G.R. No. 160384.

April 29, 2005

7. That, to protect their rights and interest, plaintiffs were constrained to engage the services
of a lawyer.3

CESAR T. HILARIO, for himself and as Attorney-in-Fact of IBARRA, NESTOR, LINA and
PRESCILLA, all surnamed HILARIO, Petitioners, vs.ALLAN T. SALVADOR, Respondents.
HEIRS OF SALUSTIANO SALVADOR, namely, REGIDOR M. SALVADOR and VIRGINIA
SALVADOR-LIM, respondents-intervenors.
DECISION
CALLEJO, SR., J.:
This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court of the
Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. 63737 as well as its Resolution 2
denying the motion for the reconsideration of the said decision.
The Antecedents
On September 3, 1996, petitioners Cesar, Ibarra, Nestor, Lina and Prescilla, all surnamed
Hilario, filed a complaint with the Regional Trial Court (RTC) of Romblon, Romblon, Branch
71, against private respondent Allan T. Salvador. They alleged therein, inter alia, as follows:

The petitioners prayed that, after due proceedings, judgment be rendered in their favor,
thus:
WHEREFORE, it is prayed of this Honorable Court that after due process (sic), an order be
issued for the defendant to vacate and peacefully turn over to the plaintiffs the occupied
property and that defendant be made to pay plaintiffs:
a. actual damages, as follows:
a.1. transportation expenses in connection with the projected settlement of the case
amounting to P1,500.00 and for the subsequent attendance to the hearing of this case at
P1,500.00 each schedule;
a.2. attorneys fees in the amount of P20,000.00 and P500.00 for every court appearance;
b. moral and exemplary damages in such amount incumbent upon the Honorable Court to
determine; and
c. such other relief and remedies just and equitable under the premises. 4

2. That, the plaintiffs are co-owners by inheritance from Concepcion Mazo Salvador of a
parcel of land designated as Cad. Lot No. 3113-part, located at Sawang, Romblon,
Romblon, which property was [adjudged] as the hereditary share of their father, Brigido M.
Hilario, Jr. when their father was still single, and which adjudication was known by the
plaintiffs[] fathers co-heirs;

The private respondent filed a motion to dismiss the complaint on the ground of lack of
jurisdiction over the nature of the action, citing Section 33 of Batas Pambansa (B.P.) Blg.
129, as amended by Section 3(3) of Republic Act (R.A.) No. 7691. 5 He averred that
(1) the complaint failed to state the assessed value of the land in dispute;

3. That, sometime in 1989, defendant constructed his dwelling unit of mixed materials on
the property of the plaintiffs father without the knowledge of the herein plaintiffs or their
predecessors-in-interest;
4. That, demands have been made of the defendant to vacate the premises but the latter
manifested that he have (sic) asked the prior consent of their grandmother, Concepcion
Mazo Salvador;
5. That, to reach a possible amicable settlement, the plaintiffs brought the matter to the
Lupon of Barangay Sawang, to no avail, evidenced by the CERTIFICATE TO FILE ACTION
hereto attached as ANNEX B;
6. That, the unjustified refusal of the defendant to vacate the property has caused the
plaintiffs to suffer shame, humiliation, wounded feelings, anxiety and sleepless nights;

(2) the complaint does not sufficiently identify and/or describe the parcel of land referred to
as the subject-matter of this action;
both of which are essential requisites for determining the jurisdiction of the Court where the
case is filed. In this case, however, the assessed value of the land in question is totally
absent in the allegations of the complaint and there is nothing in the relief prayed for which
can be picked-up for determining the Courts jurisdiction as provided by law.
In the face of this predicament, it can nevertheless be surmised by reading between the
lines, that the assessed value of the land in question cannot exceed P20,000.00 and, as
such, it falls within the jurisdiction of the Municipal Trial Court of Romblon and should have
been filed before said Court rather than before the RTC. 6

The petitioners opposed the motion. 7 They contended that the RTC had jurisdiction over the
action since the court can take judicial notice of the market value of the property in question,
which was P200.00 per square meter and considering that the property was 14,797 square
meters, more or less, the total value thereof is P3,500,000.00. Besides, according to the
petitioners, the motion to dismiss was premature and "the proper time to interpose it is when
the [petitioners] introduced evidence that the land is of such value."
On November 7, 1996, the RTC issued an Order 8 denying the motion to dismiss, holding
that the action was incapable of pecuniary estimation, and therefore, cognizable by the RTC
as provided in Section 19(1) of B.P. Blg. 129, as amended.
After the denial of the motion to dismiss, the private respondent filed his answer with
counterclaim.9 Traversing the material allegations of the complaint, he contended that the
petitioners had no cause of action against him since the property in dispute was the
conjugal property of his grandparents, the spouses Salustiano Salvador and Concepcion
Mazo-Salvador.
On April 8, 1997, Regidor and Virginia Salvador filed their Answer-in-Intervention 10 making
common cause with the private respondent. On her own motion, however, Virginia Salvador
was dropped as intervenor.11
During trial, the petitioners adduced in evidence Tax Declaration No. 8590-A showing that in
1991 the property had an assessed value of P5,950.00.12
On June 3, 1999, the trial court rendered judgment finding in favor of the petitioners. The
dispositive portion of the decision reads:

SO ORDERED.14
The CA declared that the action of the petitioners was one for the recovery of ownership
and possession of real property. Absent any allegation in the complaint of the assessed
value of the property, the Municipal Trial Court (MTC) had exclusive jurisdiction over the
action, conformably to Section 3315 of R.A. No. 7691.
The petitioners filed a motion for reconsideration of the said decision, which the appellate
court denied.16 Hence, they filed the instant petition, with the following assignment of errors:
I
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE REVERSIBLE ERROR IN
HOLDING THAT THE INSTANT CASE, ACCION REINVINDICATORIA, FALLS WITHIN
THE EXCLUSIVE ORIGINAL JURISDICTION OF THE MUNICIPAL TRIAL COURT OF
ROMBLON, AND NOT WITH THE REGIONAL TRIAL COURT OF ROMBLON.
II
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS REVERSIBLE ERROR
IN ORDERING THE REFILING OF THE CASE IN THE [PROPER] COURT, INSTEAD OF
DECIDING THE CASE ON THE MERITS BASED ON THE COMPLETE RECORDS
ELEVATED BEFORE SAID APPELLATE COURT AND IN NOT AFFIRMING IN TOTO THE
DECISION OF THE TRIAL COURT.17
The Ruling of the Court

WHEREFORE, as prayed for, judgment is rendered:

Ordering the defendant to vacate and peacefully turn over to the plaintiffs the occupied
property; and
Dismissing defendants counterclaim.
SO ORDERED.13
Aggrieved, the private respondent and respondent-intervenor Regidor Salvador appealed
the decision to the CA, which rendered judgment on May 23, 2003 reversing the ruling of
the RTC and dismissing the complaint for want of jurisdiction. The fallo of the decision is as
follows:

The lone issue for our resolution is whether the RTC had jurisdiction over the action of the
petitioners, the plaintiffs in the RTC, against the private respondent, who was the defendant
therein.
The petitioners maintain that the RTC has jurisdiction since their action is an accion
reinvindicatoria, an action incapable of pecuniary estimation; thus, regardless of the
assessed value of the subject property, exclusive jurisdiction falls within the said court.
Besides, according to the petitioners, in their opposition to respondents motion to dismiss,
they made mention of the increase in the assessed value of the land in question in the
amount of P3.5 million. Moreover, the petitioners maintain that their action is also one for
damages exceeding P20,000.00, over which the RTC has exclusive jurisdiction under R.A.
No. 7691.
The petition has no merit.

IN VIEW OF THE FOREGOING, the appealed decision is REVERSED, and the case
DISMISSED, without prejudice to its refilling in the proper court.

It bears stressing that the nature of the action and which court has original and exclusive

jurisdiction over the same is determined by the material allegations of the complaint, the
type of relief prayed for by the plaintiff and the law in effect when the action is filed,
irrespective of whether the plaintiffs are entitled to some or all of the claims asserted
therein.18 The caption of the complaint is not determinative of the nature of the action. Nor
does the jurisdiction of the court depend upon the answer of the defendant or agreement of
the parties or to the waiver or acquiescence of the parties.
We do not agree with the contention of the petitioners and the ruling of the CA that the
action of the petitioners in the RTC was an accion reinvindicatoria. We find and so rule that
the action of the petitioners was an accion publiciana, or one for the recovery of possession
of the real property subject matter thereof. An accion reinvindicatoria is a suit which has for
its object the recovery of possession over the real property as owner. It involves recovery of
ownership and possession based on the said ownership. On the other hand, an accion
publiciana is one for the recovery of possession of the right to possess. It is also referred to
as an ejectment suit filed after the expiration of one year after the occurrence of the cause
of action or from the unlawful withholding of possession of the realty.19
The action of the petitioners filed on September 3, 1996 does not involve a claim of
ownership over the property. They allege that they are co-owners thereof, and as such,
entitled to its possession, and that the private respondent, who was the defendant,
constructed his house thereon in 1989 without their knowledge and refused to vacate the
property despite demands for him to do so. They prayed that the private respondent vacate
the property and restore possession thereof to them.
When the petitioners filed their complaint on September 3, 1996, R.A. No. 7691 was already
in effect. Section 33(3) of the law provides:
Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal
Circuit Trial Courts in Civil Cases. Metropolitan Trial Courts, Municipal Trial Courts and
Municipal Circuit Trial Courts shall exercise:

original jurisdiction:

(2) In all civil actions, which involve the title to, or possession of, real property, or any
interest therein, where the assessed value of the property involved exceeds Twenty
Thousand Pesos (P20,000.00) or, for civil actions in Metro Manila, where such value
exceeds Fifty Thousand Pesos (P50,000.00) except actions for forcible entry into and
unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts.
The jurisdiction of the court over an action involving title to or possession of land is now
determined by the assessed value of the said property and not the market value thereof.
The assessed value of real property is the fair market value of the real property multiplied by
the assessment level. It is synonymous to taxable value. 20 The fair market value is the price
at which a property may be sold by a seller, who is not compelled to sell, and bought by a
buyer, who is not compelled to buy.
Even a cursory reading of the complaint will show that it does not contain an allegation
stating the assessed value of the property subject of the complaint. 21 The court cannot take
judicial notice of the assessed or market value of lands. 22 Absent any allegation in the
complaint of the assessed value of the property, it cannot thus be determined whether the
RTC or the MTC had original and exclusive jurisdiction over the petitioners action.
We note that during the trial, the petitioners adduced in evidence Tax Declaration No. 8590A, showing that the assessed value of the property in 1991 was P5,950.00. The petitioners,
however, did not bother to adduce in evidence the tax declaration containing the assessed
value of the property when they filed their complaint in 1996. Even assuming that the
assessed value of the property in 1991 was the same in 1995 or 1996, the MTC, and not
the RTC had jurisdiction over the action of the petitioners since the case involved title to or
possession of real property with an assessed value of less than P20,000.00.23

We quote with approval, in this connection, the CAs disquisition:

(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of,
real property, or any interest therein where the assessed value of the property or interest
therein does not exceed Twenty Thousand Pesos (P20,000.00) or, in civil actions in Metro
Manila, where such assessed value does not exceed Fifty Thousand Pesos ( P50,000.00)
exclusive of interest, damages of whatever kind, attorneys fees, litigation expenses and
costs: Provided, That in cases of land not declared for taxation purposes, the value of such
property shall be determined by the assessed value of the adjacent lots.
Section 19(2) of the law, likewise, provides that:
Sec. 19. Jurisdiction in civil cases. The Regional Trial Court shall exercise exclusive

The determining jurisdictional element for the accion reinvindicatoria is, as RA 7691
discloses, the assessed value of the property in question. For properties in the provinces,
the RTC has jurisdiction if the assessed value exceeds P20,000, and the MTC, if the value
is P20,000 or below. An assessed value can have reference only to the tax rolls in the
municipality where the property is located, and is contained in the tax declaration. In the
case at bench, the most recent tax declaration secured and presented by the plaintiffsappellees is Exhibit B. The loose remark made by them that the property was worth 3.5
million pesos, not to mention that there is absolutely no evidence for this, is irrelevant in the
light of the fact that there is an assessed value. It is the amount in the tax declaration that
should be consulted and no other kind of value, and as appearing in Exhibit B, this is
P5,950. The case, therefore, falls within the exclusive original jurisdiction of the Municipal

Trial Court of Romblon which has jurisdiction over the territory where the property is located,
and not the court a quo.24

WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court
of Appeals in CA-G.R. CV No. 63737 are AFFIRMED. Costs against the petitioners.

It is elementary that the tax declaration indicating the assessed value of the property enjoys
the presumption of regularity as it has been issued by the proper government agency. 25

SO ORDERED.

Unavailing also is the petitioners argumentation that since the complaint, likewise, seeks
the recovery of damages exceeding P20,000.00, then the RTC had original jurisdiction over
their actions. Section 33(3) of B.P. Blg. 129, as amended, quoted earlier, explicitly excludes
from the determination of the jurisdictional amount the demand for "interest, damages of
whatever kind, attorneys fees, litigation expenses, and costs." This Court issued
Administrative Circular No. 09-94 setting the guidelines in the implementation of R.A. No.
7691, and paragraph 2 thereof states that
2. The exclusion of the term "damages of whatever kind" in determining the jurisdictional
amount under Section 19(8) and Section 33(1) of B.P. Blg. 129, as amended by R.A. 7691,
applies to cases where the damages are merely incidental to or a consequence of the main
cause of action. However, in cases where the claim for damages is the main cause of
action, or one of the causes of action, the amount of such claim shall be considered in
determining the jurisdiction of the court.
Neither may the petitioners find comfort and solace in Section 19(8) of B.P. Blg. 129, as
amended, which states:
SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive original
jurisdiction:

(8) In all other cases in which the demand, exclusive of interest, damages of whatever kind,
attorney's fees, litigation expenses, and costs or the value of the property in controversy
exceeds One Hundred Thousand Pesos (P100,000.00) or, in such other cases in Metro
Manila, where the demand, exclusive of the above-mentioned items exceeds Two Hundred
Thousand Pesos (P200,000.00).
The said provision is applicable only to "all other cases" other than an action involving title
to, or possession of real property in which the assessed value is the controlling factor in
determining the courts jurisdiction. The said damages are merely incidental to, or a
consequence of, the main cause of action for recovery of possession of real property.26
Since the RTC had no jurisdiction over the action of the petitioners, all the proceedings
therein, including the decision of the RTC, are null and void. The complaint should perforce
be dismissed.27

DIGEST.
HILARIO vs. SALVADOR
G.R. No. 160384 . April 29, 2005, CALLEJO, SR. , J .
FACTS: Petitioners herein are co-owners of a parcel of land located in Romblon. In 1996,
they filed a complaint with the RTC of Romblon against herein, respondent, alleging that as
co-owners, they are entitled to possession of the lot, and that respondent constructed his
house thereon without their knowledge and refused to vacate the property despite demands
to do so. They prayed for the private respondent to vacate the property and restore
possession thereof to them. The complaint, however, failed to allege the assessed value of
the land. Nevertheless, petitioners were able to present during the trial the most recent tax
declaration, which shows that the assessed value of the property was Php 5,950.00.
The respondent filed a Motion to Dismiss on the ground of lack of jurisdiction
because of the failure to allege the value of the land. The motion was denied.
Respondent then filed an Answer, traversing the material allegations of the
complaint, contending that petitioners had no cause of action against him since the property
in dispute was the conjugal property of his grandparents, the spouses Salustiano Salvador
and Concepcion Mazo-Salvador.
The RTC ruled in favor of the petitioners. On appeal, the CA reversed the
decision, holding that the action was one for the recovery of ownership and possession of
real property, and that absent any allegation in the complaint of the assessed value of the
property, the MTC had exclusive jurisdiction over the action (citing Sec. 33 of R.A. No.
7691). The CA then ordered the refiling of the case in the proper court.
ISSUES: Whether the RTC has jurisdiction over the action
HELD: NO. Petitioner argues that the RTC has jurisdiction since their action is an accion
reivindicatoria, an action incapable of pecuniary estimation. Thus, regardless of the
assessed value of the subject property, exclusive jurisdiction falls within the said court. This
argument is without merit.
The jurisdiction of the court over an action involving title to or possession of land
is now determined by the assessed value of the said property and not the market value
thereof. [] In the case at bar, the complaint does not contain an allegation stating the
assessed value of the property subject of the complaint. The court cannot take judicial
notice of the assessed or market value of land. The Court noted that during the trial, the
petitioners adduced in evidence at ax de c l a r a t ion, showing that the assessed value
of the property in 1991 was Php5,950.00. The petitioners, however, did not bother to
adduce in evidence the tax declaration containing the assessed value of the property when
they filed their complaint in 1996. Even assuming that the assessed value of the property in
1991 was the same in 1995 or 1996, the MTC, and not the RTC had jurisdiction over the
action of the petitioners, since the case involved title to or possession of real property with
an assessed value of less than Php20,000.00. As the Court of Appeals had held:

The determining jurisdictional element for the accion reinvindicatoria [sic] is, as
RA 7691 discloses, the assessed value of the property in question.
For properties in the provinces, the RTC has jurisdiction if the
assessed value exceeds Php20,000.00, and the MTC, if the value is
Php20,000.00 or below. An assessed value can have reference only to the tax
rolls in the municipality where the property is located, and is contained in the tax
declaration. In the case at bench, the most recent tax declaration secured and
presented by the plaintiffs-appellees is Exhibit B. The loose remark made by
them that the property was worth 3.5 million pesos, not to mention that there is
absolutely no evidence for this, is irrelevant in the light of the fact that there is an
assessed value. It is the amount in the tax declaration that should be consulted
and no other kind of value, and as appearing in Exhibit B, this is Php5,950.00.
The case, therefore, falls within the exclusive original jurisdiction of the Municipal
Trial Court of Romblon which has jurisdiction over the territory where the property
is located, and not the court a quo. 24
In an obiter, the Court discussed the nature of an accion publiciana, thus:
The action of the petitioners was an accion publiciana, or one for the recovery of
possession of the real property subject matter thereof. It does
not involve a claim of ownership over the property. An accion reinvindicatoria is a suit which
has for its object the recovery of possession over the real property as owner. It involves
recovery of ownership and possession based on the said ownership. On the other hand,
an accion publiciana is one for the recovery of pos session of the right to possess. It is also
referred to as an ejectment suit filed after the expiration of one year after the occurrence of
the cause of action or from the unlawful withholding
of possession of the realty. []
The Supreme Court finally held that all proceedings before the RTC, including the RTC
decision, are null and void, since the RTC had no jurisdiction over the action of the
petitioners.
Criticism of the ponencia: The discussion about the distinction between an
accion reivindicatoria and an accion publiciana is inappropriate. The issue to be resolved by
the court is: which court has jurisdiction, the MTC or the RTC? It is immaterial whether the
case is one for accion reivindicatoria or accion publiciana; only one court will have exclusive
jurisdiction. I submit that what should have been discussed in the obiter is that if the claim of
co-ownership by the defendant is true, may a plaintiff co-owner then file an action in
ejectment against another co-owner?
Dr. Tolentino is of the opinion that a co-owner may bring such an action against another coowner who takes exclusive possession of and asset ownership in himself alone. The effect
of the action will be to obtain recognition of the co-ownership.
The defendant co-owner, however, cannot be excluded from possession because as coowner, he also has the right to possess.

possessors of the same lot; that on June 1, 1992, while they were temporarily absent from
the lot in question, defendant Cesar Sampayan, through strategy and stealth, entered the lot
and built a house thereon, to their exclusion; and that, despite their repeated demands for
Sampayan to vacate the lot and surrender the possession thereof to them, the latter failed
and refused to do so.
[G.R. No. 156360. January 14, 2005]

CESAR SAMPAYAN, petitioner, vs. The HONORABLE COURT OF APPEALS, CRISPULO

VASQUEZ and FLORENCIA VASQUEZ GILSANO, respondents.
DECISION
GARCIA, J.:

In this verified petition for review on certiorari under Rule 45 of the Rules of Court,
petitioner Cesar Sampayan seeks the annulment and setting aside of the following
issuances of the Court of Appeals in CA-G.R. SP No. 43557, to wit:
1. Decision dated May 16, 2002, denying his petition for review and affirming an earlier
decision of the Regional Trial Court at Agusan del Sur, Branch VII, which in turn reversed on
appeal a favorable judgment of the Municipal Circuit Trial Court (MCTC) of Bayugan and
Sibagat, Agusan del Sur in a forcible entry case thereat commenced against him by herein
private respondents, the brother-and-sister Crispulo Vasquez and Florencia VasquezGilsano; and

In his answer, defendant Sampayan denied the material allegations of the

complaint and averred that neither the plaintiffs nor their mother have ever been in
possession of Lot No. 1959 and that he does not even know plaintiffs identities or their
places of residence. He claimed that he did not enter the subject lot by stealth or strategy
because he asked and was given permission therefor by Maria Ybaez, the overseer of the
lots true owners, Mr. and Mrs. Anastacio Terrado who were then temporarily residing in
Cebu City for business purposes. In the same answer, Sampayan alleged that the plaintiffs
claim has long prescribed for the reason that the lot in dispute had been possessed and
declared for taxation purposes by the spouses Felicisimo Oriol and Concordia Balida-Oriol
in 1960, and that in 1978, the Oriol spouses sold one-half (1/2) of the lot to the spouses Mr.
and Mrs. Anastacio Terrado, while the other half, to the couple Manolito Occida and Juliana
Sambale-Occida in 1979. Both vendees, so Sampayan averred, have actually possessed
the respective portions purchased by them up to the present. He thus prayed for the
dismissal of the complaint.
In the ensuing proceedings following the joinder of issues, the plaintiffs, to prove
that they have been in actual possession of Lot No. 1959 when defendant Sampayan
effected his entry thereto, submitted in evidence the following documents:
1. Tax Declaration No. 3180 in the name of Cristita Quita;
2. Certificate of Death showing the date of death of Cristita Quita on January 11,
1984;

2. Resolution dated November 7, 2002, which denied his motion for reconsideration.

3. Certificate issued by Fermina R. Labonete, Land Management Officer-III of

CENRO X-3-E, DENR-X-3-9, Bayugan, Agusan del Sur showing that Lot 1959, PLS-225 is
covered by a Miscellaneous Sales Application of Cristita Quita;

From the pleadings and memoranda respectively filed by the parties, the Court
gathers the following factual antecedents:

4. Affidavit of one Emiliano G. Gatillo to the effect that he was the one who gave the
lot in question to Cristita Quita sometime in 1957 and that since then the latter had been
occupying the lot;

On July 8, 1992, in the MCTC of Bayugan and Sibagat, Agusan del Sur, the
siblings Crispulo Vasquez and Florencia Vasquez-Gilsano filed complaint for forcible entry
against Cesar Sampayan for allegedly having entered and occupied a parcel of land,
identified as Lot No. 1959, PLS-225, and built a house thereon without their knowledge,
consent or authority, the entry having been supposedly effected through strategy and
stealth.
In their complaint, the plaintiffs (now private respondents), substantially alleged that
their mother Cristita Quita was the owner and actual possessor of Lot No. 1959; that after
their mothers death on January 11, 1984, they became co-owners pro-indiviso and lawful

Plaintiffs also filed a Supplemental Position Paper dated July 13, 1994 for the
purpose of showing that Cristita Quita is one of the oppositors in Cadastral Case No. 149.
Together with said position paper, they submitted a copy of the Answer/Opposition earlier
filed in Cadastral Case No. 149. In said cadastral case, Cristita Quita was claiming Lot
1959, thus her name appeared in the list of oppositors therein.
5. The decision in the said Cadastral Case No. 149 showing that the then Court of
First Instance of Agusan del Sur declared Lot No. 1959 as one of the lots subject of the
same cadastral case.

For his part, defendant Sampayan, to prove the allegations in his answer, offered in
evidence the following:

MCTC judges findings and observations during the ocular inspection, about which the
herein private respondents took no exception whatsoever, are hereunder quoted, as follows:

1. Tax Declaration No. A-11698 in the name of Felicisimo Oriol, which cancels Tax
Declaration 8103;

Noted inside the land are the house of the defendant, Cesar Sampayan, of Peter Siscon,
which appears to be dilapidated, and part of the house of Macario Noynay which
encroached to the land in question. Planted on the land are five (5) coconut trees, fruit
bearing, three (3) not fruit bearing coconut trees, and three (3) star apple or caimito trees.
Defendant Sampayan admitted that he started occupying the land since 1992. It is admitted
by the parties during the ocular inspection that one-half (1/2) portion of the land was bought
by a certain Occida from certain Mr. and Mrs. Felicisimo Oriol.

2. Tax Declaration No. GRB-01-930 in the name of Felicisimo Oriol which cancels
Tax Declaration No. A-11698;
3. Deed of Absolute Sale of Portion of Land, dated April 30, 1979, executed by
Jesus Oriol for and in behalf of the spouses Felicisimo Oriol and Concordia Balida-Oriol,
conveying the one-half (1/2) portion of Lot No. 1959 to the couple Manolito Occida and
Juliana Sambale-Occida who possessed the one-half (1/2) portion and introduced
improvements thereon, such as coconut and caimito trees;
4. Deed of Relinquishment of Rights of Portion of Land, executed by the spouses
Oriol in favor of the same couple Manolito Occida and Juliana Sambale-Occida, to further
strengthen the transfer of possession and whatever possessory rights the Oriols had in the
lot in question;
5. Deed of Absolute Sale of Land executed by Concordia Balida-Oriol with the
conformity of Teodosio Mosquito (another claimant), to prove that the other half of Lot No.
1959 was sold in 1978 to Mr. and Mrs. Anastacio Terrado whose overseer allowed
Sampayan to enter and occupy the premises;
6. Protest filed with the CENRO, Agusan del Sur by the vendee Juliana SambaleOccida against the Miscellaneous Sales Application of Cristita Quita;
7. Affidavit of Dionesia Noynay attesting to the fact that she is residing in Lot No.
1957, a lot adjacent to the lot in question, since 1960 up to the present. In the same
affidavit, Dionisia claimed that neither Cristita Quita, much less the plaintiffs, had ever
possessed Lot No. 1959. She claimed that it was the Occida couple who possessed said lot
and introduced improvements thereon; and
8. Affidavit of Juliana Occida and Maria Ybaez to show the impossibility of plaintiffs
possession of the same lot.
Meanwhile, on March 21, 1996, while the case was pending with the MCTC, the
presiding judge thereof personally conducted an ocular inspection of the contested lot in the
presence of the parties and/or their counsels. Among those found in the area during the
inspection are: the house of defendant Sampayan; the dilapidated house of a certain Peter
Siscon; and a portion of the house of Macario Noynay, husband of Dionisia Noynay, one of
Sampayans witnesses.
Based on his ocular findings, the judge concluded that the improvements he saw in
the premises could never have been introduced by the plaintiffs nor by their mother Cristita
Quita but by the vendees of the same lot. Reproduced by petitioner Jose Sampayan in the
instant petition as well as in the Memorandum he subsequently filed with this Court, the

The findings in the ocular inspection have confirmed the allegation of the defendant that his
predecessors-in-interest have introduced improvements by planting caimito trees, coconut
trees, and others on the land in question.
Nothing can be seen on the land that plaintiffs had once upon a time been in possession of
the land. The allegation that Cristita Quita, the predecessor-in-interest of the plaintiffs had
been in possession of the said property since 1957, openly, exclusively, continuously,
adversely and in the concept of an owner is a naked claim, unsupported by any evidence.
Clearly, from the appearance of the improvements introduced by the predecessors-ininterest of the defendant, it is showed that they have been in possession of the land for
more than one (1) year. Hence, the action of the plaintiffs, if any, is accion publiciana or
plenaria de possession[1] (Emphasis supplied).
In time, the MCTC rendered judgment dismissing the compliant for lack of merit.
Therefrom, the plaintiffs appealed to the Regional Trial Court (RTC) at Agusan del
Sur, which appeal was raffled to Branch VII thereof. In a decision dated December 5, 1996,
said court reversed that of the MCTC, taking note of the fact that Cristita Quita was among
the oppositors in Cadastral Case No. 149 and that she filed a Miscellaneous Sales
Application over the lot. On the basis of such finding, the RTC concluded that it was Cristita
Quita, predecessor-in-interest of the herein private respondents, who was in actual prior
physical possession of Lot No. 1959.
Unable to accept the RTC judgment, Sampayan went to the Court of Appeals on a
petition for review, thereat docketed as CA-G.R. SP No. 43557.
As stated at the threshold hereof, the Court of Appeals, in the herein assailed
Decision dated May 16, 2002,[2] denied Sampayans petition. His motion for reconsideration
having been similarly denied by that court in its Resolution of November 7, 2002,[3]
Sampayan is now with us via the present recourse, it being his submissions I.

