G.R. No.

111097 July 20, 1994

MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO
Petitioners,
Vs.
PRYCE PROPERTIES AND CORPORATION INC. & PHILIPPINE
AMUZEMENT AND GAMING CORPORATION , Respondents.
Cruz, J.
Facts:
The Philippine amusement and Gaming Corporation (PAGCOR) is a
corporation created directly by the presidential decree 1869 to help
centralize and regulate all games of chance, including casinos on land
and sea within the territorial jurisdiction of the Philippines. Sometime in
1992, the Philippine Amusement and Gaming Corporation (PAGCOR)
decided to expand its operations to Cagayan de Oro City. It leased a
portion of a building belonging to Pryce Properties Corporation, Inc.,
renovated and equipped the same, and prepared to inaugurate its
casino there during the Christmas season. However, civic organizations
in Cagayan de Oro angrily denounced the opening by PAGCOR of a
casino in the city. The citys religious elements echoed the objection
along with the women and the youth groups. Demonstrations were led
by the mayor, Pablo P. Magtajas, and the city legislators. The media
trumpeted the protest, describing the casino as an affront to the welfare
of the city. The petitioners contend that the operation of a casino in the
city would violate Ordinance No. 3353, which prohibits the issuance of a
business permit as well as the cancellation of an existing business
permit of any establishment using and allowing its premises or any
portion thereof to be used for the operation of a casino, and Ordinance
No. 3375-93, which prohibits the operation of a casino within its
jurisdiction. The respondents, on the other hand, invoked P.D. 1869,
which directly created PAGCOR to help centralize and regulate all games
of chance, including casinos on land and on sea within the territorial
jurisdiction of the Philippines. The Court of Appeals ruled in favor of the
respondents. Thus, a petition for review was filed by the respondents.
Issue:
Whether Ordinance No. 3353 and Ordinance No. 3375-93 are valid?
Ruling:
No, Cagayan de Oro City, like other local political subdivisions, is
empowered to enact ordinances for the purpose indicated in the Local
Government Code. It is expressly vested with the police power under
what is known as the General Welfare Clause now embodied in Section
16 of the Code. One of the substantive requirements for the validity of

an ordinance is that it must not contravene the constitution or any

statute. Local councils exercise only delegated legislative powers
conferred on them by Congress as the national lawmaking body. The
delegate cannot be superior to the principal or exercise powers higher
than those of the latter. It is a heresy to suggest that the local
government units can undo the acts of Congress, from which they have
derived their power in the first pace, and negate by ere ordinance the
mandate of the statute. Casino gambling is authorized by P.D. 1869. This
decree has the status of a statute that cannot be amended or nullified
by a mere ordinance.

Other sources of the DAP include the unprogrammed funds from the
General Appropriations Act (GAA). Unprogrammed funds are standby
appropriations made by Congress in the GAA.

Araullo v. Aquino, GR 209287, 3 February 2015,

En Banc Resolution, Bersamin
Power of the Purse Executive Impoundment
Brief:
Consolidated special civil actions for certiorari and prohibition by
taxpayers and Filipino citizens challenging the constitutionality of the
Disbursement Acceleration Program (DAP), implemented by the
President, through the Department of Budget and Management (DBM),
which issued National Budget Circular No. 541 (NBC 541) dated July 18,
2012.
Facts:
When President Benigno Aquino III took office, his administration noticed
the sluggish growth of the economy. The World Bank advised that the
economy needed a stimulus plan. Budget Secretary Florencio Butch
Abad then came up with a program called the Disbursement
Acceleration Program (DAP).
The DAP was seen as a remedy to speed up the funding of government
projects. DAP enables the Executive to realign funds from slow moving
projects to priority projects instead of waiting for next years
appropriation. So what happens under the DAP was that if a certain
government project is being undertaken slowly by a certain executive
agency, the funds allotted therefor will be withdrawn by the Executive.
Once withdrawn, these funds are declared as savings by the Executive
and said funds will then be reallotted to other priority projects. The DAP
program did work to stimulate the economy as economic growth was in
fact reported and portion of such growth was attributed to the DAP (as
noted by the Supreme Court).

