POLI DIGEST - Fundamental Powers of The State

POLITICAL LAW REVIEW Case Digests
Part V (Fundamental Powers of the State) Page 1 of 34
V. Fundamental Powers of the State

RAUL L. LAMBINO and ERICO B. AUMENTADO, TOGETHER WITH 6,327,952 REGISTERED VOTERS v. COMELEC G.R. No. 174153, October25, 2006 DOCTRINE: The Constitution, as the fundamental law of the land, deserves the utmost respect and obedience of all the citizens of this nation. No one can trivialize the Constitution by cavalierly amending or revising it in blatant violation of the clearly specified modes of amendment and revision laid down in the Constitution itself. To allow such change in the fundamental law is to set adrift the Constitution in unchartered waters, to be tossed and turned by every dominant political group of the day. If this Court allows today a cavalier change in the Constitution outside the constitutionally prescribed modes, tomorrow the new dominant political group that comes will demand its own set of changes in the same cavalier and unconstitutional fashion. A revolving-door constitution does not augur well for the rule of law in this country. FACTS: On 15 February 2006, petitioners in G.R. No. 174153, namely Raul L. Lambino and Erico B. Aumentado ("Lambino Group"), with other groups and individuals, commenced gathering signatures for an initiative petition to change the 1987 Constitution. On 25 August 2006, the Lambino Group filed a petition with the COMELEC to hold a plebiscite that will ratify their initiative petition under Section 5(b) and (c) and Section 7 of Republic Act No. 6735 or the Initiative and Referendum Act. The Lambino Group's initiative petition changes the 1987 Constitution by modifying Sections 1-7 of Article VI (Legislative Department) and Sections 1-4 of Article VII (Executive Department) and by adding Article XVIII entitled "Transitory Provisions. These proposed changes will shift the present Bicameral-Presidential system to a UnicameralParliamentary form of government. The Lambino Group prayed that after due publication of their petition, the COMELEC should submit the following proposition in a plebiscite for the voters' ratification: DO YOU APPROVE THE AMENDMENT OF ARTICLES VI AND VII OF THE 1987 CONSTITUTION, CHANGING THE FORM OF GOVERNMENT FROM THE PRESENT BICAMERAL-PRESIDENTIAL TO A UNICAMERALPARLIAMENTARY SYSTEM, AND PROVIDING ARTICLE XVIII AS TRANSITORY PROVISIONS FOR THE ORDERLY SHIFT FROM ONE SYSTEM TO THE OTHER? On 30 August 2006, the Lambino Group filed an Amended Petition with the COMELEC indicating modifications in the proposed Article XVIII (Transitory Provisions) of their initiative. On 31 August 2006, the COMELEC issued its Resolution denying due course to the Lambino Group's petition for lack of an enabling law governing initiative petitions to amend the Constitution. PETITIONERS CONTENTION: The Lambino Group alleged that their petition had the support of 6,327,952 individuals constituting at least twelve per centum (12%) of all registered voters, with each legislative district represented by at least three per centum (3%) of its registered voters. The Lambino Group also claimed that COMELEC election registrars had verified the signatures of the 6.3 million individuals. RESPONDENTs CONTENTION: The draft of the proposed constitutional amendment " should be "ready and shown" to the people "before" they sign such proposal. The framers plainly stated that " before they sign there is already a draft shown to them ." The framers also "envisioned" that the people should sign on the proposal itself because the proponents must " prepare that proposal and pass it around for signature."
*antonio|arrellano|calvan|cayaban|federio|quinto|quintos|salendab|santos|sta.ana|tecson|valencia|villanueva|zulueta*
POLITICAL LAW REVIEW Case Digests ISSUES:
1. Whether the Lambino Group's initiative petition complies with Section 2, Article XVII of the Constitution on amendments to the Constitution through a people's initiative; 2. Whether this Court should revisit its ruling in Santiago declaring RA 6735 "incomplete, inadequate or wanting in essential terms and conditions" to implement the initiative clause on proposals to amend the Constitution; and 3. Whether the COMELEC committed grave abuse of discretion in denying due course to the Lambino Group's petition. RULING: The Lambino Group miserably failed to comply with the basic requirements of the Constitution for conducting a people's initiative. Thus, there is even no need to revisit Santiago, as the present petition warrants dismissal based alone on the Lambino Group's glaring failure to comply with the basic requirements of the Constitution. For following the Court's ruling in Santiago, no grave abuse of discretion is attributable to the Commission on Elections. 1. The Initiative Petition Does Not Comply with Section 2, Article XVII of the Constitution on Direct Proposal by the People Section 2, Article XVII of the Constitution is the governing constitutional provision that allows a people's initiative to propose amendments to the Constitution. This section states: Sec. 2. Amendments to this Constitution may likewise be directly proposed by the people through initiative upon a petition of at least twelve per centum of the total number of registered voters of which every legislative district must be represented by at least three per centum of the registered voters therein. x x x x The essence of amendments "directly proposed by the people through initiative upon a petition " is that the entire proposal on its face is a petition by the people . This means two essential elements must be present. First, the people must author and thus sign the entire proposal. No agent or representative can sign on their behalf. Second, as an initiative upon a petition, the proposal must be embodied in a petition.
These essential elements are present only if the full text of the proposed amendments is first shown to the people who express their assent by signing such complete proposal in a petition. Thus, an amendment is "directly proposed by the people through initiative upon a petition" only if the people sign on a petition that contains the full text of the proposed amendments. A people's initiative to change the Constitution applies only to an amendment of the Constitution and not to its revision. 2. A Revisit of Santiago v. COMELEC is NOT Necessary The present petition warrants dismissal for failure to comply with the basic requirements of Section 2, Article XVII of the Constitution on the conduct and scope of a people's initiative to amend the Constitution. There is no need to revisit this Court's ruling in Santiago declaring RA 6735 "incomplete, inadequate or wanting in essential terms and conditions" to cover the system of initiative to amend the Constitution. An affirmation or reversal of Santiago will not change the outcome of the present petition. Thus, this Court must decline to revisit Santiago which effectively ruled that RA 6735 does not comply with the requirements of the Constitution to implement the initiative clause on amendments to the Constitution. This Court must avoid revisiting a ruling involving the constitutionality of a statute if the case before the Court can be resolved on some other grounds. Such avoidance is a logical consequence of the well-settled doctrine that courts will not pass upon the constitutionality of a statute if the case can be resolved on some other grounds. 3. The COMELEC Did Not Commit Grave Abuse of Discretion in Dismissing the Lambino Group's Initiative
In dismissing the Lambino Group's initiative petition, the COMELEC en banc merely followed this Court's ruling in Santiago and People's Initiative for Reform, Modernization and Action (PIRMA) v. COMELEC . For following this Court's ruling, no grave abuse of discretion is attributable to the COMELEC. On this ground alone, the present petition warrants outright dismissal. Thus, this Court should reiterate its unanimous ruling in PIRMA:
The Court ruled, first, by a unanimous vote, that no grave abuse of discretion could be attributed to the public respondent COMELEC in dismissing the petition filed by PIRMA therein, it appearing that it only complied with the dispositions in the Decisions of this Court in G.R. No. 127325, promulgated on March 19, 1997, and its Resolution of June 10, 1997. HAIG V. AGEE 453 U.S. 280 (1981) Facts: Respondent, an American citizen and a former employee of the Central Intelligence Agency, announced a campaign "to expose CIA officers and agents and to take the measures necessary to drive them out of the countries where they are operating." He then engaged in activities abroad that have resulted in identifications of alleged undercover CIA agents and intelligence sources in foreign countries. Because of these activities the Secretary of State revoked respondent's passport, explaining that the revocation was based on a regulation authorizing revocation of a passport where the Secretary determines that an American citizen's activities abroad "are causing or are likely to cause serious damage to the national security or the foreign policy of the United States." The notice also advised respondent of his right to an administrative hearing. Respondent filed suit against the Secretary in Federal District Court, seeking declaratory and injunctive relief and alleging that the regulation invoked by the Secretary has not been authorized by Congress and is impermissibly overbroad; that the passport revocation violated respondent's freedom to travel and his First Amendment right to criticize Government policies; and that the failure to accord him a pre-revocation hearing violated his Fifth Amendment right to procedural due process. The district court found the Secretary lacked the power to revoke the passport and the court of appeals affirmed. Issue: Whether the Secretary of State has the authority to revoke respondents passport. Held: YES. The Supreme Court held that, given the broad discretion accorded the executive branch in matters of national security and foreign policy, the Passport act of 1926 should be interpreted as granting the power to revoke a passport when necessary for national security. The 1926 Act authorizes the revocation of respondent's passport pursuant to the policy announced by the challenged regulation, such policy being "sufficiently substantial and consistent" to compel the conclusion that Congress has approved it; and the regulation is constitutional as applied. The Court concluded that the history of passport controls since the earliest days of the Republic showed congressional recognition of Executive authority to withhold passports on the basis of substantial reasons of national security and foreign policy. Regarding Agee's Constitutional attacks, the Court held that they, too, were without merit. The revocation of his passport did not impermissibly burdens his freedom to travel because the freedom to travel abroad with a "letter of introduction" in the form of a passport issued by the sovereign is subordinate to national security and foreign policy considerations; as such, it is subject to reasonable governmental regulation. The action was not intended to penalize his exercise of free speech and deter his criticism of Government policies and practices because assuming, arguendo, that First Amendment protections reach beyond our national boundaries, revocation of Agee's passport rested in part on the content of his speech. To the extent the revocation of his passport operates to inhibit Agee, "it is an inhibition of action," rather than of speech. And that failure to accord him a prerevocation hearing did not violate his Fifth Amendment right to procedural due process because when there is a substantial likelihood of "serious damage" to national security or foreign policy as a result of a passport holder's activities in foreign countries, the Government may take action to ensure that the holder may not exploit the sponsorship of his travels by the United States. The Court found that the right to hold a passport is subordinate to national security and foreign policy considerations, and is subject to reasonable governmental regulation. Denial of Agee's passport was not protected under the First Amendment because unlike Kent v. Dulles and Aptheker v. Secretary of State involving denials of passports solely on the basis of political beliefs entitled to First Amendment protection, Agee's actions amounted to more than speech and that the national security interests here, like Zemel v. Rusk, was sufficiently important to justify revocation. Finally, the Court held that the Government was not required to hold a pre-revocation hearing, since where there was a
substantial likelihood of "serious damage" to national security or foreign policy as the result of a passport holder's activities abroad, the Government may take action to ensure that the holder may not exploit the United States' sponsorship of his travels. Further, a statement of reasons and an opportunity for a prompt post-revocation hearing were sufficient to satisfy the Constitution's due process guarantees. NY TIMES V US CALVAN PHILIPPINE PRESS INSTITUTE, INC., vs. COMMISSION ON ELECTIONS G.R. No. L-119694 May 22, 1995 Feliciano, J. DOCTRINE: Section 2 of Resolution No. 2772 is a blunt and heavy instrument that purports, without a showing of existence of a national emergency or other imperious public necessity, indiscriminately and without regard to the individual business condition of particular newspapers or magazines located in differing parts of the country, to take private property of newspaper or magazine publishers. No attempt was made to demonstrate that a real and palpable or urgent necessity for the taking of print space confronted the Comelec and that Section 2 of Resolution No. 2772 was itself the only reasonable and calibrated response to such necessity available to the Comelec. Section 2 does not constitute a valid exercise of the police power of the State. FACTS: The Philippine Press Institute, Inc. ("PPI") is before this Court assailing the constitutional validity of Resolution No. 2772 issued by respondent Comelec and its corresponding Comelec directive. Petitioner PPI is a non-stock, nonprofit organization of newspaper and magazine publishers. On 2 March 1995, Comelec promulgated Resolution No. 2772, which reads in part: Sec. 2. Comelec Space. The Commission shall procure free print space of not less than one half (1/2) page in at least one newspaper of general circulation in every province or city for use as "Comelec Space" from March 6, 1995 in the case of candidates for senator and from March 21, 1995 until May 12, 1995. In the absence of said newspaper, "Comelec Space" shall be obtained from any magazine or periodical of said province or city. Sec. 3. Uses of Comelec Space. "Comelec Space" shall be allocated by the Commission, free of charge, among all candidates within the area in which the newspaper, magazine or periodical is circulated to enable the candidates to make known their qualifications, their stand on public issues and their platforms and programs of government. "Comelec Space" shall also be used by the Commission for dissemination of vital election information . Sec. 4. Allocation of Comelec Space. (a) "Comelec Space" shall also be available to all candidatesduring the periods stated in Section 2 hereof. Its allocation shall be equal and impartial among all candidates for the same office. All candidates concerned shall be furnished a copy of the allocation of "Comelec Space" for their information, guidance and compliance. Apparently in implementation of this Resolution, Comelec through Commissioner Regalado E. Maambong sent identical letters to various publishers of newspapers like the Business World, the Philippine Star, the Malaya and the Philippine Times Journal, all members of PPI. PETITIONERS CONTENTION: PPI asks the SC to declare Comelec Resolution No. 2772 unconstitutional and void on the ground that it violates the prohibition imposed by the Constitution upon the government, and any of its agencies, against the taking of private property for public use without just compensation. Petitioner also contends that the letter directives of Comelec requiring publishers to give free "Comelec Space" and at the same time process raw data to make it cameraready, constitute impositions of involuntary servitude, contrary to the provisions the 1987 Constitution. Finally, PPI argues that the Comelec Resolution is violative of the constitutionally guaranteed freedom of speech, of the press and of expression. The SC issued a TRO enjoining Comelec from enforcing and implementing Section 2 of Resolution No. 2772, as well as the Comelec directives addressed to various print media enterprises. The Court also required the respondent to file a Comment on the Petition.
