III.
FUNDAMENTAL POWERS OF THE STATE CA: affirmed with modification; even on the assumption that LOI
Similarities and Differences
PLANTERS PRODUCTS, INC. VS. FERTIPHIL CORPORATION
(PONENTE: REYES)
Doctrine/s:
(1) If the purpose is primarily revenue, or if revenue is, at least,
one of the real and substantial purposes, then the exaction is
properly called a tax.
(2) The power to tax exists for the general welfare; hence, implicit
in its power is the limitation that it should be used only for a
public purpose.
Facts:
Petitioner PPI and private respondent Fertiphil are private
corporations incorporated under Philippine laws. They are both
engaged in the importation and distribution of fertilizers, pesticides and
agricultural chemicals.
On 3 June 1985, then President Ferdinand Marcos, exercising his
legislative powers, issued LOI No. 1465 which provided, among
others, for the imposition of a capital recovery component
(CRC) on the domestic sale of all grades of fertilizers in the
Philippines. The LOI provides:
3. The Administrator of the Fertilizer Pesticide Authority to
include in its fertilizer pricing formula a capital
contribution component of not less than P10 per bag.
This capital contribution shall be collected until adequate
capital is raised to make PPI viable. Such capital
contribution shall be applied by FPA to all domestic
sales of fertilizers in the Philippines. (Underscoring
supplied)
Pursuant to the LOI, Fertiphil paid P10 for every bag of fertilizer it
sold in the domestic market to the Fertilizer and Pesticide
Authority (FPA). FPA then remitted the amount collected to the
Far East Bank and Trust Company, the depositary bank of
PPI.Fertiphil paid P6,689,144 to FPA from July 8, 1985 to January 24,
1986
After the 1986 Edsa Revolution, FPA voluntarily stopped the
imposition of the P10 levy. With the return of democracy, Fertiphil
demanded from PPI a refund of the amounts it paid under LOI
No. 1465, but PPI refused to accede to the demand.
Fertiphil filed a complaint for collection and damagesagainst
FPA and PPI with the RTC in Makati. It questioned the
constitutionality of LOI No. 1465 for being unjust, unreasonable,
oppressive, invalid and an unlawful imposition that amounted to a denial
of due process of law.Fertiphil alleged that the LOI solely favored
PPI, a privately owned corporation, which used the proceeds to
maintain its monopoly of the fertilizer industry.
In its Answer, FPA, through the Solicitor General, countered that
the issuance of LOI No. 1465 was a valid exercise of the police
power of the State in ensuring the stability of the fertilizer
industry in the country. It also averred that Fertiphil did not sustain
any damage from the LOI because the burden imposed by the levy fell on
the ultimate consumer, not the seller.
RTC: the imposition of the P10 CRC was an exercise of the
State’s inherent power of taxation; invalidated the levy for
violating the basic principle that taxes can only be levied for
public purpose. (PPI filed a M.R. -> denied; In a separate but related
proceeding, SC allowed appeal but remanded to CA)
No. 1465 was issued under the police power of the state, it is
still unconstitutional because it did not promote public
welfare; the levy was NOT for the benefit, as alleged, of
Planters Foundation, Inc. (on the strength of the Letter of
Understanding (LOU) issued by then Prime Minister Cesar
Virata on 18 April 1985 and affirmed by the Secretary of Justice
in an Opinion dated 12 October 1987.(PPI filed a M.R. -> denied)
Issue/s:
(1) Whether the imposition of the levy was an exercise by the State
of its taxation power.
(2) Whether LOI 1465 constitutes a valid legislation pursuant to
the exercise of taxation.
(3) Whether LOI 1465 constitutes a valid legislation pursuant to
the exercise of police power.
Held:
(1) Yes;
The imposition of the levy was an exercise by the State of its taxation
power. While it is true that the power of taxation can be used as an
implement of police power,the primary purpose of the levy is revenue
generation. If the purpose is primarily revenue, or if revenue is,
at least, one of the real and substantial purposes, then the
exaction is properly called a tax.
In Philippine Airlines, Inc. v. Edu, it was held that the imposition of a
vehicle registration fee is not an exercise by the State of its police power,
but of its taxation power, thus:
It is clear from the provisions of Section 73 of Commonwealth
Act 123 and Section 61 of the Land Transportation and Traffic
Code that the legislative intent and purpose behind the law
requiring owners of vehicles to pay for their registration
is mainly to raise funds for the construction and maintenance
of highways and to a much lesser degree, pay for the
operating expenses of the administering agency. x xx Fees
may be properly regarded as taxes even though they
also serve as an instrument of regulation.
Taxation may be made the implement of the state's police
power (Lutz v. Araneta, 98 Phil. 148). If the purpose is
primarily revenue, or if revenue is, at least, one of the real and
substantial purposes, then the exaction is properly called a
tax. Such is the case of motor vehicle registration fees. The
same provision appears as Section 59(b) in the Land
Transportation Code. It is patent therefrom that the
legislators had in mind a regulatory tax as the law refers to
the imposition on the registration, operation or ownership of
a motor vehicle as a "tax or fee." x xx Simply put, if the
exaction under Rep. Act 4136 were merely a regulatory fee,
the imposition in Rep. Act 5448 need not be an "additional"
tax. Rep. Act 4136 also speaks of other "fees" such as the
special permit fees for certain types of motor vehicles (Sec. 10)
and additional fees for change of registration (Sec. 11). These
are not to be understood as taxes because such fees
are very minimal to be revenue-raising. Thus, they are
not mentioned by Sec. 59(b) of the Code as taxes like the motor
vehicle registration fee and chauffeurs’ license fee. Such fees
are to go into the expenditures of the Land Transportation
Commission as provided for in the last proviso of Sec. 61.
(Underscoring supplied)
The P10 levy under LOI No. 1465 is too excessive to serve a
mere regulatory purpose. The levy, no doubt, was a big burden on the
seller or the ultimate consumer. It increased the price of a bag of fertilizer
by as much as five percent. A plain reading of the LOI also supports
the conclusion that the levy was for revenue generation. The
FUNDAMENTAL POWERS OF THE STATE
Page 1 of 11
LOI expressly provided that the levy was imposed "until
adequate capital is raised to make PPI viable."
(2) No;
The P10 levy is unconstitutional because it was not for a public purpose.
The levy was imposed to give undue benefit to PPI.
An inherent limitation on the power of taxation is public
purpose. Taxes are exacted only for a public purpose. They cannot be
used for purely private purposes or for the exclusive benefit of
private persons. The reason for this is simple. The power to tax
exists for the general welfare; hence, implicit in its power is the
limitation that it should be used only for a public purpose.
The term "public purpose" is not defined. It is an elastic concept that
can be hammered to fit modern standards. Jurisprudence
states that "public purpose" should be given a broad
interpretation. It does not only pertain to those purposes which
are traditionally viewed as essentially government functions,
such as building roads and delivery of basic services, but also
includes those purposes designed to promote social justice.
Thus, public money may now be used for the relocation of illegal settlers,
low-cost housing and urban or agrarian reform.
While the categories of what may constitute a public purpose are
continually expanding in light of the expansion of government functions,
the inherent requirement that taxes can only be exacted for a
public purpose still stands. Public purpose is the heart of a tax law.
When a tax law is only a mask to exact funds from the public
when its true intent is to give undue benefit and advantage to a
private enterprise, that law will not satisfy the requirement of
"public purpose."
Indications that it is not for the public purpose
1. The LOI expressly provided that the levy be imposed to benefit
PPI, a private company.
2. The LOI provides that the imposition of the P10 levy was
conditional and dependent upon PPI becoming financially
"viable."
3. The levies paid under the LOI were directly remitted and
deposited by FPA to Far East Bank and Trust Company, the
depositary bank of PPI which proves that PPI benefitted from
the LOI
4. The levy was used to pay the corporate debts of PPI.
(3) No;
Even if We consider LOI No. 1695 enacted under the police power of the
State, it would still be invalid for failing to comply with the test
of "lawful subjects" and "lawful means." Jurisprudence states the
test as follows: (1) the interest of the public generally, as distinguished
from those of particular class, requires its exercise; and (2) the means
employed are reasonably necessary for the accomplishment of the
purpose and not unduly oppressive upon individuals.
