Consti 2

11-13-10

Police Power

Police Power does not require that there is just compensation (unlike eminent domain). It is the widest
and most far reaching power of the state which could include almost anything so long as it promotes
public interest. The legislature can promote or enact laws exercising police power.

Basis: Implied (Preamble)

Limitations of Police Power

1. Article 3, Section 1 – Due Process. Since what is involved is an encroachment into individual
rights, all means must be exhausted by the State to accord the individual the due process of law.
The end sought must not be oppressive, capricious nor unfair

2. Equal protection – The act must be fair and does not unjustly discriminate nor target a particular
class or individual. To treat equals equally, and those in similar situations with similarly.

Edu v. Ericta (Reflector Law)

Facts: Petitioner Edu, Commissioner of Land Transportation, files seeks issuance of certiorari on
respondent Judge Ericta’s decision, declaring unconstitutional the “Reflector Law” as violative of due
process and AO 2 as an undue delegation of legislative power

Issue: WON Reflector Law is unconstitutional

HELD: Reflector Law is a valid exercise of the state’s police power.

Consider the Subject and the Means:

Subject – to be deemed lawful the measure must be within the scope of police power; the activity or
property sought to be regulated affects the public welfare. Here the purpose of the statute is to promote
the motorist’s safety especially during the night time and to prevent vehicular accidents by requiring that
there be reflectors on every vehicle to forewarn incoming motorists.

Means – the act must not be unreasonable, arbitrary, unlawful, oppressive or unfair. An act is arbitrary
when there is no due process (one is not fully informed, there is no standard, when details are unknown
to those concerned); it is oppressive when the penalties imposed are excessive or harsh; it is
unreasonable when there is no connection between the means and the purpose.

The Reflector Law can withstand any of these tests. The penalty imposed is reasonable, it is directly
related to the purpose. Requiring that there be a reflector on every vehicle is a valid means of achieving
the general purpose of public safety.
The statute assailed is not infected with arbitrariness. It is not the product of whim or caprice. It is far
from oppressive. It is a legitimate response, to a felt public need. It can stand the test of the most
unsympathetic appraisal.

Clearly the law was intended to promote the safety of the people. In Calalang vs. Williams, the Court
defined police power as “state authority to enact legislation that may interfere with personal liberty or
property in order to promote the general welfare.”

Persons and property could thus “be subjected to all kinds of restraints and burden in order to secure
the general of the people.

Social justice is what is followed in the Philippines: for equitable: for those who have less in life shall
have more in law. It shall fill in what this disadvantage group lacks. In the end all of them are equal. This
is a valid exercise of power.

Ermita v. Manila (Reg Form in Motels)

Facts: Petitioners assail City Ordinance 4760 regulating the management of Motels in Metro Manila,
requiring, among others, guests to fill up an information sheet, limiting the number of room rentals per
day and imposing fines for violations thereof. Petitioners claim that the statute is unconstitutional for
infringing on the rights to privacy, liberty and due process, detrimental to the Hotel and Motel industries
and void for being vague.

Issues: WON Ordinance is constitutional for being a valid exercise of police power

HELD: Police power measure specifically aimed to safeguard public morals. As such it is immune from
any imputation of nullity resting purely on conjecture and unsupported by anything of substance. To hold
otherwise would be to unduly restrict and narrow the scope of police power which has been properly
characterized as the most essential, insistent and the least limitable of powers extending as it does "to all
the great public needs."

The test for determining WON a statute deprives an individual of due process is that of being
unreasonable or arbitrary. Here we have a situation where there exists to an undeniable existence of an
undesirable situation and a legislative attempt at correction. The city council is thus not merely acting
out of capricious or tyrannical whim but with the public health, morals and welfare in mind.

In this case the right of the owners to manage and operate their inns, motels and hotels are subjected to
regulation due to a valid concern by the local government of the growing cases of prostitution and other
illegal activity within the said establishments. In this sense, the local government is merely making sure
that prostitution would be abated and the values of the family are protected.

A local government unit (council) has delegated authority from the legislative (local government code) to
exercise police power over those within their jurisdiction.