POLITICAL LAW REVIEW Case Digests RESPONDENTS CONTENTION:
The Office of the Solicitor General filed its Comment on behalf of respondent Comelec alleging that Comelec Resolution No. 2772 does not impose upon the publishers any obligation to provide free print space in the newspapers as it does not provide any criminal or administrative sanction for non-compliance with that Resolution. According to the Solicitor General, the questioned Resolution merely established guidelines to be followed in connection with the procurement of "Comelec space," the procedure for and mode of allocation of such space to candidates and the conditions or requirements for the candidate's utilization of the "Comelec space" procured. At the same time, however, the Solicitor General argues that even if the questioned Resolution and its implementing letter directives are viewed as mandatory, the same would nevertheless be valid as an exercise of the police power of the State. The Solicitor General also maintains that Section 8 of Resolution No. 2772 is a permissible exercise of the power of supervision or regulation of the Comelec over the communication and information operations of print media enterprises during the election period to safeguard and ensure a fair, impartial and credible election. Respondent Comelec through its Chairman, Hon. Bernardo Pardo stated that the Resolution were not intended to compel those members to supply Comelec with free print space. The letter-directives were merely designed to solicit from the publishers the same free print space which many publishers had voluntarily given to Comelec during the election period relating to the May 1992 elections. ISSUE: Whether Comlelec Resolution No. 2772 is a valid exercise of police power. HELD: NO, the Resolution, particularly Section 2, is a fatal constitutional vice and must be set aside and nullified. To compel print media companies to donate "Comelec-space" of the dimensions specified in Section 2 of Resolution No. 2772 (not less than one-half page), amounts to "taking" of private personal property for public use or purposes. Section 2 failed to specify the intended frequency of such compulsory "donation." The extent of the taking or deprivation is not insubstantial; this is not a case of a de minimis temporary limitation or restraint upon the use of private property. The monetary value of the compulsory "donation," measured by the advertising rates ordinarily charged by newspaper publishers whether in cities or in non-urban areas, may be very substantial indeed. The taking of print space here sought to be effected may first be appraised under the rubric of expropriation of private personal property for public use. The threshold requisites for a lawful taking of private property for public use need to be examined here: one is the necessity for the taking; another is the legal authority to effect the taking . The element of necessity for the taking has not been shown by respondent Comelec. It has not been suggested that the members of PPI are unwilling to sell print space at their normal rates to Comelec for election purposes. Indeed, the unwillingness or reluctance of Comelec to buy print space lies at the heart of the problem. Similarly, it has not been suggested, let alone demonstrated, that Comelec has been granted the power of eminent domain either by the Constitution or by the legislative authority. A reasonable relationship between that power and the enforcement and administration of election laws by Comelec must be shown; it is not casually to be assumed. That the taking is designed to subserve "public use" is not contested by petitioner PPI. We note only that, under Section 3, the free "Comelec space" sought by the respondent Commission would be used not only for informing the public about the identities, qualifications and programs of government of candidates for elective office but also for "dissemination of vital election information" (including, presumably, circulars, regulations, notices, directives, etc. issued by Comelec). It seems to the Court a matter of judicial notice that government offices and agencies (including the Supreme Court) simply purchase print space, in the ordinary course of events, when their rules and regulations, circulars, notices and so forth need officially to be brought to the attention of the general public. The taking of private property for public use is, of course, authorized by the Constitution, but not without payment of "just compensation" (Article III, Section 9). And apparently the necessity of paying compensation for "Comelec space" is precisely what is sought to be avoided by respondent Commission, whether Section 2 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. There is nothing at all to prevent newspaper and magazine publishers from voluntarily giving free print space to Comelec for the purposes contemplated in Resolution No. 2772. Section 2 does not, however, provide a constitutional basis for compelling publishers, against their will, in the kind of factual context here present, to provide free print space for Comelec purposes. Section 2 does not constitute a valid exercise of the power of eminent domain. As earlier noted, the Solicitor General also contended that Section 2, even if read as compelling publishers to "donate" "Comelec space, " may be sustained as a valid exercise of the police power of the state. This argument was, however, made too casually to require prolonged consideration on our part . Firstly, there was no effort (and apparently no inclination on the part of Comelec) to show that the police power essentially a power of legislation has been
constitutionally delegated to respondent Commission . 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. VALENTIN TIO doing business under the name and style of OMI ENTERPRISES vs. VIDEOGRAM REGULATORY BOARD G.R. No. L-75697 June 18, 1987 Melencio-Herrera, J.: FACTS: This petition assails the constitutionality of Presidential Decree No. 1987 entitled "An Act Creating the Videogram Regulatory Board" with broad powers to regulate and supervise the videogram industry (hereinafter briefly referred to as the BOARD). Thereafter, PD No. 1994 amended the NIRC providing, inter alia: SEC. 134. Video Tapes. 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 Greater Manila Theaters Association, Integrated Movie Producers, Importers and Distributors Association of the Philippines, and Philippine Motion Pictures Producers Association, hereinafter collectively referred to as the Intervenors, were permitted by the Court to intervene in the case, over petitioner's opposition, upon the allegations that intervention was necessary for the complete protection of their rights and that their "survival and very existence is threatened by the unregulated proliferation of film piracy." PETITIONERS CONTENTION: PD 1987 is unconstitutional based on the following grounds: 1. Section 10 thereof, which imposes a tax of 30% on the gross receipts payable to the local government is a RIDER and the same is not germane to the subject matter thereof; 2. The tax imposed is harsh, confiscatory, oppressive and/or in unlawful restraint of trade in violation of the due process clause of the Constitution; 3. There is no factual nor legal basis for the exercise by the President of the vast powers conferred upon him by Amendment No. 6; 4. There is undue delegation of power and authority; 5. The Decree is an ex-post facto law; and 6. There is over regulation of the video industry as if it were a nuisance, which it is not. RESPONDENTS CONTENTION: PD 1987 is constitutional since the State has the power to tax. It was also mentioned that while the underlying objective of the DECREE is to protect the moribund movie industry, there is no question that public welfare is at bottom of its enactment, considering "the unfair competition posed by rampant film piracy; the erosion of the moral fiber of the viewing public brought about by the availability of unclassified and unreviewed video tapes containing pornographic films and films with brutally violent sequences; and losses in government revenues due to the drop in theatrical attendance, not to mention the fact that the activities of video establishments are virtually untaxed since mere payment of Mayor's permit and municipal license fees are required to engage in business. ISSUE: Whether the tax imposed is unconstitutional because it is harsh and oppressive, confiscatory, and in restraint of trade. HELD: NO. 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. In imposing a tax, the legislature acts upon its constituents. This is, in general, a sufficient security against erroneous and oppressive taxation. 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 videogram operators. 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. ORTIGAS V CA QUINTO G.R. No. 126102. December 4, 2000 Quisumbing, J: 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. FACTS: On August 25, 1976, petitioner Ortigas & Company sold to Emilia Hermoso, a parcel of land located in Greenhills Subdivision IV, San Juan, Metro Manila,. The contract of sale provided that the lot: . (1) be used exclusivelyfor residential purposes only, and not more than one single-family residential
building will be constructed thereon, xxx 6. The BUYER shall not erectany sign or billboard on the rooffor advertising purposes xxx 11. No single-family residential building shall be erecteduntil the building plans, specificationhave been approved by the SELLER xxx 14....restrictions shall run with the land and shall be construed as real covenants until December 31, 2025 when they shall cease and terminate
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. PETITIONERS CONTENTION: On January 18, 1995, petitioner filed a complaint against Emilia Hermoso. The complaint sought the demolition of
the said commercial structure for having violated the terms and conditions of the Deed of Sale. Ortigas and Company averred that inasmuch as the restrictions on the use of the lot were duly annotated on the title it issued to Emilia Hermoso, said restrictions must prevail over the ordinance, specially since these restrictions were agreed upon before the passage of MMC Ordinance No. 81-01. CA ruled in favor of Mathay PETITIONERS CONTENTION BEFORE THE SC: Petitioner contends that the appellate court erred in *limiting its decision to the cited zoning ordinance. *a contractual right is not automatically discarded once a claim is made that it conflicts with police power. *the restrictive clauses in the questioned contract is not in conflict with the zoning ordinance. *the MMC Ordinance No. 81-01 did not prohibit the construction of residential buildings. *even with the zoning ordinance, the seller and buyer of the re-classified lot can voluntarily agree to an exclusive residential use thereof. Hence, petitioner concludes that the CA erred in holding that the condition imposing exclusive residential use was effectively nullified by the zoning ordinance RESPONDENTS CONTENTION: Private respondent argues *appellate court correctly ruled refusing to subject the contract to the MMC Ordinance No. 81-01. *appellate court properly held the police power superior to the non-impairment of contract clause in the Constitution. He concludes that the appellate court did not err in dissolving the writ of preliminary injunction issued by the trial court in excess of its jurisdiction. Issue: Whether the MMC Ordinance should be applied in order to limit the contract of sale Ruling: Yes. 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 CHAVEZ v. ROMULO G.R. No. 157036. June 9, 2004 Sandoval-Gutierez, J. 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). Under this directive, civilian owners may no longer bring their firearms outside their residences. Those who want to use their guns for target practice will be given special and temporary permits from time to time only for that purpose. Acting on this directive, respondent Ebdane made a guideline for the implementation of the ban. This guideline is the one being assailed in this case.
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 # 1: Whether Respondent Ebdane as PNP Chief is authorize to issue the assailed guidelines. HELD: YES. In an attempt to evade the application of the above-mentioned laws and regulations, petitioner argues that the Chief of the PNP is not the same as the Chief of the Constabulary, the PC being a mere unit or component of the newly established PNP. He contends further that Republic Act No. 8294 amended P.D. No. 1866 such that the authority to issue rules and regulations regarding firearms is now jointly vested in the Department of Justice and the DILG, not the Chief of the Constabulary. THIS IS NOT TRUE. By virtue of Republic Act No. 6975, the Philippine National Police (PNP) absorbed the Philippine Constabulary (PC). Consequently, the PNP Chief succeeded the Chief of the Constabulary and, therefore, assumed the latters licensing authority. Section 24 thereof specifies, as one of PNPs powers, the issuance of licenses for the possession of firearms and explosives in accordance with law . This is in conjunction with the PNP Chiefs power to issue detailed implementing policies and instructions on such matters as may be necessary to effectively carry out the functions, powers and duties of the PNP. Contrary to petitioners contention, R.A. No. 8294 does not divest the Chief of the Constabulary (now the PNP Chief) of his authority to promulgate rules and regulations for the effective implementation of P.D. No. 1866. For one, R.A. No. 8294 did not repeal entirely P.D. No. 1866. It merely provides for the reduction of penalties for illegal possession of firearms. Thus, the provision of P.D. No. 1866 granting to the Chief of the Constabulary the authority to issue rules and regulations regarding firearms remains effective. Correspondingly, the Implementing Rules and Regulations dated September 15, 1997 jointly issued by the Department of Justice and the DILG pursuant to Section 6 of R.A. No. 8294 deal only with the automatic review, by the Director of the Bureau of Corrections or the Warden of a provincial or city jail, of the records of convicts for violations of P.D. No. 1866. The Rules seek to give effect to the beneficent provisions of R.A. No. 8294, thereby ensuring the early release and reintegration of the convicts into the community. Clearly, both P.D. No. 1866 and R.A. No. 6975 authorize the PNP Chief to issue the assailed guidelines.