Meanwhile, in September 2013, Senator Jinggoy Estrada made an

expos claiming that he, and other Senators, received Php50M from the
President as an incentive for voting in favor of the impeachment of then
Chief Justice Renato Corona. Secretary Abad claimed that the money
was taken from the DAP but was disbursed upon the request of the
Senators.
This apparently opened a can of worms as it turns out that the DAP does
not only realign funds within the Executive. It turns out that some nonExecutive projects were also funded; to name a few: Php1.5B for the
CPLA (Cordillera Peoples Liberation Army), Php1.8B for the MNLF (Moro
National Liberation Front), P700M for the Quezon Province, P50-P100M
for certain Senators each, P10B for Relocation Projects, etc.
This prompted Maria Carolina Araullo, Chairperson of the Bagong
Alyansang Makabayan, and several other concerned citizens to file
various petitions with the Supreme Court questioning the validity of the
DAP. Among their contentions was:
DAP is unconstitutional because it violates the constitutional rule which
provides that no money shall be paid out of the Treasury except in
pursuance of an appropriation made by law.
Secretary Abad argued that the DAP is based on certain laws particularly
the GAA (savings and augmentation provisions thereof), Sec. 25(5), Art.
VI of the Constitution (power of the President to augment), Secs. 38 and
49 of Executive Order 292 (power of the President to suspend
expenditures and authority to use savings, respectively).
Issues:
I. Whether or not the DAP violates the principle no money shall be paid
out of the Treasury except in pursuance of an appropriation made by
law (Sec. 29(1), Art. VI, Constitution).

II. Whether or not the DAP realignments can be considered as

impoundments by the executive.
III. Whether or not the DAP realignments/transfers are constitutional.
IV. Whether or not the sourcing of unprogrammed funds to the DAP is
constitutional.
V. Whether or not the Doctrine of Operative Fact is applicable.
HELD:
I. No, the DAP did not violate Section 29(1), Art. VI of the Constitution.
DAP was merely a program by the Executive and is not a fund nor is it
an appropriation. It is a program for prioritizing government spending.
As such, it did not violate the Constitutional provision cited in Section
29(1), Art. VI of the Constitution. In DAP no additional funds were
withdrawn from the Treasury otherwise, an appropriation made by law
would have been required. Funds, which were already appropriated for
by the GAA, were merely being realigned via the DAP.
II. No, there is no executive impoundment in the DAP. Impoundment of
funds refers to the Presidents power to refuse to spend appropriations
or to retain or deduct appropriations for whatever reason. Impoundment
is actually prohibited by the GAA unless there will be an unmanageable
national government budget deficit (which did not happen).
Nevertheless, theres no impoundment in the case at bar because
whats involved in the DAP was the transfer of funds.
III. No, the transfers made through the DAP were unconstitutional. It is
true that the President (and even the heads of the other branches of the
government) are allowed by the Constitution to make realignment of
funds, however, such transfer or realignment should only be made
within
their
respective
offices.
Thus,
no
cross-border
transfers/augmentations may be allowed. But under the DAP, this was
violated because funds appropriated by the GAA for the Executive were
being transferred to the Legislative and other non-Executive agencies.
Further, transfers within their respective offices also contemplate
realignment of funds to an existing project in the GAA. Under the DAP,

even though some projects were within the Executive, these projects are
non-existent insofar as the GAA is concerned because no funds were
appropriated to them in the GAA. Although some of these projects may
be legitimate, they are still non-existent under the GAA because they
were not provided for by the GAA. As such, transfer to such projects is
unconstitutional and is without legal basis.
On the issue of what are savings
These DAP transfers are not savings contrary to what was being
declared by the Executive. Under the definition of savings in the GAA,
savings only occur, among other instances, when there is an excess in
the funding of a certain project once it is completed, finally
discontinued, or finally abandoned. The GAA does not refer to savings
as funds withdrawn from a slow moving project. Thus, since the
statutory definition of savings was not complied with under the DAP,
there is no basis at all for the transfers. Further, savings should only be
declared at the end of the fiscal year. But under the DAP, funds are
already being withdrawn from certain projects in the middle of the year
and then being declared as savings by the Executive particularly by
the DBM.
IV. No. Unprogrammed funds from the GAA cannot be used as money
source for the DAP because under the law, such funds may only be used
if there is a certification from the National Treasurer to the effect that
the revenue collections have exceeded the revenue targets. In this case,
no such certification was secured before unprogrammed funds were
used.
V. Yes. The Doctrine of Operative Fact, which recognizes the legal effects
of an act prior to it being declared as unconstitutional by the Supreme
Court, is applicable. The DAP has definitely helped stimulate the
economy. It has funded numerous projects. If the Executive is ordered to
reverse all actions under the DAP, then it may cause more harm than
good. The DAP effects can no longer be undone. The beneficiaries of the
DAP cannot be asked to return what they received especially so that
they relied on the validity of the DAP. However, the Doctrine of
Operative Fact may not be applicable to the authors, implementers, and
proponents of the DAP if it is so found in the appropriate tribunals (civil,
criminal, or administrative) that they have not acted in good faith.

