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SAN BEDA COLLEGE OF LAW 2017

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2. They are not only necessary but


INDISPENSABLE. The State cannot
FUNDAMENTAL POWERS continue or be effective unless it is
OF THE STATE able to exercise them.
3. They are methods by which STATE
INTERFERES WITH PRIVATE
What are the fundamental Powers of RIGHTS.
the State? 4. They all presuppose an
 Police Power EQUIVALENT COMPENSATION for
 Power of Eminent Domain the private rights interfered with.
 Power of taxation 5. They are EXERCISED primarily BY
THE LEGISLATURE.

They are supposed to co-exist with the


state. The moment the State comes in to DIFFERENCES OF THE INHERENT
being, it is deemed invested with these POWERS
three (3) powers as its innate attributes.
1. The Police power REGULATES
Briefly, the POLICE POWER is the power both LIBERTY and PROPERTY. The
of the State to regulate liberty, and Power of Eminent Domain and the
property for the promotion of General Power of Taxation affect only
Welfare. The POWER OF EMIINENT PROPERTY RIGHTS.
DOMAIN enables the State to forcibly 2. The Police Power and Power of
acquire private property, upon payment Taxation may be EXERCISED ONLY
of just compensation, for some intended BY THE GOVERNMENT. The Power
for public use. By the POWER OF of Eminent Domain may be
TAXATION, the State is able to demand EXERCISED BY SOME PRIVATE
from the members of society their ENTITIES.
proportionate share or contribution in the 3. The property taken in the exercise
maintenance of the government. of Police Power is DESTROYED
because it is NOXIOUS or
SIMILARITIES OF THE INHERENT INTENDED FOR A NOXIOUS
POWERS PURPOSE. The property taken
under the Power of Eminent
1. They are INHERENT in the State Domain and the Power of Taxation
and may be exercised by it is intended for a PUBLIC USE OR
WITHOUT NEED OF EXPRESS PURPOSE is therefore
CONSTITUTIONAL CONFERMENT. WHOLESOME.
The compensation of the person

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subjected to Police Power is the 2. Political Rights


INTANGIBLE ALTRUISTIC FEELING that 3. Social Rights – associated with other
he has contributed to the general welfare. rights
The compensation involved in the other 4. Economic Rights – to survive
powers is more concrete, to wit, a full and 5. Cultural Rights – customs
fair equivalent of the property
expropriated or protection and public
improvement for the taxes paid. LIMITATIONS OF THE INHERENT
POWER OF THE STATE
:Generally, the Bill of Rights, although in
some cases the exercise of the power Although inherent and indispensable, the
prevails over specific constitutional Fundamental powers of the State are not
guarantees. The courts may annul the without restrictions (meaning, hindi sya
improvident exercise of police power, e.g., absolute). As ours is a government of
in Quezon City v. Ericta, 122 SCRA 759 limited powers, even these prerogatives
and in Philippine Press Institute v. may not be exercised arbitrarily, to the
Comelec, 244 SCRA 272. prejudice of the bill of rights.

The presumption in libertarian societies


is in favor of private rights and against
Concept and Origin of the Bill of Rights attempts on the part of the State to
Life – pursuit of happiness interfere with them. “Constitutional
Liberty – (freedom is broader) Provisions for the security of persons
Property – right to own and disown and property should be liberally
construed”

Main Classification Hence, the exercise of these fundamental


1. Natural Right – inherent rights (ex. powers is subject at all times to the
Human rights) limitations and requirements of the
2. Constitutional Right – to guarantee constitution and may in proper cases be
rights arbitrary intrusion by the annulled by the courts of justice. (reyes,
government 2007 pp37-39)
3. Statutory Right – to enable the
provisions of the constitution (ex.
overtime pay)

Classification According to Purpose POLICE POWER


1. Civil Rights

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• Eminent domain may also be used to


What is police Power? (by Freund) implement or attain police power
• Non-impairment of contracts or vested
Police power is defined by Freund as 'the rights will have to yield to superior and
power of promoting the public welfare by legitimate exercise of police power
restraining and regulating the use of • Exercise of profession may be regulated
liberty and property'. by the state to safeguard health, morals,
peace, education, order, safety and
several welfare of the people

Basis
Salus populi est suprema lex (welfare of
the people is the supreme law)

Sic utere tuo ut alienum non laedas (so


as to use your property so as not to
impair/injure another)

What are the Two (2) elements Of Police


Power as enunciated in the case of (PASEI
vs. Drilon)

Definition  Foster Common Good


- Power of promoting public welfare by  Imposition of restraint upon
restraining and regulating the use of liberty or property
liberty and property.
- Most essential, insistent and less
limitable of powers, extending as it does Who exercises said power?
to all the great public needs. Legislative branch
Executive branch, upon valid delegation

Scope/Characteristics
• It cannot be bargained away through the
medium of treaty /contract
• Taxing power may be used to
implement police power

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The power of promoting public welfare by


restraining and regulating the use of
liberty and property.

Scope/Characteristics: Police power is


the most pervasive, the least limitable,
and the most demanding of the three
powers. The justification is found in the
Latin maxims: saluspopuli est suprema
lex, and sic utere tuo ut alienum non
laedas.

LAW OF OVERWHELMING NECESSITY a) Police power cannot be bargained


away through the medium of a treaty or a
Police power is an inherent attribute of contract [Stone v. Mississippi, 101 U.S.
sovereignty. It can exist even without 814; Ichong v. Hernandez, 101 Phil.
reservation in the constitution. It is based 1155].
on necessity as without it, there can be no
b) The taxing power may be used as an
effective government. It is also referred to
implement of police power [Lutz v.
as the law of overwhelming necessity.
Araneta, 98 Phil. 148; Tiu v. Videogram
Regulatory Board, 151 SCRA 208;
As to the question of the subject
Gaston v. Republic Planters Bank, 158
ordinance (selling admission tickets to
SCRA 626; Osmena v. Orbos, 220 SCRA
children 7-12 years old to full payment
703].
but should charge only ½ the price) being
a valid exercise of police power, the same c) Eminent domain may be used as an
must be resolved in the negative. While it implement to attain the police objective
is true that a business may be regulated, it [Association of Small Landowners v.
is equally true that such regulation must Secretary of Agrarian Reform, 175 SCRA
be within the bounds of reason, that is, 343].
the regulatory ordinance must be
reasonable, and its provisions cannot be d) A law enacted in the exercise of police
oppressive amounting to an arbitrary power to regulate or govern certain
interference with the business or calling activities or transactions could be given
subject ofregulation. Balacuit v. CFI, G.R. retroactive effect and may reasonably
No. L-38429, June 30, 1988 impair vested rights or contracts. Police
power legislation is applicable not only to
future contracts, but equally to those
BIRD’s EYE VIEW OF POLICE POWER: already in existence. Non- impairment of

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contracts or vested rights clauses will vested right. A permit to carry a firearm
have to yield to the superior and outside one’s residence may be revoked
legitimate exercise by the State of the at any time. Even if it were a property
police power [Ortigas& Co. v. Court of right, it cannot be considered as absolute
Appeals, G.R. No. 126102, December 4, as to be beyond the reach of the police
2000], power [Chavez v. Romulo, 431 SCRA
534].
Thus, despite the retroactive effect of PD
957 (Subdivision and Condominium g) Like timber permits, mining
Buyers Protective Decree), there is no exploration permits do not vest in the
violation of the non-impairment clause, grantee any permanent or irrevocable
because the decree is a valid exercise of right within the purview of the non-
the police power, and police power impairmentanddue process clauses, since
prevails over contracts [PNB v. Office of the State, underitsall-encompassing police
the President, 255 SCRA 5], power, may alter, modify or amend the
same in accordance with the demands of
e) It is true that the Court has upheld the the general welfare [Southeast
constitutional right of every citizen to Mindanao Goldmining Corporation v.
select a profession or course of study Balite Portal Mining, G.R. No. 135190,
subject to fair, reasonable and equitable April 3, 2002].
admission and academic requirements.
But like all rights and freedoms h) A license to operate a motor vehicle is
guaranteed by the Charter, their exercise not a property right, but a privilege
may be so regulated pursuant to the granted by the State, which may be
police power of the State to safeguard suspended or revoked by the State in the
health, morals, peace, education, order, exercise of its police power, in the interest
safety, and the general welfare of the of public safety and welfare, subject to the
people. This regulation assumes procedural due process requirements
particular pertinence in the field of [Metropolitan Manila Development
medicine, to protect the public from the Authority v. Garin, G.R. No. 130230,
potentially deadly effects of incompetence April 15, 2005].
and ignorance [Professional Regulation
Commission v. De Guzman, G.R. No. i) R.A. 9257, otherwise known as
144681, June 21, 2004]. the “Expanded Senior Citizens Act of
2003”, is a legitimate exercise of
f) The right to bear arms is merely a police power. Administrative Order
statutory privilege. The license to carry a No. 177 issued by the Department of
firearm is neither a property or a Health, providing that the 20%
property right. Neither does it create a discount privilege of senior citizens

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shall not be limited to the purchase (2) in order to foster the common good. It
of unbranded generic medicine but is not capable of an exact definition but
shall extend to both prescription has been, purposely, veiled in general
and non-prescription medicince, terms to underscore its all-
whether branded or generic, is valid. comprehensive embrace.
When conditions so demand, as
determined by the legislature, "Its scope, ever-expanding to meet the
property rights must bow to the exigencies of the times, even to anticipate
primacy of police power because the future where it could be done,
property rights, though sheltered by provides enough room for an efficient and
the due process clause, must yield to flexible response to conditions and
the general welfare [Carlos circumstances thus assuring the greatest
Superdrug Corporation v. DSWD, benefits."
etal., G.R. No. 166494, June 29,
2007]. It finds no specific Constitutional grant for
the plain reason that it does not owe its
origin to the Charter. Along with the
taxing power and eminent domain, it is
May the government regulate home or inborn in the very fact of statehood and
outside home? sovereignty. It is a fundamental attribute
- Anything that affects public of government that has enabled it to
welfare. perform the most vital functions of
governance. Marshall, to whom the
expression has been credited, refers to it
succinctly as the plenary power of the
DOCTRINES: PASEI vs DRILON State "to govern its citizens." "The police
power of the State . . . is a power
CONCEPT OF POLICE POWER. The coextensive with self-protection, and it is
concept of police power is well- not inaptly termed the 'law of
established in this jurisdiction. It has been overwhelming necessity.' It may be said
defined as the "state authority to enact to be that inherent and plenary power in
legislation that may interfere with the State which enables it to prohibit all
personal liberty or property in order to things hurtful to the comfort, safety, and
promote the general welfare." As defined, welfare of society." It constitutes an
it consists of implied limitation on the Bill of Rights.
According to Fernando, it is "rooted in the
(1) an imposition of restraint upon liberty conception that men in organizing the
or property, state and imposing upon its government
limitations to safeguard constitutional

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rights did not intend thereby to enable an President, to administrative bodies and to
individual citizen or a group of citizens to lawmaking bodies of local government
obstruct unreasonably the enactment of units. Local government units exercise the
such salutary measures calculated to power under the general welfare clause
ensure communal peace, safety, good [Sec. 16, R.A. 7160], and under Secs. 391,
order, and welfare." 447, 458 and 468, R.A. 7160..

Significantly, the Bill of Rights itself does


not purport to be an absolute guaranty of
individual rights and liberties "Even PHILIPPINE ASSOCIATION OF SERVICE
liberty itself, the greatest of all rights, is EXPORTERS, INC vs. HON. DRILON
not unrestricted license to act according G.R. No. 81958, June 30, 1988,
to one's will." It is subject to the far more SARMIENTO, J.
overriding demands and requirements of
the greater number. FACTS:
The petitioner, Philippine Association of
Notwithstanding its extensive sweep, Service Exporters, Inc. (PASEI, for short),
police power is not without its own a firm "engaged principally in the
limitations. For all its awesome recruitment of Filipino workers, male and
consequences, it may not be exercised female, for overseas placement,"
arbitrarily or unreasonably. Otherwise, challenges the Constitutional validity of
and in that event, it defeats the purpose Department Order No. 1, Series of 1988,
for which it is exercised, that is, to of the Department of Labor and
advance the public good. Thus, when the Employment, in the character of
power is used to further private interests "GUIDELINES GOVERNING THE
at the expense of the citizenry, there is a TEMPORARY SUSPENSION OF
clear misuse of the power. DEPLOYMENT OF FILIPINO DOMESTIC
AND HOUSEHOLD WORKERS," in this
petition for certiorari and prohibition.
Specifically, the measure is assailed for
Why is police power not capable of "discrimination against males or females;"
exact definition? that it "does not apply to all Filipino
workers but only to domestic helpers and
Because it is illimitable. In order to
females with similar skills;" and that it is
underscore… ( see PASEI) violative of the right to travel. It is held
Who may exercise the power? The likewise to be an invalid exercise of the
power is inherently vested in the lawmaking power, police power being
Legislature. However, Congress may legislative, and not executive, in character.
validly delegate this power to the

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In this petition for certiorari and The concept of police power is well-
prohibition, PASEI, challenges the validity established in this jurisdiction. It has
of Department Order No. 1 (deployment been defined as the "state authority to
ban) of the DOLE on the following enact legislation that may interfere
grounds: with personal liberty or property in
order to promote the general welfare."
1) it is discriminatory as it only applies to As defined, it consists of
female workers;
2) it is an invalid exercise of the (1)an imposition of restraint upon
lawmaking power. The respondents liberty or property,
invoke the police power of the Philippine (2) in order to foster the common good.
State. It is not capable of an exact definition
but has been, purposely, veiled in
ISSUE: Whether or not the enactment of general terms to underscore its all
DO No. 1 is a valid exercise of police comprehensive embrace.
power.
"Its scope, ever-expanding to meet the
HELD: Yes, it is a valid exercise of police exigencies of the times, even to anticipate
power. Police power has been defined as the future where it could be done,
the "state authority to enact legislation provides enough room for an efficient and
that may interfere with personal liberty flexible response to conditions and
or property in order to promote the circumstances thus assuring the greatest
general welfare." It finds no specific benefits." It finds no specific
Constitutional grant for the plain reason Constitutional grant for the plain
that it does not owe its origin to the reason that it does not owe its origin to
Charter. It is a fundamental attribute of the Charter. Along with the taxing
government that has enabled it to power and eminent domain, it is inborn
perform the most vital functions of in the very fact of statehood and
governance. It constitutes an implied sovereignty. It is a fundamental attribute
limitation on the Bill of Rights. However, of government that has enabled it to
police power is not without its own perform the most vital functions of
limitations. It may not be exercised governance. Marshall, to whom the
arbitrarily or unreasonably. It is admitted expression has been credited, refers to it
that Department Order No. 1 is in the succinctly as the plenary power of the
nature of a police power measure. The State "to govern its citizens." "The police
only question is whether or not it is valid power of the State . . . is a power
under the Constitution. coextensive with self-protection, and it is
not inaptly termed the 'law of
overwhelming necessity.' It may be said

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to be that inherent and plenary power in DO No. 1 applies only to "female contract
the State which enables it to prohibit all workers," but it does not thereby make an
things hurtful to the comfort, safety, and undue discrimination between the sexes.
welfare of society." “Equality before the law" admits of
classifications, provided that
It constitutes an implied limitation on
the Bill of Rights. According to (1) such classifications rest on substantial
Fernando, it is "rooted in the conception distinctions;
that men in organizing the state and (2) they are germane to the purposes of
imposing upon its government the law;
limitations to safeguard constitutional (3) they are not confined to existing
rights did not intend thereby to enable conditions; and
an individual citizen or a group of (4) they apply equally to all members of
citizens to obstruct unreasonably the the same class.
enactment of such salutary measures
calculated to ensure communal peace, It is the avowed objective of DO No. 1 to
safety, good order, and welfare." "enhance the protection for Filipino
Significantly, the Bill of Rights itself does female overseas workers. Discrimination
not purport to be an absolute guaranty of in this case is justified. Police power is the
individual rights and liberties "Even domain of the legislature, but it does not
liberty itself, the greatest of all rights, is mean that such an authority may not be
not unrestricted license to act according lawfully delegated. The Labor Code itself
to one's will." It is subject to the far more vests the DOLE with rulemaking powers
overriding demands and requirements of in the enforcement whereof. Hence it is a
the greater number. valid exercise of police power.

