PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC
― Equality
vs. HON. DRILON
G.R. No. 81958, June 30, 1988, SARMIENTO, J.
Facts:
The petitioner, Philippine Association of Service
Exporters, Inc. (PASEI), a firm "engaged principally in
the recruitment of Filipino workers, male and female,
for overseas placement," challenges the Constitutional
validity of Department Order No. 1, Series of 1988, of
the Department of Labor and Employment, in the
character of "GUIDELINES GOVERNING THE
TEMPORARY SUSPENSION OF DEPLOYMENT OF
FILIPINO DOMESTIC AND HOUSEHOLD WORKERS," in
this petition for certiorari and prohibition. Specifically,
the measure is assailed for "discrimination against
males or females;" that it "does not apply to all Filipino
workers but only to domestic helpers and females with
similar skills;" and that it is violative of the right to
travel. It is held likewise to be an invalid exercise of the
lawmaking power, police power being legislative, and
not executive, in character.
In this petition for certiorari and prohibition, PASEI,
challenges the validity of Department Order No. 1
(deployment ban) of the DOLE on the following
grounds:
1) it is discriminatory as it only applies to female
workers;
2) it is an invalid exercise of the lawmaking power
Issue:
Whether or not the enactment of DO No. 1 is a valid
exercise of police power.
Held: Yes, it is a valid exercise of police power.
 Police power has been defined as the "state
authority to enact legislation that may interfere
with personal liberty or property in order to
promote the general welfare."
 It finds no specific Constitutional grant for the
plain reason that it does not owe its origin to the
Charter. It is a fundamental attribute of
government that has enabled it to perform the
most vital functions of governance. It constitutes
an implied limitation on the Bill of Rights.
 However, police power is not without its own
limitations. It may not be exercised arbitrarily or
unreasonably. Otherwise, and in that event, it
defeats the purpose for which it is exercised, that
is, to advance the public good. Thus, when the
power is used to further private interests at the
expense of the citizenry, there is a clear misuse of
the power.
 It is admitted that Department Order No. 1 is in
the nature of a police power measure. The only
question is whether or not it is valid under the
Constitution.
Petitioner’s Claim
“Discriminatory as it applies only to female workers”
 DO No. 1 applies only to "female contract
workers," but it does not thereby make an undue
discrimination between the sexes.
before the law" admits of classifications, provided
that
1. such classifications rest on substantial
distinctions;
2. they are germane to the purposes of the
law;
3. they are not confined to existing conditions;
4. they apply equally to all members of the
same class.
 Discrimination in this case is justified.
“Invalid exercise of the lawmaking body”
 It is the objective of DO No. 1 to "enhance the
protection for Filipino female overseas workers.
 Police power is the domain of the legislature, but it
does not mean that such an authority may not be
lawfully delegated. The Labor Code itself vests the
DOLE with rulemaking powers in the enforcement
whereof.
 Hence it is a valid exercise of police power.
ICHONG vs. HERNANDEZ
101 PHIL. 1155
Facts:
RA 1180 or “An Act to Regulate the Retail Business”
was passed. The said law provides for a prohibition
against foreigners as well as corporations owned by
foreigners from engaging from retail trade in our
country.
Petitioner filed a suit to invalidate the Retail Trade
Nationalization Law, on the premise that it violated
several treaties which under the rule of pacta sunt
servanda, a generally accepted principle of
international law, should be observed by the Court in
good faith.
Issue:
Whether or not the Retail Trade Nationalization Law is
unconstitutional for it is in conflict with treaties which
are generally accepted principles of international law.
Held:
 The Supreme Court said it saw no conflict. The
reason given by the Court was that the Retail Trade
National Law was passed in the exercise of the
police power which cannot be bargained away
through the medium of a treaty or a contract.
 The law in question was enacted to remedy a real
actual threat and danger to national economy
posed by alien dominance and control of the
retail business and free the citizens and country
from such dominance and control; that the
enactment clearly falls within the scope of the
police power of the State, thru which and by
which it protects its own personality and insures
its security and future.
 Resuming what we have set forth above we hold
that the disputed law was enacted to remedy a
real actual threat and danger to national economy
 posed by alien dominance and control of the retail
business and free citizens and country from such
dominance and control;
 That the enactment clearly falls within the scope of
the police power of the state, through which and
by which it protects its own personality and insures
its security and future; that the law does not
violate the equal protection clause of the
Constitution because sufficient grounds exist for
the distinction between alien and citizen in the
exercise of occupation regulated, nor the due
process of the law clause; because the law is
prospective in operation and recognizes the
privilege of aliens already engaged in the
occupation and reasonably protects their privilege;
 That the wisdom and efficacy of the law to carry
out its objectives appear to us to be plainly evident
- as a matter of fact it seems not only appropriate
but actually necessary - and that in any case such
matter falls within the prerogative of the
legislature, with whose power and discretion the
judicial department of the Government may not
interfere;
 That the provisions of the law are clearly embraced
in the title, and this suffers from no duplicity and
has not misled the legislature of the segment of
the population affected; and that it cannot be said
to be void for supposed conflict with treaty
obligations because no treaty has actually been
entered into on the subject and the police power
may not be curtailed or surrendered by any treaty
or any other conventional agreement.