THAT THE COURT OF APPEALS ERRED IN RULING THAT THE MUNICIPAL CIRCUIT
TRIAL COURT OF BAYUGAN, AGUSAN DEL SUR, HAS JURISDICTION OVER THE
CASE, CONSIDERING THAT DURING THE HEARING THEREOF IT WAS FOUND OUT
BY THE SAID MUNICIPAL COURT THAT ACCION PUBLICIANA OR PLENARIA DE
POSESION, AND NOT FORCIBLE ENTRY, IS THE PROPER ACTION;
II.
THAT THE CONCLUSION OF THE HONORABLE COURT OF APPEALS THAT PRIVATE
RESPONDENTS HAVE BEEN IN PRIOR ACTUAL POSSESSION IS CONTRADICTED BY
EVIDENCE ON RECORD, AND CONSIDERING THAT THE POSSESSION TO BE
LEGALLY SUFFICIENT, CONSIST (SIC) IN THE EXERCISE OF DOMINIUM OVER IT,
SUCH AS FENCING, CULTIVATING OR OTHER UNMISTAKABLE ACTS OF EXCLUSIVE
CUSTODY AND CONTROL FACTS WHICH THE PRIVATE RESPONDENTS HAVE NEVER
DONE - IS CONTRARY TO LAW.[4]
In the main, petitioner maintains that based on the pieces of evidence on record, he
had sufficiently proven his prior physical possession of the subject lot. Upon this premise,
he argues that private respondents complaint for forcible entry has no leg to stand on,
adding that the proper remedy available to the latter is accion publiciana or plenaria de
posesion which falls under the original jurisdiction of Regional Trial Courts and not of
Municipal Circuit Trial Courts.
As we see it, the arguments put forward by the petitioner crystallize to one pivotal
question: will the complaint for forcible entry in this case prosper? To resolve this, however,
we must first determine as to who between the herein parties was in prior actual physical
possession of the subject lot at the time the complaint was filed in the MCTC. For, as we
have said in Gaza vs. Lim[5],
xxx In an action for forcible entry, the plaintiff must prove that he was in prior possession of
the land or building and that he was deprived thereof by means of force, intimidation, threat,
strategy or stealth. xxx
We emphasize, absence of prior physical possession by the plaintiff in a forcible
entry case warrants the dismissal of his complaint.
Undoubtedly, the issue of prior physical possession is one of fact, and settled is the
rule that this Court is not a trier of facts and does not normally embark on a re-examination
of the evidence adduced by the parties during trial. Of course, the rule admits of exceptions.
So it is that in Insular Life Assurance Company, Ltd. vs. CA,[6] we wrote:
[i]t is a settled rule that in the exercise of the Supreme Court's power of review, the Court is
not a trier of facts and does not normally undertake the re-examination of the evidence
presented by the contending parties' during the trial of the case considering that the findings
of facts of the CA are conclusive and binding on the Court. However, the Court had
recognized several exceptions to this rule, to wit: (1) when the findings are grounded

entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly
mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the
judgment is based on a misapprehension of facts; (5) when the findings of facts are
conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of
the case, or its findings are contrary to the admissions of both the appellant and the
appellee; (7) when the findings are contrary to the trial court; (8) when the findings are
conclusions without citation of specific evidence on which they are based; (9) when the facts
set forth in the petition as well as in the petitioner's main and reply briefs are not disputed by
the respondent; (10) when the findings of fact are premised on the supposed absence of
evidence and contradicted by the evidence on record; and (11) when the Court of Appeals
manifestly overlooked certain relevant facts not disputed by the parties, which, if properly
considered, would justify a different conclusion.
To our mind, exceptions (5) and (11) are present in this case.
However, before delving into the question of who as between the petitioner and
private respondents had prior physical possession of the subject lot, we deem it best to first
resolve the issue of whether or not the MCTC had jurisdiction over the complaint filed in this
case, an issue also raised by the petitioner.
Relying on the conclusion of the MCTC that private respondents proper remedy is
accion publiciana or plenaria de posesion, and not forcible entry, petitioner would deny the
MCTCs jurisdiction over the case.
Petitioner is in error.
In Sarmiento vs. CA[7], we held:
[t]o give the court jurisdiction to effect the ejectment of an occupant or deforciant on the
land, it is necessary that the complaint should embody such a statement of facts as brings
the party clearly within the class of cases for which the statutes provide a remedy, as these
proceedings are summary in nature. The complaint must show enough on its face to give
the court jurisdiction without resort to parol testimony. The jurisdictional facts must appear
on the face of the complaint. x x x
Clear it is from the above that for the MCTC to acquire jurisdiction over a forcible
entry case, it is enough that the complaint avers the jurisdictional facts, i.e. that the plaintiff
had prior physical possession and that he was deprived thereof by the defendant through
force, intimidation, threats, strategy and stealth.[8] The complaint in this case makes such
an averment. Hence, the irrelevant circumstance that the evidence adduced during the
hearing rendered improper an action for forcible entry is of no moment and cannot deprive
the MCTC of its jurisdiction over the case. The MCTC continues to have that jurisdiction.
We shall now address the more decisive question of prior physical possession.
After a careful evaluation of the evidence at hand, we find for the petitioner.

To begin with, we are at once confronted by the uncontested findings of the MCTC
judge himself during his ocular inspection of the premises in dispute that what he saw
thereat confirmed the allegations of the defendant [now petitioner Sampayan] that his
predecessors-in-interest have introduced improvements by planting caimito trees, coconut
trees, and others on the land in question, adding that [N]othing can be seen on the land that
plaintiff had once upon a time been in possession of the land, and categorically stating that
[T]he allegation that Cristita Quita, the predecessor-in-interest of the plaintiffs had been in
possession of the said property since 1957, openly, exclusively, continuously, adversely and
in the concept of an owner is a naked claim, unsupported by any evidence.
Then, too, there is the sworn affidavit of Dionesia Noynay to the effect that she had
been residing since 1960 onward on Lot No. 1957, the lot adjacent to Lot No. 1959, and that
neither the private respondents nor their mother had ever possessed Lot No. 1959. Coming
as it does from an immediate neighbor, Dionesias statement commands great weight and
respect. Incidentally, the MCTC judge himself found during the ocular inspection that a
portion of the house of Macario Noynay, husband of Dionesia, protruded on Lot No. 1959.
We note that in the herein assailed decision, the Court of Appeals attached much
significance to the fact that private respondents mother Cristita Quita was an oppositor in
Cadastral Case No. 149. We rule and so hold that the mothers being an oppositor in said
cadastral case does not, by itself, establish prior physical possession because not all
oppositors in cadastral cases are actual possessors of the lots or lands subject thereof.
WHEREFORE, the instant petition is hereby GRANTED and the Decision and
Resolution, respectively dated May 16, 2002 and November 7, 2002, of the Court of
Appeals REVERSED and SET ASIDE.
SO ORDERED.
DIGEST
SAMPAYAN vs . COURT OF APPEALS
G.R. No. 156360. January 14, 2005 GARCIA , J .
FACTS: On July 8, 1992, in the MCTC of Bayugan and Sibagat, Agusan del Sur, the
siblings Crispulo Vasquez and Florencia Vasquez-Gilsano filed complaint for forcible entry
against Cesar Sampayan for allegedly having entered and occupied a parcel of land,
identified as Lot No. 1959, PLS-225, and built a house thereon without their knowledge,
consent or authority, the entry having been supposedly effected through strategy and
stealth. In their complaint, Crispulo and Florencia asserted that they were co-owners proindiviso of the said lot, their mother Cristita Quita being the ownerand actual possessor
thereof. Upon the latters death and while they were absent from the said lot, Cesar
Sampayan, through strategy and stealth, allegedly built a house on the lot, to their
exclusion. After repeated demands, Cesar Sampayan allegedly refused to vacate the said
lot. Thus, they filed an action for unlawful detainer.
In his defense, Cesar Sampayan asserted that his occupation of the lot was by
tolerance of the lots true owners, Mr. and Mrs. Terrado, who were then residing in Cebu.
The permission was given by the lots overseer, Maria Ybanez. Sampayan further asserted

that Crispulo and Valencias action had long prescribed, inasmuch as the said lot had
already been owned and possessed by the spouses Oriol since 1960, as evidenced by the
latters payment of taxes. The Oriols, in turn, sold half the land to the Terrados. Together,
they maintained possession of their respective portions.
Both the plaintiff siblings and defendant Sampayan submitted their respective
evidence consisting of affidavits and tax declarations. Meanwhile, the MCTC judge also
conducted an ocular inspection of the premises, where he found improvements. The
findings in the ocular inspection have confirmed the allegation of the defendant that his
predecessors-in-interest have introduced improvements by planting caimito trees, coconut
trees, and others on the land in question. The MCTC dismissed the complaint. It held that it
is clear that defendants have been in possession for more than one year and that the
appropriate remedy would have been accion publiciana or lenaria de possession. Upon
appeal to the RTC, it reversed the decision, relying on the involvement of Cristita Quita,
plaintiffs mother, in a cadastral case involving the lot in 1957.
Sampayan then appealed to the CA, which denied the same. Thus this petition
for certiorari.
ISSUE: Whether or not the complaint for forcible entry would prosper
HELD: YES. In Sarmiento vs. CA, the Court held:
[t]o give the court jurisdiction to effect the ejectment of an occupant or
deforciant on the land, it is necessary that the complaint should embody such a statement of
facts as brings the party clearly within the class of cases for which the statutes provide a
remedy, as these proceedings are summary in nature. The complaint must show enough on
its face to give the court jurisdiction without resort to parol testimony. The jurisdictional facts
must appear on the face of the complaint. . . .
It is clear it is from the above that for the MCTC to acquire jurisdiction over a
forcible entry case, it is enough that the complaint avers the jurisdictional facts, i.e. that the
plaintiff had prior physical possession and that he was deprived thereof by the defendant
through force, intimidation, threats, strategy and stealth. The complaint in this case makes
such an averment. Hence, the irrelevant circumstance that the evidence adduced during the
hearing rendered improper an action for forcible entry is of no moment and cannot deprive
the MCTC of its jurisdiction over the case. The MCTC continues to have that jurisdiction.
ISSUE: Whether or not the petitioner had prior physical possession
HELD: YES. To begin with, the Court is at once confronted by the uncontested findings of
the MCTC judge himself during his ocular inspection of the premises in dispute that what he
saw thereat confirmed the allegations of the defendant [now petitioner Sampayan] that his
predecessors-in-interest have introduced improvements by planting caimito trees, coconut
trees, and others on the land in question, adding that [N]othing can be seen on the land
that plaintiff had once upon a time been in possession of the land, and categorically stating
that [T]he allegation that Cristita Quita, the predecessor-in-interest of the plaintiffs had been
in possession of the said property since 1957, openly, exclusively, continuously, adversely
and in the concept of an owner is a naked claim, unsupported by any evidence.
x x x
The Court noted that in the assailed decision herein, the Court of Appeals
attached much significance to the fact that private respondents mother, Cristita Quita, was
an oppositor in Cadastral Case No. 149. The Court ruled and held that the mothers being

an oppositor in said cadastral case does not, by itself, establish prior physical possession
because not all oppositors in cadastral cases are actual possessors of the lots or lands
subject thereof.

In their answer, respondents sought a dismissal of this case on the ground that the court
has no jurisdiction over it since there is no lessor-lessee relationship between the parties.
Respondents denied they were occupying petitioner's property by mere tolerance, claiming
they own the contested portion and have been occupying the same long before petitioner
acquired his lots in 1985.
On July 31, 1997, the MTCC rendered its Decision in favor of petitioner, thus:

G.R. No. 137013

"WHEREFORE, judgment is rendered in favor of the plaintiff and against the defendants
ordering the latter, their successors-in-interest and other persons acting in their behalf to
vacate the portion of the subject properties and peacefully surrender possession thereof to
plaintiff as well as dismantle/remove the structures found thereon.

May 6, 2005

RUBEN SANTOS, petitioner, vs.SPOUSES TONY AYON and MERCY AYON, respondents.
DECISION

Defendants are further ordered to pay reasonable value for the use and occupation of the
encroached area in the amount of One Thousand Pesos (P1,000.00) a month beginning
September 1996 and the subsequent months thereafter until premises are vacated; to pay
attorney's fees of Ten Thousand Pesos (P10,000.00); and to pay the costs of suit.

SANDOVAL-GUTIERREZ, J.:
SO ORDERED."3
For our resolution is the petition for review on certiorari assailing the Decision1 of the Court
of Appeals dated October 5, 1998 in CA-G.R. SP No. 4735 and its Resolution 2 dated
December 11, 1998 denying the motion for reconsideration.
The petition alleges that on November 6, 1996, Ruben Santos, petitioner, filed with the
Municipal Trial Court in Cities (MTCC), Branch 2, Davao City a complaint for illegal detainer
against spouses Tony and Mercy Ayon, respondents, docketed as Civil Case No. 3506-B96.
In his complaint, petitioner averred that he is the registered owner of three lots situated at
Lanzona Subdivision, Matina, Davao City, covered by Transfer Certificates of Title (TCT)
Nos. 108174, 108175, and 108176. Respondent spouses are the registered owners of an
adjacent parcel of land covered by TCT No. T-247792. The previous occupant of this
property built a building which straddled both the lots of the herein parties. Respondents
have been using the building as a warehouse.
Petitioner further alleged in his complaint that in 1985, when he bought the three lots, he
informed respondents that the building occupies a portion of his land. However, he allowed
them to continue using the building. But in 1996, he needed the entire portion of his lot,
hence, he demanded that respondents demolish and remove the part of the building
encroaching his property and turn over to him their possession. But they refused. Instead,
they continued occupying the contested portion and even made improvements on the
building. The dispute was then referred to the barangay lupon, but the parties failed to reach
an amicable settlement. Accordingly, on March 27, 1996, a certification to file action was
issued.

On appeal, the Regional Trial Court (RTC), Branch 11, Davao City, in its Decision dated
February 12, 1998 in Civil Case No. 25, 654-97, affirmed in toto the MTCC judgment.4 The
RTC upheld the finding of the MTCC that respondents' occupation of the contested portion
was by mere tolerance. Hence, when petitioner needed the same, he has the right to eject
them through court action.
Respondents then elevated the case to the Court of Appeals through a petition for review. In
its Decision dated October 5, 1988 now being challenged by petitioner, the Court of Appeals
held that petitioner's proper remedy should have been an accion publiciana before the RTC,
not an action for unlawful detainer, thus:
"In this case, petitioners were already in possession of the premises in question at the time
private respondent bought three (3) lots at the Lanzona Subdivision in 1985, a portion of
which is occupied by a building being used by the former as a bodega. Apart from private
respondent's bare claim, no evidence was alluded to show that petitioners' possession was
tolerated by (his) predecessor-in-interest. The fact that respondent might have tolerated
petitioners' possession is not decisive. What matters for purposes of determining the proper
cause of action is the nature of petitioners' possession from its inception. And in this regard,
the Court notes that the complaint itself merely alleges that defendants-petitioners have
been 'occupying a portion of the above properties of the plaintiff for the past several years
by virtue of the tolerance of the plaintiff.' Nowhere is it alleged that his predecessor likewise
tolerated petitioners' possession of the premises. x x x.
Consequently, x x x, respondent should present his claim before the Regional Trial Court in

an accion publiciana and not before the Municipal Trial Court in a summary proceeding of
unlawful detainer.
WHEREFORE, the decision under review is hereby REVERSED and SET ASIDE.
Accordingly, the complaint for unlawful detainer is ordered DISMISSED." 5
Petitioner filed a motion for reconsideration, but was denied by the Appellate Court in its
Resolution dated December 11, 1998.
Hence, the instant petition for review on certiorari ascribing to the Court of Appeals the
following errors:
"I
THE HONORABLE COURT OF APPEALS MISAPPLIED THE LAW IN DISMISSING THE
INSTANT CASE ON THE GROUND THAT PETITIONER SHOULD PRESENT HIS CLAIM
BEFORE THE REGIONAL TRIAL COURT IN AN ACCION PUBLICIANA.
II
THE FINDINGS OF THE HONORABLE COURT OF APPEALS IS NOT IN CONSONANCE
WITH EXISTING LAWS AND JURISPRUDENCE."
The sole issue here is whether the Court of Appeals committed a reversible error of law in
holding that petitioner's complaint is within the competence of the RTC, not the MTCC.
Petitioner contends that it is not necessary that he has prior physical possession of the
questioned property before he could file an action for unlawful detainer. He stresses that he
tolerated respondents' occupancy of the portion in controversy until he needed it. After his
demand that they vacate, their continued possession became illegal. Hence, his action for
unlawful detainer before the MTCC is proper.

forcible entry or unlawful detainer.7 All actions for forcible entry or unlawful detainer shall be
filed with the proper Metropolitan Trial Courts, the Municipal Trial Courts and the Municipal
Circuit Trial Courts, which actions shall include not only the plea for restoration of
possession but also all claims for damages and costs arising therefrom. 8 The said courts are
not divested of jurisdiction over such cases even if the defendants therein raises the
question of ownership over the litigated property in his pleadings and the question of
possession cannot be resolved without deciding the issue of ownership. 9
Section 1, Rule 70 on forcible entry and unlawful detainer of the 1997 Rules of Civil
Procedure, as amended, reads:
"Section 1. Who may institute proceedings, and when. Subject to the provisions of the
next succeeding section, a person deprived of the possession of any land or building by
force, intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person
against whom the possession of any land or building is unlawfully withheld after the
expiration or termination of the right to hold possession, by virtue of any contract, express or
implied, or the legal representatives or assigns of any such lessor, vendor, vendee or other
person may, at any time within one (1) year after such unlawful deprivation or withholding of
possession, bring an action in the proper Municipal Trial Court against the person or
persons unlawfully withholding or depriving of possession, or any person or persons
claiming under them, for the restitution of such possession, together with damages and
costs."
Under the above provision, there are two entirely distinct and different causes of action, to
wit: (1) a case for forcible entry, which is an action to recover possession of a property from
the defendant whose occupation thereof is illegal from the beginning as he acquired
possession by force, intimidation, threat, strategy or stealth; and (2) a case for unlawful
detainer, which is an action for recovery of possession from defendant whose possession of
the property was inceptively lawful by virtue of a contract (express or implied) with the
plaintiff, but became illegal when he continued his possession despite the termination of his
right thereunder.10
Petitioner's complaint for unlawful detainer in Civil Case No. 3506-B-96 is properly within the
competence of the MTCC. His pertinent allegations in the complaint read:

Respondents, in their comment, insisted that they have been in possession of the disputed
property even before petitioner purchased the same on April 10, 1985. Hence, he cannot
claim that they were occupying the property by mere tolerance because they were ahead in
time in physical possession.

"4. That defendants (spouses) have constructed an extension of their residential house as
well as other structures and have been occupying a portion of the above PROPERTIES of
the plaintiff for the past several years by virtue of the tolerance of the plaintiff since at the
time he has no need of the property;

We sustain the petition.

5. That plaintiff needed the property in the early part of 1996 and made demands to the
defendants to vacate and turn over the premises as well as the removal (of) their structures
found inside the PROPERTIES of plaintiff; that without any justifiable reasons, defendants
refused to vacate the portion of the PROPERTIES occupied by them to the damage and
prejudice of the plaintiff.

It is an elementary rule that the jurisdiction of a court over the subject matter is determined
by the allegations of the complaint and cannot be made to depend upon the defenses set up
in the answer or pleadings filed by the defendant. 6 This rule is no different in an action for

6. Hence, plaintiff referred the matter to the Office of the Barangay Captain of Matina
Crossing 74-A, Davao City for a possible settlement sometime in the latter part of February
1996. The barangay case reached the Pangkat but no settlement was had. Thereafter, a
'Certification To File Action' dated March 27, 1996 was issued x x x;
x x x."11 (underscoring ours)

The MTCC ruled in favor of petitioner and ordered the respondents to vacate and
surrender possession of the property. On appeal, the RTC affirmed in toto the MTCC
judgment, and upheld the finding that respondents occupation of the contested portion was
by mere tolerance. On petition for review however, the CA held that petitioners proper
remedy should have been an accion publiciana before the RTC and not anaction for
unlawful detainer, and thus dismissing the complaint.
ISSUE: Whether the MTCC properly exercised jurisdiction over the complaint.

Verily, petitioner's allegations in his complaint clearly make a case for an unlawful detainer.
We find no error in the MTCC assuming jurisdiction over petitioner's complaint. A complaint
for unlawful detainer is sufficient if it alleges that the withholding of the possession or the
refusal to vacate is unlawful without necessarily employing the terminology of the law. 12
Here, there is an allegation in petitioner's complaint that respondents occupancy on the
portion of his property is by virtue of his tolerance. Petitioner's cause of action for unlawful
detainer springs from respondents' failure to vacate the questioned premises upon his
demand sometime in 1996. Within one (1) year therefrom, or on November 6, 1996,
petitioner filed the instant complaint.
It bears stressing that possession by tolerance is lawful, but such possession becomes
unlawful when the possessor by tolerance refuses to vacate upon demand made by the
owner. Our ruling in Roxas vs. Court of Appeals13 is applicable in this case: "A person who
occupies the land of another at the latter's tolerance or permission, without any contract
between them, is necessarily bound by an implied promise that he will vacate upon
demand, failing which, a summary action for ejectment is the proper remedy against him."
WHEREFORE, the petition is GRANTED. The assailed Decision and Resolution of the
Court of Appeals in CA-G.R. SP No. 47435 are hereby REVERSED and SET ASIDE. The
Decision dated February 12, 1998 of the Regional Trial Court, Branch 11, Davao City in Civil
Case No. 25, 654-97, affirming the Decision dated July 31, 1997 of the Municipal Trial Court
in Cities, Branch 2, Davao City in Civil Case No. 3506-B-96, is hereby REINSTATED.
SO ORDERED.
DIGEST
SANTOS v s . AYON
G.R. No. 137013, Ma y 6, 2005, SANDOVAL -GUTIERREZ, J .
FACTS: In 1996, the petitioner, Santos, filed with the Municipal Trial Court in Cities (MTCC)
in Davao City a complaint for illegal detainer against the respondents, spouses Ayon. In his
complaint, he averred that a building used by the respondents as a warehouse, encroached
on a portion of his land. As early as 1985, he had allegedly already informed respondents
that the said building occupies a portion of his land, but allowed them to continue using the
building. In 1996, needing the entire portion of his lot, he demanded that respondents
remove the part of the building encroaching
on his property, but respondents refused and continued to occupy the contested portion.

HELD: YES. All actions for forcible entry or unlawful detainer shall be filed with the proper
Metropolitan Trial Courts, the Municipal Trial Courts and the Municipal Circuit Trial Courts,
which actions shall include not only the plea for restoration of possession but also all claims
for damages and costs arising therefrom. The said courts are not divested of jurisdiction
over such cases even if the defendants therein raises the question of ownership over the
litigated property in his pleadings and the question of possession cannot be resolved
without deciding the issue of ownership.
The Court found no error in the MTCC assuming jurisdiction over petitioners
complaint. A complaint for unlawful detainer is sufficient if it alleges that the withholding of
the possession or the refusal to vacate is unlawful, without necessarily employing the
terminology of the law. Here, there is an allegation in petitioners complaint that
respondents occupancy on the portion of his property is by virtue of his tolerance.
Petitioners cause of action for unlawful detainer springs from respondents
failure to vacate the questioned premises upon his demand sometime in 1996.
It bears stressing that possession by tolerance is lawful, but such possession
becomes unlawful when the possessor by tolerance refuses to vacate upon demand made
by the owner. Our ruling in Roxas vs. Court of Appeals 391 SCRA 351 is applicable in this
case: A person who occupies the land of another at the latters tolerance or permission,
without any contract between them, is necessarily bound by an implied promise that he will
vacate upon demand, failing which, a summary action for ejectment is the proper remedy
against him.

In their Answers,5 eight6 of the petitioners claimed that Lot 1227 was formerly a shoreline
which they developed when they constructed their respective houses. Another eight 7
maintained that their houses stood on Lot 1229 of the Cadastral Survey of Jordan,
Guimaras. The other three8 asserted that Lot 1227 is a social forest area.
At the preliminary conference, the parties agreed to designate two geodetic engineers as
commissioners of the MCTC to conduct a relocation survey of Lot 1227 and to identify who
among the petitioners have houses within the lot. 9

G.R. No. 150755

June 28, 2005

RENE GANILA,* EDUARDO DUMADA-OG, SR., RAFAEL GANILA, JOSE PASTRANA,

LOURDES GANILA, FLORENTINO GANILA, SERAFIN GANILA, LORETO ARELLANO,
CONRADO GANILA, VIVENCIO ALVIOR, EDUARDO GANTALA, AMPARO VILLANUEVA,
ELEUTERIO SILVA, ADELINA GANILA, FELIZARDO GANILA, SR., ENRIQUE GANILA,
ABRAHAM TANONG, EMILIO ALFARAS, JR., BAPTIST CHRISTIAN LEARNING CENTER,
petitioners, vs.HON. COURT OF APPEALS AND VIOLETA C. HERRERA, respondents.
DECISION
QUISUMBING, J.:
For review on certiorari are the D E C I S I O N 1 dated March 30, 2001 of the Court of
Appeals in CA-G.R. SP No. 58191, and its Resolution2 dated October 18, 2001 denying the
motion for reconsideration. The assailed decision denied the petition to set aside the
Resolution3 of the Regional Trial Court (RTC) of San Miguel, Jordan, Guimaras, Branch 65,
affirming the Order of the Municipal Circuit Trial Court (MCTC) for the 19 petitioners to
vacate the contested parcel of land.
The facts are as follows:
On March 19, 1997, private respondent Violeta Herrera filed 21 ejectment Complaints4
before the 16th MCTC, Jordan-Buenavista-Nueva Valencia, Jordan, Guimaras. Private
respondent alleged that she owns Lot 1227 of the Cadastral Survey of Jordan, Guimaras,
with an area of 43,210 square meters; that she inherited the lot from her parents; and that
she only tolerated petitioners to construct residential houses or other improvements on
certain portions of the lot without rental. Sometime in September or October 1996, private
respondent demanded that the petitioners vacate the lot and remove their houses and other
improvements thereon. Petitioners refused, despite offer of money by way of assistance to
them. After the barangay conciliation failed, private respondent filed the complaints.

The commissioners reported that: (1) the house of Henry Gabasa, defendant in Civil Case
No. 288-J, is almost outside Lot 1227; (2) the house of Ludovico Amatorio, defendant in
Civil Case No. 289-J, diagonally traversed the boundary; and (3) the houses of the 19
petitioners are inside Lot 1227.10
Eight months after herein petitioners failure to comment on the manifestation of private
respondent to terminate the preliminary conference, the MCTC terminated the preliminary
conference.11 Thereafter, petitioners counsel Atty. Nelia Jesusa L. Gonzales failed to file her
clients position papers and affidavits, even after they sought a 30-day extension to file the
same.12
Consequently, the MCTC decided the cases as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff
whereby each of the twenty-one (21) defendants are hereby ordered:
1. To vacate Lot 1227 of the Cadastral Survey of Jordan, Guimaras;
2. To pay Two Hundred Pesos (P200.00) per month from October, 1996 as compensation
for the use of the property until the same is vacated; and
3. To pay Two Thousand Pesos (P2,000.00) as attorneys fees and litigation expenses.
SO ORDERED.13
Petitioners appealed to the RTC, Branch 65, at Jordan, Guimaras, which decided as
follows:
WHEREFORE, premises considered, the decision in Civil Cases Nos. 0270-J, 0272-J,
0273-J, 0274-J, 0275-J, 0276-J, 0277-J, 0278-J, 0279-J, 0280-J, 0281-J, 0282-J, 0283-J,
0284-J, 0285-J, 0286-J, 0287-J, 0291-J and 0292-J are hereby affirmed.
The decision of the court below in Civil Cases Nos. 0288-J and 0289-J are set aside. Civil

Cases Nos. 0288-J and 0289-J are hereby DISMISSED.

SO ORDERED.14
The RTC ruled that the evidence showed the better right of private respondent to possess
Lot 1227. Private respondents position paper, affidavit and tax declaration supported her
allegations. In addition, the commissioners report and sketch plan showed that indeed
petitioners occupy Lot 1227. On the other hand, according to the RTC, the petitioners failed
to present evidence which would show that they are entitled to possess the lot.
Based on the sketch plan, the RTC dismissed the cases against Gabasa and Amatorio
since their houses occupy only a small area of Lot 1227. It declared that Gabasa and
Amatorio believed in good faith that the whole area they occupied was part of the seashore.
The 19 petitioners, who were ordered to vacate the lot, filed a joint petition for review with
the Court of Appeals. The appellate court denied the petition. Petitioners moved for
reconsideration and filed an amended petition. The Court of Appeals, however, affirmed the
factual findings and conclusions arrived at by the trial courts and denied the amended
petition for lack of merit.15 It also denied the motion for reconsideration.
Petitioners are now before us, on a petition for review, alleging that:
The Honorable Court of Appeals, with due respect and deference, committed a reversible
error in the interpretation/application of the law in the instant case and in the appreciation of
the facts and evidence presented. The Court of Appeals gravely abused its discretion when
it denied and dismissed the petition filed by the petitioners. 16
After considering the parties submissions, we find three basic issues: (1) Did the MCTC err
in taking jurisdiction over and deciding the cases? (2) Did the RTC err in sustaining the
MCTCs judgment? (3) Did the CA err in denying the petition for review filed by the 19
petitioners ordered to be ejected?
Petitioners insist that private respondent should have filed an action to recover possession
de jure, not a mere complaint for ejectment, for two reasons. One, they possessed Lot 1227
in good faith for more than 30 years in the concept of owners. And two, there was no
withholding of possession since private respondent was not in prior possession of the lot.
Private respondent states in her Comment before us that the allegations in her Complaints
make out a clear case of unlawful detainer which is cognizable by the MCTC. We are in
agreement with her stance. There was no error in the choice of the complainants remedy, a
matter left to her determination as the suitor. And the complaint itself is defined by the
allegations therein, not the allegations of the defendants.