Notwithstanding its extensive sweep,


police power is not without its own NACHURA:
limitations. For all its awesome
consequences, it may not be exercised While police power may be validly
arbitrarily or unreasonably. Otherwise, delegated to the President by law, R.A.
and in that event, it defeats the purpose 6939 and P.D. 260, as amended, do not
for which it is exercised, that is, to authorize the President, or any other
advance the public good. Thus, when administrative body, to take over the
the power is used to further private internal management of a cooperative.
interests at the expense of the citizenry, Accordingly, Memorandum Order No. 409,
there is a clear misuse of the power. issued by the President, constituting an
ad hoc committee to temporarily take
over and manage the affairs of

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CANORECO is invalid [Camarines Norte Development Authority v. Garin, G.R. No.


Electric Cooperative v. Torres, G.R. No. 130230, April 15, 2005]
127249, February 27, 1998].
In Francisco v. Fernando, G.R. No.
Unlike the legislative bodies of local 166501, November 16, 2006, a petition
government units, there is no provision in for prohibition and mandamus was filed
R.A. 7924 that empowers the Metro against the MMDA and its Chairman,
Manila Development Authority (MMDA) Bayani Fernando, to enjoin the further
or its Council to “enact ordinances, implementation of the “Wet Flag Scheme”
approve resolutions and appropriate and to compel respondents to “respect
funds for the general welfare” of the and uphold” the pedestrians’ right to due
inhabitants of Metro Manila. Thus, MMDA process and right to equal protection of
may not order the opening of Neptune St. the law. (As implemented, police mobile
in the Bel-Air Subdivision to public traffic, units bearing wet flags with words
as it does not possess delegated police “Maglakadandmag-abangsabangketa”are
power [Metro Manila Development deployed along major Metro Manila
Authority v. Bel-Air Village Association, thoroughfares.) It was held that the
G.R. No. 135962, March 27, 2000]. petitioner failed to show the lack of basis
or the unreasonableness of the Wet Flag
While Sec. 5(f), R.A. 7924, does not grant Scheme. On the alleged lack of legal basis,
the MMDA the power to confiscate and the Court noted that all the cities and
suspend or revoke drivers’ licenses municipalities within MMDA’s jurisdiction
without need of any other legislative except Valenzuela City have each enacted
enactment, the same law vests the MMDA anti- jaywalking ordinances or traffic
with the duty to enforce existing traffic management codes with provisions for
rules and regulations. Thus, where there pedestrian regulation. This serves as
is a traffic law or regulation validly sufficient basis for the respondent’s
enacted by the legislature or those implementation of schemes to enforce the
agencies to whom legislative power has anti-jaywalking ordinances and similar
been delegated (the City of Manila, in this regulations. The MMDA is an
case), the MMDA is not precluded — and administrative agency tasked with the
in fact is duty-bound — to confiscate and implementation of rules and regulations
suspend or revoke drivers’ licenses in the enacted by proper authorities. The
exercise of its mandate of transport and absence of an anti-jaywalking ordinance
traffic management, as well as the in Valenzuela City does not detract from
administration and implementation of all this conclusion absent any proof that
traffic enforcement operations, traffic respondents implemented the Flag
engineering services and traffic education Scheme in that city.
programs [Metropolitan Manila

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While concededly, the President has the and it is almost impossible to limit its
authority to provide for the establishment sweep. It derives its existence from the
of the Greater Manila Mass Transport very existence of the State itself, and does
System, in order to decongest traffic by not need to be expressed or defined in its
eliminating bus terminals along major scope. It is said to be co-extensive with
Metro Manila thoroughfares, EO No. 179, self - protection and survival, and as such
which designates the Metro Manila it is the most positive and active of all
Development Authority as the governmental processes, the most
implementing agency for the project, is essential, insistent and illimitable.
ultra vires. Under the provisions of EO Especially is it so under a modern
125, as amended, it is the DOTC, not the democratic framework where the
MMDA, which is authorized to establish demands of society and of nations have
and implement such a project. The multiplied to almost unimaginable
President must exercise the authority proportions; the field and scope of police
through the instrumentality of the DOTC power has become almost boundless, just
which, by law is the primary as the fields of public interest and public
implementing and administrative entity welfare have become almost all-
in the promotion, development and embracing and have transcended human
regulation of networks of transportation. foresight.
By designating the MMDA as the
implementing agency, the President The conflict between police power and
overstepped the limits of the authority the guarantees of due process and equal
conferred by law [Metropolitan Manila protection of the laws is more apparent
Development Authority v. Viron than real. Properly related, the power and
Transportation, G.R. No. 170656, August the guarantees are supposed to coexist.
15, 2007]. The balancing is the essence, or the
indispensable means for the attainment of
legitimate aspirations of any democratic
DOCTRINES: ICHONG VS. HERNANDEZ society. There can be no absolute power,
whoever exercises it, for that would be
Why is it considered “law of tyranny. Yet there can neither be absolute
overwhelming necessity”? liberty, for that would mean license and
anarchy. So the State can deprive persons
Ichong vs Hernandez- almost all of life, liberty or property, provided there
embracing and transcending is due process of law; and persons may be
classified into classes and groups,
provided everyone is given the equal
POLICE POWER; NATURE AND SCOPE. protection of the law.
— Police power is far-reaching in scope,

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The test or standard, as always, is reason. contract. The law in question was enacted
The police power legislation must be to remedy a real actual threat and
firmly grounded on public interest and danger to national economy posed by
welfare, and a reasonable relation must alien dominance and control of the
exist between purposes and means. And if retail business and free the citizens and
distinction or classification has been country from such dominance and
made, there must be a reasonable basis control; that the enactment clearly falls
for said distinction. 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.
ICHONG VS. HERNANDEZ
101 PHIL. 1155 Resuming what we have set forth above
we hold that the disputed law was
FACTS: enacted to remedy a real actual threat and
Republic Act 1180 or commonly known as danger to national economy posed by
“An Act to Regulate the Retail Business” alien dominance and control of the retail
was passed. The said law provides for a business and free citizens and country
prohibition against foreigners as well as from such dominance and control; that
corporations owned by foreigners from the enactment clearly falls within the
engaging from retail trade in our country. scope of the police power of the state,
Petitioner filed a suit to invalidate the through which and by which it protects its
Retail Trade Nationalization Law, on the own personality and insures its security
premise that it violated several treaties and future; that the law does not violate
which under the rule of pacta sunt the equal protection clause of the
servanda, a generally accepted principle Constitution because sufficient grounds
of international law, should be observed exist for the distinction between alien and
by the Court in good faith. citizen in the exercise of occupation
regulated, nor the due process of the law
ISSUE: Whether or not the Retail Trade clause; because the law is prospective in
Nationalization Law is unconstitutional operation and recognizes the privilege of
for it is in conflict with treaties which are aliens already engaged in the occupation
generally accepted principles of and reasonably protects their privilege;
international law. that the wisdom and efficacy of the law to
carry out its objectives appear to us to be
HELD: The Supreme Court said it saw no plainly evident - as a matter of fact it
conflict. The reason given by the Court seems not only appropriate but actually
was that the Retail Trade National Law necessary - and that in any case such
was passed inthe medium of a treaty or a matter falls within the prerogative of the

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legislature, with whose power and b. If for regulation – police


discretion the judicial department of the power; in Lutz v Araneta,
Government may not interfere; that the the tax measure was used
provisions of the law are clearly for regulation of sugar
embraced in the title, and this suffers industry
from no duplicity and has not misled the
legislature of the segment of the
population affected; and that it cannot be
said to be void for supposed conflict with
treaty obligations because no treaty has POWER OF TAXATION MAY BE USED AS
actually been entered into on the subject AN IMPLEMENT OF POLICE POWER.
and the police power may not be curtailed The basic defect in the plaintiff's position
or surrendered by any treaty or any other is his assumption that the tax provided
conventional agreement. for in Commonwealth Act No. 567 is a
pure exercise of the taxing power.
Analysis of the Act, and particularly of
section 6 (heretofore quoted in full), will
show that the tax is levied with a
DOCTRINE: LUTZ VS ARANETA regulatory purpose, to provide means for
the rehabilitation and stabilization of the
threatened sugar industry. In other words,
Do these inherent powers live in the act is primarily an exercise of the
different worlds? police power.
Traditionally, yes. But currently, Court
This Court can take judicial notice of the
abandoned that traditional view. It can be fact that sugar production is one of the
commingled. It may be used great industries of our nation, sugar
simultaneously. (Lutz v Araneta) occupying a leading position among its
export products; that it gives employment
In Lutz v Araneta, no violation of
to thousands of laborers in fields and
uniformity of taxation, because taxation
factories; that it is a great source of the
was used as an implement of police state's wealth, is one of the important
power. sources of foreign exchange needed by
When is a tax measure an exercise of our government, and is thus pivotal in the
police power and when taxation? plans of a regime committed to a policy of
currency stability. Its promotion,
a. If for revenue raising – protection and advancement, therefore
taxation redounds greatly to the general welfare.
Hence it was competent for the legislature

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to find that the general welfare demanded in character. If objective and methods are
that the sugar industry should be alike constitutionally valid, no reason is
stabilized in turn; and in the wide field of seen why the state may not be levy taxes
its police power, the law-making body to raise funds for their prosecution and
could provide that the distribution of attainment. Taxation may be made the
benefits therefrom be readjusted among implement of the state's police power
its components to enable it to resist the
added strain of the increase in taxes that
it had to sustain.
WALTER LUTZ, et. al vs. ANTONIO
As stated in Johnson vs. State ex rel. ARANETA, G.R. No. L-7859, December
Marey, with reference to the citrus 22, 1955, REYES, J.B L., J.
industry in
Florida —
FACTS: Plaintiffs seek to recover tax from
the respondent alleging that such is
"The protection of a large industry unconstitutional and void, being levied for
constituting one of the great the aid and support of the sugar industry
sources of the state's wealth and exclusively, which in plaintiff's opinion is
therefore directly or indirectly not a public purpose for which a tax may
affecting the welfare of so great a be constitutionally levied. The action
portion of the population of the having been dismissed by the Court of
State is affected to such an extent First Instance, the plaintiffs appealed the
by public interests as to be within case directly to the Supreme Court.
the police power of the sovereign."
(128 So. 857)
ISSUE: Whether or not the imposition of
tax under the CA No. 567 is a valid
Once it is conceded, as it must, that the exercise of police power.
protection and promotion of the sugar
industry is a matter of public concern, it HELD: Yes. The tax is levied with a
follows that the Legislature may regulatory purpose , to provide means
determine within reasonable bounds for the rehabilitation and stabilization
what is necessary for its protection and of the threatened sugar industry. In
expedient for its promotion. Here, the other words, the act is primarily an
legislative discretion must be allowed full exercise of the police power. The
play, subject only to the test of protection of a large industry constituting
reasonableness; and it is not contended one of the great sources of the state's
that the means provided in section 6 of
wealth and therefore directly or indirectly
the law (above quoted) bear no relation affecting the welfare of so great a portion
to the objective pursued or are oppressive of the population of the State is affected
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to such an extent by public interests as to


be within the police power of the No less importantly, the government
sovereign. The decision appealed from is financial instruments making up the
affirmed. balance of the payment are "negotiable at
any time." The other modes, which are
likewise available to the landowner at his
option, are also not unreasonable because
payment is made in shares of stock, LBP
DOCTRINE: Association of Small
Landowners vs. Secretary of Agrarian bonds, other properties or assets, tax
Reform credits, and other things of value
equivalent to the amount of just
compensation. Association of Small
In Association of Small Landowners v
Landowners v. DAR, 175 SCRA 343
Sec. of Agrarian, there were 2 phases
(1989)
a. 1st phase: Retention of
limits – police power
b. 2nd phase: Taking – eminent POWER OF EMINENT DOMAIN MAY BE
domain USED AS AN IMPLEMENT OF POLICE
POWER.
In police power, property may be
regulated, it may also be taken for There are traditional distinctions
noxiouspurposes. between the police power and the power
of eminent domain that logically preclude
the application of both powers at the
MANNER OF PAYMENT: Accepting the same time on the same subject. In the case
theory that payment of the just of City of Baguio v. NAWASA, for example,
compensation is not always required to where a law required the transfer of all
be made fully in money, we find further municipal waterworks systems to the
that the proportion of cash payment to NAWASA in exchange for its assets of
the other things of value constituting the equivalent value, the Court held that the
total payment, as determined on the basis power being exercised was eminent
of the areas of the lands expropriated, is domain because the property involved
not unduly oppressive upon the was wholesome and intended for a public
landowner. It is noted that the smaller the use. Property condemned under the
land, the bigger the payment in money, police power is noxious or intended for a
primarily because the small landowner noxious purpose, such as a building on the
will be needing it more than the big verge of collapse, which should be
landowners, who can afford a bigger demolished for the public safety, or
balance in bonds and other things of value. obscene materials, which should be