WALTER LUTZ, et. al vs. ANTONIO ARANETA,
G.R. No. L-7859, December 22, 1955, REYES, J.B L., J.
Facts:
Plaintiffs seek to recover tax from the respondent
alleging that such is unconstitutional and void, being
levied for the aid and support of the sugar industry
exclusively, which in plaintiff's opinion is not a public
purpose for which a tax may be constitutionally levied.
The action having been dismissed by the Court of First
Instance, the plaintiffs appealed the case directly to the
Supreme Court.
Issue: Whether or not the imposition of tax under the
CA No. 567 is a valid exercise of police power.
Held:
 Yes. The tax is levied with a regulatory purpose, to
provide means for the rehabilitation and
stabilization of the threatened sugar industry. In
other words, the act is primarily an exercise of the
police power.
 The protection of a large industry constituting one
of the great sources of the state's wealth and
therefore directly or indirectly affecting the
welfare of so great a portion of the population of
the State is affected to such an extent by public
interests as to be within the police power of the
sovereign.
The decision appealed from is affirmed.
FLORENTINA A. LOZANO vs. HONORABLE
ANTONIO M. MARTINEZ, et.al
G.R. No. L-63419 December 18, 1986, YAP, J.
Facts:
Batas Pambansa Bilang 22 (BP 22 for short),
popularly known as the Bouncing Check Law
punishes a person "who makes or draws and
issues any check on account or for value,
knowing at the time of issue that he does not
have sufficient funds in or credit with the
drawee bank for the payment of said check in
full upon presentment, which check is
subsequently dishonored by the drawee bank
for insufficiency of funds or credit or would
have been dishonored for the same reason had
not the drawer, without any valid reason,
ordered the bank to stop payment." Those who
question the constitutionality of BP 22 insist
that it offends the constitutional provision
forbidding imprisonment for debt and it
contravenes the equal protection clause.
Issue:
Whether or not the enactment of BP 22 is a
valid exercise of police power.
Held:
Yes. The enactment of BP 22 is a valid exercise
of the police power and is not repugnant to
the constitutional inhibition against
imprisonment for debt. It may be
constitutionally impermissible for the
legislature to penalize a person for non-
payment of a debt ex contractu. But certainly
it is within the prerogative of the lawmaking
body to proscribe certain acts deemed
pernicious and inimical to public welfare. Acts
mala in se are not the only acts which the law
can punish. An act may not be considered by
society as inherently wrong, hence, not malum
in se but because of the harm that it inflicts on
the community, it can be outlawed and
criminally punished as malum prohibitum. The
state can do this in the exercise of its police
power. There is no substance in the claim that
the statute in question denies equal protection
of the laws or is discriminatory, since it
penalizes the drawer of the check, but not the
payee. Wherefore, the decision rendered by the
respondent judge is hereby set aside.
Recent statistics of the Central Bank show that
one-third of the entire money supply of the
country, roughly totalling P32.3 billion, consists
of peso demand deposits; the remaining two-
thirds consists of currency in circulation. These
demand deposits in the banks constitute the
funds against which, among others, commercial
papers like checks, are drawn. The magnitude of
the amount involved amply justifies the
legitimate concern of the state in preserving the
integrity of the banking system. Flooding the
system with worthless checks is like pouring
garbage into the bloodstream of the nation's
economy.
The effects of the issuance of a worthless check
transcends the private interests of the parties
directly involved in the transaction and touches
the interests of the community at large. The
mischief it creates is not only a wrong to the
payee or holder, but also an injury to the public.
The harmful practice of putting valueless
commercial papers in circulation, multiplied a
thousandfold, can very well pollute the
channels of trade and commerce, injure the
banking system and eventually hurt the
welfare of society and the public interest.
In sum, we find the enactment of BP 22 a valid
exercise of the police power and is not
repugnant to the constitutional inhibition
against imprisonment for debt.
DECS v San Diego
180 SCRA 233, Cruz, J.
Facts:
The petitioner disqualified the private
respondent who had actually taken and failed
four times the National Medical Admission Test
from taking it again under its regulation. But the
private respondent contends that he is still
entitled and hence, applied to take a fifth
examination based on constitutional grounds:
right to academic freedom and quality
education, due process and equal protection.
He filed a petition for mandamus. The
respondent judge declared the said rule invalid
and granted the petition.
Issue:
Whether or not the three flunk rule is a valid
exercise of police power.
Held:
Yes. The police power is validly exercised if:
(a) the interests of the public generally, as
distinguished from those of a particular class,
require the interference of the State, and
(b) the means employed are reasonably
necessary to the attainment of the object
sought to be accomplished and not unduly
oppressive upon individuals.
Thus, the subject of the challenged regulation
is certainly within the ambit of the police
power. It is the right and indeed the
responsibility of the State to insure that the
medical profession is not infiltrated by
incompetents to whom patients may unwarily
entrust their lives and health. While every
person is entitled to aspire to be a doctor, he
does not have a constitutional right to be a
doctor. The private respondent has failed the
NMAT five times and this is sufficed to say that
he must yield to the challenged rule and give
way to those better prepared. The Court upheld
the constitutionality of the NMAT as a measure
intended to limit the admission to medical
schools only to those who have initially proved
their competence and preparation for a medical
education. The decision of the respondent
judge is reversed.