At the outset, we note that petitioners question the MCTCs jurisdiction yet they admit in
their preliminary statement that the Complaints filed are indeed for unlawful detainer, and
that the only issue to be determined is mere physical possession (possession de facto) and
not juridical possession (possession de jure), much less ownership.17
While petitioners assert that this case involves only deprivation of possession, they confuse
the remedy of an action for forcible entry with that of unlawful detainer. In unlawful detainer,
prior physical possession by the plaintiff is not necessary. It is enough that plaintiff has a
better right of possession. Actual, prior physical possession of a property by a party is
indispensable only in forcible entry cases. In unlawful detainer cases, the defendant is
necessarily in prior lawful possession of the property but his possession eventually
becomes unlawful upon termination or expiration of his right to possess. 18 Thus, the fact that
petitioners are in possession of the lot does not automatically entitle them to remain in
possession. And the issue of prior lawful possession by the defendants does not arise at all
in a suit for unlawful detainer, simply because prior lawful possession by virtue of contract or
other reasons is given or admitted. Unlike in forcible entry where defendants, by force,
intimidation, threat, strategy or stealth, deprive the plaintiff or the prior physical possessor of
possession. Here there is no evidence to show that petitioners entered the lot by any of
these acts.
If only to stress the fundamental principles related to present controversy, jurisdiction over
unlawful detainer suits is vested in municipal trial courts. 19 And in ejectment cases, the
jurisdiction of the court is determined by the allegations of the complaint. 20
In this case for ejectment, private respondents allegations sufficiently present a case of
unlawful detainer. She alleged that (1) she owns Lot 1227; (2) she tolerated petitioners to
construct their houses thereon; (3) she withdrew her tolerance; and (4) petitioners refused
to heed her demand to vacate the lot. The Complaints were also filed within one year from
the date of her demand. The cause of action for unlawful detainer between the parties
springs from the failure of petitioners to vacate the lot upon lawful demand of the private
respondent. When they refused to vacate the lot after her demand, petitioners continued
possession became unlawful. Her complaint for ejectment against respondent, to put it
simply, is not without sufficient basis.
Petitioners contention that private respondent should have filed an action to recover
possession de jure with the RTC is not supported by law or jurisprudence. The distinction
between a summary action of ejectment and a plenary action for recovery of possession
and/or ownership of the land is settled in our jurisprudence.
What really distinguishes an action for unlawful detainer from a possessory action ( accion
publiciana) and from a reinvindicatory action (accion reinvindicatoria) is that the first is
limited to the question of possession de facto. An unlawful detainer suit (accion interdictal)
together with forcible entry are the two forms of an ejectment suit that may be filed to
recover possession of real property. Aside from the summary action of ejectment, accion
publiciana or the plenary action to recover the right of possession and accion
reinvindicatoria or the action to recover ownership which includes recovery of possession,

make up the three kinds of actions to judicially recover possession. 21

It is not up to defendants, now petitioners herein, to dictate upon plaintiff, now the private
respondent, what her initial recourse should be. Her choice of an action for ejectment
against so-called squatters is well within her rights.
Petitioners cite the case of Bayubay v. Court of Appeals,22 and argue that the MCTCs
decision was without jurisdictional or legal basis because the MCTC did not issue a
preliminary conference order. They assert that the 10-day period to file position papers and
affidavits only starts after the parties had received a preliminary conference order. They
insist they were denied due process when the MCTC decided the cases based merely on
private respondents Complaints and affidavit, without considering their Answers.
For her part, private respondent maintains that there was substantial compliance with the
rules in the MCTCs conduct of the preliminary conference, hence there was no violation of
due process nor disregard of its proper jurisdiction.
Petitioners present contention was first raised only in their appeal to the RTC. Raising it
before the appellate tribunal is barred by estoppel. 23 They should have raised it in the
proceedings before the MCTC. In our view, this issue is a mere afterthought, when the
MCTC decided against them. Basic rules of fair play, justice and due process require that as
a rule an issue cannot be raised by the petitioners for the first time on appeal. 24
Besides, petitioners did not question initially the MCTCs Order dated February 19, 1999,
when they moved for an extension of time to file their position papers and affidavits. They
wanted another 30 days on top of the 30 days set by the MCTC, which strictly should have
been 10 days only. In this regard, petitioners could not claim that they were denied sufficient
time to file their position papers and affidavits before the trial court. Further, they cannot
validly invoke our ruling25 in Bayubay, for in that case there was no order at all terminating
the preliminary conference and requiring the parties to submit position papers and affidavits.
We note with dismay petitioners insistence that we order the MCTC "to conduct the
requisite preliminary conference." The summary character of ejectment suits will be
disregarded if we allow petitioners to further delay this case by allowing a second
preliminary conference. Ejectment by way of forcible entry and unlawful detainer cases are
summary proceedings, designed to provide an expeditious means of protecting actual
possession or the right to possession over the property involved. It is a timely procedure
designed to remedy the delay in the resolution of such cases. 26
Lastly, petitioners aver that private respondent failed to prove her allegation of ownership of
Lot 1227 as it is only based on a tax declaration which is not an evidence of ownership.
They also claim that their possession of the lot was not and could not be by mere tolerance.
However, this is a factual matter best left to the trial courts.

What we have now is sufficient evidence showing that private respondent has a better right
to possess Lot 1227. The commissioners report and sketch plan show that the 19
petitioners occupy the lot, which corroborate private respondents allegation and disprove
petitioners defense that Lot 1227 is a shoreline; or that Lot 1227 is a social forest area.
While not a conclusive evidence of ownership, private respondents tax declaration
constitutes proof that she has a claim of title over the lot. It has been held that:
Although tax declarations or realty tax payment of property are not conclusive evidence of
ownership, nevertheless, they are good indicia of possession in the concept of owner for no
one in his right mind would be paying taxes for a property that is not in his actual or at least
constructive possession. They constitute at least proof that the holder has a claim of title
over the property. The voluntary declaration of a piece of property for taxation purposes
manifests not only ones sincere and honest desire to obtain title to the property and
announces his adverse claim against the State and all other interested parties, but also the
intention to contribute needed revenues to the Government. Such an act strengthens ones
bona fide claim of acquisition of ownership.27
The lower courts did not err in adjudicating the issue of possession. Mere absence of title
over the lot is not a ground for the courts to withhold relief from the parties in an ejectment
case. Plainly stated, the trial court has validly exercised its jurisdiction over the ejectment
cases below. The policy behind ejectment suits is to prevent breaches of the peace and
criminal disorder, and to compel the party out of possession to respect and resort to the law
alone to obtain what she claims is hers. The party deprived of possession must not take the
law into his or her own hands.28 For their part, herein petitioners could not be barred from
defending themselves before the court adequately, as a matter of law and right.
However, petitioners in their defense should show that they are entitled to possess Lot
1227. If they had any evidence to prove their defenses, they should have presented it to the
MCTC with their position papers and affidavits. But they ignored the courts order and
missed the given opportunity to have their defenses heard, the very essence of due
process.29 Their allegations were not only unsubstantiated but were also disproved by the
plaintiffs evidence.
In sum, we find no reversible error much less any grave abuse of discretion committed by
the Court of Appeals. A person who occupies the land of another at the latters tolerance or
permission, without any contract between them, is necessarily bound by an implied promise
that he will vacate upon demand, failing which a summary action for ejectment is the proper
remedy against him.30 His status is analogous to that of a lessee or tenant whose term of
lease has expired but whose occupancy continued by tolerance of the owner. In such a
case, the date of unlawful deprivation or withholding of possession is to be counted from the
date of the demand to vacate.31
WHEREFORE, the instant petition is DENIED for lack of merit. The Decision of the Court of
Appeals dated March 30, 2001 and its Resolution dated October 18, 2001 are AFFIRMED.
Costs against petitioners.

SO ORDERED.

of the private respondent. When they refused to vacate the lot after her demand, petitioners
continued possession became unlawful. Her complaint for ejectment against respondent, to
put it simply, is not without sufficient basis.

DIGEST
GANILA vs . COURT OF APPEALS
G.R. No. 150755, 06/28/2005 QUISUMBING, J .
FACTS: Private respondent, Violeta Herrera, filed 21 ejectment complaints in the MCTC,
which ordered the 21 defendants, now petitioners, to vacate the property in question (Lot
1227). The RTC sustained the decision as to 19 defendants but dismissed the case against
2. The 19 defendants who were ordered to vacate Lot 1227 filed a petition for review with
the CA based on two arguments, namely: first, that they possessed lot 1227 in good faith for
more than 30 years in the concept of owners, and second, that there was no withholding of
possession since private respondent was not in prior possession of the lot.

Whether private respondent should have filed an action to recover possession de jure, as
argued by petitioners on appeal
NO. Petitioners contention that private respondent should have filed an action
to recover possession de jure with the TC is not supported by law or jurisprudence. The
distinction between a summary action of ejectment and a plenary action for recovery of
possession and/or ownership of the land is settled in our jurisprudence. Petitioners present
contention was first raised only in their appeal to the RTC. Raising it before the appellate
tribunal is barred by estoppel. They should have raised it in the proceedings before the
MCTC. In our view, this issue is a mere afterthought, when the MCTC decided against
them. Basic rules of fair play, justice and due process require that as a rule an issue cannot
be raised by the petitioners for the first time on appeal.

I S S U E S / H E L D:
Whether prior physical possession by the plaintiff is necessary for a complaint for unlawful
detainer to prosper
NO. While petitioners assert that this case involves only deprivation of
possession, they confuse the remedy of an action for forcible entry with that of unlawful
detainer. In unlawful detainer, prior physical possession by the plaintiff is not necessary. It is
enough that plaintiff has a better right of possession. Actual and prior physical possession of
a property by a party is indispensable only in forcible entry cases. In unlawful detainer
cases, the defendant is necessarily in prior lawful possession of the property but his
possession eventually becomes unlawful upon termination or expiration of his right to
possess. Thus, the fact that petitioners are in possession of the lot does not automatically
entitle them to remain in possession. And the issue of prior lawful possession by the
defendants does not arise at all in a suit for unlawful detainer simply because prior lawful
possession by virtue of contract or other reasons is given or admitted. Unlike in a forcible
entry where defendants, by force, intimidation, threat, strategy or stealth, deprive the palintiff
or the prior physical possessor of possession, here there is no evidence to show that
petitioners entered the lot by any of these acts.
Whether private respondent properly filed complaints for unlawful detainer
YES. If only to stress the fundamental principles related to the present
controversy, jurisdiction over unlawful detainer suits is vested in Municipal Trial Courts. And
in ejectment cases, the jurisdiction of the court is determined by the allegations of the
complaint. In the case for ejectment, private respondents allegations sufficiently present a
case of unlawful detainer. She alleged that (1) she owns Lot 1227, (2) she tolerated
petitioners to construct their houses thereon; (3) she withdrew her tolerance; and (4)
petitioners refused to heed her demand to vacate the lot. The Complaints were also filed
within one year from the date of her demand. The cause of action for unlawful detainer
between the parties springs from the failure of petitioners to vacate the lot upon lawful
demand

The Court noted with dismay petitioners insistence that it must order the MCTC
to conduct the requisite preliminary conference. The summary character of ejectment suits
will be disregarded if the Court would allow petitioners to further delay this case by allowing
a second preliminary conference. Ejectment by way of forcible entry and unlawful detainer
cases are summary proceedings, designed to provide an expeditious means of protecting
actual possession or the right to possession over the property involved. It is a timely
procedure designed to remedy the delay in the resolution of such cases.
In sum, the Court found no reversible error much less any grave abuse of
discretion committed by the Court of Appeals. A person who occupies the land of another at
the latters tolerance or permission, without any contract between them, is necessarily
bound by an implied promise that he will vacate upon demand, failing which a summary
action for ejectment is the proper remedy against him. His status is analogous to that of a
lessee or tenant whose term of lease has expired but whose occupancy continued by
tolerance of the owner. In such a case, the date of unlawful deprivation or withholding of
possession is to be counted from the date of the demand
to vacate.

G.R. No. L-10572 December 21, 1915

FRANCIS A. CHURCHILL and STEWART TAIT,
plaintiffs-appellees, vs.JAMES J. RAFFERTY,
Collector of Internal Revenue, defendantappellant.

annual tax mentioned and described in

subsection (b) of section 100 of Act No. 2339,
effective July 1, 1914, and from destroying or
removing any sign, signboard, or billboard, the
property of the plaintiffs, for the sole reason that
such sign, signboard, or billboard is, or may be,
offensive to the sight; and decrees the
cancellation of the bond given by the plaintiffs to
secure the issuance of the preliminary injunction
granted soon after the commencement of this
action.

TRENT, J.:

This case divides itself into two parts and gives

rise to two main questions; (1) that relating to the
power of the court to restrain by injunction the
collection of the tax complained of, and (2) that
relating to the validity of those provisions of
subsection (b) of section 100 of Act No. 2339,
conferring power upon the Collector of Internal
Revenue to remove any sign, signboard, or
billboard upon the ground that the same is
offensive to the sight or is otherwise a nuisance.

The judgment appealed from in this case

perpetually restrains and prohibits the defendant
and his deputies from collecting and enforcing
against the plaintiffs and their property the

The first question is one of the jurisdiction and is

of vital importance to the Government. The
sections of Act No. 2339, which bear directly
upon the subject, are 139 and 140. The first

Attorney-General Avancea for appellant.Aitken

and DeSelms for appellees.

expressly forbids the use of an injunction to stay

the collection of any internal revenue tax; the
second provides a remedy for any wrong in
connection with such taxes, and this remedy was
intended to be exclusive, thereby precluding the
remedy by injunction, which remedy is claimed to
be constitutional. The two sections, then, involve
the right of a dissatisfied taxpayers to use an
exceptional remedy to test the validity of any tax
or to determine any other question connected
therewith, and the question whether the remedy
by injunction is exceptional.
Preventive remedies of the courts are
extraordinary and are not the usual remedies.
The origin and history of the writ of injunction
show that it has always been regarded as an
extraordinary,
preventive
remedy,
as
distinguished from the common course of the law
to redress evils after they have been
consummated. No injunction issues as of course,
but is granted only upon the oath of a party and
when there is no adequate remedy at law. The
Government does, by section 139 and 140, take
away the preventive remedy of injunction, if it
ever existed, and leaves the taxpayer, in a

contest with it, the same ordinary remedial

actions which prevail between citizen and citizen.
The Attorney-General, on behalf of the
defendant, contends that there is no provisions of
the paramount law which prohibits such a
course. While, on the other hand, counsel for
plaintiffs urge that the two sections are
unconstitutional because (a) they attempt to
deprive aggrieved taxpayers of all substantial
remedy for the protection of their property,
thereby, in effect, depriving them of their property
without due process of law, and (b) they attempt
to diminish the jurisdiction of the courts, as
conferred upon them by Acts Nos. 136 and 190,
which jurisdiction was ratified and confirmed by
the Act of Congress of July 1, 1902.
In the first place, it has been suggested that
section 139 does not apply to the tax in question
because the section, in speaking of a "tax,"
means only legal taxes; and that an illegal tax
(the one complained of) is not a tax, and,
therefore, does not fall within the inhibition of the
section, and may be restrained by injunction.
There is no force in this suggestion. The
inhibition applies to all internal revenue taxes

imposes, or authorized to be imposed, by Act No.

2339. (Snyder vs. Marks, 109 U.S., 189.) And,
furthermore, the mere fact that a tax is illegal, or
that the law, by virtue of which it is imposed, is
unconstitutional, does not authorize a court of
equity to restrain its collection by injunction.
There must be a further showing that there are
special circumstances which bring the case
under some well recognized head of equity
jurisprudence, such as that irreparable injury,
multiplicity of suits, or a cloud upon title to real
estate will result, and also that there is, as we
have indicated, no adequate remedy at law. This
is the settled law in the United States, even in the
absence of statutory enactments such as
sections 139 and 140. (Hannewinkle vs. Mayor,
etc., of Georgetown, 82 U.S., 547; Indiana Mfg.
Co. vs. Koehne, 188 U.S., 681; Ohio Tax cases,
232 U. S., 576, 587; Pittsburgh C. C. & St. L. R.
Co. vs. Board of Public Works, 172 U. S., 32;
Shelton vs. Plat, 139 U.S., 591; State Railroad
Tax Cases, 92 U. S., 575.) Therefore, this branch
of the case must be controlled by sections 139
and 140, unless the same be held
unconstitutional, and consequently, null and void.

The right and power of judicial tribunals to

declare whether enactments of the legislature
exceed the constitutional limitations and are
invalid has always been considered a grave
responsibility, as well as a solemn duty. The
courts invariably give the most careful
consideration to questions involving the
interpretation and application of the Constitution,
and approach constitutional questions with great
deliberation, exercising their power in this
respect with the greatest possible caution and
even reluctance; and they should never declare a
statute void, unless its invalidity is, in their
judgment, beyond reasonable doubt. To justify a
court in pronouncing a legislative act
unconstitutional, or a provision of a state
constitution to be in contravention of the
Constitution of the United States, the case must
be so clear to be free from doubt, and the conflict
of the statute with the constitution must be
irreconcilable, because it is but a decent respect
to the wisdom, the integrity, and the patriotism of
the legislative body by which any law is passed
to presume in favor of its validity until the
contrary is shown beyond reasonable doubt.
Therefore, in no doubtful case will the judiciary

pronounce a legislative act to be contrary to the

constitution. To doubt the constitutionality of a
law is to resolve the doubt in favor of its validity.
(6 Ruling Case Law, secs. 71, 72, and 73, and
cases cited therein.)
It is also the settled law in the United States that
"due process of law" does not always require, in
respect to the Government, the same process
that is required between citizens, though it
generally
implies
and
includes
regular
allegations, opportunity to answer, and a trial
according to some well settled course of judicial
proceedings. The case with which we are dealing
is in point. A citizen's property, both real and
personal, may be taken, and usually is taken, by
the government in payment of its taxes without
any judicial proceedings whatever. In this
country, as well as in the United States, the
officer charged with the collection of taxes is
authorized to seize and sell the property of
delinquent taxpayers without applying to the
courts for assistance, and the constitutionality of
the law authorizing this procedure never has
been seriously questioned. (City of Philadelphia
vs. [Diehl] The Collector, 5 Wall., 720; Nicholl vs.

U.S., 7 Wall., 122, and cases cited.) This must

necessarily be the course, because it is upon
taxation that the Government chiefly relies to
obtain the means to carry on its operations, and
it is of the utmost importance that the modes
adopted to enforce the collection of the taxes
levied should be summary and interfered with as
little as possible. No government could exist if
every litigious man were permitted to delay the
collection of its taxes. This principle of public
policy must be constantly borne in mind in
determining cases such as the one under
consideration.
With these principles to guide us, we will proceed
to inquire whether there is any merit in the two
propositions insisted upon by counsel for the
plaintiffs. Section 5 of the Philippine Bill provides:
"That no law shall be enacted in said Islands
which shall deprive any person of life, liberty, or
property without due process of law, or deny to
any person therein the equal protection of the
law."
The origin and history of these provisions are
well-known. They are found in substance in the
Constitution of the United States and in that of

ever state in the Union.

Section 3224 of the Revised Statutes of the
United States, effective since 1867, provides
that: "No suit for the purpose of restraining the
assessment or collection of any tax shall be
maintained in any court."
Section 139, with which we have been dealing,
reads: "No court shall have authority to grant an
injunction to restrain the collection of any
internal-revenue tax."
A comparison of these two sections show that
they are essentially the same. Both expressly
prohibit the restraining of taxes by injunction. If
the Supreme Court of the United States has
clearly and definitely held that the provisions of
section 3224 do not violate the "due process of
law" and "equal protection of the law" clauses in
the Constitution, we would be going too far to
hold that section 139 violates those same
provisions in the Philippine Bill. That the
Supreme Court of the United States has so held,
cannot be doubted.
In Cheatham vs. United States (92 U.S., 85,89)

which involved the validity of an income tax

levied by an act of Congress prior to the one in
issue in the case of Pollock vs. Farmers' Loan &
Trust Co. (157 U.S., 429) the court, through Mr.
Justice Miller, said: "If there existed in the courts,
state or National, any general power of impeding
or controlling the collection of taxes, or relieving
the hardship incident to taxation, the very
existence of the government might be placed in
the power of a hostile judiciary. (Dows vs. The
City of Chicago, 11 Wall., 108.) While a free
course of remonstrance and appeal is allowed
within the departments before the money is
finally exacted, the General Government has
wisely made the payment of the tax claimed,
whether of customs or of internal revenue, a
condition precedent to a resort to the courts by
the party against whom the tax is assessed. In
the internal revenue branch it has further
prescribed that no such suit shall be brought until
the remedy by appeal has been tried; and, if
brought after this, it must be within six months
after the decision on the appeal. We regard this
as a condition on which alone the government
consents to litigate the lawfulness of the original
tax. It is not a hard condition. Few governments

have conceded such a right on any condition. If

the compliance with this condition requires the
party aggrieved to pay the money, he must do it."
Again, in State Railroad Tax Cases (92 U.S.,
575, 613), the court said: "That there might be no
misunderstanding of the universality of this
principle, it was expressly enacted, in 1867, that
"no suit for the purpose of restraining the
assessment or collection of any tax shall be
maintained in any court." (Rev, Stat., sec. 3224.)
And though this was intended to apply alone to
taxes levied by the United States, it shows the
sense of Congress of the evils to be feared if
courts of justice could, in any case, interfere with
the process of collecting taxes on which the
government depends for its continued existence.
It is a wise policy. It is founded in the simple
philosophy derived from the experience of ages,
that the payment of taxes has to be enforced by
summary and stringent means against a
reluctant and often adverse sentiment; and to do
this successfully, other instrumentalities and
other modes of procedure are necessary, than
those which belong to courts of justice."
And again, in Snyder vs. Marks (109 U.S., 189),

the court said: "The remedy of a suit to recover

back the tax after it is paid is provided by statute,
and a suit to restrain its collection is forbidden.
The remedy so given is exclusive, and no other
remedy can be substituted for it. Such has been
the current of decisions in the Circuit Courts of
the United States, and we are satisfied it is a
correct view of the law."
itc-a1f

In the consideration of the plaintiffs' second

proposition, we will attempt to show (1) that the
Philippine courts never have had, since the
American occupation, the power to restrain by
injunction the collection of any tax imposed by
the Insular Government for its own purpose and
benefit, and (2) that assuming that our courts had
or have such power, this power has not been
diminished or curtailed by sections 139 and 140.
We will first review briefly the former and present
systems of taxation. Upon the American
occupation of the Philippine, there was found a
fairly complete system of taxation. This system
was continued in force by the military authorities,
with but few changes, until the Civil Government
assumed charge of the subject. The principal
sources of revenue under the Spanish regime

were derived from customs receipts, the socalled industrial taxes, the urbana taxes, the
stamp tax, the personal cedula tax, and the sale
of the public domain. The industrial and urbana
taxes constituted practically an income tax of
some 5 per cent on the net income of persons
engaged in industrial and commercial pursuits
and on the income of owners of improved city
property. The sale of stamped paper and
adhesive stamp tax. The cedula tax was a
graduated tax, ranging from nothing up to
P37.50. The revenue derived from the sale of the
public domain was not considered a tax. The
American authorities at once abolished the
cedula tax, but later restored it in a modified
form, charging for each cedula twenty centavos,
an amount which was supposed to be just
sufficient to cover the cost of issuance. The
urbana tax was abolished by Act No. 223,
effective September 6, 1901.
The "Municipal Code" (Act No. 82) and the
Provincial Government Act (No. 83), both
enacted in 1901, authorize municipal councils
and provincial boards to impose an ad valorem
tax on real estate. The Municipal Code did not

apply to the city of Manila. This city was given a

special charter (Act No. 183), effective August
30, 1901; Under this charter the Municipal Board
of Manila is authorized and empowered to
impose taxes upon real estate and, like municipal
councils, to license and regulate certain
occupations. Customs matters were completely
reorganized by Act No. 355, effective at the port
of Manila on February 7, 1902, and at other ports
in the Philippine Islands the day after the receipt
of a certified copy of the Act. The Internal
Revenue Law of 1904 (Act No. 1189), repealed
all existing laws, ordinances, etc., imposing taxes
upon the persons, objects, or occupations taxed
under that act, and all industrial taxes and stamp
taxes imposed under the Spanish regime were
eliminated, but the industrial tax was continued in
force until January 1, 1905. This Internal
Revenue Law did not take away from municipal
councils, provincial boards, and the Municipal
Board of the city of Manila the power to impose
taxes upon real estate. This Act (No. 1189), with
its amendments, was repealed by Act No. 2339,
an act "revising and consolidating the laws
relative to internal revenue."

Section 84 of Act No. 82 provides that "No court

shall entertain any suit assailing the validity of a
tax assessed under this act until the taxpayer
shall have paid, under protest, the taxes
assessed against him, . . . ."
This inhibition was inserted in section 17 of Act
No. 83 and applies to taxes imposed by
provincial boards. The inhibition was not inserted
in the Manila Charter until the passage of Act No.
1793, effective October 12, 1907. Act No. 355
expressly makes the payment of the exactions
claimed a condition precedent to a resort to the
courts by dissatisfied importers. Section 52 of Act
No. 1189 provides "That no courts shall have
authority to grant an injunction restraining the
collection of any taxes imposed by virtue of the
provisions of this Act, but the remedy of the
taxpayer who claims that he is unjustly assessed
or taxed shall be by payment under protest of the
sum claimed from him by the Collector of Internal
Revenue and by action to recover back the sum
claimed to have been illegally collected."
Sections 139 and 140 of Act No. 2339 contain,
as we have indicated, the same prohibition and
remedy. The result is that the courts have been

expressly forbidden, in every act creating or

imposing taxes or imposts enacted by the
legislative body of the Philippines since the
American occupation, to entertain any suit
assailing the validity of any tax or impost thus
imposed until the tax shall have been paid under
protest. The only taxes which have not been
brought within the express inhibition were those
included in that part of the old Spanish system
which completely disappeared on or before
January 1, 1905, and possibly the old customs
duties which disappeared in February, 1902.
Section 56 of the Organic Act (No. 136), effective
June 16, 1901, provides that "Courts of First
Instance shall have original jurisdiction:
xxx

xxx

xxx

2. In all civil actions which involve the ... legality

of any tax, impost, or assessment, . . . .
xxx

xxx

xxx

7. Said courts and their judges, or any of them,

shall have power to issue writs of injunction,
mandamus, certiorari, prohibition, quo warranto,

and habeas corpus in their respective provinces

and districts, in the manner provided in the Code
of Civil Procedure.
The provisions of the Code of Civil Procedure
(Act No. 190), effective October 1, 1901, which
deals with the subject of injunctions, are sections
162 to 172, inclusive. Injunctions, as here
defined, are of two kinds; preliminary and final.
The former may be granted at any time after the
commencement of the action and before final
judgment, and the latter at the termination of the
trial as the relief or part of the relief prayed for
(sec. 162). Any judge of the Supreme Court may
grant a preliminary injunction in any action
pending in that court or in any Court of First
Instance. A preliminary injunction may also be
granted by a judge of the Court of First Instance
in actions pending in his district in which he has
original jurisdiction (sec. 163). But such
injunctions may be granted only when the
complaint shows facts entitling the plaintiff to the
relief demanded (sec. 166), and before a final or
permanent injunction can be granted, it must
appear upon the trial of the action that the
plaintiff is entitled to have commission or

continuance of the acts complained of

perpetually restrained (sec. 171). These
provisions authorize the institution in Courts of
First Instance of what are known as "injunction
suits," the sole object of which is to obtain the
issuance of a final injunction. They also authorize
the granting of injunctions as aiders in ordinary
civil actions. We have defined in Davesa vs.
Arbes (13 Phil. Rep., 273), an injunction to be "A
"special remedy" adopted in that code (Act 190)
from American practice, and originally borrowed
from English legal procedure, which was there
issued by the authority and under the seal of a
court of equity, and limited, as in other cases
where equitable relief is sought, to those cases
where there is no "plain, adequate, and complete
remedy at law,"which will not be granted while
the rights between the parties are undetermined,
except in extraordinary cases where material and
irreparable injury will be done,"which cannot be
compensated in damages . . .
By paragraph 2 of section 56 of Act No. 136,
supra, and the provisions of the various
subsequent Acts heretofore mentioned, the
Insular Government has consented to litigate

with aggrieved persons the validity of any original

tax or impost imposed by it on condition that this
be done in ordinary civil actions after the taxes or
exactions shall have been paid. But it is said that
paragraph 2 confers original jurisdiction upon
Courts of First Instance to hear and determine
"all civil actions" which involve the validity of any
tax, impost or assessment, and that if the allinclusive words "all" and "any" be given their
natural and unrestricted meaning, no action
wherein that question is involved can arise over
which such courts do not have jurisdiction.
(Barrameda vs. Moir, 25 Phil. Rep., 44.) This is
true. But the term "civil actions" had its well
defined meaning at the time the paragraph was
enacted. The same legislative body which
enacted paragraph 2 on June 16, 1901, had, just
a few months prior to that time, defined the only
kind of action in which the legality of any tax
imposed by it might be assailed. (Sec. 84, Act 82,
enacted January 31, 1901, and sec. 17, Act No.
83, enacted February 6, 1901.) That kind of
action being payment of the tax under protest
and an ordinary suit to recover and no other,
there can be no doubt that Courts of First
Instance have jurisdiction over all such actions.

