Poli Rev Case Digest 4

Fundamental Powers
of the State
1. Sto. Tomas vs. Salac, 685 SCRA 245 (2012)
DOCTRINE:
The rule is settled that every statute has in its favor the presumption of constitutionality. The Court cannot
inquire into the wisdom or expediency of the laws enacted by the Legislative Department. Hence, in the
absence of a clear and unmistakable case that the statute is unconstitutional, the Court must uphold its
validity.
FACTS:
These consolidated cases pertain to the constitutionality of certain provisions of Republic Act 8042,
otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995.
On June 7, 1995 Congress enacted R.A 8042 or the Migrant Workers and Overseas Filipinos Act of 1995
that, for among other purposes, sets the Government's policies on overseas employment and establishes a
higher standard of protection and promotion of the welfare of migrant workers, their families, and overseas
Filipinos in distress.
I. G.R. 152642 and G.R. 152710 (Constitutionality of Sections 29 and 30, R.A. 8042) --- Respondents Rey
Salac filed a petition for certiorari, prohibition and mandamus with TRO and preliminary injunction against
petitioners, the DOLE Secretary, the POEA Administrator, and the TESDA Secretary-General before the
RTC of Quezon City. Salac, et al. sought to: 1) nullify DOLE Department Order 10 (DOLE DO 10) and
POEA Memorandum Circular 15 (POEA MC 15); 2) prohibit the DOLE, POEA, and TESDA from
implementing the same and from further issuing rules and regulations that would regulate the recruitment
and placement of overseas Filipino workers (OFWs); and 3) also enjoin them to comply with the policy of
deregulation mandated under Sections 29 and 30 of Republic Act 8042. RTC granted Salac, et al.'s petition
and ordered the government agencies mentioned to deregulate the recruitment and placement of OFWs.
The RTC also annulled DOLE DO 10, POEA MC 15, and all other orders, circulars and issuances that are
inconsistent with the policy of deregulation under R.A. 8042. The government officials concerned filed the
present petition in G.R. 152642 and G. R 152710 seeking to annul the RTC's decision and have the same
enjoined pending action on the petition. The Philippine Association of Service Exporters, Inc. and CALEA
(The Confederated Association of Licensed Entertainment Agencies, Incorporated) intervened claiming
that the RTC March 20, 2002 Decision gravely affected them since it paralyzed the deployment abroad of
OFWs and performing artists. A TRO was issued enjoining RTC-QC from enforcing its decision.
Later, Sec. 29 and 30 of R.A 8042 was expressly repealed by R.A 9422. This law was signed by Pres. Gloria
Arroyo. Respondents Salac, et al. told the Court that they agree with the Republic's view that the repeal of
Sections 29 and 30 of R.A. 8042 renders the issues they raised by their action moot and academic.
II. G.R. 167590 on Constitutionality of Sections 6, 7, and 9 of R.A. 8042 --- respondent Philippine
Association of Service Exporters, Inc. (PASEI) filed a petition for declaratory relief and prohibition with
prayer for issuance of TRO and writ of preliminary injunction before the RTC of Manila, seeking to annul
Sections 6, 7, and 9 of R.A. 8042 for being unconstitutional. Section 6 defines the crime of "illegal
recruitment" and enumerates the acts constituting the same. Section 7 provides the penalties for prohibited
acts. Section 9 of R.A. 8042 allowed the filing of criminal actions arising from "illegal recruitment" before
the RTC of the province or city where the offense was committed or where the offended party actually
resides at the time of the commission of the offense.
The RTC of Manila declared Section 6 unconstitutional after hearing on the ground that its definition of
"illegal recruitment" is vague as it fails to distinguish between licensed and non-licensed recruiters and for
that reason gives undue advantage to the non¬licensed recruiters in violation of the right to equal protection
of those that operate with government licenses or authorities. (Take note: Actually, "illegal recruitment" as
defined in Section 6 is clear and unambiguous and, contrary to the RTC's finding, actually makes a
distinction between licensed and non-licensed recruiters. By its terms, persons who engage in "canvassing,
enlisting, contracting, transporting, utilizing, hiring, or procuring workers" without the appropriate
government license or authority are guilty of illegal recruitment whether or not they commit the wrongful
acts enumerated in that section. On the other hand, recruiters who engage in the canvassing, enlisting, etc.
of OFWs, although with the appropriate government license or authority, are guilty of illegal recruitment
only if they commit any of the wrongful acts enumerated in Section 6.
Section 7 was also declared unconstitutional on the ground that its sweeping application of the penalties
failed to make any distinction as to the seriousness of the act committed for the application of the penalty
imposed on such violation.
Section 9 of R.A. 8042 was also invalidated on the ground that allowing the offended parties to file the
criminal case in their place of residence would negate the general rule on venue of criminal cases which is
the place where the crime or any of its essential elements were committed. Venue, said the RTC, is
jurisdictional in penal laws and, allowing the filing of criminal actions at the place of residence of the
offended parties violates their right to due process. (Take Note: there is nothing arbitrary or unconstitutional
in Congress fixing an alternative venue for violations of Section 6 of R.A. 8042 that differs from the venue
established by the Rules on Criminal Procedure. Indeed, Section 15 (a), Rule 110 of the latter Rules allows
exceptions provided by laws.)| |
III. G.R. 167590, G.R. 182978-79, and G.R. 184298-99
(Constitutionality of Section 10, last sentence of 2nd paragraph)--- Respondent spouses Simplicio and Mila
Cuaresma (the Cuaresmas) filed a claim for death and insurance benefits and damages against petitioners
Becmen Service Exporter and Promotion, Inc. (Becmen) and White Falcon Services, Inc. (White Falcon)
for the death of their daughter Jasmin Cuaresma while working as staff nurse in Riyadh, Saudi Arabia. LA
dismissed the claim but NLRC found petitioners Becmen and Falcon jointly and severally liable for the
death, ordering them to pay $113,000.00 as actual damages. Jasmine died of criminal violence and rape.
Becmen and White Falcon appealed the NLRC Decision to the CA. CA held Becmen and White Falcon
jointly and severally liable with their Saudi Arabian employer for actual damages, with Becmen having a
right of reimbursement from White Falcon. Becmen and White Falcon appealed the CA Decision to this
Court.
The Court found Jasmin's death not work-related or work- connected since her rape and death did
not occur while she was on duty at the hospital or doing acts incidental to her employment. The Court
deleted the award of actual damages but ruled that Becmen's corporate directors and officers are solidarily
liable with their company for its failure to investigate the true nature of her death. Becmen and White Falcon
abandoned their legal, moral, and social duty to assist the Cuaresmas in obtaining justice for their daughter.
Now,the corporate directors and officers of Becmen, namely, Gumabay, et al.. questioned the
constitutionality of the last sentence of the second paragraph of Section 10, R.A. 8042 which holds the
corporate directors, officers and partners jointly and solidarily liable with their company for money claims
filed by OFWs against their employers and the recruitment firms.
ISSUE:
WON R.A 8042 is constitutional.
HELD:
I. As to the constitutionality of Sec. 29 and Sec 30. It was rendered moot and academic. R.A 9422 adopted
the policy of close government regulation of the recruitment and deployment of OFWs. It states among
others that POEA, in addition to its powers, to inform migrant not only their rights as workers but their
rights as human beings. It also provides that deployment of migrant workers shall only be available to
countries where the Philippines has concluded bilateral agreements or arrangements.
II. As to Sec 6, 7, and 9, all are rendered constitutional. (those "take note" in parenthesis on the facts above
explains why it is constitutional)
The court said, in fixing uniform penalties for each of the enumerated acts under Section 6, Congress was
within its prerogative to determine what individual acts are equally reprehensible, consistent with the State
policy of according full protection to labor, and deserving of the same penalties. It is not within the power
of the Court to question the wisdom of this kind of choice. Notably, this legislative policy has been further
stressed in July 2010 with the enactment of R.A. 10022 which increased even more the duration of the
penalties of imprisonment and the amounts of fine for the commission of the acts listed under Section 7.
What is the spirit behind the law? Obviously, in fixing such tough penalties, the law considered the
unsettling fact that OFWs must work outside the country's borders and beyond its immediate protection.
The law must, therefore, make an effort to somehow protect them from conscienceless individuals within
its jurisdiction who, fueled by greed, are willing to ship them out without clear assurance that their
contracted principals would treat such OFWs fairly and humanely.
III. The Court HOLDS the last sentence of the second paragraph of Section 10 of Republic Act 8042 valid
and constitutional.
The Court has already held, pending adjudication of this case, that the liability of corporate directors and
officers is not automatic. To make them jointly and solidarily liable with their company, there must be a
finding that they were remiss in directing the affairs of that company, such as sponsoring or tolerating the
conduct of illegal activities. In the case of Becmen and White Falcon, while there is evidence that these
companies were at fault in not investigating the cause of Jasmin's death, there is no mention of any evidence
in the case against them that intervenors Gumabay, et al., Becmen's corporate officers and directors, were
personally involved in their company's particular actions or omissions in Jasmin's case.
As a final note, R.A. 8042 is a police power measure intended to regulate the recruitment and deployment
of OFWs. It aims to curb, if not eliminate, the injustices and abuses suffered by numerous OFWs seeking
to work abroad. The rule is settled that every statute has in its favor the presumption of constitutionality.
The Court cannot inquire into the wisdom or expediency of the laws enacted by the Legislative Department.
Hence, in the absence of a clear and unmistakable case that the statute is unconstitutional, the Court must
uphold its validity.
2. NY Times vs. U.S. (Pentagon Papers) 403 U.S. 713 (1971)
DOCTRINE:
Any system of prior restraint comes to this court bears a heavy presumption AGAINST its constitutional
validity. The government thus carry a heavy burden of showing a justification for the imposition of such a
restraint.
FACTS:
Over the years the Supreme Court has disagreed on the limits that can be placed on the 1st Amendment
guarantees of freedom of speech and press. In 1971, the Court faced these issues again in a case brought by
the New York Times. The newspaper had obtained a copy of documents known as "The Pentagon Papers"—
an internal Defense Department report that detailed government deception with regard to the Vietnam War.
The Pentagon Papers surfaced at a time when the American people were deeply divided on the question of
United States involvement in the war. The New York Times fought for the right to publish the papers under
the umbrella of the 1st Amendment.
The Pentagon Papers, officially known as "History of U.S. Decision-Making Process on Vietnam Policy,"
were illegally copied and then leaked to the press. The New York Times and the Washington Post had
obtained the documents. Acting at the Government's request, the United States district court in New York
issued a temporary injunction—a court order—that directed the New York Times not to publish the
documents. The Government claimed that the publication of the papers would endanger the security of the
United States. The New York Times appealed the order to the United States Supreme Court, arguing that
prior restraint— preventing publication—violated the 1st Amendment.