Ynot v IAC
148 SCRA 659, Cruz, J.
Facts:
President Marcos issued E.O. 626-A amending
E.O. 626, which prohibits the transport of
carabaos or carabeefs from one province to
another for the purpose of preventing
indiscriminate slaughter of these animals. The
petitioner had transported six carabaos from
Masbate to Iloilo where they were confiscated
for violation of the said order. He sued for
recovery and challenges the constitutionality of
the said order. The lower court sustained the
confiscation of the carabaos. He appealed the
decision to the Intermediate Appellate Court
which upheld the lower court. Hence this
petition for review on certiorari.
Issue:
Whether or not the purpose of E.O. 626-A is a
valid exercise of police power.
Held:
No. We do not see how the prohibition of the
interprovincial transport of carabaos can
prevent their indiscriminate slaughter,
considering that they can be killed anywhere,
with no less difficulty in one province than in
another. Obviously, retaining the carabaos in
one province will not prevent their slaughter
there, any more than moving them to another
province will make it easier to kill them there.
As for the carabeef, the prohibition is made to
apply to it as otherwise, so says executive
order, it could be easily circumvented by
simply killing the animal. Perhaps so. However,
if the movement of the live animals for the
purpose of preventing their slaughter cannot be
prohibited, it should follow that there is no
reason either to prohibit their transfer as, not
to be flippant, dead meat.
Even if a reasonable relation between the
means and the end were to be assumed, we
would still have to reckon with the sanction that
the measure applies for violation of the
prohibition. The penalty is outright confiscation
of the carabao or carabeef being transported,
to be meted out by the executive authorities,
usually the police only. In the Toribio Case, the
statute was sustained because the penalty
prescribed was fine and imprisonment, to be
imposed by the court after trial and conviction
of the accused. Under the challenged measure,
significantly, no such trial is prescribed, and the
property being transported is immediately
impounded by the police and declared, by the
measure itself, as forfeited to the government.
In the instant case, the carabaos were
arbitrarily confiscated by the police station
commander, were returned to the petitioner
only after he had filed a complaint for recovery
and given a supersedeas bond of P12,000.00,
which was ordered confiscated upon his failure
to produce the carabaos when ordered by the
trial court. The executive order defined the
prohibition, convicted the petitioner and
immediately imposed punishment, which was
carried out forthright. The measure struck at
once and pounced upon the petitioner without
giving him a chance to be heard, thus denying
him the centuries-old guaranty of elementary
fair play.
In the instant case, the challenged measure is
an invalid exercise of the police power because
the method employed to conserve the carabaos
is not reasonably necessary to the purpose of
the law and, worse, is unduly oppressive.
Moreover, there was no such pressure of time
or action calling for the petitioner's peremptory
treatment. The properties involved were not
even inimical per se as to require their instant
destruction. Thus, the Court cannot say with
equal certainty that it complies with the second
requirement, that there be a lawful method.
The reasonable connection between the means
employed and the purpose sought to be
achieved by the questioned measure is missing.
Executive Order No. 626-A is hereby declared
unconstitutional.
City Gov’t of Quezon City v Ericta
122 SCRA 759, Gutierrez, Jr., J
Facts:
Respondent Himlayang Pilipino filed a petition
seeking to annul Section 9 of Ordinance No.
6118, S-64, requiring private cemeteries to
reserve 6% of its total area for the burial of
paupers, on the ground that it is contrary to the
Constitution. The petitioner contends that the
said order was a valid exercise of police power
under the general welfare clause. The
respondent court declared the said order null
and void. Hence, this instant petition.
Issue:
Whether or not Section 9 of the ordinance in
question is a valid exercise of police power.
Held:
No. Section 9 cannot be justified under the
power granted to Quezon City to tax, fix the
license fee, and regulate such other business,
trades, and occupation as may be established or
practice in the City.' (Subsections 'C', Sec. 12,
R.A. 537). The ordinance in question not only
confiscates but also prohibits the operation of
a memorial park cemetery. As defined, police
power is 'the power of promoting the public
welfare by restraining and regulating the use
of liberty and property'. In the instant case,
Section 9 of Ordinance No. 6118, Series of 1964
of Quezon City is not a mere police regulation
but an outright confiscation.
It deprives a person of his private property
without due process of law, nay, even without
compensation. There is no reasonable relation
between the setting aside of at least six (6)
percent of the total area of an private
cemeteries for charity burial grounds of
deceased paupers and the promotion of
health, morals, good order, safety, or the
general welfare of the people. The ordinance is
actually a taking without compensation of a
certain area from a private cemetery to
benefit paupers who are charges of the
municipal corporation. Instead of building or
maintaining a public cemetery for this purpose,
the city passes the burden to private
cemeteries. As a matter of fact, the petitioners
rely solely on the general welfare clause or on
implied powers of the municipal corporation,
not on any express provision of law as statutory
basis of their exercise of power. The petition for
review is hereby dismissed.