Chavez
v.
Romulo,
GR
157036,
2004, En Banc, Sandoval-Guttierez
[J]

June

CHAVEZ VS. ROMULO

FRANCISCO I. CHAVEZ, petitioner,
v.
HON. ALBERTO G. ROMULO, IN HIS CAPACITY AS EXECUTIVE SECRETARY;
DIRECTOR GENERAL HERMOGENES E. EBDANE, JR., IN HIS CAPACITY AS
THE CHIEF OF THE PNP, et al., respondents.
G.R. No. 157036
June 9, 2004
Ponente: SANDOVAL-GUTIERREZ

FACTS:
This case is about the ban on the carrying of firearms outside of
residence in order to deter the rising crime rates. Petitioner questions
the ban as a violation of his right to property.
President Gloria Macapagal-Arroyo delivered a speech before the
members of the PNP stressing the need for a nationwide gun ban in all
public places to avert the rising crime incidents. She directed the then
PNP Chief, respondent Ebdane, to suspend the issuance of Permits to
Carry Firearms Outside of Residence Acting on President Arroyos
directive, respondent Ebdane issued Guidelines in the Implementation of
the Ban on the Carrying of Firearms Outside of Residence which was
referred to PD 1866 dated June 29, 1983 and its Implementing Rules and
Regulations.
Petitioner Francisco I. Chavez, a licensed gun owner to whom a PTCFOR
has been issued, requested the Department of Interior and Local
Government (DILG) to reconsider the implementation of the assailed
Guidelines. However, his request was denied. Thus, he filed the present
petition .
ISSUES:
1. Whether the citizens right to bear arms is a constitutional right and the
revocation of petitioners PTCFOR pursuant to the assailed Guidelines is a
violation of his right to property?;
2. Whether the issuance of the assailed Guidelines is a valid exercise of
police power?; and
HELD:
1. No. The bulk of jurisprudence is that a license authorizing a person to
enjoy a certain privilege is neither a property nor property right. In Tan
vs. The Director of Forestry, it was ruled that a license is merely a
permit or privilege to do what otherwise would be unlawful, and 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. In a more emphatic pronouncement, IT WAS held in Oposa
vs. Factoran, Jr. that: Needless to say, all licenses may thus be revoked
or rescinded by executive action. It is not a contract, property or a
property right protected by the due process clause of the
Constitution.xxx In our jurisdiction, the PNP Chief is granted broad
discretion in the issuance of PTCFOR. This is evident from the tenor of

the Implementing Rules and Regulations of P.D. No. 1866 which state
that the Chief of Constabulary may, in meritorious cases as determined
by him and under such conditions as he may impose, authorize lawful
holders of firearms to carry them outside of residence. Following the
American doctrine, it is indeed logical to say that a PTCFOR does not
constitute a property right protected under our Constitution.
Consequently, a PTCFOR, just like ordinary licenses in other
regulated fields, may be revoked any time. It does not confer an
absolute right, but only a personal privilege to be exercised
under existing restrictions, and such as may thereafter be
reasonably imposed. A licensee takes his license subject to such
conditions as the Legislature sees fit to impose, and one of the
statutory conditions of this license is that it might be revoked by
the selectmenat their pleasure. Such a license is not a contract,
and a revocation of it does not deprive the defendant of any
property, immunity, or privilege within the meaning of these
words in the Declaration of Rights. The US Supreme Court, in
Doyle vs. Continental Ins. Co, held: The correlative power to
revoke or recall a permission is a necessary consequence of the
main power. A mere license by the State is always revocable.
2. Yes. It follows that its enactment by the legislature is a proper and
legitimate exercise of the police power of the state. In a number of
cases, we laid down the test to determine the validity of a police
measure, thus:(1) The interests of the public generally, as distinguished
from those of a particular class, require the exercise of the police power;
and(2) The means employed are reasonably necessary for the
accomplishment of the purpose and not unduly oppressive upon
individuals.
It is apparent from the assailed Guidelines that the basis for its
issuance was the need for peace and order in the society. Owing
to the proliferation of crimes, particularly those committed by the
New Peoples Army (NPA), which tends to disturb the peace of the
community, President Arroyo deemed it best to impose a
nationwide gun ban. Undeniably, the motivating factor in the
issuance of the assailed Guidelines is the interest of the public in
general.
In the instant case, the assailed Guidelines do not entirely
prohibit possession of firearms. What they proscribe is merely the
carrying of firearms outside of residence. However, those who
wish to carry their firearms outside of their residences may reapply for a new PTCFOR. This we believe is a reasonable