For the same reasons as discussed, LOI No. 1695 is invalid because it
did not promote public interest. The law was enacted to give undue
advantage to a private corporation.
Dispositive Portion: WHEREFORE, the petition is DENIED. The Court
of Appeals Decision dated November 28, 2003 is AFFIRMED.
a. POLICE POWER
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS VS.
DRILON
G.R. NO. L-81958
JUNE 30, 1988
FACTS: The Philippine Association of Service Exporters, Inc. (PASEI)
challenges the Constitutional validity of Department Order No. 1, Series
of 1988, of the Department of Labor and Employment, in the character of
"GUIDELINES GOVERNING THE TEMPORARY SUSPENSION OF
DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD
WORKERS," in this petition for certiorari and prohibition. Specifically,
the measure is assailed for "discrimination against males or females;" that
it "does not apply to all Filipino workers but only to domestic helpers and
females with similar skills;" and that it is violative of the right to travel. It
is held likewise to be an invalid exercise of the lawmaking power, police
power being legislative, and not executive, in character.
In its supplement to the petition, PASEI invokes Section 3, of Article XIII,
of the Constitution, providing for worker participation "in policy and
decision-making processes affecting their rights and benefits as may be
provided by law." Department Order No. 1, it is contended, was passed in
the absence of prior consultations. It is claimed, finally, to be in violation
of the Charter's non-impairment clause, in addition to the "great and
irreparable injury" that PASEI members face should the Order be further
enforced.
ISSUE: Whether or not the Department Order No. 1 in nature of the
police power is valid under the Constitution?
HELD: In the light of the foregoing, the petition must be dismissed.
As a general rule, official acts enjoy a presumed validity. In the absence of
clear and convincing evidence to the contrary, the presumption logically
stands.
The petitioner has shown no satisfactory reason why the contested
measure should be nullified. There is no question that Department Order
No. 1 applies only to "female contract workers," but it does not thereby
make an undue discrimination between the sexes. It is well-settled that
"equality before the law" under the Constitution does not import a perfect
Identity of rights among all men and women. It admits of classifications,
provided that (1) such classifications rest on substantial distinctions; (2)
they are germane to the purposes of the law; (3) they are not confined to
existing conditions; and (4) they apply equally to all members of the same
class.
The Court is well aware of the unhappy plight that has befallen our female
labor force abroad, especially domestic servants, amid exploitative
working conditions marked by physical and personal abuse. As precisely
the caretaker of Constitutional rights, the Court is called upon to protect
victims of exploitation. In fulfilling that duty, the Court sustains the
Government's efforts.
The same, however, cannot be said of our male workers. In the first place,
there is no evidence that, except perhaps for isolated instances, our men
abroad have been afflicted with an identical predicament. Suffice it to
state, then, that insofar as classifications are concerned, this Court is
content that distinctions are borne by the evidence. Discrimination in this
case is justified.
There is likewise no doubt that such a classification is germane to the
purpose behind the measure. Unquestionably, it is the avowed objective
of Department Order No. 1 to "enhance the protection for Filipino female
overseas workers" this Court has no quarrel that in the midst of the
terrible mistreatment Filipina workers have suffered abroad, a ban on
deployment will be for their own good and welfare.
The Order does not narrowly apply to existing conditions. Rather, it is
intended to apply indefinitely so long as those conditions exist. This is
clear from the Order itself ("Pending review of the administrative and
legal measures, in the Philippines and in the host countries . . ."),
meaning to say that should the authorities arrive at a means impressed
with a greater degree of permanency, the ban shall be lifted.
FUNDAMENTAL POWERS OF THE STATE
Page 2 of 11

It is incorrect to say that Department Order No. 1 prescribes a total ban
on overseas deployment. From scattered provisions of the Order, it is
evident that such a total ban has not been contemplated.
The consequence the deployment ban has on the right to travel does not
impair the right. The right to travel is subject, among other things, to the
requirements of "public safety," "as may be provided by law. Neither is
there merit in the contention that Department Order No. 1 constitutes an
invalid exercise of legislative power. It is true that police power is the
domain of the legislature, but it does not mean that such an authority
may not be lawfully delegated. As we have mentioned, the Labor Code
itself vests the Department of Labor and Employment with rule-making
powers in the enforcement whereof.
The non-impairment clause of the Constitution, invoked by the petitioner,
must yield to the loftier purposes targeted by the Government. Freedom
of contract and enterprise, like all other freedoms, is not free from
restrictions, more so in this jurisdiction, where laissez faire has never
been fully accepted as a controlling economic way of life.
This Court understands the grave implications the questioned Order has
on the business of recruitment. The concern of the Government, however,
is not necessarily to maintain profits of business firms. In the ordinary
sequence of events, it is profits that suffer as a result of Government
regulation. The interest of the State is to provide a decent living to its
citizens. The Government has convinced the Court in this case that this is
its intent. We do not find the impugned Order to be tainted with a grave
abuse of discretion to warrant the extraordinary relief prayed for.
WALTER LUTZ VS. ANTONIO ARANETA
G.R. NO. L-7859
DECEMBER 22, 1955
FACTS: This case was initiated in the Court of First Instance of Negros
Occidental to test the legality of the taxes imposed by Commonwealth Act
No. 567, otherwise known as the Sugar Adjustment Act.
Promulgated in 1940, the due to the threat to our industry by the
imminent imposition of export taxes upon sugar as provided in the
Tydings-McDuffe Act, and the "eventual loss of its preferential position in
the United States market"; wherefore, the national policy was expressed
"to obtain a readjustment of the benefits derived from the sugar industry
by the component elements thereof" and "to stabilize the sugar industry
so as to prepare it for the eventuality of the loss of its preferential position
in the United States market and the imposition of the export taxes."
In section 2, Commonwealth Act 567 provides for an increase of the
existing tax on the manufacture of sugar, on a graduated basis, on each
picul of sugar manufactured; while section 3 levies on owners or persons
in control of lands devoted to the cultivation of sugar cane and ceded to
others for a consideration, on lease or otherwise a tax equivalent to the
difference between the money value of the rental or consideration
collected and the amount representing 12 per centum of the assessed
value of such land.
Plaintiff, Walter Lutz, in his capacity as Judicial Administrator of the
Intestate Estate of Antonio Jayme Ledesma, seeks to recover from the
Collector of Internal Revenue the sum of P14,666.40 paid by the estate as
taxes, under section 3 of the Act, for the crop years 1948-1949 and 1949-
1950; alleging that such tax is unconstitutional and void, being levied for
the aid and support of the sugar industry exclusively, which in plaintiff's
opinion is not a public purpose for which a tax may be constitutionally
levied. The action having been dismissed by the Court of First Instance,
the plaintiffs appealed the case directly to this Court (Judiciary Act,
section 17).
ISSUE: Whether or not the CA No. 567 or Sugar Adjustment Act is
constitutional and for public purpose.
HELD: The basic defect in the plaintiff's position is his assumption that
the tax provided for in Commonwealth Act No. 567 is a pure exercise of
the taxing power. Analysis of the Act, and particularly of section 6, will
show that the tax is levied with a regulatory purpose, to provide means for
the rehabilitation and stabilization of the threatened sugar industry. In
other words, the act is primarily an exercise of the police power.
This Court can take judicial notice of the fact that sugar production is one
of the great industries of our nation, sugar occupying a leading position
among its export products; that it gives employment to thousands of
laborers in fields and factories; that it is a great source of the state's
wealth, is one of the important sources of foreign exchange needed by our
government, and is thus pivotal in the plans of a regime committed to a
policy of currency stability. Its promotion, protection and advancement,
therefore redounds greatly to the general welfare. Hence it was competent
for the legislature to find that the general welfare demanded that the
sugar industry should be stabilized in turn; and in the wide field of its
police power, the lawmaking body could provide that the distribution of
benefits therefrom be readjusted among its components to enable it to
resist the added strain of the increase in taxes that it had to sustain.