From June 12 to 14, 1971, the New York Times published a series of articles about the origins of the
Vietnam War. The articles were based on a forty-seven-volume Defense Department study covering the
years 1945 to 1968, which had been leaked to the Times by Daniel Ellsberg, a former Defense Department
analyst. Although the study contained only information regarding events that occurred before 1968, the
government contended that the study contained "secret" and "top secret" information. Further, the
government alleged that publication of the information could prolong the Vietnam War and threaten the
safe return of U.S. prisoners of war. On June 15, 1971, the government sued in New York federal district
court, seeking an injunction prohibiting the Times from continuing to publish information from the
Pentagon Papers. Soon after, the Washington Post began publishing material from the study; accordingly,
the government sought a similar injunction against the Post in the District of Columbia.
It was the Nixon Administration that attempted to prevent the New York Times and Washington Post from
publishing materials. The President argued that prior restraint was necessary to protect national security.
CONTENTIONS:
For the New York Times: The 1st Amendment's guarantee of freedom of the press protects the newspaper
in the publication of these documents. One of the few restraints on executive power in matters of national
defense is a knowledgeable population. The press must be free to inform the American people. In addition,
the Government has failed to show that publication of the Pentagon Papers would endanger national
security.
For the United States: The 1st Amendment does not guarantee an absolute freedom of the press, especially
when the nation's security is involved. The Court must strike a balance between the fundamentally
important right to a free press and the equally important duty of the Government to protect the nation.
Allowing the publication of these documents would establish a dangerous precedent for future cases
involving national security.
ISSUE:
WON prior restraint of publication constitutes violation of the first amendment
HELD:
Yes. Any system of prior restraint comes to this court bearing a heavy presumption AGAINST its
constitutionality. The government, thus carry a heavy burden of showing a justification for the imposition
of such a restraint. In this case, the government has not MET that burden.
The Supreme Court decided on a 6-3 vote that a prior restraint could not be imposed on publication of the
Pentagon Papers. The whole Court noted that the government "carries a heavy burden of showing
justification for the imposition of such a restraint" and stated that the government had failed to meet that
burden. The Court could not agree on a precise standard for determining when the government may impose
a prior restraint on free speech, or even whether the government could ever impose a prior restraint.
Dissent on Separation of Powers:
The scope of the judicial function in passing upon activities of the Executive Branch in the field of foreign
affairs is very narrowly restricted. This view is dictated by the doctrine of Separation of Powers. The
doctrine prohibiting prior restraints does not prevent the courts from maintaining status quo long enough to
act responsibly. The First Amendment is only part of the Constitution. The cases should be remanded to be
developed expeditiously.
Concurrence.
To find that the President has "inherent power" to halt the publication of news by resort to the courts would
wipe out the First Amendment of the United States Constitution [Constitution]. The First Amendment of
the Constitution leaves no room for governmental restraint on the press. There is, moreover, no statute
barring the publication by the press of the material that the Times and Post seek to publish.
The First Amendment of the Constitution tolerates no prior judicial restraints of the press predicated upon
surmise or conjecture that untoward consequences may result. Thus, only governmental allegation and
proof that publication must inevitably, directly and immediately cause the occurrence of an event kindred
to imperiling the safety of a transport already at sea can support the issuance of an interim restraining order.
Unless and until the Government has clearly made its case, the First Amendment of the Constitution
commands that no injunction be issued. The responsibility must be where the power is. The Executive must
have the large duty to determine and preserve the degree of internal security necessary to exercise its power
effectively. The Executive is correct with respect to some of the documents here, but disclosure of any of
them will not result in irreparable danger to the public.
3. PPI vs. COMELEC, 244 SCRA 272
DOCTRINE:
To compel print media companies to donate "Comelec space" amounts to "taking" of private personal
property for public use or purposes. 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).
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.
FACTS:
Comelec promulgated Resolution No. 2772 which allowed Comelec to procure free print space of not less
than 1/2 page in at least one newspaper of general circulation in every province or city for use as 'Comelec
Space' (Section 2). The 'Comelec Space' shall be allocated, through lottery, 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 - in short, dissemination of vital election information.
Furthermore, the resolution stated that 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 publication that the accounts or views published are significant, newsworthy and of public
interest (Section 8). Comelec directed several newspapers, which previously gave 2 pages during the 1992
elections, to provide free print space of not less than 1/2 page for use as 'Comelec Space'.
Petitioner's contention: Resolution No. 2772 was unconstitutional and void; they claimed that there was
taking of private property for public use without just compensation. It also constituted impositions of
involuntary servitude. And that the resolution violated freedom of speech, of the press and of expression.
Respondent's contention: SolGen claims that Resolution No. 2772 does not impose upon any obligation as
it does not provide any criminal or administrative sanction for non-compliance with that Resolution. And
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.
ISSUE:
WON the Comelec, through the subject resolution, validly exercised its power of eminent domain and
police power.
HELD:
No. Re eminent domain: To compel print media companies to donate "Comelec space" amounts to "taking"
of private personal property for public use or purposes. The resolution 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 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 the Resolution 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 the Resolution
attempts to suggest. 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. 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. The resolution does not constitute a valid exercise of the power
of eminent domain. Thus, public funds, not publishers solely, should bear costs for public information of
electoral processes. 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.
Re police power: Firstly, there was no effort (and apparently no inclination on the part of Comelec) to show
that the police power — essentially a power of legislation — has been constitutionally delegated to
respondent Commission. 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. Section 2 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.
4. Tio vs. Videogram Regulatory Board, 151 SCRA 208
DOCTRINE:
The public purpose of a tax may legally exist even if the motive which impelled the legislature to impose
the tax was to favor one industry over another. "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 "inequities which result from a singling out of
one particular class for taxation or exemption infringe no constitutional limitation'." Taxation has been
made the implement of the state's police power.
FACTS:
PD No. 1994 amended the National Internal Revenue Code providing, inter alia: SEC. 134. There shall be
collected on each processed video-tape cassette, ready for playback, regardless of length, an annual tax of
five pesos; Provided, That locally manufactured or imported blank video tapes shall be subject to sales tax.
The rationale relates to: 1) the proliferation and unregulated circulation of videograms that have greatly
prejudiced the operations of moviehouses and theaters, and have caused a sharp decline in theatrical
attendance by at least 40% and a tremendous drop in the collection of sales, contractor's specific,
amusement and other taxes, thereby resulting in substantial losses estimated at P450 Million annually in
government revenues; 2) videogram establishments collectively earn around P600 Million per annum from
rentals, sales and disposition of videograms, and such earnings have not been subjected to tax, thereby
depriving the Government of approximately P180 Million in taxes each year; 3) proper taxation of the
activities of videogram establishments will not only alleviate the dire financial condition of the movie
industry upon which more than 75,000 families and 500,00 workers depend for their livelihood, but also
provide an additional source of revenue for the Government, and at the same time rationalize the heretofore
distribution of videograms; 4) the rampant and unregulated showing of obscene videogram features
constitutes a clear and present danger to the moral and spiritual well-being of the youth, and impairs the
mandate of the Constitution for the State to support the rearing of the youth for civic efficiency and the
development of moral character and promote their physical, intellectual, and social being; etc.
Tio claimed that Section 10 was unconstitutional because the tax imposed is harsh, confiscatory, oppressive
and/or in unlawful restraint of trade in violation of the due process clause of the Constitution, etc.
ISSUE:
WON the power of taxation was validly exercised.
HELD:
Yes. It is beyond serious question that a tax does not cease to be valid merely because it regulates,
discourages, or even definitely deters the activities taxed. The power to impose taxes is one so unlimited in
force and so searching in extent, that the courts scarcely venture to declare that it is subject to any
restrictions whatever, except such as rest in the discretion of the authority which exercises it. The tax
imposed by the DECREE is not only a regulatory but also a revenue measure prompted by the realization
that earnings of videogram establishments of around P600 million per annum have not been subjected to
tax, thereby depriving the Government of an additional source of revenue. It is an end-user tax, imposed on
retailers for every videogram they make available for public viewing. It is similar to the 30% amusement
tax imposed or borne by the movie industry which the theater-owners pay to the government, but which is
passed on to the entire cost of the admission ticket, thus shifting the tax burden on the buying or the viewing
public. It is a tax that is imposed uniformly on all videogramoperators. The levy of the 30% tax is for a
public purpose. It was imposed primarily to answer the need for regulating the video industry, particularly
because of the rampant film piracy, the flagrant violation of intellectual property rights, and the proliferation
of pornographic video tapes. And while it was also an objective of the DECREE to protect the movie
industry, the tax remains a valid imposition. The public purpose of a tax may legally exist even if the motive
which impelled the legislature to impose the tax was to favor one industry over another. "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
"inequities which result from a singling out of one particular class for taxation or exemption infringe no
constitutional limitation'." Taxation has been made the implement of the state's police power. At bottom,
the rate of tax is a matter better addressed to the taxing legislature.
5. Ortigas vs. Court of Appeals, G.R. No. 126102, December 4, 2000
DOCTRINE:
A law enacted in the exercise of police power to regulate or govern certain activities or transactions could
be given retroactive effect and may reasonably impair vested rights or contracts. Police power legislation
is applicable not only to future contracts, but equally to those already in existence. Nonimpairment of
contracts or vested rights clauses will have to yield to the superior and legitimate exercise by the State of
police power to promote the health, morals, peace, education, good order, safety, and general welfare of the
people. Moreover, statutes in exercise of valid police power must be read into every contract.
FACTS:
On August 25, 1976, petitioner Ortigas & Company sold to Emilia Hermoso, a parcel of land with an area
of 1,508 square meters, located in Greenhills Subdivision IV, San Juan, Metro Manila. The contract of sale
provided that the lot be used exclusively for Presidential purposes only, and not more than one single-family
residential building will be constructed thereon; the BUYER shall not erect any sign or billboard on the
roof for advertising purposes; no single-family residential building shall be erected until the building plans,
specification have been approved by the SELLER; restrictions shall run with the land and shall be construed
as real covenants until December 31, 2025 when they shall cease and terminate.These and the other
conditions were duly annotated on the certificate of title issued to Emilia.
In 1981, the Metropolitan Manila Commission (now Metropolitan Manila Development Authority) enacted
MMC Ordinance No. 81-01, also known as the Comprehensive Zoning Area for the National Capital
Region. The ordinance reclassified as a commercial area a portion of Ortigas Avenue from Madison to
Roosevelt Streets of Greenhills Subdivision where the lot is located. On June 8, 1984, private respondent
Ismael Mathay III leased the lot from Emilia Hermoso and J.P. Hermoso Realty Corp.. The lease contract
did not specify the purposes of the lease. Thereupon, private respondent constructed a single story
commercial building for Greenhills Autohaus, Inc., a car sales company.
Thereafter, petitioner filed a complaint against Emilia Hermoso with the RTC of Pasig. The complaint
sought the demolition of the said commercial structure for having violated the terms and conditions of the
Deed of Sale. Petitioner asked for the issuance of a TRO and a writ of preliminary injunction.