regulation. If the carrying of firearms is regulated, necessarily,

crime incidents will be curtailed. Criminals carry their weapon to
hunt for their victims; they do not wait in the comfort of their
homes. With the revocation of all PTCFOR, it would be difficult for
criminals to roam around with their guns. On the other hand, it
would be easier for the PNP to apprehend them.
Notably, laws regulating the acquisition or possession of guns
have frequently been upheld as reasonable exercise of the police
power. In State vs. Reams, it was held that the legislature may
regulate the right to bear arms in a manner conducive to the
public peace. With the promotion of public peace as its objective
and the revocation of all PTCFOR as the means, we are convinced
that the issuance of the assailed Guidelines constitutes a
reasonable exercise of police power. We think there can be no
question as to the reasonableness of a statutory regulation
prohibiting the carrying of concealed weapons as a police
measure well calculated to restrict the too frequent resort to such
weapons in moments of anger and excitement. We do not doubt
that the strict enforcement of such a regulation would tend to
increase the security of life and limb, and to suppress crime and
lawlessness, in any community wherein the practice of carrying
concealed weapons prevails, and this without being unduly
oppressive upon the individual owners of these weapons.

Tax for Regulatory Purpose is an exercise of Police Power

GASTON VS. REPUBLIC PLANTERS BANK
VIRGILIO GASTON, HORTENCIA STARKE, ROMEO GUANZON, OSCAR
VILLANUEVA, JOSE ABELLO, REMO RAMOS, CAROLINA LOPEZ, JESUS
ISASI, MANUEL LACSON, JAVIER LACSON, TITO TAGARAO, EDUARDO

SUATENGCO, AUGUSTO LLAMAS, RODOLFO SIASON, PACIFICO MAGHARI,

JR., JOSE JAMANDRE, AURELIO GAMBOA, ET AL., petitioners,

have been funded from stabilization fees paid by the sugar producers
since 1978, pursuant to P.D. No. 388.

vs.

PHILSUCOM and SRA argue that the stabilization fees collected are
considered government funds under the Government Auditing Code.

REPUBLIC PLANTERS BANK, PHILIPPINE SUGAR COMMISSION, and SUGAR

REGULATORY ADMINISTRATION, respondents, ANGEL H. SEVERINO, JR.,
GLICERIO JAVELLANA, GLORIA P. DE LA PAZ, JOEY P. DE LA PAZ, ET AL.,
and NATIONAL FEDERATION OF SUGARCANE PLANTERS, intervenors.
G.R. No. L-77194
March 15, 1988
Ponente: MELENCIO-HERRERA

Nature of Case
Petition for a Writ of Mandamus
BRIEF
This is a prayer for a writ of mandamus to privatize the Republic Planters
Bank by the transfer and distribution of the shares of stock in the said
bank, from the Philippine Sugar Commission, to the sugar producers,
planters and millers, who claim to be the true beneficial owners of the
shares or a total investment of more than P290 million, the said
investment having been funded by the deduction of P1.00 per picul from
sugar proceeds of the sugar producers commencing the year 1978-79
until the present as stabilization fund pursuant to P.D. #388.
FACTS
The Philippine Sugar Commission (PHILSUCOM) was formerly the
government office tasked with the function of regulating and supervising
the sugar industry until it was superseded by the Sugar Regulatory
Administration (SRA) in 1986. It was mandated to exist for 3 more years
as a juridical entity "for the purpose of prosecuting and defending suits
by or against it, to settle and close its affairs, to dispose of and convey
its property and to distribute its assets."
Petitioners, who are sugar producers, sugarcane planters and millers, in
their individual capacities and in representation of others, pray for a writ
of mandamus so that the shares of stock now held by the PHILSUCOM in
the Republic Planters Bank be distributed amongst them. They claim
that they were the true beneficial owners, since the said investment

ISSUE/S of the CASE

1. Whether the stabilization fees collected from sugar planters and
millers pursuant to P.D. No. 388 are funds in trust for them, or
public funds; and
2. Whether shares of stock in respondent Bank paid for with said
stabilization fees belong to the PHILSUCOM or to the different
sugar planters and millers from whom the fees were collected or
levied.
ACTION/S of the COURT

SC: Petition DENIED.

