasia Denzon under
Transfer Certificate of Title (TCT) No. 14921 with an area of 25,137 square meters,
while Lot 939 was in the name of Eulalia Denzon and covered by TCT No. 12560
consisting of 13,164 square meters.
After depositing P9,500.00 with the Philippine National Bank, pursuant to the Order
of the CFI dated October 19, 1938, the Republic took possession of the lots. Thereafter,
or on May 14, 1940, the CFI rendered its Decision ordering the Republic to pay the
Denzons the sum of P4,062.10 as just compensation.
The Denzons interposed an appeal to the Court of Appeals but it was dismissed on
March 11, 1948. An entry of judgment was made on April 5, 1948.
In 1950, Jose Galeos, one of the heirs of the Denzons, filed with the National Airports
Corporation a claim for rentals for the two lots, but it "denied knowledge of the
matter." Another heir, Nestor Belocura, brought the claim to the Office of then
President Carlos Garcia who wrote the Civil Aeronautics Administration and the
Secretary of National Defense to expedite action on said claim. On September 6, 1961,
Lt. Manuel Cabal rejected the claim but expressed willingness to pay the appraised
value of the lots within a reasonable time.
For failure of the Republic to pay for the lots, on September 20, 1961, the Denzons'
successors-in-interest, Francisca Galeos-Valdehueza and Josefina
Galeos-Panerio,[2] filed with the same CFI an action for recovery of possession with
damages against the Republic and officers of the Armed Forces of the Philippines in
possession of the property. The case was docketed as Civil Case No. R-7208.
In the interim or on November 9, 1961, TCT Nos. 23934 and 23935 covering Lots 932
and 939 were issued in the names of Francisca Valdehueza and Josefina Panerio,
respectively. Annotated thereon was the phrase "subject to the priority of the
National Airports Corporation to acquire said parcels of land, Lots 932 and 939 upon
previous payment of a reasonable market value."
On July 31, 1962, the CFI promulgated its Decision in favor of Valdehueza and Panerio,
holding that they are the owners and have retained their right as such over Lots 932
and 939 because of the Republic's failure to pay the amount of P4,062.10, adjudged in
the expropriation proceedings. However, in view of the annotation on their land titles,
they were ordered to execute a deed of sale in favor of the Republic. In view of "the
differences in money value from 1940 up to the present," the court adjusted the
market value at P16,248.40, to be paid with 6% interest per annum from April 5, 1948,
date of entry in the expropriation proceedings, until full payment.
After their motion for reconsideration was denied, Valdehueza and Panerio appealed
from the CFI Decision, in view of the amount in controversy, directly to this
Court. The case was docketed as No. L-21032.[3] On May 19, 1966, this Court
rendered its Decision affirming the CFI Decision. It held that Valdehueza and Panerio
are still the registered owners of Lots 932 and 939, there having been no payment of
just compensation by the Republic. Apparently, this Court found nothing in the
records to show that the Republic paid the owners or their successors-in-interest
according to the CFI decision. While it deposited the amount of P9,500,00, and said
deposit was allegedly disbursed, however, the payees could not be ascertained.
Notwithstanding the above finding, this Court still ruled that Valdehueza and Panerio
are not entitled to recover possession of the lots but may only demand the payment of
their fair market value, ratiocinating as follows:
"Appellants would contend that: (1) possession of Lots 932 and 939
should be restored to them as owners of the same; (2) the Republic
should be ordered to pay rentals for the use of said lots, plus
attorney's fees; and (3) the court a quo in the present suit had no
power to fix the value of the lots and order the execution of the deed
of sale after payment.