Registration – ensure no minors

12 hour minimum – discourage use of rooms for sexual purposes

License fees – there is a valid cost for regulation

Phil Assn. of Service Exporters v. Torres (DH Abuse)

Facts: Petitioners assail DOLE and POEA circulars suspending the employment of Domestic Helpers in
Hong Kong as beyond the jurisdiction of the said agencies to implement and being unreasonable and
oppressive. Said AOs were implemented in light of the increasing instances of abuse suffered by Filipino
DHs in Hong Kong.

Issue: WON circulars issued by DOLE and POEA are constitutional for being valid exercises of their quasi-
legislative and police powers

HELD: The power to "restrict and regulate conferred by Article 36 of the Labor Code involves a grant of
police power.

Purpose: to protect the welfare of Domestic Helpers in Hong Kong by establishing mechanism. Is this
valid? Yes since recruitment agencies are primarily motivated by income thus the welfare of those
seeking employment abroad falls squarely upon the government through its agencies (DOLE, POEA)

Method: Temporary suspension and prohibition for recruitment agencies from sending DHs to HK. Is this
valid? Yes since it is not a blanket suspension of licenses since they can still recruit workers for other
areas except HK. It is not unreasonable since it is the only way to achieve the purpose by monitoring the
placement of the DHs. It is not arbitrary as it applies to all recruitment agencies sending DHs to HK.

It is noteworthy that the assailed circulars do not prohibit the petitioner from engaging in the
recruitment and deployment of Filipino landbased workers for overseas employment. A careful reading
of the challenged administrative issuances discloses that the same fall within the "administrative and
policing powers expressly or by necessary implication conferred" upon the respondents

(The circulars are however invalid for lack of publication)

Standards – implied from tenor of the law. May be as broad as public interest.

Objective – protection of welfare of OFWs.

Lawful subject – ensure welfare by establishing mechanism for protecting OFWs.

Means -

JMM Promotion v. CA (Japayuki)

Facts: Following the increasing number of abuses of overseas entertainers in Japan and the much
publicized death of Maricris Sioson, the POEA created the EIAC which was charged with the training and
processing of applications of entertainers who sought employment abroad. Among the additional
requirements imposed by said agency was the hurdling of a test, training and the issuance of an Artist’s
Record Book (ARB) which was a necessary requisite for processing any contract of employment by the
POEA.

Petitioners assail the constitutionality of the required ARB and the regulations by the POEA and EIAC for
being an invalid exercise of police power and for infringing on the property right of the entertainers for
pursuing employment abroad.

Issue: WON the ARB requirement and others are unconstitutional

HELD: "The police power of the State," one court has said . . . 'is a power coexistensive with self-
protection, and is not inaptly termed 'the law of overruling necessity.' It may be said to be that inherent
and plenary power in the state which enables it to prohibit all things hurtful to the comfort, safety and
welfare of society." Carried onward by the current of legislature. the judiciary rarely attempts to dam the
onrushing power of legislative discretion, provided the purposes of the law do not go beyond the great
principles that mean security for the public welfare or do not arbitrarily interfere with the right of the
individual."

As the assailed Department Order enjoys a presumed validity, it follows that the burden rests upon
petitioners to demonstrate that the said order, particularly its ARB requirement, does not enhance the
public welfare or was exercised arbitrarily or unreasonably.

No right is absolute, and the proper regulation of a profession, calling business or trade has always been
upheld as a legitimate subject of a valid exercise of the police power by the state particularly when their
conduct affects either the execution of legitimate governmental functions, the preservation of the State,
the public health and welfare and public morals.

In any case, where the liberty curtailed affects at most the rights of property, the permissible scope of
regulatory measures is certainly much wider. 14 To pretend that licensing or accreditation requirements
violates the due process clause is to ignore the settled practice, under the mantle of the police power, of
regulating entry to the practice of various trades or professions.

Chavez v. Romulo (bear arms)

Purpose: To avert rising criminal incidents.