Once it is conceded, as it must, that the protection and promotion of the
sugar industry is a matter of public concern, it follows that the Legislature
may determine within reasonable bounds what is necessary for its
protection and expedient for its promotion. Here, the legislative
discretion must be allowed fully play, subject only to the test of
reasonableness; and it is not contended that the means provided in
section 6 of the law bear no relation to the objective pursued or are
oppressive in character. If objective and methods are alike
constitutionally valid, no reason is seen why the state may not levy taxes
to raise funds for their prosecution and attainment. Taxation may be
made the implement of the state's police power.
That the tax to be levied should burden the sugar producers themselves
can hardly be a ground of complaint; indeed, it appears rational that the
tax be obtained precisely from those who are to be benefited from the
expenditure of the funds derived from it. At any rate, it is inherent in the
power to tax that a state be free to select the subjects of taxation, and it
has been repeatedly held that "inequalities which result from a singling
out of one particular class for taxation, or exemption infringe no
constitutional limitation".
From the point of view we have taken it appears of no moment that the
funds raised under the Sugar Stabilization Act, now in question, should be
exclusively spent in aid of the sugar industry, since it is that very
enterprise that is being protected. It may be that other industries are also
in need of similar protection; that the legislature is not required by the
Constitution to adhere to a policy of "all or none." As ruled in Minnesota
ex rel. Pearson vs. Probate Court, 309 U. S. 270, 84 L. Ed. 744, "if the law
presumably hits the evil where it is most felt, it is not to be overthrown
because there are other instances to which it might have been applied;"
and that "the legislative authority, exerted within its proper field, need
not embrace all the evils within its reach".
ASSOCIATION OF SMALL LANDOWNERS VS. SECREATARY
OF AGRARIAN REFORM
G.R. NO. L-78742
JULY 14, 1989
FACTS: This is a consolidation of cases which involve constitutional
questions as to the validity of Comprehensive Agrarian Reform Law of
1988, which President Aquino signed on June 10, 1988.
FUNDAMENTAL POWERS OF THE STATE
Page 3 of 11
"Land for the Landless" is a slogan that underscores the acute imbalance
in the distribution of this precious resource among our people. But it is
more than a slogan. Through the brooding centuries, it has become a
battle-cry dramatizing the increasingly urgent demand of the
dispossessed among us for a plot of earth as their place in the sun.
Recognizing this need, the Constitution in 1935 mandated the policy of
social justice to "insure the well-being and economic security of all the
people," especially the less privileged. In 1973, the new Constitution
affirmed this goal adding specifically that "the State shall regulate the
acquisition, ownership, use, enjoyment and disposition of private
property and equitably diffuse property ownership and profits."
Significantly, there was also the specific injunction to "formulate and
implement an agrarian reform program aimed at emancipating the tenant
from the bondage of the soil."
The Constitution of 1987 was not to be outdone. Besides echoing these
sentiments, it also adopted one whole and separate Article XIII on Social
Justice and Human Rights, containing grandiose but undoubtedly sincere
provisions for the uplift of the common people. These include a call in the
following words for the adoption by the State of an agrarian reform
program:
SEC. 4. The State shall, by law, undertake an agrarian reform program
founded on the right of farmers and regular farmworkers, who are
landless, to own directly or collectively the lands they till or, in the case of
other farmworkers, to receive a just share of the fruits thereof. To this
end, the State shall encourage and undertake the just distribution of all
agricultural lands, subject to such priorities and reasonable retention
limits as the Congress may prescribe, taking into account ecological,
developmental, or equity considerations and subject to the payment of
just compensation. In determining retention limits, the State shall respect
the right of small landowners. The State shall further provide incentives
for voluntary land-sharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land
Reform Code, had already been enacted by the Congress of the
Philippines on August 8, 1963, in line with the above-stated principles.
This was substantially superseded almost a decade later by P.D. No. 27,
which was promulgated on October 21, 1972, along with martial law, to
provide for the compulsory acquisition of private lands for distribution
among tenant-farmers and to specify maximum retention limits for
landowners.
On July 17, 1987, President Corazon C. Aquino issued E.O. No. 228,
declaring full land ownership in favor of the beneficiaries of P.D. No. 27
and providing for the valuation of still unvalued lands covered by the
decree as well as the manner of their payment. This was followed on July
22, 1987 by Presidential Proclamation No. 131, instituting a
comprehensive agrarian reform program (CARP), and E.O. No. 229,
providing the mechanics for its implementation.
Subsequently, with its formal organization, the revived Congress of the
Philippines took over legislative power from the President and started its
own deliberations, including extensive public hearings, on the
improvement of the interests of farmers. The result, after almost a year of
spirited debate, was the enactment of R.A. No. 6657, otherwise known as
the Comprehensive Agrarian Reform Law of 1988, which President
Aquino signed on June 10, 1988. This law, while considerably changing
the earlier mentioned enactments, nevertheless gives them suppletory
effect insofar as they are not inconsistent with its provisions.
ISSUE: Whether or not Comprehensive Agrarian Reform Law of 1988 is
unconstitutional and violates individual rights to equal protection clause
and due process.
HELD: The court in upholding the constitutionality of the
Comprehensive Agrarian Reform Law of 1988 discussed the issues.
The cases before us present no knotty complication insofar as the
question of compensable taking is concerned. To the extent that the
measures under challenge merely prescribe retention limits for
landowners, there is an exercise of the police power for the regulation of
private property in accordance with the Constitution. But where, to carry
out such regulation, it becomes necessary to deprive such owners of
whatever lands they may own in excess of the maximum area allowed,
there is definitely a taking under the power of eminent domain for which
payment of just compensation is imperative. The taking contemplated is
not a mere limitation of the use of the land. What is required is the
surrender of the title to and the physical possession of the said excess and
all beneficial rights accruing to the owner in favor of the farmer-
beneficiary. This is definitely an exercise not of the police power but of
the power of eminent domain.
Whether as an exercise of the police power or of the power of eminent
domain, the several measures before us are challenged as violative of the
due process and equal protection clauses.
The argument of the small farmers that they have been denied equal
protection because of the absence of retention limits has also become
academic under Section 6 of R.A. No. 6657. Significantly, they too have
not questioned the area of such limits. There is also the complaint that
they should not be made to share the burden of agrarian reform, an
objection also made by the sugar planters on the ground that they belong
to a particular class with particular interests of their own. However, no
evidence has been submitted to the Court that the requisites of a valid
classification have been violated.
Classification has been defined as the grouping of persons or things
similar to each other in certain particulars and different from each other
in these same particulars. To be valid, it must conform to the following
requirements: (1) it must be based on substantial distinctions; (2) it must
be germane to the purposes of the law; (3) it must not be limited to
existing conditions only; and (4) it must apply equally to all the members
of the class. The Court finds that all these requisites have been met by the
measures here challenged as arbitrary and discriminatory.
Equal protection simply means that all persons or things similarly
situated must be treated alike both as to the rights conferred and the
liabilities imposed. The petitioners have not shown that they belong to a
different class and entitled to a different treatment. The argument that
not only landowners but also owners of other properties must be made to
share the burden of implementing land reform must be rejected. There is
a substantial distinction between these two classes of owners that is
clearly visible except to those who will not see. There is no need to
elaborate on this matter. In any event, the Congress is allowed a wide
leeway in providing for a valid classification. Its decision is accorded
recognition and respect by the courts of justice except only where its
discretion is abused to the detriment of the Bill of Rights.
It is worth remarking at this juncture that a statute may be sustained
under the police power only if there is a concurrence of the lawful subject
and the lawful method. Put otherwise, the interests of the public generally
as distinguished from those of a particular class require the interference
of the State and, no less important, the means employed are reasonably
necessary for the attainment of the purpose sought to be achieved and not
unduly oppressive upon individuals. As the subject and purpose of
agrarian reform have been laid down by the Constitution itself, we may
say that the first requirement has been satisfied. What remains to be
examined is the validity of the method employed to achieve the
constitutional goal.
This brings us now to the power of eminent domain.