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destroyed in the interest of public morals. restriction here in question is merely the
The confiscation of such property is not prohibition of a noxious use. The property
compensable, unlike the taking of so restricted remains in the possession of
property under the power of its owner. The state does not appropriate
expropriation, which requires the it or make any use of it. The state merely
payment of just compensation to the prevents the owner from making a use
owner. which interferes with paramount rights of
the public. Whenever the use prohibited
In the case of Pennsylvania Coal Co. v. ceases to be noxious — as it may because
Mahon, Justice Holmes laid down the of further changes in local or social
limits of the police power in a famous conditions — the restriction will have to
aphorism: "The general rule at least is be removed and the owner will again be
that while property may be regulated to a free to enjoy his property as heretofore.
certain extent, if regulation goes too far it
will be recognized as a taking." The Recent trends, however, would indicate
regulation that went "too far" was a law not a polarization but a mingling of the
prohibiting mining which might cause the police power and the power of eminent
subsidence of structures for human domain, with the latter being used as an
habitation constructed on the land implement of the former like the power of
surface. This was resisted by a coal taxation. The employment of the taxing
company which had earlier granted a power to achieve a police purpose has
deed to the land over its mine but long been accepted. As for the power of
reserved all mining rights thereunder, expropriation, Prof. John J. Costonis of the
with the grantee assuming all risks and University of Illinois College of Law
waiving any damage claim. The Court held (referring to the earlier case of Euclid v.
the law could not be sustained without Ambler Realty Co., 272 US 365, which
compensating the grantor. Justice sustained a zoning law under the police
Brandeis filed a lone dissent in which he power) makes the following significant
argued that there was a valid exercise of remarks:
the police power. He said: Every
restriction upon the use of property
imposed in the exercise of the police Euclid, moreover, was decided in an era
power deprives the owner of some right when judges located the police and
theretofore enjoyed, and is, in that sense, eminent domain powers on different
an abridgment by the State of rights in planets. Generally speaking, they viewed
property without making compensation. eminent domain as encompassing public
But restriction imposed to protect the acquisition of private property for
public health, safety or morals from improvements that would be available for
dangers threatened is not a taking. The "public use," literally construed. To the

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police power, on the other hand, they there is definitely a taking under the
assigned the less intrusive task of power of eminent domain for which
preventing harmful externalities, a point payment of just compensation is
reflected in the Euclid opinion's reliance imperative. The taking contemplated is
on an analogy to nuisance law to bolster not a mere limitation of the use of the
its support of zoning. So long as land. What is required is the surrender of
suppression of a privately authored harm the title to and the physical possession of
bore a plausible relation to some the said excess and all beneficial rights
legitimate "public purpose," the pertinent accruing to the owner in favor of the
measure need have afforded no farmer-beneficiary. This is definitely an
compensation whatever. With the exercise not of the police power but of the
progressive growth of government's power of eminent domain.
involvement in land use, the distance
between the two powers has contracted
considerably. Today government often ASSOCIATION OF SMALL LANDOWNERS
employs eminent domain interchangeably IN THE PHILIPPINES, INC., et. Al vs.
with or as a useful complement to the HONORABLE SECRETARY OF
police power — a trend expressly AGRARIAN REFORM
approved in the Supreme Court's 1954 G.R. No. 78742, July 14, 1989, CRUZ, J.
decision in Berman v. Parker, which
broadened the reach of eminent domain's Facts: In these consolidated cases,
"public use" test to match that of the petitioners primarily assail the
police power's standard of "public constitutionality of R.A. No. 6657, P.D. No.
purpose." 27, Proc. No. 131, and E.O. Nos. 228 and
229 arguing that no private property shall
The cases before us present no knotty be taken for public use without just
complication insofar as the question of compensation. The respondent invokes
compensable taking is concerned. To the the police power of the State.
extent that the measures under challenge
merely prescribe retention limits for ISSUE: Whether or not the taking of
landowners, there is an exercise of the property under the said laws is a valid
police power for the regulation of private exercise of police power or of the power
property in accordance with the of eminent domain.
Constitution.
HELD: It is an exercise of the power of
But where, to carry out such regulation, it eminent domain. The cases present no
becomes necessary to deprive such knotty complication insofar as the
owners of whatever lands they may own question of compensable taking is
in excess of the maximum area allowed, concerned. To the extent that the

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measures under challenge merely


prescribe retention limits for What is the interest sought to be
landowners, there is an exercise of the achieved by the State in prohibiting the
police power for the regulation of issuance of bouncing checks/rubber
private property in accordance with the checks?
Constitution. But where, to carry out
such regulation, it becomes necessary BP 22 intends to preserve integrity of
to deprive such owners of whatever commercial documents
lands they may own in excess of the
maximum area allowed, there is
definitely a taking under the power of “If one wants to be a
eminent domain for which payment of lawyer…compared to a plumber”, why
just compensation is imperative. The the comparison? “Declogging…”
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 CONCEPT OF POLICE POWER. It may be
excess and all beneficial rights accruing constitutionally impermissible for the
to the owner in favor of the farmer legislature to penalize a person for non-
beneficiary. payment of a debt ex contractu. But
certainly it is within the prerogative of the
This is definitely an exercise not of the lawmaking body to proscribe certain acts
police power but of the power of deemed pernicious and inimical to public
eminent domain. Wherefore, the Court welfare. Acts mala in se are not the only
holds the constitutionality of R.A. No. acts which the law can punish. An act may
6657, P.D. No. 27, Proc. No. 131, and E.O. not be considered by society as inherently
Nos. 228 and 229. However, the title to all wrong, hence, not malum in se, but
expropriated properties shall be because of the harm that it inflicts on the
transferred to the State only upon full community, it can be outlawed and
payment of compensation to their criminally punished as malum prohibitum.
respective owners. The state can do this in the exercise of its
police power.

The police power of the state has been


described as "the most essential, insistent
DOCTRINE: :LOZANO VS. MARTINEZ and illimitable of powers" which enables
it to prohibit all things hurtful to the
May a financial document be an comfort, safety and welfare of society. It is
example of a lawful subject? a power not emanating from or conferred
Yes – Lozano
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by the constitution, but inherent in the


state, plenary, suitably vague and far from FACTS: Batas Pambansa Bilang 22 (BP 22
precisely defined, rooted in the for short), popularly known as the
conception that man in organizing the Bouncing Check Law punishes a person
state and imposing upon the government "who makes or draws and issues any
limitations to safeguard constitutional check on account or for value, knowing at
rights did not intend thereby to enable the time of issue that he does not have
individual citizens or group of citizens to sufficient funds in or credit with the
obstruct unreasonably the enactment of drawee bank for the payment of said
such salutary measures to ensure check in full upon presentment, which
communal peace, safety, good order and check is subsequently dishonored by the
welfare." drawee bank for insufficiency of funds or
credit or would have been dishonored for
The enactment of BP 22 is a declaration the same reason had not the drawer,
by the legislature that, as a matter of without any valid reason, ordered the
public policy, the making and issuance of bank to stop payment."
a worthless check is deemed a public
nuisance to be abated by the imposition of Those who question the constitutionality
penal sanctions. It is not for us to question of BP 22 insist that it offends the
the wisdom or impolicy of the statute. It is constitutional provision forbidding
sufficient that a reasonable nexus exists imprisonment for debt and it contravenes
between means and end. Considering the the equal protection clause.
factual and legal antecedents that led to
the adoption of the statute, it is not ISSUE: Whether or not the enactment of
difficult to understand the public concern BP 22 is a valid exercise of police power.
which prompted its enactment. It had
been reported that the approximate value HELD: Yes. The enactment of BP 22 is a
of bouncing checks per day was close to valid exercise of the police power and is
200 million pesos, and thereafter when not repugnant to the constitutional
overdrafts were banned by the Central inhibition against imprisonment for
Bank, it averaged between 50 million to debt. It may be constitutionally
80 million pesos a day. impermissible for the legislature to
penalize a person for non-payment of a
debt ex contractu. But certainly it is
within the prerogative of the
FLORENTINA A. LOZANO vs. lawmaking body to proscribe certain
HONORABLE ANTONIO M. MARTINEZ, acts deemed pernicious and inimical to
et.alG.R. No. L-63419 December 18, public welfare. Acts mala in se are not
1986, YAP, J. the only acts which the law can punish.

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An act may not be considered by society


as inherently wrong, hence, not malum The harmful practice of putting
in se but because of the harm that it valueless commercial papers in
inflicts on the community, it can be circulation, multiplied a thousandfold,
outlawed and criminally punished as can very well pollute the channels of
malum prohibitum. The state can do trade and commerce, injure the banking
this in the exercise of its police power. system and eventually hurt the welfare
of society and the public interest.
There is no substance in the claim that the
statute in question denies equal In sum, we find the enactment of BP 22 a
protection of the laws or is discriminatory, valid exercise of the police power and is
since it penalizes the drawer of the check, not repugnant to the constitutional
but not the payee. Wherefore, the inhibition against imprisonment for debt.
decision rendered by the respondent
judge is hereby set aside. Recent statistics
of the Central Bank show that one-third of
the entire money supply of the country, DOCTRINES: Department of Education,
roughly totalling P32.3 billion, consists of Culture and Sports vs. San Diego
peso demand deposits; the remaining
two-thirds consists of currency in May choice of profession be vaild/lawful
circulation. These demand deposits in the subject of police power? Read DECS v San
banks constitute the funds against which, Diego
among others, commercial papers like
checks, are drawn. The magnitude of the
amount involved amply justifies the What is the interest of the State in the
legitimate concern of the state in entrance exam of students in the
preserving the integrity of the banking
medical profession? To ensure that the
system. Flooding the system with
worthless checks is like pouring garbage medical profession will not be infiltrated
into the bloodstream of the nation's with incompetents…to which the society
economy. entrust their lives.

The effects of the issuance of a worthless


check transcends the private interests of TESTS OF VALID EXERCISE OF POLICE
the parties directly involved in the POWER. There is no need to redefine
transaction and touches the interests of here the police power of the State. Suffice
the community at large. The mischief it it to repeat that the power is validly
creates is not only a wrong to the payee exercised if
or holder, but also an injury to the public.

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(a) the interests of the public generally, as true of any other calling in which the
distinguished from those of a particular public interest is involved; and the closer
class, require the interference of the State, the link, the longer the bridge to one's
and ambition. The State has the responsibility
(b) the means employed are reasonably to harness its human resources and to see
necessary to the attainment of the object to it that they are not dissipated or, no
sought to be accomplished and not unduly less worse, not used at all. These
oppressive upon individuals. resources must be applied in a manner
that will best promote the common good
while also giving the individual a sense of
What are the two tests of Valid satisfaction.
Exercise of PP?
A person cannot insist on being a
 Lawful Subject physician if he will be a menace to his
 Lawful Means patients. If one who wants to be a lawyer
may prove better as a plumber, he should
be so advised and adviced. Of course, he
In other words, the proper exercise of the may not be forced to be a plumber, but on
police power requires the concurrence of the other hand he may not force his entry
a lawful subject and a lawful method. into the bar. By the same token, a student
who has demonstrated promise as a
The subject of the challenged regulation is pianist cannot be shunted aside to take a
certainly within the ambit of the police course in nursing, however appropriate
power. It is the right and indeed the this career may be for others.
responsibility of the State to insure that
the medical profession is not infiltrated The right to quality education invoked by
by incompetents to whom patients may the private respondent is not absolute.
unwarily entrust their lives and health. The Constitution also provides that "every
citizen has the right to choose a
The method employed by the challenged profession or course of study, subject to
regulation is not irrelevant to the purpose fair, reasonable and equitable admission
of the law nor is it arbitrary or oppressive. and academic requirements." The private
The three-flunk rule is intended to respondent must yield to the challenged
insulate the medical schools and rule and give way to those better
ultimately the medical profession from prepared. Where even those who have
the intrusion of those not qualified to be qualified may still not be accommodated
doctors. While every person is entitled to in our already crowded medical schools,
aspire to be a doctor, he does not have a there is all the more reason to bar those
constitutional right to be a doctor. This is

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who, like him, have been tested and found Thus, the subject of the challenged
wanting. regulation is certainly within the ambit
of the police
power. It is the right and indeed the
responsibility of the State to insure that
DECS VS SAN DIEGO the medical profession is not infiltrated
180 SCRA 233, Cruz, J. by incompetents to whom patients may
unwarily entrust their lives and health.
FACTS: The petitioner disqualified the
private respondent who had actually While every person is entitled to aspire to
taken and failed four times the National be a doctor, he does not have a
Medical Admission Test from taking it constitutional right to be a doctor. The
again under its regulation. But the private private respondent has failed the NMAT
respondent contends that he is still five times and this is sufficed to say that
entitled and hence, applied to take a fifth he must yield to the challenged rule and
examination based on constitutional give way to those better prepared. The
grounds: right to academic freedom and Court upheld the constitutionality of the
quality education, due process and equal NMAT as a measure intended to limit the
protection. He filed a petition for admission to medical schools only to
mandamus. The respondent judge those who have initially proved their
declared the said rule invalid and granted competence and preparation for a
the petition. medical education. The decision of the
respondent judge is reversed.
ISSUE: Whether or not the three flunk
rule is a valid exercise of police power.
DOCTRINES: YNOT VS. IAC
HELD: Yes. The police power is validly
exercised if InYnot v IAC; EO 626-A; is the
(a) the interests of the public generally, as preservation of carabaos lawful
distinguished from those of a particular subject?
class, require the interference of the State,
Yes.
and
(b) the means employed are reasonably
necessary to the attainment of the object
sought to be accomplished and not unduly Is there lawful means employed?
oppressive upon individuals.
None. NO rational connection between
the means employed and the purpose or
object of the law.