The subsequent legislation on the same subject

shows clearly that the Commission, in enacting
paragraph 2, supra, did not intend to change or
modify in any way section 84 of Act No. 82 and
section 17 of Act No. 83, but, on the contrary, it
was intended that "civil actions," mentioned in
said paragraph, should be understood to mean,
in so far as testing the legality of taxes were
concerned, only those of the kind and character
provided for in the two sections above
mentioned. It is also urged that the power to
restrain by injunction the collection of taxes or
imposts is conferred upon Courts of First
Instance by paragraph 7 of section 56, supra.
This paragraph does empower those courts to
grant injunctions, both preliminary and final, in
any civil action pending in their districts, provided
always, that the complaint shows facts entitling
the plaintiff to the relief demanded. Injunction
suits, such as the one at bar, are "civil actions,"
but of a special or extraordinary character. It
cannot be said that the Commission intended to
give a broader or different meaning to the word
"action," used in Chapter 9 of the Code of Civil
Procedure in connection with injunctions, than it
gave to the same word found in paragraph 2 of

section 56 of the Organic Act. The Insular

Government, in exercising the power conferred
upon it by the Congress of the United States, has
declared that the citizens and residents of this
country shall pay certain specified taxes and
imposts. The power to tax necessarily carries
with it the power to collect the taxes. This being
true, the weight of authority supports the
proposition that the Government may fix the
conditions upon which it will consent to litigate
the validity of its original taxes. (Tennessee vs.
Sneed, 96 U.S., 69.)
We must, therefore, conclude that paragraph 2
and 7 of section 56 of Act No. 136, construed in
the light of the prior and subsequent legislation to
which we have referred, and the legislative and
judicial history of the same subject in the United
States with which the Commission was familiar,
do not empower Courts of firs Instance to
interfere by injunction with the collection of the
taxes in question in this case.
1awphil.net

If we are in error as to the scope of paragraph 2

and 7, supra, and the Commission did intend to
confer the power upon the courts to restrain the
collection of taxes, it does not necessarily follow

that this power or jurisdiction has been taken

away by section 139 of Act No. 2339, for the
reason that all agree that an injunction will not
issue in any case if there is an adequate remedy
at law. The very nature of the writ itself prevents
its issuance under such circumstances.
Legislation forbidding the issuing of injunctions in
such cases is unnecessary. So the only question
to be here determined is whether the remedy
provided for in section 140 of Act No. 2339 is
adequate. If it is, the writs which form the basis of
this appeal should not have been issued. If this is
the correct view, the authority to issue injunctions
will not have been taken away by section 139,
but rendered inoperative only by reason of an
adequate remedy having been made available.
The legislative body of the Philippine Islands has
declared from the beginning (Act No. 82) that
payment under protest and suit to recover is an
adequate remedy to test the legality of any tax or
impost, and that this remedy is exclusive. Can
we say that the remedy is not adequate or that it
is not exclusive, or both? The plaintiffs in the
case at bar are the first, in so far as we are
aware, to question either the adequacy or

exclusiveness of this remedy. We will refer to a

few cases in the United States where statutes
similar to sections 139 and 140 have been
construed and applied.
In May, 1874, one Bloomstein presented a
petition to the circuit court sitting in Nashville,
Tennessee, stating that his real and personal
property had been assessed for state taxes in
the year 1872 to the amount of $132.60; that he
tendered to the collector this amount in "funds
receivable by law for such purposes;" and that
the collector refused to receive the same. He
prayed for an alternative writ of mandamus to
compel the collector to receive the bills in
payment for such taxes, or to show cause to the
contrary. To this petition the collector, in his
answer, set up the defense that the petitioner's
suit was expressly prohibited by the Act of the
General Assembly of the State of Tennessee,
passed in 1873. The petition was dismissed and
the relief prayed for refused. An appeal to the
supreme court of the State resulted in the
affirmance of the judgment of the lower court.
The case was then carried to the Supreme Court
of the United States (Tennessee vs. Sneed, 96

U. S., 69), where the judgment was again

affirmed.
The two sections of the Act of [March 21,] 1873,
drawn in question in that cases, read as follows:
1. That in all cases in which an officer, charged
by law with the collection of revenue due the
State, shall institute any proceeding, or take any
steps for the collection of the same, alleged or
claimed to be due by said officer from any
citizen, the party against whom the proceeding or
step is taken shall, if he conceives the same to
be unjust or illegal, or against any statute or
clause of the Constitution of the State, pay the
same under protest; and, upon his making said
payment, the officer or collector shall pay such
revenue into the State Treasury, giving notice at
the time of payment to the Comptroller that the
same was paid under protest; and the party
paying said revenue may, at any time within thirty
days after making said payment, and not longer
thereafter, sue the said officer having collected
said sum, for the recovery thereof. And the same
may be tried in any court having the jurisdiction
of the amount and parties; and, if it be
determined that the same was wrongfully

collected, as not being due from said party to the

State, for any reason going to the merits of the
same, then the court trying the case may certify
of record that the same was wrongfully paid and
ought to be refunded; and thereupon the
Comptroller shall issue his warrant for the same,
which shall be paid in preference to other claims
on the Treasury.
2. That there shall be no other remedy, in any
case of the collection of revenue, or attempt to
collect revenue illegally, or attempt to collect
revenue in funds only receivable by said officer
under the law, the same being other or different
funds than such as the tax payer may tender, or
claim the right to pay, than that above provided;
and no writ for the prevention of the collection of
any revenue claimed, or to hinder or delay the
collection of the same, shall in anywise issue,
either injunction, supersedeas, prohibition, or any
other writ or process whatever; but in all cases in
which, for any reason, any person shall claim
that the tax so collected was wrongfully or
illegally collected, the remedy for said party shall
be as above provided, and in no other manner."
In discussing the adequacy of the remedy

provided by the Tennessee Legislature, as above

set forth, the Supreme Court of the United
States, in the case just cited, said: "This remedy
is simple and effective. A suit at law to recover
money unlawfully exacted is as speedy, as easily
tried, and less complicated than a proceeding by
mandamus. ... In revenue cases, whether arising
upon its (United States) Internal Revenue Laws
or those providing for the collection of duties
upon foreign imports, it (United States) adopts
the rule prescribed by the State of Tennessee. It
requires the contestant to pay the amount as
fixed by the Government, and gives him power to
sue the collector, and in such suit to test the
legality of the tax. There is nothing illegal or even
harsh in this. It is a wise and reasonable
precaution for the security of the Government."
Thomas C. Platt commenced an action in the
Circuit Court of the United States for the Eastern
District of Tennessee to restrain the collection of
a license tax from the company which he
represented. The defense was that sections 1
and 2 of the Act of 1873, supra, prohibited the
bringing of that suit. This case also reached the
Supreme Court of the United States. (Shelton vs.

Platt, 139 U. 591.) In speaking of the inhibitory

provisions of sections 1 and 2 of the Act of 1873,
the court said: "This Act has been sanctioned
and applied by the Courts of Tennessee.
(Nashville vs. Smith, 86 Tenn., 213; Louisville &
N. R. Co. vs. State, 8 Heisk., 663, 804.) It is, as
counsel observe, similar to the Act of Congress
forbidding suit for the purpose of restraining the
assessment or collection of taxes under the
Internal Revenue Laws, in respect to which this
court held that the remedy by suit to recover
back the tax after payment, provided for by the
Statute, was exclusive. (Snyder vs. Marks, of this
character has been called for by the
embarrassments resulting from the improvident
employment of the writ of injunction in arresting
the collection of the public revenue; and, even in
its absence, the strong arm of the court of
chancery ought not to be interposed in that
direction except where resort to that court is
grounded upon the settled principles which
govern its jurisdiction."
In Louisville & N.R. Co. vs. State (8 Heisk. [64
Tenn.], 663, 804), cited by the Supreme Court of
the United States in Shelton vs. Platt, supra, the

court said: "It was urged that this statute

(sections 1 and 2 of the Act of 1873, supra) is
unconstitutional and void, as it deprives the
citizen of the remedy by certiorari, guaranteed by
the organic law."
By the 10th section of the sixth article of the
Constitution, [Tennessee] it is provided that: "The
judges or justices of inferior courts of law and
equity shall have power in all civil cases to issue
writs of certiorari, to remove any cause, or the
transcript of the record thereof, from any inferior
jurisdiction into such court of law, on sufficient
cause, supported by oath or affirmation."
The court held the act valid as not being in
conflict with these provisions of the State
constitution.
In Eddy vs. The Township of Lee (73 Mich., 123),
the complainants sought to enjoin the collection
of certain taxes for the year 1886. The
defendants, in support of their demurrer, insisted
that the remedy by injunction had been taken
away by section 107 of the Act of 1885, which
section reads as follows: "No injunction shall
issue to stay proceedings for the assessment or

collection of taxes under this Act."

It was claimed by the complainants that the
above quoted provisions of the Act of 1885 were
unconstitutional and void as being in conflict with
article 6, sec. 8, of the Constitution, which
provides that: "The circuit courts shall have
original jurisdiction in all matters, civil and
criminal, not excepted in this Constitution, and
not prohibited by law. ... They shall also have
power to issue writs of habeas corpus,
mandamus, injunction, quo warranto, certiorari,
and other writs necessary to carry into effect their
orders, judgments, and decrees."
Mr. Justice Champlin, speaking for the court,
said: "I have no doubt that the Legislature has
the constitutional authority, where it has provided
a plain, adequate, and complete remedy at law to
recover back taxes illegally assessed and
collected, to take away the remedy by injunction
to restrain their collection."
Section 9 of the Philippine Bill reads in part as
follows: "That the Supreme Court and the Courts
of First Instance of the Philippine Islands shall
possess and exercise jurisdiction as heretofore

provided and such additional jurisdiction as shall

hereafter be prescribed by the Government of
said Islands, subject to the power of said
Government to change the practice and method
of procedure."
It will be seen that this section has not taken
away from the Philippine Government the power
to change the practice and method of procedure.
If sections 139 and 140, considered together,
and this must always be done, are nothing more
than a mode of procedure, then it would seem
that the Legislature did not exceed its
constitutional authority in enacting them.
Conceding for the moment that the duly
authorized procedure for the determination of the
validity of any tax, impost, or assessment was by
injunction suits and that this method was
available to aggrieved taxpayers prior to the
passage of Act No. 2339, may the Legislature
change this method of procedure? That the
Legislature has the power to do this, there can
be no doubt, provided some other adequate
remedy is substituted in lieu thereof. In speaking
of the modes of enforcing rights created by
contracts, the Supreme Court of the United

States, in Tennessee vs. Sneed, supra, said:

"The rule seems to be that in modes of
proceedings and of forms to enforce the contract
the Legislature has the control, and may enlarge,
limit or alter them, provided that it does not deny
a remedy, or so embarrass it with conditions and
restrictions as seriously to impair the value of the
right."
In that case the petitioner urged that the Acts of
1873 were laws impairing the obligation of the
contract contained in the charter of the Bank of
Tennessee, which contract was entered into with
the State in 1838. It was claimed that this was
done by placing such impediments and
obstructions in the way of its enforcement,
thereby so impairing the remedies as practically
to render the obligation of no value. In disposing
of this contention, the court said: "If we assume
that prior to 1873 the relator had authority to
prosecute his claim against the State by
mandamus, and that by the statutes of that year
the further use of that form was prohibited to him,
the question remains. whether an effectual
remedy was left to him or provided for him. We
think the regulation of the statute gave him an

abundant means of enforcing such right as he

possessed. It provided that he might pay his
claim to the collector under protest, giving notice
thereof to the Comptroller of the Treasury; that at
any time within thirty days thereafter he might
sue the officer making the collection; that the
case should be tried by any court having
jurisdiction and, if found in favor of the plaintiff on
the merits, the court should certify that the same
was wrongfully paid and ought to be refunded
and the Comptroller should thereupon issue his
warrant therefor, which should be paid in
preference to other claim on the Treasury."
But great stress is laid upon the fact that the
plaintiffs in the case under consideration are
unable to pay the taxes assessed against them
and that if the law is enforced, they will be
compelled to suspend business. This point may
be best answered by quoting from the case of
Youngblood vs. Sexton (32 Mich., 406), wherein
Judge Cooley, speaking for the court, said: "But if
this consideration is sufficient to justify the
transfer of a controversy from a court of law to a
court of equity, then every controversy where
money is demanded may be made the subject of

equitable cognizance. To enforce against a

dealer a promissory note may in some cases as
effectually break up his business as to collect
from him a tax of equal amount. This is not what
is known to the law as irreparable injury. The
courts have never recognized the consequences
of the mere enforcement of a money demand as
falling within that category."
Certain specified sections of Act No. 2339 were
amended by Act No. 2432, enacted December
23, 1914, effective January 1, 1915, by imposing
increased and additional taxes. Act No. 2432 was
amended, were ratified by the Congress of the
United States on March 4, 1915. The opposition
manifested against the taxes imposed by Acts
Nos. 2339 and 2432 is a matter of local history. A
great many business men thought the taxes thus
imposed were too high. If the collection of the
new taxes on signs, signboards, and billboards
may be restrained, we see no well-founded
reason why injunctions cannot be granted
restraining the collection of all or at least a
number of the other increased taxes. The fact
that this may be done, shows the wisdom of the
Legislature in denying the use of the writ of

injunction to restrain the collection of any tax

imposed by the Acts. When this was done, an
equitable remedy was made available to all
dissatisfied taxpayers.
The question now arises whether, the case being
one of which the court below had no jurisdiction,
this court, on appeal, shall proceed to express an
opinion upon the validity of provisions of
subsection (b) of section 100 of Act No. 2339,
imposing the taxes complained of. As a general
rule, an opinion on the merits of a controversy
ought to be declined when the court is powerless
to give the relief demanded. But it is claimed that
this case is, in many particulars, exceptional. It is
true that it has been argued on the merits, and
there is no reason for any suggestion or
suspicion that it is not a bona fide controversy.
The legal points involved in the merits have been
presented with force, clearness, and great ability
by the learned counsel of both sides. If the law
assailed were still in force, we would feel that an
opinion on its validity would be justifiable, but, as
the amendment became effective on January 1,
1915, we think it advisable to proceed no further
with this branch of the case.

The next question arises in connection with the

supplementary complaint, the object of which is
to enjoin the Collector of Internal Revenue from
removing certain billboards, the property of the
plaintiffs located upon private lands in the
Province of Rizal. The plaintiffs allege that the
billboards here in question "in no sense
constitute a nuisance and are not deleterious to
the health, morals, or general welfare of the
community, or of any persons." The defendant
denies these allegations in his answer and
claims that after due investigation made upon the
complaints of the British and German Consuls,
he "decided that the billboard complained of was
and still is offensive to the sight, and is otherwise
a nuisance." The plaintiffs proved by Mr.
Churchill that the "billboards were quite a
distance from the road and that they were
strongly built, not dangerous to the safety of the
people, and contained no advertising matter
which is filthy, indecent, or deleterious to the
morals of the community." The defendant
presented no testimony upon this point. In the
agreed statement of facts submitted by the
parties, the plaintiffs "admit that the billboards
mentioned were and still are offensive to the

sight."
The pertinent provisions of subsection (b) of
section 100 of Act No. 2339 read: "If after due
investigation the Collector of Internal Revenue
shall decide that any sign, signboard, or billboard
displayed or exposed to public view is offensive
to the sight or is otherwise a nuisance, he may
by summary order direct the removal of such
sign, signboard, or billboard, and if same is not
removed within ten days after he has issued
such order he my himself cause its removal, and
the sign, signboard, or billboard shall thereupon
be forfeited to the Government, and the owner
thereof charged with the expenses of the
removal so effected. When the sign, signboard,
or billboard ordered to be removed as herein
provided shall not comply with the provisions of
the general regulations of the Collector of
Internal Revenue, no rebate or refund shall be
allowed for any portion of a year for which the tax
may have been paid. Otherwise, the Collector of
Internal Revenue may in his discretion make a
proportionate refund of the tax for the portion of
the year remaining for which the taxes were paid.
An appeal may be had from the order of the

Collector of Internal Revenue to the Secretary of

Finance and Justice whose decision thereon
shall be final."
The Attorney-General, on behalf of the
defendant, says: "The question which the case
presents under this head for determination,
resolves itself into this inquiry: Is the suppression
of advertising signs displayed or exposed to
public view, which are admittedly offensive to the
sight, conducive to the public interest?"
And cunsel for the plaintiffs states the question
thus: "We contend that that portion of section 100
of Act No. 2339, empowering the Collector of
Internal Revenue to remove billboards as
nuisances, if objectionable to the sight, is
unconstitutional, as constituting a deprivation of
property without due process of law."
From the position taken by counsel for both
sides, it is clear that our inquiry is limited to the
question whether the enactment assailed by the
plaintiffs was a legitimate exercise of the police
power of the Government; for all property is held
subject to that power.

As a consequence of the foregoing, all

discussion and authorities cited, which go to the
power of the state to authorize administrative
officers to find, as a fact, that legitimate trades,
callings, and businesses are, under certain
circumstances, statutory nuisances, and whether
the procedure prescribed for this purpose is due
process of law, are foreign to the issue here
presented.
There can be no doubt that the exercise of the
police power of the Philippine Government
belongs to the Legislature and that this power is
limited only by the Acts of Congress and those
fundamentals principles which lie at the
foundation of all republican forms of government.
An Act of the Legislature which is obviously and
undoubtedly foreign to any of the purposes of the
police power and interferes with the ordinary
enjoyment of property would, without doubt, be
held to be invalid. But where the Act is
reasonably within a proper consideration of and
care for the public health, safety, or comfort, it
should not be disturbed by the courts. The courts
cannot substitute their own views for what is
proper in the premises for those of the

Legislature. In Munn vs. Illinois (94 U.S., 113),

the United States Supreme Court states the rule
thus: "If no state of circumstances could exist to
justify such statute, then we may declare this one
void because in excess of the legislative power
of this state; but if it could, we must presume it
did. Of the propriety of legislative interference,
within the scope of the legislative power, a
legislature is the exclusive judge."
This rule very fully discussed and declared in
Powell vs. Pennsylvania (127 U.S., 678)
"oleo-margarine" case. (See also Crowley vs.
Christensen, 137 U.S., 86, 87; Camfield vs. U.S.,
167 U.S., 518.) While the state may interfere
wherever the public interests demand it, and in
this particular a large discretion is necessarily
vested in the legislature to determine, not only
what the interest of the public require, but what
measures are necessary for the protection of
such interests; yet, its determination in these
matters is not final or conclusive, but is subject to
the supervision of the courts. (Lawton vs. Steele,
152 U.S., 133.) Can it be said judicially that
signs, signboards, and billboards, which are
admittedly offensive to the sight, are not with the

category of things which interfere with the public

safety, welfare, and comfort, and therefore
beyond the reach of the police power of the
Philippine Government?
The numerous attempts which have been made
to limit by definition the scope of the police power
are only interesting as illustrating its rapid
extension within comparatively recent years to
points heretofore deemed entirely within the field
of private liberty and property rights. Blackstone's
definition of the police power was as follows:
"The due regulation and domestic order of the
kingdom, whereby the individuals of the state,
like members of a well governed family, are
bound to conform their general behavior to the
rules of propriety, good neigborhood, and good
manners, to be decent, industrious, and
inoffensive in their respective stations."
(Commentaries, vol. 4, p. 162.)
Chanceller Kent considered the police power the
authority of the state "to regulate unwholesome
trades, slaughter houses, operations offensive to
the
senses."
Chief
Justice
Shaw
of
Massachusetts defined it as follows: "The power
vested in the legislature by the constitution 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 of the subjects of the same."
(Com. vs. Alger, 7 Cush., 53.)

S.E., 139.)

In the case of Butchers' Union Slaughter-house,

etc. Co. vs. Crescent City Live Stock Landing,
etc. Co. (111 U.S., 746), it was suggested that
the public health and public morals are matters of
legislative concern of which the legislature
cannot divest itself. (See State vs. Mountain
Timber Co. [1913], 75 Wash., 581, where these
definitions are collated.)

In Com. vs. Plymouth Coal Co. ([1911] 232 Pa.,

141), it was said: "The police power of the state
is difficult of definition, but it has been held by the
courts to be the right to prescribe regulations for
the good order, peace, health, protection,
comfort, convenience and morals of the
community, which does not encroach on a like
power vested in congress or state legislatures by
the federal constitution, or does not violate the
provisions of the organic law; and it has been
expressly held that the fourteenth amendment to
the federal constitution was not designed to
interfere with the exercise of that power by the
state."

In Champer vs. Greencastle (138 Ind., 339), it

was said: "The police power of the State, so far,
has not received a full and complete definition. It
may be said, however, to be the right of the
State, or state functionary, to prescribe
regulations for the good order, peace, health,
protection, comfort, convenience and morals of
the community, which do not ... violate any of the
provisions of the organic law." (Quoted with
approval in Hopkins vs. Richmond [Va., 1915], 86

In People vs. Brazee ([Mich., 1914], 149 N.W.,

1053), it was said: "It [the police power] has for
its object the improvement of social and
economic conditioned affecting the community at
large and collectively with a view to bring about
"he greatest good of the greatest number."Courts
have consistently and wisely declined to set any
fixed limitations upon subjects calling for the
exercise of this power. It is elastic and is
exercised from time to time as varying social

conditions demand correction."

In 8 Cyc., 863, it is said: "Police power is the
name given to that inherent sovereignty which it
is the right and duty of the government or its
agents to exercise whenever public policy, in a
broad sense, demands, for the benefit of society
at large, regulations to guard its morals, safety,
health, order or to insure in any respect such
economic conditions as an advancing civilization
of a high complex character requires." (As
quoted with approval in Stettler vs. O'Hara
[1914], 69 Ore, 519.)
Finally, the Supreme Court of the United States
has said in Noble State Bank vs. Haskell (219
U.S. [1911], 575: "It may be said in a general way
that the police power extends to all the great
public needs. It may be put forth in aid of what is
sanctioned by usage, or held by the prevailing
morality or strong and preponderant opinion to
be greatly and immediately necessary to the
public welfare."
This statement, recent as it is, has been quoted
with approval by several courts. (Cunningham
vs. Northwestern Imp. Co. [1911], 44 Mont., 180;

State vs. Mountain Timber Co. [1913], 75 Wash.,

581; McDavid vs. Bank of Bay Minette [Ala.,
1915], 69 Sou., 452; Hopkins vs. City of
Richmond [Va., 1915], 86 S.E., 139; State vs.
Philipps [Miss. 1915], 67 Sou., 651.)
It was said in Com. vs. Alger (7 Cush., 53, 85),
per Shaw, C.J., that: "It is much easier to
perceive and realize the existence and sources
of this police power than to mark its boundaries,
or to prescribe limits to its exercise." In Stone vs.
Mississippi (101 U.S., 814), it was said: "Many
attempts have been made in this court and
elsewhere to define the police power, but never
with entire success. It is always easier to
determine whether a particular case comes
within the general scope of the power, than to
give an abstract definition of the power itself,
which will be in all respects accurate."
Other courts have held the same vow of efforts to
evolve a satisfactory definition of the police
power. Manifestly, definitions which fail to
anticipate cases properly within the scope of the
police power are deficient. It is necessary,
therefore, to confine our discussion to the
principle involved and determine whether the

cases as they come up are within that principle.

The basic idea of civil polity in the United States
is that government should interfere with
individual effort only to the extent necessary to
preserve a healthy social and economic condition
of the country. State interference with the use of
private property may be exercised in three ways.
First, through the power of taxation, second,
through the power of eminent domain, and third,
through the police power. Buy the first method it
is assumed that the individual receives the
equivalent of the tax in the form of protection and
benefit he receives from the government as
such. By the second method he receives the
market value of the property taken from him. But
under the third method the benefits he derived
are only such as may arise from the maintenance
of a healthy economic standard of society and is
often referred to as damnum absque injuria.
(Com. vs. Plymouth Coal Co. 232 Pa., 141;
Bemis vs. Guirl Drainage Co., 182 Ind., 36.)
There was a time when state interference with
the use of private property under the guise of the
police power was practically confined to the
suppression of common nuisances. At the
present day, however, industry is organized

along lines which make it possible for large

combinations of capital to profit at the expense of
the socio-economic progress of the nation by
controlling prices and dictating to industrial
workers wages and conditions of labor. Not only
this but the universal use of mechanical
contrivances by producers and common carriers
has enormously increased the toll of human life
and limb in the production and distribution of
consumption goods. To the extent that these
businesses affect not only the public health,
safety, and morals, but also the general social
and economic life of the nation, it has been and
will continue to be necessary for the state to
interfere by regulation. By so doing, it is true that
the enjoyment of private property is interfered
with in no small degree and in ways that would
have been considered entirely unnecessary in
years gone by. The regulation of rates charged
by common carriers, for instance, or the limitation
of hours of work in industrial establishments have
only a very indirect bearing upon the public
health, safety, and morals, but do bear directly
upon social and economic conditions. To permit
each individual unit of society to feel that his
industry will bring a fair return; to see that his

work shall be done under conditions that will not

either immediately or eventually ruin his health;
to prevent the artificial inflation of prices of the
things which are necessary for his physical well
being are matters which the individual is no
longer capable of attending to himself. It is within
the province of the police power to render
assistance to the people to the extent that may
be necessary to safeguard these rights. Hence,
laws providing for the regulation of wages and
hours of labor of coal miners (Rail & River Coal
Co. vs. Taylor, 234 U.S., 224); requiring payment
of employees of railroads and other industrial
concerns in legal tender and requiring salaries to
be paid semimonthly (Erie R.R. Co. vs. Williams,
233 U.S., 685); providing a maximum number of
hours of labor for women (Miller vs. Wilson, U.S.
Sup. Ct. [Feb. 23, 1915], Adv. Opns., p. 342);
prohibiting child labor (Sturges & Burn vs.
Beauchamp, 231 U.S., 320); restricting the hours
of labor in public laundries (In re Wong Wing,
167 Cal., 109); limiting hours of labor in industrial
establishment generally (State vs. Bunting, 71
Ore., 259); Sunday Closing Laws (State vs.
Nicholls [Ore., 1915], 151 Pac., 473; People vs.
C. Klinck Packing Co. [N.Y., 1915], 108 N. E.,

278; Hiller vs. State [Md., 1914], 92 Atl., 842;

State vs. Penny, 42 Mont., 118; City of
Springfield vs. Richter, 257 Ill., 578, 580; State
vs. Hondros [S.C., 1915], 84 S.E., 781); have all
been upheld as a valid exercise of the police
power. Again, workmen's compensation laws
have been quite generally upheld. These statutes
discard the common law theory that employers
are not liable for industrial accidents and make
them responsible for all accidents resulting from
trade risks, it being considered that such
accidents are a legitimate charge against
production and that the employer by controlling
the prices of his product may shift the burden to
the community. Laws requiring state banks to join
in establishing a depositors' guarantee fund have
also been upheld by the Federal Supreme Court
in Noble State Bank vs. Haskell (219 U. S., 104),
and Assaria State Bank vs. Dolley (219 U.S.,
121).
Offensive noises and smells have been for a long
time considered susceptible of suppression in
thickly populated districts. Barring livery stables
from such locations was approved of in Reinman
vs. Little Rock (U.S. Sup. Ct. [Apr. 5, 1915], U.S.

Adv. Opns., p. 511). And a municipal ordinance

was recently upheld (People vs. Ericsson, 263
Ill., 368), which prohibited the location of garages
within two hundred feet of any hospital, church,
or school, or in any block used exclusively for
residential purposes, unless the consent of the
majority of the property owners be obtained.
Such statutes as these are usually upheld on the
theory of safeguarding the public health. But we
apprehend that in point of fact they have little
bearing upon the health of the normal person,
but a great deal to do with his physical comfort
and convenience and not a little to do with his
peace of mind. Without entering into the realm of
psychology, we think it quite demonstrable that
sight is as valuable to a human being as any of
his other senses, and that the proper ministration
to this sense conduces as much to his
contentment as the care bestowed upon the
senses of hearing or smell, and probably as
much as both together. Objects may be offensive
to the eye as well as to the nose or ear. Man's
esthetic feelings are constantly being appealed
to through his sense of sight. Large investments
have been made in theaters and other forms of
amusement, in paintings and spectacular

displays, the success of which depends in great

part upon the appeal made through the sense of
sight. Moving picture shows could not possible
without the sense of sight. Governments have
spent millions on parks and boulevards and other
forms of civic beauty, the first aim of which is to
appeal to the sense of sight. Why, then, should
the Government not interpose to protect from
annoyance this most valuable of man's senses
as readily as to protect him from offensive noises
and smells?
The advertising industry is a legitimate one. It is
at the same time a cause and an effect of the
great industrial age through which the world is
now passing. Millions are spent each year in this
manner to guide the consumer to the articles
which he needs. The sense of sight is the
primary essential to advertising success.
Billboard advertising, as it is now conducted, is a
comparatively recent form of advertising. It is
conducted out of doors and along the arteries of
travel, and compels attention by the strategic
locations of the boards, which obstruct the range
of vision at points where travelers are most likely
to direct their eyes. Beautiful landscapes are

marred or may not be seen at all by the traveler

because of the gaudy array of posters
announcing a particular kind of breakfast food, or
underwear, the coming of a circus, an
incomparable soap, nostrums or medicines for
the curing of all the ills to which the flesh is heir,
etc. It is quite natural for people to protest
against this indiscriminate and wholesale use of
the landscape by advertisers and the intrusion of
tradesmen upon their hours of leisure and
relaxation from work. Outdoor life must lose
much of its charm and pleasure if this form of
advertising is permitted to continue unhampered
until it converts the streets and highways into
veritable canyons through which the world must
travel in going to work or in search of outdoor
pleasure.
The success of billboard advertising depends not
so much upon the use of private property as it
does upon the use of the channels of travel used
by the general public. Suppose that the owner of
private property, who so vigorously objects to the
restriction of this form of advertising, should
require the advertiser to paste his posters upon
the billboards so that they would face the interior

of the property instead of the exterior. Billboard

advertising would die a natural death if this were
done, and its real dependency not upon the
unrestricted use of private property but upon the
unrestricted use of the public highways is at once
apparent. Ostensibly located on private property,
the real and sole value of the billboard is its
proximity to the public thoroughfares. Hence, we
conceive that the regulation of billboards and
their restriction is not so much a regulation of
private property as it is a regulation of the use of
the streets and other public thoroughfares.
We would not be understood as saying that
billboard advertising is not a legitimate business
any more than we would say that a livery stable
or an automobile garage is not. Even a billboard
is more sightly than piles of rubbish or an open
sewer. But all these businesses are offensive to
the senses under certain conditions.
It has been urged against ministering to the
sense of sight that tastes are so diversified that
there is no safe standard of legislation in this
direction. We answer in the language of the
Supreme Court in Noble State Bank vs. Haskell
(219 U.S., 104), and which has already been

adopted by several state courts (see supra), that

"the prevailing morality or strong and
preponderating
opinion"
demands
such
legislation. The agitation against the unrestrained
development of the billboard business has
produced results in nearly all the countries of
Europe. (Ency. Britannica, vol. 1, pp. 237-240.)
Many drastic ordinances and state laws have
been passed in the United States seeking to
make the business amenable to regulation. But
their regulation in the United states is hampered
by what we conceive an unwarranted restriction
upon the scope of the police power by the courts.
If the police power may be exercised to
encourage a healthy social and economic
condition in the country, and if the comfort and
convenience of the people are included within
those subjects, everything which encroaches
upon such territory is amenable to the police
power. A source of annoyance and irritation to
the public does not minister to the comfort and
convenience of the public. And we are of the
opinion that the prevailing sentiment is manifestly
against the erection of billboards which are
offensive to the sight.