RTC- granted the writ of preliminary injunction in favor of Ortigas. CA- ruled in favor of Mathay. It held
that MMC Ordinance No. 81¬01 effectively nullified the restrictions allowing only residential use of the
property in question. CA- denied Ortigas' motion for reconsideration.
ISSUE:
WON CA erred in ruling that a contractual right is automatically discarded once it conflicts with police
power (MMC Ordinance No. 81-01)
HELD:
The SC noted that in issuing the disputed writ of preliminary injunction, the trial court observed that the
contract of sale was entered into in August 1976, while the zoning ordinance was enacted only in March
1981. The trial court reasoned that since private respondent had failed to show that MMC Ordinance No.
81¬01 had retroactive effect, said ordinance should be given prospective application only, citing Co vs.
Intermediate Appellate Court, 162 SCRA 390 (1988).
In general, we agree that laws are to be construed as having only prospective operation. Lex prospicit, non
respicit. Equally settled, only laws existing at the time of the execution of a contract are applicable thereto
and not later statutes, unless the latter are specifically intended to have retroactive effect.A later law which
enlarges, abridges, or in any manner changes the intent of the parties to the contract necessarily impairs the
contract itself and cannot be given retroactive effect without violating the constitutional prohibition against
impairment of contracts.
But, the foregoing principles do admit of certain exceptions. One involves police power. A law enacted in
the exercise of police power to regulate or govern certain activities or transactions could be given retroactive
effect and may reasonably impair vested rights or contracts. Police power legislation is applicable not only
to future contracts, but equally to those already in existence. Nonimpairment of contracts or vested rights
clauses will have to yield to the superior and legitimate exercise by the State of police power to promote
the health, morals, peace, education, good order, safety, and general welfare of the people. Moreover,
statutes in exercise of valid police power must be read into every contract.
Following the SC ruling in Ortigas & Co., Ltd. vs. Feati Bank & Trust Co., 94 SCRA 533 (1979), the
contractual stipulations annotated on the Torrens Title, on which Ortigas relies, must yield to the ordinance.
When that stretch of Ortigas Avenue from Roosevelt Street to Madison Street was reclassified as a
commercial zone by the Metropolitan Manila Commission in March 1981, the restrictions in the contract
of sale between Ortigas and Hermoso, limiting all construction on the disputed lot to single¬family
residential buildings, were deemed extinguished by the retroactive operation of the zoning ordinance and
could no longer be enforced. While our legal system upholds the sanctity of contract so that a contract is
deemed law between the contracting parties, nonetheless, stipulations in a contract cannot contravene "law,
morals, good customs, public order, or public policy." Otherwise such stipulations would be deemed null
and void. Respondent court correctly found that the trial court committed in this case a grave abuse of
discretion amounting to want of or excess of jurisdiction in refusing to treat Ordinance No. 81-01 as
applicable to Civil Case No. 64931.
6. Chavez vs. Romulo, 431 SCRA 534
DOCTRINE:
In a number of cases, the SC laid down the test to determine the validity of a police measure, thus: The
interests of the public generally, as distinguished from those of a particular class, require the exercise of the
police power; and the means employed are reasonably necessary for the accomplishment of the purpose
and not unduly oppressive upon individuals.
FACTS:
In January 2003, President Gloria Macapagal-Arroyo delivered a speech before the members of the PNP
stressing the need for a nationwide gun ban in all public places to avert the rising crime incidents. She
directed the then PNP Chief, respondent Ebdane, to suspend the issuance of Permits to Carry Firearms
Outside of Residence (PTCFOR). This was prompted by the latest killing of former NPA leader Rolly
Kintanar.
Acting on President Arroyo's directive, respondent Ebdane issued the assailed Guidelines in the
Implementation of the Ban on the Carrying of Firearms Outside of Residence. Petitioner Francisco I.
Chavez, a licensed gun owner to whom a PTCFOR has been issued, requested the Department of Interior
and Local Government (DILG) to reconsider the implementation of the assailed Guidelines. However, his
request was denied. Thus, he filed the present petition impleading public respondents Ebdane, as Chief of
PNP; Alberto G. Romulo, as Executive Secretary; and Gerry L. Barias, as Chief of the PNP-Firearms and
Explosives Division.
ISSUE:
WON the issuance of the assailed Guidelines is a valid exercise of police power
HELD:
At any rate, assuming that petitioner's PTCFOR constitutes a property right protected by the Constitution,
the same cannot be considered as absolute as to be placed beyond the reach of the State's police power. All
property in the state is held subject to its general regulations, necessary to the common good and general
welfare.
In a number of cases, we laid down the test to determine the validity of a police measure, thus:
(1) The interests of the public generally, as distinguished from those of a particular class, require the exercise
of the police power; and
(2) The means employed are reasonably necessary for the accomplishment of the purpose and not unduly
oppressive upon individuals.
Deeper reflection will reveal that the test merely reiterates the essence of the constitutional guarantees of
substantive due process, equal protection, and non-impairment of property rights.
It is apparent from the assailed Guidelines that the basis for its issuance was the need for peace and order
in the society. Owing to the proliferation of crimes, particularly those committed by the New People's Army
(NPA), which tends to disturb the peace of the community, President Arroyo deemed it best to impose a
nationwide gun ban. Undeniably, the motivating factor in the issuance of the assailed Guidelines is the
interest of the public in general.
The only question that can then arise is whether the means employed are appropriate and reasonably
necessary for the accomplishment of the purpose and are not unduly oppressive. In the instant case, the
assailed Guidelines do not entirely prohibit possession of firearms. What they proscribe is merely the
carrying of firearms outside of residence. However, those who wish to carry their firearms outside of their
residences may re-apply for a new PTCFOR. This we believe is a reasonable regulation. If the carrying of
firearms is regulated, necessarily, crime incidents will be curtailed. Criminals carry their weapon to hunt
for their victims; they do not wait in the comfort of their homes. With the revocation of all PTCFOR, it
would be difficult for criminals to roam around with their guns. On the other hand, it would be easier for
the PNP to apprehend them.
Notably, laws regulating the acquisition or possession of guns have frequently been upheld as reasonable
exercise of the police power. In State vs. Reams, it was held that the legislature may regulate the right to
bear arms in a manner conducive to the public peace. With the promotion of public peace as its objective
and the revocation of all PTCFOR as the means, we are convinced that the issuance of the assailed
Guidelines constitutes a reasonable exercise of police power.
7. Metro Manila Development Authority vs. Bel-Air Village Association, G.R. No. 135962, March 27,
2000
DOCTRINE:
MMDA is not vested with police power. Its functions are merely administrative in nature.
FACTS:
Petitioner MMDA is a government agency tasked with the delivery of basic services in Metro Manila.
Respondent Bel-Air Village Association, Inc. (BAVA) is a non-stock, non-profit corporation whose
members are homeowners in Bel-Air Village, a private subdivision in Makati City. Respondent BAVA is
the registered owner of Neptune Street, a road beside Bel-Air Village. 111 Respondent received from
petitioner, through its Chairman, a notice dated December 22, 1995 requesting respondent to open Neptune
Street to public vehicular traffic starting January 2, 1996.111 On the same day, respondent was apprised
that the perimeter wall separating the subdivision from the adjacent Kalayaan Avenue would be demolished.
Respondent instituted against petitioner before the Regional Trial Court for injunction.
After due hearing, the trial court denied issuance of a preliminary injunction. Respondent questioned the
denial before the Court of Appeals. The appellate court conducted an ocular inspection of Neptune Street 3
and on February 13, 1996, it issued a writ of preliminary injunction enjoining the implementation of the
MMDA's proposed action. The appellate court rendered a Decision on the merits of the case finding that
the MMDA has no authority to order the opening of Neptune Street, a private subdivision road and cause
the demolition of its perimeter walls. It held that the authority is lodged in the City Council of Makati by
ordinance.
Petitioner MMDA claims that it has the authority to open Neptune Street to public traffic because it is an
agent of the state endowed with police power in the delivery of basic services in Metro Manila. One of
these basic services is traffic management which involves the regulation of the use of thoroughfares to
insure the safety, convenience and welfare of the general public.
ISSUE:
WON MMDA has the authority to order the opening of Neptune Street and the demolition of the perimeter
wall pursuant to its alleged police power.
HELD:
No. Police power is an inherent attribute of sovereignty. It has been defined as the power vested by the
Constitution in the legislature to make, ordain, and establish all manner of wholesome and reasonable laws,
statutes and ordinances, either with penalties or without, not repugnant to the Constitution, as they shall
judge to be for the good and welfare of the commonwealth, and for the subjects of the same. The power is
plenary and its scope is vast and pervasive, reaching and justifying measures for public health, public safety,
public morals, and the general welfare. It bears stressing that police power is lodged primarily in the
National Legislature. It cannot be exercised by any group or body of individuals not possessing legislative
power. The National Legislature, however, may delegate this power to the President and administrative
boards as well as the lawmaking bodies of municipal corporations or local government units. Once
delegated, the agents can exercise only such legislative powers as are conferred on them by the national
lawmaking body.
The scope of the MMDA's function is limited to the delivery of seven (7) basic services. One of these is
transport and traffic management which includes the formulation and monitoring of policies, standards and
projects to rationalize the existing transport operations, infrastructure requirements, the use of
thoroughfares and promotion of the safe movement of persons and goods. It also covers the mass transport
system and the institution of a system of road regulation, the administration of all traffic enforcement
operations, traffic engineering services and traffic education programs, including the institution of a single
ticketing system in Metro Manila for traffic violations. Under this service, the MMDA is expressly
authorized "to set the policies concerning traffic" and "coordinate and regulate the implementation of all
traffic management programs." In addition, the MMDA may "install and administer a single ticketing
system," fix, impose and collect fines and penalties for all traffic violations.
It will be noted that the powers of the MMDA are limited to the following acts: formulation, coordination,
regulation, implementation, preparation, management, monitoring, setting of policies, installation
of a system and administration. There is no syllable in R.A. No. 7924 that grants the MMDA police power,
let alone legislative power. Even the Metro Manila Council has not been delegated any legislative power.
Unlike the legislative bodies of the local government units, there is no provision in R.A. No. 7924 that
empowers the MMDA or its Council to "enact ordinances, approve resolutions and appropriate funds for
the general welfare" of the inhabitants of Metro Manila. The MMDA is, as termed in the charter itself, a
"development authority." It is an agency created for the purpose of laying down policies and coordinating
with the various national government agencies, people's organizations, non-governmental organizations
and the private sector for the efficient and expeditious delivery of basic services in the vast metropolitan
area. All its functions are administrative in nature and these are actually summed up in the charter itself.
The MMDA has no power to enact ordinances for the welfare of the community. It is the local government
units, acting through their respective legislative councils, that possess legislative power and police power.