Eminent domain is an inherent power of the State that enables it to
forcibly acquire private lands intended for public use upon payment of
FUNDAMENTAL POWERS OF THE STATE
Page 4 of 11
just compensation to the owner. Obviously, there is no need to
expropriate where the owner is willing to sell under terms also acceptable
to the purchaser, in which case an ordinary deed of sale may be agreed
upon by the parties. It is only where the owner is unwilling to sell, or
cannot accept the price or other conditions offered by the vendee, that the
power of eminent domain will come into play to assert the paramount
authority of the State over the interests of the property owner. Private
rights must then yield to the irresistible demands of the public interest on
the time-honored justification, as in the case of the police power, that the
welfare of the people is the supreme law.
But for all its primacy and urgency, the power of expropriation is by no
means absolute (as indeed no power is absolute). The limitation is found
in the constitutional injunction that "private property shall not be taken
for public use without just compensation" and in the abundant
jurisprudence that has evolved from the interpretation of this principle.
Basically, the requirements for a proper exercise of the power are: (1)
public use and (2) just compensation.
Let us dispose first of the argument raised by the petitioners in G.R. No.
79310 that the State should first distribute public agricultural lands in the
pursuit of agrarian reform instead of immediately disturbing property
rights by forcibly acquiring private agricultural lands. Parenthetically, it is
not correct to say that only public agricultural lands may be covered by
the CARP as the Constitution calls for "the just distribution of all
agricultural lands." In any event, the decision to redistribute private
agricultural lands in the manner prescribed by the CARP was made by the
legislative and executive departments in the exercise of their discretion.
We are not justified in reviewing that discretion in the absence of a clear
showing that it has been abused.
A becoming courtesy admonishes us to respect the decisions of the
political departments when they decide what is known as the political
question.
The second requirement, i.e., the payment of just compensation, needs a
longer and more thoughtful examination.
Just compensation is defined as the full and fair equivalent of the
property taken from its owner by the expropriator. It has been repeatedly
stressed by this Court that the measure is not the taker's gain but the
owner's loss. The word "just" is used to intensify the meaning of the word
"compensation" to convey the idea that the equivalent to be rendered for
the property to be taken shall be real, substantial, full, ample.
It bears repeating that the measures challenged in these petitions
contemplate more than a mere regulation of the use of private lands
under the police power. We deal here with an actual taking of private
agricultural lands that has dispossessed the owners of their property and
deprived them of all its beneficial use and enjoyment, to entitle them to
the just compensation mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is
compensable taking when the following conditions concur: (1) the
expropriator must enter a private property; (2) the entry must be for
more than a momentary period; (3) the entry must be under warrant or
color of legal authority; (4) the property must be devoted to public use or
otherwise informally appropriated or injuriously affected; and (5) the
utilization of the property for public use must be in such a way as to oust
the owner and deprive him of beneficial enjoyment of the property. All
these requisites are envisioned in the measures before us.
Asso. Of Small Landowners Vs. Sec. Of DAR
175 SCRA 343 G.R. No. L-78742 July 14, 1989
Facts: Several petitions are the root of the case:
a. A petition alleging the constitutionality of PD No. 27, EO 228 and 229
and RA 6657. Subjects of the petition are a 9-hectare and 5 hectare
Riceland worked by four tenants. Tenants were declared full owners
by EO 228 as qualified farmers under PD 27. The petitioners now
contend that President Aquino usurped the legislature’s power.
b. A petition by landowners and sugarplanters in Victoria’s Mill Negros
Occidental against Proclamation 131 and EO 229. Proclamation 131 is
the creation of Agrarian Reform Fund with initial fund of P50Billion.
c. A petition by owners of land which was placed by the DAR under the
coverage of Operation Land Transfer.
d. A petition invoking the right of retention under PD 27 to owners of rice
and corn lands not exceeding seven hectares.
Issue: Whether or Not the aforementioned EO’s, PD, and RA were
constitutional.
Held: The promulgation of PD 27 by President Marcos was valid in
exercise of Police power and eminent domain.
The power of President Aquino to promulgate Proc. 131 and EO 228 and
229 was authorized under Sec. 6 of the Transitory Provisions of the 1987
Constitution. Therefore it is a valid exercise of Police Power and Eminent
Domain.
RA 6657 is likewise valid. The carrying out of the regulation under CARP
becomes necessary to deprive owners of whatever lands they may own in
excess of the maximum area allowed, there is definitely a taking under the
power of eminent domain for which payment of just compensation is
imperative. The taking contemplated is not a mere limitation of the use of
the land. What is required is the surrender of the title and the physical
possession of said excess and all beneficial rights accruing to the owner in
favour of the farmer.
A statute may be sustained under the police power only if there is
concurrence of the lawful subject and the method.
Subject and purpose of the Agrarian Reform Law is valid, however what is
to be determined is the method employed to achieve it.
FLORENTINA A. LOZANO VS. MARTINEZ
G.R. NO. L-63419 146 SCRA 323
DECEMBER 18, 1986
FACTS: The constitutionality of Batas Pambansa Bilang 22 (BP 22 for
short), popularly known as the Bouncing Check Law, which was approved
on April 3, 1979, is the sole issue presented by these petitions for decision.
The question is definitely one of first impression in our jurisdiction.
These petitions arose from cases involving prosecution of offenses under
the statute. The defendants in those cases moved seasonably to quash
the information on the ground that the acts charged did not constitute an
offense, the statute being unconstitutional.
ISSUE: Whether or not the bouncing check law is unconstitutional?
HELD: BP 22 is aimed at putting a stop to or curbing the practice of
issuing checks that are worthless, i.e. checks that end up being rejected or
dishonored for payment. The practice, as discussed later, is proscribed by
the state because of the injury it causes to the public interests.
Those who question the constitutionality of BP 22 insist that: (1) it
offends the constitutional provision forbidding imprisonment for debt;
(2) it impairs freedom of contract; (3) it contravenes the equal protection
clause; and (4) it unduly delegates legislative and executive powers;
FUNDAMENTAL POWERS OF THE STATE
Page 5 of 11
Has BP 22 transgressed the constitutional inhibition against
imprisonment for debt? To answer the question, it is necessary to
examine what the statute prohibits and punishes as an offense. Is it the
failure of the maker of the check to pay a debt? Or is it the making and
issuance of a worthless check in payment of a debt? What is the gravamen
of the offense? This question lies at the heart of the issue before us.
The gravamen of the offense punished by BP 22 is the act of making and
issuing a worthless check or a check that is dishonored upon its
presentation for payment. It is not the non-payment of an obligation
which the law punishes. The law is not intended or designed to coerce a
debtor to pay his debt. The thrust of the law is to prohibit, under pain of
penal sanctions, the making of worthless checks and putting them in
circulation. Because of its deleterious effects on the public interest, the
practice is proscribed by the law. The law punishes the act not as an
offense against property, but an offense against public order.
The police power of the state has been described as "the most essential,
insistent and illimitable (least limitable) of powers" which enables it to
prohibit all things hurtful to the comfort, safety and welfare of society. It
is a power not emanating from or conferred by the constitution, but
inherent in the state, plenary, "suitably vague and far from precisely
defined, rooted in the conception that man in organizing the state and
imposing upon the government limitations to safeguard constitutional
rights did not intend thereby to enable individual citizens or group of
citizens to obstruct unreasonably the enactment of such salutary
measures to ensure communal peace, safety, good order and welfare."
The enactment of BP 22 is a declaration by the legislature that, as a
matter of public policy, the making and issuance of a worthless check is
deemed public nuisance to be abated by the imposition of penal
sanctions.
It is not for us to question the wisdom or impolicy of the statute. It is
sufficient that a reasonable nexus exists between means and end.
Considering the factual and legal antecedents that led to the adoption of
the statute, it is not difficult to understand the public concern which
prompted its enactment. It had been reported that the approximate value
of bouncing checks per day was close to 200 million pesos, and thereafter
when overdrafts were banned by the Central Bank, it averaged between
50 million to 80 million pesos a day.