It is true that plaintiffs are still the registered owners of the land,
there not having been a transfer of said lots in favor of the
Government. The records do not show that the Government paid
the owners or their successors-in-interest according to the 1940 CFI
decision although, as stated, P9,500.00 was deposited by it, and
said deposit had been disbursed. With the records lost, however, it
cannot be known who received the money (Exh. 14 says: 'It is further
certified that the corresponding Vouchers and pertinent Journal
and Cash Book were destroyed during the last World War, and
therefore the names of the payees concerned cannot be
ascertained.') And the Government now admits that there is no
available record showing that payment for the value of the lots in
question has been made (Stipulation of Facts, par. 9, Rec. on Appeal,
p. 28).
The points in dispute are whether such payment can still be made
and, if so, in what amount. Said lots have been the subject of
expropriation proceedings. By final and executory judgment in said
proceedings, they were condemned for public use, as part of an
airport, and ordered sold to the Government. In fact, the
abovementioned title certificates secured by plaintiffs over said lots
contained annotations of the right of the National Airports
Corporation (now CAA) to pay for and acquire them. It follows that
both by virtue of the judgment, long final, in the expropriation suit,
as well as the annotations upon their title certificates, plaintiffs are
not entitled to recover possession of their expropriated lots which
are still devoted to the public use for which they were expropriated
but only to demand the fair market value of the same."
Meanwhile, in 1964, Valdehueza and Panerio mortgaged Lot 932 to Vicente
Lim, herein respondent,[4] as security for their loans. For their failure to pay Lim
despite demand, he had the mortgage foreclosed in 1976. Thus, TCT No. 23934 was
cancelled, and in lieu thereof, TCT No. 63894 was issued in his name.
On August 20, 1992, respondent Lim filed a complaint for quieting of title with the
Regional Trial Court (RTC), Branch 10, Cebu City, against General Romeo Zulueta, as
Commander of the Armed Forces of the Philippines, Commodore Edgardo Galeos, as
Commander of Naval District V of the Philippine Navy, Antonio Cabaluna, Doroteo
Mantos and Florencio Belotindos, herein petitioners. Subsequently, he amended the
complaint to implead the Republic.
On May 4, 2001, the RTC rendered a decision in favor of respondent, thus:
"WHEREFORE, judgment is hereby rendered in favor of plaintiff
Vicente Lim and against all defendants, public and
private, declaring plaintiff Vicente Lim the absolute and exclusive
owner of Lot No. 932 with all the rights of an absolute owner
including the right to possession. The monetary claims in the
complaint and in the counter claims contained in the answer of
defendants are ordered Dismissed.
Petitioners elevated the case to the Court of Appeals, docketed therein as CA-G.R. CV
No. 72915. In its Decision[5] dated September 18, 2003, the Appellate Court
sustained the RTC Decision, thus:
"Obviously, defendant-appellant Republic evaded its duty of paying
what was due to the landowners. The expropriation proceedings had
already become final in the late 1940's and yet, up to now, or more
than fifty (50) years after, the Republic had not yet paid the
compensation fixed by the court while continuously reaping benefits
from the expropriated property to the prejudice of the
landowner. x x x. This is contrary to the rules of fair play because
the concept of just compensation embraces not only the correct
determination of the amount to be paid to the owners of the land,
but also the payment for the land within a reasonable time from its
taking. Without prompt payment, compensation cannot be
considered "just" for the property owner is made to suffer the
consequence of being immediately deprived of his land while being
made to wait for a decade or more, in this case more than 50 years,
before actually receiving the amount necessary to cope with the loss.
To allow the taking of the landowners' properties, and in the
meantime leave them empty-handed by withholding payment of
compensation while the government speculates on whether or not it
will pursue expropriation, or worse, for government to subsequently
decide to abandon the property and return it to the landowners, is
undoubtedly an oppressive exercise of eminent domain that must
never be sanctioned. (Land Bank of the Philippines vs. Court of
Appeals, 258 SCRA 404).
x x x x x x
An action to quiet title is a common law remedy for the removal of
any cloud or doubt or uncertainty on the title to real property. It is
essential for the plaintiff or complainant to have a legal or equitable
title or interest in the real property, which is the subject matter of
the action. Also the deed, claim, encumbrance or proceeding that is
being alleged as cloud on plaintiff's title must be shown to be in fact
invalid or inoperative despite its prima facie appearance of validity
or legal efficacy (Robles vs. Court of Appeals, 328 SCRA 97). In view
of the foregoing discussion, clearly, the claim of defendant-appellant
Republic constitutes a cloud, doubt or uncertainty on the title of
 plaintiff-appellee Vicente Lim that can be removed by an action to
quiet title.
WHEREFORE, in view of the foregoing, and finding no reversible
error in the appealed May 4, 2001 Decision of Branch 9, Regional
Trial Court of Cebu City, in Civil Case No. CEB-12701, the said
decision is UPHELD AND AFFIRMED. Accordingly, the appeal
is DISMISSED for lack of merit."
Undaunted, petitioners, through the Office of the Solicitor General, filed with this
Court a petition for review on certiorari alleging that the Republic has remained the
owner of Lot 932 as held by this Court in Valdehueza vs. Republic.[6]
In our Resolution dated March 1, 2004, we denied the petition outright on the ground
that the Court of Appeals did not commit a reversible error. Petitioners filed an
urgent motion for reconsideration but we denied the same with finality in our
Resolution of May 17, 2004.
On May 18, 2004, respondent filed an ex-parte motion for the issuance of an entry of
judgment. We only noted the motion in our Resolution of July 12, 2004.
On July 7, 2004, petitioners filed an urgent plea/motion for clarification, which is
actually a second motion for reconsideration. Thus, in our Resolution of September 6,
2004, we simply noted without action the motion considering that the instant petition
was already denied with finality in our Resolution of May 17, 2004.
On October 29, 2004, petitioners filed a very urgent motion for leave to file a motion
for reconsideration of our Resolution dated September 6, 2004 (with prayer to refer
the case to the En Banc). They maintain that the Republic's right of ownership has
been settled in Valdehueza.
The basic issue for our resolution is whether the Republic has retained ownership of
Lot 932 despite its failure to pay respondent's predecessors-in-interest the just
compensation therefor pursuant to the judgment of the CFI rendered as early as May
14, 1940.
Initially, we must rule on the procedural obstacle.
While we commend the Republic for the zeal with which it pursues the present case,
we reiterate that its urgent motion for clarification filed on July 7, 2004 is actually a
second motion for reconsideration. This motion is prohibited under Section 2, Rule
52, of the 1997 Rules of Civil Procedure, as amended, which provides:
"Sec. 2. Second motion for reconsideration. No second motion for
reconsideration of a judgment or final resolution by the same party
shall be entertained."
Consequently, as mentioned earlier, we simply noted without action the motion since
petitioners' petition was already denied with finality.
Considering the Republic's urgent and serious insistence that it is still the owner of Lot
932 and in the interest of justice, we take another hard look at the controversial issue
in order to determine the veracity of petitioner's stance.
One of the basic principles enshrined in our Constitution is that no person shall be
deprived of his private property without due process of law; and in expropriation cases,
an essential element of due process is that there must be just compensation whenever
private property is taken for public use.[7]Accordingly, Section 9, Article III, of our
Constitution mandates: "Private property shall not be taken for public use without just
compensation."
The Republic disregarded the foregoing provision when it failed and refused to pay
respondent's predecessors-in-interest the just compensation for Lots 932 and
939. The length of time and the manner with which it evaded payment demonstrate
its arbitrary high-handedness and confiscatory attitude. The final judgment in the
expropriation proceedings (Civil Case No. 781) was entered on April 5, 1948. More
than half of a century has passed, yet, to this day, the landowner, now respondent, has
remained empty-handed. Undoubtedly, over 50 years of delayed payment cannot, in
any way, be viewed as fair. This is more so when such delay is accompanied by
bureaucratic hassles. Apparent from Valdehueza is the fact that respondent's
predecessors-in-interest were given a "run around" by the Republic's officials and
agents. In 1950, despite the benefits it derived from the use of the two lots, the
National Airports Corporation denied knowledge of the claim of respondent's
predecessors-in-interest. Even President Garcia, who sent a letter to the Civil
Aeronautics Administration and the Secretary of National Defense to expedite the
payment, failed in granting relief to them. And, on September 6, 1961, while the Chief
of Staff of the Armed Forces expressed willingness to pay the appraised value of the
lots, nothing happened.
The Court of Appeals is correct in saying that Republic's delay is contrary to the rules
of fair play, as "just compensation embraces not only the correct determination of the
amount to be paid to the owners of the land, but also the payment for the land within a
reasonable time from its taking. Without prompt payment, compensation cannot be