In the case at bar, the Sangguniang Panlunsod of
Makati City did not pass any ordinance or resolution ordering the opening of Neptune Street, hence, its
proposed opening by petitioner MMDA is illegal and the respondent Court of Appeals did not err in so
ruling.
Moreover, the MMDA was created to put some order in the metropolitan transportation system, but
unfortunately the powers granted by its charter are limited. Its good intentions cannot justify the opening
for public use of a private street in a private subdivision without any legal warrant. The promotion of the
general welfare is not antithetical to the preservation of the rule of law.
8. Professional Regulations Commission vs. De Guzman, G.R. No. 144681, June 21, 2004
DOCTRINE:
The Professional Regulation Commission, pursuant to the exercise of its police power, has the authority to
regulate the medical profession.
FACTS:
The respondents are all graduates of the Fatima College of Medicine, Valenzuela City, Metro Manila. They
passed the Physician Licensure Examination conducted in February 1993 by the Board of Medicine
(Board). Petitioner Professional Regulation Commission (PRC) then released their names as successful
examinees in the medical licensure examination.
Shortly thereafter, the Board observed that the grades of the seventy-nine successful examinees from Fatima
College in the two most difficult subjects in the medical licensure exam, Biochemistry (Bio-Chem) and
Obstetrics and Gynecology (OB-Gyne), were unusually and exceptionally high. Eleven Fatima examinees
scored 100% in Bio-Chem and ten got 100% in OB-Gyne, another eleven got 99% in Bio-Chem, and
twenty-one scored 99% in OB-Gyne. The Board also observed that many of those who passed from Fatima
got marks of 95% or better in both subjects, and no one got a mark lower than 90%. A comparison of the
performances of the candidates from other schools was made. The Board observed that strangely, the
unusually high ratings were true only for Fatima College examinees. It was a record-breaking phenomenon
in the history of the Physician Licensure Examination. The Board issued Resolution No. 19, withholding
the registration as physicians of all the examinees from the Fatima College of Medicine. The PRC asked
the National Bureau of Investigation (NBI) to investigate whether any anomaly or irregularity marred the
February 1993 Physician Licensure Examination. the NBI found that "the questionable passing rate of
Fatima examinees in the [1993] Physician Examination leads to the conclusion that the Fatima examinees
gained early access to the test questions. Respondents then filed a special civil action for mandamus with
the RTC of Manila.
ISSUE:
WON the petition for mandamus will lie.
HELD:
No. The function of mandamus is not to establish a right but to enforce one that has been established by
law. If no legal right has been violated, there can be no application of a legal remedy, and the writ of
mandamus is a legal remedy for a legal right. There must be a well-defined, clear and certain legal right to
the thing demanded. It is long established rule that a license to practice medicine is a privilege or franchise
granted by the government.
It is true that this Court has upheld the constitutional right of every citizen to select a profession or course
of study subject to a fair, reasonable, and equitable admission and academic requirements. But like all rights
and freedoms guaranteed by the Charter, their exercise may be so regulated pursuant to the police power of
the State to safeguard health, morals, peace, education, order, safety, and general welfare of the people.
Thus, persons who desire to engage in the learned professions requiring scientific or technical knowledge
may be required to take an examination as a prerequisite to engaging in their chosen careers. This regulation
takes particular pertinence in the field of medicine, to protect the public from the potentially deadly effects
of incompetence and ignorance among those who would practice medicine.
It must be stressed, nevertheless, that the power to regulate the exercise of a profession or pursuit of an
occupation cannot be exercised by the State or its agents in an arbitrary, despotic, or oppressive manner. A
political body that regulates the exercise of a particular privilege has the authority to both forbid and grant
such privilege in accordance with certain conditions. Such conditions may not, however, require giving up
ones constitutional rights as a condition to acquiring the license. Under the view that the legislature cannot
validly bestow an arbitrary power to grant or refuse a license on a public agency or officer, courts will
generally strike down license legislation that vests in public officials discretion to grant or refuse a license
to carry on some ordinarily lawful business, profession, or activity without prescribing definite rules and
conditions for the guidance of said officials in the exercise of their power.
In the present case, the aforementioned guidelines are provided for in Rep. Act No. 2382, as amended,
which prescribes the requirements for admission to the practice of medicine, the qualifications of candidates
for the board examinations, the scope and conduct of the examinations, the grounds for denying the issuance
of a physician's license, or revoking a license that has been issued. Verily, to be granted the privilege to
practice medicine, the applicant must show that he possesses all the qualifications and none of the
disqualifications. Furthermore, it must appear that he has fully complied with all the conditions and
requirements imposed by the law and the licensing authority. Should doubt taint or mar the compliance as
being less than satisfactory, then the privilege will not issue. For said privilege is distinguishable from a
matter of right, which may be demanded if denied. Thus, without a definite showing that the aforesaid
requirements and conditions have been satisfactorily met, the courts may not grant the writ of mandamus
to secure said privilege without thwarting the legislative will.
AmigasForSharing| 100
9. JMM Promotion and Management, Inc. vs. Court of Appeals, 260 SCRA 319
DOCTRINE:
No right is absolute, and the proper regulation of a profession, calling, business or trade has always been
upheld as a legitimate subject of a valid exercise of the police power by the State particularly when their
conduct affects either the execution of legitimate governmental functions, the preservation of the State, the
public health and welfare and public morals.
FACTS:
Following the much-publicized death of Maricris Sioson in 1991, former President Corazon C. Aquino
ordered a total ban against the deployment of performing artists to Japan and other foreign destinations.
The ban was, however, rescinded after leaders of the overseas employment industry promised to extend full
support for a program aimed at removing kinks in the system of deployment. In its place, the government,
through the Secretary of Labor and Employment, subsequently issued Department Order No. 28 creating
the Entertainment Industry Advisory Council (EIAC) which was tasked with issuing guidelines on the
training, testing certification and deployment of performing artists abroad.
Pursuant to the EIAC's recommendations, the Secretary of Labor, on January 6, 1994, issued Department
Order No. 3 establishing various procedures and requirements for screening performing artists under a new
system of training, testing, certification and deployment of the former. Performing artists successfully
hurdling the test, training and certification requirement were to be issued an Artist's Record Book (ARB),
a necessary prerequisite to processing of any contract of employment by the POEA.
Thereafter, the Department of Labor, following the EIAC's recommendation, issued a series of orders fine-
tuning and implementing the new system which include, among others:
Department Order No. 3-B, pertaining to the Artist Record Book (ARB) requirement, which could be
processed only after the artist could show proof of academic and skills training and has passed the required
tests.
Federation of Entertainment Talent Managers of the Philippines (FETMOP), on January 27, 1995 filed a
class suit assailing these department orders, principally contending that said orders 1) violated the
constitutional right to travel; 2) abridged existing contracts for employment; and 3) deprived individual
artists of their licenses without due process of law. FETMOP, likewise, averred that the issuance of the
Artist Record Book (ARB) was discriminatory and illegal and "in gross violation of the constitutional right
... to life liberty and property." Said Federation consequently prayed for the issuance of a writ of preliminary
injunction against the aforestated orders.
JMM Promotion and Management, Inc. And Kary International, Inc., herein petitioners, filed a Motion for
Intervention in said civil case, which was granted by the trial court but which later denied petitioner's prayer
for a writ of preliminary injunction and dismissed the complaint.
ISSUE:
WON the Artist Record Book requirement and the other Department Orders were issued by the Secretary
of Labor pursuant to a valid exercise of the police power.
HELD:
YES. The latin maxim salus populi est suprema lex embodies the character of the entire spectrum of public
laws aimed at promoting the general welfare of the people under the State's police power. As an inherent
attribute of sovereignty which virtually "extends to all public needs," this "least limitable" of
governmental powers grants a wide panoply of instruments through which the state, as parens patriae gives
effect to a host of its regulatory powers.
Thus, police power concerns government enactments which precisely interfere with personal liberty or
property in order to promote the general welfare or the common good. As the assailed Department Order
enjoys a presumed validity, it follows that the burden rests upon petitioners to demonstrate that the said
order, particularly, its ARB requirement, does not enhance the public welfare or was exercised arbitrarily
or unreasonably.
Pursuant to the alarming number of reports that a significant number of Filipina performing artists ended
up as prostitutes abroad (many of whom were beaten, drugged and forced into prostitution), and following
the deaths of a number of these women, the government began instituting measures aimed at deploying
only those individuals who met set standards which would qualify them as legitimate performing artists. In
spite of these measures, however, a number of our countrymen have nonetheless fallen victim to
unscrupulous recruiters, ending up as virtual slaves controlled by foreign crime syndicates and forced into
jobs other than those indicated in their employment contracts. Worse, some of our women have been forced
into prostitution.
Clearly, the welfare of Filipino performing artists, particularly the women was paramount in the issuance
of Department Order No. 3. Short of a total and absolute ban against the deployment of performing artists
to "high-risk" destinations, a measure which would only drive recruitment further underground, the new
scheme at the very least rationalizes the method of screening performing artists by requiring reasonable
educational and artistic skills from them and limits deployment to only those individuals adequately
prepared for the unpredictable demands of employment as artists abroad. It cannot be gainsaid that this
scheme at least lessens the room for exploitation by unscrupulous individuals and agencies.
As to the other provisions of Department Order No. 3 questioned by petitioners, we see nothing wrong with
the requirement for document and booking confirmation (D.O. 3-C), a minimum salary scale (D.O. 3-E),
or the requirement for registration of returning performers. The requirement for a venue certificate or other
documents evidencing the place and nature of work allows the government closer monitoring of foreign
employers and helps keep our entertainers away from prostitution fronts and other worksites associated
with unsavory, immoral, illegal or exploitative practices. Parenthetically, none of these issuances appear to
us, by any stretch of the imagination, even remotely unreasonable or arbitrary. They address a felt need of
according greater protection for an oft-exploited segment of our OCW's. They respond to the industry's
demand for clearer and more practicable rules and guidelines. Many of these provisions were fleshed out
following recommendations by, and after consultations with, the affected sectors and non-government
organizations. On the whole, they are aimed at enhancing the safety and security of entertainers and artists
bound for Japan and other destinations, without stifling the industry's concerns for expansion and growth.
In any event, apart from the State's police power, the Constitution itself mandates government to extend the
fullest protection to our overseas workers. The basic constitutional statement on labor, embodied in Section
18 of Article II of the Constitution provides:
Sec. 18.The State affirms labor as a primary social economic force. It shall protect the rights of workers
and promote their welfare.
Obviously, protection to labor does not indicate promotion of employment alone. Under the welfare and
social justice provisions of the Constitution, the promotion of full employment, while desirable, cannot take
a backseat to the government's constitutional duty to provide mechanisms for the protection of our
workforce, local or overseas.
We now go to petitioners' assertion that the police power cannot, nevertheless, abridge the right of our
performing workers to return to work abroad after having earlier qualified under the old process, because,
having previously been accredited, their accreditation became a "property right," protected by the due
process clause. We find this contention untenable.