By definition, a check is a bill of exchange drawn on a bank and payable
on demand. It is a written order on a bank, purporting to be drawn
against a deposit of funds for the payment of all events, of a sum of money
to a certain person therein named or to his order or to cash and payable
on demand. Unlike a promissory note, a check is not a mere undertaking
to pay an amount of money. It is an order addressed to a bank and
partakes of a representation that the drawer has funds on deposit against
which the check is drawn, sufficient to ensure payment upon its
presentation to the bank. There is therefore an element of certainty or
assurance that the instrument will be paid upon presentation. For this
reason, checks have become widely accepted as a medium of payment in
trade and commerce. Although not legal tender, checks have come to be
perceived as convenient substitutes for currency in commercial and
financial transactions. The basis or foundation of such perception is
confidence. If such confidence is shakes the usefulness of checks as
currency substitutes would be greatly diminished or may become nit. Any
practice therefore tending to destroy that confidence should be deterred
for the proliferation of worthless checks can only create havoc in trade
circles and the banking community.
The effects of the issuance of a worthless check transcends the private
interests of the parties directly involved in the transaction and touches
the interests of the community at large. The mischief it creates is not only
a wrong to the payee or holder, but also an injury to the public. The
harmful practice of putting valueless commercial papers in circulation,
multiplied a thousand fold, can very well pollute the channels of trade and
commerce, injure the banking system and eventually hurt the welfare of
society and the public interest. As aptly stated:
“The 'check flasher' does a great deal more than contract a debt; he
shakes the pillars of business; and to my mind, it is a mistaken charity of
judgment to place him in the same category with the honest man who is
unable to pay his debts, and for whom the constitutional inhibition
against' imprisonment for debt, except in cases of fraud was intended as a
shield and not a sword.”
In sum, we find the enactment of BP 22 a valid exercise of the police
power and is not repugnant to the constitutional inhibition against
imprisonment for debt.
As stated elsewhere, police power is a dynamic force that enables the state
to meet the exigencies of changing times. There are occasions when the
police power of the state may even override a constitutional guaranty. For
example, there have been cases wherein we held that the constitutional
provision on non-impairment of contracts must yield to the police power
of the state. Whether the police power may override the constitutional
inhibition against imprisonment for debt is an issue we do not have to
address. This bridge has not been reached, so there is no occasion to cross
it.
We hold that BP 22 does not conflict with the constitutional inhibition
against imprisonment for debt.
We find no valid ground to sustain the contention that BP 22 impairs
freedom of contract. The freedom of contract which is constitutionally
protected is freedom to enter into "lawful" contracts. Contracts which
contravene public policy are not lawful. Besides, we must bear in mind
that checks cannot be categorized as mere contracts. It is a commercial
instrument which, in this modem day and age, has become a convenient
substitute for money; it forms part of the banking system and therefore
not entirely free from the regulatory power of the state.
Neither do we find substance in the claim that the statute in question
denies equal protection of the laws or is discriminatory, since it penalizes
the drawer of the check, but not the payee. It is contended that the payee
is just as responsible for the crime as the drawer of the check, since
without the indispensable participation of the payee by his acceptance of
the check there would be no crime. This argument is tantamount to
saying that, to give equal protection, the law should punish both the
swindler and the swindled. The petitioners' posture ignores the well-
accepted meaning of the clause "equal protection of the laws." The clause
does not preclude classification of individuals, who may be accorded
different treatment under the law as long as the classification is no
unreasonable or arbitrary.
It is also suggested that BP 22 constitutes undue or improper delegation
of legislative powers, on the theory that the offense is not completed by
the sole act of the maker or drawer but is made to depend on the will of
the payee. If the payee does not present the check to the bank for payment
but instead keeps it, there would be no crime. The logic of the argument
stretches to absurdity the meaning of "delegation of legislative power."
What cannot be delegated is the power to legislate, or the power to make
laws which means, as applied to the present case, the power to define the
offense sought to be punished and to prescribe the penalty. By no stretch
of logic or imagination can it be said that the power to define the crime
and prescribe the penalty therefor has been in any manner delegated to
the payee. Neither is there any provision in the statute that can be
construed, no matter how remotely, as undue delegation of executive
power. The suggestion that the statute unlawfully delegates its
enforcement to the offended party is far fetched.
DEPARTMENT OF EDUCATION, CULTURE AND SPORTS
(DECS) and DIRECTOR OF CENTER FOR EDUCATIONAL
FUNDAMENTAL POWERS OF THE STATE
Page 6 of 11
MEASUREMENT,petitioners, vs.ROBERTO REY C. SAN DIEGO
and JUDGE TERESITA DIZON-CAPULONG, in her capacity as
Presiding Judge of the Regional Trial Court of Valenzuela, Metro
Manila, Branch 172, respondents.
G.R. No. 89572 December 21, 1989
FACTS: The issue before us is mediocrity. The question is whether a
person who has thrice failed the National Medical Admission Test
(NMAT) is entitled to take it again.
The petitioner contends he may not, under its rule that-
h) A student shall be allowed only three (3) chances to take the NMAT.
After three (3) successive failures, a student shall not be allowed to take
the NMAT for the fourth time.
The private respondent insists he can, on constitutional grounds.
The private respondent is a graduate of the University of the East with a
degree of Bachelor of Science in Zoology. The petitioner claims that he
took the NMAT three times and flunked it as many times. 1 When he
applied to take it again, the petitioner rejected his application on the basis
of the aforesaid rule. He then went to the Regional Trial Court of
Valenzuela, Metro Manila, to compel his admission to the test.
In his original petition for mandamus, he first invoked his constitutional
rights to academic freedom and quality education. In an amended
petition filed with leave of court, he squarely challenged the
constitutionality of MECS Order No. 12, Series of 1972, containing the
above-cited rule. The additional grounds raised were due process and
equal protection.
ISSUE: Whether or not MECS Order No. 12, Series of 1972 is
unconstitutional and violative of the constitution rights to academic
freedom and quality education, due process and equal protection?
HELD: In reversing the decision of the RTC Judge and affirming the
constitutionality of the MECS Order No. 12, the court cited that the power
is validly exercised if (a) the interests of the public generally, as
distinguished from those of a particular class, require the interference of
the State, and (b) the means employed are reasonably necessary to the
attainment of the object sought to be accomplished and not unduly
oppressive upon individuals.
In other words, the proper exercise of the police power requires the
concurrence of a lawful subject and a lawful method.
The subject of the challenged regulation is certainly within the ambit of
the police power. It is the right and indeed the responsibility of the State
to insure that the medical profession is not infiltrated by incompetents to
whom patients may unwarily entrust their lives and health.
The method employed by the challenged regulation is not irrelevant to the
purpose of the law nor is it arbitrary or oppressive. The three-flunk rule is
intended to insulate the medical schools and ultimately the medical
profession from the intrusion of those not qualified to be doctors.
The State has the responsibility to harness its human resources and to see
to it that they are not dissipated or, no less worse, not used at all. These
resources must be applied in a manner that will best promote the
common good while also giving the individual a sense of satisfaction.
The right to quality education invoked by the private respondent is not
absolute. The Constitution also provides that "every citizen has the right
to choose a profession or course of study, subject to fair, reasonable and
equitable admission and academic requirements.”
The private respondent must yield to the challenged rule and give way to
those better prepared.
The contention that the challenged rule violates the equal protection
clause is not well-taken. There would be unequal protection if some
applicants who have passed the tests are admitted and others who have
also qualified are denied entrance. In other words, what the equal
protection requires is equality among equals.
RESTITUTO YNOT, petitioner, vs. INTERMEDIATE APPELLATE
COURT, THE STATION COMMANDER, INTEGRATED
NATIONAL POLICE, BAROTAC NUEVO, ILOILO and THE
REGIONAL DIRECTOR, BUREAU OF ANIMAL INDUSTRY,
REGION IV, ILOILO CITY, respondents.
FACTS: The petitioner had transported six carabaos in a pump boat
from Masbate to Iloilo on January 13, 1984, when they were confiscated
by the police station commander of Barotac Nuevo, Iloilo, for violation of
Executive Order No. 626-A which provides that “the carabao or carabeef
transported in violation of this Executive Order as amended shall be
subject to confiscation and forfeiture by the government, to be distributed
to charitable institutions and other similar institutions as the Chairman of
the National Meat Inspection Commission may ay see fit, in the case of
carabeef, and to deserving farmers through dispersal as the Director of
Animal Industry may see fit, in the case of carabaos”.