ISSUE # 2: Whether or not the citizens right to bear arms is constitutional. HELD: NO. Possession of firearms by the citizens in the Philippines is the exception, not the rule . The right to bear arms is a mere statutory privilege, not a constitutional right. It is a mere statutory creation. What then are the laws that grant such right to the Filipinos? The first real firearm law is Act No. 1780 enacted by the Philippine Commission on October 12, 1907. It was passed to regulate the importation, acquisition, possession, use and transfer of firearms. Being a mere statutory creation, the right to bear arms cannot be considered an inalienable or absolute right.
ISSUE #3: Whether the revocation of the right to carry firearm is a violation of a persons right to property.
HELD: the PNP Chief is granted broad discretion in the issuance of PTCFOR. This is evident from the tenor of the Implementing Rules and Regulations of P.D. No. 1866 which state that the Chief of Constabulary may, in meritorious cases as determined by him and under such conditions as he may impose, authorize lawful holders of firearms to carry them outside of residence. Following the American doctrine, it is indeed logical to say that a PTCFOR does not constitute a property right protected under our Constitution. Consequently, a PTCFOR, just like ordinary licenses in other regulated fields, may be revoked any time. It does not confer an absolute right, but only a personal privilege to be exercised under existing restrictions, and such as may thereafter be reasonably imposed. A licensee takes his license subject to such conditions as the Legislature sees fit to impose, and one of the statutory conditions of this license is that it might be revoked by the selectmen at their pleasure. Such a license is not a contract, and a revocation of it does not deprive the defendant of any property, immunity, or privilege within the meaning of these words in the Declaration of Rights . The US Supreme Court, in
Doyle vs. Continental Ins. Co , held: The correlative power to revoke or recall a permission is a necessary consequence of the main power. A mere license by the State is always revocable . ISSUE #4: Whether the issuance of the guideline is a valid exercise of police power. HELD: The test to determine the validity of police measure are: (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. 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 Peoples 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. METROPOLITAN MANILA DEVELOPMENT AUTHORITY vs. BEL-AIR VILLAGE ASSOCIATION, INC. G.R. No. 135962, March 27, 2000 Doctrine: Police power is lodged primarily in the National Legislature. It cannot be exercised by any group or body of individuals not possessing legislative power. 13 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. 14 Once delegated, the agents can exercise only such legislative powers as are conferred on them by the national lawmaking body. Our Congress delegated police power to the local government units in the Local Government Code of 1991. The MMDA is NOT a local government unit and does NOT possess police power. Its functions are merely administrative in nature. Facts: MMDA is a government agency tasked with the delivery of basic services in Metro Manila. Bel-Air Village Association, Inc (BAVA) is a corporation whose members are homeowners in Bel-Air Village, a private subdivision in Makati City. It is the registered owner of Neptune Street, a road inside Bel-Air Village. On December 30, 1995, respondent received from petitioner, through its Chairman, a notice dated December 22, 1995 requesting respondent to open Neptune Street to public vehicular traffic starting January 2, 1996. On the same day, respondent was apprised that the perimeter wall separating the subdivision from the adjacent Kalayaan Avenue would be demolished. BAVA then asked for a TRO from the RTC which issued the same. However, the RTC denied issuance of a preliminary injunction but which denial was overturned by the CA. Hence this petition. Issue: Whether or not MMDA has authority to open Neptune Street to public traffic since it is an agent of the state endowed with 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. 14 Once delegated, the agents can exercise only such legislative powers as are conferred on them by the national lawmaking body. Our Congress delegated police power to the local government units in the Local Government Code of 1991. This delegation is found in Section 16 of the same Code, known as the general welfare clause. Local government units exercise police power through their respective legislative bodies . With the passage of Republic Act (R . A.) No. 7924 in 1995, Metropolitan Manila was declared as a "special development and administrative region " and the Administration of "metro-wide" basic services affecting the region placed under "a development authority" referred to as the MMDA . The scope of the MMDA's function is limited to the delivery of the seven (7) basic services. One of these is transport and traffic management which includes the formulation and monitoring of policies, standards and projects to rationalize the existing transport operations, infrastructure requirements, the use of thoroughfares and promotion of the safe movement of persons and goods. There is no syllable in R.A. No. 7924 that grants the MMDA police power , let alone legislative power. The MMDA is, as termed in the charter itself, "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. Contrary to petitioner's claim , the two Sangalang (Sanggalang v IAC) cases do not apply to the case at bar . Firstly, both involved zoning ordinances passed by the municipal council of Makati and the MMC. In the instant case, the basis for the proposed opening of Neptune Street is contained in the notice which does not cite any ordinance or law, either by the Sangguniang Panlungsod of Makati City or by the MMDA, as the legal basis for the proposed opening of Neptune Street. Petitioner MMDA simply relied on its authority under its charter "to rationalize the use of roads and/or thoroughfares for the safe and convenient movement of persons." Secondly, the MMDA is not the same entity as the MMC in Sangalang. Although the MMC is the forerunner of the present MMDA, an examination of Presidential Decree (P. D.) No. 824, the charter of the MMC, shows that the latter possessed greater powers which were not bestowed on the present MMDA. The MMC was the "central government" of Metro Manila for the purpose of establishing and administering programs providing services common to the area. It possessed legislative powers . All ordinances, resolutions and measures recommended by the Sangguniang Bayan were subject to the MMC's approval. 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. PROFESSIONAL REGULATION COMMISSION (PRC) vs. ARLENE V. DE GUZMAN et.al G.R. No. 144681, June 21, 2004 Tinga, J.: Doctrine: A license to practice medicine is a privilege or franchise granted by the government. It is not a right which can enforced through the writ of mandamus. Facts: Respondents, who are all graduates of the Fatima College of Medicine in Valenzuela City Metro Manila, passed the Physician Licensure Examination conducted in February 1993 by the Board of Medicine (Board). Petitioner (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 (79) successful examinees from Fatima College in the two most difficult subjects in the medical licensure exam, Biochemistry (Bio-Chem) and Obstetrics and Gynecology (OBGyne), 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 BioChem, 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%. 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 then withheld the registration as physicians of all the examinees from the Fatima College of Medicine. The Board also charged respondents with "immorality, dishonest conduct, fraud, and deceit" in connection with the Bio-Chem and Ob-Gyne examinations. It recommended that the test results of the Fatima examinees be nullified. Respondents filed a special civil action for mandamus, with prayer for preliminary mandatory injunction against the Board. The RTC of Manila granted the writ of mandamus and allowed the respondents to take their physicians oath and to register as duly licensed physicians. In sustaining the trial courts decision, the CA ratiocinated that the respondents complied with all the statutory requirements for admission into the licensure examination Issue: Are respondents entitled to a writ of mandamus? 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. 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. 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, guidelines are provided for in Rep. Act No. 2382 (The Medical Act of 1959), 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 physicians license, or revoking a license that has been issued. Section 8 of Rep. Act No. 2382 prescribes, among others, that a person who aspires to practice medicine in the Philippines, must have "satisfactorily passed the corresponding Board Examination." Section 22, in turn, provides that the oath may only be administered "to physicians who qualified in the examinations." The operative word here is "satisfactorily," defined as "sufficient to meet a condition or obligation" or "capable of dispelling doubt or ignorance." 31 The licensing authority (Board) apparently did not find that the respondents "satisfactorily passed" the licensure examinations. 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. Decision of the CA reversed and the writ of Mandamus is nullified. JMM PROMOTION AND MANAGEMENT, INC. V. CA
Part V (Fundamental Powers of the State) Page 13 of 34 260 SCRA 319
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 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. Petitioners assail the validity of the Department Orders on the ground that the issuance of the Artist Record Book (ARB) was discriminatory and illegal. The government countered that the same was a valid exercise of police power. ISSUE: Is the issuance of the Department Orders a valid exercise of police power? HELD: YES. The police power of the State," one court has said... is a power coextensive with self-protection, and is not inaptly termed "the law of overruling necessity." It may be said to be that inherent and plenary power in the state which enables it to prohibit all things hurtful to the comfort, safety and welfare of society." Carried onward by the current of legislature, the judiciary rarely attempts to dam the onrushing power of legislative discretion, provided the purposes of the law do not go beyond the great principles that mean security for the public welfare or do not arbitrarily interfere with the right of the individual. 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. 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. DE LA CRUZ VS PARAS G.R. No. L-42571-72 July 25, 1983 Fernando, C.J.: Doctrine: Police Power. A local government council cannot prohibit the establishment of nightclubs and cabarets; it may only regulate their operations. Facts: Bocaue, Bulacan passed Ordinance No. 84 known as the prohibition and closure ordinance which tackles the prohibition and revocation of licenses of nightclubs. The pertinent provisions of such ordinance: 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. And due to the effect of said ordinance, the owners and operators of these nightclubs questioned the validity of passing such ordinance for being violative of due process and Bocaue having no power to pass such kind of ordinance. Petitioners contention: 1. Ordinance No. 84 is null and void as a municipality has no authority to prohibit a lawful business, occupation or calling. 2. Ordinance No. 84 is violative of the petitioners' right to due process and the equal protection of the law, as the license previously given to petitioners was in effect withdrawn without judicial hearing. 3. That under Presidential Decree No. 189, as amended, by Presidential Decree No. 259, the power to license and regulate tourist-oriented businesses including night clubs, has been transferred to the Department of Tourism." Respondents contention: 1. That the Municipal Council is authorized by law not only to regulate but to prohibit the establishment, maintenance and operation of night clubs invoking Section 2243 of the RAC, CA 601, Republic Acts Nos. 938, 978 and 1224. 2. The Ordinance No. 84 is not violative of petitioners' right to due process and the equal protection of the law, since property rights are subordinate to public interests. 3. That Presidential Decree No. 189, as amended, did not deprive Municipal Councils of their jurisdiction to regulate or prohibit night clubs." The lower court dismissed the petitions. Its rationale is set forth in the opening paragraph thus: " Those who lust cannot last. This in essence is also why this Court, obedient to the mandates of good government, and cognizant of the categorical imperatives of the current legal and social revolution, hereby [upholds] in the name of police power the validity and constitutionality of Ordinance No. 84, Series of 1975, of the Municipal Council of Bocaue, Bulacan. Issue: Whether or not a municipal corporation, Bocaue, Bulacan, represented by respondents, 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. 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." It is practically a reproduction of the former Section 39 of Municipal Code. An ordinance enacted by virtue thereof, according to Justice Moreland, speaking for the Court in the leading case of United States v. Abendan "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." 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, in the language of the Administrative Code, such competence extending to all "the great public needs, to quote from Holmes, 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. 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.