considered 'just.'" In jurisdictions similar to ours, where an entry to the expropriated
property precedes the payment of compensation, it has been held that if the
compensation is not paid in a reasonable time, the party may be treated as a
trespasser ab initio.[8]
Corollarily, in Provincial Government of Sorsogon vs. Vda. De Villaroya,[9] similar to
the present case, this Court expressed its disgust over the government's vexatious
delay in the payment of just compensation, thus:
 "The petitioners have been waiting for more than thirty years to be
paid for their land which was taken for use as a public high school.
As a matter of fair procedure, it is the duty of the Government,
whenever it takes property from private persons against their will, to
supply all required documentation and facilitate payment of just
compensation. The imposition of unreasonable requirements and
vexatious delays before effecting payment is not only galling and
arbitrary but a rich source of discontent with government. There
should be some kind of swift and effective recourse against
unfeeling and uncaring acts of middle or lower level bureaucrats."
We feel the same way in the instant case.
More than anything else, however, it is the obstinacy of the Republic that prompted us
to dismiss its petition outright. As early as May 19, 1966, in Valdehueza, this Court
mandated the Republic to pay respondent's predecessors-in-interest the sum of
P16,248.40 as "reasonable market value of the two lots in question." Unfortunately, it
did not comply and allowed several decades to pass without obeying this Court's
mandate. Such prolonged obstinacy bespeaks of lack of respect to private rights and
to the rule of law, which we cannot countenance. It is tantamount to confiscation of
private property. While it is true that all private properties are subject to the need of
government, and the government may take them whenever the necessity or the
exigency of the occasion demands, however, the Constitution guarantees that when
this governmental right of expropriation is exercised, it shall be attended by
compensation.[10] From the taking of private property by the government under the
power of eminent domain, there arises an implied promise to compensate the owner
for his loss.[11]
Significantly, the above-mentioned provision of Section 9, Article III of the
Constitution is not a grant but a limitation of power. This limiting function is in
keeping with the philosophy of the Bill of Rights against the arbitrary exercise of
governmental powers to the detriment of the individual's rights. Given this function,
the provision should therefore be strictly interpreted against the expropriator, the
government, and liberally in favor of the property owner.[12]
Ironically, in opposing respondent's claim, the Republic is invoking this Court's
Decision in Valdehueza, a Decision it utterly defied. How could the Republic acquire
ownership over Lot 932 when it has not paid its owner the just compensation, required
by law, for more than 50 years? The recognized rule 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. In Association of Small Landowners in the
Philippines, Inc. et al., vs. Secretary of Agrarian Reform,[13] 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.
x x x 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. (Emphasis
supplied.)
In Kennedy v. Indianapolis, 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 uniform to this effect. As early as 1838,
in Rubottom v. McLure, 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, 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."
Our own Supreme Court has held in Visayan Refining Co. v. Camus
and Paredes, 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.)
Clearly, without full payment of just compensation, there can be no transfer of title
from the landowner to the expropriator. Otherwise stated, the Republic's acquisition
of ownership is conditioned upon the full payment of just compensation within a
reasonable time.[14]
Significantly, in Municipality of Biñan v. Garcia[15] this Court ruled that the
expropriation of lands consists of two stages, to wit:
 "x x x The first is concerned with the determination of the authority
of the plaintiff to exercise the power of eminent domain and the
propriety of its exercise in the context of the facts involved in the
suit. It ends with an order, if not of dismissal of the action, "of
condemnation declaring that the plaintiff has a lawful right to take
the property sought to be condemned, 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 filing of the complaint" x x x.
The second phase of the eminent domain action is concerned with
the determination by the court of "the just compensation for the
property sought to be taken." This is done by the court with the
assistance of not more than three (3) commissioners. x x x.
It is only upon the completion of these two stages that expropriation is said to have
been completed. In Republic v. Salem Investment Corporation,[16] we ruled that,
"the process is not completed until payment of just compensation." Thus, here, the
failure of the Republic to pay respondent and his predecessors-in-interest for a period
of 57 years rendered the expropriation process incomplete.
The Republic now argues that under Valdehueza, respondent is not entitled to recover
possession of Lot 932 but only to demand payment of its fair market value. Of course,
we are aware of the doctrine that "non-payment of just compensation (in an
expropriation proceedings) does not entitle the private landowners to recover
possession of the expropriated lots." This is our ruling in the recent cases of Republic
of the Philippines vs. Court of Appeals, et al.,[17] and Reyes vs. National Housing
Authority.[18] However, the facts of the present case do not justify its application. It
bears stressing that the Republic was ordered to pay just compensation twice,
the first was in the expropriation proceedings and the second, in
Valdehueza. Fifty-seven (57) years have passed since then. We cannot but construe
the Republic's failure to pay just compensation as a deliberate refusal on its
part. Under such circumstance, recovery of possession is in order. In several
jurisdictions, the courts held that recovery of possession may be had when property
has been wrongfully taken or is wrongfully retained by one claiming to act under the
power of eminent domain[19] or where a rightful entry is made and the party
condemning refuses to pay the compensation which has been assessed or agreed
upon;[20] or fails or refuses to have the compensation assessed and paid.[21]
The Republic also contends that where there have been constructions being used by
the military, as in this case, public interest demands that the present suit should not be
sustained.
It must be emphasized that an individual cannot be deprived of his property for the
public convenience.[22] In Association of Small Landowners in the Philippines, Inc. vs.
Secretary of Agrarian Reform,[23] we ruled:
"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.
The 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."
The Republic's assertion that the defense of the State will be in grave danger if we shall
order the reversion of Lot 932 to respondent is an overstatement. First, Lot 932 had
ceased to operate as an airport. What remains in the site is just the National
Historical Institute's marking stating that Lot 932 is the "former location of Lahug
Airport." And second, there are only thirteen (13) structures located on Lot 932, eight
(8) of which are residence apartments of military personnel. Only two (2) buildings
are actually used as training centers. Thus, practically speaking, the reversion of Lot
932 to respondent will only affect a handful of military personnel. It will not result to
"irreparable damage" or "damage beyond pecuniary estimation," as what the Republic
vehemently claims.
We thus rule that the special circumstances prevailing in this case entitle respondent
to recover possession of the expropriated lot from the Republic. Unless this form of
swift and effective relief is granted to him, the grave injustice committed against his
predecessors-in-interest, though no fault or negligence on their part, will be
perpetuated. Let this case, therefore, serve as a wake-up call to the Republic that in
the exercise of its power of eminent domain, necessarily in derogation of private rights,
it must comply with the Constitutional limitations. This Court, as the guardian of the
people's right, will not stand still in the face of the Republic's oppressive and
confiscatory taking of private property, as in this case.
At this point, it may be argued that respondent Vicente Lim acted in bad faith in
entering into a contract of mortgage with Valdehueza and Panerio despite the clear
annotation in TCT No. 23934 that Lot 932 is "subject to the priority of the National
Airports Corporation [to acquire said parcels of land] x x x upon previous payment of a
reasonable market value."
The issue of whether or not respondent acted in bad faith is immaterial considering
that the Republic did not complete the expropriation process. In short, it failed to
perfect its title over Lot 932 by its failure to pay just compensation. The issue of bad
faith would have assumed relevance if the Republic actually acquired title over Lot
932. In such a case, even if respondent's title was registered first, it would be the
Republic's title or right of ownership that shall be upheld. But now, assuming that
respondent was in bad faith, can such fact vest upon the Republic a better title over Lot
932? We believe not. This is because in the first place, the Republic has no title to
speak of.
At any rate, assuming that respondent had indeed knowledge of the annotation, still
nothing would have prevented him from entering into a mortgage contract involving
Lot 932 while the expropriation proceeding was pending. Any person who deals with a
property subject of an expropriation does so at his own risk, taking into account the
ultimate possibility of losing the property in favor of the government. Here, the
annotation merely served as a caveat that the Republic had a preferential right to