COURT RATIONALE
First issue. From the legal standpoint, the opinion of the Commission
on Audit is worth reading:
That the government, PHILSUCOM or its successor-ininterest, Sugar Regulatory Administration, in particular,
owns and stocks. While it is true that the collected
stabilization fees were set aside by PHILSUCOM, it did
not collect said fees for the account of the sugar
producers
The stabilization fees collected are in the nature of a tax, which is within
the power of the State to impose for the promotion of the sugar industry.
They constitute sugar liens (Sec. 7[b], P.D. No. 388). The tax collected is
not in a pure exercise of the taxing power. It is levied with a
regulatory purpose, to provide means for the stabilization of the sugar
industry. The levy is primarily in the exercise of the police power
of the State.
The protection of a large industry constituting one of the
great sources of the state's wealth and therefore directly
or indirectly affecting the welfare of so great a portion of
the population of the State is affected to such an extent
by public interests as to be within the police power of
the sovereign.

The stabilization fees in question are levied by the State upon sugar
millers, planters and producers for a special purpose that of financing
the growth and development of the sugar industry and all its
components, stabilization of the domestic market including the foreign
market. The fact that the State has taken possession of money pursuant
to law is sufficient to constitute them state funds, even though they are
held for a special purpose. Once the purpose has been fulfilled or
abandoned, the balance, if any, is to be transferred to the general funds
of the Government. (See 1987 Constitution, Article VI, Sec. 29(3)).
Second issue. That the fees were collected from sugar producers,
planters and millers, and that the funds were channeled to the purchase
of shares of stock in respondent Bank do not convert the funds into a
trust fund for their benefit nor make them the beneficial owners of the
shares so purchased. It is but rational that the fees be collected from
them since it is also they who are to be benefited from the expenditure
of the funds derived from it.
To rule in petitioners' favor would contravene the general principle that
revenues derived from taxes cannot be used for purely private purposes
or for the exclusive benefit of private persons. The Stabilization Fund is
to be utilized for the benefit of the entire sugar industry, "and all its
components, stabilization of the domestic market," including the foreign
market the industry being of vital importance to the country's economy
and to national interest.
SUPREME COURT RULING
WHEREFORE, the Writ of mandamus is denied and the Petition hereby
dismissed. No costs.
This Decision is immediately executory.
SO ORDERED.

Nature of Case:
Petitions to review the decisions of the Secretary of Agrarian Reform.

Section 9, Art. III, of the 1987 Constitution

Eminent Domain and Police Power
Just Compensation
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC.
V. SECRETARY OF AGRARIAN REFORM
G.R. No. 78742. July 14, 1989.
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC.,
JUANITO D. GOMEZ, GERARDO B. ALARCIO, FELIPE A. GUICO, JR.,
BERNARDO M. ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO,
FELISA I. LLAMIDO, FAUSTO J. SALVA, REYNALDO G. ESTRADA, FELISA C.
BAUTISTA, ESMENIA J. CABE, TEODORO B. MADRIAGA, AUREA J.
PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA C. APRESTO, CONSUELO
M. MORALES, BENJAMIN R. SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S.
FERRER, petitioners, vs. HONORABLE SECRETARY OF AGRARIAN
REFORM, respondent.
G.R. No. 79310. July 14, 1989.
ARSENIO AL. ACUA, NEWTON JISON, VICTORINO FERRARIS, DENNIS
JEREZA, HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO and
PLANTERS COMMITTEE, INC., Victorias Mill District, Victorias, Negros
Occidental, petitioners, vs. JOKER ARROYO, PHILIP E. JUICO and
PRESIDENTIAL AGRARIAN REFORM COUNCIL, respondents.
G.R. No. 79744. July 14, 1989.
INOCENTES PABICO, petitioner, vs. HON. PHILIP E. JUICO, SECRETARY OF
THE DEPARTMENT OF AGRARIAN REFORM, HON. JOKER ARROYO,
EXECUTIVE SECRETARY OF THE OFFICE OF THE PRESIDENT, and Messrs.
SALVADOR TALENTO, JAIME ABOGADO, CONRADO AVANCEA, and
ROBERTO TAAY, respondents.
G.R. No. 79777. July 14, 1989.
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners, vs. HON.
PHILIP ELLA JUICO, as Secretary of Agra rian Reform, and LAND BANK OF
THE PHILIPPINES, respondents.
G.R. No. 78742
14 July 1989
Ponente: Cruz