The petitioner sued for recovery, and the Regional Trial Court of Iloilo
City issued a writ of replevin upon his filing of a supersedeas bond of
P12,000.00. After considering the merits of the case, the court sustained
the confiscation of the carabaos and, since they could no longer be
produced, ordered the confiscation of the bond. The court also declined to
rule on the constitutionality of the executive order, as raise by the
petitioner, for lack of authority and also for its presumed validity.
The petitioner appealed the decision to the Intermediate Appellate
Court,* 3 which upheld the trial court, ** and he has now come before us
in this petition for review on certiorari.
ISSUES: Whether or not executive order no. 626-A is unconstitutional
due misapplication of police power, violation of due process, and undue
delegation of legislative power?
HELD: The protection of the general welfare is the particular function of
the police power which both restraints and is restrained by due process.
The police power is simply defined as the power inherent in the State to
regulate liberty and property for the promotion of the general welfare. It
is this power that is now invoked by the government to justify Executive
Order No. 626-A, amending the basic rule in Executive Order No. 626,
prohibiting the slaughter of carabaos except under certain conditions. To
justify the State in thus interposing its authority in behalf of the public, it
must appear, first, that the interests of the public generally, as
distinguished from those of a particular class, require such interference;
and second, that the means are reasonably necessary for the
accomplishment of the purpose, and not unduly oppressive upon
individuals.
In the light of the tests mentioned, we hold with the Toribio Case that
there is no doubt that by banning the slaughter of these animals except
where they are at least seven years old if male and eleven years old if
female upon issuance of the necessary permit, the executive order will be
conserving those still fit for farm work or breeding and preventing their
improvident depletion.
But while conceding that the amendatory measure has the same lawful
subject as the original executive order, we cannot say with equal certainty
that it complies with the second requirement, viz., that there be a lawful
method. We note that to strengthen the original measure, Executive
Order No. 626-A imposes an absolute ban not on the slaughter of the
carabaos but on their movement, providing that "no carabao regardless of
age, sex, physical condition or purpose (sic) and no carabeef shall be
transported from one province to another." The object of the prohibition
escapes us. The reasonable connection between the means employed and
the purpose sought to be achieved by the questioned measure is missing.
FUNDAMENTAL POWERS OF THE STATE
Page 7 of 11

We do not see how the prohibition of the inter-provincial transport of
carabaos can prevent their indiscriminate slaughter, considering that they
can be killed anywhere, with no less difficulty in one province than in
another. Obviously, retaining the carabaos in one province will not
prevent their slaughter there, any more than moving them to another
province will make it easier to kill them there. As for the carabeef, the
prohibition is made to apply to it as otherwise, so says executive order, it
could be easily circumvented by simply killing the animal. Perhaps so.
However, if the movement of the live animals for the purpose of
preventing their slaughter cannot be prohibited, it should follow that
there is no reason either to prohibit their transfer as, not to be flippant
dead meat.
Even if a reasonable relation between the means and the end were to be
assumed, we would still have to reckon with the sanction that the
measure applies for violation of the prohibition. The penalty is outright
confiscation of the carabao or carabeef being transported, to be meted out
by the executive authorities, usually the police only. In the Toribio Case,
the statute was sustained because the penalty prescribed was fine and
imprisonment, to be imposed by the court after trial and conviction of the
accused. Under the challenged measure, significantly, no such trial is
prescribed, and the property being transported is immediately
impounded by the police and declared, by the measure itself, as forfeited
to the government. This measure deprives the individual due process as
granted by the Constitution.
The due process clause was kept intentionally vague so it would remain
also conveniently resilient. This was felt necessary because due process is
not, like some provisions of the fundamental law, an "iron rule" laying
down an implacable and immutable command for all seasons and all
persons. Flexibility must be the best virtue of the guaranty. The very
elasticity of the due process clause was meant to make it adapt easily to
every situation, enlarging or constricting its protection as the changing
times and circumstances may require.
Aware of this, the courts have also hesitated to adopt their own specific
description of due process lest they confine themselves in a legal
straitjacket that will deprive them of the elbow room they may need to
vary the meaning of the clause whenever indicated.
The minimum requirements of due process are notice and hearing which,
generally speaking, may not be dispensed with because they are intended
as a safeguard against official arbitrariness. It is a gratifying commentary
on our judicial system that the jurisprudence of this country is rich with
applications of this guaranty as proof of our fealty to the rule of law and
the ancient rudiments of fair play.
It has already been remarked that there are occasions when notice and
hearing may be validly dispensed with notwithstanding the usual
requirement for these minimum guarantees of due process. It is also
conceded that summary action may be validly taken in administrative
proceedings as procedural due process is not necessarily judicial only. In
the exceptional cases accepted, however. there is a justification for the
omission of the right to a previous hearing, to wit, the immediacy of the
problem sought to be corrected and the urgency of the need to correct it.
In the case before us, there was no such pressure of time or action calling
for the petitioner's peremptory treatment. The properties involved were
not even inimical per se as to require their instant destruction. There
certainly was no reason why the offense prohibited by the executive order
should not have been proved first in a court of justice, with the accused
being accorded all the rights safeguarded to him under the Constitution.
Considering that, as we held in Pesigan v. Angeles, 21 Executive Order
No. 626-A is penal in nature, the violation thereof should have been
pronounced not by the police only but by a court of justice, which alone
would have had the authority to impose the prescribed penalty, and only
after trial and conviction of the accused.
To sum up then, we find that the challenged measure is an invalid
exercise of the police power because the method employed to conserve
the carabaos is not reasonably necessary to the purpose of the law and,
worse, is unduly oppressive. Due process is violated because the owner of
the property confiscated is denied the right to be heard in his defense and
is immediately condemned and punished. The conferment on the
administrative authorities of the power to adjudge the guilt of the
supposed offender is a clear encroachment on judicial functions and
militates against the doctrine of separation of powers. There is, finally,
also an invalid delegation of legislative powers to the officers mentioned
therein who are granted unlimited discretion in the distribution of the
properties arbitrarily taken. For these reasons, we hereby declare
Executive Order No. 626-A unconstitutional.
CITY GOVERNMENT OF QUEZON CITY and CITY COUNCIL OF
QUEZON CITY, petitioners, vs. HON. JUDGE VICENTE G.
ERICTA as Judge of the Court of First Instance of Rizal, Quezon City,
Branch XVIII; HIMLAYANG PILIPINO, INC., respondents.
G.R. No. L-34915 June 24, 1983
FACTS: This is a petition for review which seeks the reversal of the
decision of the Court of First Instance of Rizal, Branch XVIII declaring
Section 9 of Ordinance No. 6118, S-64, of the Quezon City Council null
and void.
Section 9 of Ordinance No. 6118, S-64, entitled "ORDINANCE
REGULATING THE ESTABLISHMENT, MAINTENANCE AND
OPERATION OF PRIVATE MEMORIAL TYPE CEMETERY OR BURIAL
GROUND WITHIN THE JURISDICTION OF QUEZON CITY AND
PROVIDING PENALTIES FOR THE VIOLATION THEREOF" provides:
Sec. 9. At least six (6) percent of the total area of the memorial park
cemetery shall be set aside for charity burial of deceased persons who are
paupers and have been residents of Quezon City for at least 5 years prior
to their death, to be determined by competent City Authorities. The area
so designated shall immediately be developed and should be open for
operation not later than six months from the date of approval of the
application.
For several years, the aforequoted section of the Ordinance was not
enforced by city authorities but seven years after the enactment of the
ordinance, the Quezon City Council passed the following resolution:
RESOLVED by the council of Quezon assembled, to request, as it does
hereby request the City Engineer, Quezon City, to stop any further selling
and/or transaction of memorial park lots in Quezon City where the
owners thereof have failed to donate the required 6% space intended for
paupers burial.
Pursuant to this 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.
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
FUNDAMENTAL POWERS OF THE STATE
Page 8 of 11
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.
ISSUE: Whether or not the Section 9 of Ordinance No. 6118, S-64 is a
valid exercise of police power?
HELD: 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.
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.'
The power to regulate does not include the power to prohibit. 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.'
Police power is defined by Freund as 'the power of promoting the public
welfare by restraining and regulating the use of liberty and property'. 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.