acquire Lot 932 upon its payment of a "reasonable market value." It did not proscribe
Valdehueza and Panerio from exercising their rights of ownership including their right
to mortgage or even to dispose of their property. In Republic vs. Salem Investment
Corporation,[24] we recognized the owner's absolute right over his property pending
completion of the expropriation proceeding, thus:
"It is only upon the completion of these two stages that
expropriation is said to have been completed. Moreover, it is only
upon payment of just compensation that title over the property
passes to the government. Therefore, until the action for
expropriation has been completed and terminated, ownership over
the property being expropriated remains with the registered
owner. Consequently, the latter can exercise all rightspertaining to
an owner, including the right to dispose of his property subject to
the power of the State ultimately to acquire it through
expropriation.
It bears emphasis that when Valdehueza and Panerio mortgaged Lot 932 to
respondent in 1964, they were still the owners thereof and their title had not yet
passed to the petitioner Republic. In fact, it never did. Such title or ownership was
rendered conclusive when we categorically ruled in Valdehuezathat: "It is true that
plaintiffs are still the registered owners of the land, there not having been a transfer of
said lots in favor of the Government."
For respondent's part, it is reasonable to conclude that he entered into the contract of
mortgage with Valdehueza and Panerio fully aware of the extent of his right as a
mortgagee. A mortgage is merely an accessory contract intended to secure the
performance of the principal obligation. One of its characteristics is that it
is inseparable from the property. It adheres to the property regardless of who its
owner may subsequently be.[25] Respondent must have known that even if Lot 932 is
ultimately expropriated by the Republic, still, his right as a mortgagee is protected. In
this regard, Article 2127 of the Civil Code provides:
"Art. 2127. The mortgage extends to the natural accessions, to the
improvements, growing fruits, and the rents or income not yet
received when the obligation becomes due, and to the amount of the
indemnity granted or owing to the proprietor from the insurers of
the property mortgaged, or in virtue of expropriation for public
use, with the declarations, amplifications, and limitations
established by law, whether the estate remains in the possession of
the mortgagor or it passes in the hands of a third person.
In summation, while the prevailing doctrine is that "the non-payment of just
compensation does not entitle the private landowner to recover possession of the
expropriated lots,[26] however, in cases where the government failed to pay just
compensation within five (5)[27] years from the finality of the judgment in the
expropriation proceedings, the owners concerned shall have the right to recover
possession of their property. This is in consonance with the principle that "the
government cannot keep the property and dishonor the judgment."[28] To be sure, the
five-year period limitation will encourage the government to pay just compensation
punctually. This is in keeping with justice and equity. After all, it is the duty of the
government, whenever it takes property from private persons against their will, to
facilitate the payment of just compensation. In Cosculluela v. Court of
Appeals,[29] we defined just compensation as not only the correct determination of
the amount to be paid to the property owner but also the payment of the property
within a reasonable time. Without prompt payment, compensation cannot be
considered "just."
WHEREFORE, the assailed Decision of the Court of Appeals in CA-G.R. CV No. 72915
is AFFIRMED in toto.
The Republic's motion for reconsideration of our Resolution dated March 1, 2004 is
DENIED with FINALITY. No further pleadings will be allowed.
Let an entry of judgment be made in this case.
SO ORDERED.
Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Carpio,
Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, Tinga,
Chico-Nazario, and Garcia, JJ., concur.
[1] Rawls, A Theory of Justice (1971) at 4.
[2] They were joined by their husbands, Angel Valdehueza and Pablo Panerio, and
father, Jose Galeos.
[3] May 19, 1966, 17 SCRA 107.
[4] The mortgage was duly annotated at the back of the mortgagors' title in 1964, while
the Decision of this Court in Valdehueza vs. Republic was annotated in 1974.
[5] Penned by Justice Sergio L. Pestaño (retired) and concurred in by Justices Perlita J.
Tria Tirona and Jose C. Mendoza.
[6] Supra.
[7] Coscuella vs. Court of Appeals, No. L-77765, August 15, 1988, 164 SCRA 393,
citing Province of Pangasinan vs. CFI Judge of Pangasinan, Branch VIII,80 SCRA 117,
120-121 (1977).
[8] Law of Eminent Domain, Third Edition, Volume II § 931 citing Cushman vs.
Smith, 34 Me. 247; and see Davis vs. Russel, 47 Me. 443.
[9] No. L-64037, August 27, 1987, 153 SCRA 291.
[10] 26 Am Jur 2d § 168.
[11] Ibid.
[12] Cruz, Constitutional Law, 1995 Ed., at 58-59.
[13] G.R. No. 78742, July 14, 1989, 175 SCRA 343.
[14] "Just compensation is described as a full and fair equivalent of the property taken
from the private owner by the expropriator. This is intended to indemnify the owner
fully for the loss he has sustained as a result of the expropriation. The measure of this
compensation is not the taker's gain but the owner's loss. 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 taken shall be real, substantial, full, ample."
(Manila Railroad Co. vs. Velasquez, 32 Phil. 286).
[15] G.R. No. 69260, December 22, 1989, 180 SCRA 576, 583-584.
[16] G.R. No. 137569, June 23, 2000, 334 SCRA 320, 329.
[17] G.R. No. 146587, July 2, 2002, 383 SCRA 611.
[18] G.R. No. 147511, January 20, 2003, 395 SCRA 494.
[19] Law of Eminent Domain, Third Edition, Volume II § 927 citing Robinson vs.
Southern California Ry.Co., 129 Cal. 8, 61 Pac. 947; Meeker vs. Chicago,23 Ill. App.
23; Wilson vs. Muskegon etc. R.R. Co., 132 Mich. 469, 93 N.W. 1059; Illinois Cent.R.R.
Co. vs. Hoskins, 80 Miss. 730, 32 So. 150, 92 Am St. Rep. 612; McClinton vs. Pittsburg
etc. Ry Co., 66 Pa St. 404
[20] Id., citing White vs. Wabash, St. Louis & Pacific Ry. Co., 64 Ia. 281,20 N.W.
436; St. Joseph & Denver City R.R. Co. vs. Callender, 13 Kan. 496; Blackshire vs.
Atchison,Topeka and Sta. Fe R.R. Co., 13 Kan. 514; Kanne v. Minneapolis & St. Louis
Ry.Co., 30 Minn. 423; Bartleson vs. Minneapolis, 33 Minn. 468; Wheeling etc. R.R.Co.
vs. Warrell, 122 Pa St. 613, 16 Alt 20
[21] Id., citing Connellsville Gas Coal Co. vs. Baltimore, etc. R.R. Co., 216 Pa St.309, 65
Atl. 669.
[22] Law of Eminent Domain, Third Edition, Volume II § 929 citing Hooper vs.
Columbus & Western Ry.Co., 78 Ala. 213; Stratten vs. Great Western & Bradford
Ry.Co., 40 L.J. Eq. 50. In the latter case the court says. "With regard to what is said as
to public interests, I am not inclined to listen to any suggestion of public interest as
against private rights acquired in a lawful way. I do not think that the interest of the
public in using something that is provided for their convenience is to be upheld at the
price of saying that a person's property is to be confiscated for that purpose. A man
who comes to this court is entitled to have his rights ascertained and declared,
however, inconvenient it may be to third persons to whom it may be a convenience to
have the use of his property."
[23] Supra at 375-376.
[24] Supra.
[25] Paras, Civil Code of the Philippines Annotated, 14th Ed., Book V, at 1021.
[26] Republic of the Philippines vs. Court of Appeals, supra. and Reyes vs. National
Housing Authority, supra.
[27] Section 6, Rule 39 provides that: "A final and executory judgment or order may be
executed on motion within five (5) years from the date of its entry. After the lapse of
such time, and before it is barred by the statute of limitations, a judgment may be
enforced by action. The revived judgment may also be enforced by motion within (5)
years from the date of its entry and thereafter by action before it is barred by the
statute of limitations."
EN BANC
[ GR No. L-59431, Jul 25, 1984 ]
ANTERO M. SISON v. RUBEN B. ANCHETA
DECISION
215 Phil. 582
FERNANDO, C.J.:
The success of the challenge posed in this suit for declaratory relief or prohibition
proceeding[1] on the validity of Section 1 of Batas Pambansa Blg. 135 depends upon a
showing of its constitutional infirmity. The assailed provision further amends Section
21 of the National Internal Revenue Code of 1977, which provides for rates of tax on
citizens or residents on (a) taxable compensation income, (b) taxable net income, (c)
royalties, prizes, and other winnings, (d) interest from bank deposits and yield or any
other monetary benefit from deposit substitutes and from trust fund and similar
arrangements, (e) dividends and share of individual partner in the net profits of
taxable partnership, (f) adjusted gross income.[2] Petitioner[3] as taxpayer alleges
that by virtue thereof, "he would be unduly discriminated against by the imposition of
higher rates of tax upon his income arising from the exercise of his
profession vis-a-vis those which are imposed upon fixed income or salaried individual
taxpayers."[4] He characterizes the above section as arbitrary amounting to class
legislation, oppressive and capricious in character.[5] For petitioner, therefore, there
is a transgression of both the equal protection and due process clauses[6] of the
Constitution as well as of the rule requiring uniformity in taxation.[7]
The Court, in a resolution of January 26, 1982, required respondents to file an answer
within 10 days from notice. Such an answer, after two extensions were granted the
Office of the Solicitor General, was filed on May 28, 1982.[8] The facts as alleged were
admitted but not the allegations which to their mind are "mere arguments, opinions or
conclusions on the part of the petitioner, the truth [for them] being those stated [in
their] Special and Affirmative Defenses."[9] The answer then affirmed: "Batas
Pambansa Blg. 135 is a valid exercise of the State's power to tax. The authorities and
cases cited, while correctly quoted or paraphrased, do not support petitioner's