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for the accomplishment of the purpose, and


LAWFUL MEANS AS A TEST OF not unduly oppressive upon individuals. . . .
VALIDITY OF EXERCISE. A similar
prohibition was challenged in United "From what has been said, we think it is
States v. Toribio, where a law regulating clear that the enactment of the provisions
the registration, branding and slaughter of the statute under consideration was
of large cattle was claimed to be a required by `the interests of the public
deprivation of property without due generally, as distinguished from those of a
process of law. The defendant had been particular class' and that the prohibition of
convicted thereunder for having the slaughter of carabaos for human
slaughtered his own carabao without the consumption, so long as these animals are
required permit, and he appealed to the fit for agricultural work or draft purposes
Supreme Court. The conviction was was a `reasonably necessary' limitation on
affirmed. The law was sustained as a valid private ownership, to protect the
police measure to prevent the community from the loss of the services of
indiscriminate killing of carabaos, which such animals by their slaughter by
were then badly needed by farmers. An improvident owners, tempted either by
epidemic had stricken many of these greed of momentary gain, or by a desire to
animals and the reduction of their enjoy the luxury of animal food, even when
number had resulted in an acute decline by so doing the productive power of the
in agricultural output, which in turn had community may be measurably and
caused an incipient famine. dangerously affected."

Furthermore, because of the scarcity of In the light of the tests mentioned above,
the animals and the consequent increase we hold with the Toribio Case that the
in their price, cattle-rustling had spread carabao, as the poor man's tractor, so to
alarmingly, necessitating more effective speak, has a direct relevance to the public
measures for the registration and welfare and so is a lawful subject of
branding of these animals. The Court held Executive Order No. 626. The method
that the questioned statute was a valid chosen in the basic measure is also
exercise of the police power and declared reasonably necessary for the purpose
in part as follows: "To justify the State in sought to be achieved and not unduly
thus interposing its authority in behalf of oppressive upon individuals, again
the public, it must appear, first, that the following the above-cited doctrine. There
interests of the public generally, as is no doubt that by banning the slaughter
distinguished from those of a particular of these animals except where they are at
class, require such interference; and second, least seven years old if male and eleven
that the means are reasonably necessary years old if female upon issuance of the
necessary permit, the executive order will

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be conserving those still fit for farm work preventing their slaughter cannot be
or breeding and preventing their prohibited, it should follow that there is
improvident depletion. no reason either to prohibit their transfer
But while conceding that the amendatory as, not to be flippant, dead meat.
measure has the same lawful subject as
the original executive order, we cannot Even if a reasonable relation between the
say with equal certainty that it complies means and the end were to be assumed,
with the second requirement, viz., that we would still have to reckon with the
there be a lawful method. We note that to sanction that the measure applies for
strengthen the original measure, violation of the prohibition. The penalty is
Executive Order No. 626-A imposes an outright confiscation of the carabao or
absolute ban not on the slaughter of the carabeef being transported, to be meted
carabaos but on their movement, out by the executive authorities, usually
providing that "no carabao regardless of the police only. In the Toribio Case, the
age, sex, physical condition or purpose statute was sustained because the penalty
(sic) and no carabeef shall be transported prescribed was fine and imprisonment, to
from one province to another." The object be imposed by the court after trial and
of the prohibition escapes us. The conviction of the accused. Under the
reasonable connection between the challenged measure, significantly, no such
means employed and the purpose sought trial is prescribed, and the property being
to be achieved by the questioned measure transported is immediately impounded by
is missing. the police and declared, by the measure
itself, as forfeited to the government.
We do not see how the prohibition of the
interprovincial transport of carabaos can
prevent their indiscriminate slaughter, YNOT VS INTERMEDIATE APPELLATE
considering that they can be killed COURT 148 SCRA 659, Cruz, J.
anywhere, with no less difficulty in one
province than in another. Obviously, FACTS: President Marcos issued E.O. 626-
retaining the carabaos in one province A amending E.O. 626, which prohibits the
will not prevent their slaughter there, any transport of carabaos or carabeefs from
more than moving them to another one province to another for the purpose
province will make it easier to kill them of preventing indiscriminate slaughter
there. As for the carabeef, the prohibition of these animals. The petitioner had
is made to apply to it as otherwise, so says transported six carabaos from Masbate to
executive order, it could be easily Iloilo where they were confiscated for
circumvented by simply killing the animal. violation of the said order. He sued for
Perhaps so. However, if the movement of recovery and challenges the
the live animals for the purpose of constitutionality of the said order. The

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lower court sustained the confiscation of executive authorities, usually the police
the carabaos. He appealed the decision to only. In the Toribio Case, the statute was
the Intermediate Appellate Court which sustained because the penalty prescribed
upheld the lower court. Hence this was fine and imprisonment, to be
petition for review on certiorari. imposed by the court after trial and
conviction of the accused. Under the
ISSUE: Whether or not the purpose of E.O. challenged measure, significantly, no such
626-A is a valid exercise of police power. trial is prescribed, and the property being
transported is immediately impounded by
HELD: No. We do not see how the the police and declared, by the measure
prohibition of the interprovincial itself, as forfeited to the government.
transport of carabaos can prevent their
indiscriminate slaughter, considering In the instant case, the carabaos were
that they can be killed anywhere, with arbitrarily confiscated by the police station
no less difficulty in one province than in commander, were returned to the
another. Obviously, retaining the petitioner only after he had filed a
carabaos in one province will not complaint for recovery and given a
prevent their slaughter there, any more supersedeas bond of P12,000.00, which was
than moving them to another province ordered confiscated upon his failure to
will make it easier to kill them there. As produce the carabaos when ordered by the
for the carabeef, the prohibition is trial court. The executive order defined the
made to apply to it as otherwise, so says prohibition, convicted the petitioner and
executive order, it could be easily immediately imposed punishment, which
circumvented by simply killing the was carried out forthright. The measure
animal. Perhaps so. struck at once and pounced upon the
petitioner without giving him a chance to
However, if the movement of the live be heard, thus denying him the centuries-
animals for the purpose of preventing old guaranty of elementary fair play.
their slaughter cannot be prohibited, it
should follow that there is no reason In the instant case, the challenged
either to prohibit their transfer as, not to measure is an invalid exercise of the
be flippant, dead meat. Even if a police power because the method
reasonable relation between the means employed to conserve the carabaos is not
and the end were to be assumed, we would reasonably necessary to the purpose of
still have to reckon with the sanction that the law and, worse, is unduly oppressive.
the measure applies for violation of the Moreover, there was no such pressure of
prohibition. The penalty is outright time or action calling for the petitioner's
confiscation of the carabao or carabeef peremptory treatment. The properties
being transported, to be meted out by the involved were not even inimical per se as

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to require their instant destruction. Thus, would justify the ordinance in question
the Court cannot say with equal certainty except the provision granting police
that it complies with the second power to the City. Section 9 cannot be
requirement, that there be a lawful justified under the power granted to
method. The reasonable connection Quezon City to tax, fix the license fee, and
between the means employed and the regulate such other business, trades, and
purpose sought to be achieved by the occupation as may be established or
questioned measure is missing. Executive practiced in the City.' (Subsections 'C', Sec.
Order No. 626-A is hereby declared 12, R.A. 537). "The power to regulate does
unconstitutional. not include the power to prohibit (People
vs. Esguerra, 81 Phil. 33, Vega vs.
Municipal Board of Iloilo, L-6765, May 12,
DOCTRINE: City Government of Quezon 1954; 39 N.J. Law, 70, Mich. 396). A
City vs. Ericta fortiori, the power to regulate does not
include the power to confiscate. The
In City Government of Quezon City v ordinance in question not only confiscates
Ericta, is the 6% imposition a taking or but also prohibits the operation of a
a regulation? Imposition amounts to memorial park cemetery, because under
confiscation. If regulation goes too far it Section 13 of said ordinance, 'Violation of
amounts to taking. the provision thereof is punishable with a
fine and/or imprisonment and that upon
Is it taking for destruction? conviction thereof the permit to operate
No. taking of private property for public and maintain a private cemetery shall be
use – NOT proper object of police power. revoked or cancelled.' The confiscatory
clause and the penal provision in effect
If for Police power – it must be for
deter one from operating a memorial park
destruction.
cemetery. Neither can the ordinance in
question be justified under sub-section 't',
We find the stand of the private Section 12 of Republic Act 537 which
respondent as well as the decision of the authorizes the City Council to —
respondent Judge to be well-founded. We "'prohibit the burial of the dead within
quote with approval the lower court's the center of population of the city and
ruling which declared null and void provide for their burial in such proper
Section 9 of the questioned city place and in such manner as the council
ordinance: "The issue is: Is Section 9 of may determine, subject to the provisions
the ordinance in question a valid exercise of the general law regulating burial
of the police power? "An examination of grounds and cemeteries and governing
the Charter of Quezon City (Rep. Act No. funerals and disposal of the dead.'(Sub-
5371), does not reveal any provision that sec. (t), Sec. 12, Rep. Act No. 537).

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law' (Art. III, Section 1


There is nothing in the above provision subparagraph 1, Constitution).
which authorizes confiscation or as
euphemistically termed by the "On the other hand, there are three
respondents, 'donation.' We now come to inherent powers of government by which
the question whether or not Section 9 of the state interferes with the property
the ordinance in question is a valid rights, namely (1) police power, (2)
exercise of police power. The police eminent domain, (3) taxation. These are
power of Quezon City is defined in sub- said to exist independently of the
section 00, Sec. 12, Rep. Act 537 which Constitution as necessary attributes of
reads as follows: sovereignty.

"(00) To make such further "Police power is defined by Freund as 'the


ordinance and regulations not power of promoting the public welfare by
repugnant to law as may be restraining and regulating the use of
necessary to carry into effect and liberty and property' (Quoted in Political
discharge the powers and duties Law by Tañada and Carreon, V-II, p. 50).
conferred by this act and such as it It is usually exerted in order to merely
shall deem necessary and proper regulate the use and enjoyment of
to provide for the health and safety, property of the owner. If he is deprived of
promote, the prosperity, improve his property outright, it is not taken for
the morals, peace, good order, public use but rather to destroy in order
comfort and convenience of the to promote the general welfare. In police
city and the inhabitants thereof, power, the owner does not recover from
and for the protection of property the government for injury sustained in
therein; and enforce obedience consequence thereof. (12 C.J. 623). It has
thereto with such lawful fines or been said that police power is the most
penalties as the City Council may essential of government powers, at times
prescribe under the provisions of the most insistent, and always one of the
subsection (jj) of this section.' least limitable of the powers of
government (Ruby vs. Provincial Board,
"We start the discussion with a 39 Phil. 660; Ichong vs. Hernandez, L-
restatement of certain basic 7995, May 31, 1957).
principles. Occupying the forefront
in the bill of rights is the provision This power embraces the whole system of
which states that 'no person shall public regulation (U.S. vs. Linsuya Fan,
be deprived of life, liberty or 10 Phil. 104). The Supreme Court has
property without due process of said that police power is so far-reaching
in scope that it has almost become

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impossible to limit its sweep. As it derives welfare. It does not involve the taking or
its existence from the very existence of confiscation of property with the
the state itself, it does not need to be exception of a few cases where there is a
expressed or defined in its scope. Being necessity to confiscate private property in
coextensive with self-preservation and order to destroy it for the purpose of
survival itself, it is the most positive and protecting the peace and order and of
active of all governmental processes, the promoting the general welfare as for
most essential, insistent and illimitable. instance, the confiscation of an illegally
Especially it is so under the modern possessed article, such as opium and
democratic framework where the firearms.
demands of society and nations have
multiplied to almost unimaginable "It seems to the court that Section 9 of
proportions. The field and scope of police Ordinance No. 6118, Series of 1964 of
power have become almost boundless, Quezon City is not a mere police
just as the fields of public interest and regulation but an outright confiscation. It
public welfare have become almost all deprives a person of his private property
embracing and have transcended human without due process of law, nay, even
foresight. Since the Courts cannot foresee without compensation."
the needs and demands of public interest
and welfare, they cannot delimit
beforehand the extent or scope of the Elements of Taking:
police power by which and through which There is no reasonable relation between
the state seeks to attain or achieve public the setting aside of at least six (6) percent
interest and welfare. (Ichong vs. of the total area of an private cemeteries
Hernandez, L-7995, May 31, 1957). for charity burial grounds of deceased
paupers and the promotion of health,
"The police power being the most active morals, good order, safety, or the general
power of the government and the due welfare of the people. The ordinance is
process clause being the broadest actually a taking without compensation of
limitation on governmental power, the a certain area from a private cemetery to
conflict between this power of benefit paupers who are charges of the
government and the due process clause of municipal corporation. Instead of building
the Constitution is oftentimes inevitable. or maintaining a public cemetery for this
purpose, the city passes the burden to
"It will be seen from the foregoing private cemeteries. City Govt. of Quezon
authorities that police power is usually City v. Ericta, 122 SCRA 759 (1983)
exercised in the form of mere regulation
or restriction in the use of liberty or
property for the promotion of the general

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CITY GOVT OF QUEZON CITY VS ERICTA due process of law, nay, even without
122 SCRA 759, Gutierrez, Jr., J compensation.

FACTS: Respondent Himlayang Pilipino There is no reasonable relation


filed a petition seeking to annul Section 9 between the setting aside of at least six
of Ordinance No. 6118, S-64, requiring (6) percent of the total area of an
private cemeteries to reserve 6% of its private cemeteries for charity burial
total area for the burial of paupers, on the grounds of deceased paupers and the
ground that it is contrary to the promotion of health, morals, good order,
Constitution. The petitioner contends that safety, or the general welfare of the
the said order was a valid exercise of people. The ordinance is actually a
police power under the general welfare taking without compensation of a
clause. The respondent court declared the certain area from a private cemetery to
said order null and void. Hence, this benefit paupers who are charges of the
instant petition. municipal corporation.