The conclusion reached by this Court is not to be interpreted as a retreat from its resolute stand sustaining police power legislation to promote public morals. The commitment to such an Ideal forbids such a backward step. Legislation of that character is deserving of the fullest sympathy from the judiciary. Accordingly, the judiciary has not been hesitant to lend the weight of its support to measures that can be characterized as falling within that aspect of the police power. REPUBLIC OF THE PHILIPPINES v. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY G.R. No. L-18841 January 27, 1969 Reyes, J.B.L.,J. Facts: The Republic of the Philippines is a political entity exercising government powers through one of its branches, the Bureau of Telecommunication (BOT). PLDT is a public service corporation holding a franchise to install, operate and maintain a telephone system. After its creation, the BOT set up its own government telephone system by utilizing its own appropriations and other equipment and by renting trunk lines of the PLDT to enable the governmentt offices to call privately. BOT entered into an agreement with the RCA communications for joint overseas telephone service whereby BOT would convey overseas calls received by RCA to local residents. PLDT complained to the BOT that it was a violation of the condition of their agreement since the BOT had used trunk lines not only for the use of government offices but also to serve private persons or the general public in competition with the business of PLDT. Subsequently, the plaintiff commenced suit against PLDT asking the court that judgment be rendered ordering the PLDT to execute a contract with the plaintiff, through the BOT for the use of the facilities of PLDT's telephone system throughout the country under such conditions as the court may consider reasonable. The CFI rendered judgment stating that it could not compel PLDT to enter into such agreement. Hence this petition. Issue: Whether or not the PLDT can be compelled by the Republic to enter into an interconnecting agreement. Ruling: YES. The court a quo has apparently overlooked that while the Republic may not compel the PLDT to celebrate a contract with it, the Republic may, in the exercise of the sovereign power of eminent domain, require the telephone company to permit interconnection of the government telephone system and that of the PLDT, as the needs of the government service may require, subject to the payment of just compensation to be determined by the court. Nominally, of course, the power of eminent domain results in the taking or appropriation of title to, and possession of, the expropriated property; but no cogent reason appears why the said power may not be availed of to impose only a burden upon the owner of condemned property, without loss of title and possession. It is unquestionable that real property may, through expropriation, be subjected to an easement of right of way. The use of the PLDT's lines and services to allow inter-service connection between both telephone systems is not much different. In either case private property is subjected to a burden for public use and benefit. If, under section 6, Article XIII, of the Constitution, the State may, in the interest of national welfare, transfer utilities to public ownership upon payment of just compensation, there is no reason why the State may not require a public utility to render services in the general interest, provided just compensation is paid therefor. Ultimately, the beneficiary of the interconnecting service would be the users of both telephone systems, so that the condemnation would be for public use. JESUS IS LORD CHRISTIAN SCHOOL FOUNDATION, INC., vs. MUNICIPALITY (now CITY) OF PASIG, METRO MANILA, G.R. No. 152230. August 9, 2005 Callejo, Sr., J.: 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.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. On April 19, 1993, the Sangguniang Bayan of Pasig approved an Ordinance authorizing the municipal mayor to initiate expropriation proceedings to acquire the said property and appropriate the fund therefor. On July 21, 1993, the municipality filed a complaint, amended on August 6, 1993, against the Ching Cuancos for the expropriation of the property under Section 19 of Republic Act (R.A.) No. 7160, otherwise known as the Local Government Code. JILCSFI averred, by way of special and affirmative defenses, that the City of Pasigs exercise of eminent domain was only for a particular class and not for the benefit of the poor and the landless. It alleged that the property sought to be expropriated is not the best portion for the road and the least burdensome to it. JILCSFI also averred that it has been
denied the use and enjoyment of its property because the road was constructed in the middle portion and that the plaintiff was not the real party-in-interest. The RTC held that, as gleaned from the declaration in Ordinance No. 21, there was substantial compliance with the definite and valid offer requirement of Section 19 of R.A. No. 7160, and that the expropriated portion is the most convenient access to the interior of Sto. Tomas Bukid. Dissatisfied, JILCSFI elevated the case to the CA on the following assignment of errors: ISSUES: THE LOWER COURT SERIOUS[LY] ERRED WHEN IT RULED THAT PLAINTIFF-APPELLEE SUBSTANTIALLY COMPLIED WITH THE LAW WHEN IT EXPROPRIATED JILS PROPERTY TO BE USED AS A RIGHT OF WAY. HELD: YES. The right of eminent domain is usually understood to be an ultimate right of the sovereign power to appropriate any property within its territorial sovereignty for a public purpose . When the sovereign delegates the power to a political unit or agency, a strict construction will be given against the agency asserting the power. When the power is granted, the extent to which it may be exercised is limited to the express terms or clear implication of the statute in which the grant is contained. Corollarily, the City of Pasig, which is the condemnor, has the burden of proving all the essentials necessary to show the right of condemnation. It has the burden of proof to establish that it has complied with all the requirements provided by law for the valid exercise of the power of eminent domain. The grant of the power of eminent domain to local government units is grounded on Section 19 of R.A. No. 7160. The Court declared that the following requisites for the valid exercise of the power of eminent domain by a local government unit must be complied with: 1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf of the local government unit, to exercise the power of eminent domain or pursue expropriation proceedings over a particular private property. 2. The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of the poor and the landless. 3. There is payment of just compensation, as required under Section 9, Article III of the Constitution, and other pertinent laws. 4. A valid and definite offer has been previously made to the owner of the property sought to be expropriated, but said offer was not accepted Valid and Definite Offer Article 35 of the Rules and Regulations Implementing the Local Government Code provides: The purpose of the requirement of a valid and definite offer 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 action. There is no legal and factual basis to the CAs ruling that the annotation of a notice of lis pendens at the dorsal portion of petitioners TCT No. PT-92579 is a substantial compliance with the requisite offer. Neither is the declaration in one of the whereas clauses of the ordinance that "the property owners were already notified by the municipality of the intent to purchase the same for public use as a municipal road," a substantial compliance with the requirement of a valid and definite offer under Section 19 of R.A. No. 7160. As long as the purpose of the taking is public, then the power of eminent domain comes into play. As just noted, the constitution in at least two cases, to remove any doubt, determines what is public use. One is the expropriation of lands to be subdivided into small lots for resale at cost to individuals. The other is the transfer, through the exercise of this power, of utilities and other private enterprise to the government. It is accurate to state then that at present whatever may be beneficially employed for the general welfare satisfies the requirements of public use. The subject property is expropriated for the purpose of constructing a road. The respondent is not mandated to comply with the essential requisites for an easement of right-of-way under the New Civil Code. Case law has it that in the absence of legislative restriction, the grantee of the power of eminent domain may determine the location and route of the land to be taken unless such determination is capricious and wantonly injurious . Expropriation is justified so long as it is for the public good and there is genuine necessity of public character. Government may not capriciously choose what private property should be taken.
DEVORAH E. BARDILLON vs.BARANGAY MASILI OF CALAMBA, LAGUNA G.R. No. 146886, April 30, 2003 Panganiban, J.: DOCTRINE: An expropriation suit is incapable of pecuniary estimation. Accordingly, it falls within the jurisdiction of Regional Trial Courts, regardless of the value of the subject property. BRIEF FACTS: Two complaints for eminent domain were filed by herein respondent for the purpose of expropriating a ONE HUNDRED FORTY FOUR (144) square meter-parcel of land, otherwise known as Lot 4381-D situated in Barangay Masili, Calamba, Laguna and owned by herein petitioner . The expropriation of Lot 4381-D was being pursued in view of providing Barangay Masili a multi-purpose hall for the use and benefit of its constituents. The first Complaint for eminent domain was filed before the Municipal Trial Court of Calamba, Laguna ('MTC'). The MTC issued an order dismissing the Expropriation case 'for lack of interest' for failure of the [respondent] and its counsel to appear at the pre-trial. The second Complaint for eminent domain was filed before Branch 37 of the Regional Trial Court of Calamba, Laguna ('RTC') on October 18, 1999. This]complaint also sought the expropriation of the said Lot 4381-D for the erection of a multi-purpose hall of Barangay Masili, but petitioner, by way of a Motion to Dismiss, opposed this [C]complaint by alleging in the main that it violated Section 19(f) of Rule 16 in that [respondent's] cause of action is barred by prior judgment, pursuant to the doctrine of res judicata. Th Judge issued an order denying petitioner's Motion to Dismiss, holding that the MTC which ordered the dismissal of Civil Case No. 3648 has no jurisdiction over the said expropriation proceeding. On appeal by petitioner to the CA, the latter held that the Regional Trial Court (RTC) of Calamba, the second Complaint for eminent domain not barred by res judicata. The reason is that the Municipal Trial Court (MTC), which dismissed the first Complaint for eminent domain had no jurisdiction over the action. PETITONERS CONTENTION: Petitioner claims that, since the value of the land is only P11,448, the MTC had jurisdiction over the case. Petitioner claims that the MTC's dismissal of the first Complaint for eminent domain was with prejudice, since there was no indication to the contrary in the Order of dismissal. She contends that the filing of the second Complaint before the RTC should therefore be dismissed on account of res judicata. Petitioner argues that the CA erred when it ignored the RTC's Writ of Possession over her property, issued despite the pending Motion for Reconsideration of the ruling dismissing the Complaint. Petitioner also claims that respondent is guilty of forum shopping, because it scouted for another forum after obtaining an unfavorable Decision from the MTC. RESPONDENTS CONTENTION: On the other hand, the appellate court held that the assessed value of the property was P28,960. 1 Thus, the MTC did not have jurisdiction over the expropriation proceedings, because the amount involved was beyond the P20,000 jurisdictional amount cognizable by MTCs. Having no jurisdication, res judicata likewise cannot set in. ISSUE: 1. Does the MTC have jurisdiction over the expropriation case?- NO. 2. Does the dismissal of that case before the MTC constitute res judicata?-NO 3. Did the CA err when it ignored the issue of entry upon the premises- NO 4, Is the respondent is guilty of forum shopping? NO. RULING: I. An expropriation suit does not involve the recovery of a sum of money. Rather, it deals with the exercise by the government of its authority and right to take property for public use. 1As such, it is incapable of pecuniary estimation and should be filed with the regional trial courts. 12This was explained by the Court in Barangay San Roque v. Heirs of Francisco Pastor:13"It should be stressed that the primary consideration in an expropriation suit is whether the government or any of its instrumentalities has complied with the requisites for the taking of private property . Hence, the courts
determine the authority of the government entity, the necessity of the expropriation, and the observance of due process. In the main, the subject of an expropriation suit is the government's exercise of eminent domain, a matter that is incapable of pecuniary estimation. II Res judicata literally means a matter adjudged, judicially acted upon or decided, or settled by judgment. 15 It provides that a final judgment on the merits rendered by a court of competent jurisdiction is conclusive as to the rights of the parties and their privies; and constitutes an absolute bar to subsequent actions involving the same claim, demand or cause of action. The following are the requisites of res judicata: (1) the former judgment must be final; (2) the court that rendered it had jurisdiction over the subject matter and the parties; (3) it is a judgment on the merits; and (4) there is between the first and the second actions an identity of parties, subject matter and cause of action. Since the MTC had no jurisdiction over expropriation proceedings, the doctrine of res judicata finds no application even if the Order of dismissal may have been an adjudication on the merits. III The requirements for the issuance of a writ of possession in an expropriation case are expressly and specifically governed by Section 2 of Rule 67 of the 1997 Rules of Civil Procedure. 18On the part of local government units, expropriation is also governed by Section 19 of the Local Government Code. 19 Accordingly, in expropriation proceedings, the requisites for authorizing immediate entry are as follows: (1) the filing of a complaint for expropriation sufficient in form and substance; and (2) the deposit of the amount equivalent to 15 percent of the fair market value of the property to be expropriated based on its current tax declaration. In the instant case, the issuance of the Writ of Possession in favor of respondent after it had filed the Complaint for expropriation and deposited the amount required was proper, because it had complied with the foregoing requisites. Note: The issue of the necessity of the expropriation is a matter properly addressed to the RTC in the course of the expropriation proceedings. If petitioner objects to the necessity of the takeover of her property, she should say so in her Answer to the Complaint.21 The RTC has the power to inquire into the legality of the exercise of the right of eminent domain and to determine whether there is a genuine necessity for it. IV The test for determining the presence of forum shopping is whether the elements of litis pendentia are present in two or more pending cases, such that a final judgment in one case will amount to res judicata in another. Be it noted that the earlier case lodged with the MTC had already been dismissed when the Complaint was filed before the RTC. Even granting arguendo that both cases were still pending, a final judgment in the MTC case will not constitute res judicata in the RTC, since the former had no jurisdiction over the expropriation case. REPUBLIC OF THE PHILIPPINES v. CARMEN M. VDA. DE CASTELLVI G.R. No. L-20620 August 15, 1974 DOCTRINE: "Just compensation" is to be determined as of the date of the filing of the complaint. FACTS: Plaintiff-appellant, the Republic of the Philippines filed, on June 26, 1959, a complaint for eminent domain against defendants-appellees Carmen M. Vda. de Castellvi and Maria Nieves Toledo-Gozun over parcels of land situated in the barrio of San Jose, Floridablanca, Pampanga. In its complaint, the Republic alleged, among other things, that the fair market value of the above-mentioned lands, according to the Committee on Appraisal for the Province of Pampanga, was not more than P2,000 per hectare, or a total market value of P259,669.10; and prayed, that the provisional value of the lands be fixed at P259.669.10, that the court authorizes plaintiff to take immediate possession of the lands upon deposit of that amount with the Provincial Treasurer of Pampanga; that the court appoints three commissioners to ascertain and report to the court the just compensation for the property sought to be expropriated, and that the court issues thereafter a final order of condemnation. On June 29, 1959 the trial court issued an order fixing the provisional value of the lands at P259,669.10.