It will be seen from the foregoing authorities that police power is usually
exercised in the form of mere regulation or restriction in the use of liberty
or property for the promotion of the general welfare. It does not involve
the taking or confiscation of property with the exception of a few cases
where there is a necessity to confiscate private property in order to
destroy it for the purpose of protecting the peace and order and of
promoting the general welfare as for instance, the confiscation of an
illegally possessed article, such as opium and firearms.
It seems to the court that Section 9 of Ordinance No. 6118, Series of 1964
of Quezon City is not a mere police regulation but an outright
confiscation. It deprives a person of his private property without due
process of law, nay, even without compensation.
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.
THE UNITED STATES, plaintiff-appellant, vs. SILVESTRE
POMPEYA, defendant-appellee
G.R. No. L-10255 August 6, 1915
FACTS: A Municipal Ordinance was enacted by the Province of Iloilo
pursuant to the provisions of Act No. 1309, the specific purpose of which
is to require each able-bodied male resident of the municipality, between
the ages of 18 and 55, as well as each householder when so required by
the president, to assist in the maintenance of peace and good order in the
community, by apprehending ladrones, etc., as well as by giving
information of the existence of such persons in the locality. The
amendment contains a punishment for those who may be called upon for
such service, and who refuse to render the same.
o A complaint was filed by the prosecuting attorney of the
Province of Iloilo against Pompeya with violation of the said
ordinance for failing to render service on patrol duty required
under the same
 Defendant argued that the municipal ordinance alleged to be violated is
unconstitutional because it is repugnant to the Organic Act of the
Philippines, which guarantees the liberty of the citizens.
ISSUE:
Whether or not the ordinance upon which said complaint was based is
constitutional.
HELD: Yes
 The right or power conferred upon the municipalities by Act No. 1309
falls within the police power of the state and the state was fully
authorized and justified in conferring the same upon the municipalities
of the Philippine Islands and that, therefore, the provisions of said
Act are constitutional and not in violation nor in derogation of the
rights of the persons affected thereby
→ Police power has been defined as the power of the government,
inherent in every sovereign, and cannot be limited. The power
vested in the legislature to make such laws as they shall judge to
be for the good of the state and its subjects. The power to govern
men and things, extending to the protection of the lives, limbs,
health, comfort, and quiet of all persons, and the protection of all
property within the state. The authority to establish such rules
and regulations for the conduct of all persons as may be
conducive to the public interest.
→ Blackstone, in his valuable commentaries on the common laws,
defines police power as "the defenses, regulations, and domestic
order of the country, whereby the inhabitants of a state, like
members of a well-governed family, are bound to conform their
general behaviour to the rules of propriety, good neighborhood,
and good manners, and to be decent, industrious, and
inoffensive in their respective stations."
→ The police power of the state may be said to embrace the whole
system of internal regulation, by which the state seeks not only
to preserve public order and to prevent offenses against the
state, but also to establish, for the intercourse of citizen with
citizen, those rules of good manners and good neighborhood,
which are calculated to prevent a conflict of rights, and to insure
to each the uninterrupted enjoyment of his own, so far as is
reasonably consistent, with a like enjoyment of the rights
of others. The police power of the state includes not only
the public health and safety, but also the public welfare,
protection against impositions, and generally the public's best
best interest. It so extensive and all pervading, that the courts
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 refuse to lay down a general rule defining it, but decide each
specific case on its merits
 It will also be noted that the law authorizing the president of
the municipality to call upon persons, imposes certain conditions as
prerequisites: (1) The person called upon to render such services must
be an able-bodied male resident of the municipality; (2) he must be
between the ages of 18 and 55[50], and (3) certain conditions must
exist requiring the services of such persons
→ It will not contended that a non-resident of the municipality
would be liable for his refusal to obey the call of the president;
neither can it be logically contended that one under the age of 18
or over the age of 55 [50] would incur the penalty of the law by
his refusal to obey the command of the president. Moreover, the
persons liable for the service mentioned in the law cannot be
called upon at the mere whim or caprice of the president. There
must be some just and reasonable ground, at least sufficient in
the mind of a reasonable man, before the president can call upon
the the persons for the service mentioned in the law. The law
does not apply to all persons. The law does not apply to every
condition. The law applies to special persons and special
conditions
→ A complaint based upon such a law, in order to be free from
objection under a demurrer, must show that the person charged
belongs to the class of persons to which the law is applicable
 Even admitting all of the facts in the complaint in the present case,
the court would be unable to impose the punishment provided for by
law, because it does not show (a) that the defendant was a male citizen
of the municipality; (b) that he was an able-bodied citizen; (c) that he
was not under 18years of age nor over 55 [50]; nor (d) that conditions
existed which justified the president of the municipality in calling upon
him for the services mentioned in the law
ICHONG VS HERNANDEZ
LAO H. ICHONG, in his own behalf and in behalf of other alien
residents, corporations and partnerships adversely affected. by
Republic Act No. 1180, petitioner, vs. JAIME
HERNANDEZ, Secretary of Finance, and MARCELINO
SARMIENTO, City Treasurer of Manila, respondents.
G.R. No. L-7995 May 31, 1957
FACTS: Republic Act No. 1180 is entitled "An Act to Regulate the Retail
Business." In effect it nationalizes the retail trade business. The main
provisions of the Act are: (1) a prohibition against persons, not citizens of
the Philippines, and against associations, partnerships, or corporations
the capital of which are not wholly owned by citizens of the Philippines,
from engaging directly or indirectly in the retail trade; (2) an exception
from the above prohibition in favor of aliens actually engaged in said
business on May 15, 1954, who are allowed to continue to engaged
therein, unless their licenses are forfeited in accordance with the law,
until their death or voluntary retirement in case of natural persons, and
for ten years after the approval of the Act or until the expiration of term in
case of juridical persons; (3) an exception there from in favor of citizens
and juridical entities of the United States; (4) a provision for the
forfeiture of licenses for violation of the laws on nationalization, control
weights and measures and labor and other laws relating to trade,
commerce and industry; (5) a prohibition against the establishment or
opening by aliens actually engaged in the retail business of additional
stores or branches of retail business, (6) a provision requiring aliens
actually engaged in the retail business to present for registration with the
proper authorities a verified statement concerning their businesses,
giving, among other matters, the nature of the business, their assets and
liabilities and their offices and principal offices of judicial entities; and (7)
a provision allowing the heirs of aliens now engaged in the retail business
who die, to continue such business for a period of six months for purposes
of liquidation.
Petitioner, for and in his own behalf and on behalf of other alien
resident,s corporations and partnerships adversely affected by the
provisions of Republic Act. No. 1180, brought this action to obtain a
judicial declaration that said Act is unconstitutional, and to enjoin the
Secretary of Finance and all other persons acting under him, particularly
city and municipal treasurers, from enforcing its provisions. Petitioner
attacks the constitutionality of the Act, contending that it denies to alien
residents the equal protection of the laws and deprives of their liberty and
property without due process of law.
ISSUE: Whether or not R.A. No. 1180 denies equal protection of laws
and due process?
HELD: The Court cited the following reason in upholding the
constitutionality and validity of R.A. No. 1180 which does not violate the
equal protection of laws and due process.
We hold that the disputed law was enacted to remedy a real actual threat
and danger to national economy posed by alien dominance and control of
the retail business and free citizens and country from dominance and
control; that the enactment clearly falls within the scope of the police
power of the State, thru which and by which it protects its own
personality and insures its security and future.
The present dominance of the alien retailer, especially in the big centers
of population, therefore, becomes a potential source of danger on
occasions of war or other calamity. We do not have here in this country
isolated groups of harmless aliens retailing goods among nationals; what
we have are well organized and powerful groups that dominate the
distribution of goods and commodities in the communities and big
centers of population. They owe no allegiance or loyalty to the State, and
the State cannot rely upon them in times of crisis or emergency. While the
national holds his life, his person and his property subject to the needs of
his country, the alien may even become the potential enemy of the State.
The law does not violate the equal protection clause of the Constitution
because sufficient grounds exist for the distinction between alien and
citizen in the exercise of the occupation regulated. Aliens are under no
special constitutional protection which forbids a classification otherwise
justified simply because the limitation of the class falls along the lines of
nationality. That would be requiring a higher degree of protection for
aliens as a class than for similar classes than for similar classes of
American citizens. Broadly speaking, the difference in status between
citizens and aliens constitutes a basis for reasonable classification in the
exercise of police power.