ISSUE: Whether or not Section 9 of the Instead of building or maintaining a


ordinance in question is a valid exercise public cemetery for this purpose, the city
of police power. passes the burden to private cemeteries.
As a matter of fact, the petitioners rely
HELD: No. Section 9 cannot be justified solely on the general welfare clause or on
under the power granted to Quezon City implied powers of the municipal
to tax, fix the license fee, and regulate corporation, not on any express provision
such other business, trades, and of law as statutory basis of their exercise
occupation as may be established or of power. The petition for review is
practice in the City.' (Subsections 'C', Sec. hereby dismissed
12, R.A. 537). The ordinance in question
not only confiscates but also prohibits
the operation of a memorial park DOCTRINE: MANILA MEMORIAL PARK
cemetery. As defined, police power is vs DSWD
'the power of promoting the public In Manila Memorial Park v DSWD – grant
welfare by restraining and regulating
of 20% discount is like a price control
the use of liberty and property'. In the
mechanism under the Price Control Act;
instant case, Section 9 of Ordinance No.
6118, Series of 1964 of Quezon City is the 5% discount is a self-imposed law
not a mere police regulation but an
outright confiscation. It deprives a
person of his private property without

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MANILA MEMORIAL PARK vs. DSWD carnivals and other similar places of
GR. 175356 culture, leisure and amusement, which
discount shall be deducted by the said
FACTS: On April 23, 1992, RA 7432 was establishments from their gross income for
passed into law, granting senior citizens income tax purposes and from their gross
the following privileges: SECTION 4. sales for value-added tax or other
Privileges for the Senior Citizens. – The percentage tax purposes.
senior citizens shall be entitled to the
following:
a) the grant of twenty percent (20%) On February 26, 2004, RA 92578
discount from all establishments relative amended certain provisions of RA 7432,
to utilization of transportation services, to wit:
SECTION 4. Privileges for the
hotels and similar lodging Senior Citizens. – The senior citizens shall
establishment[s], restaurants and be entitled to the following:
(a) the grant
recreation centers and purchase of of twenty percent (20%) discount from all
medicine anywhere in the country: establishments relative to the utilization
Provided, That private establishments of services in hotels and similar lodging
may claim the cost as tax credit; establishments, restaurants and
recreation centers, and purchase of
b) a minimum of twenty percent (20%) medicines in all establishments for the
discount on admission fees charged by exclusive use or enjoyment of senior
theaters, cinema houses and concert halls, citizens, including funeral and burial
circuses, carnivals and other similar services for the death of senior citizens;
places of culture, leisure, and amusement;
The establishment may claim the
On August 23, 1993, Revenue Regulations discounts granted under (a), (f), (g) and
(RR) No. 02-94 was issued to implement (h) as tax deduction based on the net cost
RA 7432. Sections 2(i) and 4 of RR No. of the goods sold or services rendered:
02-94 provide: Provided, That the cost of the discount
Sec. 2. DEFINITIONS. – For purposes of shall be allowed as deduction from gross
these regulations: i. Tax Credit – refers to income for the same taxable year that the
the amount representing the 20% discount discount is granted. Provided, further,
That the total amount of the claimed tax
granted to a qualified senior citizen by all
deduction net of value added tax if
establishments relative to their utilization
of transportation services, hotels and applicable, shall be included in their gross
similar lodging establishments, restaurants, sales receipts for tax purposes and shall
be subject to proper documentation and
drugstores, recreation centers, theaters,
to the provisions of the National Internal
cinema houses, concert halls, circuses,
Revenue Code, as amended.

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claimed as a tax deduction by the private


establishments, are invalid and
To implement the tax provisions of RA unconstitutional.
9257, the Secretary of Finance issued RR
No. 4-2006, the pertinent provision of RULING: No. Based on the afore-stated
which provides: DOF Opinion, the tax deduction scheme
does not fully reimburse petitioners for
the discount privilege accorded to senior
citizens. This is because the discount is
SEC. 8. AVAILMENT BY
treated as a deduction, a tax-deductible
ESTABLISHMENTS OF SALES DISCOUNTS
expense that is subtracted from the gross
AS DEDUCTION FROM GROSS INCOME. –
income and results in a lower taxable
Establishments enumerated in
income. Being a tax deduction, the
subparagraph (6) hereunder granting
sales discounts to senior citizens on the discount does not reduce taxes owed on a
sale of goods and/or services specified peso for peso basis but merely offers a
fractional reduction in taxes owed.
thereunder are entitled to deduct the said
discount from gross income subject to the Theoretically, the treatment of the
discount as a deduction reduces the net
following conditions:
income of the private establishments
Feeling aggrieved by the tax deduction concerned. The discounts given would
scheme, petitioners filed the present have entered the coffers and formed part
recourse, praying that Section 4 of RA of the gross sales of the private
7432, as amended by RA 9257, and the establishments, were it not for R.A. No.
implementing rules and regulations 9257. The permanent reduction in their
issued by the DSWD and the DOF be total revenues is a forced subsidy
declared unconstitutional insofar as these corresponding to the taking of private
allow business establishments to claim property for public use or benefit. This
the 20% discount given to senior citizens constitutes compensable taking for which
as a tax deduction; that the DSWD and the petitioners would ordinarily become
DOF be prohibited from enforcing the entitled to a just compensation. Just
same; and that the tax credit treatment of compensation is defined as the full and
the 20% discount under the former fair equivalent of the property taken from
Section 4 (a) of RA 7432 be reinstated. its owner by the expropriator. The
measure is not the takers gain but the
ISSUE: Whether or not Section 4 of owners loss. The word just is used to
Republic Act 9257 and its implementing intensify the meaning of the word
rules and regulations insofar as they compensation, and to convey the idea that
provide that the twenty percent (20%) the equivalent to be rendered for the
discount to senior citizens may be property to be taken shall be real,

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substantial, full and ample. the operations of a business which may


result in an impairment of property rights
A tax deduction does not offer full in the process.
reimbursement of the senior citizen
discount. As such, it would not meet the Undeniably, the success of the senior
definition of just compensation. Having citizens program rests largely on the
said that, this raises the question of support imparted by petitioners and the
whether the State, in promoting the other private establishments concerned.
health and welfare of a special group of This being the case, the means employed
citizens, can impose upon private in invoking the active participation of the
establishments the burden of partly private sector, in order to achieve the
subsidizing a government program. The purpose or objective of the law, is
Court believes so. reasonably and directly related. Without
sufficient proof that Section 4 (a) of R.A.
The Senior Citizens Act was enacted No. 9257 is arbitrary, and that the
primarily to maximize the contribution of continued implementation of the same
senior citizens to nation-building, and to would be unconscionably detrimental to
grant benefits and privileges to them for petitioners, the Court will refrain from
their improvement and well-being as the quashing a legislative act. Carlos
State considers them an integral part of Superdrug Corp v. DSWD, 553 Phil. 120
our society. (2007).

The priority given to senior citizens finds When we ruled that petitioners in Carlos
its basis in the Constitution as set forth in Superdrug case failed to prove that the
the law itself. 20% discount is arbitrary, oppressive or
confiscatory. We noted that no evidence,
As a form of reimbursement, the law such as a financial report, to establish the
provides that business establishments impact of the 20% discount on the overall
extending the twenty percent discount to profitability of petitioners was presented
senior citizens may claim the discount as in order to show that they would be
a tax deduction. The law is a legitimate operating at a loss due to the subject
exercise of police power which, similar to regulation or that the continued
the power of eminent domain, has general implementation of the law would be
welfare for its object. unconscionably detrimental to the
business operations of petitioners.
While the Constitution protects property
rights, petitioners must accept the In the case at bar, petitioners proceeded
realities of business and the State, in the with a hypothetical computation of the
exercise of police power, can intervene in alleged loss that they will suffer similar to

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what the petitioners in Carlos Superdrug objectives of national productivity


Corporation did. and self-reliance; it is a vice and a
social ill which the government
We, thus, found that the 20% discount as must minimize (or eradicate) in
well as the tax deduction scheme is a valid pursuit of social and economic
exercise of the police power of the State. development. Miners Association of
Thus, it is constitutional. the Philippines v. Factoran, 240
SCRA 100, upheld the validity of
Administrative Orders Nos. 57 and
82 of the DENR Secretary which
NACHURA
effectively converted existing
mining leases and other mining
Limitations (Tests for Valid Exercise):
agreements into production-sharing
a) Lawful subject: The interests of the agreements within one year from
public in general as distinguished from effectivity, inasmuch as the subject
those of a particular class, require the sought to be governed by the
exercise of the power. This means that the questioned orders is germane to the
activity or property sought to be objects and purposes of E.O 279, and
regulated affects the general welfare; if it that mining leases or agreements
does, then the enjoyment of the rights granted by the State are subject to
flowing therefrom may have to yield to alterations through a reasonable
the interests of the greater number. exercise of the police power of the
See.Taxicab Operators v. Board of State.
Transportation, 119 SCRA 597; Velasco
ii) In Pollution Adjudication Board
v. Villegas, 120 SCRA 568; Bautista v.
v. Court of Appeals, 195 SCRA 112,
Juinio, 127 SCRA 329; Lozano v.
Martinez, 146 SCRA 323; Sangalang v. the Supreme Court held that ex
Intermediate Appellate Court, 176 SCRA parte cease and desist orders issued
719. by the Pollution Adjudication Board
are permitted by law and
i) In Lim v. Pacquing, 240 SCRA regulations in situations such as
649, it was held that P.D. 771, which stopping the continuous discharge
expressly revoked all existing of pollutive and untreated effluents
franchises and permits to operate all into the rivers and other inland
forms of gambling facilities waters. The relevant pollution
(including jai-alai) issued by local control statute and implementing
governments, was a valid exercise of regulations were enacted and
the police power. Gambling is promulgated in the exercise of
essentially antagonistic to the police power, x xx The ordinary

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requirements of procedural due less than 1/2 page as Comelec space,


process yield to the necessities of was held to be an invalid exercise of
protecting vital public interests the police power in Philippine Press
through the exercise of police power. Institute v. Comelec, 244 SCRA
272,,there being no showing of the
b) Lawful Means: The means employed existence of a national emergency or
are reasonably necessary for the imperious public necessity for the
accomplishment of the purpose, and not taking of print space, nor that the
unduly oppressive on individuals. See: resolution was the only reasonable
Ynotv. Intermediate Appellate Court, and calibrated response to such
148SCRA 659; Tablarin v. Gutierrez, 152 necessity. [This was held to be an
SCRA 730; Balacuit v. CFI of Agusan del exercise of the power of eminent
Norte, 163 SCRA 182. domain, albeit invalid, because the
Comelec would not pay for the space
i) Police power concerns to be given to it by the newspapers.]
government enactments, which Similarly, in City Government of
precisely interfere with personal Quezon City v. Ericta, 122 SCRA
liberty or property to promote the 759, the Quezon City ordinance
general welfare or the common which required commercial
good. At horough review of the facts cemetery owners to reserve 6% of
and circumstances leading to the burial lots for paupers in the City
issuance of DOLE Order No. 3 was held to be an invalid exercise of
(establishing various procedures the police power, but was, instead,
and requirements for screening an exercise of the power of eminent
performing artists as a prerequisite domain which would make the City
to the processing of any contract of liable to pay the owners just
employment by POEA) shows that compensation.
the assailed order was issued by the
Secretary of Labor pursuant to a iii) The proper exercise of the police
valid exercise of the police power power requires compliance with the
[JMM Promotion and Management, following requisites: (a) the
Inc. v. Court of Appeals, 260 SCRA interests of the public generally, as
319]. distinguished from those of a
particular class, require the
ii) However, Sec. 2 of Comelec intereference by the State; and (b)
Resolution No. 2772, which the means employed are reasonably
mandates newspapers of general necessary for the attainment of the
circulation in every province or city object sought and not unduly
to provide free print space of not oppressive upon individuals. An

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ordinance aimed at relieving traffic regulation, be allowed; an activity allowed


congestion meets the first standard; by law may be regulated, but not
but declaring bus terminals as prohibited.] See: De la Cruz v. Paras, 123
nuisances per se and ordering their SCRA 569; City Government of Quezon
closure orrelocation contravenes City v. Ericta, 122 SCRA 759; Villacortav.
the second standard [Lucena Grand Bernardo, 143 SCRA 480.
Central Terminal v. JAC Liner, G.R.
NO. 148339, February 23, 2005]. i) In Solicitor General v.
Metropolitan Manila Authority,
iv) In Cabrera v. Lapid, G.R. No. G.R. No. 102782, December
129098, December 6, 2006, the 11,1991, reiterated in Tatelv.
Supreme Court upheld the dismissal Municipality of Virac, G.R. No.
by the Office of the Ombudsman of 40243, March 11, 1992, and in
criminal charges against Magtajas v. Pryce Properties, G.R.
respondents local government No. 111097, July 20, 1994, the
officials who had ordered and Supreme Court declared that for
carried out the demolition of a municipal ordinances to be valid,
fishpond which purportedly blocked they:
the flow of the Pasak River in
Sasmuan, Pampanga, The Court [a] must not contravene the
agreed with the findings of the Constitution or any statute;
Ombudsman that “those who
participated in the blasting of the [b] must not be unfair or oppressive;
subject fishpond were only impelled
[c] must not be partial or
by their desire to serve the best
discriminatory;
interest of the general public”.
[d] must not prohibit, but may
Additional Limitations .When
regulate, trade;
exercised by delegate
[e] must not be unreasonable; and
a) Express grant by law [e.g., Secs. 16,
391,447, 458 and 468, R. A. 7160, for [f] must be general in application
local government units] and consistent with public policy.
b) Within territorial limits [for local ii) In City of Manila v. Judge Laguio,
government units, except when exercised G.R. No. 118127, April 12, 2005, the
to protect water supply], Supreme Court declared as an
invalid exercise of the police power
c) Must not be contrary to law. [Activity
City of Manila Ordinance No. 7783,
prohibited by law cannot, in the guise of

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which prohibited “the establishment and 142980, May 25, 2004].


or operation of businesses providing
certain forms of amusement,
entertainment, services and
facilities in the Ermita-Malate area”. POWER OF EMINENT
Concedely, the ordinance was
enacted with the best of motives and
DOMAIN
shares the concern of the public for
the cleansing of the Ermita-Malate
Definition
area of its social sins. Despite its
It is the right, authority or power of the
virtuous aims, however, the
State as sovereign, or of those to whom
enactment of the ordinance has no
the power has been lawfully delegated to
statutory or constitutional authority
take private property for public use upon
to stand on. Local legislative bodies
observance of due process of law and
cannot prohibit the operation of
sauna and massage parlors, karaoke paying for the owner a just compensation
to be ascertained according to law.
bars, beerhouses, night clubs, day
clubs, supper clubs, discotheques,
It is an inherent power of the state that
cabarets, dance halls, motels and
enables it to forcibly acquire private
inns, or order their transfer or
property, which is intended for public use,
conversion without infringing the
upon the payment of just compensation. It
constitutional guarantees of due
is based on political necessity; it is
process and equal protection of the
inseparable from the state unless it is
laws, not even in the guise of police
denied to it by its fundamental law.
power.

iii) The authority of a municipality Condemnation of private property is


to issue zoning classification is an justified only if it is for the public good
exercise of the police power, not the character. It is the courts of law that have
power of eminent domain. A zoning the power to determine whether there is
ordinance is defined as a local city necessity therefore. Also called the power
or municipal legislation which of expropriation, eminent domain is
logically arranges, prescribes, described as the “highest and most exact
defines and apportions a given. idea of property remaining in the
political subdivision into specific government” that may be acquired for
land uses as present and future some public purpose through a method
projection of needs [Pasong “in the nature of a compulsory sale to the
Bayabas Farmers Association v. state”.
Court of Appeals, G.R. Nos. 142359

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is usually noxious or intended for a


Is eminent domain same with noxious purpose, hence no compensation
expropriation? is paid.