EMINENT DOMAIN
ASSOCIATION OF SMALL LANDOWNERS IN THE
PHILIPPINES, INC., et. al
vs. HONORABLE SECRETARY OF AGRARIAN REFORM
G.R. No. L-7859, December 22, 1955, REYES, J.B L., J.
Facts:
In these consolidated cases, petitioners primarily assail
the constitutionality of R.A. No. 6657, P.D. No. 27, Proc.
No. 131, and E.O. Nos. 228 and 229 arguing that no
private property shall be taken for public use without
just compensation. The respondent invokes the police
power of the State.
Issue:
Whether or not the taking of property under the said
laws is a valid exercise of police power or of the power
of eminent domain.
Held:
 It is an exercise of the power of eminent domain.
The cases present no knotty complication insofar
as the question of compensable taking is
concerned. To the extent that the measures under
challenge merely prescribe retention limits for
landowners, there is an exercise of the police
power for the regulation of private property in
accordance with the Constitution. But where, to
carry out such regulation, it becomes necessary to
deprive such owners of whatever lands they may
own in excess of the maximum area allowed,
there is definitely a taking under the power of
eminent domain for which payment of just
compensation is imperative. The taking
contemplated is not a mere limitation of the use
of the land. What is required is the surrender of
the title to and the physical possession of the said
excess and all beneficial rights accruing to the
owner in favor of the farmer-beneficiary.
 This is definitely an exercise not of the police
power but of the power of eminent domain.
 Wherefore, the Court holds the constitutionality of
R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O.
Nos. 228 and 229. However, the title to all
expropriated properties shall be transferred to the
State only upon full payment of compensation to
their respective owners.
Manila Memorial vs. Secretary of DSWD,
G.R. No. 175356, December 3 2013 711
SCRA 302
TAXATION
Facts:
On August 31, 1954, petitioner Wenceslao
Pascual, as Provincial Governor of Rizal,
instituted this action for declaratory relief, with
injunction, upon the ground that Republic Act
No. 920, entitled "An Act Appropriating Funds
for Public Works", approved on June 20, 1953,
contained, in section 1-C (a) thereof, an item
(43[h]) of P85,000.00 "for the construction,
reconstruction, repair, extension and
improvement" of Pasig feeder road terminals,
that, at the time of the passage and approval of
said Act, the said feeder roads were "nothing
but projected and planned subdivision roads
within the Antonio Subdivision situated at Pasig,
Rizal" near Shaw Boulevard, not far away from
the intersection between the latter and EDSA,
which projected feeder roads "do not connect
any government property or any important
premises to the main highway";
that the aforementioned Antonio Subdivision
(as well as the lands on which said feeder roads
were to be construed) were private properties
of respondent Jose C. Zulueta, who, at the time
of the passage and approval of said Act, was a
member of the Senate of the Philippines;
that on May, 1953, respondent Zulueta,
addressed a letter to the Municipal Council of
Pasig, Rizal, offering to donate said projected
feeder roads to the municipality of Pasig, Rizal;
that, on June 13, 1953, the offer was accepted
by the council, subject to the condition "that
the donor would submit a plan of the said roads
and agree to change the names of two of
them"; that no deed of donation in favor of the
municipality of Pasig was, however, executed;
that on July 10, 1953, respondent Zulueta wrote
another letter to said council, calling attention
to the approval of Republic Act. No. 920, and
the sum of P85,000.00 appropriated therein for
the construction of the projected feeder roads
in question; that the municipal council of Pasig
endorsed said letter of respondent Zulueta to
the District Engineer of Rizal, who, up to the
present "has not made any endorsement
thereon" that inasmuch as the projected feeder
roads in question were private property at the
time of the passage and approval of Republic
Act No. 920, the appropriation of P85,000.00
therein made, for the construction,
reconstruction, repair, extension and
improvement of said projected feeder roads,
was illegal and, therefore, void ab initio"; that
said appropriation of P85,000.00 was made by
Congress because its members were made to
believe that the projected feeder roads in
question were "public roads and not private
streets of a private subdivision"'; that, "in order
to give a semblance of legality, when there is
absolutely none, to the aforementioned
appropriation", respondents Zulueta executed
on December 12, 1953, while he was a member
of the Senate of the Philippines, an alleged
deed of donation of the four (4) parcels of land
constituting said projected feeder roads, in
favor of the Government of the Republic of the
Philippines; that said alleged deed of donation
was, on the same date, accepted by the then
Executive Secretary; that being subject to an
onerous condition, said donation partook of the
nature of a contract; that, such, said donation
violated the provision of our fundamental law
prohibiting members of Congress from being
directly or indirectly financially interested in any
contract with the Government, and, hence, is
unconstitutional, as well as null and voidab
initio, for the construction of the projected
feeder roads in question with public funds
would greatly enhance or increase the value of
the aforementioned subdivision of respondent
Zulueta,
Issue:
Whether the contested item of Republic Act No.
920 unconstitutional and, therefor, illegal?