After the Republic had deposited with the Provincial Treasurer of Pampanga the amount of P259,669.10, the trial court ordered that the Republic be placed in possession of the lands. The Republic was actually placed in possession of the lands on August 10, 1959. On November 4, 1959, the trial court authorized the Provincial Treasurer of Pampanga to pay defendant ToledoGozun the sum of P107,609.00 as provisional value of her lands. On May 16, 1960 the trial Court authorized the Provincial Treasurer of Pampanga to pay defendant Castellvi the amount of P151,859.80 as provisional value of the land under her administration, and ordered said defendant to deposit the amount with the Philippine National Bank under the supervision of the Deputy Clerk of Court. In another order of May 16, 1960 the trial Court entered an order of condemnation. The trial Court appointed three commissioners: Atty. Amadeo Yuzon, Clerk of Court, as commissioner for the court; Atty. Felicisimo G. Pamandanan, counsel of the Philippine National Bank Branch at Floridablanca, for the plaintiff; and Atty. Leonardo F. Lansangan, Filipino legal counsel at Clark Air Base, for the defendants. The Commissioners, after having qualified themselves, proceeded to the performance of their duties. On March 15,1961 the Commissioners submitted their report and recommendation, wherein, after having determined that the lands sought to be expropriated were residential lands, they recommended unanimously that the lowest price that should be paid was P10.00 per square meter, for both the lands of Castellvi and Toledo-Gozun; that an additional P5,000.00 be paid to Toledo-Gozun for improvements found on her land; that legal interest on the compensation, computed from August 10, 1959, be paid after deducting the amounts already paid to the owners, and that no consequential damages be awarded. The Commissioners' report was objected to by all the parties in the case by defendants Castellvi and Toledo-Gozun, who insisted that the fair market value of their lands should be fixed at P15.00 per square meter; and by the Republic, which insisted that the price to be paid for the lands should be fixed at P0.20 per square meter. Pursuant to the Commissioners report, the court ruled that the plaintiff will pay 6% interest per annum on the total value of the lands of defendant Toledo-Gozun since the amount deposited as provisional value from August 10, 1959 until full payment is made to said defendant or deposit therefor is made in court. In respect to the defendant Castellvi, interest at 6% per annum will also be paid by the plaintiff to defendant Castellvi from July 1, 1956 when plaintiff commenced its illegal possession of the Castellvi land when the instant action had not yet been commenced to July 10, 1959 when the provisional value thereof was actually deposited in court, on the total value of the said land as herein adjudged. The same rate of interest shall be paid from July 11, 1959 on the total value of the land herein adjudged minus the amount deposited as provisional value, or P151,859.80, such interest to run until full payment is made to said defendant or deposit therefor is made in court. The costs shall be charged to the plaintiff. PLAINTIFFS CONTENTION: The "taking" of Castellvi's property for purposes of eminent domain cannot be considered to have taken place in 1947 when the Republic commenced to occupy the property as lessee thereof. We find merit in the contention of Castellvi that two essential elements in the "taking" of property under the power of eminent domain, namely: (1) that the entrance and occupation by the condemnor must be for a permanent, or indefinite period, and (2) that in devoting the property to public use the owner was ousted from the property and deprived of its beneficial use, were not present when the Republic entered and occupied the Castellvi property in 1947. RESPONDENTS CONTENTION: CASTELLVIS: In her "motion to dismiss" filed on July 14, 1959, Castellvi alleged that the land under her administration, being a residential land, had a fair market value of P15.00 per square meter, so it had a total market value of P11,389,485.00; that the Republic, through the Armed Forces of the Philippines, particularly the Philippine Air Force, had been, despite repeated demands, illegally occupying her property since July 1, 1956, thereby preventing her from using and disposing of it, thus causing her damages by way of unrealized profits. This defendant prayed that the complaint be dismissed, or that the Republic be ordered to pay her P15.00 per square meter, or a total of P11,389,485.00, plus interest thereon at 6% per annum from July 1, 1956; that the Republic be ordered to pay her P5,000,000.00 as unrealized profits, and the costs of the suit. Appellee Castellvi maintains that the "taking" of property under the power of eminent domain requires two essential elements, to wit: (1) entrance and occupation by condemn or upon the private property for more than a momentary or limited period, and (2) devoting it to a public use in such a way as to oust the owner and deprive him of all beneficial enjoyment of the property. This appellee argues that in the instant case the first element is wanting, for the
contract of lease relied upon provides for a lease from year to year; that the second element is also wanting, because the Republic was paying the lessor Castellvi a monthly rental of P445.58; and that the contract of lease does not grant the Republic the "right and privilege" to buy the premises "at the value at the time of occupancy. TOLEDO-GOZUNS: In her "motion to dismiss", dated October 22, 1959, Toledo-Gozun alleged, among other things, that her two parcels of land were residential lands, in fact a portion with an area of 343,303 square meters had already been subdivided into different lots for sale to the general public, and the remaining portion had already been set aside for expansion sites of the already completed subdivisions; that the fair market value of said lands was P15.00 per square meter, so they had a total market value of P8,085,675.00; and she prayed that the complaint be dismissed, or that she be paid the amount of P8,085,675.00, plus interest thereon at the rate of 6% per annum from October 13, 1959, and attorney's fees in the amount of P50,000.00. ISSUE: Whether or not just compensation should be computed from the time of the actual taking of the property. RULING: No. The "taking" of the Castellvi property should not be reckoned as of the year 1947 when the Republic first occupied the same pursuant to the contract of lease, and that the just compensation to be paid for the Castellvi property should not be determined on the basis of the value of the property as of that year. The lower court did not commit an error when it held that the "taking" of the property under expropriation commenced with the filing of the complaint in this case. Under Section 4 of Rule 67 of the Rules of Court, the "just compensation" is to be determined as of the date of the filing of the complaint. This Court has ruled that when the taking of the property sought to be expropriated coincides with the commencement of the expropriation proceedings, or takes place subsequent to the filing of the complaint for eminent domain, the just compensation should be determined as of the date of the filing of the complaint. (Republic vs. Philippine National Bank, L-14158, April 12, 1961, 1 SCRA 957, 961-962). In the instant case, it is undisputed that the Republic was placed in possession of the Castellvi property, by authority of the court, on August 10, 1959. The "taking" of the Castellvi property for the purposes of determining the just compensation to be paid must, therefore, be reckoned as of June 26, 1959 when the complaint for eminent domain was filed. Regarding the two parcels of land of Toledo-Gozun, also sought to be expropriated, which had never been under lease to the Republic, the Republic was placed in possession of said lands, also by authority of the court, on August 10, 1959, The taking of those lands, therefore, must also be reckoned as of June 26, 1959, the date of the filing of the complaint for eminent domain. FILSTREAM INTERNATIONAL INCORPORATED vs. CA, JUDGE FELIPE S. TONGCO and THE CITY OF MANILA G.R. No. 125218 January 23, 1998 FILSTREAM INTERNATIONAL INCORPORATED vs. COURT OF APPEALS et al. G.R. No. 128077 January 23, 1998 FACTS: Petitioner, Filstream International, Inc., is the registered owner of the properties subject of this dispute consisting of adjacent parcels of land situated in Tondo II, Manila. On January 7, 1993, petitioner filed an ejectment suit before the MTC Manila against the occupants (respondents) on the grounds of termination of the lease contract and non-payment of rentals. Judgment was rendered by the MTC against respondents ordering them to vacate the premises and pay back rentals to petitioner. The decision was affirmed by RTC Manila and CA on appeal and the decision became final and executory for lack of further action. However, it appeared that during the pendency of the ejectment proceedings, private respondents a complaint for Annulment of Deed of Exchange against petitioner Filstream before the RTC of Manila. It was at this stage that respondent City of Manila came into the picture when the city government approved Ordinance No. 7813 authorizing Mayor Alfredo S. Lim to initiate the acquisition by negotiation, expropriation, purchase, or other legal means certain parcels of land 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 owned by petitioner's 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.
Pursuant to the complaint for eminent domain filed by respondent City of Manila for the expropriation of parcels of land owned by petitioner Filstream, the trial court issued a Writ of Possession in favor of the former which ordered the transfer of possession over the disputed premises to the City of Manila. Petitioners motion to dismiss complaint and subsequent motions for reconsideration were denied, including a Petition for Certiorari with the CA. Hence this instant petition for review on certiorari. Meanwhile, owing to the finality of the decision in the ejectment suit the MTC of Manila issued a Writ of Execution as well as a Notice to Vacate the disputed premises and an order of demolition. Upon respondents motion, the RTC of Manila issued a TRO enjoining the execution of the writ. On appeal to CA, the TRO was sustained. Hence this petition for certiorari. Issues: 1. Whether the dismissal of petitioners appeal in the expropriation proceedings based on purely procedural and technical grounds is tantamount to a deprivation of property without due process of law (CA dismissed the petition for non-compliance with Sec. 2(a) of Rule 6 of the Revised Internal Rules of the Court of Appeals by failing to attach to its petition other pertinent documents and papers and for attaching copies of pleadings which are blurred and unreadable). 2. Whether the City of Manila validly expropriated petitioner Filstream's properties. Ruling: 1. YES. A strict adherence to the technical and procedural rules in this case would defeat rather than meet the ends of justice as it would result in the violation of the substantial rights of petitioner. At stake in the appeal filed by petitioner before the CA is the exercise of their property rights over the disputed premises which have been expropriated and have in fact been ordered condemned in favor of the City of Manila. In effect, the dismissal of their appeal in the expropriation proceedings based on the aforementioned grounds is tantamount to a deprivation of property without due process of law as it would automatically validate the expropriation proceedings which the petitioner is still disputing. It must be emphasized that where substantial rights are affected, as in this case, the stringent application of procedural rules may be relaxed if only to meet the ends of substantial justice. 2. NO. The Court found nothing that would indicate that respondent City of Manila complied with Sec. 9 and Sec. 10 of R.A. 7279. Petitioner Filstream's 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 Filstream's 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. DIOSDADO LAGCAO, DOROTEO LAGCAO and URSULA LAGCAO vs. JUDGE GENEROSA G. LABRA G.R. No. 155746, October 13, 2004 DOCTRINE: The foundation of the right to exercise eminent domain is genuine necessity and that necessity must be of public character. Government may not capriciously or arbitrarily choose which private property should be expropriated. In this case, there was no showing at all why petitioners property was singled out for expropriation by the city ordinance or what necessity impelled the particular choice or selection. Ordinance No. 1843 stated no reason for the choice of petitioners property as the site of a socialized housing project. FACTS: In 1964, the Province of Cebu donated 210 lots to the City of Cebu. One of these lots was Lot 1029, situated in Capitol Hills, Cebu City, with an area of 4,048 square meters. In 1965, petitioners purchased Lot 1029 on installment basis. 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. On July 9, 1986, 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 and the CA affirmed such decision in 1992. 