We do not consider that we are in conflict with

the decision in Eubank vs. Richmond (226 U.S.,
137), where a municipal ordinance establishing a
building line to which property owners must
conform was held unconstitutional. As we have
pointed out, billboard advertising is not so much
a use of private property as it is a use of the
public thoroughfares. It derives its value to the
power solely because the posters are exposed to
the public gaze. It may well be that the state may
not require private property owners to conform to
a building line, but may prescribe the conditions
under which they shall make use of the adjoining
streets and highways. Nor is the law in question
to be held invalid as denying equal protection of
the laws. In Keokee Coke Co. vs. Taylor (234
U.S., 224), it was said: "It is more pressed that
the act discriminates unconstitutionally against
certain classes. But while there are differences of
opinion as to the degree and kind of
discrimination permitted by the Fourteenth
Amendment, it is established by repeated
decisions that a statute aimed at what is deemed
an evil, and hitting it presumably where
experience shows it to be most felt, is not to be
upset by thinking up and enumerating other

instances to which it might have been applied

equally well, so far as the court can see. That is
for the legislature to judge unless the case is
very clear."
But we have not overlooked the fact that we are
not in harmony with the highest courts of a
number of the states in the American Union upon
this point. Those courts being of the opinion that
statutes which are prompted and inspired by
esthetic considerations merely, having for their
sole purpose the promotion and gratification of
the esthetic sense, and not the promotion or
protection of the public safety, the public peace
and good order of society, must be held invalid
and contrary to constitutional provisions holding
inviolate the rights of private property. Or, in other
words, the police power cannot interfere with
private property rights for purely esthetic
purposes. The courts, taking this view, rest their
decisions upon the proposition that the esthetic
sense is disassociated entirely from any relation
to the public health, morals, comfort, or general
welfare and is, therefore, beyond the police
power of the state. But we are of the opinion, as
above indicated, that unsightly advertisements or

signs, signboards, or billboards which are

offensive to the sight, are not disassociated from
the general welfare of the public. This is not
establishing a new principle, but carrying a well
recognized principle to further application.
(Fruend on Police Power, p. 166.)
For the foregoing reasons the judgment
appealed from is hereby reversed and the action
dismissed upon the merits, with costs. So
ordered.

DIGEST

Facts
Appellees, Francis A. Churchill and
Stewart Tait are involved in the advertising
business,
particularly
in
billboard
advertising. Their billboards located upon
private lands in the Province of Rizal were
removed upon complaints and by the
orders of the defendant Collector of
Internal Revenue by virtue of the

provisions of subsection (b) of section 100

of Act No. 2339.
Appellees,
in
their
supplementary
complaint challenge the power of the of the
Collector of Internal Revenue to remove
any sign, signboard, or billboard upon the
ground that the same is offensive to the
sight or is otherwise a nuisance and
maintain that the billboards in question in
no sense constitute a nuisance and are
not deleterious to the health, morals, or
general welfare of the community, or of
any persons. Defendant Collector of
Internal Revenue avers that after due
investigation made upon the complaints of
the British and German Consuls, the
defendant decided that the billboard
complained of was and still offensive to the
sight and is otherwise a nuisance.
Issue
1. Was the enactment assailed by the

plaintiffs was a legitimate

exercise of the police power of the
Government?
Held
The High Court is of the opinion that
unsightly advertisements or signs,
signboards, or billboards which are
offensive to the sight, are not
disassociated from the general welfare of
the public. This is not establishing a new
principle, but carrying a well- recognized
principle to further application. Moreover, if
the police power may be exercised to
encourage a healthy social and economic
condition in the country, and if the comfort
and convenience of the people are
included within those subjects, everything
which encroaches upon such territory is
amenable to the police power. Judgment
reversed.

This Petition for "Certiorari, Prohibition and

mandamus with Preliminary Injunction and
Temporary Restraining Order" filed by the
Taxicab Operators of Metro Manila, Inc.,
Felicisimo Cabigao and Ace Transportation,
seeks to declare the nullity of Memorandum
Circular No. 77-42, dated October 10, 1977, of
the Board of Transportation, and Memorandum
Circular No. 52, dated August 15, 1980, of the
Bureau of Land Transportation.

G.R. No. L-59234 September 30, 1982

TAXICAB OPERATORS OF METRO MANILA,
INC., FELICISIMO CABIGAO and ACE
TRANSPORTATION CORPORATION,
petitioners, vs.THE BOARD OF
TRANSPORTATION and THE DIRECTOR OF
THE BUREAU OF LAND TRANSPORTATION,
respondents.

MELENCIO-HERRERA, J.:

Petitioner Taxicab Operators of Metro Manila,

Inc. (TOMMI) is a domestic corporation
composed of taxicab operators, who are
grantees of Certificates of Public Convenience to
operate taxicabs within the City of Manila and to
any other place in Luzon accessible to vehicular
traffic. Petitioners Ace Transportation Corporation
and Felicisimo Cabigao are two of the members
of TOMMI, each being an operator and grantee
of such certificate of public convenience.
On October 10, 1977, respondent Board of
Transportation (BOT) issued Memorandum
Circular No. 77-42 which reads:
SUBJECT: Phasing out and Replacement of

Old and Dilapidated Taxis

WHEREAS, it is the policy of the government to
insure that only safe and comfortable units are
used as public conveyances;
WHEREAS, the riding public, particularly in
Metro-Manila, has, time and again, complained
against, and condemned, the continued
operation of old and dilapidated taxis;
WHEREAS, in order that the commuting public
may be assured of comfort, convenience, and
safety, a program of phasing out of old and
dilapidated taxis should be adopted;
WHEREAS, after studies and inquiries made by
the Board of Transportation, the latter believes
that in six years of operation, a taxi operator has
not only covered the cost of his taxis, but has
made reasonable profit for his investments;
NOW, THEREFORE, pursuant to this policy, the
Board hereby declares that no car beyond six
years shall be operated as taxi, and in
implementation of the same hereby promulgates
the following rules and regulations:

1. As of December 31, 1977, all taxis of Model

1971 and earlier are ordered withdrawn from
public service and thereafter may no longer be
registered and operated as taxis. In the
registration of cards for 1978, only taxis of Model
1972 and later shall be accepted for registration
and allowed for operation;
2. As of December 31, 1978, all taxis of Model
1972 are ordered withdrawn from public service
and thereafter may no longer be registered and
operated as taxis. In the registration of cars for
1979, only taxis of Model 1973 and later shall be
accepted for registration and allowed for
operation; and every year thereafter, there shall
be a six-year lifetime of taxi, to wit:
1980 Model 1974
1981 Model 1975, etc.
All taxis of earlier models than those provided
above are hereby ordered withdrawn from public
service as of the last day of registration of each
particular year and their respective plates shall
be surrendered directly to the Board of
Transportation for subsequent turnover to the

Land Transportation Commission.

further dropping order from the BOT.

For an orderly implementation of this

Memorandum Circular, the rules herein shall
immediately be effective in Metro-Manila. Its
implementation outside Metro- Manila shall be
carried out only after the project has been
implemented in Metro-Manila and only after the
date has been determined by the Board. 1

Henceforth, taxi units within the National Capitol

Region having year models over 6 years old shall
be refused registration. The following schedule of
phase-out is herewith prescribed for the
guidance of all concerned:

Pursuant to the above BOT circular, respondent

Director of the Bureau of Land Transportation
(BLT) issued Implementing Circular No. 52,
dated August 15, 1980, instructing the Regional
Director, the MV Registrars and other personnel
of BLT, all within the National Capitol Region, to
implement said Circular, and formulating a
schedule of phase-out of vehicles to be allowed
and accepted for registration as public
conveyances. To quote said Circular:
Pursuant to BOT Memo-Circular No. 77-42, taxi
units with year models over six (6) years old are
now banned from operating as public utilities in
Metro Manila. As such the units involved should
be considered as automatically dropped as
public utilities and, therefore, do not require any

Year Model

Automatic Phase-Out Year

1980

1974

1981

1975

1982

1976

1983

1977
etc.

etc.

Strict compliance here is desired.

In accordance therewith, cabs of model 1971

were phase-out in registration year 1978; those
of model 1972, in 1979; those of model 1973, in
1980; and those of model 1974, in 1981.
On January 27, 1981, petitioners filed a Petition
with the BOT, docketed as Case No. 80-7553,
seeking to nullify MC No. 77-42 or to stop its
implementation; to allow the registration and
operation in 1981 and subsequent years of
taxicabs of model 1974, as well as those of
earlier models which were phased-out, provided
that, at the time of registration, they are
roadworthy and fit for operation.
On February 16, 1981, petitioners filed before the
BOT a "Manifestation and Urgent Motion",
praying for an early hearing of their petition. The
case was heard on February 20, 1981.
Petitioners
presented
testimonial
and
documentary evidence, offered the same, and
manifested that they would submit additional

documentary proofs. Said proofs were submitted

on March 27, 1981 attached to petitioners'
pleading entitled, "Manifestation, Presentation of
Additional Evidence and Submission of the Case
for Resolution." 3
On November 28, 1981, petitioners filed before
the same Board a "Manifestation and Urgent
Motion to Resolve or Decide Main Petition"
praying that the case be resolved or decided not
later than December 10, 1981 to enable them, in
case of denial, to avail of whatever remedy they
may have under the law for the protection of their
interests before their 1975 model cabs are
phased-out on January 1, 1982.
Petitioners, through its President, allegedly made
personal follow-ups of the case, but was later
informed that the records of the case could not
be located.
On December 29, 1981, the present Petition was
instituted wherein the following queries were
posed for consideration by this Court:
A. Did BOT and BLT promulgate the questioned
memorandum circulars in accord with the

manner required by Presidential Decree No. 101,

thereby
safeguarding
the
petitioners'
constitutional right to procedural due process?
B. Granting, arguendo, that respondents did
comply with the procedural requirements
imposed by Presidential Decree No. 101, would
the implementation and enforcement of the
assailed memorandum circulars violate the
petitioners' constitutional rights to.

public utility motor vehicles.

Section 2 of said Decree provides procedural
guidelines for said agency to follow in the
exercise of its powers:
Sec. 2. Exercise of powers. In the exercise of
the powers granted in the preceding section, the
Board shag proceed promptly along the method
of legislative inquiry.

Presidential Decree No. 101 grants to the Board

of Transportation the power

Apart from its own investigation and studies, the

Board, in its discretion, may require the
cooperation and assistance of the Bureau of
Transportation, the Philippine Constabulary,
particularly the Highway Patrol Group, the
support agencies within the Department of Public
Works, Transportation and Communications, or
any other government office or agency that may
be able to furnish useful information or data in
the formulation of the Board of any policy, plan or
program in the implementation of this Decree.

4. To fix just and reasonable standards,

classification,
regulations,
practices,
measurements, or service to be furnished,
imposed, observed, and followed by operators of

The Board may also can conferences, require

the submission of position papers or other
documents, information, or data by operators or
other persons that may be affected by the

(1) Equal protection of the law;

(2) Substantive due process; and
(3) Protection against arbitrary and unreasonable
classification and standard?
On Procedural and Substantive Due Process:

implementation of this Decree, or employ any

other suitable means of inquiry.

sources of the data and information that may be

desired by the BOT.

In support of their submission that they were

denied procedural due process, petitioners
contend that they were not caged upon to submit
their position papers, nor were they ever
summoned to attend any conference prior to the
issuance of the questioned BOT Circular.

Dispensing with a public hearing prior to the

issuance of the Circulars is neither violative of
procedural due process. As held in Central Bank
vs. Hon. Cloribel and Banco Filipino, 44 SCRA
307 (1972):

It is clear from the provision aforequoted,

however, that the leeway accorded the Board
gives it a wide range of choice in gathering
necessary information or data in the formulation
of any policy, plan or program. It is not
mandatory that it should first call a conference or
require the submission of position papers or
other documents from operators or persons who
may be affected, this being only one of the
options open to the Board, which is given wide
discretionary authority. Petitioners cannot
justifiably claim, therefore, that they were
deprived of procedural due process. Neither can
they state with certainty that public respondents
had not availed of other sources of inquiry prior
to issuing the challenged Circulars. operators of
public conveyances are not the only primary

Pevious notice and hearing as elements of due

process, are constitutionally required for the
protection of life or vested property rights, as well
as of liberty, when its limitation or loss takes
place in consequence of a judicial or quasijudicial proceeding, generally dependent upon a
past act or event which has to be established or
ascertained. It is not essential to the validity of
general rules or regulations promulgated to
govern future conduct of a class or persons or
enterprises, unless the law provides otherwise.
(Emphasis supplied)
Petitioners further take the position that fixing the
ceiling at six (6) years is arbitrary and oppressive
because the roadworthiness of taxicabs depends
upon their kind of maintenance and the use to
which they are subjected, and, therefore, their

actual physical condition should be taken into

consideration at the time of registration. As public
contend, however, it is impractical to subject
every taxicab to constant and recurring
evaluation, not to speak of the fact that it can
open the door to the adoption of multiple
standards, possible collusion, and even graft and
corruption. A reasonable standard must be
adopted to apply to an vehicles affected
uniformly, fairly, and justly. The span of six years
supplies that reasonable standard. The product
of experience shows that by that time taxis have
fully depreciated, their cost recovered, and a fair
return on investment obtained. They are also
generally dilapidated and no longer fit for safe
and comfortable service to the public specially
considering that they are in continuous operation
practically 24 hours everyday in three shifts of
eight hours per shift. With that standard of
reasonableness and absence of arbitrariness,
the requirement of due process has been met.
On Equal Protection of the Law:
Petitioners alleged that the Circular in question
violates their right to equal protection of the law
because the same is being enforced in Metro

Manila only and is directed solely towards the

taxi industry. At the outset it should be pointed
out that implementation outside Metro Manila is
also envisioned in Memorandum Circular No. 7742. To repeat the pertinent portion:
For an orderly implementation of this
Memorandum Circular, the rules herein shall
immediately be effective in Metro Manila. Its
implementation outside Metro Manila shall be
carried out only after the project has been
implemented in Metro Manila and only after the
date has been determined by the Board. 4
In fact, it is the understanding of the Court that
implementation of the Circulars in Cebu City is
already being effected, with the BOT in the
process of conducting studies regarding the
operation of taxicabs in other cities.
The Board's reason for enforcing the Circular
initially in Metro Manila is that taxicabs in this
city, compared to those of other places, are
subjected to heavier traffic pressure and more
constant use. This is of common knowledge.
Considering that traffic conditions are not the
same in every city, a substantial distinction exists

so that infringement of the equal protection

clause can hardly be successfully claimed.
As enunciated in the preambular clauses of the
challenged BOT Circular, the overriding
consideration is the safety and comfort of the
riding public from the dangers posed by old and
dilapidated taxis. The State, in the exercise, of its
police power, can prescribe regulations to
promote the health, morals, peace, good order,
safety and general welfare of the people. It can
prohibit all things hurtful to comfort, safety and
welfare of society. 5 It may also regulate property
rights. 6 In the language of Chief Justice Enrique M.
Fernando "the necessities imposed by public welfare
may justify the exercise of governmental authority to
regulate even if thereby certain groups may plausibly
assert that their interests are disregarded". 7

In so far as the non-application of the assailed

Circulars to other transportation services is
concerned, it need only be recalled that the equal
protection clause does not imply that the same
treatment be accorded all and sundry. It applies
to things or persons Identically or similarly
situated. It permits of classification of the object
or subject of the law provided classification is

reasonable or based on substantial distinction,

which make for real differences, and that it must
apply equally to each member of the class. 8
What is required under the equal protection clause is
the uniform operation by legal means so that all
persons under Identical or similar circumstance
would be accorded the same treatment both in
privilege conferred and the liabilities imposed. 9 The
challenged Circulars satisfy the foregoing criteria.

Evident then is the conclusion that

questioned Circulars do not suffer from
constitutional infirmity. To declare a
unconstitutional,
the
infringement
constitutional right must be clear, categorical
undeniable. 10

the
any
law
of
and

WHEREFORE, the Writs prayed for are denied

and this Petition is hereby dismissed. No costs.
SO ORDERED.

FACTS: Petitioner assailed the constitutionality of an

administrative regulation phasing out taxicabs more than
six years old on grounds that it is violative of the

constitutional rights of equal protection because it is only

enforced in Manila and directed solely towards the taxi
industry.
Respondents contend that the purpose of the regulation
is the promotion of safety and comfort of the riding public
from the dangers posed by old and dilapidated taxis.
ISSUE: Whether or not an administrative regulation
phasing out taxicabs more than six years old is a valid
exercise of police power.
HELD: No, the State in the exercise of its police power,
can prescribe regulations to promote the safety and
general welfare of the people. In addition, there is no
infringement of the equal protection clause because it is
common knowledge that taxicabs in Manila are subjected
to heavier traffic pressure and more constant use,
creating a substantial distinction from taxicabs of other
places.

G.R. No. L-20620 August 15, 1974

REPUBLIC OF THE PHILIPPINES, plaintiffappellant, vs.CARMEN M. VDA. DE
CASTELLVI, ET AL., defendants-appellees.
Office of the Solicitor General for plaintiffappellant.
C.A. Mendoza & A. V. Raquiza and Alberto
Cacnio & Associates for defendant-appellees.

ZALDIVAR, J.:p
Appeal from the decision of the Court of First
Instance of Pampanga in its Civil Case No. 1623,
an expropriation proceeding.

Plaintiff-appellant,
the
Republic
of
the
Philippines, (hereinafter referred to as the
Republic) filed, on June 26, 1959, a complaint for
eminent domain against defendant-appellee,
Carmen M. Vda. de Castellvi, judicial
administratrix of the estate of the late Alfonso de
Castellvi (hereinafter referred to as Castellvi),
over a parcel of land situated in the barrio of San
Jose, Floridablanca, Pampanga, described as
follows:
A parcel of land, Lot No. 199-B Bureau of Lands
Plan Swo 23666. Bounded on the NE by Maria
Nieves Toledo-Gozun; on the SE by national
road; on the SW by AFP reservation, and on the
NW by AFP reservation. Containing an area of
759,299 square meters, more or less, and
registered in the name of Alfonso Castellvi under
TCT No. 13631 of the Register of Pampanga ...;
and against defendant-appellee Maria Nieves
Toledo Gozun (hereinafter referred to as ToledoGozun over two parcels of land described as
follows:
A parcel of land (Portion Lot Blk-1, Bureau of
Lands Plan Psd, 26254. Bounded on the NE by

Lot 3, on the SE by Lot 3; on the SW by Lot 1-B,

Blk. 2 (equivalent to Lot 199-B Swo 23666; on
the NW by AFP military reservation. Containing
an area of 450,273 square meters, more or less
and registered in the name of Maria Nieves
Toledo-Gozun under TCT No. 8708 of the
Register of Deeds of Pampanga. ..., and
A parcel of land (Portion of lot 3, Blk-1, Bureau of
Lands Plan Psd 26254. Bounded on the NE by
Lot No. 3, on the SE by school lot and national
road, on the SW by Lot 1-B Blk 2 (equivalent to
Lot 199-B Swo 23666), on the NW by Lot 1-B,
Blk-1. Containing an area of 88,772 square
meters, more or less, and registered in the name
of Maria Nieves Toledo Gozun under TCT No.
8708 of the Register of Deeds of Pampanga, ....
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.
In her "motion to dismiss" filed on July 14, 1959,
Castellvi alleged, among other things, that the
land under her administration, being a residential
land, had a fair market value of P15.00 per
square meter, so it had a total market value of
P11,389,485.00; that the Republic, through the
Armed Forces of the Philippines, particularly the
Philippine Air Force, had been, despite repeated
demands, illegally occupying her property since
July 1, 1956, thereby preventing her from using
and disposing of it, thus causing her damages by
way of unrealized profits. This defendant prayed
that the complaint be dismissed, or that the
Republic be ordered to pay her P15.00 per
square meter, or a total of P11,389,485.00, plus

interest thereon at 6% per annum from July 1,

1956; that the Republic be ordered to pay her
P5,000,000.00 as unrealized profits, and the
costs of the suit.
By order of the trial court, dated August, 1959,
Amparo C. Diaz, Dolores G. viuda de Gil,
Paloma Castellvi, Carmen Castellvi, Rafael
Castellvi, Luis Castellvi, Natividad Castellvi de
Raquiza, Jose Castellvi and Consuelo Castellvi
were allowed to intervene as parties defendants.
Subsequently, Joaquin V. Gozun, Jr., husband of
defendant Nieves Toledo Gozun, was also
allowed by the court to intervene as a party
defendant.
After the Republic had deposited with the
Provincial Treasurer of Pampanga the amount of
P259,669.10, the trial court ordered that the
Republic be placed in possession of the lands.
The Republic was actually placed in possession
of the lands on August 10, 1959. 1
In her "motion to dismiss", dated October 22,
1959, Toledo-Gozun alleged, among other
things, that her two parcels of land were
residential lands, in fact a portion with an area of

343,303 square meters had already been

subdivided into different lots for sale to the
general public, and the remaining portion had
already been set aside for expansion sites of the
already completed subdivisions; that the fair
market value of said lands was P15.00 per
square meter, so they had a total market value of
P8,085,675.00; and she prayed that the
complaint be dismissed, or that she be paid the
amount of P8,085,675.00, plus interest thereon
at the rate of 6% per annum from October 13,
1959, and attorney's fees in the amount of
P50,000.00.
Intervenors Jose Castellvi and Consuelo
Castellvi in their answer, filed on February 11,
1960, and also intervenor Joaquin Gozun, Jr.,
husband of defendant Maria Nieves ToledoGozun, in his motion to dismiss, dated May 27,
1960, all alleged that the value of the lands
sought to be expropriated was at the rate of
P15.00 per square meter.
On November 4, 1959, the trial court authorized
the Provincial Treasurer of Pampanga to pay
defendant Toledo-Gozun the sum of P107,609.00
as provisional value of her lands. 2 On May 16,

1960 the trial Court authorized the Provincial

Treasurer of Pampanga to pay defendant Castellvi
the amount of P151,859.80 as provisional value of
the land under her administration, and ordered said
defendant to deposit the amount with the Philippine
National Bank under the supervision of the Deputy
Clerk of Court. In another order of May 16, 1960 the
trial Court entered an order of condemnation. 3

The trial Court appointed three commissioners:

Atty. Amadeo Yuzon, Clerk of Court, as
commissioner for the court; Atty. Felicisimo G.
Pamandanan, counsel of the Philippine National
Bank Branch at Floridablanca, for the plaintiff;
and Atty. Leonardo F. Lansangan, Filipino legal
counsel at Clark Air Base, for the defendants.
The Commissioners, after having qualified
themselves, proceeded to the performance of
their duties.
On March 15,1961 the Commissioners submitted
their report and recommendation, wherein, after
having determined that the lands sought to be
expropriated were residential lands, they
recommended unanimously that the lowest price
that should be paid was P10.00 per square
meter, for both the lands of Castellvi and Toledo-

Gozun; that an additional P5,000.00 be paid to

Toledo-Gozun for improvements found on her
land; that legal interest on the compensation,
computed from August 10, 1959, be paid after
deducting the amounts already paid to the
owners, and that no consequential damages be
awarded. 4 The Commissioners' report was objected

recommendation of the commissioners of ten

(P10.00) pesos per square meter for the three
lots of the defendants subject of this action is fair
and just.
xxx xxx xxx

to by all the parties in the case by defendants

Castellvi and Toledo-Gozun, who insisted that the
fair market value of their lands should be fixed at
P15.00 per square meter; and by the Republic,
which insisted that the price to be paid for the lands
should be fixed at P0.20 per square meter. 5

The plaintiff will pay 6% interest per annum on

the total value of the lands of defendant ToledoGozun since (sic) the amount deposited as
provisional value from August 10, 1959 until full
payment is made to said defendant or deposit
therefor is made in court.

After the parties-defendants and intervenors had

filed their respective memoranda, and the
Republic, after several extensions of time, had
adopted as its memorandum its objections to the
report of the Commissioners, the trial court, on
May 26, 1961, rendered its decision 6 the

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 (Castellvi)
land as herein adjudged. The same rate of
interest shall be paid from July 11, 1959 on the
total value of the land herein adjudged minus the
amount deposited as provisional value, or
P151,859.80, such interest to run until full

dispositive portion of which reads as follows:

WHEREFORE, taking into account all the

foregoing circumstances, and that the lands are
titled, ... the rising trend of land values ..., and the
lowered purchasing power of the Philippine peso,
the
court
finds
that
the
unanimous

payment is made to said defendant or deposit

therefor is made in court. All the intervenors
having failed to produce evidence in support of
their respective interventions, said interventions
are ordered dismissed.
The costs shall be charged to the plaintiff.
On June 21, 1961 the Republic filed a motion for
a new trial and/or reconsideration, upon the
grounds of newly-discovered evidence, that the
decision was not supported by the evidence, and
that the decision was against the law, against
which motion defendants Castellvi and ToledoGozun filed their respective oppositions. On July
8, 1961 when the motion of the Republic for new
trial and/or reconsideration was called for
hearing, the Republic filed a supplemental
motion for new trial upon the ground of additional
newly-discovered evidence. This motion for new
trial and/or reconsideration was denied by the
court on July 12, 1961.
On July 17, 1961 the Republic gave notice of its
intention to appeal from the decision of May 26,
1961 and the order of July 12, 1961. Defendant
Castellvi also filed, on July 17, 1961, her notice

of appeal from the decision of the trial court.

The Republic filed various ex-parte motions for
extension of time within which to file its record on
appeal. The Republic's record on appeal was
finally submitted on December 6, 1961.
Defendants Castellvi and Toledo-Gozun filed not
only a joint opposition to the approval of the
Republic's record on appeal, but also a joint
memorandum in support of their opposition. The
Republic also filed a memorandum in support of
its prayer for the approval of its record on appeal.
On December 27, 1961 the trial court issued an
order declaring both the record on appeal filed by
the Republic, and the record on appeal filed by
defendant Castellvi as having been filed out of
time, thereby dismissing both appeals.
On January 11, 1962 the Republic filed a "motion
to strike out the order of December 27, 1961 and
for reconsideration", and subsequently an
amended record on appeal, against which motion
the defendants Castellvi and Toledo-Gozun filed
their opposition. On July 26, 1962 the trial court
issued an order, stating that "in the interest of
expediency, the questions raised may be

properly and finally determined by the Supreme

Court," and at the same time it ordered the
Solicitor General to submit a record on appeal
containing copies of orders and pleadings
specified therein. In an order dated November
19, 1962, the trial court approved the Republic's
record on appeal as amended.
Defendant Castellvi did not insist on her appeal.
Defendant Toledo-Gozun did not appeal.
The motion to dismiss the Republic's appeal was
reiterated by appellees Castellvi and ToledoGozun before this Court, but this Court denied
the motion.

October 14, 1969.

On February 14, 1972, Attys. Alberto Cacnio, and
Associates, counsel for the estate of the late Don
Alfonso de Castellvi in the expropriation
proceedings, filed a notice of attorney's lien,
stating that as per agreement with the
administrator of the estate of Don Alfonso de
Castellvi they shall receive by way of attorney's
fees, "the sum equivalent to ten per centum of
whatever the court may finally decide as the
expropriated price of the property subject matter
of the case."
---------

In her motion of August 11, 1964, appellee

Castellvi sought to increase the provisional value
of her land. The Republic, in its comment on
Castellvi's motion, opposed the same. This Court
denied Castellvi's motion in a resolution dated
October 2,1964.

Before this Court, the Republic contends that the

lower court erred:

The motion of appellees, Castellvi and ToledoGozun, dated October 6, 1969, praying that they
be authorized to mortgage the lands subject of
expropriation, was denied by this Court or

2. In holding that the "taking" of the properties

under expropriation commenced with the filing of
this action;

1. In finding the price of P10 per square meter of

the lands subject of the instant proceedings as
just compensation;

3. In ordering plaintiff-appellant to pay 6%

interest on the adjudged value of the Castellvi
property to start from July of 1956;
4. In denying plaintiff-appellant's motion for new
trial based on newly discovered evidence.
In its brief, the Republic discusses the second
error assigned as the first issue to be considered.
We shall follow the sequence of the Republic's
discussion.
1. In support of the assigned error that the lower
court erred in holding that the "taking" of the
properties under expropriation commenced with
the filing of the complaint in this case, the
Republic argues that the "taking" should be
reckoned from the year 1947 when by virtue of a
special lease agreement between the Republic
and appellee Castellvi, the former was granted
the "right and privilege" to buy the property
should the lessor wish to terminate the lease,
and that in the event of such sale, it was
stipulated that the fair market value should be as
of the time of occupancy; and that the permanent
improvements amounting to more that half a
million pesos constructed during a period of

twelve years on the land, subject of

expropriation, were indicative of an agreed
pattern of permanency and stability of occupancy
by the Philippine Air Force in the interest of
national Security. 7
Appellee Castellvi, on the other hand, maintains
that the "taking" of property under the power of
eminent domain requires two essential elements,
to wit: (1) entrance and occupation by 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." 8
Appellee Toledo-Gozun did not comment on the
Republic's argument in support of the second

error assigned, because as far as she was

concerned the Republic had not taken
possession of her lands prior to August 10, 1959.
9

In order to better comprehend the issues raised

in the appeal, in so far as the Castellvi property is
concerned, it should be noted that the Castellvi
property had been occupied by the Philippine Air
Force since 1947 under a contract of lease,
typified by the contract marked Exh. 4-Castellvi,
the pertinent portions of which read:
CONTRACT OF LEASE
This AGREEMENT OF LEASE MADE AND
ENTERED into by and between INTESTATE
ESTATE OF ALFONSO DE CASTELLVI,
represented by CARMEN M. DE CASTELLVI,
Judicial Administratrix ... hereinafter called the
LESSOR and THE REPUBLIC OF THE
PHILIPPINES represented by MAJ. GEN.
CALIXTO DUQUE, Chief of Staff of the ARMED
FORCES OF THE PHILIPPINES, hereinafter
called the LESSEE,
WITNESSETH:

1. For and in consideration of the rentals

hereinafter reserved and the mutual terms,
covenants and conditions of the parties, the
LESSOR has, and by these presents does, lease
and let unto the LESSEE the following described
land together with the improvements thereon and
appurtenances thereof, viz:
Un Terreno, Lote No. 27 del Plano de subdivision
Psu 34752, parte de la hacienda de Campauit,
situado en el Barrio de San Jose, Municipio de
Floridablanca Pampanga. ... midiendo una
extension superficial de cuatro milliones once mil
cuatro cientos trienta y cinco (4,001,435) [sic]
metros cuadrados, mas o menos.
Out of the above described property, 75.93
hectares thereof are actually occupied and
covered by this contract. .
Above lot is more particularly described in TCT
No. 1016, province of Pampanga ...
of which premises, the LESSOR warrants that
he/she/they/is/are the registered owner(s) and
with full authority to execute a contract of this
nature.