A profession, trade or calling is a property right within the meaning of our constitutional guarantees. One
cannot be deprived of the right to work and the right to make a living because these rights are property
rights, the arbitrary and unwarranted deprivation of which normally constitutes an actionable wrong.
Nevertheless, no right is absolute, and the proper regulation of a profession, calling, business or trade has
always been upheld as a legitimate subject of a valid exercise of the police power by the State particularly
when their conduct affects either the execution of legitimate governmental functions, the preservation of
the State, the public health and welfare and public morals. According to the maxim, sic utere tuo ut alienum
non laedas, it must of course be within the legitimate range of legislative action to define the mode and
manner in which every one may so use his own property so as not to pose injury to himself or others.
In any case, where the liberty curtailed affects at most the rights of property, the permissible scope of
regulatory measures is certainly much wider. To pretend that licensing or accreditation requirements
violates the due process clause is to ignore the settled practice, under the mantle of the police power, of
regulating entry to the practice of various trades or professions. Professionals leaving for abroad are
required to pass rigid written and practical exams before they are deemed fit to practice their trade. Seamen
are required to take tests determining their seamanship. Locally, the Professional Regulation Commission
has began to require previously licensed doctors and other professionals to furnish documentary proof that
they had either re-trained or had undertaken continuing education courses as a requirement for renewal of
their licenses. It is not claimed that these requirements pose an unwarranted deprivation of a property right
under the due process clause. So long as professionals and other workers meet reasonable regulatory
standards no such deprivation exists.
10. Dela Cruz vs. Paras, 123 SCRA 569
DOCTRINE:
It is a general rule that ordinances passed by virtue of the implied power found in the general welfare clause
must be reasonable, consonant with the general powers and purposes of the corporation, and not inconsistent
with the laws or policy of the State.
FACTS:
On November 5, 1975, two cases for prohibition with preliminary injunction were filed with the Court of
First Instance of Bulacan.
The Ordinance is known as the Prohibition and Closure Ordinance of Bocaue, Bulacan. Sec. 3 and 4
provide:
Section 3. — Prohibition in the Issuance and Renewal of Licenses, Permits. — Being the principal cause
in the decadence of morality and because of their other adverse effects on this community as explained
above, no operator of night clubs, cabarets or dance halls shall henceforth be issued permits/licenses to
operate within the jurisdiction of the municipality and no license/permit shall be issued to any professional
hostess, hospitality girls and professional dancer for employment in any of the aforementioned
establishments. The prohibition in the issuance of licenses/permits to said persons and operators of said
establishments shall include prohibition in the renewal thereof.
Section 4.— Revocation of Permits and Licenses.— The licenses and permits issued to operators of night
clubs, cabarets or dance halls which are now in operation including permits issued to professional hostesses,
hospitality girls and professional dancers are hereby revoked upon the expiration of the thirty-day period
given them as provided in Section 8 hereof and thenceforth, the operation of these establishments within
the jurisdiction of the municipality shall be illegal.
On January 15, 1976 the decision was rendered upholding the constitutionality and validity of Ordinance
No. 84 and dismissing the cases. Hence this petition for certiorari by way of appeal.
ISSUE:
WON a municipal corporation, Bocaue, Bulacan, can prohibit the exercise of a lawful trade, the operation
of night clubs, and the pursuit of a lawful occupation, such clubs employing hostesses.
HELD:
NO. This Court holds that reliance on the police power is insufficient to justify the enactment of the assailed
ordinance. It must be declared null and void.
Police power is granted to municipal corporations in general terms as follows: "General power of council
to enact ordinances and make regulations. - The municipal council shall enact such ordinances and make
such regulations, not repugnant to law, as
may be necessary to carry into effect and discharge the powers and duties conferred upon it by law and
such as shall seem necessary and proper to provide for the health and safety, promote the prosperity,
improve the morals, peace, good order, comfort, and convenience of the municipality and the inhabitants
thereof, and for the protection of property therein." An ordinance enacted by virtue thereof, according to
Justice Moreland, speaking for the Court in the leading case of United States v. Abendan 12 "is valid, unless
it contravenes the fundamental law of the Philippine Islands, or an Act of the Philippine Legislature, or
unless it is against public policy, or is unreasonable, oppressive, partial, discriminating, or in derogation of
common right. Where the power to legislate upon a given subject, and the mode of its exercise and the
details of such legislation are not prescribed, the ordinance passed pursuant thereto must be a reasonable
exercise of the power, or it will be pronounced invalid."
In another case penned by Justice Malcolm where the present Administrative Code provision was applied,
it was stated by this Court: "The general welfare clause has two branches: One branch attaches itself to the
main trunk of municipal authority, and relates to such ordinances and regulations as may be necessary to
carry into effect and discharge the powers and duties conferred upon the municipal council by law. With
this class we are not here directly concerned. The second branch of the clause is much more independent
of the specific functions of the council which are enumerated by law. It authorizes such ordinances as shall
seem necessary and proper to provide for the health and safety, promote the prosperity, improve the morals,
peace, good order, comfort, and convenience of the municipality and the inhabitants thereof, and for the
protection of property therein.' It is a general rule that ordinances passed by virtue of the implied power
found in the general welfare clause must be reasonable, consonant with the general powers and purposes of
the corporation, and not inconsistent with the laws or policy of the State." If night clubs were merely then
regulated and not prohibited, certainly the assailed ordinance would pass the test of validity. In the two
leading cases above set forth, this Court had stressed reasonableness, consonant with the general powers
and purposes of municipal corporations, as well as consistency with the laws or policy of the State. It cannot
be said that such a sweeping exercise of a lawmaking power by Bocaue could qualify under the term
reasonable. The objective of fostering public morals, a worthy and desirable end can be attained by a
measure that does not encompass too wide a field. Certainly the ordinance on its face is characterized by
overbreadth. The purpose sought to be achieved could have been attained by reasonable restrictions rather
than by an absolute prohibition.
The decision now under review refers to Republic Act No. 938 as amended. It was originally enacted on
June 20, 1953. It is entitled: "AN ACT GRANTING MUNICIPAL OR CITY BOARDS AND COUNCILS
THE POWER TO REGULATE THE ESTABLISHMENT, MAINTENANCE AND OPERATION OF
CERTAIN PLACES OF AMUSEMENT WITHIN THEIR RESPECTIVE TERRITORIAL
JURISDICTIONS.' The Constitution mandates: "Every bill shall embrace only one subject which shall be
expressed in the title thereof." Since there is no dispute as the title limits the power to regulating, not
prohibiting, it would result in the statute being invalid if, as was done by the Municipality of Bocaue, the
operation of a night club was prohibited. There is a wide gap between the exercise of a regulatory power
"to provide for the health and safety, promote the prosperity, improve the morals, and to interdict any
calling, occupation, or enterprise. In accordance with the well-settled principle of constitutional
construction that between two possible interpretations by one of which it will be free from constitutional
infirmity and by the other tainted by such grave defect, the former is to be preferred. A construction that
would save rather than one that would affix the seal of doom certainly commends itself. We have done so
before We do so again.
There is reinforcement to the conclusion reached by virtue of a specific provision of the recently-enacted
Local Government Code. The general welfare clause, a reiteration of the Administrative Code provision, is
set forth in the first paragraph of Section 149 defining the powers and duties of the sangguniang bayan.
(hindi ko na cinopy paste sobrang haba) It is clear that municipal corporations cannot prohibit the operation
of night clubs. They may be regulated, but not prevented from carrying on their business. It would be,
therefore, an exercise in futility if the decision under review were sustained. All that petitioners would have
to do is to apply once more for licenses to operate night clubs. A refusal to grant licenses, because no such
businesses could legally open, would be subject to judicial correction. That is to comply with the legislative
will to allow the operation and continued existence of night clubs subject to appropriate regulations. In the
meanwhile, to compel petitioners to close their establishments, the necessary result of an affirmance, would
amount to no more than a temporary termination of their business. During such time, their employees would
undergo a period of deprivation. Certainly, if such an undesirable outcome can be avoided, it should be.
The law should not be susceptible to the reproach that it displays less than sympathetic concern for the
plight of those who, under a mistaken appreciation of a municipal power, were thus left without
employment. Such a deplorable consequence is to be avoided. If it were not thus, then the element of
arbitrariness enters the picture. That is to pay less, very much less, than full deference to the due process
clause with its mandate of fairness and reasonableness.
Certiorari is granted and the decision of the lower court is reversed, set aside, and nullified.
11. Republic vs. PLDT, 26 SCRA 620
DOCTRINE:
The State may, in the exercise of its power to expropriate, require a public utility to render services in the
general interest, provided just compensation compensation is paid therefor.
FACTS:
Sometime in 1933, the defendant PLDT entered into an agreement with RCA Communications Inc., an
American corporation, whereby telephone messages coming from the US and received by RCA's domestic
station, could automatically be transferred to the lines of PLDT, and vice versa. The petitioner, meanwhile,
established the Bureau of Telecommunications. It set up its own Government Telephone System by utilizing
its own appropriation and equipment and by renting trunk lines of the PLDT. Thereafter, the State also
entered into an agreement with RCA for a joint overseas telephone service.
Alleging that petitioner is in competition with them, PLDT notified the former about the competition. PLDT
complained that the Bureau was violating the conditions for using the trunk lines not only for the use of
government offices but even to serve private persons or the general public. PLDT gave a notice that if
violations were not stopped, PLDT would sever the connections -which PLDT did. Receiving no reply,
PLDT disconnected the trunk lines being rented by petitioner; thus, prompting the plaintiff to file a case
before the CFI praying for judgment commanding PLDT to execute a contract with the Bureau for the use
of the facilities of PLDT's telephone system, and for a writ of preliminary injunction against the defendant
to restrain the severance of the existing trunk lines and restore those severed.
ISSUE:
Whether or not the defendant PLDT can be compelled to enter into a contract with the plaintiff.
HELD:
Yes. The SC explained that " x x x 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."
Considering (1) that the PLDT franchise is non- exclusive, (2) that it is unable to adequately cope with the
current demands for telephone service, as shown by the number of pending applications therefor; and (3)
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 PLDT are without merit. To uphold the
PLDT's contention is to subordinate the needs of the general public.
12. Jesus is Lord Christian School Foundation vs. Municipality of Pasig, G.R. No. 152230, August 9,
2005
DOCTRINE:
One essential requisite for the exercise of the power of eminent domain is to prove the mandatory
requirement of a valid and definite offer to the owner of the property (and its rejection thereof by the latter)
before filing its complaint.