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 MTC and RTC ruled in favor of petitioners. However, when the demolition order was about to be implemented, Cebu City Mayor Alvin Garcia wrote two letter 4 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 mayors request, the MTCC issued two orders suspending the demolition for a period of 120 days from February 22, 1999. Unfortunately for petitioners, during the suspension period, the Sangguniang Panlungsod (SP) of Cebu City passed a resolution which identified Lot 1029 as a socialized housing site pursuant to RA 7279.Then, on June 30, 1999, the SP of Cebu City passed Ordinance No. 1772 which included Lot 1029 among the identified sites for socialized housing. On July, 19, 2000, Ordinance No. 184 was enacted by the SP of Cebu City authorizing the mayor of Cebu City to initiate expropriation proceedings for the acquisition of Lot 1029 which was registered in the name of petitioners. The intended acquisition was to be used for the benefit of the homeless after its subdivision and sale to the actual occupants thereof. For this purpose, the ordinance appropriated the amount of P6,881,600 for the payment of the subject lot. This ordinance was approved by Mayor Garcia on August 2, 2000. PETITIONERS CONTENTION: Ordinance No. 184 is unconstitutional. ISSUE: whether or not the intended expropriation by the City of Cebu of a 4,048-square-meter parcel of land owned by petitioners contravenes the Constitution and applicable laws. RULING: 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 was enacted pursuant to Section 19 of RA 7160: SEC. 19. Eminent Domain. A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws xxx. (italics supplied). Ordinance No. 1843 which authorized the expropriation of petitioners lot was enacted by the SP 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. 13 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. The exercise of the power of eminent domain drastically affects a landowners right to private property, which is as much a constitutionally-protected right necessary for the preservation and enhancement of personal dignity and intimately connected with the rights to life and liberty. Whether directly exercised by the State or by its authorized agents, the exercise of eminent domain is necessarily in derogation of private rights. The due process clause cannot be trampled upon each time an ordinance orders the expropriation of a private individuals property. The courts cannot even adopt a hands-off policy simply because public use or public purpose is invoked by an ordinance, or just compensation has been fixed and determined The foundation of the right to exercise eminent domain is genuine necessity and that necessity must be of public character. Government may not capriciously or arbitrarily choose which private property should be expropriated. In this
case, there was no showing at all why petitioners property was singled out for expropriation by the city ordinance or what necessity impelled the particular choice or selection. Ordinance No. 1843 stated no reason for the choice of petitioners property as the site of a socialized housing project. RA 7279 is the law that governs the local expropriation of property for purposes of urban land reform and housing. Sections 9 and 10 thereof provide: 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 or Priority Development, Zonal Improvement Program sites, and Slum Improvement and Resettlement Program sites which have not yet been acquired; (e) Bagong Lipunan Improvement of Sites and Services or BLISS 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. (Emphasis supplied). SEC. 10. Modes of Land Acquisition. xxxxxxxxxxxxx..Provided, however, That expropriation shall be resorted to only when other modes of acquisition have been exhausted : Provided further, That where expropriation is resorted to, parcels of land owned by small property owners shall be exempted for purposes of this Act: xxx. (Emphasis supplied). It should also be noted that, as early as 1998, petitioners had already obtained a favorable judgment of eviction against the illegal occupants of their property. The judgment in this ejectment case had, in fact, already attained finality, with a writ of execution and an order of demolition. But Mayor Garcia requested the trial court to suspend the demolition on the pretext that the City was still searching for a relocation site for the squatters. However, instead of looking for a relocation site during the suspension period, the city council suddenly enacted Ordinance No. 1843 for the expropriation of petitioners lot. It was trickery and bad faith, pure and simple. The unconscionable manner in which the questioned ordinance was passed clearly indicated that respondent City transgressed the Constitution, RA 7160 and RA 7279. For an ordinance to be valid, it must not only be within the corporate powers of the city or municipality to enact but must also be passed according to the procedure prescribed by law. It must be in accordance with certain well-established basic principles of a substantive nature. These principles require that an ordinance (1) must not contravene the Constitution or any statute (2) must not be unfair or oppressive (3) must not be partial or discriminatory (4) must not prohibit but may regulate trade (5) must be general and consistent with public policy, and (6) must not be unreasonable. Ordinance No. 1843 failed to comply with the foregoing substantive requirements. A clear case of constitutional infirmity having been thus established, this Court is constrained to nullify the subject ordinance. We recapitulate: first, the questioned ordinance is repugnant to the pertinent provisions of the Constitution, RA 7279 and RA 7160; second, the precipitate manner in which it was enacted was plain oppression masquerading as a pro-poor ordinance; third, the fact that petitioners small property was singled out for expropriation for the purpose of awarding it to no more than a few squatters indicated manifest partiality against petitioners, and fourth, the ordinance failed to show that there was a reasonable relation between the end sought and the means adopted. While the objective of the City of Cebu was to provide adequate housing to slum dwellers, the means it employed in pursuit of such objective fell short of what was legal, sensible and called for by the circumstances. SANTIAGO ESLABAN, JR., in his capacity as Project Manager of the National Irrigation Administration (NIA), vs. CLARITA VDA. DE ONORIO, G.R. No. 146062, June 28, 2001 Mendoza, J. DOCTRINE: 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. FACTS: Respondent Clarita Vda. de Enorio is the owner of a lot in Barangay M. Roxas, Sto. Nio, South Cotabato. On October 6, 1981, Santiago Eslaban, Jr., Project Manager of the NIA, approved the construction of the main irrigation canal of the NIA on the said lot, affecting a portion thereof. Respondents 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 COA. 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. The same year, petitioner offered respondent the sum of P35,000.00 by way of amicable settlement pursuant to Executive Order No. 1035, 18, which provides in part that Financial assistance may also be given to owners of lands acquired under C.A. 141, as amended, for the area or portion subject to the reservation under Section 12 thereof in such amounts as may be determined by the implementing agency/instrumentality concerned in consultation with the Commission on Audit and the assessors office concerned. Respondent demanded payment for the taking of her property, but petitioner refused to pay. Accordingly, respondent filed a complaint against petitioner on December 1990 before the RTC, praying that petitioner be ordered to pay the sum of P111,299.55 as compensation for the portion of her property used in the construction of the canal constructed by the NIA, litigation expenses, and the costs. PETITIONERS CONTENTION: Petitioner, through the Office of the Solicitor-General, filed an Answer, in which he admitted that NIA constructed an irrigation canal over the property of the plaintiff and that NIA paid a certain landowner whose property had been taken for irrigation purposes, but petitioner interposed the defense that: (1) the government had not consented to be sued; (2) the total area used by the NIA for its irrigation canal was only 2.27 hectares, not 24,600 square meters; and (3) respondent was not entitled to compensation for the taking of her property considering that she secured title over the property by virtue of a homestead patent under C.A. No. 141. TRIAL COURT: Decision is hereby rendered in favor of plaintiff (de Onorio) and against the defendant ordering the defendant, National Irrigation Administration, to pay to plaintiff the sum of P107,517.60 as just compensation for the questioned area of 24,660 square meters of land owned by plaintiff and taken by said defendant NIA which used it for its main canal plus costs. CA: Affirmed the RTC decision. ISSUE: Whether 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: 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.Nevertheless, as noted in Ansaldo v. Tantuico, Jr., there are instances where the expropriating agency takes over the property prior to the expropriation suit, in which case just compensation shall be determined as of the time of taking, not as of the time of filing of the action of eminent domain. It is now provided that SEC. 4. Order of expropriation. If the objections to and the defense against the right of the plaintiff to expropriate the property are overruled, or when no party appears to defend as required by this Rule, the court may issue an order of expropriation declaring that the plaintiff has a lawful right to take the property sought to be expropriated, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the taking of the property or the filing of the complaint, whichever came first. Thus, 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." Even before the new rule, however, it was already held in Commissioner of Public Highways v. Burgos that the price of the land at the time of taking, not its value after the passage of time,
represents the true value to be paid as just compensation. It was, therefore, error for the Court of Appeals to rule that the just compensation to be paid to respondent should be determined as of the filing of the complaint in 1990, and not the time of its taking by the NIA in 1981, because petitioner was allegedly remiss in its obligation to pay respondent, and it was respondent who filed the complaint. In the case of Burgos, it was also the property owner who brought the action for compensation against the government after 25 years since the taking of his property for the construction of a road. Indeed, the value of the land may be affected by many factors. It may be enhanced on account of its taking for public use, just as it may depreciate. As observed in Republic v. Lara: [W]here property is taken ahead of the filing of the condemnation proceedings, the value thereof may be enhanced by the public purpose for which it is taken; the entry by the plaintiff upon the property may have depreciated its value thereby; or there may have been a natural increase in the value of the property from the time it is taken to the time the complaint is filed, due to general economic conditions. The owner of private property should be compensated only for what he actually loses; it is not intended that his compensation shall extend beyond his loss or injury. And what he loses is only the actual value of his property at the time it is taken. This is the only way that compensation to be paid can be truly just, i.e., "just" not only to the individual whose property is taken, "but to the public, which is to pay for it" . . . . In this case, the proper valuation for the property in question is P16,047.61 per hectare, the price level for 1982, based on the appraisal report submitted by the commission (composed of the provincial treasurer, assessor, and auditor of South Cotabato) constituted by the trial court to make an assessment of the expropriated land and fix the price thereof on a per hectare basis. REPUBLIC OF THE PHILIPPINES, represented by the Department of Agrarian Reform (DAR), and LAND BANK OF THE PHILIPPINES, vs. COURT OF APPEALS and ACIL CORPORATION, G.R. No. 122256 October 30, 1996 Mendoza, J.: FACTS: Private respondent Acil Corporation owned several hectares of land in Linoan, Montevista, Davao del Norte, which the government took pursuant to the CARL (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, or for a total of P439,105.39. It appears, however, that in the Statement of Agricultural Landholdings ("LISTASAKA") which private respondent had earlier filed with the 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, pointing out that nearby lands planted to the same crops were valued at the higher price of P24,717.40 per hectare. The matter was brought before the Provincial Agrarian Reform Adjudicator (PARAD) who sustained the initial valuation made by the LBP. Private respondent filed a Petition for Just Compensation in the RTC 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. MR denied, thus, private respondent therefore filed a petition for certiorari with the CA which set aside the order of dismissal by the RTC. Hence this petition, PETITIONERS CONTENTION: For 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. The fixing of just compensation for the taking of lands under R.A. No. 6657 is a "[matter] involving the implementation of agrarian reform" within the contemplation of the quasi- judicial powers of DAR (50). Petitioners also cite Rule II, 5 and Rule XIII, 1 of the DARAB Rules of Procedure in support of their contention that decisions of agrarian reform adjudicators may only be appealed to the DARAB. RESPONDENTS CONTENTION: Petition for just compensation under R.A. No. 6657 56-57 falls under the exclusive and original jurisdiction of the RTC .