Method: Implementation of a nationwide gun ban in all public places. Revocation by the PNP of all
PTCFOR (Permit To Carry Firearms Outside of Residence)

Does PNP chief have the authority to issue assailed guidelines (gun ban and PTCFOR revocation)? Yes,
under old law regulation of firearms was exercised by Chief of Constabulary. PNP has absorbed
Constabulary and with it the authority of the CC to the PNP Chief.

Is the right to bear arms a constitutional right? No, it is merely a privilege granted by the State through
statute. Therefore it is subject to the regulation.
Is the revocation of the license a violation of petitioner’s property rights? No, a license does not grant a
right. It is merely a privilege granted by the State to do what would otherwise be illegal. It is not a
contract between the authority granting it and the person to whom it is granted; neither is it property or
a property right, nor does it create a vested right.

National Dev Company v. Phil Veterans Bank (Agrix)

Purpose: Marcos issued PD give assistance to Agrix.

Method: PD decreed among others that it extinguished all standing debts of Agrix, all unsecured
obligations shall bear no interests and that all accrued interests shall not be recognized.

NOT a valid exercise of police power. NOT in the interest of the public in general but of a particular class.
Means employed are arbitrary, unjust and oppressive. No consideration is paid for the extinction of the
mortgage rights. The accrued interests and other charges are simply rejected by the decree. The right to
property is dissolved by legislative fiat without regard to the private interest violated and, worse, in favor
of another private interest.

It also discriminates against secured creditors by lumping them all together as unsecured creditors. It
thusly violates the equal protection clause for treating classes situated differently similarly disregarding
the principle that there should only be equality among equals.

MMDA v. Garin (Driver’s License)

Is a driver’s license a right or a privilege? Privilege that the State may grant, withhold or restrict at its
discretion in the exercise of its police power.

Does the MMDA exercise Police Power? No. Only the Legislature and to those whom Police Power is
delegated can exercise Police Power (LGUs). The MMDA Charter is merely involved with administrative
functions over the Metro Manila area.

Can the MMDA enact ordinances? No, only implement rules in accordance with duly enacted legislation.

Can the MMDA confiscate licenses? If there is a validly enacted traffic law by the legislature or a
delegated authority (City of Manila) then MMDA is duty bound to enforce such rules and thereby
confiscate, revoke or suspend a driver’s license. Absent such legislation the MMDA cannot.

NCR is an administrative region. MMDA has no quasi legislative authority hence no police power.

Beltran v. Secretary of Health (Bloodbank)

Purpose: To promote public health by implementing measures to ensure that the national supply of
blood is free from disease.

Method: Phasing out of Commercial Blood Banks and promotion of voluntary blood donations and
health awareness programs by government agencies such as the DOH
Valid? YES. RA 7719 (National Blood Services Act of 1994) was enacted to promote public health and
welfare following the study conducted by an internationally acclaimed medical group that found 70% of
the Phil blood supply come from commercial blood banks. Being engaged in a business rather than a
service to the public, these blood banks usually do not undertake measures to make sure that the blood
they collect is free from diseases.

Is it not excessive? The phasing out of commercial blood banks was not an unjust exercise of police
power since it was necessary to effectuate the purposes of the said law by encouraging voluntary blood
donations and discouraging the unscrupulous retail of blood for a quick buck. Although such an action
may affect the owners and operators, as well as the employees, of commercial blood banks their
interests must give way to serve a higher end for the interest of the public.

White Light Corp v. Manila (short time)

Purpose: to promote public health, welfare and morality and prevent the rise of prostitution, drug use
etc in the motels, inns and hotels of Metro Manila.

Method: an ordinance that prohibits “washup rates” and the use of a room more than twice a day

Valid? No. Studying the ordinance through procedural and substantive due process

Procedural due process – proper steps as instituted in the law are undertaken by the governing power.

Substantive due process – sufficient justification for depriving a person of life, liberty or property.

From such analysis what is under consideration is not merely the deprivation of the rights of the
petitioners to engage in their businesses but of the patrons who would be deprived of availing short time
access or washup rates to the lodging establishments in question.

Not only will the ordinance curtail the prostitutes and their patrons but the legitimate married couples
or consenting individuals as well. It also constitutes an invasion of the right to privacy. Government
powers should stop short of certain intrusions into the personal life of its citizens.