stand."[10] The prayer is for the dismissal of the petition for lack of merit.
This Court finds such a plea more than justified. The petition must be dismissed.
1. It is manifest that the field of state activity has assumed a much
wider scope. The reason was so clearly set forth by retired Chief
Justice Makalintal thus: "The areas which used to be left to private
enterprise and initiative and which the government was called upon
to enter optionally, and only 'because it was better equipped to
administer for the public welfare than is any private individual or
group of individuals,' continue to lose their well-defined boundaries
and to be absorbed within activities that the government must
undertake in its sovereign capacity if it is to meet the increasing
social challenges of the times."[11] Hence the need for more
revenues. The power to tax, an inherent prerogative, has to be
availed of to assure the performance of vital state functions. It is the
source of the bulk of public funds. To paraphrase a recent decision,
taxes being the lifeblood of the government, their prompt and
certain availability is of the essence.[12]
2. The power to tax moreover, to borrow from Justice Malcolm, "is
an attribute of sovereignty. It is the strongest of all the powers of
government."[13] It is, of course, to be admitted that for all its
plenitude, the power to tax is not unconfined. There are restrictions.
The Constitution sets forth such limits. Adversely affecting as it does
property rights, both the due process and equal protection clauses
may properly be invoked, as petitioner does, to invalidate in
appropriate cases a revenue measure. If it were otherwise, there
would be truth to the 1803 dictum of Chief Justice Marshall that
"the power to tax involves the power to destroy."[14] In a separate
opinion in Graves v. New York,[15]Justice Frankfurter, after
referring to it as an "unfortunate remark," characterized it as "a
flourish of rhetoric [attributable to] the intellectual fashion of the
times [allowing] a free use of absolutes."[16] This is merely to
emphasize that it is not and there cannot be such a constitutional
mandate. Justice Frankfurter could rightfully conclude: "The web of
unreality spun from Marshall's famous dictum was brushed away by
one stroke of Mr. Justice Holmes's pen: 'The power to tax is not the
power to destroy while this Court sits.' "[17] So it is in the
Philippines.
3. This Court then is left with no choice. The Constitution as the
fundamental law overrides any legislative or executive act that runs
counter to it. In any case therefore where it can be demonstrated
that the challenged statutory provision - as petitioner here alleges -
fails to abide by its command, then this Court must so declare and
adjudge it null. The inquiry thus is centered on the question of
whether the imposition of a higher tax rate on taxable net income
derived from business or profession than on compensation is
constitutionally infirm.
4. The difficulty confronting petitioner is thus apparent. He alleges
arbitrariness. A mere allegation, as here, does not suffice. There
must be a factual foundation of such unconstitutional taint.
Considering that petitioner here would condemn such a provision as
void on its face, he has not made out a case. This is merely to adhere
to the authoritative doctrine that where the due process and equal
protection clauses are invoked, considering that they are not fixed
rules but rather broad standards, there is a need for proof of such
persuasive character as would lead to such a conclusion. Absent
such a showing, the presumption of validity must prevail.[18]
5. It is undoubted that the due process clause may be invoked where
a taxing statute is so arbitrary that it finds no support in the
Constitution. An obvious example is where it can be shown to
amount to the confiscation of property. That would be a clear abuse
of power. It then becomes the duty of this Court to say that such an
arbitrary act amounted to the exercise of an authority not conferred.
That properly calls for the application of the Holmes dictum. It has
also been held that where the assailed tax measure is beyond the
jurisdiction of the state, or is not for a public purpose, or, in case of a
retroactive statute is so harsh and unreasonable, it is subject to
attack on due process grounds.[19]
6. Now for equal protection. The applicable standard to avoid the
charge that there is a denial of this constitutional mandate whether
the assailed act is in the exercise of the police power or the power of
eminent domain is to demonstrate "that the governmental act
assailed, far from being inspired by the attainment of the common
weal was prompted by the spirit of hostility, or at the very least,
discrimination that finds no support in reason. It suffices then that
the laws operate equally and uniformly on all persons under similar
circumstances or that all persons must be treated in the same
manner, the conditions not being different, both in the privileges
conferred and the liabilities-imposed. Favoritism and undue
preference cannot be allowed. For the principle is that equal
protection and security shall be given to every person under
circumstances, which if not identical are analogous. If law be looked
upon in terms of burden or charges, those that fall within a class
should be treated in the same fashion, whatever restrictions cast on
some in the group equally binding on the rest."[20] That same
formulation applies as well to taxation measures. The equal
protection clause is of course, inspired by the noble concept of
approximating the ideal of the laws's benefits being available to all
and the affairs of men being governed by that serene and impartial
uniformity, which is of the very essence of the idea of law. There is,
however, wisdom, as well as realism, in these words of Justice
Frank-further: "The equality at which the 'equal protection' clause
the former deals with an eminent domain proceeding and the latter
with a suit contesting the validity of a police power measure aims is
not a disembodied equality. The Fourteenth Amendment enjoins
'the equal protection of the laws,' and laws are not abstract
propositions. They do not relate to abstract units A, B and C, but are
expressions of policy arising out of specific difficulties, addressed to
the attainment of specific ends by the use of specific remedies. The
Constitution does not require things which are different in fact or
opinion to be treated in law as though they were the
same."[21] Hence the constant reiteration of the view that
classification if rational in character is allowable. As a matter of fact,
in a leading case of Lutz v. Araneta,[22] this Court, through Justice
J.B.L. Reyes, went so far as to hold "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.'"[23]
7. Petitioner likewise invoked the kindred concept of uniformity.
According to the Constitution: "The rule of taxation shall be uniform
and equitable."[24] This requirement is met according to Justice
Laurel in Philippine Trust Company v. Yatco,[25] decided in 1940,
when the tax "operates with the same force and effect in every place
where the subject may be found."[26] He likewise added: "The rule
of uniformity does not call for perfect uniformity or perfect equality,
because this is hardly attainable."[27] The problem of classification
did not present itself in that case. It did not arise until nine years
later, when the Supreme Court held: "Equality and uniformity in
taxation means that all taxable articles or kinds of property of the
same class shall be taxed at the same rate. The taxing power has the
authority to make reasonable and natural classifications for
purposes of taxation, * * *.[28] As clarified by Justice Tuason, where
" the differentiation" complained of "conforms to the practical
dictates of justice and equity" it "is not discriminatory within the
meaning of this clause and is therefore uniform."[29] There is quite
a similarity then to the standard of equal protection for all that is
required is that the tax "applies equally to all persons, firms and
corporations placed in similar situation."[30]
8. Further on this point. Apparently, what misled petitioner is his
failure to take into consideration the distinction between a tax rate
and a tax base. There is no legal objection to a broader tax base or
taxable income by eliminating all deductible items and at the same
 time reducing the applicable tax rate. Taxpayers may be classified This is a frivolous suit. While the tax rates for compensation income are lower than
into different categories. To repeat, it is enough that the those for net income such circumstance does not necessarily result in lower
classification must rest upon substantial distinctions that make real tax payments for those receiving compensation income. In fact, the reverse will most
differences. In the case of the gross income taxation embodied in likely be the case; those who file returns on the basis of net income will pay less taxes
Batas Pambansa Blg. 135, the discernible basis of classification is the because they can claim all sorts of deductions justified of not. I vote for dismissal.
susceptibility of the income to the application of generalized rules
removing all deductible items for all taxpayers within the class and
fixing a set of reduced tax rates to be applied to all of them.
Taxpayers who are recipients of compensation income are set apart
as a class. As there is practically no overhead expense, these
taxpayers are not entitled to make deductions for income tax,
purposes because they are in the same situation more or less. On the
other hand, in the case of professionals in the practice of their
calling and businessmen, there is no uniformity in the costs or
expenses necessary to produce their income. It would not be just
then to disregard the disparities by giving all of them zero deduction
and indiscriminately impose on all alike the same tax rates on the
basis of gross income. There is ample justification then for the
Batasang Pambansa to adopt the gross system of income taxation to
compensation income, while continuing the system of net income
taxation as regards professional and business income.