FACTS:
The Municipality of Pasig needed an access road from E. R. Santos Street, a municipal road near the Pasig
Public Market, to Barangay Sto. Tomas Bukid, Pasig, where 60 to 70 houses, mostly made of light
materials, were located. The municipality then decided to acquire 51 square meters out of the 1,791-square
meter property of Lorenzo Ching Cuanco, Victor Ching Cuanco and Ernesto Ching Cuanco Kho which is
abutting E. R. Santos Street. However, it ix claimed that, as early as February 1993, they had sold the said
property to petitioner JILCSFI as evidenced by a deed of sale 9 bearing the signature of defendant Ernesto
Ching Cuanco Kho and his wife. When apprised about the complaint, JILCSFI filed a motion for leave to
intervene.
RTC allowed the expropriation proceedings. Court of Appeals affirmed the lower court's decision for the
construction of an access road. Petitioner argues that there was no valid and definite offer made before a
complaint for eminent domain was filed as the law requires (Art. 35, Rules and Regulations Implementing
the Local Government Code). Respondent contends that a letter to purchase was offered to the previous
owners and the same was not accepted.
ISSUE:
Whether or not a letter to purchase is sufficient enough as a definite and valid offer to expropriate.
HELD:
No. Failure to prove compliance with the mandatory requirement of a valid and definite offer will result in
the dismissal of the complaint. The purpose of the mandatory requirement to be first made to the owner is
to encourage settlements and voluntary acquisition of property needed for public purposes in order to avoid
the expense and delay of a court of action. In the present case, the respondent failed to prove that before it
filed its complaint, it made a written definite and valid offer to acquire the property for public use as an
access road. The only evidence adduced by the respondent to prove its compliance with Section 19 of the
Local Government Code is the photocopy of the letter purportedly bearing the signature of Engr. Jose
Reyes, to only one of the co¬owners, Lorenzo Ching Cuanco. It bears stressing, however, that the
respondent offered the letter only to prove its desire or intent to acquire the property for a right-of-way. The
document was not offered to prove that the respondent made a definite and valid offer to acquire the
property. Hence, the decision of the lower court and CA are set aside.
13. Republic vs. Legaspi, 670 SCRA 110 (2012)
DOCTRINE:
The power of eminent domain is the ultimate right of the sovereign power to appropriate any property
within its territorial sovereignty for a public purpose thru a method that partakes the nature of a compulsory
sale. The fact that property is being utilized by respondents for their own private purposes is, consequently,
not a valid reason to deny exercise of the right of expropriation, for as long as the taking is for a public
purpose and just compensation is paid.
FACTS:
The case involves the alienation of a property in Miag-ao, Iloilo. UP Visayas (UPV) acquired Lot No. 1,
consisting of ten lots, through a contract of sale with respondent Rosalina Libo-on. UPV immediately took
possession of the property, and started building thereon road networks, infrastructure and school facilities
as part of its educational development plan. However, 2 years from such sale, Rosalina wrote a letter,
informing UPV that she was rescinding the sale of the subject parcel on the ground that she was no longer
the owner of the property in view of her 5 September 1978 conveyance thereof by way of barter in favor of
respondents Legaspi et al. Republic, thru UPV, then filed against respondents the complaint for eminent
domain, alleging, among other matters, that the subject parcel is within the approved and delineated campus
of the UPV which had well-established its presence in the area by building its laboratories, classrooms,
faculty and student centers, among other facilities; and, that it had been constrained to resort to
expropriation in view of the failure of its efforts to negotiate with respondents for the retention of the
property on which it constructed considerable improvements already being used for academic purposes.
Maintaining that the fair market value of the property at the time of its entry was P49,298.00, UPV sought
confirmation of its right of condemnation as well as the fixing of the just compensation for the property.
The RTC issued an order granting petitioner's motion to allow UPV to continue its possession of the subject
parcel upon deposit with the Iloilo Provincial Treasurer of the sum of P50,070.00, representing the
provisional valuation of the property. Consequently, the RTC issued a condemnation order. Such order
initially included only three lots of the ten lots in Lot No. 1, so Republic moved for the continuation of the
condemnation proceedings insofar as the remaining seven lots were concerned. The RTC issued a
condemnation order for the remaining lots, with the exclusion of the Villa Marina Beach Resort. Seeking
the inclusion of such lot in the expropriation, Republic filed a motion for reconsideration, which was denied
by the RTC. Republic then filed the Rule 65 petition for certiorari and mandamus, assailing the RTC's order
dated 31 May 2004 on the ground that grave abuse of discretion attended the denial of the expropriation of
the subject lots after the right to expropriate the same was earlier upheld in the likewise assailed order dated
17 November 2003. The petition was denied.
ISSUE:
Whether or not the Republic has the right to expropriate the remaining lot in question.
HELD:
YES. "The RTC compounded its error when, acting on the motions for reconsideration filed by the parties,
it issued the assailed Order, denying petitioner's right of expropriation over Lot Nos. 21609-A, 21609-D,
21609-F, 21609-G, 21609-H, 21609-I and 21609-J, on the ground that the same were already used by
respondents for their businesses and/or residences. Subject to the direct constitutional qualification that
"private property shall not be taken for public use without just compensation," the power of eminent domain
is, after all, the ultimate right of the sovereign power to appropriate any property within its territorial
sovereignty for a public purpose through a method that partakes the nature of a compulsory sale. The fact
that said lots are being utilized by respondents Legaspis for their own private purposes is, consequently,
not a valid reason to deny exercise of the right of expropriation, for as long as the taking is for a public
purpose and just compensation is paid. Our review of the documents attached to the pleadings filed in
connection with the petition before the CA and this Court failed to yield any basis for the RTC's
pronouncement that UPV excluded the area occupied by the Villa Marina Resort from its exercise of the
right of expropriation. This is belied by Republic's motion for continuation of the condemnation
proceedings for the seven remaining lots into which Lot No. 1 had been subdivided, UPV's letter-protest
against respondent Rodolfo Legaspi, Sr.'s occupation of the property, its motion for the grant of a writ of
possession of the entire lot and the motions for reconsideration of petitioner and UPV filed from the
condemnation order. Considering that the site of the Villa Marina Resort appears to have already been
earmarked for UPV's proposed National Institute of Marine Biotechnology, the RTC clearly abused its
discretion when it ruled that the exclusion of 31,617 square meters from the original 40,133 sought to be
expropriated would not adversely affect UPV's operations. Granted that no part of the ground of a public
cemetery can be taken for other public uses under a general authority, there is, likewise, no showing in the
record of the location and area of the public cemetery of Miag-ao in relation to the subject property." The
CA's Decision is therefore REVERSED and SET ASIDE.
14. NPC vs. Ileto, 678 SCRA 107 (2012)
DOCTRINE:
Expropriation cases which do not involve mere liens on the property in the form of aerial easements,
such as installment of transmission lines, require payment of just compensation because of the imposition
of additional limitations to the landowners interfering with the owner's right to possess and enjoy their
properties.
The determination of just compensation in expropriation cases is a function addressed to the discretion of
the courts, and may not be usurped by any other department of the government.
FACTS:
To materialize its Northwestern Luzon Transmission Project, the National Power Corporation (NPC) filed
a complaint, which was subsequently amended, seeking to expropriate certain parcels of land in Bulacan
owned by Ileto et al. After depositing with the Land Bank the amount of Php204,566.60, the NPC received
actual possession of the properties. To determine the value of the just compensation, the RTC constituted a
team of commissioners. However, owners Heirs of Sofia Mangahas of one property and the NPC filed with
the RTC a jointly executed compromise agreement on NPC's acquisition of 13,855 sq m. of the 95,445 sq
m. property owned by the former for payment with an assessed value of Php250.00/sqm. Such compromise
agreement was found by the RTC to be valid. Bugayong, the commissioner for NPC, opposed such
agreement, and recommended that NPC pay an easement fee of 10% of Php85.00/sqm. for the agricultural
land that would merely be traversed by the transmission lines. But the RTC approved Commissioners
Tanyag and Villacorta's recommendation of payment of just compensation for all affected lands pegged at
Php250.00/sqm. The NPC filed a motion for reconsideration, which was denied by the RTC. The OSG,
representing NPC, filed an appeal with the CA, assailing the approval of the compromise agreement, and
the propriety of paying just compensation instead of merely the 10% easement fee pursuant to Section 3A
of R.A. No. 6395, as amended.
The CA (1) affirmed the validity of the compromise agreement, (2) upheld the Php250.00 valuation of just
compensation in the compromise agreement for being congruent with the amount of just compensation for
residential lands as listed by the NPC in its Board Res. No. 97-246, and (3) recognized the error of RTC in
fixing valuation of other expropriated lands at Php250.00 although they are not residential.
ISSUE:
(1) Whether or not the NPC must pay just compensation to landowners instead of a mere aerial easement fee.
(2) Whether or not the CA and the RTC erred in the determination of the just compensation.
HELD:
YES. "Republic Act No. 6395 grants the NPC the power to acquire 'property incident to, or necessary,
convenient or proper to carry out the purposes for which [it] was created,' namely: the construction of
generation and transmission facilities to provide electricity for the entire country. xxx At the heart of this
argument is the mistaken assumption that what are involved are mere liens on the property in the form of
aerial easements. While it may be true that the transmission lines merely pass over the affected properties,
the easement imposes the additional limitation that the landowners are prohibited from constructing any
improvements or planting any trees that exceed three (3) meters within the aerial right of way area. This
prohibition clearly interferes with the landowners' right to possess and enjoy their properties. xxx Apart
from interfering with the attributes of ownership, we have articulated in our observation in National Power
Corp. v. Sps. Gutierrez that these transmission lines, because of the high- tension current that passes through
them, pose a danger to the lives and limbs of those in the surrounding areas, and, thus, serve to limit the
activities that can be done on these lands. We also declared in National Power Corporation v. Purefoods
Corporation that Section 3A of Republic Act No. 6395, as amended (which provides a fixed formula in the
computation of just compensation in cases of acquisition of easements of right of way) is not binding upon
this Court. This is in keeping with the established rule that the determination of 'just compensation' in
eminent domain cases is a judicial function." It was established by the Supreme Court that it is necessary
for NPC to pay to the landowners just compensation for the affected properties instead of mere easement
fees, because of the nature of the public use for which the expropriation was intended. NPC's reliance on
the provision in R.A. No. 6395, requiring the payment of mere easement fee, was misplaced.
YES. Such determination of just compensation in expropriation cases is a function addressed to the
discretion of the courts, and may not be usurped by any other department of the government. Any valuation
for just compensation provided in statutes may only serve as guiding principle, but not substitute the court's
own decision. In this regard, both the RTC and the CA erred in using the statutes in determining just
compensation. Although the determination of just compensation lies within the trial court's discretion, it
should not be done arbitrarily or capriciously. The decision of the trial court must be based on all established
rules, correct legal principles, and competent evidence. The courts are proscribed from basing their
judgments on speculations and surmises. In light of the foregoing, we find that the trial court arbitrarily
fixed the amount of just compensation due the landowners at Php250.00 per square meter. Thus, the Court
has no alternative but to remand the case to the court of origin for the proper determination of just
compensation.