The purpose and the method must have a reasonable relation. It must be proven that there are no other
alternatives for the accomplishment of the purpose that would be less intrusive of private rights. In fact
the actions sought to be prevented are already outlawed in our nation and would be better addressed by
applying existing laws rather than enacting new ones.

Eminent Domain

Assoc of Small Landowners v. Sec. of Agrarian Reform (CARP)

Reyes v. NHA (housing project turned subdivision)

Mandaluyong v. Aguilar (Abalos Condos)

Lagcao v. Labra (Sneaky Mayor Garcia)

Taxation

Sison v. Ancheta (professional tax)

Does Batas Pambansa blg. 135 violate the principle of uniformity and equitability in taxation when it
distinguished between: Professional or self-employed tax (net income taxation) and compensation
income tax (gross) and higher tax rates for pros than employed?

Basis for distinction: For self-employed or professionals it is not immediately determinable what amount
of their income would be spent for the maintenance of their establishments and other such necessary
measures for the sustenance of their callings, thus there is first the need to deduct these expenses from
the gross which would be the net. For the common employees their income can be immediately taxable
since they are free from such burdens.

Is this rule uniform? Yes, people belonging to the same class (pro or employee) would be taxed similarly
with those belonging to the same class.

Is it equitable? Yes, since what will be taxed is in proportion to what a person actually earns.

JBL Reyes v. Almanzor

The Reyeses were prevented from making a profit from their property due to PD20 which prohibited the
increase of rentals on certain properties and from ejecting the tenants therein.

City assessor of Manila reassessed tax on the Reyes property based on schedule of market values
disregarding the fact that the property was constrained in its profit-making by PD20.

The tax therefore was unduly oppressive to Reyes since he was not making money out of his property
because the law itself prevented him from doing so. Now the government wants to impose a tax utterly
disproportionate from what the Reyeses has earned from it and would likely result into forfeiture.

Taxes should be applied equitably upon all persons situated similarly, clearly in this case the Reyeses
were in a situation different from their neighboring land owners who had free control over their
property and were thusly assessed in accordance with the market value of their property.

CIR v. Solidbank

A percentage tax is a national tax measured by a certain percentage of the gross selling price or gross
value in money of goods sold, bartered or imported; or of the gross receipts or earnings derived by any
person engaged in the sale of services. It is not subject to withholding.

An income tax, on the other hand, is a national tax imposed on the net or the gross income realized in a
taxable year. 23 It is subject to withholding.
There is no double taxation.

1. Two taxes refer to different subject matters. FWT is a tax on passive income based on interest on
deposits etc while GRT is a tax for the privilege of engaging in banking, the income of the bank.

2. Different taxing periods. FWT is deducted and withheld as soon as income is received after every
calendar quarter in which it is earned. GRT is neither deducted nor withheld, but is paid after
every taxable quarter it is earned.

3. Two taxes are of different characters. The FWT is an income tax subject to withholding while GRT
is a percentage tax not subject to withholding.

Lung Center v. QC

NAPOCOR v. Cabanatuan

Do GOCCs that were granted exempted prior to the enactment of the LGC retain such exemption?

No.

Although NPC was previously granted tax exemption, it was the intent of the framers of the LGC to
removes such when it did not include it among those that cannot be taxed by the LGC, expression unius
est exclusion alterius.

Precisely the goal of the LGC is to strengthen the autonomy of LGUs and for the devolution of power
from central government. In order to attain such a goal, it is necessary for LGUs to enjoy a certain
amount of fiscal autonomy and the most expedient means of accumulating revenue is the imposition of
taxes upon those within their local jurisdiction.

Rationale: revenue acquired by GOCCs within a city, municipality etc should be subject to the tax of
those directly within the immediate jurisdiction (local gov) instead of passing the revenue to the national
gov which would be contrary to the LGC’s goal of devolution of power and promotion of autonomy.

Double taxation? No, since NPC is being taxed by 2 separate entities. Local governments are separate
and distinct from National Government.