9. Nothing can be clearer, therefore, than that the petition is without

merit, considering the (1) lack of factual foundation to show the
arbitrary character of the assailed provision;[31] (2) the force of
controlling doctrines on due process, equal protection, and
uniformity in taxation and (3) the reasonableness of the distinction
between compensation and taxable net income of professionals and
businessmen -- certainly not a suspect classification.

WHEREFORE, the petition is dismissed. Costs against petitioner.

Makasiar, Concepcion, Jr., Guerrero, Melencio-Herrera, Escolin, Relova, Gutierrez, Jr.,

De La Fuente, and Cuevas, JJ., concur.

Teehankee and Aquino, JJ., in the result.

Abad Santos, J., see notation.

Plana, J., no part.

ABAD SANTOS, J.:

[ GR No. L-10405, Dec 29, 1960 ]
WENCESLAO PASCUAL v. SECRETARY OF PUBLIC WORKS
DECISION
110 Phil. 331
CONCEPCION, J.:
Appeal, by petitioner Wenceslao Pascual, from a decision of the Court of First Instance
of Rizal, dismissing the above entitled case and dissolving the writ of preliminary
injunction therein issued, without costs.
On August 31, 1954, petitioner Wenceslao Pascual, as Provincial Governor of Rizal,
instituted this action for declaratory relief, with injunction, upon the ground that
Republic Act No. 920, entitled "An Act Appropriating Funds for Public Works",
approved on June 20, 1953, contained, in section 1-C (a) thereof, an item (43 [h]) of
P85,000.00, "for the construction, reconstruction, repair, extension and
improvement" of "Pasig feeder road terminals (Gen. Roxas Gen. Araneta Gen. Lucban
Gen. Capinpin Gen. Segundo Gen. Delgado Gen. Malvar Gen. Lim)"; that, at the time
of the passage and approval of said Act, the aforementioned feeder roads were
"nothing but projected and planned subdivision roads, not yet constructed, * * * within
the Antonio Subdivision * * * situated at * * * Pasig, Rizal" (according- to the tracings
attached to the petition as Annexes A and B, near Shaw Boulevard, not far away from
the intersection between the latter and Highway 54), which projected feeder roads "do
not connect any government property or any important premises to the main highway";
that the aforementioned Antonio Subdivision (as well as the lands on which said
feeder roads were to be constructed) were private properties of respondent Jose C.
Zulueta, who, at the time of the passage and approval of said Act, was a member of the
Senate of the Philippines; that on May 29, 195S, respondent Zulueta, addressed a letter
to the Municipal Council of Pasig, Rizal, offering to donate said projected feeder roads
to the municipality of Pasig, Rizal; that, on June 13, 1953, the offer was accepted by the
council, subject to the condition "that the donor would submit a plan of the said roads
and agree to change the names of two of them"; that no deed of donation in favor of the
municipality of Pasig was, however, executed; that on July 10, 1953, respondent
Zulueta wrote another letter to said council, calling attention to the approval of
Republic Act No. 920, and the sum of P85.000.00 appropriated therein for the
construction of the projected feeder roads in question; that the municipal council of
Pasig endorsed said letter of respondent Zulueta to the District Engineer of Rizal, who,
up to the present "has not made any endorsement thereon"; that inasmuch as the
projected feeder roads in question were private property at the time of the passage and
approval of Republic Act No. 920, the appropriation of P85.000.00 therein made, for
the construction, reconstruction, repair, extension and improvement of said projected
feeder roads, was "illegal and, therefore, void ab initio"; that said appropriation of
P85,000.00 was made by Congress because its members were made to believe that the
projected feeder roads in question were "public roads and not private streets of a
private subdivision"' ; that, "in order to give a semblance of legality, where there is
absolutely none, to the aforementioned appropriation", respondent Zulueta executed,
on December 12, 1953, while he was a member of the Senate of the Philippines, an
alleged deed of donation copy of which is annexed to the petition of the four (4) parcels
of land constituting said projected feeder roads, in favor of the Government of the
Republic of the Philippines; that said alleged deed of donation was, on the same date,
accepted by the then Executive Secretary; that being-subject to an onerous condition,
said donation partook of the nature of a contract; that, as such, said donation violated
the provision of our fundamental law prohibiting members of Congress from being
directly or indirectly financially interested in any contract with the Government, and,
hence, is unconstitutional, as well as null and void ab initio, for the construction of the
projected feeder roads in question with public funds would greatly enhance or increase
the value of the aforementioned subdivision of respondent Zulueta, "aside from
relieving him from the burden of constructing his subdivision streets or roads at his
own expense"; that the construction of said projected feeder roads was then being
undertaken by the Bureau of Public Highways; and that, unless restrained by the court,
the respondents would continue to execute, comply with, follow and implement the
aforementioned illegal provision of law, "to the irreparable damage, detriment and
prejudice not only to the petitioner but to the Filipino nation."
Petitioner prayed, therefore, that the contested item of Republic Act No. 920 be
declared null and void; that the alleged deed of donation of the feeder roads in
question be "declared unconstitutional and, therefore, illegal"; that a writ of injunction
be issued enjoining the Secretary of Public Works and Communications, the Director
of the Bureau of Public Works, the Commissioner of the Bureau of Public Highways
and Jose C. Zulueta from ordering or allowing the continuance of the
above-mentioned feeder roads project, and from making and securing any new and
further releases on the aforementioned item of Republic Act No. 920, and the
disbursing officers of the Department of Public Works and Communications, the
Bureau of Public Works and the Bureau of Public Highways from making any further
payments out of said funds provided for in Republic Act No. 920; and that pending
final hearing on the merits, a writ of preliminary injunction be issued enjoining the
aforementioned parties respondent from making and securing any new and further
releases on the aforesaid item of Republic Act No. 920 and from making any further
payments out of said illegally appropriated funds.
Respondents moved to dismiss the petition upon the ground that petitioner had "no
legal capacity to sue", and that the petition did "not state a cause of action". In support
to this motion, respondent Zulueta alleged that the Provincial Fiscal of Rizal, not its
provincial governor, should represent the Province of Rizal, pursuant to section 1683
of the Revised Administrative Code; that said respondent is "not aware of any law
which makes illegal the appropriation of public funds for the improvement of * * *
private property"; and that,, the constitutional provision invoked by petitioner is
inapplicable to the donation in question, the same being a pure act of liberality, not a
contract. The other respondents, in turn, maintained that petitioner could not assail
the appropriation in question because "there is no actual bona fide case * * * in which
the validity of Republic Act No. 920 is necessarily involved" and petitioner "has not
shown that he has a personal and substantial interest" in said Act "and that its
enforcement has caused or will cause him a direct injury".
Acting upon said motions to dismiss, the lower court rendered the aforementioned
decision, dated October 29, 1953, holding that, since public interest is involved in this
case, the Provincial Governor of Rizal and the provincial fiscal thereof who represents
him therein, "have the requisite personalities" to question the constitutionality of the
disputed item of Republic Act No. 920; that "the legislature is without power to
appropriate public revenues for anything but a public purpose", that the construction
and improvement of the feeder roads in question, if such roads were private property,
would not be a public purpose; that, being subject to the following condition:
"The within donation is hereby made upon the condition that the
Government of the Republic of the Philippines will use the parcels of
land liereby donated for street purposes only and for no other
purposes whatsoever; it being expressly understood that should the
Government of the Kepuhlic of the Philippines violate the condition
hereby imposed upon it, the title to the land hereby donated shall,
upon such violation, ipso facto revert to the Donor, Jose C. Zulueta."
(Italics supplied.)
which is onerous, the donation in question is a contract; that said donation or contract
is "absolutely forbidden by the Constitution" and consequently "illegal", for Article
1409 of the Civil Code of the Philippines, declares inexistent and void from the very
beginning contracts "whose cause, object or purpose is contrary to law, morals * * * or
public policy"; that the legality of said donation may not be contested, however, by
petitioner herein because his "interests are not directly affected" thereby and that,
accordingly, the appropriation in question "should be upheld" and the case dismissed.
At the outset, it should be noted that we are concerned with a decision granting the
aforementioned motions to dismiss, which as such, are deemed to have admitted
hypothetically the allegations of fact made in the petition of appellant herein.
According to said petition, respondent Zulueta is the owner of several parcels of
residential land, situated in Pasig, Rizal, and known as the Antonio Subdivision,
certain portions of which had been reserved for the projected feeder roads
aforementioned, which, admittedly, were private property of said respondent when
Republic Act No. 920, appropriating P85.000.00 for the "construction, reconstruction,
repair, extension and improvement" of said roads, was passed by Congress, as well as
when it was approved by the President on June 20, 1953. The petition further alleges
that the construction of said feeder roads, to be undertaken with the aforementioned
appropriation of P85,000.00, would have the effect of relieving respondent Zulueta of
the burden of constructing his subdivision streets or roads at his own expenses,[1] and
would "greatly enhance or increase the value of the subdivision" of said respondent.
The lower court held that under these circumstances, the appropriation in question
was "clearly for a private, not a public purpose."
Respondents do not deny the accuracy of this conclusion, which is
self-evident.[2] However, respondent Zulueta contended, in his motion to dismiss
that:
"A law passed by Congress and approved by the President can never
be illegal because Congress is the source of all laws * * *. Aside from
the fact that the movant is not aware of any law which makes illegal
the appropriatoin of public funds for the improvement of what we,
in the meantime, may assume as private property * * *." (Record on
Appeal, p. 33.)
The first proposition must be rejected most emphatically, it being inconsistent with
the nature of the Government established under the Constitution of the Philippines
and the system of checks and balances underlying our political structure. Moreover, it
is refuted by the decisions of this Court invalidating legislative enactments deemed
violative of the Constitution or organic laws.[3]
As regards the legal feasibility of appropriating public funds for a private purpose, the
principle according to Ruling Case Law, is this:
"It is a general rule that the legislature is without power to
appropriate public revenue for anything but a public purpose. * * *
It is the essential character of the direct object of the expenditure
which must determine its validity as justifying a tax, and not the
magnitude of the interests to be affected nor the degree to which the
general advantage of the community, and thus the public welfare,
may be ultimately benefited by their
promotion. Incidental advantage to the public or to the state, which
results from the promotion of private interests and the prosperity of
private enterprises or business, does not justify their aid by the use
of public money." (25 R.L.C. pp. 398-400; Italics supplied.)
The rule is set forth in Corpus Juris Secundum in the following language:
"In accordance with the rule that the taxing power must be exercised
for public purposes only, discussed supra sec. 14, money raised by
taxation can be expended only for public purposes and not for the
 advantage of private individuals." (85 C.J.S. pp. 645-646; italics
supplied.)
Explaining the reason underlying said rule, Corpus Juris Secundum states:
"Generally, under the express or implied provisions of the
constitution, public funds may be used only for a public purpose.
The right of the legislature to appropriate funds is correlative with
its right to tax, and, under constitutional provisions against taxation
except for public purposes and prohibiting: the collection of a tax for
one purpose and the devotion thereof to another purpose, no
appropriation of state funds can be made for other than a public
purpose. * * *
*******
"The test of the constitutionality of a statute requiring the use of
public funds is whether the statute is designed to promote the public
interests, as opposed to the furtherance of the advantage of
individuals, although each advantage to individuals
might incidentally serve the public. * * * ." (81 C.J.S. p. 1147; italics
supplied.)
Needless to say, this Court is fully in accord with the foregoing views which, apart from
being patently sound, are a necessary corollary to our democratic system of
government, which, as such,, exists primarily for the promotion of the general welfare.
Besides, reflecting as they do, the established jurisprudence in the United States, after
whose constitutional system ours has been patterned, said views and jurisprudence
are, likewise, part and parcel of our own constitutional law.
This notwithstanding, the lower court felt constrained to uphold the appropriation in
question, upon the ground that petitioner may not contest the legality of the donation
above referred to because the same does not affect him directly. This conclusion is,
presumably, based upon the following premises, namely: (1) that, if valid, said
donation cured the constitutional infirmity of the aforementioned appropriation; (2)
that the latter may not be annulled without a previous declaration of
unconstitutionality of the said donation; and (3) that the rule set forth in Article 1421
of the Civil Code is absolute, and admits of no exception. We do not agree with these
premises.
The validity of a statute depends upon the powers of Congress at the time of its passage
or approval, not upon events occurring, or acts performed, subsequently thereto,
unless the latter consist of an amendment of the organic law, removing, with
retrospective operation, the constitutional limitation infringed by said statute.
Referring to the P85,000.00 appropriation for the projected feeder roads in question,
the legality thereof depended upon whether said roads were public or private property
when the bill, which, later on, became Republic Act No. 920, was passed by Congress,
or, when said bill was approved by the President and the disbursement of said sum
became effective, or on June 20, 1953 (see section 13 of said Act). Inasmuch as the land
on which the projected feeder roads were to be constructed belonged then to
respondent Zulueta, the result is that said appropriation sought a private purpose, and,
hence, was null and void.[4] The donation to the Government, over five (5)
months after the approval and effectivity of said Act, made, according to the petition,
for the purpose of giving a "semblance of legality", or legalizing, the appropriation in
question, did not cure its aforementioned basic defect. Consequently, a judicial
nullification of said donation need not precede the declaration of unconstitutionality
of said appropriation.
Again, Article 1421 of our Civil Code, like many other statutory enactments, is subject
to exceptions. For instance, the creditors of a party to an illegal contract may, under
the conditions set forth in Article 1177 of said Code, exercise the rights and actions of
the latter, except only those which are inherent in his person, including, therefore, his
right to the annulment of said contract, even though such creditors are not affected by
the same, except indirectly, in the manner indicated in said legal provision
Again, it is well settled that the validity of a statuia may be contested only by one who
will sustain a direct injury in consequence of its enforcement. Yet, there are many
decisions nullifying, at the instance of taxpayers, laws providing for the disbursement
of public funds,[5] upon the theory that "the expenditure of public funds by an officer
of the State for the purpose of administering an unconstitutional act constitutes
a misapplication of such funds," which may be enjoined at the request of a
taxpayer.[6] Although there are some decisions to the contrary,[7] the prevailing view
in the United States is stated in the American Jurisprudence as follows:
"In the determination of the degree of interest essential to give the
requisite standing to attack the constitutionality of a statute the
general rule is that not only persons individually affected, but also
taxpayers, have sufficient interest in preventing the illegal
expenditure of moneys raised by taxation and may therefore
question llw constitutionality of statutes requiring expenditure of
public moneys." (11 Am. Jur. 761; italics supplied.)
However, this view was not favored by the Supreme Court of the U.S. in
Frothingham vs. Mellon (262 U.S. 447), insofar as federal laws are concerned, upon
the ground that the relationship of a taxpayer of the U.S. to its Federal Government is
different from that of a taxpayer of a municipal corporation to its government. Indeed,
under the composite system of government existing in the U.S., the states of the Union
are integral part of the Federation from an international viewpoint, but, each state
enjoys internally a substantial measure of sovereignty, subject to the limitations
imposed by the Federal Constitution. In fact, the same was made by representatives
of each state of the Union, not of the people of the U.S., except insofar as the former
represented the people of the respective States, and the people of each State has,
independently of that of the others, ratified said Constitution. In other words, the
Federal Constitution and the Federal statutes have become binding upon the people of
the U.S. in consequence of an act of, and, in this sense, through the respective states of
the Union of which they are citizens. The peculiar nature of the relation between said
people and the Federal Government of the U.S. is reflected in the election of its
President, who is chosen directly, not by the people of the U.S., but by electors chosen
by each State, in such manner as the legislature thereof may direct (Article II, section 2,
of the Federal Constitution).
question; that this action should not have been dismissed by the lower court; and that
the writ of preliminary injunction should have been maintained.
Wherefore, the decision appealed from is hereby reversed, and the records are
remanded to the lower court for further proceedings not inconsistent with this
decision, with the costs of this instance against respondent Jose C. Zulueta. It is so
ordered.
Paras, C.J., Bengzon, Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Barrera,
Gutierrez David, Paredes, and Dizon, JJ., concur.