Held:
No. The P85,000.00 appropriation for the
projected feeder roads in question, the legality
thereof depended upon whether said roads
were public or private property when the bill,
which, latter on, became Republic Act 920, was
passed by Congress, or, when said bill was
approved by the President and the
disbursement of said sum became effective, or
on June 20, 1953 (see section 13 of said Act).
Inasmuch as the land on which the projected
feeder roads were to be constructed belonged
then to respondent Zulueta, the result is that
said appropriation sought a private purpose,
and hence, was null and void.
The donation to the Government, over five (5)
months after the approval and effectivity of said
Act, made, according to the petition, for the
purpose of giving a "semblance of legality", or
legalizing, the appropriation in question, did not
cure its aforementioned basic defect.
Consequently, a judicial nullification of said
donation need not precede the declaration of
unconstitutionality of said appropriation.
Again, it is well-stated that the validity of a
statute may be contested only by one who will
sustain a direct injury in consequence of its
enforcement. Yet, there are many decisions
nullifying, at the instance of taxpayers, laws
providing for the disbursement of public funds,
upon the theory that "the expenditure of
public funds by an officer of the State for the
purpose of administering an unconstitutional
act constitutes a misapplication of such funds,"
which may be enjoined at the request of a
taxpayer.
Republic Act No. 920 is unconstitutional, since
the legislature is without power to appropriate
public revenue for anything but a public
purpose and the project feeder roads are at the
time private properties. The right of the
legislature to appropriate funds is correlative
with its right to tax, and, under constitutional
provisions against taxation except for public
purposes and prohibiting the collection of a
tax for one purpose and the devotion thereof
to another purpose, no appropriation of state
funds can be made for other than for a public
purpose.
Punsalan vs. Municipal Board of the City of
Manila
G.R. No. L-4817, 26 May 1954
Facts:
An ordinance was approved by the Municipal
Board of the City of Manila which imposes a
municipal occupation tax on persons exercising
various professions in the city and penalizes
non-payment of the tax by a fine of not more
than two hundred pesos or by imprisonment of
not more than six months or by both such fine
and imprisonment in the discretion of the court.
The ordinance was in pursuance to paragraph
(1) Section 18 of the Revised Charter of the City
of Manila which empowers the Municipal Board
of said city to impose a municipal occupation
tax, not to exceed P50 per annum, on persons
engaged in the various professions above
referred to the plaintiffs, after having paid their
occupation tax, now being required to pay the
additional tax prescribed in the ordinance. The
plaintiffs paid the said tax under protest. The
lower court declared the validity of the law
authorizing the enactment of the ordinance,
but declared the latter illegal and void since its
penalty provided for the non-payment of tax
was not legally authorized.
Issue:
Is this ordinance and the law authorizing it
constitute class legislation, are unjust and
oppressive, and authorize what amounts to
double taxation?
Held:
NO. To begin with defendants' appeal, we find
that the lower court was in error in saying that
the imposition of the penalty provided for in
the ordinance was without the authority of law.
The last paragraph (kk) of the very section that
authorizes the enactment of this tax ordinance
(section 18 of the Manila Charter) in express
terms also empowers the Municipal Board "to
fix penalties for the violation of ordinances
which shall not exceed to(sic) two hundred
pesos fine or six months" imprisonment, or both
such fine and imprisonment, for a single
offense." Hence, the pronouncement below
that the ordinance in question is illegal and void
because it imposes a penalty not authorized by
law is clearly without basis.
Secondly, In raising the hue and cry of "class
legislation", the burden of plaintiffs' complaint
is not that the professions to which they
respectively belong have been singled out for
the imposition of this municipal occupation tax;
and in any event, the Legislature may, in its
discretion, select what occupations shall be
taxed, and in the exercise of that discretion it
may tax all, or it may select for taxation
certain classes and leave the others untaxed.
(Cooley on Taxation, Vol. 4, 4th ed., pp. 3393-
3395.) Plaintiffs' complaint is that while the law
has authorized the City of Manila to impose the
said tax, it has withheld that authority from
other chartered cities, not to mention
municipalities. We do not think it is for the
courts to judge what particular cities or
municipalities should be empowered to impose
occupation taxes in addition to those imposed
by the National Government. That matter is
peculiarly within the domain of the political
departments and the courts would do well not
to encroach upon it. Moreover, as the seat of
the National Government and with a
population and volume of trade many times
that of any other Philippine city or
municipality, Manila, no doubt, offers a more
lucrative field for the practice of the
professions, so that it is but fair that the
professionals in Manila be made to pay a
higher occupation tax than their brethren in
the provinces.
Thirdly, Plaintiffs brand the ordinance unjust
and oppressive because they say that it creates
discrimination within a class in that while
professionals with offices in Manila have to pay
the tax, outsiders who have no offices in the city
but practice their profession therein are not
subject to the tax. Plaintiffs make a distinction
that is not found in the ordinance. The
ordinance imposes the tax upon every person
"exercising" or "pursuing" — in the City of
Manila naturally — any one of the occupations
named, but does not say that such person must
have his office in Manila. What constitutes
exercise or pursuit of a profession in the city is a
matter of judicial determination. The argument
against double taxation may not be invoked
where one tax is imposed by the state and the
other is imposed by the city (1 Cooley on
Taxation, 4th ed., p. 492), it being widely
recognized that there is nothing inherently
obnoxious in the requirement that license fees
or taxes be exacted with respect to the same
occupation, calling or activity by both the state
and the political subdivisions thereof.