2. The term of this lease shall be for the period

beginning July 1, 1952 the date the premises
were occupied by the PHILIPPINE AIR FORCE,
AFP until June 30, 1953, subject to renewal for
another year at the option of the LESSEE or
unless sooner terminated by the LESSEE as
hereinafter provided.
3. The LESSOR hereby warrants that the
LESSEE shall have quiet, peaceful and
undisturbed possession of the demised premises
throughout the full term or period of this lease
and the LESSOR undertakes without cost to the
LESSEE to eject all trespassers, but should the
LESSOR fail to do so, the LESSEE at its option
may proceed to do so at the expense of the
LESSOR. The LESSOR further agrees that
should he/she/they sell or encumber all or any
part of the herein described premises during the
period of this lease, any conveyance will be
conditioned on the right of the LESSEE
hereunder.
4. The LESSEE shall pay to the LESSOR as
monthly rentals under this lease the sum of
FOUR HUNDRED FIFTY-FIVE PESOS & 58/100
(P455.58) ...

5. The LESSEE may, at any time prior to the

termination of this lease, use the property for any
purpose or purposes and, at its own costs and
expense make alteration, install facilities and
fixtures and errect additions ... which facilities or
fixtures ... so placed in, upon or attached to the
said premises shall be and remain property of
the LESSEE and may be removed therefrom by
the LESSEE prior to the termination of this lease.
The LESSEE shall surrender possession of the
premises upon the expiration or termination of
this lease and if so required by the LESSOR,
shall return the premises in substantially the
same condition as that existing at the time same
were first occupied by the AFP, reasonable and
ordinary wear and tear and damages by the
elements or by circumstances over which the
LESSEE has no control excepted: PROVIDED,
that if the LESSOR so requires the return of the
premises in such condition, the LESSOR shall
give written notice thereof to the LESSEE at least
twenty (20) days before the termination of the
lease and provided, further, that should the
LESSOR give notice within the time specified
above, the LESSEE shall have the right and
privilege to compensate the LESSOR at the fair

value or the equivalent, in lieu of performance of

its obligation, if any, to restore the premises. Fair
value is to be determined as the value at the time
of occupancy less fair wear and tear and
depreciation during the period of this lease.
6. The LESSEE may terminate this lease at any
time during the term hereof by giving written
notice to the LESSOR at least thirty (30) days in
advance ...
7. The LESSEE should not be responsible,
except under special legislation for any damages
to the premises by reason of combat operations,
acts of GOD, the elements or other acts and
deeds not due to the negligence on the part of
the LESSEE.
8. This LEASE AGREEMENT supersedes and
voids any and all agreements and undertakings,
oral or written, previously entered into between
the parties covering the property herein leased,
the same having been merged herein. This
AGREEMENT may not be modified or altered
except by instrument in writing only duly signed
by the parties. 10

It was stipulated by the parties, that "the

foregoing contract of lease (Exh. 4, Castellvi) is
'similar in terms and conditions, including the
date', with the annual contracts entered into from
year to year between defendant Castellvi and the
Republic of the Philippines (p. 17, t.s.n., Vol. III)".
It is undisputed, therefore, that the Republic
occupied Castellvi's land from July 1, 1947, by virtue
of the above-mentioned contract, on a year to year
basis (from July 1 of each year to June 30 of the
succeeding year) under the terms and conditions
therein stated.
11

Before the expiration of the contract of lease on

June 30, 1956 the Republic sought to renew the
same but Castellvi refused. When the AFP
refused to vacate the leased premises after the
termination of the contract, on July 11, 1956,
Castellvi wrote to the Chief of Staff, AFP,
informing the latter that the heirs of the property
had decided not to continue leasing the property
in question because they had decided to
subdivide the land for sale to the general public,
demanding that the property be vacated within
30 days from receipt of the letter, and that the
premises be returned in substantially the same
condition as before occupancy (Exh. 5

Castellvi). A follow-up letter was sent on January

12, 1957, demanding the delivery and return of
the property within one month from said date
(Exh. 6 Castellvi). On January 30, 1957,
Lieutenant General Alfonso Arellano, Chief of
Staff, answered the letter of Castellvi, saying that
it was difficult for the army to vacate the
premises in view of the permanent installations
and other facilities worth almost P500,000.00
that were erected and already established on the
property, and that, there being no other recourse,
the acquisition of the property by means of
expropriation
proceedings
would
be
recommended to the President (Exhibit "7"
Castellvi).
Defendant Castellvi then brought suit in the Court
of First Instance of Pampanga, in Civil Case No.
1458, to eject the Philippine Air Force from the
land. While this ejectment case was pending, the
Republic
instituted
these
expropriation
proceedings, and, as stated earlier in this
opinion, the Republic was placed in possession
of the lands on August 10, 1959, On November
21, 1959, the Court of First Instance of
Pampanga, dismissed Civil Case No. 1458, upon

petition of the parties, in an order which, in part,

reads as follows:
1. Plaintiff has agreed, as a matter of fact has
already signed an agreement with defendants,
whereby she has agreed to receive the rent of
the lands, subject matter of the instant case from
June 30, 1966 up to 1959 when the Philippine Air
Force was placed in possession by virtue of an
order of the Court upon depositing the
provisional amount as fixed by the Provincial
Appraisal Committee with the Provincial
Treasurer of Pampanga;
2. That because of the above-cited agreement
wherein the administratrix decided to get the rent
corresponding to the rent from 1956 up to 1959
and considering that this action is one of illegal
detainer and/or to recover the possession of said
land by virtue of non-payment of rents, the
instant case now has become moot and
academic and/or by virtue of the agreement
signed by plaintiff, she has waived her cause of
action in the above-entitled case. 12
The Republic urges that the "taking " of
Castellvi's property should be deemed as of the

year 1947 by virtue of afore-quoted lease

agreement. In American Jurisprudence, Vol. 26,
2nd edition, Section 157, on the subject of
"Eminent Domain, we read the definition of
"taking" (in eminent domain) as follows:
Taking' under the power of eminent domain may
be defined generally as entering upon private
property for more than a momentary period, and,
under the warrant or color of legal authority,
devoting it to a public use, or otherwise informally
appropriating or injuriously affecting it in such a
way as substantially to oust the owner and
deprive him of all beneficial enjoyment thereof. 13
Pursuant to the aforecited authority, a number of
circumstances must be present in the "taking" of
property for purposes of eminent domain.
First, the expropriator must enter a private
property. This circumstance is present in the
instant case, when by virtue of the lease
agreement the Republic, through the AFP, took
possession of the property of Castellvi.
Second, the entrance into private property must
be for more than a momentary period.

"Momentary" means, "lasting but a moment; of

but a moment's duration" (The Oxford English
Dictionary, Volume VI, page 596); "lasting a very
short time; transitory; having a very brief life;
operative or recurring at every moment"
(Webster's Third International Dictionary, 1963
edition.) The word "momentary" when applied to
possession or occupancy of (real) property
should be construed to mean "a limited period"
not indefinite or permanent. The aforecited
lease contract was for a period of one year,
renewable from year to year. The entry on the
property, under the lease, is temporary, and
considered transitory. The fact that the Republic,
through the AFP, constructed some installations
of a permanent nature does not alter the fact that
the entry into the land was transitory, or intended
to last a year, although renewable from year to
year by consent of 'The owner of the land. By
express provision of the lease agreement the
Republic, as lessee, undertook to return the
premises in substantially the same condition as
at the time the property was first occupied by the
AFP. It is claimed that the intention of the lessee
was to occupy the land permanently, as may be
inferred from the construction of permanent

improvements. But this "intention" cannot prevail

over the clear and express terms of the lease
contract. Intent is to be deduced from the
language employed by the parties, and the terms
'of the contract, when unambiguous, as in the
instant case, are conclusive in the absence of
averment and proof of mistake or fraud the
question being not what the intention was, but
what is expressed in the language used. (City of
Manila v. Rizal Park Co., Inc., 53 Phil. 515, 525);
Magdalena Estate, Inc. v. Myrick, 71 Phil. 344,
348). Moreover, in order to judge the intention of
the contracting parties, their contemporaneous
and subsequent acts shall be principally
considered (Art. 1371, Civil Code). If the intention
of the lessee (Republic) in 1947 was really to
occupy permanently Castellvi's property, why
was the contract of lease entered into on year to
year basis? Why was the lease agreement
renewed from year to year? Why did not the
Republic expropriate this land of Castellvi in
1949 when, according to the Republic itself, it
expropriated the other parcels of land that it
occupied at the same time as the Castellvi land,
for the purpose of converting them into a jet air
base? 14 It might really have been the intention of the

Republic to expropriate the lands in question at

some future time, but certainly mere notice - much
less an implied notice of such intention on the part
of the Republic to expropriate the lands in the future
did not, and could not, bind the landowner, nor bind
the land itself. The expropriation must be actually
commenced in court (Republic vs. Baylosis, et al., 96
Phil. 461, 484).

Third, the entry into the property should be under

warrant or color of legal authority. This
circumstance in the "taking" may be considered
as present in the instant case, because the
Republic entered the Castellvi property as
lessee.
Fourth, the property must be devoted to a public
use or otherwise informally appropriated or
injuriously affected. It may be conceded that the
circumstance of the property being devoted to
public use is present because the property was
used by the air force of the AFP.
Fifth, the utilization of the property for public use
must be in such a way as to oust the owner and
deprive him of all beneficial enjoyment of the
property. In the instant case, the entry of the

Republic into the property and its utilization of the

same for public use did not oust Castellvi and
deprive her of all beneficial enjoyment of the
property. Castellvi remained as owner, and was
continuously recognized as owner by the
Republic, as shown by the renewal of the lease
contract from year to year, and by the provision
in the lease contract whereby the Republic
undertook to return the property to Castellvi
when the lease was terminated. Neither was
Castellvi deprived of all the beneficial enjoyment
of the property, because the Republic was bound
to pay, and had been paying, Castellvi the
agreed monthly rentals until the time when it filed
the complaint for eminent domain on June 26,
1959.
It is clear, therefore, that the "taking" of Catellvi's
property for purposes of eminent domain cannot
be considered to have taken place in 1947 when
the Republic commenced to occupy the property
as lessee thereof. We find merit in the contention
of Castellvi that two essential elements in the
"taking" of property under the power of eminent
domain, namely: (1) that the entrance and
occupation by the condemnor must be for a

permanent, or indefinite period, and (2) that in

devoting the property to public use the owner
was ousted from the property and deprived of its
beneficial use, were not present when the
Republic entered and occupied the Castellvi
property in 1947.
Untenable also is the Republic's contention that
although the contract between the parties was
one of lease on a year to year basis, it was "in
reality a more or less permanent right to occupy
the premises under the guise of lease with the
'right and privilege' to buy the property should the
lessor wish to terminate the lease," and "the right
to buy the property is merged as an integral part
of the lease relationship ... so much so that the
fair market value has been agreed upon, not, as
of the time of purchase, but as of the time of
occupancy" 15 We cannot accept the Republic's
contention that a lease on a year to year basis can
give rise to a permanent right to occupy, since by
express legal provision a lease made for a
determinate time, as was the lease of Castellvi's land
in the instant case, ceases upon the day fixed,
without need of a demand (Article 1669, Civil Code).
Neither can it be said that the right of eminent
domain may be exercised by simply leasing the

premises to be expropriated (Rule 67, Section 1,

Rules of Court). Nor can it be accepted that the
Republic would enter into a contract of lease where
its real intention was to buy, or why the Republic
should enter into a simulated contract of lease
("under the guise of lease", as expressed by counsel
for the Republic) when all the time the Republic had
the right of eminent domain, and could expropriate
Castellvi's land if it wanted to without resorting to any
guise whatsoever. Neither can we see how a right to
buy could be merged in a contract of lease in the
absence of any agreement between the parties to
that effect. To sustain the contention of the Republic
is to sanction a practice whereby in order to secure a
low price for a land which the government intends to
expropriate (or would eventually expropriate) it would
first negotiate with the owner of the land to lease the
land (for say ten or twenty years) then expropriate
the same when the lease is about to terminate, then
claim that the "taking" of the property for the
purposes of the expropriation be reckoned as of the
date when the Government started to occupy the
property under the lease, and then assert that the
value of the property being expropriated be reckoned
as of the start of the lease, in spite of the fact that the
value of the property, for many good reasons, had in
the meantime increased during the period of the
lease. This would be sanctioning what obviously is a

deceptive scheme, which would have the effect of

depriving the owner of the property of its true and fair
market value at the time when the expropriation
proceedings were actually instituted in court. The
Republic's claim that it had the "right and privilege"
to buy the property at the value that it had at the time
when it first occupied the property as lessee
nowhere appears in the lease contract. What was
agreed expressly in paragraph No. 5 of the lease
agreement was that, should the lessor require the
lessee to return the premises in the same condition
as at the time the same was first occupied by the
AFP, the lessee would have the "right and privilege"
(or option) of paying the lessor what it would fairly
cost to put the premises in the same condition as it
was at the commencement of the lease, in lieu of the
lessee's performance of the undertaking to put the
land in said condition. The "fair value" at the time of
occupancy, mentioned in the lease agreement, does
not refer to the value of the property if bought by the
lessee, but refers to the cost of restoring the property
in the same condition as of the time when the lessee
took possession of the property. Such fair value
cannot refer to the purchase price, for purchase was
never intended by the parties to the lease contract. It
is a rule in the interpretation of contracts that
"However general the terms of a contract may be,
they shall not be understood to comprehend things

that are distinct and cases that are different from

those upon which the parties intended to agree" (Art.
1372, Civil Code).

We hold, therefore, that the "taking" of the

Castellvi property should not be reckoned as of
the year 1947 when the Republic first occupied
the same pursuant to the contract of lease, and
that the just compensation to be paid for the
Castellvi property should not be determined on
the basis of the value of the property as of that
year. The lower court did not commit an error
when it held that the "taking" of the property
under expropriation commenced with the filing of
the complaint in this case.
Under Section 4 of Rule 67 of the Rules of Court,
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
16

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 ToledoGozun, also sought to be expropriated, which
had never been under lease to the Republic, the
Republic was placed in possession of said lands,
also by authority of the court, on August 10,
1959, The taking of those lands, therefore, must
also be reckoned as of June 26, 1959, the date
of the filing of the complaint for eminent domain.
2. Regarding the first assigned error
discussed as the second issue the Republic
maintains that, even assuming that the value of
the expropriated lands is to be determined as of
June 26, 1959, the price of P10.00 per square
meter fixed by the lower court "is not only
exhorbitant but also unconscionable, and almost
fantastic". On the other hand, both Castellvi and
Toledo-Gozun maintain that their lands are
residential lands with a fair market value of not
less than P15.00 per square meter.

The lower court found, and declared, that the

lands of Castellvi and Toledo-Gozun are
residential lands. The finding of the lower court is
in consonance with the unanimous opinion of the
three commissioners who, in their report to the
court, declared that the lands are residential
lands.
The Republic assails the finding that the lands
are residential, contending that the plans of the
appellees to convert the lands into subdivision for
residential purposes were only on paper, there
being no overt acts on the part of the appellees
which indicated that the subdivision project had
been commenced, so that any compensation to
be awarded on the basis of the plans would be
speculative. The Republic's contention is not well
taken. We find evidence showing that the lands
in question had ceased to be devoted to the
production of agricultural crops, that they had
become adaptable for residential purposes, and
that the appellees had actually taken steps to
convert their lands into residential subdivisions
even before the Republic filed the complaint for
eminent domain. In the case of City of Manila vs.
Corrales (32 Phil. 82, 98) this Court laid down

basic guidelines in determining the value of the

property expropriated for public purposes. This
Court said:
In determining the value of land appropriated for
public purposes, the same consideration are to
be regarded as in a sale of property between
private parties. The inquiry, in such cases, must
be what is the property worth in the market,
viewed not merely with reference to the uses to
which it is at the time applied, but with reference
to the uses to which it is plainly adapted, that is
to say, What is it worth from its availability for
valuable uses?
So many and varied are the circumstances to be
taken into account in determining the value of
property condemned for public purposes, that it
is practically impossible to formulate a rule to
govern its appraisement in all cases. Exceptional
circumstances will modify the most carefully
guarded rule, but, as a general thing, we should
say that the compensation of the owner is to be
estimated by reference to the use for which the
property is suitable, having regard to the existing
business or wants of the community, or such as
may be reasonably expected in the immediate

future. (Miss. and Rum River Boom Co. vs.

Patterson, 98 U.S., 403).
In expropriation proceedings, therefore, the
owner of the land has the right to its value for the
use for which it would bring the most in the
market. 17 The owner may thus show every
advantage that his property possesses, present and
prospective, in order that the price it could be sold for
in the market may be satisfactorily determined. 18
The owner may also show that the property is
suitable for division into village or town lots. 19

The trial court, therefore, correctly considered,

among other circumstances, the proposed
subdivision plans of the lands sought to be
expropriated in finding that those lands are
residential lots. This finding of the lower court is
supported not only by the unanimous opinion of
the commissioners, as embodied in their report,
but also by the Provincial Appraisal Committee of
the province of Pampanga composed of the
Provincial Treasurer, the Provincial Auditor and
the District Engineer. In the minutes of the
meeting of the Provincial Appraisal Committee,
held on May 14, 1959 (Exh. 13-Castellvi) We
read in its Resolution No. 10 the following:

3. Since 1957 the land has been classified as

residential in view of its proximity to the air base
and due to the fact that it was not being devoted
to agriculture. In fact, there is a plan to convert it
into a subdivision for residential purposes. The
taxes due on the property have been paid based
on its classification as residential land;
The evidence shows that Castellvi broached the
idea of subdividing her land into residential lots
as early as July 11, 1956 in her letter to the Chief
of Staff of the Armed Forces of the Philippines.
(Exh. 5-Castellvi) As a matter of fact, the layout
of the subdivision plan was tentatively approved
by the National Planning Commission on
September 7, 1956. (Exh. 8-Castellvi). The land
of Castellvi had not been devoted to agriculture
since 1947 when it was leased to the Philippine
Army. In 1957 said land was classified as
residential, and taxes based on its classification
as residential had been paid since then (Exh. 13Castellvi). The location of the Castellvi land
justifies its suitability for a residential subdivision.
As found by the trial court, "It is at the left side of
the entrance of the Basa Air Base and bounded
on two sides by roads (Exh. 13-Castellvi),

paragraphs 1 and 2, Exh. 12-Castellvi), the

poblacion, (of Floridablanca) the municipal
building, and the Pampanga Sugar Mills are
closed by. The barrio schoolhouse and chapel
are also near (T.S.N. November 23,1960, p. 68)."
20

The lands of Toledo-Gozun (Lot 1-B and Lot 3)

are practically of the same condition as the land
of Castellvi. The lands of Toledo-Gozun adjoin
the land of Castellvi. They are also contiguous to
the Basa Air Base, and are along the road.
These lands are near the barrio schoolhouse, the
barrio chapel, the Pampanga Sugar Mills, and
the poblacion of Floridablanca (Exhs. 1, 3 and 4Toledo-Gozun). As a matter of fact, regarding lot
1-B it had already been surveyed and
subdivided, and its conversion into a residential
subdivision was tentatively approved by the
National Planning Commission on July 8, 1959
(Exhs. 5 and 6 Toledo-Gozun). As early as June,
1958, no less than 32 man connected with the
Philippine Air Force among them commissioned
officers, non-commission officers, and enlisted
men had requested Mr. and Mrs. Joaquin D.
Gozun to open a subdivision on their lands in
question (Exhs. 8, 8-A to 8-ZZ-Toledo-Gozun). 21

We agree with the findings, and the conclusions,

of the lower court that the lands that are the
subject of expropriation in the present case, as of
August 10, 1959 when the same were taken
possession of by the Republic, were residential
lands and were adaptable for use as residential
subdivisions. Indeed, the owners of these lands
have the right to their value for the use for which
they would bring the most in the market at the
time the same were taken from them. The most
important issue to be resolved in the present
case relates to the question of what is the just
compensation that should be paid to the
appellees.
The Republic asserts that the fair market value of
the lands of the appellees is P.20 per square
meter. The Republic cites the case of Republic
vs. Narciso, et al., L-6594, which this Court
decided on May 18, 1956. The Narciso case
involved lands that belonged to Castellvi and
Toledo-Gozun, and to one Donata Montemayor,
which were expropriated by the Republic in 1949
and which are now the site of the Basa Air Base.
In the Narciso case this Court fixed the fair
market value at P.20 per square meter. The lands

that are sought to be expropriated in the present

case being contiguous to the lands involved in
the Narciso case, it is the stand of the Republic
that the price that should be fixed for the lands
now in question should also be at P.20 per
square meter.
We can not sustain the stand of the Republic.
We find that the price of P.20 per square meter,
as fixed by this Court in the Narciso case, was
based on the allegation of the defendants
(owners) in their answer to the complaint for
eminent domain in that case that the price of
their lands was P2,000.00 per hectare and that
was the price that they asked the court to pay
them. This Court said, then, that the owners of
the land could not be given more than what they
had asked, notwithstanding the recommendation
of the majority of the Commission on Appraisal
which was adopted by the trial court that
the fair market value of the lands was P3,000.00
per hectare. We also find that the price of P.20
per square meter in the Narciso case was
considered the fair market value of the lands as
of the year 1949 when the expropriation
proceedings were instituted, and at that time the

lands were classified as sugar lands, and

assessed for taxation purposes at around
P400.00 per hectare, or P.04 per square meter.
22 While the lands involved in the present case,
like the lands involved in the Narciso case, might
have a fair market value of P.20 per square
meter in 1949, it can not be denied that ten years
later, in 1959, when the present proceedings
were instituted, the value of those lands had
increased considerably. The evidence shows that
since 1949 those lands were no longer cultivated
as sugar lands, and in 1959 those lands were
already classified, and assessed for taxation
purposes, as residential lands. In 1959 the land
of Castellvi was assessed at P1.00 per square
meter. 23
The Republic also points out that the Provincial
Appraisal Committee of Pampanga, in its
resolution No. 5 of February 15, 1957 (Exhibit D),
recommended the sum of P.20 per square meter
as the fair valuation of the Castellvi property. We
find that this resolution was made by the
Republic the basis in asking the court to fix the
provisional value of the lands sought to be
expropriated at P259,669.10, which was

approved by the court.

It must be considered,
however, that the amount fixed as the provisional
value of the lands that are being expropriated does
not necessarily represent the true and correct value
of the land. The value is only "provisional" or
"tentative", to serve as the basis for the immediate
occupancy of the property being expropriated by the
condemnor. The records show that this resolution
No. 5 was repealed by the same Provincial
Committee on Appraisal in its resolution No. 10 of
May 14, 1959 (Exhibit 13-Castellvi). In that resolution
No. 10, the appraisal committee stated that "The
Committee has observed that the value of the land in
this locality has increased since 1957 ...", and
recommended the price of P1.50 per square meter. It
follows, therefore, that, contrary to the stand of the
Republic, that resolution No. 5 of the Provincial
Appraisal Committee can not be made the basis for
fixing the fair market value of the lands of Castellvi
and Toledo-Gozun.
24

The Republic further relied on the certification of

the Acting Assistant Provincial Assessor of
Pampanga, dated February 8, 1961 (Exhibit K),
to the effect that in 1950 the lands of ToledoGozun were classified partly as sugar land and
partly as urban land, and that the sugar land was
assessed at P.40 per square meter, while part of

the urban land was assessed at P.40 per square

meter and part at P.20 per square meter; and
that in 1956 the Castellvi land was classified as
sugar land and was assessed at P450.00 per
hectare, or P.045 per square meter. We can not
also consider this certification of the Acting
Assistant Provincial Assessor as a basis for fixing
the fair market value of the lands of Castellvi and
Toledo-Gozun because, as the evidence shows,
the lands in question, in 1957, were already
classified and assessed for taxation purposes as
residential lands. The certification of the
assessor refers to the year 1950 as far as the
lands of Toledo-Gozun are concerned, and to the
year 1956 as far as the land of Castellvi is
concerned. Moreover, this Court has held that
the valuation fixed for the purposes of the
assessment of the land for taxation purposes can
not bind the landowner where the latter did not
intervene in fixing it. 25
On the other hand, the Commissioners,
appointed by the court to appraise the lands that
were being expropriated, recommended to the
court that the price of P10.00 per square meter
would be the fair market value of the lands. The

commissioners made their recommendation on

the basis of their observation after several ocular
inspections of the lands, of their own personal
knowledge of land values in the province of
Pampanga, of the testimonies of the owners of
the land, and other witnesses, and of
documentary evidence presented by the
appellees. Both Castellvi and Toledo-Gozun
testified that the fair market value of their
respective land was at P15.00 per square meter.
The documentary evidence considered by the
commissioners consisted of deeds of sale of
residential lands in the town of San Fernando
and in Angeles City, in the province of
Pampanga, which were sold at prices ranging
from P8.00 to P20.00 per square meter (Exhibits
15, 16, 17, 18, 19, 20, 21, 22, 23-Castellvi). The
commissioners also considered the decision in
Civil Case No. 1531 of the Court of First Instance
of Pampanga, entitled Republic vs. Sabina
Tablante, which was expropriation case filed on
January 13, 1959, involving a parcel of land
adjacent to the Clark Air Base in Angeles City,
where the court fixed the price at P18.00 per
square meter (Exhibit 14-Castellvi). In their
report, the commissioners, among other things,

said:
... This expropriation case is specially pointed
out, because the circumstances and factors
involved therein are similar in many respects to
the defendants' lands in this case. The land in
Civil Case No. 1531 of this Court and the lands in
the present case (Civil Case No. 1623) are both
near the air bases, the Clark Air Base and the
Basa Air Base respectively. There is a national
road fronting them and are situated in a firstclass municipality. As added advantage it may be
said that the Basa Air Base land is very near the
sugar mill at Del Carmen, Floridablanca,
Pampanga, owned by the Pampanga Sugar
Mills. Also just stone's throw away from the same
lands is a beautiful vacation spot at Palacol, a
sitio of the town of Floridablanca, which counts
with a natural swimming pool for vacationists on
weekends. These advantages are not found in
the case of the Clark Air Base. The defendants'
lands are nearer to the poblacion of
Floridablanca then Clark Air Base is nearer (sic)
to the poblacion of Angeles, Pampanga.
The deeds of absolute sale, according to the
undersigned commissioners, as well as the land

in Civil Case No. 1531 are competent evidence,

because they were executed during the year
1959 and before August 10 of the same year.
More specifically so the land at Clark Air Base
which coincidentally is the subject matter in the
complaint in said Civil Case No. 1531, it having
been filed on January 13, 1959 and the taking of
the land involved therein was ordered by the
Court of First Instance of Pampanga on January
15, 1959, several months before the lands in this
case were taken by the plaintiffs ....

recommendation of the commissioners of ten

(P10.00) pesos per square meter for the three
lots of the defendants subject of this action is fair
and just". 27 In arriving at its conclusion, the lower

From the above and considering further that the

lowest as well as the highest price per square
meter obtainable in the market of Pampanga
relative to subdivision lots within its jurisdiction in
the year 1959 is very well known by the
Commissioners, the Commission finds that the
lowest price that can be awarded to the lands in
question is P10.00 per square meter. 26

A court of first instance or, on appeal, the

Supreme Court, may change or modify the report
of the commissioners by increasing or reducing
the amount of the award if the facts of the case
so justify. While great weight is attached to the
report of the commissioners, yet a court may
substitute therefor its estimate of the value of the
property as gathered from the record in certain
cases, as, where the commissioners have
applied illegal principles to the evidence
submitted to them, or where they have
disregarded a clear preponderance of evidence,
or where the amount allowed is either palpably
inadequate or excessive. 28

The lower court did not altogether accept the

findings of the Commissioners based on the
documentary evidence, but it considered the
documentary evidence as basis for comparison
in determining land values. The lower court
arrived at the conclusion that "the unanimous

court took into consideration, among other

circumstances, that the lands are titled, that there is
a rising trend of land values, and the lowered
purchasing power of the Philippine peso.

In the case of Manila Railroad Co. vs. Caligsihan,

40 Phil. 326, 328, this Court said:

The report of the commissioners of appraisal in

condemnation proceedings are not binding, but
merely advisory in character, as far as the court
is concerned. 29 In our analysis of the report of the
commissioners, We find points that merit serious
consideration in the determination of the just
compensation that should be paid to Castellvi and
Toledo-Gozun for their lands. It should be noted that
the commissioners had made ocular inspections of
the lands and had considered the nature and
similarities of said lands in relation to the lands in
other places in the province of Pampanga, like San
Fernando and Angeles City. We cannot disregard the
observations of the commissioners regarding the
circumstances that make the lands in question suited
for residential purposes their location near the
Basa Air Base, just like the lands in Angeles City that
are near the Clark Air Base, and the facilities that
obtain because of their nearness to the big sugar
central of the Pampanga Sugar mills, and to the
flourishing first class town of Floridablanca. It is true
that the lands in question are not in the territory of
San Fernando and Angeles City, but, considering the
facilities of modern communications, the town of
Floridablanca may be considered practically adjacent
to San Fernando and Angeles City. It is not out of
place, therefore, to compare the land values in
Floridablanca to the land values in San Fernando

and Angeles City, and form an idea of the value of

the lands in Floridablanca with reference to the land
values in those two other communities.