Judgment reversed, records remanded to lower court for further proceedings.

The relation between the people of the Philippines and its taxpayers, on the one hand,
and the Republic of the Philippines, on the other, is not identical to that obtaining
between the people and taxpayers of the U.S. and its Federal Government. It is closer,
from a domestic viewpoint, to that existing between the people and taxpayers of each
state and the government thereof, except that the authority of the Republic of the
Philippines over the people of the Philippines is more fully direct than that of the
states of the Union, insofar as the simple and unitary type of our national government
is not subject to limitations analogous to those imposed by the Federal Constitution
upon the states of the Union, and those imposed upon the Federal Government in the
interest of the states of the Union. For this reason, the rule recognizing the right of
taxpayers to assail the constitutionality of a legislation appropriating local or state
public funds which has been upheld by the Federal Supreme Court (Crampton vs.
Zabriskie, 101 U.S. 601) has greater application in the Philippines than that adopted
with respect to acts of Congress of the United States appropriating federal funds.

Indeed, in the Province of Tayabas vs. Perez (56 Phil., 257), involving the
expropriation of a land by the Province of Tayabas, two (2) taxpayers thereof were
allowed to intervene for the purpose of contesting the price being paid to the owner
thereof, as unduly exhorbitant. It is true that in Custodio vs. President of the Senate
(42 Off. Gaz., 1243), a taxpayer and employee of the Government was not permitted to
question the constitutionality of an appropriation for backpay of members of Congress.
However, in Rodriguez vs. Treasurer of the Philippines and Barredo vs. Commission
on Elections (84 Phil., 368; 45 Off. Gaz., 4411), we entertained the action of taxpayers
impugning the validity of certain appropriations of public funds, and invalidated the
same. Moreover, the reason that impelled this Court to take such position in said two
(2) cases the importance of the issues therein raised is present in the case at bar. Again,
like the petitioners in the Rodriguez and Barredo cases, petitioner herein is not merely
a taxpayer. The Province of Rizal, which he represents officially as its Provincial
Governor, is our most populated political subdivision,[7] and, the taxpayers therein
bear a substantial portion of the burden of taxation, in the Philippines.

Hence, it is our considered opinion that the circumstances surrounding this case
sufficiently justify petitioner's action in contesting the appropriation and donation in
[ GR No. L-4817, May 26, 1954 ]
SILVESTRE M. PUNSALAN v. MUNICIPAL BOARD OF CITY OF MANILA
DECISION
95 Phil. 46
REYES, J.:
This suit was commenced in the Court of First Instance of Manila by two lawyers, a
medical practitioner, a public accountant, a dental surgeon and a pharmacist,
purportedly "in their own behalf and in behalf of other professionals practicing in the
City of Manila who may desire to join it." Object of the suit is the annulment of
Ordinance No. 3398 of the City of Manila together with the provision of the Manila
charter authorizing it and the refund of taxes collected under the ordinance but paid
under protest.
The ordinance in question, which was approved by the municipal board of the City of
Manila on July 25, 1950, imposes a municipal occupation tax on persons exercising
various professions in the city and penalizes non-payment of the tax "by a fine of not
more than two hundred pesos or by imprisonment of not more than six months, or by
both such fine and imprisonment in the discretion of the court." Among the
professions taxed were those to which plaintiffs belong. The ordinance was enacted
pursuant to paragraph (1) of section 18 of the Revised Charter of the City of Manila (as
amended by Republic Act No. 409), which empowers the Municipal Board of said city
to impose a municipal occupation tax, not to exceed P50 per annum, on persons
engaged in the various professions above referred to.
Having already paid their occupation tax under section 201 of the National Internal
Revenue Code, plaintiffs, upon being required to pay the additional tax prescribed in
the ordinance, paid the same under protest and then brought the present suit for the
purpose already stated. The lower court upheld the validity of the provision of law
authorizing the enactment of the ordinance but declared the ordinance itself illegal
and void on the ground that the penalty therein provided for non-payment of the tax
was not legally authorized. From this decision both parties appealed to this Court, and
the only question they have presented for our determination is whether this ruling is
correct or not, for though the decision is silent on the refund of taxes paid plaintiffs
make no assignment of error on this point.
To begin with defendants' appeal, we find that the lower court was in error in saying
that the imposition of the penalty provided for in the ordinance was without the
authority of law. The last paragraph (kk) of the very section that authorizes the
enactment of this tax ordinance (section 18 of the Manila Charter) in express terms
also empowers the Municipal Board "to fix penalties for the violation of ordinances
which shall not exceed to (sic) two hundred pesos fine or six months' imprisonment, or
both such fine and imprisonment, for a single offense" Hence, the pronouncement
below that the ordinance in question is illegal and void because it imposes a penalty
not authorized by law is clearly without basis.
As to plaintiffs' appeal, the contention in substance is that this ordinance and the law
authorizing it constitute class legislation, are unjust and oppressive, and authorize
what amounts to double taxation.
In raising the hue and cry of "class legislation", the burden of plaintiffs' complaint is
not that the professions to which they respectively belong have been singled out for the
imposition of this municipal occupation tax; and in any event, the Legislature may, in
its discretion, select what occupations shall be taxed, and in the exercise of that
discretion it may tax all, or it may select for taxation certain classes and leave the
others untaxed. (Cooley on Taxation, Vol. 4, 4th ed., pp. 3393-3395.) Plaintiffs'
complaint is that while the law has authorized the City of Manila to impose the said tax,
it has withheld that authority from other chartered cities, not to mention
municipalities. We do not think it is for the courts to judge what particular cities or
municipalities should be empowered to impose occupation taxes in addition to those
imposed by the National Government. That matter is peculiarly within the domain of
the political departments and the courts would do well not to encroach upon it.
Moreover, as the seat of the National Government and with a population and volume
of trade many times that of any other Philippine city or municipality, Manila, no doubt,
offers a more lucrative field for the practice of the professions, so that it is but fair that
the professionals in Manila be made to pay a higher occupation tax than their brethren
in the provinces.
Plaintiffs brand the ordinance unjust and oppressive because they say that it creates
discrimination within a class in that while professionals with offices in Manila have to
pay the tax, outsiders who have no offices in the city but practice their profession
therein are not subject to the tax. Plaintiffs make a distinction that is not found in the
ordinance. The ordinance imposes the tax upon every person "exercising" or
"pursuing" in the City of Manila naturally any one of the occupations named, but does
not say that such person must have his office in Manila. What constitutes exercise or
pursuit of a profession in the city is a matter of judicial determination.
The argument against double taxation may not be invoked where one tax is imposed
by the state and the other is imposed by the city (1 Cooley on Taxation, 4th ed., p. 492),
it being widely recognized that there is nothing inherently obnoxious in the
requirement that license fees or taxes be exacted with respect to the same occupation,
calling or activity by both the state and the political subdivisions thereof. (51 Am. Jur.,
341.)
In view of the foregoing, the judgment appealed from is reversed in so far as it declares tax, either under the Internal Revenue Code or under Ordinance No. 3398, should be
Ordinance No. 3398 of the City of Manila illegal and void and affirmed in so far as it imposed upon a practitioner in Manila.
holds the validity of the provision of the Manila charter authorizing it. With costs
against plaintiffs-appellants.