Lladoc v. Commissioner of Internal Revenue
GR L-19201, 16 June 1965
Facts:
In 1957, the MB Estate Inc., of Bacolod City,
donated P10,000.00 in cash to Fr. Crispin Ruiz
then parish priest of Victorias, Negros
Occidental, and predecessor of Fr. Casimiro
Lladoc, for the construction of a new Catholic
Church in the locality. The total samount was
actually spent for the purpose intended. On 3
March 1958, MB Estate filed the donor‘s gift tax
return. Under date of 29 April 1960, the
Commissioner of Internal Revenue issued as
assessment for donee‘s gift tax against the
Catholic Parish of Victorias, Negros Occidental,
of which petitioner was the priest. The tax
amounted to P1,370.00 including surcharges,
interest of 1% monthly from 15 May 1958 to 15
June 1960, and the compromise for the late
filing of the return. Petitioner lodged a protest
to the assessment and requested the
withdrawal thereof. The protest and the motion
for reconsideration presented to the
Commissioner of Internal Revenue were denied.
The petitioner appealed to the CTA on 2
November 1960. After hearing, the CTA
affirmed the decision of the Commissioner of
Internal Revenue except the imposition of
compromise penalty of P20. Fr. Lladoc appealed
to the Supreme Court.
Issue:
Whether a donee‘s gift tax may be assessed
against the Catholic Church.
Held:
Yes. The phrase ―exempt from taxation, as
employed in the Constitution should not be
interpreted to mean exemption from all kinds
of taxes. Section 22(3), Art. VI of the
Constitution of the Philippines, exempts from
taxation cemeteries, churches and personages
or convents, appurtenant thereto, and all lands,
buildings, and improvements used exclusively
for religious purposes. The exemption is only
from the payment of taxes assessed on such
properties enumerated, as property taxes, as
contra-distinguished from excise taxes. A
donee‘s gift tax is not a property tax but an
excise tax imposed on the transfer of property
by way of gift inter vivos. Its assessment was
not on the property themeselves. It does not
rest upon general ownership, but an excise
upon the use made of the properties, upon the
exercise of the privilege of receiving the
properties. The imposition of such excise tax on
property used for religious purposes does not
constitute an impairment of the Constitution.
13. Abra Valley College vs. Aquino
GR L-39086, 15 June 1988
Facts:
Petitioner Abra Valley College is an educational
corporation and institution of higher learning
duly incorporated with the SEC in 1948. On 6
July 1972, the Municipal and Provincial
treasurers (Gaspar Bosque and Armin Cariaga,
respectively) and issued a Notice of Seizure
upon the petitioner for the college lot and
building (OCT Q-83) for the satisfaction of said
taxes thereon. The treasurers served upon the
petitioner a Notice of Sale on 8 July 1972, the
sale being held on the same day. Dr. Paterno
Millare, then municipal mayor of Bangued,
Abra, offered the highest bid of P 6,000 on
public auction involving the sale of the college
lot and building. The certificate of sale was
correspondingly issued to him.
The petitioner filed a complaint on 10 July 1972
in the court a quo to annul and declare void the
―Notice of Seizure‖ and the ―Notice of Sale‖
of its lot and building located at Bangued, Abra,
for non-payment of real estate taxes and
penalties amounting to P5,140.31. On 12 April
1973, the parties entered into a stipulation of
facts adopted and embodied by the trial court
in its questioned decision. The trial court ruled
for the government, holding that the second
floor of the building is being used by the
director for residential purposes and that the
ground floor used and rented by Northern
Marketing Corporation, a commercial
establishment, and thus the property is not
being used ―exclusively‖ for educational
purposes. Instead of perfecting an appeal,
petitioner availed of the instant petition for
review on certiorari with prayer for preliminary
injunction before the Supreme Court, by filing
said petition on 17 August 1974.
Issue:
Whether the College is exempt from taxes.
Held:
Yes. While the Court allows a more liberal and
non-restrictive interpretation of the phrase
―exclusively used for educational purposes,‖
reasonable emphasis has always been made
that exemption extends to facilities which are
incidental to and reasonably necessary for the
accomplishment of the main purposes. While
the second floor‘s use, as residence of the
director, is incidental to education; the lease of
the first floor cannot by any stretch of
imagination be considered incidental to the
purposes of education. The test of exemption
from taxation is the use of the property for
purposes mentioned in the Constititution.
Adonis Notes: The SC stated that if only the
judge had read the 1973 Constitution, he should
have known the difference between the 1935
and the 1973 Constitution and he could not
have summarily dismissed the case. There is a
substantial distinction between the 1935 and
the 1973 Constitution. In the 1935 Constitution
the requirement for exemption for real
property taxes is “exclusively”, while the 1973
Constitution requires “actually, directly &
exclusively”. The SC remanded to the Court of
Origin for further hearing. (excerpts from
Sababan Notes)
SECTION 1
I. PROCEDURAL DUE PROCESS
A. JUDICIAL PROCEEDINGS
18. Banco Espanol v. Palanca
SYLLABUS
1. MORTGAGES; FORECLOSURE; JURISDICTION
OF COURT OVER NONRESIDENT MORTGAGOR.