The important factor in expropriation proceeding

is that the owner is awarded the just
compensation for his property. We have carefully
studied the record, and the evidence, in this
case, and after considering the circumstances
attending the lands in question We have arrived
at the conclusion that the price of P10.00 per
square meter, as recommended by the
commissioners and adopted by the lower court,
is quite high. It is Our considered view that the
price of P5.00 per square meter would be a fair
valuation of the lands in question and would
constitute a just compensation to the owners
thereof. In arriving at this conclusion We have
particularly taken into consideration the
resolution of the Provincial Committee on
Appraisal of the province of Pampanga
informing, among others, that in the year 1959
the land of Castellvi could be sold for from P3.00
to P4.00 per square meter, while the land of
Toledo-Gozun could be sold for from P2.50 to
P3.00 per square meter. The Court has weighed
all the circumstances relating to this

expropriations proceedings, and in fixing the

price of the lands that are being expropriated the
Court arrived at a happy medium between the
price as recommended by the commissioners
and approved by the court, and the price
advocated by the Republic. This Court has also
taken judicial notice of the fact that the value of
the Philippine peso has considerably gone down
since the year 1959. 30 Considering that the lands
of Castellvi and Toledo-Gozun are adjoining each
other, and are of the same nature, the Court has
deemed it proper to fix the same price for all these
lands.

3. The third issue raised by the Republic relates

to the payment of interest. The Republic
maintains that the lower court erred when it
ordered the Republic to pay Castellvi interest at
the rate of 6% per annum on the total amount
adjudged as the value of the land of Castellvi,
from July 1, 1956 to July 10, 1959. We find merit
in this assignment of error.
In ordering the Republic to pay 6% interest on
the total value of the land of Castellvi from July 1,
1956 to July 10, 1959, the lower court held that
the Republic had illegally possessed the land of

Castellvi from July 1, 1956, after its lease of the

land had expired on June 30, 1956, until August
10, 1959 when the Republic was placed in
possession of the land pursuant to the writ of
possession issued by the court. What really
happened was that the Republic continued to
occupy the land of Castellvi after the expiration of
its lease on June 30, 1956, so much so that
Castellvi filed an ejectment case against the
Republic in the Court of First Instance of
Pampanga. 31 However, while that ejectment case
was pending, the Republic filed the complaint for
eminent domain in the present case and was placed
in possession of the land on August 10, 1959, and
because of the institution of the expropriation
proceedings the ejectment case was later dismissed.
In the order dismissing the ejectment case, the Court
of First Instance of Pampanga said:

Plaintiff has agreed, as a matter of fact has

already signed an agreement with defendants,
whereby she had agreed to receive the rent of
the lands, subject matter of the instant case from
June 30, 1956 up to 1959 when the Philippine Air
Force was placed in possession by virtue of an
order of the Court upon depositing the
provisional amount as fixed by the Provincial

Appraisal Committee with

Treasurer of Pampanga; ...

the

Provincial

If Castellvi had agreed to receive the rentals from

June 30, 1956 to August 10, 1959, she should be
considered as having allowed her land to be
leased to the Republic until August 10, 1959, and
she could not at the same time be entitled to the
payment of interest during the same period on
the amount awarded her as the just
compensation of her land. The Republic,
therefore, should pay Castellvi interest at the rate
of 6% per annum on the value of her land, minus
the provisional value that was deposited, only
from July 10, 1959 when it deposited in court the
provisional value of the land.
4. The fourth error assigned by the Republic
relates to the denial by the lower court of its
motion for a new trial based on nearly discovered
evidence. We do not find merit in this assignment
of error.
After the lower court had decided this case on
May 26, 1961, the Republic filed a motion for a
new trial, supplemented by another motion, both
based upon the ground of newly discovered

evidence. The alleged newly discovered

evidence in the motion filed on June 21, 1961
was a deed of absolute sale-executed on
January 25, 1961, showing that a certain Serafin
Francisco had sold to Pablo L. Narciso a parcel
of sugar land having an area of 100,000 square
meters with a sugar quota of 100 piculs, covered
by P.A. No. 1701, situated in Barrio Fortuna,
Floridablanca, for P14,000, or P.14 per square
meter.
In the supplemental motion, the alleged newly
discovered evidence were: (1) a deed of sale of
some 35,000 square meters of land situated at
Floridablanca for P7,500.00 (or about P.21 per
square meter) executed in July, 1959, by the
spouses Evelyn D. Laird and Cornelio G. Laird in
favor of spouses Bienvenido S. Aguas and
Josefina Q. Aguas; and (2) a deed of absolute
sale of a parcel of land having an area of
4,120,101 square meters, including the sugar
quota covered by Plantation Audit No. 161 1345,
situated at Floridablanca, Pampanga, for
P860.00 per hectare (a little less than P.09 per
square meter) executed on October 22, 1957 by
Jesus Toledo y Mendoza in favor of the Land

Tenure Administration.
We find that the lower court acted correctly when
it denied the motions for a new trial.
To warrant the granting of a new trial based on
the ground of newly discovered evidence, it must
appear that the evidence was discovered after
the trial; that even with the exercise of due
diligence, the evidence could not have been
discovered and produced at the trial; and that the
evidence is of such a nature as to alter the result
of the case if admitted. 32 The lower court correctly
ruled that these requisites were not complied with.

The lower court, in a well-reasoned order, found

that the sales made by Serafin Francisco to
Pablo Narciso and that made by Jesus Toledo to
the Land Tenure Administration were immaterial
and irrelevant, because those sales covered
sugarlands with sugar quotas, while the lands
sought to be expropriated in the instant case are
residential lands. The lower court also concluded
that the land sold by the spouses Laird to the
spouses Aguas was a sugar land.
We agree with the trial court. In eminent domain

proceedings, in order that evidence as to the sale

price of other lands may be admitted in evidence
to prove the fair market value of the land sought
to be expropriated, the lands must, among other
things, be shown to be similar.
But even assuming, gratia argumenti, that the
lands mentioned in those deeds of sale were
residential, the evidence would still not warrant
the grant of a new trial, for said evidence could
have been discovered and produced at the trial,
and they cannot be considered newly discovered
evidence as contemplated in Section 1(b) of Rule
37 of the Rules of Court. Regarding this point,
the trial court said:
The Court will now show that there was no
reasonable diligence employed.
The land described in the deed of sale executed
by Serafin Francisco, copy of which is attached
to the original motion, is covered by a Certificate
of Title issued by the Office of the Register of
Deeds of Pampanga. There is no question in the
mind of the court but this document passed
through the Office of the Register of Deeds for
the purpose of transferring the title or annotating

the sale on the certificate of title. It is true that

Fiscal Lagman went to the Office of the Register
of Deeds to check conveyances which may be
presented in the evidence in this case as it is
now sought to be done by virtue of the motions at
bar, Fiscal Lagman, one of the lawyers of the
plaintiff, did not exercise reasonable diligence as
required by the rules. The assertion that he only
went to the office of the Register of Deeds 'now
and then' to check the records in that office only
shows the half-hazard [sic] manner by which the
plaintiff looked for evidence to be presented
during the hearing before the Commissioners, if it
is at all true that Fiscal Lagman did what he is
supposed to have done according to Solicitor
Padua. It would have been the easiest matter for
plaintiff to move for the issuance of a subpoena
duces tecum directing the Register of Deeds of
Pampanga to come to testify and to bring with
him all documents found in his office pertaining
to sales of land in Floridablanca adjacent to or
near the lands in question executed or recorded
from 1958 to the present. Even this elementary
precaution was not done by plaintiff's numerous
attorneys.

The same can be said of the deeds of sale

attached to the supplementary motion. They refer
to lands covered by certificate of title issued by
the Register of Deeds of Pampanga. For the
same reason they could have been easily
discovered if reasonable diligence has been
exerted by the numerous lawyers of the plaintiff
in this case. It is noteworthy that all these deeds
of sale could be found in several government
offices, namely, in the Office of the Register of
Deeds of Pampanga, the Office of the Provincial
Assessor of Pampanga, the Office of the Clerk of
Court as a part of notarial reports of notaries
public that acknowledged these documents, or in
the archives of the National Library. In respect to
Annex 'B' of the supplementary motion copy of
the document could also be found in the Office of
the Land Tenure Administration, another
government entity. Any lawyer with a modicum of
ability handling this expropriation case would
have right away though [sic] of digging up
documents diligently showing conveyances of
lands near or around the parcels of land sought
to be expropriated in this case in the offices that
would have naturally come to his mind such as
the offices mentioned above, and had counsel for

the movant really exercised the reasonable

diligence required by the Rule' undoubtedly they
would have been able to find these documents
and/or caused the issuance of subpoena duces
tecum. ...

evidence. Unfortunately the Court cannot classify

it as newly-discovered evidence, because tinder
the circumstances, the correct qualification that
can be given is 'forgotten evidence'. Forgotten
however, is not newly-discovered evidence. 33

It is also recalled that during the hearing before

the Court of the Report and Recommendation of
the Commissioners and objection thereto,
Solicitor Padua made the observation:

The granting or denial of a motion for new trial is,

as a general rule, discretionary with the trial
court, whose judgment should not be disturbed
unless there is a clear showing of abuse of
discretion. 34 We do not see any abuse of discretion

I understand, Your Honor, that there was a sale

that took place in this place of land recently
where the land was sold for P0.20 which is
contiguous to this land.
The Court gave him permission to submit said
document subject to the approval of the Court. ...
This was before the decision was rendered, and
later promulgated on May 26, 1961 or more than
one month after Solicitor Padua made the above
observation. He could have, therefore, checked
up the alleged sale and moved for a reopening to
adduce further evidence. He did not do so. He
forgot to present the evidence at a more
propitious time. Now, he seeks to introduce said
evidence under the guise of newly-discovered

on the part of the lower court when it denied the

motions for a new trial.

WHEREFORE, the decision appealed from is

modified, as follows:
(a) the lands of appellees Carmen Vda. de
Castellvi and Maria Nieves Toledo-Gozun, as
described in the complaint, are declared
expropriated for public use;
(b) the fair market value of the lands of the
appellees is fixed at P5.00 per square meter;
(c) the Republic must pay appellee Castellvi the
sum of P3,796,495.00 as just compensation for

her one parcel of land that has an area of

759,299 square meters, minus the sum of
P151,859.80 that she withdrew out of the amount
that was deposited in court as the provisional
value of the land, with interest at the rate of 6%
per annum from July 10, 1959 until the day full
payment is made or deposited in court;
(d) the Republic must pay appellee ToledoGozun the sum of P2,695,225.00 as the just
compensation for her two parcels of land that
have a total area of 539,045 square meters,
minus the sum of P107,809.00 that she withdrew
out of the amount that was deposited in court as
the provisional value of her lands, with interest at
the rate of 6%, per annum from July 10, 1959
until the day full payment is made or deposited in
court; (e) the attorney's lien of Atty. Alberto
Cacnio is enforced; and

DIGEST
FACTS: After the owner of a parcel of land that has been
rented and occupied by the government in 1947 refused
to extend the lease, the latter commenced expropriation
proceedings in 1959. During the assessment of just
compensation, the government argued that it had taken
the property when the contract of lease commenced and
not when the proceedings begun. The owner maintains
that the disputed land was not taken when the
government commenced to occupy the said land as
lessee because the essential elements of the taking of
property under the power of eminent domain, namely (1)
entrance and occupation by condemnor upon the private
property for more than a momentary 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, are not present.

(f) the costs should be paid by appellant Republic

of the Philippines, as provided in Section 12,
Rule 67, and in Section 13, Rule 141, of the
Rules of Court.

ISSUE: Whether or not the taking of property has taken

place when the condemnor has entered and occupied the
property as lesse.

IT IS SO ORDERED.

HELD: No, the property was deemed taken only when the
expropriation proceedings commenced in 1959.

The essential elements of the taking are: (1) Expropriator

must enter a private property, (2) for more than a
momentary period, (3) and under warrant of legal
authority, (4) devoting it to public use, or otherwise
informally appropriating or injuriously affecting it in such a
way as (5) substantially to oust the owner and deprive
him of all beneficial enjoyment thereof.
In the case at bar, these elements were not present when
the government entered and occupied the property under
a contract of lease.

vs.HON. JUDGE VICENTE G. ERICTA as

Judge of the Court of First Instance of Rizal,
Quezon City, Branch XVIII; HIMLAYANG
PILIPINO, INC., respondents.
City Fiscal for petitioners.
Manuel Villaruel, Jr. and Feliciano Tumale for
respondents.

GUTIERREZ, JR., J.:

This is a petition for review which seeks the
reversal of the decision of the Court of First
Instance of Rizal, Branch XVIII declaring Section
9 of Ordinance No. 6118, S-64, of the Quezon
City Council null and void.

G.R. No. L-34915 June 24, 1983

CITY GOVERNMENT OF QUEZON CITY and
CITY COUNCIL OF QUEZON CITY, petitioners,

Section 9 of Ordinance No. 6118, S-64, entitled

"ORDINANCE
REGULATING
THE
ESTABLISHMENT,
MAINTENANCE
AND
OPERATION OF PRIVATE MEMORIAL TYPE
CEMETERY OR BURIAL GROUND WITHIN
THE JURISDICTION OF QUEZON CITY AND
PROVIDING PENALTIES FOR THE VIOLATION

THEREOF" provides:
Sec. 9. At least six (6) percent of the total area of
the memorial park cemetery shall be set aside for
charity burial of deceased persons who are
paupers and have been residents of Quezon City
for at least 5 years prior to their death, to be
determined by competent City Authorities. The
area so designated shall immediately be
developed and should be open for operation not
later than six months from the date of approval of
the application.
For several years, the aforequoted section of the
Ordinance was not enforced by city authorities
but seven years after the enactment of the
ordinance, the Quezon City Council passed the
following resolution:
RESOLVED by the council of Quezon
assembled, to request, as it does hereby request
the City Engineer, Quezon City, to stop any
further selling and/or transaction of memorial
park lots in Quezon City where the owners
thereof have failed to donate the required 6%
space intended for paupers burial.

Pursuant to this petition, the Quezon City

Engineer notified respondent Himlayang Pilipino,
Inc. in writing that Section 9 of Ordinance No.
6118, S-64 would be enforced
Respondent Himlayang Pilipino reacted by filing
with the Court of First Instance of Rizal Branch
XVIII at Quezon City, a petition for declaratory
relief, prohibition and mandamus with preliminary
injunction (Sp. Proc. No. Q-16002) seeking to
annul Section 9 of the Ordinance in question The
respondent alleged that the same is contrary to
the Constitution, the Quezon City Charter, the
Local Autonomy Act, and the Revised
Administrative Code.
There being no issue of fact and the questions
raised being purely legal both petitioners and
respondent agreed to the rendition of a judgment
on the pleadings. The respondent court,
therefore, rendered the decision declaring
Section 9 of Ordinance No. 6118, S-64 null and
void.
A motion for reconsideration having been denied,
the City Government and City Council filed the
instant petition.

Petitioners argue that the taking of the

respondent's property is a valid and reasonable
exercise of police power and that the land is
taken for a public use as it is intended for the
burial ground of paupers. They further argue that
the Quezon City Council is authorized under its
charter, in the exercise of local police power, " to
make such further ordinances and resolutions
not repugnant to law as may be necessary to
carry into effect and discharge the powers and
duties conferred by this Act and such as it shall
deem necessary and proper to provide for the
health and safety, promote the prosperity,
improve the morals, peace, good order, comfort
and convenience of the city and the inhabitants
thereof, and for the protection of property
therein."
On the other hand, respondent Himlayang
Pilipino, Inc. contends that the taking or
confiscation of property is obvious because the
questioned ordinance permanently restricts the
use of the property such that it cannot be used
for any reasonable purpose and deprives the
owner of all beneficial use of his property.
The respondent also stresses that the general

welfare clause is not available as a source of

power for the taking of the property in this case
because it refers to "the power of promoting the
public welfare by restraining and regulating the
use of liberty and property." The respondent
points out that if an owner is deprived of his
property outright under the State's police power,
the property is generally not taken for public use
but is urgently and summarily destroyed in order
to promote the general welfare. The respondent
cites the case of a nuisance per se or the
destruction of a house to prevent the spread of a
conflagration.
We find the stand of the private respondent as
well as the decision of the respondent Judge to
be well-founded. We quote with approval the
lower court's ruling which declared null and void
Section 9 of the questioned city ordinance:
The issue is: Is Section 9 of the ordinance in
question a valid exercise of the police power?
An examination of the Charter of Quezon City
(Rep. Act No. 537), does not reveal any provision
that would justify the ordinance in question
except the provision granting police power to the

City. Section 9 cannot be justified under the

power granted to Quezon City to tax, fix the
license fee, and regulate such other business,
trades, and occupation as may be established or
practised in the City.' (Subsections 'C', Sec. 12,
R.A. 537).
The power to regulate does not include the
power to prohibit (People vs. Esguerra, 81 PhiL
33, Vega vs. Municipal Board of Iloilo, L-6765,
May 12, 1954; 39 N.J. Law, 70, Mich. 396). A
fortiori, the power to regulate does not include
the power to confiscate. The ordinance in
question not only confiscates but also prohibits
the operation of a memorial park cemetery,
because under Section 13 of said ordinance,
'Violation of the provision thereof is punishable
with a fine and/or imprisonment and that upon
conviction thereof the permit to operate and
maintain a private cemetery shall be revoked or
cancelled.' The confiscatory clause and the penal
provision in effect deter one from operating a
memorial park cemetery. Neither can the
ordinance in question be justified under subsection "t", Section 12 of Republic Act 537 which
authorizes the City Council to-

'prohibit the burial of the dead within the center of

population of the city and provide for their burial
in such proper place and in such manner as the
council may determine, subject to the provisions
of the general law regulating burial grounds and
cemeteries and governing funerals and disposal
of the dead.' (Sub-sec. (t), Sec. 12, Rep. Act No.
537).
There is nothing in the above provision which
authorizes confiscation or as euphemistically
termed by the respondents, 'donation'
We now come to the question whether or not
Section 9 of the ordinance in question is a valid
exercise of police power. The police power of
Quezon City is defined in sub-section 00, Sec.
12, Rep. Act 537 which reads as follows:
(00) To make such further ordinance and
regulations not repugnant to law as may be
necessary to carry into effect and discharge the
powers and duties conferred by this act and such
as it shall deem necessary and proper to provide
for the health and safety, promote, the prosperity,
improve the morals, peace, good order, comfort
and convenience of the city and the inhabitants

thereof, and for the protection of property therein;

and enforce obedience thereto with such lawful
fines or penalties as the City Council may
prescribe under the provisions of subsection (jj)
of this section.
We start the discussion with a restatement of
certain basic principles. Occupying the forefront
in the bill of rights is the provision which states
that 'no person shall be deprived of life, liberty or
property without due process of law' (Art. Ill,
Section 1 subparagraph 1, Constitution).
On the other hand, there are three inherent
powers of government by which the state
interferes with the property rights, namely-. (1)
police power, (2) eminent domain, (3) taxation.
These are said to exist independently of the
Constitution
as necessary attributes
of
sovereignty.
Police power is defined by Freund as 'the power
of promoting the public welfare by restraining and
regulating the use of liberty and property'
(Quoted in Political Law by Tanada and Carreon,
V-11, p. 50). It is usually exerted in order to
merely regulate the use and enjoyment of

property of the owner. If he is deprived of his

property outright, it is not taken for public use but
rather to destroy in order to promote the general
welfare. In police power, the owner does not
recover from the government for injury sustained
in consequence thereof (12 C.J. 623). It has
been said that police power is the most essential
of government powers, at times the most
insistent, and always one of the least limitable of
the powers of government (Ruby vs. Provincial
Board, 39 PhiL 660; Ichong vs. Hernandez,
1,7995, May 31, 1957). This power embraces the
whole system of public regulation (U.S. vs.
Linsuya Fan, 10 PhiL 104). The Supreme Court
has said that police power is so far-reaching in
scope that it has almost become impossible to
limit its sweep. As it derives its existence from
the very existence of the state itself, it does not
need to be expressed or defined in its scope.
Being coextensive with self-preservation and
survival itself, it is the most positive and active of
all governmental processes, the most essential
insistent and illimitable Especially it is so under
the modern democratic framework where the
demands of society and nations have multiplied
to almost unimaginable proportions. The field

and scope of police power have become almost

boundless, just as the fields of public interest and
public welfare have become almost all embracing
and have transcended human foresight. Since
the Courts cannot foresee the needs and
demands of public interest and welfare, they
cannot delimit beforehand the extent or scope of
the police power by which and through which the
state seeks to attain or achieve public interest
and welfare. (Ichong vs. Hernandez, L-7995,
May 31, 1957).

for the purpose of protecting the peace and order

and of promoting the general welfare as for
instance, the confiscation of an illegally
possessed article, such as opium and firearms.

The police power being the most active power of

the government and the due process clause
being the broadest station on governmental
power, the conflict between this power of
government and the due process clause of the
Constitution is oftentimes inevitable.

In sustaining the decision of the respondent

court, we are not unmindful of the heavy burden
shouldered by whoever challenges the validity of
duly enacted legislation whether national or local
As early as 1913, this Court ruled in Case v.
Board of Health (24 PhiL 250) that the courts
resolve every presumption in favor of validity
and, more so, where the ma corporation asserts
that the ordinance was enacted to promote the
common good and general welfare.

It will be seen from the foregoing authorities that

police power is usually exercised in the form of
mere regulation or restriction in the use of liberty
or property for the promotion of the general
welfare. It does not involve the taking or
confiscation of property with the exception of a
few cases where there is a necessity to
confiscate private property in order to destroy it

It seems to the court that Section 9 of Ordinance

No. 6118, Series of 1964 of Quezon City is not a
mere police regulation but an outright
confiscation. It deprives a person of his private
property without due process of law, nay, even
without compensation.

In the leading case of Ermita-Malate Hotel and

Motel Operators Association Inc. v. City Mayor of
Manila (20 SCRA 849) the Court speaking
through the then Associate Justice and now

Chief Justice Enrique M. Fernando stated

earlier stated in Case v. Board of Health supra :

Primarily what calls for a reversal of such a

decision is the a of any evidence to offset the
presumption of validity that attaches to a statute
or ordinance. As was expressed categorically by
Justice Malcolm 'The presumption is all in favor
of validity. ... The action of the elected
representatives of the people cannot be lightly
set aside. The councilors must, in the very nature
of things, be familiar with the necessities of their
particular ... municipality and with all the facts
and lances which surround the subject and
necessitate action. The local legislative body, by
enacting the ordinance, has in effect given notice
that the regulations are essential to the wellbeing of the people. ... The Judiciary should not
lightly set aside legislative action when there is
not a clear invasion of personal or property rights
under the guise of police regulation. (U.S. v.
Salaveria (1918], 39 Phil. 102, at p. 111. There
was an affirmation of the presumption of validity
of municipal ordinance as announced in the
leading Salaveria decision in Ebona v. Daet,
[1950]85 Phil. 369.)

... Under the provisions of municipal charters

which are known as the general welfare clauses,
a city, by virtue of its police power, may adopt
ordinances to the peace, safety, health, morals
and the best and highest interests of the
municipality. It is a well-settled principle, growing
out of the nature of well-ordered and society, that
every holder of property, however absolute and
may be his title, holds it under the implied liability
that his use of it shall not be injurious to the
equal enjoyment of others having an equal right
to the enjoyment of their property, nor injurious to
the rights of the community. An property in the
state is held subject to its general regulations,
which are necessary to the common good and
general welfare. Rights of property, like all other
social and conventional rights, are subject to
such reasonable limitations in their enjoyment as
shall prevent them from being injurious, and to
such reasonable restraints and regulations,
established by law, as the legislature, under the
governing and controlling power vested in them
by the constitution, may think necessary and
expedient. The state, under the police power, is

We have likewise considered the principles

possessed with plenary power to deal with all

matters relating to the general health, morals,
and safety of the people, so long as it does not
contravene any positive inhibition of the organic
law and providing that such power is not
exercised in such a manner as to justify the
interference of the courts to prevent positive
wrong and oppression.
but find them not applicable to the facts of this
case.
There is no reasonable relation between the
setting aside of at least six (6) percent of the total
area of an private cemeteries for charity burial
grounds of deceased paupers and the promotion
of health, morals, good order, safety, or the
general welfare of the people. The ordinance is
actually a taking without compensation of a
certain area from a private cemetery to benefit
paupers who are charges of the municipal
corporation. Instead of building or maintaining a
public cemetery for this purpose, the city passes
the burden to private cemeteries.
The expropriation without compensation of a
portion of private cemeteries is not covered by

Section 12(t) of Republic Act 537, the Revised

Charter of Quezon City which empowers the city
council to prohibit the burial of the dead within
the center of population of the city and to provide
for their burial in a proper place subject to the
provisions of general law regulating burial
grounds and cemeteries. When the Local
Government Code, Batas Pambansa Blg. 337
provides in Section 177 (q) that a Sangguniang
panlungsod may "provide for the burial of the
dead in such place and in such manner as
prescribed by law or ordinance" it simply
authorizes the city to provide its own city owned
land or to buy or expropriate private properties to
construct public cemeteries. This has been the
law and practise in the past. It continues to the
present. Expropriation, however, requires
payment of just compensation. The questioned
ordinance is different from laws and regulations
requiring owners of subdivisions to set aside
certain areas for streets, parks, playgrounds, and
other public facilities from the land they sell to
buyers of subdivision lots. The necessities of
public safety, health, and convenience are very
clear from said requirements which are intended
to insure the development of communities with

salubrious and wholesome environments. The

beneficiaries of the regulation, in turn, are made
to pay by the subdivision developer when
individual lots are sold to home-owners.
As a matter of fact, the petitioners rely solely on
the general welfare clause or on implied powers
of the municipal corporation, not on any express
provision of law as statutory basis of their
exercise of power. The clause has always
received broad and liberal interpretation but we
cannot stretch it to cover this particular taking.
Moreover, the questioned ordinance was passed
after Himlayang Pilipino, Inc. had incorporated.
received necessary licenses and permits and
commenced operating. The sequestration of six
percent of the cemetery cannot even be
considered
as
having
been
impliedly
acknowledged by the private respondent when it
accepted the permits to commence operations.
WHEREFORE, the petition for review is hereby
DISMISSED. The decision of the respondent
court is affirmed.
SO ORDERED.

DIGEST
Facts:
An ordinance was promulgated in Quezon city which
approved the the regulation ofestablishment of
private cemeteries in the said city. According to the
ordinance, 6% of the total area of the private
memorial park shall be set aside for charity burial of
deceased persons who are paupers and have been
residents of QC. Himlayang Pilipino, a private
memorial park, contends that the taking or
confiscation of property restricts the use of property
such that it cannot be used for any reasonable
purpose and deprives the owner of all beneficial use
of his property. It also contends that the taking is not
a valid exercise of police power, since the properties
taken in the exercise of police power are destroyed
and not for the benefit of the public.
Issue:
Whether or not the ordinance made by Quezon City
is a valid taking of private property
Ruling:
No, the ordinance made by Quezon City is not a
valid way of taking private property. The ordinace is
actually a taking without compensation of a certain

area from a private cemetery to benefit paupers who

are charges of the municipal corporation. Instead of
building or maintaing a public cemeteries. State's
exercise of the power of expropriation requires
payment of just compensation. Passing the
ordinance without benefiting the owner of the
property with just compensation or due process,
would amount to unjust taking of a real property.
Since the property that is needed to be taken will be
used for the public's benefit, then the power of the
state to expropriate will come forward and not the
police power of the state.

G.R. No. L-18841

January 27, 1969

REPUBLIC OF THE PHILIPPINES, plaintiffappellant, vs.PHILIPPINE LONG DISTANCE

TELEPHONE COMPANY, defendant-appellant.