Pablo, Bengzon, Montemayor, Jugo, Bautista Angelo, Labrador, and Concepcion,

JJ., concur.

DISSENTING

PARAS, C. J.:

I am constrained to dissent from the decision of the majority upon the ground that the
Municipal Board of Manila cannot outlaw what Congress of the Philippines has
already authorized. The plaintiffs-appellants two lawyers, a physician, an accountant,
a dentist and a pharmacist had already paid the occupation tax under section 201 of
the National Internal Revenue Code and are there- by duly licensed to practice their
respective professions throughout the Philippines; and yet they had been required to
pay another occupation tax under Ordinance No. 3398 for practising in the City ,of
Manila. This is a glaring example of contradiction the license granted by the National
Government is in effect withdrawn by the City in case of non-payment of the tax under
the ordinance. If it be argued that the national occupation tax is collected to allow the
professional residing in Manila to pursue his calling in other places in the Philippines,
it should then be exacted only from professionals practising simultaneously in and
outside of Manila. At any rate, we are confronted with the following situation: Whereas
the professionals elsewhere pay only one occupation tax, in the City of Manila they
have to pay two, although all are on equal footing insofar as opportunities for earning
money out of their pursuits are concerned. The statement that practice in Manila is
more lucrative than in the provinces, may be true perhaps with reference only to a
limited few, but certainly not to the general mass of practitioners in any field. Again,
provincial residents who have occasional or isolated practice in Manila may have to
pay the city tax. This obvious discrimination or lack of uniformity cannot be brushed
aside or justified by any trite pronouncement that double taxation is legitimate or that
legislation may validly affect certain classes.

My position is that a professional who has paid the occupation tax under the National
Internal Revenue Code should be allowed to practice in Manila even without paying
the similar tax imposed by Ordinance No. 3398. The City cannot give what said
professional already has. I would not say that this Ordinance, enacted by the
Municipal Board pursuant to paragraph 1 of section 18 of the Revised Charter of
Manila, as amended by Republic Act No. 409, empowering the Board to impose a
municipal occupation tax not to exceed P50 per annum, is invalid; but that only one
[ GR No. L-19201, Jun 16, 1965 ]
REV. FR. CASIMIRO LLADOC v. COMMISIONER OF INTERNAL
REVENUE
DECISION
121 Phil. 1074
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 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 V 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. Pr. Caslmiro 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
Iaw3 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.
* * * * * * *
"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 would
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 present parish wherever 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.
* * * * * * *
"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, 98
Phil., 670; 53 Off. Gaz. 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.
Hastings, 5 Phil., 701.)
* * * * * * *
"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 objection to such a substitution. Counsel for the petitioner did not also offer objection
imposition of the compromise penalty in the amount of P20.00 thereto.
(Collector of Internal Revenue vs. U.S.T., G. R. No. L-11274, Nov. 28,
1958; * * * * *, and the petitioner, the Rev. Fr. Casimiro Lladoc is On April 30, 1965, in a resolution, We ordered the Head of the Diocese to present
hereby ordered to pay to the respondent the amount of 'P900.00 as whatever legal issues and/or defenses he might wish to raise, to which resolution 1
donee's gift tax, plus the surcharge of five per centum (57.) as ad. counsel for petitioner, who also appeared as counsel for the Head of the Diocese, the
valorem penalty under Section 119(c) of the Tax Code, and one per Roman Catholic Bishop of Bacolod, manifested that it was submitting itself to the
centum (1%) monthly interest from May 15, 1958 to the date of jurisdiction and orders of this Court and that it was presenting, by reference, the brief
actual payment. The surcharge of 257a provided in Section 120 for of petitioner Rev. Fr. Casirairo Lladoc, as its own and for all purposes.
failure to file a return may not be imposed as the failure to file a
return was not due to willful neglect, (* * * * *). No costs."
In view hereof 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
The above judgment is now before Us on appeal, petitioner assigning two (2) errors constitutional provision exempting churches, parsonages or convents, etc. (Art. VI, sec.
allegedly committed by the Tax Court, all of which converge on the singular issue of 22[3], Constitution), the Head of the Diocese, to which the parish of Victorias pertains,
whether or not petitioner should be liable for the assessed donee's gift tax on the is liable for the payment thereof.
P10,000.00 donated for the construction of the Victorias Parish Church.
The decision appealed from should be, as it is hereby AFFIRMED, in so far a3 tax
Section 22(3), Art. VI of the Constitution of the Philippines, exempts from taxation liability is concerned; it is MODIFIED, in the sense that petitioner herein is not
cemeteries, churches and parsonages or convents, appurtenant thereto, and personally liable for the said gift tax, and that the Head of the Diocese, herein
all lands, buildings, and improvements used exclusively for religious purposes. The substitute petitioner, should pay, as he is presently ordered to pay, the said gift tax,
exemption is only from the payment of taxes assessed on such properties enumerated, without special pronouncement as to costs.
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
Bengzon, C. J., Bautista Angelo, Concepcion, Reyes, J.B.L., Dizon, Regala, Makalintal,
themselves. It did not rest upon general ownership; it was an excise upon the use made
Bengzon, J., and Zaldivar, JJ. Concur.
of the properties, upon the exercise of the privilege of receiving the properties (Phipps
vs. Com. of Int. Rev., 91 F [2d7] 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 gift inter vivos, the imposition of
which on property used exclusively for religious purposes, do 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 ip no clear,
positive or express grant of such privilege by law, in favor of the petitioner, the
exemption herein must be denied.

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
 SECOND DIVISION
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;
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. 109-110) 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.
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.
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
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.
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 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 from the payment of taxes." (Annexes "B," "B-1" of Petition; Rollo, pp.
24-49; 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.
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:
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
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.
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)
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.
xxx xxx xxx
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 as such if it finds that their consideration is necessary in arriving at a just decision."
District, 14 SCRA 991 [1965], thus — (Perez vs. Court of Appeals, 127 SCRA 645 [1984]).

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).
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.

The test of exemption from taxation is the use of the property for purposes mentioned SO ORDERED.
in the Constitution (Apostolic Prefect v. City Treasurer of Baguio, 71 Phil, 547 [1941]).
Yap, C.J., Melencio-Herrera, Padilla and Sarmiento, JJ., concur.
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 purpose—educational,
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.

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