— Where the defendant in a mortgage
foreclosure lives out of the Islands and refuses
to appear otherwise submit himself to the
authority of the court, the jurisdiction of the
latter is limited to the mortgaged property, with
respect to which the jurisdiction of the court is
based upon the fact that the property is located
within the district and that the court, under the
provisions of law applicable in such cases, is
vested with the power to subject the property
to the obligation created by the mortgage. In
such case personal jurisdiction over the
nonresident defendant is nonessential and in
fact cannot be acquired
2. CONSTITUTIONAL LAW; DUE PROCESS. — As
applied to judicial proceedings, due process of
law implies that there must be a court of
tribunal clothed with the power to hear and
determine the matter before it, that jurisdiction
shall have been lawfully acquired, that the
defendant shall have an opportunity to be
heard, and that judgment shall be rendered
upon lawful hearing.
3. ID.; ID.; MORTGAGE; FORECLOSURE. — In an
action to foreclose a mortgage against a
nonresident, some notification of the
proceedings must be given to the defendant.
Under statutes generally prevailing, this
notification commonly takes the form of
publication in a newspaper of general
circulation and the sending of notice, by mail,
by which means of the owner is admonished
that his property is the subject of judicial
proceedings. The provisions law providing for
notice of this character must be complied with.
4. ID.; ID.; ID.; ORDER FOR MAILING OF NOTICE
BY CLERK. — In a foreclosure proceeding against
a nonresident defendant, the court is required
to make an order for the clerk to mail a copy of
the summons and complaint to the defendant
at this last place of residence if known. In the
present case an order was made directing the
clerk to mail the required copy to the defendant
at Amoy China. No evidence appeared of record
showing that such notice had in fact been
mailed by the clerk; but publication was
regularly made in a periodical as the law
requires. Held: That the making of the order by
the court constituted a compliance with the
law, in so far as necessary to constitute due
process of law, and that if the clerk failed to
send the notice, his dereliction in the
performance of his duty was in irregularity
which did not constitute an infringement of the
provision of the Philippine Bill declaring that no
person shall have deprived of property without
due process of law.
FACTS:
Engracio Palanca Tanquinyeng y Limquingco
mortgaged various parcels of real property in
Manila to El Banco Espanol-Filipino. Afterwards,
Engracio returned to China and there he died
on January 29, 1810 without returning again to
the Philippines. The mortgagor then instituted
foreclosure proceeding but since defendant is a
non-resident, it was necessary to give notice by
publication. The Clerk of Court was also
directed to send copy of the summons to the
defendant’s last known address, which is in
Amoy, China. It is not shown whether the Clerk
complied with this requirement. Nevertheless,
after publication in a newspaper of the City of
Manila, the cause proceeded and judgment by
default was rendered. The decision was likewise
published and afterwards sale by public auction
was held with the bank as the highest bidder.
On August 7, 1908, this sale was confirmed by
the court. However, about seven years after the
confirmation of this sale, a motion was made by
Vicente Palanca, as administrator of the estate
of the original defendant, wherein the applicant
requested the court to set aside the order of
default and the judgment, and to vacate all the
proceedings subsequent thereto. The basis of
this application was that the order of default
and the judgment rendered thereon were void
because the court had never acquired
jurisdiction over the defendant or over the
subject of the action.
ISSUE:
1. WON the lower court acquired
jurisdiction over the defendant and the
subject matter of the action
2. WON due process of law was observed
HELD:
On Jurisdiction
The word “jurisdiction” is used in
several different, though related, senses since it
may have reference:
1. to the authority of the court to
entertain a particular kind of action or
to administer a particular kind of relief,
or it may refer to the power of the
court over the parties, or
2. over the property which is the subject
to the litigation.
The sovereign authority which organizes a court
determines the nature and extent of its powers
in general and thus fixes its competency or
jurisdiction with reference to the actions which
it may entertain and the relief it may grant.
How Jurisdiction is Acquired
Jurisdiction over the person is acquired
by the voluntary appearance of a party in court
and his submission to its authority, or it is
acquired by the coercive power of legal process
exerted over the person.
Jurisdiction over the property which is
the subject of the litigation may result either
from a seizure of the property under legal
process, whereby it is brought into the actual
custody of the law, or it may result from the
institution of legal proceedings wherein, under
special provisions of law, the power of the court
over the property is recognized and made
effective. In the latter case the property, though
at all times within the potential power of the
court, may never be taken into actual custody
at all. An illustration of the jurisdiction acquired
by actual seizure is found in attachment
proceedings, where the property is seized at the
beginning of the action, or some subsequent
stage of its progress, and held to abide the final
event of the litigation. An illustration of what
we term potential jurisdiction over the res, is
found in the proceeding to register the title of
land under our system for the registration of
land. Here the court, without taking actual
physical control over the property assumes, at
the instance of some person claiming to be
owner, to exercise a jurisdiction in rem over the
property and to adjudicate the title in favor of
the petitioner against all the world.