BRIEF
The case at bar is a consolidation of four cases involving common legal
questions, including challenges to the constitutionality of the
Comprehensive Agrarian Reform Law (RA No. 6657) and related laws (PD
No. 27, Proc. No. 301, and EO Nos. 228 and 229).
FACTS
The petitioners in these cases are questioning the unreasonable taking
of their land without just compensation. The lands were taken from the
petitioners before the payment of just compensation. The landowners
likewise raised the issue that the mode of payment of compensation for
the lands subjected to the agrarian reform program should be in the
form of money.
More particularly, in G.R. No. 79777, Nicolas Manaay and his wife, as
well as Augustin Hermano, Jr. are owners of ricelands measuring 9
hectares and 5 hectares, respectively. The subject ricelands are worked
by four tenants. They are questioning the constitutionality of P.D. No.
27, E.O. Nos. 228 and 229 and R.A. No. 6657 for declaring their tenants
as full owners of the above-mentioned lands.
In G.R. No. 79310, landowners and sugar planters in the Victoria Mills
District, Victorias, Negros Occidental and Planters Committee, Inc.
comprising of 1,400 planter-members are seeking to prohibit the
implementation of Proc. No. 131 and E.O. No. 229. The motions for
intervention filed by [1] the National Federation of Sugarcane Planters
claiming 20,000 members, as well as the one filed by [2] Manuel
Barcelona, et. al., representing coconut and riceland owners were
granted by the court.
In G.R. No. 79744, Inocentes Pabico contends that then DAR Secretary
placed his landholdings under the coverage of OLT in violation of due
process and the requirement of just compensation.
ISSUE/S of the CASE
[i] Whether agrarian reform is an exercise of police power or eminent
domain?
[ii] Whether the content and manner of just compensation as provided
for in the CARP Law is a violation of the Constitution?

ACTIONS of the COURT

SC: The petitions were dismissed.
COURT RATIONALE ON THE ABOVE FACTS
Eminent domain is an inherent power of the State that enables it to
forcibly acquire private lands intended for public use upon payment of
just compensation to the owner.
But for all its primacy and urgency, the power of expropriation is by no
means absolute. The limitation is found in the constitutional injunction
that private property shall not be taken for public use without just
compensation. Basically, the requirements for the proper exercise of
the power are: (1) public use and (2) just compensation.
Meanwhile, property condemned under the police power is noxious or
intended for a noxious purpose, such as a building on the verge of
collapse, which should be demolished for the public safety, or obscene
materials, which should be destroyed in the interest of public morals.
The confiscation of such property is not compensable, unlike the taking
of property under the power of expropriation, which requires the
payment of just compensation to the owner.
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 farmerbeneficiary. This is definitely an exercise not of the police power but of
the power of eminent domain.
The second requirement for the proper exercise of the power of
expropriation, the payment of just compensation as provided for in
Section 18 of the CARP Law, however, needs a longer and more
thoughtful examination. It is well-settled that just compensation is
defined as the full and fair equivalent of the property taken from its
owner by the expropriator.

It cannot be denied from the cases cited by the Court that the traditional
medium for the payment of just compensation is money and no other.
And so, conformably, has just compensation been paid in the past solely
in that medium. However, we do not deal here with the traditional
exercise of the power of eminent domain. This is not an ordinary
expropriation where only a specific property of relatively limited area is
sought to be taken by the State from its owner for a specific and
perhaps local purpose.
What we deal with here is a revolutionary kind of expropriation. The
expropriation before us affects all private agricultural lands whenever
found and of whatever kind as long as they are in excess of the
maximum retention limits allowed their owners.
We may therefore assume that the intention of the framers was to allow
such manner of payment as is now provided for by the CARP Law,
particularly the payment of the balance (if the owner cannot be paid
fully with money), or indeed of the entire amount of the just
compensation, with other things of value.
SUPREME COURT RULING:
WHEREFORE, the Court holds as follows:
1.R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229
are SUSTAINED against all the constitutional objections raised in the
herein petitions.
2.Title to all expropriated properties shall be transferred to the State
only upon full payment of compensation to their respective owners.
3.All rights previously acquired by the tenant-farmers under P.D. No. 27
are retained and recognized.
4.Landowners who were unable to exercise their rights of retention
under P.D. No. 27 shall enjoy the retention rights granted by R.A. No.
6657 under the conditions therein prescribed.
5.Subject to the above-mentioned rulings, all the petitions are
DISMISSED, without pronouncement as to costs.