15. Filstream International, Inc. vs. Court of Appeals, 284 SCRA 716
Facts:
Petitioner Filstream International is the registered owner of the properties subject of this case consisting of
adjacent parcels of land in Tondo II, Manila covered by 6 TCT from Register of Deeds, Manila. On January
7, 1993, petitioner filed an ejectment suit before the MeTC of Manila against the occupants of the parcels
of land on the ground of termination of lease of contract and non-payment of rentals. It was rendered in
favor of petitioner and the private respondents were ordered to vacate the premises and pay back rentals to
petitioner. The private respondents appealed way up to the CA but as the results were still the same, no
further action was taken and the decision became final and executory.
However, during the pendency of the ejectment proceedings, the private respondents files a
complaint for Annulment of Deed of Exchange against petitioner Filmstream. It was then the the
respondent, City of Manila, came into picture. The city government approved Ordinance No. 7813,
authorizing Mayor Lim to initiate the acquisition by negotiation, expropriation, purchase, or other legal
means certain parcels of land registered under T.C.T. Nos. 169193, 169198, 169190, 169200, 169202, and
169192 of the Registry of Deeds of Manila which formed part of the properties of petitioner then occupied
by private respondents. Subsequently, the City of Manila approved Ordinance No. 7855 declaring the
expropriation of certain parcels of land situated along Antonio Rivera and Fernando Ma. Guerero streets in
Tondo, Manila which were owned by Mr. Enrique Quijano Gutierez, petitioners predecessor-in-interest.
The said properties were to be sold and distributed to qualified tenants of the area pursuant to the Land Use
Development Program of the City of Manila.
City of Manila filed a complaint for eminent domain seeking to expropriate the aforecited parcels
of land owned by petitioner Filstream which are situated at Antonio Rivera Street, Tondo II, Manila. The
trial court issued a writ of Possession in favor of the City of Manila. Filstream filed a motion to dismiss as
well as motion to quash the writ of possession. The motion to dismiss was premised on the following
grounds: no valid cause of action; the petition does not satisfy the requirements of public use and a mere
clandestine maneuver to circumvent the writ execution issued by the RTC of Manila, Branch 4 in the
ejectment suit; violation of the constitutional guarantee against non-impairment of obligation and contract;
price offered was too low hence violative of the just compensation provision of the constitution and the said
amount is without the certification of the City Treasurer for availability of funds. With respect to the motion
to quash the writ of possession, petitioner raised the following objections: failure to comply with Section 2
of Rule 67 of the Rules of Court, Ordinance No. 7813 is a void enactment for it was approved without a
public hearing and violative of the constitutional guarantee against impairment of obligation and contracts;
the price is too low and unconscionable violating the just compensation provision of the constitution, and
the said writ is tainted with infirmity considering the absence of a certification from the City of Manila that
there is an immediately available fund for the subject expropriation. Both were denied and the properties
were declared condemned in favor of the City of Manila.
Pursuant to this, the CA issued a restraining order and a preliminary injunction enjoining the
execution of the writ of demolition issued in the ejectment suit as an incident to the private respondent’s
pending petition assailing the dismissal by the RTC of the consolidated pettions filed by private respondent
and City of Manila on the ground of forum shopping. Petitioner Filstream objects to the issuances of the
CA and anchors its claim by virtue of its ownership over the properties and the existence of a final and
executory judgment against private respondents ordering the latters ejectment from the premises.
Private respondents claim on the other hand hinges on an alleged supervening event which has
rendered the enforcement of petitioners rights moot, that is, the expropriation proceedings undertaken by
the City of Manila over the disputed premises for the benefit of herein private respondents. For its part, the
City of Manila is merely exercising its power of eminent domain within its jurisdiction by expropriating
petitioners properties for public use.
Issue:
Whether or not Filstream was deprived of due process on the ground of non-compliance with
priority in expropriation.
Held:
Yes. There is no dispute as to the existence of a final and executory judgment in favor of petitioner
Filstream ordering the ejectment of private respondents from the properties subject of this dispute. The
judgment in the ejectment suit became final and executory after private respondents failed to interpose any
appeal from the adverse decision of the Court of Appeals dated August 25, 1994 in CA-G.R. SP No. 33714.
Thus, petitioner has every right to assert the execution of this decision as it had already became final and
executory. However, it must also be conceded that the City of Manila has an undeniable right to exercise
its power of eminent domain within its jurisdiction. The right to expropriate private property for public use
is expressly granted to it under Section 19 of the 1991 Local Government Code, to wit:
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 (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. (Italics supplied)
More specifically, the City of Manila has the power to expropriate private property in the pursuit of its
urban land reform and housing program as explicitly laid out in the Revised Charter of the City of Manila
(R.A. No. 409) as follows:
General powers The city may have a common seal and alter the same at pleasure, and may take, purchase,
receive, hold, lease, convey, and dispose of real and personal property for the general interest of the city,
condemn private property for public use, contract and be contracted with, sue and be sued, and prosecute
and defend to final judgment and execution, and exercise all the powers hereinafter conferred. (R.A. 409,
Sec. 3; Italics supplied).
xxxxxxxxx
Sec. 100. The City of Manila is authorized to acquire private lands in the city and to subdivide the same
into home lots for sale on easy terms to city residents, giving first priority to the bona fide tenants or
occupants of said lands, and second priority to laborers and low-salaried employees. For the purpose of this
section, the city may raise necessary funds by appropriations of general funds, by securing loans or by
issuing bonds, and, if necessary, may acquire the lands through expropriation proceedings in accordance
with law, with the approval of the President x x x. (Italics supplied).
From the provisions of Republic Act No. 7279 (Urban Development and Housing Act of 1992), there are
the limitations with respect to the order of priority in acquiring private lands and in resorting to
expropriation proceedings as a means to acquire the same. Private lands rank last in the order of priority for
purposes of socialized housing. In the same vein, expropriation proceedings are to be resorted to only when
the other modes of acquisition have been exhausted. Compliance with these conditions must be deemed
mandatory because these are the only safeguards in securing the right of owners of private property to due
process when their property is expropriated for public use.
RA 7279 Urban Development Housing Act of 1992
Sec. 9. Priorities in the acquisition of Land. — Lands for socialized housing shall be acquired in the
following order:
(a) Those owned by the Government or any of its subdivisions, instrumentalities, or agencies, including
government-owned or controlled corporations and their subsidiaries; (b) Alienable lands of the public
domain; (c) Unregistered or abandoned and idle lands; (d) Those within the declared Areas for Priority
Development, Zonal Improvement sites, and Slum Improvement and Resettlement Program sites which
have not yet been acquired; (e) Bagong Lipunan Improvement of Sites and Services or BLISS sites which
have not yet been acquired; and (f) Privately-owned lands.
Where on-site development is found more practicable and advantageous to the beneficiaries, the priorities
mentioned in this section shall not apply. The local government units shall give budgetary priority to on-
site development of government lands.
The Court found nothing that would indicate the respondent City of Manila complied with Sec. 9 and Sec.
10 of R.A. 7279. Petitioners Filstreams properties were expropriated and ordered condemned in favor of
the City of Manila sans any showing that resort to the acquisition of other lands listed under Sec. 9 of RA
7279 have proved futile. Evidently, there was a violation of petitioner Filstreams right to due process which
must accordingly be rectified.
Indeed, it must be emphasized that the State has a paramount interest in exercising its power of eminent
domain for the general good considering that the right of the State to expropriate private property as long
as it is for public use always takes precedence over the interest of private property owners. However we
must not lose sight of the fact that the individual rights affected by the exercise of such right are also entitled
to protection, bearing in mind that the exercise of this superior right cannot override the guarantee of due
process extended by the law to owners of the property to be expropriated. In this regard, vigilance over
compliance with the due process requirements is in order.
16. Lagcao vs. Judge Labra, G.R. No. 155746, October 13, 2004
DOCTRINE:
While we recognize that housing is one of the most serious social problems of the country, local government
units do not possess unbridled authority to exercise their power of eminent domain in seeking solutions to
this problem. Thus, the exercise by local government units of the power of eminent domain is not absolute.
FACTS:
The Province of Cebu donated 210 lots to the City of Cebu. But then, in late 1965, the 210 lots, including
Lot 1029, reverted to the Province of Cebu. Consequently, the province tried to annul the sale of Lot 1029
by the City of Cebu to the petitioners. This prompted the latter to sue the province for specific performance
and damages in the then Court of First Instance. The court a quo ruled in favor of petitioners and ordered
the Province of Cebu to execute the final deed of sale in favor of petitioners. The Court of Appeals affirmed
the decision of the trial court. After acquiring title, petitioners tried to take possession of the lot only to
discover that it was already occupied by squatters. Thus petitioners instituted ejectment proceedings against
the squatters. The Municipal Trial Court in Cities (MTCC) ordering the squatters to vacate the lot. On
appeal, the RTC affirmed the MTCC's decision and issued a writ of execution and order of demolition.
However, when the demolition order was about to be implemented, Cebu City Mayor Alvin Garcia wrote
two letters to the MTCC, requesting the deferment of the demolition on the ground that the City was still
looking for a relocation site for the squatters. Acting on the mayor's request, the MTCC issued two orders
suspending the demolition. Unfortunately for petitioners, during the suspension period, the Sangguniang
Panlungsod of Cebu City passed a resolution which identified Lot 1029 as a socialized housing site pursuant
to RA 7279. Petitioners filed with the RTC an action for declaration of nullity of Ordinance No. 1843 for
being unconstitutional.
ISSUE:
Whether or not Ordinance No. 1843 is violative of the Constitution?
RULING:
Yes. Under Section 48 of RA 7160, otherwise known as the Local Government Code of 1991, local
legislative power shall be exercised by the Sangguniang Panlungsod of the city. The legislative acts of the
Sangguniang Panlungsod in the exercise of its lawmaking authority are denominated ordinances. Local
government units have no inherent power of eminent domain and can exercise it only when expressly
authorized by the legislature. By virtue of RA 7160, Congress conferred upon local government units the
power to expropriate. Ordinance No. 1843 which authorized the expropriation of petitioners' lot was enacted
by the Sangguniang Panlungsod of Cebu City to provide socialized housing for the homeless and low-
income residents of the City. However, while we recognize that housing is one of the most serious social
problems of the country, local government units do not possess unbridled authority to exercise their power
of eminent domain in seeking solutions to this problem. There are two legal provisions which limit the
exercise of this power: (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; and (2) private property shall not be
taken for public use without just compensation. Thus, the exercise by local government units of the power
of eminent domain is not absolute. In fact, Section 19 of RA 7160 itself explicitly states that such exercise
must comply with the provisions of the Constitution and pertinent laws.
17. Eslaban vs. De Onorio, G.R. No. 146062, June 28, 2001
DOCTRINE:
The value of the property must be determined either as of the date of the taking of the property or the filing
of the complaint, "whichever came first."