In the terminology of American law the
action to foreclose a mortgage is said to be a
proceeding quasi in rem, by which is expressed
the idea that while it is not strictly speaking an
action in rem yet it partakes of that nature and
is substantially such. The expression "action in
rem" is, in its narrow application, used only with
reference to certain proceedings in courts of
admiralty wherein the property alone is treated
as responsible for the claim or obligation upon
which the proceedings are based. The action
quasi rem differs from the true action in rem in
the circumstance that in the former an
individual is named as defendant, and the
purpose of the proceeding is to subject his
interest therein to the obligation or lien
burdening the property. All proceedings having
for their sole object the sale or other disposition
of the property of the defendant, whether by
attachment, foreclosure, or other form of
remedy, are in a general way thus designated.
The judgment entered in these proceedings is
conclusive only between the parties.
xxx
It is true that in proceedings of this character, if
the defendant for whom publication is made
appears, the action becomes as to him a
personal action and is conducted as such. This,
however, does not affect the proposition that
where the defendant fails to appear the action
is quasi in rem; and it should therefore be
considered with reference to the principles
governing actions in rem.
On Due Process
xxx As applied to a judicial proceeding,
however, it may be laid down with certainty
that the requirement of due process is satisfied
if the following conditions are present, namely;
(1) There must be a court or tribunal clothed
with judicial power to hear and determine the
matter before it; (2) jurisdiction must be
lawfully acquired over the person of the
defendant or over the property which is the
subject of the proceeding; (3) the defendant
must be given an opportunity to be heard; and
(4) judgment must be rendered upon lawful
hearing.
Passing at once to the requisite that the
defendant shall have an opportunity to be
heard, we observe that in a foreclosure case
some notification of the proceedings to the
nonresident owner, prescribing the time within
which appearance must be made, is everywhere
recognized as essential. To answer this
necessity the statutes generally provide for
publication, and usually in addition thereto, for
the mailing of notice to the defendant, if his
residence is known. Though commonly called
constructive, or substituted service of process in
any true sense. It is merely a means provided by
law whereby the owner may be admonished
that his property is the subject of judicial
proceedings and that it is incumbent upon him
to take such steps as he sees fit to protect it.
It will be observed that this mode of notification
does not involve any absolute assurance that
the absent owner shall thereby receive actual
notice. The periodical containing the publication
may never in fact come to his hands, and the
chances that he should discover the notice may
often be very slight. Even where notice is sent
by mail the probability of his receiving it,
though much increased, is dependent upon the
correctness of the address to which it is
forwarded as well as upon the regularity and
security of the mail service. It will be noted,
furthermore, that the provision of our law
relative to the mailing of notice does not
absolutely require the mailing of notice
unconditionally and in every event, but only in
the case where the defendant's residence is
known. In the light of all these facts, it is evident
that actual notice to the defendant in cases of
this kind is not, under the law, to be considered
absolutely necessary.
The idea upon which the law proceeds in
recognizing the efficacy of a means of
notification which may fall short of actual notice
is apparently this: Property is always assumed
to be in the possession of its owner, in person that in applying the requirement of due process
or by agent; and he may be safely held, under of law, it is permissible to reflect upon the
certain conditions, to be affected with purposes of the provision which is supposed to
knowledge that proceedings have been have been violated and the principle underlying
instituted for its condemnation and sale. the exercise of judicial power in these
proceedings. Judge in the light of these
Did the failure of the clerk to send notice to conceptions, we think that the provision of Act
defendant’s last known address constitute of Congress declaring that no person shall be
denial of due process? deprived of his property without due process of
law has not been infringed.
The observations which have just been made
lead to the conclusion that the failure of the
clerk to mail the notice, if in fact he did so fail in
his duty, is not such an irregularity, as amounts
to a denial of due process of law; and hence in
our opinion that irregularity, if proved, would
not avoid the judgment in this case. Notice was
given by publication in a newspaper and this is
the only form of notice which the law
unconditionally requires. This in our opinion is
all that was absolutely necessary to sustain the
proceedings.

It will be observed that in considering the effect

of this irregularity, it makes a difference
whether it be viewed as a question involving
jurisdiction or as a question involving due
process of law. In the matter of jurisdiction
there can be no distinction between the much
and the little. The court either has jurisdiction
or it has not; and if the requirement as to the
mailing of notice should be considered as a step
antecedent to the acquiring of jurisdiction,
there could be no escape from the conclusion
that the failure to take that step was fatal to the
validity of the judgment. In the application of
the idea of due process of law, on the other
hand, it is clearly unnecessary to be so rigorous.
The jurisdiction being once established, all that
due process of law thereafter requires is an
opportunity for the defendant to be heard; and
as publication was duly made in the newspaper,
it would seem highly unreasonable to hold that
failure to mail the notice was fatal. We think
19. Galvez v. CA
20. State Prosecutors v. Muro
21. Carvajal v. CA
22. Perez v. Estrada

B. ADMINISTRATIVE AND QUASI-JUDICIAL

PROCEEDINGS

C. ACADEMIC DISCIPLINE