ISSUE: What court has exclusive and original jurisdiction regarding petition for just compensation. HELD: RTC (Special Agrarian Courts). It is true that 50 grants the DAR primary jurisdiction to determine and adjudicate "agrarian reform matters" and exclusive original jurisdiction over "all matters involving the implementation of agrarian reform," except those falling under the exclusive jurisdiction of the Department of Agriculture and the Department of Environment and Natural Resources. It is also true, however that 57 provides: 57. Special Jurisdiction. The Special Agrarian Courts shall have original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners, and the prosecution of all criminal offenses under this Act. The Rules of Court shall apply to all proceedings before the Special Agrarian Courts, unless modified by this Act. The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days from submission of the case for decision. 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]." The provision of 50 must be construed in harmony with this provision by considering cases involving the determination of just compensation and criminal cases for violations of R.A. No. 6657 as excepted from the plenitude of power conferred on the DAR. Indeed, there is a reason for this distinction. The DAR is an administrative agency which cannot be granted jurisdiction over cases of eminent domain (for such are takings under R.A. No. 6657) and over criminal cases. Thus in EPZA v. Duly and Sumulong v. Guerrero we held that the valuation of property in eminent domain is essentially a judicial function which cannot be vested in administrative agencies, while in Scoty's Department Store v. Micaller we struck down a law granting the then Court of Industrial Relations jurisdiction to try criminal cases for violations of the Industrial Peace Act. Thus, 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. 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." 9 It would subvert this "original and exclusive" jurisdiction of the RTC for the DAR to vest original jurisdiction in compensation cases in administrative officials and make the RTC an appellate court for the review of administrative decisions. Consequently, although the new rules speak of directly appealing the decision of adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from 57 that the original and exclusive jurisdiction to determine such cases is in the RTCs. Any effort to transfer such jurisdiction to the adjudicators and to convert the original jurisdiction of the RTCs into appellate jurisdiction would be contrary to 57 and therefore would be void. What adjudicators are empowered to do is only to determine in a preliminary manner the reasonable compensation to be paid to landowners, leaving to the courts the ultimate power to decide this question. LAND BANK OF THE PHILIPPINES vs. COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., G.R. No. 118712 October 6, 1995 DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform, vs. COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT & DEVELOPMENT CORP., ET AL. G.R. No. 118745 October 6, 1995 Francisco, R., J.: Doctrine: Jjust compensation means not only the correct determination of the 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 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. FACTS: Private respondents are landowners whose landholdings were acquired by the DAR and subjected to transfer schemes to qualified beneficiaries under the Comprehensive Agrarian Reform Law (CARL, Republic Act No. 6657). On 4 September 1992, TCTS of respondent Pedro L. Yap were totally cancelled by the Registrar of Deeds of Leyte. TCTs were transferred in the names of farmer beneficiaries. There is a certification of Landbank that the sum of P735,337.77 and P719,869.54 have been earmarked. In November and December 1990, without notice to the respondent Heirs of Emiliano Santiago the Landbank required and the beneficiaries executed Actual tillers Deed of Undertaking to pay rentals to the LandBank for the use of their farmlots equivalent to at least 25% of the net harvest. On 24 October 1991 the DAR Regional Director issued an order directing the Landbank to pay the landowner directly or through the establishment of a trust fund in the amount of P135,482.12, that on 24 February 1992, the Landbank reserved in trust P135,482.12 in the name of Emiliano F. Santiago Respondent Agricultural Management and Development Corporation ( AMADCOR, for brevity) alleges with respect to its properties located in San Francisco, Quezon that the amount of compensation for the properties of AMADCOR in San Francisco was rendered, without notice to the landowner; and ordering the Landbank to pay or establish a trust account for said amount in the name of AMADCOR. Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the valuation and payment of compensation for their land pursuant to the provisions of RA 6657, Private respondents filed a Petition for Certiorari and Mandamus with prayer for preliminary mandatory injunction. PETITIONERS CONTENTION BEFORE THE CA: *Petitioner DAR maintained that Administrative Order No. 9 is a valid exercise of its rule-making power pursuant to Section 49 of RA 6657. Moreover, the DAR maintained that the issuance of the "Certificate of Deposit" by the Landbank was a substantial compliance with Section 16(e) of RA 6657. *Petitioner Landbank declared that the issuance of the Certificates of Deposits was in consonance with Circular Nos. 29, 29-A and 54 of the Land Registration Authority where the words "reserved/deposited" were also used. RESPONDENTS CONTENTION: Administrative Order No. 9, Series of 1990 was issued without jurisdiction and with grave abuse of discretion because it permits the opening of trust accounts by the Landbank, in lieu of depositing in cash or bonds in an accessible bank designated by the DAR, the compensation for the land before it is taken and the titles are cancelled as provided under Section 16(e) of RA 6657. Private respondents also assail the fact that the DAR and the Landbank merely "earmarked", "deposited in trust" or "reserved" the compensation in their names as landowners despite the clear mandate that before taking possession of the property, the compensation must be deposited in cash or in bonds. CA ruled in favor of respondent. PETITIONERS CONTENTION BEFORE THE SC: Petitioners submit that CA erred in (1) declaring as null and void DAR Administrative Order No. 9, Series of 1990, insofar as it provides for the opening of trust accounts in lieu of deposit in cash or in bonds, and
(2) in holding that private respondents are entitled as a matter of right to the immediate and provisional release of the amounts deposited in trust pending the final resolution of the cases it has filed for just compensation. ISSUE: 1. Whether the word "deposit" as used in Section 16(e) of RA 6657 referred merely to the act of depositing and in no way excluded the opening of a trust account as a form of deposit. NO 2. whether private respondents are entitled to withdraw the amounts deposited in trust in their behalf pending the final resolution of the cases involving the final valuation of their properties - NO Ruling: 1. No. Sec. 16. Procedure for Acquisition of Private Lands xxx xxx xxx (e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from the landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines . It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP bonds". Nowhere does it appear nor can it be inferred that the deposit can be made in any other form. If it were the intention to include a "trust account" among the valid modes of deposit, that should have been made express, or at least, qualifying words ought to have appeared from which it can be fairly deduced that a "trust account" is allowed. The conclusive effect of administrative construction is not absolute. Action of an administrative agency may be disturbed or set aside by the judicial department if there is an error of law, a grave abuse of power or lack of jurisdiction or grave abuse of discretion clearly conflicting with either the letter or the spirit of a legislative enactment. In this regard, it must be stressed that the function of promulgating rules and regulations may be legitimately exercised only for the purpose of carrying the provisions of the law into effect. The power of administrative agencies is thus confined to implementing the law or putting it into effect. Corollary to this is that administrative regulations cannot extend In the present suit, the DAR clearly overstepped the limits of its power to enact rules and regulations when it issued Administrative Circular No. 9. There is no basis in allowing the opening of a trust account in behalf of the landowner as compensation for his property because, as heretofore discussed, Section 16(e) of RA 6657 is very specific that the deposit must be made only in "cash" or in "LBP bonds". In the same vein, petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54 because these implementing regulations cannot outweigh the clear provision of the law. Respondent court therefore did not commit any error in striking down Administrative Circular No. 9 for being null and void. 2. No. The contention is premised on the alleged distinction between the deposit of compensation under Section 16(e) of RA 6657 and payment of final compensation as provided under Section 18 of the same law. According to petitioners, the right of the landowner to withdraw the amount deposited in his behalf pertains only to the final valuation as agreed upon by the landowner, the DAR and the LBP or that adjudged by the court. It has no reference to amount deposited in the trust account pursuant to Section 16(e) in case of rejection by the landowner because the latter amount is only provisional and intended merely to secure possession of the property pending final valuation. To further bolster the contention petitioners cite the following pronouncements in the case of " Association of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform". The ruling in the "Association" case merely recognized the extraordinary nature of the expropriation to be undertaken under RA 6657 thereby allowing a deviation from the traditional mode of payment of compensation and recognized payment other than in cash. It did not, however, dispense with the settled rule that there must be full payment of just compensation before the title to the expropriated property is transferred.
The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA 6657 and determination of just compensation under Section 18 is unacceptable. To withhold the right of the landowners to appropriate the amounts already deposited in their behalf as compensation for their properties simply because they rejected the DAR's valuation, and notwithstanding that they have already been deprived of the possession and use of such properties, is an oppressive exercise of eminent domain. The irresistible expropriation of private respondents' properties was painful enough for them. But petitioner DAR rubbed it in all the more by withholding that which rightfully belongs to private respondents in exchange for the taking, under an authority (the "Association" case) that is, however, misplaced. This is misery twice bestowed on private respondents, which the Court must rectify. NAPOCOR v. ANGAS G.R. Nos. 60225-26 May 8, 1992 Paras, J. FACTS: Petitioner National Power Corporation filed two complaints for eminent domain against private respondents (Angas was the judge, okie?) with the CFI of Lanao. The complaint which sought to expropriate certain specified lots in Lanao del Sur was for the purpose of the development of hydro-electric power and production of electricity as well as the erection of such subsidiary works and constructions as may be necessarily connected therewith. On June 15, 1979, a consolidated decision in Civil Cases Nos. 2248 and 2277 was rendered by the lower court, declaring and confirming that the lots mentioned and described in the complaints have entirely been lawfully condemned and expropriated by NAPOCOR, and ordering the latter to pay the private respondents certain sums of money as just compensation for their lands expropriated "with legal interest thereon... until fully paid." Petitioner did not appeal the aforesaid consolidated decision, which became final and executory. One of the private respondents (Sittie Sohra Batara) filed an ex-parte motion for the execution of the June 15, 1979 decision, praying that petitioner be directed to pay her the unpaid balance of P14,300.00 for the lands expropriated from her, including legal interest which she computed at 6% per annum. The said motion was granted by the lower court. Thereafter, the lower court directed the petitioner to deposit with its Clerk of Court the sums of money as adjudged in the joint decision dated June 15, 1979. Petitioner complied with said order and deposited the sums of money with interest computed at 6% per annum. On February 10, 1981, one of the private respondents (Pangonatan Cosna Tagol), through counsel, filed with the trial court an ex-parte motion praying, for the first time, that the legal interest on the just compensation awarded to her by the court be computed at 12% per annum as allegedly "authorized under and by virtue of Circular No. 416 of the Central Bank issued pursuant to Presidential Decree No. 116 and in a decision of the Supreme Court that legal interest allowed in the judgment of the courts, in the absence of express contract, shall be computed at 12% per annum." The lower court granted the said motion allowing 12% interest per annum. Subsequently, the other private respondents filed motions also praying that the legal interest on the just compensation awarded to them be computed at 12% per annum, on the basis of which the lower court issued on March 10, 1981 and August 28, 1981 orders bearing similar import. ISSUE: Whether the legal interest on the just compensation awarded to the private respondents should be computed at 12% per annum. HELD: NO. It is clear from the foregoing provision that the Central Bank circular applies only to loan or forbearance of money, goods or credits. This has already been settled in several cases decided by this Court. Private respondents, however, take exception to the inclusion of the term "judgments" in the said circular, claiming that such term refers to any judgment directing the payment of legal interest, which term includes the questioned judgment of the lower court in the case at bar. The term "judgments" as used in Section 1 of the Usury Law, as well as in Central Bank Circular No. 416, should be interpreted to mean only judgments involving loan or forbearance of money, goods or credits, following the principle of ejusdem generis. Any other kind of monetary judgment which has nothing to do with, nor involving loans or forbearance of any money, goods or credits does not fall within the coverage of the said law. Obviously, Art. 2209 of the Civil Code, and not Central Bank Circular No. 416, is the law applicable to the case at bar. The Central Bank circular applies only to loan or forbearance of money, goods or credits and to judgments involving such loan or forbearance of money, goods or credits. This is evident not only from said circular but
also from Presidential Decree No. 116, which amended Act No. 2655, otherwise known as the Usury Law. On the other hand, Art. 2209 of the Civil Code applies to transactions requiring the payment of indemnities as damages, in connection with any delay in the performance of the obligation arising therefrom other than those covering loan or forbearance of money, goods or credits. In the case at bar, the transaction involved is clearly not a loan or forbearance of money, goods or credits but expropriation of certain parcels of land for a public purpose, the payment of which is without stipulation regarding interest, and the interest adjudged by the trial court is in the nature of indemnity for damages. The legal interest required to be paid on the amount of just compensation for the properties expropriated is manifestly in the form of indemnity for damages for the delay in the payment thereof. Therefore, since the kind of interest involved in the joint judgment of the lower court sought to be enforced in this case is interest by way of damages, and not by way of earnings from loans, etc. Art. 2209 of the Civil Code shall apply. As for private respondents' argument that Central Bank Circular No. 416 impliedly repealed or modified Art. 2209 of the Civil Code, suffice it to state that repeals or even amendments by implication are not favored if two laws can be fairly reconciled. The Courts are slow to hold that one statute has repealed another by implication, and they will not make such an adjudication if they can refrain from doing so, or if they can arrive at another result by any construction which is just and reasonable. Besides, the courts will not enlarge the meaning of one act in order to decide that it repeals another by implication, nor will they adopt an interpretation leading to an adjudication of repeal by implication unless it is inevitable and a clear and explicit reason therefor can be adduced. In this case, Central Bank Circular No. 416 and Art. 2209 of the Civil Code contemplate different situations and apply to different transactions. In transactions involving loan or forbearance of money, goods or credits, as well as judgments relating to such loan or forbearance of money, goods or credits, the Central Bank circular applies. It is only in such transactions or judgments where the Presidential Decree allowed the Monetary Board to dip its fingers into. On the other hand, in cases requiring the payment of indemnities as damages, in connection with any delay in the performance of an obligation other than those involving loan or forbearance of money, goods or credits, Art. 2209 of the Civil Code applies. For the Court, this is the most fair, reasonable, and logical interpretation of the two laws. We do not see any conflict between Central Bank Circular No. 416 and Art. 2209 of the Civil Code or any reason to hold that the former has repealed the latter by implication. MACTAN CEBU INTERNATIONAL AIRPORT AUTHORITY, vs. HON. FERDINAND J. MARCOS, in his capacity as the Presiding Judge of the Regional Trial Court, Branch 20, Cebu City, THE CITY OF CEBU, represented by its Mayor HON. TOMAS R. OSMEA, and EUSTAQUIO B. CESA, G.R. No. 120082 September 11, 1996 DOCTRINE: Taxation is a destructive power which interferes with the personal and property for the support of the government. Accordingly, tax statutes must be construed strictly against the government and liberally in favor of the taxpayer. But since taxes are what we pay for civilized society, or are the lifeblood of the nation, the law frowns against exemptions from taxation and statutes granting tax exemptions are thus construed strictissimi juris against the taxpayers and liberally in favor of the taxing authority. A claim of exemption from tax payment must be clearly shown and based on language in the law too plain to be mistaken. Elsewise stated, taxation is the rule, exemption therefrom is the exception. Petitioner MCIAA has not sufficiently established that it is still tax exempt in view of the passage of the LGC of 1991. Facts: Petitioner MCIAA was created by virtue of Republic Act No. 6958, mandated to "principally undertake the economical, efficient and effective control, management and supervision of the Mactan International Airport in the Province of Cebu and the Lahug Airport in Cebu City, . . . and such other Airports as may be established in the Province of Cebu . Since the time of its creation, petitioner MCIAA enjoyed the privilege of exemption from payment of realty taxes in accordance with Section 14 of its Charter. On October 11, 1994, the Office of the Treasurer of the City of Cebu, demanded payment for realty taxes on several parcels of land belonging to the petitioner in the total amount of P2,229,078.79. Petitioner objected citing its excemption under its charter and additionally, under sec 133 of the Local Government Code, arguing that it is an instrumentality of the government performing governmental functions. Respondent refused insisting that petitioner is a GOCC whose tax exemption privilege has been withdrawn under the LGC, Secs 193 and 234. Petitioner paid under protest and lodged a petition for declaratory relief which the trial court dismissed. Hence the present recourse.