No. Eminent Domain is an inherent power, Likewise in the exercise of police power,
while Expropriation is the exercise of property rights of individuals are
eminent domain. subjected to restraints and burdens in
order to secure the general comfort,
Is the question of necessity a health and prosperity of the State. Where
justiciable question? a property interest is merely restricted
If exercised by Congress because the continued use thereof would
be injurious to public interest, there is no
-If exercised by Congress – a compensable taking.
political question
-If exercised by a delegate under However, when a property interest is
specific delegation – a political appropriated and applied to some public
question purpose, there is need to pay just
-If exercised by a delegate under compensation. In the exercise of police
general delegation – a justiciable power, the State restricts the use of
question private property, but none of the property
interests in the bundle of rights which
constitute ownership is appropriated for
use by or for the benefit of the public. Use
How will you distinguish from police of the property by the owners is limited,
power? but no aspect of the property is used by or
for the benefit of the public.
Police power is the power of the 
State to
promote public welfare by restraining The deprivation of use can, in fact, be total,
and regulating the use of liberty and and it will not constitute compensable
property. The power of eminent domain taking if nobody else acquires use of the
is the inherent right of the State to property or any interest therein. If,
condemn private property to public use however, in the regulation of the use of
upon payment of just compensation. the property, somebody else acquires the
Although both police power and eminent use or interest thereof, such restriction
domain have the general welfare for their constitutes compensable taking [Didipio
object, and recent trends show a mingling Earth-Savers MultiPurpose Association
of the two with the latter being used as an v. Gozun, G.R. No. 157882, March 30,
implement of the former, there are still 2006].
traditional distinctions between the two.
Property condemned under police power
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Who may exercise the Power of Taking may not only include the
Eminent domain? import of a physical possession of the
owner, as when he is ousted from his land
1. The Congress or relieved of his watch or car but also
2. The President covers trespass without actual eviction of
3. The local legislative bodies the owner, material impairment of the
4. Certain public corporations (e.g. Land value of the property or prevention of the
Authority and the MWSS) ordinary uses for which the property was
5. Quasi-public corporations (e.g. PLDT and intended.
Meralco)
The following cases constitute taking:
· Where a farmland is
What are the requisites in exercising inundated because of the
the power of eminent domain? construction of a damn
1. The property taken must be private nearby, the owner who is
property; prevented from planting on
2. The taking must be within constitutional the land.
sense; · Where government planes
3. The taking must be for public use fly over private property at
4. Just compensation must be paid; such a low altitude as to
5. There must be due process of law. practically touch the tops of
the trees.
· A municipal ordinance
The following essential requisites must prohibiting construction of
concur before an LGU can exercise the any building that would
power of eminent domain: destroy the view of the
1. An ordinance is enacted by the local plaza from the highway.
legislative council authorizing the local
chief executive to exercise the power of
eminent domain;
2. It is exercised for the public use, purpose Query: A building which is on the verge
and welfare; of collapse was ordered to be
3. There must be payment of just demolished. The owner objected
compensation; and thereto since the demolition
4. A valid and definite offer has been constitutes taking without payment of
previously made to the owner of the just compensation. Is the contention of
property south to be expropriated. the owner correct?

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Answer: No, the demolition of the The right of expropriation is not an


building is done in the exercise of police inherent power in a municipal
power. It is intended to further the corporation, and before it can exercise the
interest of the public as the structure is right some law must exist conferring the
susceptible to harm the public, in case it power upon it. When the courts come to
collapses. Hence, the owner is not entitled determine the question, they must only
to compensation. find
(a) that a law or authority exists for the
exercise of the right of eminent domain,
Query: An ordinance was passed but
requiring private cemeteries to (b) also that the right or authority is being
reserve 6% of their total areas for the exercised in accordance with the law. City
burial paupers. The owners of the of Manila v. Chinese Cemetery of Manila,
private cemeteries demand payment of 40 Phil 349 (1919)
just compensation because the
ordinance sought to deprive them of
their property. However, the city Eminent domain, the power which the
invoked that such ordinance was done Municipality of Bunawan exercised in the
in the exercise of their police power instant case, is a fundamental State power
under the general welfare clause. Is the that is inseparable from sovereignty. It is
argument of the city tenable? government's right to appropriate, in the
nature of a compulsory sale to the State,
Answer: No, although there was taking of private property for public use or purpose.
private property for public use, Inherently possessed by the national
nevertheless, it was done without legislature, the power of eminent domain
payment of just compensation. Hence, it may be validly delegated to local
violates the principles governing eminent governments, other public entities and
domain. The taking of property under the public utilities. Moday v. Court of
police power is sought to be destroyed. Appeals, 268 SCRA 368 (1997)

Just compensation is the full and fair


equivalent of the property taken from the Constitutional Limitations - Art. III, Sec.
private owner by the expropriator. The 9 - Private property shall not be taken
measure of this compensation is not the for public use without just compensation.
taker’s gain but the owner’s loss.
1. Taking = expropriation
2. Property must be private If property
Who exercises the power? is already public, no need to take but use

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3. Use must be public Public use need not the municipal courts or in the courts of
be direct, as long as there is benefit derived first instance would depend on the
4. Compensation must be just amount of the claim.
Just compensation = Fair Market Value
(FMV) + Consequential Damages (CD) – However, where the basic issue is
Consequential Benefits (CB) something other than the right to recover
5. “Shall not” means that the default a sum of money, or where the money
stance of the state is “not to” (take) claim is purely incidental to, or a
consequence of, the principal relief sought,
like in suits to have the defendant
perform his part of the contract (specific
performance) and in actions for support,
or for annulment of a judgment or to
foreclose a mortgage, this Court has
considered such actions as cases where
the subject of the litigation may not be
estimated in terms of money, and are
cognizable exclusively by courts of first
instance (now RTC).

The rationale of the rule is plainly that the


second class cases, besides the
Where The suit For eminent domain determination of damages, demand an
can be filed? inquiry into other factors which the law
has deemed to be more within the
An expropriation suit is incapable of competence of courts of first instance,
pecuniary estimation. The test to which were the lowest courts of record at
determine whether it is so was laid down the time that the first organic laws of the
by the Court in this wise: A review of the Judiciary were enacted allocating
jurisprudence of this Court indicates that jurisdiction. (emphasis supplied)
in determining whether an action is one Barangay San Roque v. Heirs of Pastor,
the subject matter of which is not capable GR 138896 June 20, 2000
of pecuniary estimation, this Court has
adopted the criterion of first ascertaining It is well settled that eminent domain is
the nature of the principal action or an inherent power of the State that need
remedy sought. If it is primarily for the not be granted even by the fundamental
recovery of a sum of money, the claim is law. Sec. 9, Art. Ill of the Constitution, in
considered capable of pecuniary mandating that “private property shall
estimation, and whether jurisdiction is in not be taken for public use without just

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compensation”, merely imposes a limit on May Government compel dollar


the government’s exercise of this power holders to sell their dollars despite low
and provides a measure of protection to dollar reserves?
the individual’s right to property. An
ejectment suit should not ordinarily -Yes. But limited to Philippine
prevail over the State’s power of eminent Currency (like an apple exchanged
domain [Republic v. Tagle, G.R. No. with another apple – No) sorry di
129079, December 2,
1998] . komasyadong gets to!!! 

Recit: Old Philippine Peso, may it be


What properties may be taken? Private expropriated upon payment of Just
property only Compensation? Philippine Peso already
out of circulation may be expropriated.
Limitation: Philippine Peso which are
Distinguish private property devoted legal tender
for public use from public property
-private property devoted for Properties registered in the name of
public use: that which can be used the Republic, may it be expropriated?
for expropriation Yes, under Rule 67 Sec. 1 of the Rules of
Court.

What kind of private property? All Can one property be the subject of
except money and choses in action different interests? Yes.

What are choses in action? Mere Public property subject to private


speculation interest, may that private interest be
subject to expropriation? Yes.

Why money? It will be absurd if money is


exchanged for money DOCTRINE: City of Manila vs. Chinese
Community of Manila

How about US Dollars? It is still money, In City of Manila v Chinese Community


so still an exception. of Manila
– there is an alternative property

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-jurisdiction of courts is not the fact that the decisions depend largely
limited to authority and just upon particular constitutional or
compensation, but also necessity statutory provisions. It cannot be denied,
under general delegation if the legislature under proper authority
should grant the expropriation of a
certain or particular parcel of land for
Expropriation can only be exercised some specified public purpose, the courts
by? would be without jurisdiction to inquire
into the purpose of that legislation.
Congress (City of Manila v Chinese
Community)
If, upon the other hand, however, the
-but the statement is inaccurate – Legislature should grant general
may also be exercised by a authority to a municipal corporation to
delegate expropriate private land for public
purposes, we think the courts have ample
authority in this jurisdiction, under the
NECESSITY OF EXPROPRIATION IS A provisions above quoted, to make inquiry
JUSTICEABLE QUESTION WHEN THE and to hear proof, upon an issue properly
POWER IS EXERCISED BY A DELEGATE. presented, concerning whether or not the
It is contended on the part of the plaintiff lands were private and whether the
that the phrase in said section, "and if the purpose was, in fact, public. In other
court shall find that the right to words, have not the courts in this
expropriate exists," means simply that, if jurisdiction the right, inasmuch as the
the court finds that there is some law questions relating to expropriation must
authorizing the plaintiff to expropriate, be referred to them (sec.241, Act No.
then the courts have no other function 190) for final decision, to ask whether or
than to authorize the expropriation and to not the law has been complied with?
proceed to ascertain the value of the land Suppose, in a particular case, it should be
involved; that the necessity for the denied that the property is not private
expropriation is a legislative and not a property but public, may not the courts
judicial question. Upon the question hear proof upon that question?
whether expropriation is a legislative
function exclusively, and that the courts Or, suppose the defense is, that the
cannot intervene except for the purpose purpose of the expropriation is not public
of determining the value of the land in but private, or that there exists no public
question, there is much legal literature. purpose at all, may not the courts make
Much has been written upon both sides of inquiry and hear proof upon that
that question. A careful examination of question?
the discussions pro and con will disclose

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We are of the opinion that the power of in this jurisdiction is compelled to stand
the court is not limited to that question. mute while his land is being expropriated
The right of expropriation is not an for a use not public, with the right simply
inherent power in a municipal to beg the city of Manila to pay him the
corporation, and before it can exercise the value of his land? Does the law in this
right some law must exist conferring the jurisdiction permit municipalities to
power upon it. When the courts come to expropriate lands, without question,
determine the question, they must not simply for the purpose of satisfying the
only find aesthetic sense of those who happen for
the time being to be in authority?
(a) that a law or authority exists for the Expropriation of lands usually calls for
exercise of the right of eminent domain, public expense. The taxpayers are called
but upon to pay the costs. Cannot the owners
(b) also that the right or authority is being of land question the public use or the
exercised in accordance with the law. public necessity?

In the present case there are two "The legislature, in providing for the
conditions imposed upon the authority exercise of the power of eminent domain,
conceded to the City of Manila: First, the may directly determine the necessity for
land must be private; and, second, the appropriating private property for a
purpose must be public. If the court, upon particular improvement for public use,
trial, finds that neither of these conditions and it may select the exact location of the
exists or that either one of them fails, improvement. In such a case, it is well
certainly it cannot be contended that the settled that the utility of the proposed
right is being exercised in accordance improvement, the extent of the public
with law. necessity for its construction, the
expediency of constructing it, the
Whether the purpose for the exercise of suitableness of the location selected and
the right of eminent domain is public, is a the consequent necessity of taking the
question of fact. Whether the land is land selected for its site, are all questions
public or private is also a question of fact; exclusively for the legislature to
and, in our opinion, when the legislature determine and the courts have no power
conferred upon the courts of the to interfere, or to substitute their own
Philippine Islands the right to ascertain views for those of the representatives of
upon trial whether the right exists for the the people."
exercise of eminent domain, it intended
that the courts should inquire into, and "But when the statute does not designate
hear proof upon, those questions. Is it the property to be taken nor how much
possible that the owner of valuable land may be taken, then the necessity of taking

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particular property is a question for the public purposes, appropriates the land of
courts. Where the application to condemn an individual without his consent, the
or appropriate is made directly to the plain meaning of the law should not be
court, the question (of necessity) should enlarged by doubtly interpretation.
be raised and decided in limine." (Bensley vs. Mountain lake Water Co.,
13 Cal., 306 and cases cited [73 Am. Dec.,
There is a wide distinction between a 576].)
legislative declaration that a municipality
is given authority to exercise the right of The statutory power of taking property
eminent domain, and a decision by the from the owner without his consent is one
municipality that there exists a necessity of the most delicate exercise of
for the exercise of that right in a governmental authority. It is to be
particular case. The first is a declaration watched with jealous scrutiny. Important
simply that there exist reasons why the as the power may be to the government,
right should be conferred upon municipal the inviolable sanctity which all free
corporation, while the second is the constitutions attach to the right of
application of the right to a particular property of the citizens, constrains the
case. Certainly, the legislative declaration strict observance of the substantial
relating to the advisability of granting the provisions of the law which are
power cannot be converted into a prescribed as modes of the exercise of the
declaration that a necessity exists for its power, and to protect it from abuse. Not
exercise in a particular case, and only must the authority of municipal
especially so when, perhaps, the land in corporations to take property be
question was not within the territorial expressly conferred and the use for which
jurisdiction of the municipality at the time it is taken specified, but the power, with
the legislative authority was granted. all constitutional limitation and directions
for its exercise, must be strictly pursued.
The exercise of the right of eminent (Dillon on Municipal Corporations [5th
domain, whether directly by the State, or Ed.], sec. 1040, and cases cited; Tenorio
by its authorized agents, is necessarily in vs. Manila Railroad Co., 22 Phil., 411.)
derogation of private rights, and the rule
in that case is that the authority must be It can scarcely be contended that a
strictly construed. No species of property municipality would be permitted to take
is held by individuals with greater property for some public use unless some
tenacity, and none is guarded by the public necessity existed therefore. The
constitution and laws more sedulously, right to take private property for public
than the right to the freehold of use originates in the necessity, and the
inhabitants. When the legislature taking must be limited by such necessity.
interferes with that right, and, for greater The appellant contends that inasmuch as