Office of the Solicitor General Arturo A. Alafriz,
Assistant Solicitor General Antonio A. Torres and
Solicitor Camilo D. Quiason for plaintiffappellant.Ponce Enrile, Siguion Reyna,
Montecillo and Belo for defendant-appellant.
REYES, J.B.L., J.:
Direct appeals, upon a joint record on appeal,
by both the plaintiff and the defendant from the
dismissal, after hearing, by the Court of First
Instance of Manila, in its Civil Case No. 35805, of
their respective complaint and counterclaims, but
making permanent a preliminary mandatory
injunction theretofore issued against the
defendant on the interconnection of telephone
facilities owned and operated by said parties.
The plaintiff, Republic of the Philippines, is a
political entity exercising governmental powers
through its branches and instrumentalities, one of
which is the Bureau of Telecommunications. That
office was created on 1 July 1947, under
Executive Order No. 94, with the following
powers and duties, in addition to certain powers

and duties formerly vested in the Director of

Posts:
1awphil.t

SEC. 79. The Bureau of Telecommunications

shall exercise the following powers and duties:
(a) To operate and maintain existing wiretelegraph and radio-telegraph offices, stations,
and facilities, and those to be established to
restore the pre-war telecommunication service
under the Bureau of Posts, as well as such
additional offices or stations as may hereafter be
established to provide telecommunication service
in places requiring such service;
(b) To investigate, consolidate, negotiate for,
operate and maintain wire-telephone or radio
telephone communication service throughout the
Philippines by utilizing such existing facilities in
cities, towns, and provinces as may be found
feasible and under such terms and conditions or
arrangements with the present owners or
operators thereof as may be agreed upon to the
satisfaction of all concerned;
(c) To prescribe, subject to approval by the
Department Head, equitable rates of charges for

messages handled by the system and/or for time

calls and other services that may be rendered by
said system;
(d) To establish and maintain coastal stations to
serve ships at sea or aircrafts and, when public
interest so requires, to engage in the
international telecommunication service in
agreement with other countries desiring to
establish such service with the Republic of the
Philippines; and
(e) To abide by all existing rules and regulations
prescribed
by
the
International
Telecommunication Convention relative to the
accounting, disposition and exchange of
messages handled in the international service,
and those that may hereafter be promulgated by
said convention and adhered to by the
Government of the Republic of the Philippines. 1
The defendant, Philippine Long Distance
Telephone Company (PLDT for short), is a public
service corporation holding a legislative
franchise, Act 3426, as amended by
Commonwealth Act 407, to install, operate and
maintain a telephone system throughout the

Philippines and to carry on the business of

electrical transmission of messages within the
Philippines and between the Philippines and the
telephone systems of other countries. 2 The RCA
Communications, Inc., (which is not a party to the
present case but has contractual relations with
the parties) is an American corporation
authorized to transact business in the Philippines
and is the grantee, by assignment, of a
legislative franchise to operate a domestic station
for the reception and transmission of long
distance wireless messages (Act 2178) and to
operate broadcasting and radio-telephone and
radio-telegraphic communications services (Act
3180). 3
Sometime in 1933, the defendant, PLDT, and
the RCA Communications, Inc., entered into an
agreement whereby telephone messages,
coming from the United States and received by
RCA's domestic station, could automatically be
transferred to the lines of PLDT; and vice-versa,
for calls collected by the PLDT for transmission
from the Philippines to the United States. The
contracting parties agreed to divide the tolls, as
follows: 25% to PLDT and 75% to RCA. The

sharing was amended in 1941 to 30% for PLDT

and 70% for RCA, and again amended in 1947 to
a 50-50 basis. The arrangement was later
extended to radio-telephone messages to and
from European and Asiatic countries. Their
contract contained a stipulation that either party
could terminate it on a 24-month notice to the
other. 4 On 2 February 1956, PLDT gave notice to
RCA to terminate their contract on 2 February
1958. 5
Soon after its creation in 1947, the Bureau of
Telecommunications set up its own Government
Telephone System by utilizing its own
appropriation and equipment and by renting trunk
lines of the PLDT to enable government offices
to call private parties. 6 Its application for the use
of these trunk lines was in the usual form of
applications for telephone service, containing a
statement, above the signature of the applicant,
that the latter will abide by the rules and
regulations of the PLDT which are on file with the
Public Service Commission. 7 One of the many
rules prohibits the public use of the service
furnished the telephone subscriber for his private
use. 8 The Bureau has extended its services to

the general public since 1948, 9 using the same

trunk lines owned by, and rented from, the PLDT,
and prescribing its (the Bureau's) own schedule
of rates. 10 Through these trunk lines, a
Government
Telephone
System
(GTS)
subscriber could make a call to a PLDT
subscriber in the same way that the latter could
make a call to the former.
On 5 March 1958, the plaintiff, through the
Director of Telecommunications, entered into an
agreement with RCA Communications, Inc., for a
joint overseas telephone service whereby the
Bureau would convey radio-telephone overseas
calls received by RCA's station to and from local
residents. 11 Actually, they inaugurated this joint
operation on 2 February 1958, under a
"provisional" agreement. 12
On 7 April 1958, the defendant Philippine Long
Distance Telephone Company, complained to the
Bureau of Telecommunications that said bureau
was violating the conditions under which their
Private Branch Exchange (PBX) is interconnected with the PLDT's facilities, referring to
the rented trunk lines, for the Bureau had used
the trunk lines not only for the use of government

offices but even to serve private persons or the

general public, in competition with the business
of the PLDT; and gave notice that if said
violations were not stopped by midnight of 12
April 1958, the PLDT would sever the telephone
connections. 13 When the PLDT received no reply,
it disconnected the trunk lines being rented by
the Bureau at midnight on 12 April 1958. 14 The
result was the isolation of the Philippines, on
telephone services, from the rest of the world,
except the United States. 15
At that time, the Bureau was maintaining 5,000
telephones and had 5,000 pending applications
for telephone connection. 16 The PLDT was also
maintaining 60,000 telephones and had also
20,000 pending applications. 17 Through the
years, neither of them has been able to fill up the
demand for telephone service.
The Bureau of Telecommunications had
proposed to the PLDT on 8 January 1958 that
both enter into an interconnecting agreement,
with the government paying (on a call basis) for
all calls passing through the interconnecting
facilities from the Government Telephone System
to the PLDT. 18 The PLDT replied that it was

willing to enter into an agreement on overseas

telephone service to Europe and Asian countries
provided that the Bureau would submit to the
jurisdiction and regulations of the Public Service
Commission and in consideration of 37 1/2% of
the gross revenues. 19 In its memorandum in lieu
of oral argument in this Court dated 9 February
1964, on page 8, the defendant reduced its offer
to 33 1/3 % (1/3) as its share in the overseas
telephone service. The proposals were not
accepted by either party.
On 12 April 1958, plaintiff Republic commenced
suit against the defendant, Philippine Long
Distance Telephone Company, in the Court of
First Instance of Manila (Civil Case No. 35805),
praying in its complaint for judgment
commanding the PLDT to execute a contract with
plaintiff, through the Bureau, for the use of the
facilities of defendant's telephone system
throughout the Philippines under such terms and
conditions as the court might consider
reasonable, and for a writ of preliminary
injunction against the defendant company to
restrain the severance of the existing telephone
connections and/or restore those severed.

Acting on the application of the plaintiff, and on

the ground that the severance of telephone
connections by the defendant company would
isolate the Philippines from other countries, the
court a quo, on 14 April 1958, issued an order for
the defendant:
(1) to forthwith reconnect and restore the
seventy-eight (78) trunk lines that it has
disconnected between the facilities of the
Government Telephone System, including its
overseas telephone services, and the facilities of
defendant; (2) to refrain from carrying into effect
its threat to sever the existing telephone
communication between the Bureau of
Telecommunications and defendant, and not to
make connection over its telephone system of
telephone calls coming to the Philippines from
foreign countries through the said Bureau's
telephone facilities and the radio facilities of RCA
Communications, Inc.; and (3) to accept and
connect through its telephone system all such
telephone calls coming to the Philippines from
foreign countries until further order of this
Court.
On 28 April 1958, the defendant company filed

its answer, with counterclaims.

It denied any obligation on its part to execute a
contrary of services with the Bureau of
Telecommunications; contested the jurisdiction of
the Court of First Instance to compel it to enter
into interconnecting agreements, and averred
that it was justified to disconnect the trunk lines
heretofore
leased
to
the
Bureau
of
Telecommunications
under
the
existing
agreement because its facilities were being used
in fraud of its rights. PLDT further claimed that
the Bureau was engaging in commercial
telephone operations in excess of authority, in
competition with, and to the prejudice of, the
PLDT, using defendants own telephone poles,
without proper accounting of revenues.
After trial, the lower court rendered judgment
that it could not compel the PLDT to enter into an
agreement with the Bureau because the parties
were not in agreement; that under Executive
Order 94, establishing the Bureau of
Telecommunications, said Bureau was not limited
to servicing government offices alone, nor was
there any in the contract of lease of the trunk
lines, since the PLDT knew, or ought to have

known, at the time that their use by the Bureau

was to be public throughout the Islands, hence
the Bureau was neither guilty of fraud, abuse, or
misuse of the poles of the PLDT; and, in view of
serious public prejudice that would result from
the disconnection of the trunk lines, declared the
preliminary injunction permanent, although it
dismissed both the complaint and the
counterclaims.
Both parties appealed.
Taking up first the appeal of the Republic, the
latter complains of the action of the trial court in
dismissing the part of its complaint seeking to
compel the defendant to enter into an
interconnecting contract with it, because the
parties could not agree on the terms and
conditions of the interconnection, and of its
refusal to fix the terms and conditions therefor.
We agree with the court below that parties can
not be coerced to enter into a contract where no
agreement is had between them as to the
principal terms and conditions of the contract.
Freedom to stipulate such terms and conditions
is of the essence of our contractual system, and

by express provision of the statute, a contract

may be annulled if tainted by violence,
intimidation, or undue influence (Articles 1306,
1336, 1337, Civil Code of the Philippines). But
the court a quo has apparently overlooked that
while the Republic may not compel the PLDT to
celebrate a contract with it, the Republic may, in
the exercise of the sovereign power of eminent
domain, require the telephone company to permit
interconnection of the government telephone
system and that of the PLDT, as the needs of the
government service may require, subject to the
payment of just compensation to be determined
by the court. 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.
The Bureau of Telecommunications, under
section 78 (b) of Executive Order No. 94, may
operate and maintain wire telephone or radio
telephone communications throughout the
Philippines by utilizing existing facilities in cities,
towns, and provinces under such terms and
conditions or arrangement with present owners
or operators as may be agreed upon to the
satisfaction of all concerned; but there is nothing
in this section that would exclude resort to
condemnation proceedings where unreasonable
or unjust terms and conditions are exacted, to
the extent of crippling or seriously hampering the

operations of said Bureau.

A perusal of the complaint shows that the
Republic's cause of action is predicated upon the
radio telephonic isolation of the Bureau's facilities
from the outside world if the severance of
interconnection were to be carried out by the
PLDT, thereby preventing the Bureau of
Telecommunications from properly discharging
its functions, to the prejudice of the general
public. Save for the prayer to compel the PLDT
to enter into a contract (and the prayer is no
essential part of the pleading), the averments
make out a case for compulsory rendering of
inter-connecting services by the telephone
company upon such terms and conditions as the
court may determine to be just. And since the
lower court found that both parties "are
practically at one that defendant (PLDT) is
entitled to reasonable compensation from plaintiff
for the reasonable use of the former's telephone
facilities" (Decision, Record on Appeal, page
224), the lower court should have proceeded to
treat the case as one of condemnation of such
services independently of contract and
proceeded to determine the just and reasonable

compensation for the

dismissing the petition.

same,

instead

of

This view we have taken of the true nature of

the Republic's petition necessarily results in
overruling the plea of defendant-appellant PLDT
that the court of first instance had no jurisdiction
to entertain the petition and that the proper forum
for the action was the Public Service
Commission. That body, under the law, has no
authority to pass upon actions for the taking of
private property under the sovereign right of
eminent domain. Furthermore, while the
defendant telephone company is a public utility
corporation whose franchise, equipment and
other properties are under the jurisdiction,
supervision and control of the Public Service
Commission (Sec. 13, Public Service Act), yet
the plaintiff's telecommunications network is a
public service owned by the Republic and
operated by an instrumentality of the National
Government, hence exempt, under Section 14 of
the Public Service Act, from such jurisdiction,
supervision and control. The Bureau of
Telecommunications was created in pursuance of
a state policy reorganizing the government

offices
to meet the exigencies attendant upon the
establishment of the free and independent
Government of the Republic of the Philippines,
and for the purpose of promoting simplicity,
economy and efficiency in its operation (Section
1, Republic Act No. 51)
and the determination of state policy is not
vested in the Commission (Utilities Com. vs.
Bartonville Bus Line, 290 Ill. 574; 124 N.E. 373).
Defendant PLDT, as appellant, contends that
the court below was in error in not holding that
the Bureau of Telecommunications was not
empowered to engage in commercial telephone
business, and in ruling that said defendant was
not justified in disconnecting the telephone trunk
lines it had previously leased to the Bureau. We
find that the court a quo ruled correctly in
rejecting both assertions.
Executive Order No. 94, Series of 1947,
reorganizing the Bureau of Telecommunications,
expressly empowered the latter in its Section 79,
subsection (b), to "negotiate for, operate and

maintain wire telephone or radio telephone

communication
service
throughout
the
Philippines", and, in subsection (c), "to prescribe,
subject to approval by the Department Head,
equitable rates of charges for messages handled
by the system and/or for time calls and other
services that may be rendered by the system".
Nothing in these provisions limits the Bureau to
non-commercial activities or prevents it from
serving the general public. It may be that in its
original prospectuses the Bureau officials had
stated that the service would be limited to
government offices: but such limitations could not
block future expansion of the system, as
authorized by the terms of the Executive Order,
nor could the officials of the Bureau bind the
Government not to engage in services that are
authorized by law. It is a well-known rule that
erroneous application and enforcement of the
law by public officers do not block subsequent
correct application of the statute (PLDT vs.
Collector of Internal Revenue, 90 Phil. 676), and
that the Government is never estopped by
mistake or error on the part of its agents (Pineda
vs. Court of First Instance of Tayabas, 52 Phil.
803, 807; Benguet Consolidated Mining Co. vs.

Pineda, 98 Phil. 711, 724).

The theses that the Bureau's commercial
services constituted unfair competition, and that
the Bureau was guilty of fraud and abuse under
its contract, are, likewise, untenable.
First, the competition is merely hypothetical, the
demand for telephone service being very much
more than the supposed competitors can supply.
As previously noted, the PLDT had 20,000
pending applications at the time, and the Bureau
had another 5,000. The telephone company's
inability to meet the demands for service are
notorious even now. Second, the charter of the
defendant expressly provides:
SEC. 14. The rights herein granted shall not be
exclusive, and the rights and power to grant to
any corporation, association or person other than
the grantee franchise for the telephone or
electrical transmission of message or signals
shall not be impaired or affected by the granting
of this franchise: (Act 3436)
And third, as the trial court correctly stated,
"when the Bureau of Telecommunications

subscribed to the trunk lines, defendant knew or

should have known that their use by the
subscriber was more or less public and all
embracing in nature, that is, throughout the
Philippines, if not abroad" (Decision, Record on
Appeal, page 216).
The acceptance by the defendant of the
payment of rentals, despite its knowledge that
the plaintiff had extended the use of the trunk
lines to commercial purposes, continuously since
1948, implies assent by the defendant to such
extended use. Since this relationship has been
maintained for a long time and the public has
patronized both telephone systems, and their
interconnection is to the public convenience, it is
too late for the defendant to claim misuse of its
facilities, and it is not now at liberty to unilaterally
sever the physical connection of the trunk lines.
..., but there is high authority for the position
that, when such physical connection has been
voluntarily made, under a fair and workable
arrangement and guaranteed by contract and the
continuous line has come to be patronized and
established as a great public convenience, such
connection shall not in breach of the agreement

be severed by one of the parties. In that case,

the public is held to have such an interest in the
arrangement that its rights must receive due
consideration. This position finds approval in
State ex rel. vs. Cadwaller, 172 Ind. 619, 636, 87
N.E. 650, and is stated in the elaborate and
learned opinion of Chief Justice Myers as
follows: "Such physical connection cannot be
required as of right, but if such connection is
voluntarily made by contract, as is here alleged
to be the case, so that the public acquires an
interest in its continuance, the act of the parties
in making such connection is equivalent to a
declaration of a purpose to waive the primary
right of independence, and it imposes upon the
property such a public status that it may not be
disregarded" citing Mahan v. Mich. Tel. Co.,
132 Mich. 242, 93 N.W. 629, and the reasons
upon which it is in part made to rest are referred
to in the same opinion, as follows: "Where
private property is by the consent of the owner
invested with a public interest or privilege for the
benefit of the public, the owner can no longer
deal with it as private property only, but must
hold it subject to the right of the public in the
exercise of that public interest or privilege

conferred for their benefit." Allnut v. Inglis (1810)

12 East, 527. The doctrine of this early case is
the acknowledged law. (Clinton-Dunn Tel. Co. v.
Carolina Tel. & Tel. Co., 74 S.E. 636, 638).
It is clear that the main reason for the objection
of the PLDT lies in the fact that said appellant did
not expect that the Bureau's telephone system
would expand with such rapidity as it has done;
but this expansion is no ground for the
discontinuance of the service agreed upon.
The last issue urged by the PLDT as appellant
is its right to compensation for the use of its
poles for bearing telephone wires of the Bureau
of Telecommunications. Admitting that section 19
of the PLDT charter reserves to the Government

the privilege without compensation of using the

poles of the grantee to attach one ten-pin crossarm, and to install, maintain and operate wires of
its telegraph system thereon; Provided, however,
That the Bureau of Posts shall have the right to
place additional cross-arms and wires on the
poles of the grantee by paying a compensation,
the rate of which is to be agreed upon by the

Director of Posts and the grantee;

the defendant counterclaimed for P8,772.00 for
the use of its poles by the plaintiff, contending
that what was allowed free use, under the
aforequoted provision, was one ten-pin crossarm attachment and only for plaintiff's telegraph
system, not for its telephone system; that said
section could not refer to the plaintiff's telephone
system, because it did not have such telephone
system when defendant acquired its franchise.
The implication of the argument is that plaintiff
has to pay for the use of defendant's poles if
such use is for plaintiff's telephone system and
has to pay also if it attaches more than one (1)
ten-pin cross-arm for telegraphic purposes.
As there is no proof that the telephone wires
strain the poles of the PLDT more than the
telegraph wires, nor that they cause more
damage than the wires of the telegraph system,
or that the Government has attached to the poles
more than one ten-pin cross-arm as permitted by
the PLDT charter, we see no point in this
assignment of error. So long as the burden to be
borne by the PLDT poles is not increased, we
see no reason why the reservation in favor of the

telegraph wires of the government should not be

extended to its telephone lines, any time that the
government decided to engage also in this kind
of communication.
In the ultimate analysis, the true objection of the
PLDT to continue the link between its network
and that of the Government is that the latter
competes "parasitically" (sic) with its own
telephone services. Considering, however, that
the PLDT franchise is non-exclusive; that it is
well-known that defendant PLDT is unable to
adequately cope with the current demands for
telephone service, as shown by the number of
pending applications therefor; and that the
PLDT's right to just compensation for the
services rendered to the Government telephone
system and its users is herein recognized and
preserved, the objections of defendant-appellant
are without merit. To uphold the PLDT's
contention is to subordinate the needs of the
general public to the right of the PLDT to derive
profit from the future expansion of its services
under its non-exclusive franchise.
WHEREFORE, the decision of the Court of First
Instance, now under appeal, is affirmed, except

in so far as it dismisses the petition of the

Republic of the Philippines to compel the
Philippine Long Distance Telephone Company to
continue servicing the Government telephone
system upon such terms, and for a
compensation, that the trial court may determine
to be just, including the period elapsed from the
filing of the original complaint or petition. And for
this purpose, the records are ordered returned to
the court of origin for further hearings and other
proceedings not inconsistent with this opinion.
No costs.
Concepcion, C.J., Dizon, Makalintal, Zaldivar,
Sanchez, Castro, Fernando, Capistrano,
Teehankee and Barredo, JJ., concur.

FACTS: Public petitioner commenced a suit against

private respondent praying for the right of the Bureau of
Telecommunications to demand interconnection between
the Government Telephone System and that of PLDT, so
that the Government Telephone System could make use
of the lines and facilities of the PLDT. Private respondent
contends that it cannot be compelled to enter into a

contract where no agreement is had between them.

ISSUE: Whether or not interconnection between PLDT
and the Government Telephone System can be a valid
object for expropriation.
HELD: Yes, in the exercise of the sovereign power of
eminent domain, the Republic may require the telephone
company to permit interconnection as the needs of the
government service may require, subject to the payment
of just compensation. The use of lines and services to
allow inter-service connection between the both
telephone systems, through expropriation can be a
subject to an easement of right of way.

United States vs. CAUSBY

Facts of the Case

Thomas Lee Causby owned a chicken farm outside
of Greensboro, North Carolina. The farm was located
near an airport used regularly by the United States
military. According to Causby, noise from the airport
regularly frightened the animals on his farm, resulting
in the deaths of several chickens. The problem
became so severe that Causby was forced to
abandon his business. Under an ancient doctrine of
the common law, land ownership extended to the
space above and below the earth. Using this doctrine
as a basis, Causby sued the United States, arguing
that he owned the airspace above his farm. By flying
planes in this airspace, he argued, the government
had confiscated his property without compensation,
thus violating the Takings Clause of the Fifth
Amendment. The United States Court of Claims
accepted Causby's argument, and ordered the
government to pay compensation.
Question
Did the flying of planes by the United States military
over Causby's farm constitute a violation of the
Takings Clause of the Fifth Amendment?
Conclusion

Yes, to an extent. In a 5-2 opinion authored by

Justice William O. Douglas, the Court concluded that
the ancient common law doctrine "has no place in
the modern world." Justice Douglas noted that, were
the Court to accept the doctrine as valid, "every
transcontinental flight would subject the operator to
countless trespass suits. Common sense revolts at
the idea." However, while the Court rejected the
unlimited reach above and below the earth described
in the common law doctrine, it also ruled that, "if the
landowner is to have full enjoyment of the land, he
must have exclusive control of the immediate
reaches of the enveloping atmosphere." Without
defining a specific limit, the Court stated that flights
over the land could be considered a violation of the
Takings Clause if they led to "a direct and immediate
interference with the enjoyment and use of the land."
Given the damage caused by the particularly low,
frequent flights over his farm, the Court determined
that the government had violated Causby's rights,
and he was entitled to compensation. (Chief Justice
Harlan Fiske Stone died on April 22; Justice Robert
H. Jackson took no part in the consideration or
decision in the case, leaving the court with 7
members.)

G.R. No. 4223

August 19, 1908

NICOLAS LUNOD, ET AL., plaintiffs-appellees,

vs.HIGINO MENESES, defendant-appellant.
T. Icasiano, for appellant.R. Salinas, for appellee.
TORRES, J.:
On the 14th of March, 1904, Nicolas Lunod, Juan
de la Vega, Evaristo Rodriguez, Fernando
Marcelo, Esteban Villena, Benito Litao, Ventura
Hernandez, and Casimiro Pantanilla, residents of
the town of Bulacan, province of the same name,
filed a written complaint against Higino Meneses,
alleging that they each owned and possessed
farm lands, situated in the places known as
Maytunas and Balot, near a small lake named
Calalaran; that the defendant is the owner of a
fish-pond and a strip of land situated in
Paraanan, adjoining the said lake on one side,
and the River Taliptip on the other; that from time

immemorial, and consequently for more than

twenty years before 1901, there existed and still
exists in favor of the rice fields of the plaintiffs a
statutory easement permitting the flow of water
over the said land in Paraanan, which easement
the said plaintiffs enjoyed until the year 1901 and
consisted in that the water collected upon their
lands and in the Calalaran Lake flow through
Paraanan into the Taliptip River. From that year
however, the defendant, without any right or
reason, converted the land in Paraanan into a
fishpond and by means of a dam and a bamboo
net, prevented the free passage of the water
through said place into the Taliptip River, that in
consequence the lands of the plaintiff became
flooded and damaged by the stagnant waters,
there being no outlet except through the land in
Paraanan; that their plantation were destroyed,
causing the loss and damages to the extent of
about P1,000, which loss and damage will
continue if the obstructions to the flow of the
water are allowed to remain, preventing its
passage through said land and injuring the rice
plantations of the plaintiffs. They therefore asked
that judgment be entered against the defendant,
declaring that the said tract of land in Paraanan

is subject to a statutory easement permitting the

flow of water from the property of the plaintiffs,
and that, without prejudice to the issuing of a
preliminary injunction, the defendant be ordered
to remove and destroy the obstructions that
impede the passage of the waters through
Paraanan, and that in future, and forever, he
abstain from closing in any manner the aforesaid
tract of land; that, upon judgment being entered,
the said injunction be declared to be final and
that the defendant be sentenced to pay to the
plaintiffs an indemnity of P1,000, and the costs in
the proceedings; that they be granted any other
and further equitable or proper remedy in
accordance with the facts alleged and proven.
In view of the demurrer interposed by the
plaintiffs to the answer of the defendant, the
latter, on the 29th of August, 1904, filed an
amended answer, denying each and everyone of
the allegations of the complaint, and alleged that
no statutory easement existed nor could exist in
favor of the lands described in the complaint,
permitting the waters to flow over the fish pond
that he, together with his brothers, owned in the
sitio of Bambang, the area and boundaries of

which were stated by him, and which he and his

brothers had inherited from their deceased
mother.
Apolinara de Leon; that the same had been
surveyed by a land surveyor in September, 1881,
he also denied that he had occupied or
converted any land in the barrio of Bambang into
a fishpond; therefore, and to sentence the
plaintiffs to pay the costs and corresponding
damages.
Upon the evidence adduced by both parties to
the suit, the court, on the 13th of March, 1907,
entered judgment declaring that the plaintiffs
were entitled to a decision in their favor, and
sentenced the defendant to remove the dam
placed on the east of the Paraanan passage on
the side of the Taliptip River opposite the old dam
in the barrio of Bambang, as well as to remove
and destroy the obstacles to the free passage of
the waters through the strip of land in Paraanan;
to abstain in future, and forever, from obstructing
or closing in any manner the course of the waters
through the said strip of land. The request that
the defendant be sentenced to pay an indemnity
was denied, and no ruling was made as to costs.

The defendant excepted to the above judgment

and furthermore asked for a new trial which was
denied and also excepted to, and, upon approval
of the bill of exceptions, the question was
submitted to this court.
Notwithstanding the defendant's denial in his
amended answer, it appears to have been clearly
proven in this case that the lands owned by the
plaintiffs in the aforesaid barrio, as well as the
small adjoining lake, named Calalaran, are
located in places relatively higher than the sitio
called Paraanan where the land and fish pond of
the defendant are situated, and which border on
the Taliptip River; that during the rainy season
the rain water which falls on he land of the
plaintiffs, and which flows toward the small
Calalaran Lake at flood time, has no outlet to the
Taliptip River other than through the low land of
Paraanan: that the border line between Calalaran
and Paraanan there has existed from time
immemorial a dam, constructed by the
community for the purpose of preventing the salt
waters from the Taliptip River, at high tide, from
flooding the land in Calalaran, passing through
the lowlands of Paraanan; but when rainfall was

abundant, one of the residents was designated in

his turn by the lieutenant or justice of the barrio
to open the sluice gate in order to let out the
water that flooded the rice fields, through the
land of Paraanan to the above-mentioned river,
that since 1901, the defendant constructed
another dam along the boundary of this fishpond
in Paraanan, thereby impeding the outlet of the
waters that flood the fields of Calalaran, to the
serious detriment of the growing crops.
According to article 530 of the Civil Code, an
easement is charge imposed upon one estate for
the benefit of another estate belonging to a
different owner, and the realty in favor of which
the easement is established is called the
dominant estate, and the one charged with it the
servient estate.
The lands of Paraanan being the lower are
subject to the easement of receiving and giving
passage to the waters proceeding from the
higher lands and the lake of Calalaran; this
easement was not constituted by agreement
between the interested parties; it is of a statutory
nature, and the law had imposed it for the
common public utility in view of the difference in

the altitude of the lands in the barrio Bambang.

Article 552 of the Civil code provides:
Lower estates must receive the waters which
naturally and without the intervention of man
descend from the higher estates, as well as the
stone or earth which they carry with them.
Neither may the owner of the lower estates
construct works preventing this easement, nor
the one of the higher estate works increasing the
burden.
Article 563 of the said code reads also:
The establishment, extent, form, and conditions
of the easements of waters to which this section
refers shall be governed by the special law
relating thereto in everything not provided for in
this code.
The special law cited in the Law of Waters of
August 3, 1866, article 111 of which, treating of
natural easements relating to waters, provides:
Lands situated at a lower level are subject to

receive the waters that flow naturally, without the

work of man, from the higher lands together with
the stone or earth which they carry with them.
Hence, the owner of the lower lands can not
erect works that will impede or prevent such an
easement or charge, constituted and imposed by
the law upon his estate for the benefit of the
higher lands belonging to different owners;
neither can the latter do anything to increase or
extend the easement.
According to the provisions of law above referred
to, the defendant, Meneses, had no right to
construct the works, nor the dam which blocks
the passage, through his lands and the outlet to
the Taliptip River, of the waters which flood the
higher lands of the plaintiffs; and having done so,
to the detriment of the easement charged on his
estate, he has violated the law which protects
and guarantees the respective rights and
regulates the duties of the owners of the fields in
Calalaran and Paraanan.
It is true that article 388 of said code authorizes
every owner to enclose his estate by means of
walls, ditches fences or any other device, but his

right is limited by the easement imposed upon

his estate.
The defendant Meneses might have constructed
the works necessary to make and maintain a fish
pond within his own land, but he was always
under the strict and necessary obligation to
respect the statutory easement of waters
charged upon his property, and had no right to
close the passage and outlet of the waters
flowing from the lands of the plaintiffs and the
lake of Calalaran into the Taliptip River. He could
not lawfully injure the owners of the dominant
estates by obstructing the outlet to the Taliptip
River of the waters flooding the upper lands
belonging to the plaintiffs.
It is perhaps useful and advantageous to the
plaintiffs and other owners of high lands in
Calalaran, in addition to the old dike between the
lake of said place and the low lands in Paraanan,
to have another made by the defendant at the
border of Paraanan adjoining the said river, for
the purpose of preventing the salt waters of the
Taliptip River flooding, at high tide, not only the
lowlands in Paraanan but also the higher ones of
Calalaran and its lake, since the plaintiffs can not

prevent the defendant from protecting his lands

against the influx of salt water; but the defendant
could never be permitted to obstruct the flow of
the waters through his lands to the Taliptip River
during the heavy rains, when the high lands in
Calalaran and the lake in said place are flooded,
thereby impairing the right of the owners of the
dominant estates.
For the above reasons, and accepting the
findings of the court below in the judgment
appealed from in so far as they agree with the
terms of this decision, we must and do hereby
declare that the defendant, Higino Meneses, as
the owner of the servient estate, is obliged to
give passage to and allow the flow of the waters
descending from the Calalaran Lake and from
the land of the plaintiffs through his lands in
Paraanan for their discharge into the Taliptip
River; and he is hereby ordered to remove any
obstacle that may obstruct the free passage of
the waters whenever there may be either a small
or large volume of running water through his
lands in the sitio of Paraanan for their discharge
into the Taliptip River; and in future to abstain
from impeding, in any manner, the flow of the

waters coming from the higher lands. The

judgment appealed from is affirmed, in so far as
it agrees with decision, and reversed in other
respects, with the costs of this instance against
the appellants. So ordered.
Carson, Willard and Tracey, JJ., concur.