PETITIONERS CONTENTION: Anent the first assigned error, the petitioner asserts that although it is a government-owned or controlled corporation it is mandated to perform functions in the same category as an instrumentality of Government. An instrumentality of Government is one created to perform governmental functions primarily to promote certain aspects of the economic life of the people. 6 Considering its task "not merely to efficiently operate and manage the Mactan-Cebu International Airport, but more importantly, to carry out the Government policies of promoting and developing the Central Visayas and Mindanao regions as centers of international trade and tourism, and accelerating the development of the means of transportation and communication in the country," 7 and that it is an attached agency of the Department of Transportation and Communication (DOTC), 8 the petitioner "may stand in [ sic] the same footing as an agency or instrumentality of the national government." Hence, its tax exemption privilege under Section 14 of its Charter "cannot be considered withdrawn with the passage of the LGC because Section 133 thereof specifically states that the taxing powers of local government units shall not extend to the levy of taxes of fees or charges of any kind on the national government its agencies and instrumentalities." It then concludes that the respondent Judge "cannot therefore correctly say that the questioned provisions of the Code do not contain any distinction between a governmental function as against one performing merely proprietary ones such that the exemption privilege withdrawn under the said Code would apply to all government corporations." For it is clear from Section 133, in relation to Section 234, of the LGC that the legislature meant to exclude instrumentalities of the national government from the taxing power of the local government units. Respondents contention: As a local government unit, it has the power to impose, levy, assess, and collect taxes within its jurisdiction. Such power is guaranteed by the Constitution and enhanced further by the LGC. While it may be true that under its Charter the petitioner was exempt from the payment of realty taxes, this exemption was withdrawn by Section 234 of the LGC. In response to the petitioner's claim that such exemption was not repealed because being an instrumentality of the National Government, Section 133 of the LGC prohibits local government units from imposing taxes, fees, or charges of any kind on it, respondent City of Cebu points out that the petitioner is likewise a government-owned corporation, and Section 234 thereof does not distinguish between government-owned corporation, and Section 234 thereof does not distinguish between government-owned corporation, and Section 234 thereof does not distinguish between government-owned or controlled corporations performing governmental and purely proprietary functions. Respondent city of Cebu urges this the Manila International Airport Authority is a governmental-owned corporation, and to reject the application of Basco because it was "promulgated . . . before the enactment and the singing into law of R.A. No. 7160," and was not, therefore, decided "in the light of the spirit and intention of the framers of the said law. Issue: Whether or not petitioner is still exempt from the taxing power of the LGUs despite the passage of the Local Government Code in 1991. Held: No. So potent indeed is the power that it was once opined that "the power to tax involves the power to destroy." Verily, taxation is a destructive power which interferes with the personal and property for the support of the government. Accordingly, tax statutes must be construed strictly against the government and liberally in favor of the taxpayer. 16 But since taxes are what we pay for civilized society, 17 or are the lifeblood of the nation, the law frowns against exemptions from taxation and statutes granting tax exemptions are thus construed strictissimi juris against the taxpayers and liberally in favor of the taxing authority. 18 A claim of exemption from tax payment must be clearly shown and based on language in the law too plain to be mistaken. 19 Elsewise stated, taxation is the rule, exemption therefrom is the exception. 20 However, if the grantee of the exemption is a political subdivision or instrumentality, the rigid rule of construction does not apply because the practical effect of the exemption is merely to reduce the amount of money that has to be handled by the government in the course of its operations. The power to tax is primarily vested in the Congress; however, in our jurisdiction, it may be exercised by local legislative bodies, no longer merely by virtue of a valid delegation as before, but pursuant to direct authority conferred by Section 5, Article X of the Constitution. Under the latter, the exercise of the power may be subject to such guidelines and limitations as the Congress may provide which, however, must be consistent with the basic policy of local autonomy. There can be no question that under Section 14 of R.A. No. 6958 the petitioner is exempt from the payment of realty taxes imposed by the National Government or any of its political subdivisions, agencies, and instrumentalities. Nevertheless, since taxation is the rule and exemption therefrom the exception, the exemption may thus be withdrawn at the pleasure of the taxing authority. The only exception to this rule is where the exemption was granted to private parties based on material consideration of a mutual nature, which then becomes contractual and is thus covered by the nonimpairment clause of the Constitution.
POLITICAL LAW REVIEW Case Digests follows:
Section 133 of the LGC prescribes the common limitations on the taxing powers of local government units as Sec. 133. Common Limitations on the Taxing Power of Local Government Units . Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: (o) TAXES, FEES, OR CHARGES OF ANY KIND ON THE NATIONAL GOVERNMENT, ITS AGENCIES AND INSTRUMENTALITIES, AND LOCAL GOVERNMENT UNITS . (emphasis supplied) Needless to say the last item (item o) is pertinent in this case. The "taxes, fees or charges" referred to are "of any kind", hence they include all of these, unless otherwise provided by the LGC. The term "taxes" is well understood so as to need no further elaboration, especially in the light of the above enumeration. The term "fees" means charges fixed by law or Ordinance for the regulation or inspection of business activity, while "charges" are pecuniary liabilities such as rents or fees against person or property. Among the "taxes" enumerated in the LGC is real property tax, which is governed by Section 232. Section 234 of LGC provides for the exemptions from payment of real property taxes and withdraws previous exemptions therefrom granted to natural and juridical persons, including government owned and controlled corporations, except as provided therein. It provides: Sec. 234. Exemptions from Real Property Tax. The following are exempted from payment of the real property tax: XXXXXX Except as provided herein, any exemptions from payment of real property tax previously granted to or presently enjoyed by, all persons whether natural or juridical, including all government owned or controlled corporations are hereby withdrawn upon the effectivity of his Code. xxxxxxx Section 193 of the LGC is the general provision on withdrawal of tax exemption privileges. It provides: Sec. 193. Withdrawal of Tax Exemption Privileges. Unless otherwise provided in this code, tax exemptions or incentives granted to or presently enjoyed by all persons, whether natural or juridical, including government-owned, or controlled corporations, except local water districts, cooperatives duly registered under R.A. 6938, non stock and non profit hospitals and educational constitutions, are hereby withdrawn upon the effectivity of this Code. On the other hand, the LGC authorizes local government units to grant tax exemption privileges. Thus, Section 192 thereof provides: Sec. 192. Authority to Grant Tax Exemption Privileges. Local government units may, through ordinances duly approved, grant tax exemptions, incentives or reliefs under such terms and conditions as they may deem necessary. Thus, reading together Section 133, 232 and 234 of the LGC, we conclude that as a general rule, as laid down in Section 133 the taxing powers of local government units cannot extend to the levy of inter alia, "taxes, fees, and charges of any kind of the National Government, its agencies and instrumentalties, and local government units"; however, pursuant to Section 232, provinces, cities, municipalities in the Metropolitan Manila Area may impose the real property tax except on, inter alia, "real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial used thereof has been granted, for consideration or otherwise, to a taxable person", as provided in item (a) of the first paragraph of Section 234. As to tax exemptions or incentives granted to or presently enjoyed by natural or juridical persons, including government-owned and controlled corporations, Section 193 of the LGC prescribes the general rule, viz., they are withdrawn upon the effectivity of the LGC, except upon the effectivity of the LGC, except those granted to local water districts, cooperatives duly registered under R.A. No. 6938, non stock and non-profit hospitals and educational institutions, and unless otherwise provided in the LGC. The latter proviso could refer to Section 234, which enumerates the properties exempt from real property tax. Since the last paragraph of Section 234 unequivocally withdrew, upon the effectivity of the LGC, exemptions from real property taxes granted to natural or juridical persons, including government-owned or controlled corporations, except as provided in the said section, and the petitioner is, undoubtedly, a government-owned corporation, it necessarily follows that its exemption from such tax granted it in Section 14 of its charter, R.A. No. 6958, has been withdrawn. Any claim to the contrary can only be justified if the petitioner can seek refuge under any of the
exceptions provided in Section 234, but not under Section 133, as it now asserts, since, as shown above, the said section is qualified by Section 232 and 234. I must show that the parcels of land in question, which are real property, are any one of those enumerated in Section 234, either by virtue of ownership, character, or use of the property. Most likely, it could only be the first, but not under any explicit provision of the said section, for one exists. In light of the petitioner's theory that it is an "instrumentality of the Government", it could only be within be first item of the first paragraph of the section by expanding the scope of the terms Republic of the Philippines" to embrace . . . . . . "instrumentalities" and "agencies" or expediency we quote: (a) real property owned by the Republic of the Philippines, or any of the Philippines, or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person. This view does not persuade us. In the first place, the petitioner's claim that it is an instrumentality of the Government is based on Section 133(o), which expressly mentions the word "instrumentalities"; and in the second place it fails to consider the fact that the legislature used the phrase "National Government, its agencies and instrumentalities" "in Section 133(o),but only the phrase "Republic of the Philippines or any of its political subdivision "in Section 234(a). The terms "Republic of the Philippines" and "National Government" are not interchangeable. The former is boarder and synonymous with "Government of the Republic of the Philippines" which the Administrative Code of the 1987 defines as the "corporate governmental entity though which the functions of the government are exercised through at the Philippines, including, saves as the contrary appears from the context, the various arms through which political authority is made effective in the Philippines, whether pertaining to the autonomous reason, the provincial, city, municipal or barangay subdivision or other forms of local government." These autonomous regions, provincial, city, municipal or barangay subdivisions" are the political subdivision. On the other hand, "National Government" refers "to the entire machinery of the central government, as distinguished from the different forms of local Governments." The National Government then is composed of the three great departments the executive, the legislative and the judicial. An "agency" of the Government refers to "any of the various units of the Government, including a department, bureau, office instrumentality, or government-owned or controlled corporation, or a local government or a distinct unit therein;" 31 while an "instrumentality" refers to "any agency of the National Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy; usually through a charter. This term includes regulatory agencies, chartered institutions and government-owned and controlled corporations". The crucial issues then to be addressed are: (a) whether the parcels of land in question belong to the Republic of the Philippines whose beneficial use has been granted to the petitioner, and (b) whether the petitioner is a "taxable person". Section 15 of the petitioner's Charter provides: Sec. 15. Transfer of Existing Facilities and Intangible Assets . All existing public airport facilities, runways, lands, buildings and other properties, movable or immovable, belonging to or presently administered by the airports, and all assets, powers, rights, interests and privileges relating on airport works, or air operations, including all equipment which are necessary for the operations of air navigation, acrodrome control towers, crash, fire, and rescue facilities are hereby transferred to the Authority: Provided however, that the operations control of all equipment necessary for the operation of radio aids to air navigation, airways communication, the approach control office, and the area control center shall be retained by the Air Transportation Office. No equipment, however, shall be removed by the Air Transportation Office from Mactan without the concurrence of the authority. The authority may assist in the maintenance of the Air Transportation Office equipment. The "airports" referred to are the "Lahug Air Port" in Cebu City and the "Mactan International AirPort in the Province of Cebu",which belonged to the Republic of the Philippines, then under the Air Transportation Office (ATO). It may be reasonable to assume that the term "lands" refer to "lands" in Cebu City then administered by the Lahug Air Port and includes the parcels of land the respondent City of Cebu seeks to levy on for real property taxes. This section involves a "transfer" of the "lands" among other things, to the petitioner and not just the transfer of the beneficial use thereof, with the ownership being retained by the Republic of the Philippines.
This "transfer" is actually an absolute conveyance of the ownership thereof because the petitioner's authorized capital stock consists of, inter alia "the value of such real estate owned and/or administered by the airports." 38 Hence, the petitioner is now the owner of the land in question and the exception in Section 234(c) of the LGC is inapplicable. Moreover, the petitioner cannot claim that it was never a "taxable person" under its Charter. It was only exempted from the payment of real property taxes . The grant of the privilege only in respect of this tax is conclusive proof of the legislative intent to make it a taxable person subject to all taxes, except real property tax. Finally, even if the petitioner was originally not a taxable person for purposes of real property tax, in light of the forgoing disquisitions, it had already become even if it be conceded to be an "agency" or "instrumentality" of the Government, a taxable person for such purpose in view of the withdrawal in the last paragraph of Section 234 of exemptions from the payment of real property taxes, which, as earlier adverted to, applies to the petitioner

POLI DIGEST - Fundamental Powers of The State

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POLITICAL LAW REVIEW Case Digests

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V. Fundamental Powers of the State

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