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the legislature has given it general accompanying the authority. The


authority to take private property for necessity for conferring the authority
public use, that the legislature has, upon a municipal corporation to exercise
therefore, settled the question of the the right of eminent domain is admittedly
necessity in every case and that the courts within the power of the legislature. But
are closed to the owners of the property whether or not the municipal corporation
upon that question. Can it be imagined, or entity is exercising the right in a
when the legislature adopted section particular case under the conditions
2429 of Act No. 2711, that it thereby imposed by the general authority, is a
declared that it was necessary to question which the courts have the right
appropriate the property of Juan de la to inquire into.
Cruz, whose property, perhaps, was not
within the city limits at the time the law PROPERTY DEVOTED TO PUBLIC USE
was adopted? The legislature, then, not MAY BE EXPROPRIATED. - Where a
having declared the necessity, can it be cemetery is open to the public, it is a
contemplated that it intended that a public use and no part of the ground can
municipality should be the sole judge of be taken for other public uses under a
the necessity in every case, and that the general authority. And this immunity
courts, in the face of the provision that "if extends to the unimproved and
upon trial they shall find that a right unoccupied parts which are held in good
exists," cannot in that trial inquire into faith for future use. (Lewis on Eminent
and hear proof upon the necessity for the Domain, sec. 434, and cases cited.)
appropriation in a particular case?
The cemetery in question seems to have
The general power to exercise the right of been established under governmental
eminent domain must not be confused authority. The Spanish Governor-General,
with the right to exercise it in a particular in an order creating the same, used the
case. The power of the legislature to following language:
confer, upon municipal corporations and
other entities within the State, general "The cemetery and general hospital for
authority to exercise the right of eminent indigent Chinese having been founded
domain cannot be questioned by the and maintained by the spontaneous and
courts, but that general authority of fraternal contribution of their protector,
municipalities or entities must not be merchants and industrials, benefactors
confused with the right to exercise it in of mankind, in consideration of their
particular instances. The moment the services to the Government of the
municipal corporation or entity attempts Islands its internal administration,
to exercise the authority conferred, it government and regime must
must comply with the conditions necessarily be adjusted to the taste and

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traditional practices of those born and an extension of Rizal Avenue, Manila


educated in China in order that the which is necessary for the plaintiff to
sentiments which animated the exercise in fee simple of certain parcels of
founders may be perpetually land. The defendant on the other hand,
effectuated." contends that the expropriation was not
necessary as a public improvement and
It is alleged, and not denied, that the that the plaintiff has no right to
cemetery in question may be used by the expropriate the said cemetery or any part
general community of Chinese, which fact, or portion thereof for street purposes.
in the general acceptation of the The lower court declared that there was
definition of a public cemetery, would no necessity for the said expropriation.
make the cemetery in question public Hence, this appeal.
property.
ISSUE: Whether or not the Courts can
If that is true, then, of course, the petition inquire into the necessity of expropriation
of the plaintiff must be denied, for the of delegate, such as the City of Manila?
reason that the city of Manila has no
authority or right under the law to HELD: The right of expropriation is not
expropriate public property. an inherent power in a municipal
corporation, and before it can exercise
But, whether or not the cemetery is public the right some law must exist
or private property, its appropriation for conferring the power upon it. The
the uses of a public street, especially general power to exercise the right of
during the lifetime of those specially eminent domain must not be confused
interested in its maintenance as a with the right to exercise it in a particular
cemetery, should be a question of great case. The power of the legislature to
concern, and its appropriation should not confer, upon municipal corporations
be made for such purposes until it is fully and other entities within the State,
established that the greatest necessity general authority to exercise the right
exists therefore. of eminent domain cannot be
questioned by courts, but the general
authority of municipalities or entities
must not be confused with the right to
CITY OF MANILA VS. CHINESE exercise it in particular instances. The
COMMUNITY 40 Phil 349, Johnson, J. moment the municipal corporation or
entity attempts to exercise the authority
FACTS: The plaintiff prayed that certain conferred, it must comply with the
lands be expropriated for the purpose of conditions accompanying the authority.
constructing a public improvement into The necessity for conferring the authority

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upon a municipal corporation to exercise


the right of eminent domain is admittedly
within the power of the legislature. DOCTRINE: Republic vs. Philippine
Long Distance Telephone Co
But whether or not the municipal
corporation or entity is exercising the Gabby: Republic v PLDT – services may
right in a particular case under the be expropriated. Services are private
conditions imposed by the general properties.
authority, is a question which the courts
Can the government compel PLDT to
have the right to inquire into.
extend the contract? No. But the
When the courts come to determine the government may compel the entity to
question, they must only find render services.
(a) that a law or authority exists for the Does it cover all kinds of services? No.
exercise of the right of eminent domain,
It must be for public use.
but
(b) also that the right or authority is being
exercised in accordance with the law. In
the present case there are two conditions Hypo: Department of Tourism will
imposed upon the authority conceded to adopt an official mascot, Manny
the City of Manila: Pacquiao, forced him to be a mascot. Is
that a valid government act? No.
First, the land must be private; and, Services which may be expropriated are
second, the purpose must be public. The limited to public utility services
authority of the city of Manila to
expropriate private lands for public
purposes, is not denied as provided in its
Charter.
Objects of Expropriation
The Republic may, in the exercise of the
However, if the court, upon trial, finds
sovereign power of eminent domain,
that neither of these conditions exists or
require the telephone company to permit
that either one of them fails, certainly it
interconnection of the government
cannot be contended that the right is
telephone system and that of the PLDT, as
being exercised in accordance with law. In
the needs of the government service may
the instant case, the record does not show
require, subject to the payment of just
conclusively that the plaintiff has
compensation to be determined by the
definitely decided that there exists a
court. Nominally, of course, the power of
necessity for expropriation. The decision
eminent domain results in the taking or
of the lower court is affirmed.

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appropriation of title to, and possession of, the PLDT, as the needs of the government
the expropriated property; but no cogent service may require, subject to the
reason appears why the said power may payment of just compensation to be
not be availed of to impose only a burden determined by the court.
upon the owner of condemned property,
without loss of title and possession. It is Normally, of course, the power of eminent
unquestionable that real property may, domain results in the taking or
through expropriation, be subjected to an appropriation of title to, and possession of,
easement of right of way. the expropriated property; but no cogent
reason appears why the said power may
not be availed of to impose only a burden
PERSONS AND ENTITIES MAY NOT BE upon the owner of condemned property,
COMPELLED TO ENTER INTO A without loss of title and possession. It is
CONTRCT WITH THE GOVERNMENT, unquestionable that real property may,
BUT THE LATTER MAY EXERCISE THE through expropriation, be subjected to an
POWER OF EMINENT DOMAIN TO easement of right of way. The use of the
IMPOSE BURDEN ON A PROPERTY PLDT's lines and services to allow
WITHOUT ACTUAL TAKING. We agree interservice connection between both
with the court below that parties cannot telephone systems is not much different.
be coerced to enter into a contract where In either case private property is
no agreement is had between them as to subjected to a burden for public use and
the principal terms and conditions of the benefit. If under Section 6, Article XIII, of
contract. Freedom to stipulate such terms the Constitution, the State may, in the
and conditions is of the essence of our interest of national welfare, transfer
contractual system, and by express utilities to public ownership upon
provision of the statute, a contract may be payment of just compensation, there is no
annulled if tainted by violence, reason why the State may not require a
intimidation or undue influence (Articles public utility to render services in the
1306, 1336, 1337, Civil Code of the general interest, provided just
Philippines). compensation is paid therefor. Ultimately,
the beneficiary of the interconnecting
But the court a quo has apparently service would be the users of both
overlooked that while the Republic may telephone systems, so that the
not compel the PLDT to celebrate a condemnation would be for public use.
contract with it, the Republic may, in the
exercise of the sovereign power of The Bureau of Telecommunications,
eminent domain, require the telephone under Section 78(b) of Executive Order
company to permit interconnection of the No. 94, may operate and maintain wire
government telephone system and that of telephone or radio telephone

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communications throughout the The Bureau of Telecommunications set


Philippines by utilizing existing facilities up its own Government Telephone
in cities, towns, and provinces under such System by utilizing its own
terms and conditions or arrangement appropriation and equipment and by
with present owners or operators as may renting trunk lines of the PLDT to
be agreed upon to the satisfaction of all enable government offices to call
concerned; but there is nothing in this private parties. The respondent said that
Section that would exclude resort to the bureau was violating the conditions
condemnation proceedings where under which their Private Branch
unreasonable or unjust terms and Exchange (PBX) is inter-connected with
conditions are exacted, to the extent of the PLDT's facilities. The petitioner
crippling or seriously hampering the prayed commanding the PLDT to execute
operations of said Bureau. a contract with it, through the Bureau, for
the use of the facilities of defendant's
telephone system. The lower court
REPUBLIC VS PLDT rendered judgment that it could not
SCRA 620, Reyes, J.B.L., J. compel the PLDT to enter into an
agreement with the Bureau because the
FACTS: The petitioner, Republic of the parties were not in agreement. Both
Philippines, is a political entity exercising parties appealed.
governmental powers through its
branches and instrumentalities, one of ISSUE: Whether or not the Bureau of
which is the Bureau of Telecommunications has the right to
Telecommunications. While the demand interconnection between the
respondent, Philippine Long Distance Government Telephone System and the
Telephone has the power to install, PLDT.
operate and maintain a telephone system
throughout the Philippines and to carry HELD: Yes. It is true that parties cannot
on the business of electrical transmission be coerced to enter into a contract where
of messages within the Philippines and no agreement was made between them.
between the Philippines and the Freedom to stipulate such terms and
telephone systems of other countries. conditions is of the essence of our
Sometime in 1933, the defendant and the contractual system, and by express
RCA Communications, Inc., entered into provision of the statute, a contract may be
an agreement whereby telephone annulled if tainted by violence,
messages, could automatically be intimidation or undue influence (Articles
transferred to the lines of PLDT; and vice- 1306, 1336, 1337, Civil Code of the
versa. Philippines). But the court a quo has
apparently overlooked that while the

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Republic may not compel the PLDT to heard People v. Fajardo , 104 Phil.443
celebrate a contract with it, the Republic, (1958)
in the exercise of the sovereign of
eminent domain, may require the The easement of right-of-way is definitely
telephone company to permit a taking under the power of eminent
interconnection of the Government domain. Considering the nature and effect
Telephone System and that of PLDT, as of the installation of the 230 KV Mexico-
the needs of the government service Limay transmission lines, the limitation
may require, subject to the payment of imposed by NPC against the use of the
just compensation. Ultimately, the land for an indefinite period deprives
beneficiary of the interconnecting service private respondents of its ordinary use.
would be the users of both telephone Napocor v. Gutierrez, 193 SCRA 1
systems, so that condemnation would be (1991)
for public use.
REGULATION OF PROPERTY WHICH
FOREVER DEPRIVES THE OWNER OF
DOCTRINE: People vs. Fajardo THE BENEFICIAL USE THEREOF
CANNOT BE SUSTAINED UNDER THE
Gabby: In People v Fajardo – respondent EXERCISE OF POLICE POWER. It is
was deprived with all the beneficial use of contended, on the other hand, that the
the property even though respondent is mayor can refuse a permit solely in case
still the owner and possessor. The Court that the proposed building "destroys the
held that there was taking. view of the public plaza or occupies any
public property" (as stated in its section
3); and in fact, the refusal of the Mayor of
DEPRIVATION OF USE: Baao to issue a building permit to the
As the case now stands, every structure appellant was predicated on the ground
that may be erected on appellants' land, that the proposed building would
regardless of its own beauty, stands "destroy the view of the public plaza" by
condemned under the ordinance in preventing its being seen from the public
question, because it would interfere with highway.
the view of the public plaza from the
highway. The appellants would, in effect, Even thus interpreted, the ordinance is
be constrained to let their land remain unreasonable and oppressive, in that it
idle and unused for the obvious purpose operates — to permanently deprive
for which it is best suited, being urban in appellants of the right to use their own
character. To legally achieve that result, property; hence, it oversteps the bounds
the municipality must give appellants just of police power, and amounts to a taking
compensation and an opportunity to be of appellants property without just

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compensation. We do not overlook that owner subject to the burden of payment


the modern tendency is to regard the of taxation, while outright confiscation
beautification of neighborhoods as would relieve him of that burden."
conducive to the comfort and happiness (Arverne Bay Constr. Co. vs. Thatcher
of residents. But while property may be (N.Y.) 117 ALR. 1110, 1116).
regulated in the interest of the general
welfare, and in its pursuit, the State may A regulation which substantially deprives
prohibit structures offensive to the sight an owner of all beneficial use of his
(Churchill and Tait vs. Rafferty, 32 Phil. property is confiscation and is a
580), the State may not, under the guise deprivation within the meaning of the
of police power, permanently divest 14th Amendment." (Sundlum vs. Zoning
owners of the beneficial use of their Bd., 145 Atl. 451; also Eaton vs. Sweeny,
property and practically confiscate them 177 NE 412; Taylor vs. Jacksonville, 133
solely to preserve or assure the aesthetic So. 114). "Zoning which admittedly limits
appearance of the community. property to a use which can not
reasonably be made of it cannot be said to
As the case now stands, every structure set aside such property to a use but
that may be erected on appellants' land, constitutes the taking of such property
regardless of its own beauty, stands without just compensation. Use of
condemned under the ordinance in property is an element of ownership
question, because it would interfere with therein. Regardless of the opinion of
the view of the public plaza from the zealots that property may properly, by
highway. The appellants would, in effect, zoning, be utterly destroyed without
be constrained to let their land remain compensation, such principle finds no
idle and unused for the obvious purpose support in the genius of our government
for which it is best suited, being urban in nor in the principles of justice as we
character. To legally achieve that result, known them. Such a doctrine shocks the
the municipality must give appellants just sense of justice. If it be of public benefit
compensation and an opportunity to be that property remain open and unused,
heard. then certainly the public, and not the
private individuals, should bear the cost
"An ordinance which permanently so of reasonable compensation for such
restricts the use of property that it cannot property under the rules of law governing
be used for any reasonable purpose goes, the condemnation of private property for
it is plain, beyond regulation and must be public use. (Tews vs. Woolhiser (1933)
recognized as a taking of the property. 352 111. 212, 185 N.E. 827) (Emphasis
The only substantial difference, in such supplied.)
case, between restriction and actual
taking, is that the restriction leaves the