DUE PROCESS
The due process of law clause is not violated because the law is
prospective in operation and recognizes the privilege of aliens already
engaged in the occupation and reasonably protects their privilege; that
the wisdom and efficacy of the law to carry out its objectives appear to us
to be plainly evident — as a matter of fact it seems not only appropriate
but actually necessary — and that in any case such matter falls within the
prerogative of the Legislature, with whose power and discretion the
Judicial department of the Government may not interfere.
The guaranty of due process demands only that the law shall not be
unreasonable, arbitrary or capricious, and that the means selected shall
have a real and substantial relation to the subject sought to be attained.
So far as the requirement of due process is concerned and in the absence
of other constitutional restriction a state is free to adopt whatever
economic policy may reasonably be deemed to promote public welfare,
and to enforce that policy by legislation adapted to its purpose. The courts
are without authority either to declare such policy, or, when it is declared
by the legislature, to override it. If the laws passed are seen to have a
reasonable relation to a proper legislative purpose, and are neither
arbitrary nor discriminatory, the requirements of due process are
satisfied, and judicial determination to that effect renders a court functus
officio. . . .
To justify the state in thus interposing its authority in behalf of the public,
it must appear, first, that the interests of the public generally, as
distinguished from those of a particular class, require such interference;
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and second, that the means are reasonably necessary for the
accomplishment of the purpose, and not unduly oppressive upon
individuals. The real question at issue, therefore, is not that posed by
petitioner, which overlooks and ignores the facts and circumstances, but
this, Is the exclusion in the future of aliens from the retail trade
unreasonable?; Arbitrary capricious, taking into account the illegitimate
and pernicious form and manner in which the aliens have heretofore
engaged therein? As thus correctly stated the answer is clear. The law in
question is deemed absolutely necessary to bring about the desired
legislative objective, i.e., to free national economy from alien control and
dominance. It is not necessarily unreasonable because it affects private
rights and privileges (11 Am. Jur. pp. 1080-1081.) The test of
reasonableness of a law is the appropriateness or adequacy under all
circumstances of the means adopted to carry out its purpose into effect
(Id.) Judged by this test, disputed legislation, which is not merely
reasonable but actually necessary, must be considered not to have
infringed the constitutional limitation of reasonableness.
AGUSTIN vs. EDU
88 SCRA 195 G.R. No. L-49112 February 2, 1979
Facts: President Marcos issued the Letter of Instruction No. 229 which
states that all owners, users or drivers shall have at all times one pair of
early warning devise (EWD) in their cars acquire from any source
depending on the owner’s choice. The Letter of Instruction was assailed
by petitioner Leovillo Agustin to have violated the constitution guarantee
of due process against Hon Edu, Land Transportation Commissioner,
Hon. Juan Ponce Enrile, Minister of national Defense, Hon. Juinio,
Minister of Public Works, Transportation and Communication and Hon.
Aquino, Minister of Public Highways. Because of such contentions, the
Implementing Rules and Regulation was ordered to be suspended for a
period of 6 months. Petitioner alleges that EWD are not necessary
because vehicles already have hazard lights (blinking lights) that can be
use as a warning device. Also petitioner contest that the letter of
instruction violates the delegation of police power because it is deemed
harsh, oppressive and unreasonable for the motorists and those dealers of
EWD will become instant millionaires because of such law.
Issue: Whether or not Petitioner’s contentions possess merit.
Held: Petitioner’s contentions are without merit because the exercise of
police power may interfere with personal liberty or property to ensure
and promote the safety, health and prosperity of the State. Also, such
letter of instruction is intended to promote public safety and it is indeed a
rare occurrence that such contention was alleged in a instruction with
such noble purpose. Petitioner also failed to present the factual
foundation that is necessary to invalidate the said letter of instruction. In
cases where there is absence in the factual foundation, it should be
presumed that constitutionality shall prevail. Pres. Marcos on the other
hand possesses vital statistics that will justify the need for the
implementation of this instruction. As signatory to the 1968 Vienna
Conventions on Road Signs and Signals, our country must abide with the
standards given as stated in our Constitution that “the Philippines adopts
the generally accepted principles of International Law as part of the law of
the land. In the case at bar, the Vienna Convention also requires the use
of EWD. Vehicle owners are not obliged to buy an EDW. They can
personally create a EWD provided that it is in accordance to the
specifications provided by law. Petitioner’s allegation against the
manufacturers of EDW being millionaires is deemed to be an unfounded
speculation. Wherefore, the petition is dismissed. The restraining order
regarding the implementation of the Reflector Law is lifted making the
said law immediately executory.
Ermita-Malate Hotel And Motel Operators Association Vs.
Mayor Of Manila
20 SCRA 849 G.R. No.L-24693 July 31, 1967
Facts: Petitioners Ermita-Malate Hotel and Motel Operators Association
with one of its members, Hotel del Mar Inc., and Go Chiu, the president
and general manager of the second petitioner, filed a petition for
prohibition against Ordinance No. 4760 against the respondent Mayor of
the City of Manila who was sued in his capacity as such charged with the
general power and duty to enforce ordinances of the City of Manila and to
give the necessary orders for the execution and enforcement of such
ordinances. It was alleged that the petitioner non-stock corporation is
dedicated to the promotion and protection of the interest of its eighteen
members operating hotels and motels, characterized as legitimate
businesses duly licensed by both national and city authorities and
regularly paying taxes. It was alleged that on June 13, 1963, the Municipal
Board of the City of Manila enacted Ordinance No. 4760, approved on
June 14, 1963 by the then acting City Mayor, Vice-Mayor Herminio
Astorga. After which the alleged grievances against the ordinance were set
forth in detail. There was the assertion of its being beyond the powers of
the Municipal Board of the City of Manila to enact insofar as it regulate
motels, on the ground that in the revised charter of the City of Manila or
in any other law, no reference is made to motels. it also being provided
that the premises and facilities of such hotels, motels and lodging houses
would be open for inspection either by the City Mayor, or the Chief of
Police, or their duly authorized representatives. The lower court on July
6, 1963 issued a writ of preliminary injunction ordering respondent
Mayor to refrain from enforcing said Ordinance No. 4760 from and after
July 8, 1963.
Issue: Whether or Not Ordinance No. 4760 of the City of Manila is
unconstitutional, therefore, null and void.
Held: A decent regard for constitutional doctrines of a fundamental
character ought to have admonished the lower court against such a
sweeping condemnation of the challenged ordinance. Its decision cannot
be allowed to stand, consistently with what has been the accepted
standards of constitutional adjudication, in both procedural and
substantive aspects.
Primarily what calls for a reversal of such a decision is the absence of any
evidence to offset the presumption of validity that attaches to a
challenged statute or ordinance. As was expressed categorically by Justice
Malcolm: "The presumption is all in favor of validity x x x . The action of
the elected representatives of the people cannot be lightly set aside. The
councilors must, in the very nature of things, be familiar with the
necessities of their particular municipality and with all the facts and
circumstances which surround the subject and necessitate action. The
local legislative body, by enacting the ordinance, has in effect given notice
that the regulations are essential to the well being of the people x x x . 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.
It admits of no doubt therefore that there being a presumption of validity,
the necessity for evidence to rebut it is unavoidable, unless the statute or
ordinance is void on its face which is not the case here. The principle has
been nowhere better expressed than in the leading case of O'Gorman &
Young v. Hartford Fire Insurance Co. where the American Supreme Court
through Justice Brandeis tersely and succinctly summed up the matter
thus: The statute here questioned deals with a subject clearly within the
scope of the police power. We are asked to declare it void on the ground
that the specific method of regulation prescribed is unreasonable and
hence deprives the plaintiff of due process of law. As underlying questions
of fact may condition the constitutionality of legislation of this character,
the resumption of constitutionality must prevail in the absence of some
factual foundation of record for overthrowing the statute." No such
factual foundation being laid in the present case, the lower court deciding
the matter on the pleadings and the stipulation of facts, the presumption
of validity must prevail and the judgment against the ordinance set aside.
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