FACTS:
Respondent Clarita Vda. de Enorio is the owner of a lot in Barangay M. Roxas, Sto. Nino, South Cotabato.
On October 6, 1981, Santiago Eslaban, Jr., Project Manager of the National Irrigation Administration
(NIA), approved the construction of the main irrigation canal of the NIA on the said lot, affecting a 24,660
square meter portion thereof. Respondent's husband agreed to the construction of the NIA canal provided
that they be paid by the government for the area taken after the processing of documents by the Commission
on Audit.
Sometime in 1983, a Right-of-Way agreement was executed between respondent and the NIA. The NIA
then paid respondent the amount of P4,180.00 as Right-of-Way damages. Respondent subsequently
executed an Affidavit of Waiver of Rights and Fees whereby she waived any compensation for damages to
crops and improvements which she suffered as a result of the construction of a right-of-way on her property.
On December 10, 1990, Respondent demanded payment for taking of property but petitioner refused to
pay. RTC ordered NIA to pay P107,517.60 as just compensation. CA affirmed.
ISSUE:
Whether or not the value of just compensation shall be determined from the time of the taking or from the
time of the finality of the decision.
HELD:
Payment should be made from the time of the taking. With respect to the compensation which the owner of
the condemned property is entitled to receive, it is likewise settled that it is the market value which should
be paid or "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 therefor. Further, just
compensation means not only the correct amount to be paid to the owner of the land but also the payment
of the land within a reasonable time from its taking. Without prompt payment, compensation cannot be
considered "just" for then 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 before actually receiving the amount
necessary to cope with his loss.
18. Republic (DAR) vs. Court of Appeals, 263 SCRA 758
DOCTRINE:
Thus Special Agrarian Courts, which are Regional Trial Courts, are given original and exclusive jurisdiction
over two categories of cases, to wit: (1) "all petitions for the determination of just compensation to
landowners" and (2) "the prosecution of all criminal offenses under [R.A. No. 6657]."
FACTS:
Acil Corporation owned several hectares of land in Linoan, Montevista, Davao del Norte, which the
government took pursuant to the Comprehensive Agrarian Reform Law (R.A. No. 6657). Private
respondent's certificates of title were cancelled and new ones were issued and distributed to farmer-
beneficiaries The lands were valued by the Land Bank of the Philippines at P19,312.24 per hectare for the
riceland and P4,267.68 per hectare for brushland. It appears, however, that in the Statement of Agricultural
Landholdings ("LISTASAKA") which private respondent had earlier filed with the Department of Agrarian
Reform (DAR), a lower "Fair Value Acceptable to Landowner" was stated and that based on this statement,
the Land Bank of the Philippines valued private respondent's lands uniformly at P15,311.79 per hectare and
fixed the amount of P390,557.84 as the total compensation to be paid for the lands. Private respondent
rejected the government's offer. On December 12, 1992, private respondent filed a Petition for Just
Compensation in the Regional Trial Court of Tagum, Davao del Norte, sitting as a Special Agrarian Court.
Private respondent prayed that DAR be ordered to pay P24,717.40 per hectare.
However, the RTC dismissed its petition on the ground that private respondent should have appealed to the
Department of Agrarian Reform Adjudication Board (DARAB), pursuant to the latter's Revised Rules of
Procedure, before recourse to it (the RTC) could be had. In addition the RTC found that, in violation of the
DARAB's rules of procedure the petition had been filed more than fifteen (15) days after notice of the
decision of the PARAD.
ISSUE:
Whether in cases involving claims for just compensation under R.A. No. 6657 an appeal from the decision
of the provincial adjudicator to the DARAB must first be made before a landowner can resort to the RTC
under §57
HELD:
No. Under the law, the Land Bank of the Philippines is charged with the initial responsibility of determining
the value of lands placed under land reform and the compensation to be paid for their taking. Through notice
sent to the landowner pursuant to §16(a) of R.A. No. 6657, the DAR makes an offer. In case the landowner
rejects the offer, a summary administrative proceeding is held and afterward the provincial (PARAD), the
regional (RARAD) or the central (DARAB) adjudicator as the case may be, depending on the value of the
land, fixes the price to be paid for the land. If the landowner does not agree to the price fixed, he may bring
the matter to the RTC acting as Special Agrarian Court. 8 This in essence is the procedure for the
determination of compensation cases under R.A. No. 6657. In accordance with it, the private respondent's
case was properly brought by it in the RTC, and it was error for the latter court to have dismissed the case.
In the terminology of §57, the RTC, sitting as a Special Agrarian Court, has "original and exclusive
jurisdiction over all petitions for the determination of just compensation to landowners."
19. Land Bank vs. Heirs of Jesus Alsua, G.R. No. 211351, February 4, 2015
Facts:
Jesus Alsua has a parcel of unregistered agricultural land (cocoland and riceland) known as Lot
No. 8882 in Pioduran, Albay. Herein respondents, Heirs of Jesus Alsua, voluntarily offered to sell the entire
parcel of land to the government under RA 6657, Comprehensive Agrarian Reform Law of 1988. Upon
receipt from the DAR of the Claim Folder on April 20, 2001 with incomplete documents, petitioner Land
Bank of the Philippines valued the subject lands at P1.369M using the formula stated in DAR AO No. 5.
The documents were only completed on September 2001 and was considered to have been received only
on that date and the LBP’s valuation was approved on September 25, 2001. The DAR then offered to
respondents the LBP’s valuation as jsut compensation for the lands, but they rejected it prompting the LBP
to deposit the said amount in cas and in Agrarian Reform Bonds in respondents’ name. After a summary
administrative proceedings for determination of just compensation by the DARAB, the Provincial Agrarian
Reform Adjudicator (PARAD) fixed the value of the subject lands at P5.479M. LBP moved for recon but
was denied. Repondents maintained PARAD’s valuation, insisting that it considered all the factors that may
be used as basis in order to arrive at a just and equitable valuation of the subject lands, including their
potential use and corresponding increase in value. RTC rejected the valuation of both LBP and PARAD
and fixed just compensation for the subject lands at P4.245M, applying DAR AO No. 5. The Cafixed the
just compensation at P2.465M less the initial valuation already paid. CA affirmed the applicability of the
provisions of DAR AO No. 5, series of 1998 in the computation of the just compensation for the subject
lands but declared that the RTC erred in fixing the date of taking on June 30, 2009 (i.e., the presumptive
date of taking pursuant to DAR AO No. 1, series of 2010). It pointed out that the taking of lands under the
agrarian reform program partakes of the nature of an expropriation proceeding; thus, just compensation
should be pegged at the price or value of the property at the time it was taken from the owner and not its
value at the time of rendition of judgment or the filing of the complaint if the government takes possession
of the land before the institution of expropriation proceedings.
Issue:
Whether or not the CA is correct in fixing the just compensation for the subject lands.
Held:
No. For purposes of determining just compensation, the fair market value of an expropriated
property is determined by its character and its price at the time of taking, or the “time when the landowner
was deprived of the use and benefit of his property,” such as when title is transferred in the name of the
beneficiaries, as in this case. In this case, both the RTC and the CA applied the provisions of DAR
AO No. 5, series of 1998 in computing the just compensation for the subject lands. Under the said
AO, there shall be one basic formula for the valuation of lands, i.e., LV = (CNI x 0.6) + (CS x 0.3)
+ (MV x 0.1), where: LV is the Land Value; CNI is the Capitalized Net Income; CS is the
Comparable Sales; and MV is the Market Value per Tax Declaration. The above-stated formula
shall be used only if all the three factors i.e., CNI, CS, and MV, are present, relevant, and
applicable. In case one or two factors are not present, the said AO provides for alternate formulas.
Records show that the comparable sales (CS) were found to be unavailable54 so the alternative
formula, i.e., LV = (CNI x 0.9) + (MV x 0.1), was used by the LBP, the RTC, and the CA in fixing the just
compensation for the subject cocoland. On the other hand, they used the one-factor formula under the said
AO, i.e., LV = MV x 2, in valuing the subject riceland considering the lack of comparable sales (CS) and production
data to arrive at the capitalized net income (CNI). It appears, however, that both the RTC and the CA made variations
from the formula under the said AO. In view of the foregoing disquisitions, the just compensation for the subject lands
should be computed based on the factors stated in Section 17 of RA 6657, as amended. However, the Court has pored
over the records and observed that the only factors considered by both courts in determining the just compensation
were (a) the nature and actual use of the property, and the income therefrom, as well as (b) the market value of the
subject lands, without a showing that the other factors under the said section were even taken into account or,
otherwise, found to be inapplicable, contrary to what the law requires. RTC is further directed to observe the following
guidelines in the remand of the case:
1. Just compensation must be valued at the time of taking, or the “time when the landowner was deprived of the use and
benefit of his property,75 in this case, upon the issuance of OCT Nos. C-27721 and 27722 in the names of the agrarian
reform beneficiaries on November 29, 2001. Hence, the evidence to be presented by the parties before the trial court for
the valuation of the subject lands must be based on the values prevalent on such time of taking for like agricultural
lands.
2. The evidence must conform to Section 17 of RA 6657, as amended, prior to its amendment by RA 9700. It bears
pointing out that while Congress passed RA 9700 on July 1, 2009, amending certain provisions of RA 6657, as
amended, among them, Section 17, and declaring “[t]hat all previously acquired lands wherein valuation is subject to
challenge by landowners shall be completed and finally resolved pursuant to Section 17 of [RA 6657], as amended,” the
law should not be retroactively applied to pending claims/cases. In fact, DAR AO No. 2, series of 200980implementing
RA 9700 expressly excepted from the application of the amended Section 17 all claim folders received by LBP prior to
July 1, 2009, which shall be valued in accordance with Section 17 of RA 6657, as amended, prior to its further
amendment by RA No. 9700. Records show that the CF from the DAR was actually received by the LBP on April 20,
2001, but the latter considered the same as received only later in September 2001 with the completion of the necessary
documents.Hence, Section 17 of RA 6657, as amended, prior to its further amendment by RA 9700, should be the basis
for the valuation of the subject lands. In the event that the respondents had already withdrawn the amount deposited by
the LBP, the withdrawn amount should be deducted from the final land valuation to be paid by LBP.
3. The RTC may impose interest on the just compensation as may be warranted by the circumstances of the case. In
previous cases, the Court has allowed the grant of legal interest in expropriation cases where there is delay in the
payment since the just compensation due to the landowners was deemed to be an effective forbearance on the part of
the State.85 Legal interest shall be pegged at the rate of 12% interest p.a. from the time of taking until June 30, 2013 only.
Thereafter, or beginning July 1, 2013, until fully paid, interest shall be at 6% p.a. in line with the amendment introduced
by BSP-MB Circular No. 799, series of 2013.
4. Finally, the RTC is advised that while it should be mindful of the different formulae created by the DAR in arriving at
just compensation, it is not strictly bound to adhere thereto if the situations before it do not warrant their application.
120

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