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HELD: No. It is not a valid exercise of


PEOPLE VS FAJARDO police power. The ordinance is
GR 12172, Aug. 29 1958 unreasonable and oppressive, in that it
operates to permanently deprive
FACTS: The municipal council of Baao, appellants of the right to use their own
Camarines Sur stating among others that property; hence, it oversteps the bounds of
construction of a building, which will police power, and amounts to a taking of
destroy the view of the plaza, shall not be appellant’s property without just
allowed and therefore be destroyed at the compensation. We do not overlook that
expense of the owner, enacted an the modern tendency is to regard the
ordinance. Herein appellant filed a beautification of neighborhoods as
written request with the incumbent conducive to the comfort and happiness
municipal mayor for a permit to construct of residents.
a building adjacent to their gasoline
station on a parcel of land registered in As the case now stands, every structure
Fajardo's name, located along the national that may be erected on appellants' land,
highway and separated from the public regardless of its own beauty, stands
plaza by a creek. The request was denied, condemned under the ordinance in
for the reason among others that the question, because it would interfere with
proposed building would destroy the the view of the public plaza from the
view or beauty of the public plaza. highway. The appellants would, in effect,
Defendants reiterated their request for a be constrained to let their land remain
building permit, but again the mayor idle and unused for the obvious purpose
turned down the request. Whereupon, for which it is best suited, being urban in
appellants proceeded with the character. To legally achieve that result,
construction of the building without a the municipality must give appellants just
permit, because they needed a place of compensation and an opportunity to be
residence very badly, their former house heard .
having been destroyed by a typhoon and
hitherto they had been living on leased
property. Thereafter, defendants were DOCTRINE: Republic vs. Vda. De
charged in violation of the ordinance and Castellvi
subsequently convicted. Hence this
appeal. Gabby: What is taking?
• Actual physical seizure not essential
ISSUE: Whether or not the ordinance is a • Taking must be direct
valid exercise of police power. • Mere notice or intention to expropriate
not sufficient

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In Republic v Vda. De Castellvi, there present in the instant case, when by


were several dates in question. When virtue of the lease agreement the Republic,
did the taking happen? Upon filing of through the AFP, took possession of the
the complaint. property
of Castellvi.
-In 1947 – taking was
momentary/temporary; there was Second, the entrance into private
no taking yet; not yet ousted of property must be for more than a
beneficial use because rents were momentary period. "Momentary" means,
still received. "lasting but a moment; of but a moment's
June 1959 duration" (The Oxford English Dictionary,
Volume VI, page 596); "lasting a very short
time; transitory; having a very brief life;
May the court be excused from operative or recurring at every moment"
appointing commissioners? Yes. When (Webster's Third International Dictionary,
parties agreed upon the just 1963 edition.) The word "momentary"
when applied to possession or occupancy
compensation.
of (real) property should be construed to
mean "a limited period" — not indefinite
or permanent. The aforecited lease
What are the requisites of Taking? contract was for a period of one year,
Taking' under the power of eminent renewable from year to year. The entry on
domain may be defined generally as the property, under the lease, is
entering upon private property for more temporary, and considered transitory.
than a momentary period, and, under the The fact that the Republic, through the
warrant or color of legal authority, AFP, constructed some installations of a
devoting it to a public use, or otherwise permanent nature does not alter the fact
informally appropriating or injuriously that the entry into the land was transitory,
affecting it in such a way as substantially or intended to last a year, although
to oust the owner and deprive him of all renewable from year to year by consent of
beneficial enjoyment thereof. Republic v. the owner of the land.
Castelvi, 58 SCRA 336 (1974)
By express provision of the lease
agreement the Republic, as lessee,
ELEMENTS OF TAKING IN EMINENT undertook to return the premises in
DOMAIN. substantially the same condition as at the
time the property was first occupied by
First, the expropriator must enter a the AFP. It is claimed that the intention of
private property. This circumstance is the lessee was to occupy the land

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permanently, as may be inferred from the part of the Republic to expropriate the
construction of permanent improvements. lands in the future did not, and could not,
But this "intention" cannot prevail over bind the landowner, nor bind the land
the clear and express terms of the lease itself. The expropriation must be actually
contract. Intent is to be deduced from the commenced in court (Republic vs.
language employed by the parties, and the Baylosis, et al., 96 Phil. 461, 484).
terms of the contract, when unambiguous,
as in the instant case, are conclusive in Third, the entry into the property should
the absence of averment and proof of be under warrant or color of legal
mistake or fraud — the question being authority. This circumstance in the
not what the intention was, but what is "taking" may be considered as present in
expressed in the language used. (City of the instant case, because the Republic
Manila v. Rizal Park Co., Inc., 53 Phil. entered the Castellvi property as lessee.
515, 525); Magdalena Estate, Inc. v.
Myrick, 71 Phil. 344, 348). Fourth, the property must be devoted to a
public use or otherwise informally
Moreover, in order to judge the intention appropriated or injuriously affected. It
of the contracting parties, their may be conceded that the circumstance of
contemporaneous and subsequent acts the property being devoted to public use
shall be principally considered (Art. 1371, is present because the property was used
Civil Code). If the intention of the lessee by the air force of the AFP.
(Republic) in 1947 was really to occupy
permanently Castellvi's property, why Fifth, the utilization of the property for
was the contract of lease entered into on public use must be in such a way as to
year to year basis? Why was the lease oust the owner and deprive him of all
agreement renewed from year to year? beneficial enjoyment of the property. In
Why did not the Republic expropriate this the instant case, the entry of the Republic
land of Castellvi in 1949 when, according into the property and its utilization of the
to the Republic itself, it expropriated the same for public use did not oust Castellvi
other parcels of land that it occupied at and deprive her of all beneficial
the same time as the Castellvi land, for the enjoyment of the property. Castellvi
purpose of converting them into a jet air remained as owner, and was continuously
base?" recognized as owner by the Republic, as
shown by the renewal of the lease
It might really have been the intention of contract from year to year, and by the
the Republic to expropriate the lands in provision in the lease contract whereby
question at some future time, but the Republic undertook to return the
certainly mere notice — much less an property to Castellvi when the lease was
implied notice — of such intention on the terminated. Neither was Castellvi

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deprived of all the beneficial enjoyment of In the instant case, it is undisputed that
the property, because the Republic was the Republic was placed in possession of
bound to pay, and had been paying, the Castellvi property, by authority of the
Castellvi the agreed monthly rentals until court, on August 10, 1959. The "taking" of
the time when it filed the complaint for the Castellvi property for the purposes of
eminent domain on June 26, 1959. determining the just compensation to be
paid must, therefore, be reckoned as of
JUST COMPENSATION IS DETERMINED June 26, 1959 when the complaint for
FROM THE TIME OF FILING THE eminent domain was filed.
COMPLAINT. We hold, therefore, that the
"taking' of the Castellvi property should In expropriation proceedings, therefore,
not be reckoned as of the year 1947 when the owner of the land has the right to its
the Republic first occupied the same value for the use for which it would bring
pursuant to the contract of lease, and that the most in the market. The owner may
the just compensation to be paid for the thus show every advantage that his
Castellvi property should not be property possesses, present and
determined on the basis of the value of prospective, in order that the price it
the property as of that year. The lower could be sold for in the market may be
court did not commit an error when it satisfactorily determined. The owner may
held that the "taking" of the property also show that the property is suitable for
under expropriation commenced with the division into village or town lots.
filing of the complaint in this case.

Under Section 4 of Rule 67 of the Rules of Who has the priority in expropriation?
Court, the "just compensation" is to be
determined as of the date of the filing of Private lands rank last in the order of
the complaint. This Court has ruled that priority for purposes of socialized
when the taking of the property sought to housing. In the same vein, expropriation
be expropriated coincides with the proceedings are to be resorted to only
commencement of the expropriation when the other modes of acquisition have
proceedings, or takes place subsequent to been exhausted. Compliance with these
the filing of the complaint for eminent conditions must be deemed mandatory
domain, the just compensation should be because these are the only safeguards in
determined as of the date of the filing of securing the right of owners of private
the complaint. (Republic vs. Philippine property to due process when their
National Bank, L-14158, April 12, 1961, property is expropriated for public use.
1 SCRA 957, 961-962). The governing law that deals with the
subject of expropriation for purposes of
urban land reform and housing is

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Republic Act No. 7279 (Urban this Act shall include, among others,
Development and Housing Act of 1992) community mortgage, land swapping, land
and Sections 9 and 10 of which assembly or consolidation, land banking,
specifically provide as follows: donation to the Government, joint venture
agreement, negotiated purchase, and
Sec. 9. Priorities in the acquisition of Land. expropriation. Provided, however, That
— Lands for socialized housing shall be expropriation shall be resorted to only
acquired in the following order: when other
modes of acquisition have been exhausted.
(a) Those owned by the Government or
any of its subdivisions, instrumentalities, Provided further, That where
or agencies, including government-owned expropriation is resorted to, parcels of
or controlled corporations and their land owned by small property owners
subsidiaries; shall be exempted for purposes of this Act.
Provided, finally, That abandoned
(b) Alienable lands of the public domain; property, as herein defined, shall be
reverted and escheated to the State in a
(c) Unregistered or abandoned and idle proceeding analogous to the procedure
lands; laid down in Rule 91 of the Rules of Court.
(d) Those within the declared Areas for
Priority Development, Zonal For the purpose of socialized housing,
Improvement sites, and Slum government-owned and foreclosed
Improvement and Resettlement Program properties shall be acquired by the local
sites which have not yet been acquired; government units, or by the National
Housing Authority primarily through
(e) Bagong Lipunan Improvement of Sites negotiated purchase: Provided, That
and Services or BLISS sites which have qualified beneficiaries who are actual
not yet been acquired; and occupants of the land shall be given the
right of first refusal. (Emphasis supplied).
(f) Privately-owned lands. Where on-site Filstream International v. CA, 284
development is found more practicable SCRA 716 (1998)
and advantageous to the beneficiaries, the
priorities mentioned in this section shall
not apply. The local government units
shall give budgetary priority to on-site REPUBLIC VS VDA. De CASTELLVI
development of government lands. GR No. 20620, Aug.15, 1974
Sec. 10. Modes of Land Acquisition. — The FACTS: The Republic of the Philippines
modes of acquiring lands for purposes of occupied the land of Carmen M. vda. de
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Castellvi from 1 July 1947, by virtue of a ISSUE: Whether the taking of Castellvi’s
contract of lease, on a year to year basis property occurred in 1947 or in 1959.
(from July 1 of each year to June 30 of the
succeeding year). The Republic sought to HELD: The Republic urges that the
renew the same but Castellvi refused. The "taking " of Castellvi's property should be
AFP refused to vacate the leased premises deemed as of the year 1947 by virtue of
after the termination of the contract afore-quoted lease agreement. In
because it would difficult for the army to American Jurisprudence, Vol. 26, 2nd
vacate the premises in view of the edition, Section 157, on the subject of
permanent installations and other "Eminent Domain, we read the definition
facilities worth almost P500,000.00 that of "taking" (in eminent domain) as
were erected and already established on follows:
the property. Castellvi then brought suit
to eject the Philippine Air Force from "Taking”under the power of eminent
the land. While this ejectment case was domain may be defined generally as
pending, the Republic filed on 26 June entering upon private property for more
1959 complaints for eminent domain than a momentary period, and, under the
against the respondents over the 3 warrant or color of legal authority,
parcels of land. devoting it to a public use, or otherwise
informally appropriating or injuriously
In its complaint, the Republic alleged, affecting it in such a way as substantially
among other things, that the fair market to oust the owner and deprive him of all
value of the above-mentioned lands, beneficial enjoyment thereof."
according to the Committee on Appraisal
for the Province of Pampanga, was not Pursuant to the aforecited authority, a
more than P2,000 per hectare.The court number of circumstances must be present
authorizes the Republic to take in the "taking" of property for purposes of
immediate possession of the lands upon eminent domain.
deposit of that amount with the Provincial First, the expropriator must enter a
Treasurer of Pampanga. private property. This circumstance is
present in the instant case, when by
In 1961, the trial court, rendered its virtue of the lease agreement the Republic,
decision in the ejectment case, finding through the AFP, took possession of the
that the unanimous recommendation of property of Castellvi.
the commissioners of P10.00 per square
meter for the 3 lots subject of the action is Second, the entrance into private
fair and just; and required the Republic to property must be for more than a
pay interests. momentary period. "Momentary" means,
"lasting but a moment; of but a moment's

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duration" (The Oxford English Dictionary, when unambiguous, as in the instant


Volume VI, page 596); "lasting a very case, are conclusive in the absence of
short time; transitory; having a very brief averment and proof of mistake or fraud
life; operative or recurring at every the question being not what the
moment" (Webster's Third International intention wag, but what is expressed in
Dictionary, 1963 edition.) the language used. Moreover, in order to
judge the intention of the contracting
The word "momentary" when applied to parties, their contemporaneous and
possession or occupancy of (real) subsequent acts shall be principally
property should be construed to mean "a considered (Art. 1371, Civil Code). If the
limited period" not indefinite or intention of the lessee (Republic) in 1947
permanent. The aforecited lease contract was really to occupy permanently
was for a period of one year, renewable Castellvi's property, why was the contract
from year to year. The entry on the of lease entered into on year to year basis?
property, under the lease, is Why was the lease agreement renewed
temporary, and considered transitory. from year to year? Why did not the
The fact that the Republic, through the Republic expropriate this land of Castellvi
AFP, constructed some installations of in 1949 when, according to the Republic
a permanent nature does not alter the itself, it expropriated the other parcels of
fact that the entry into the land was land that it occupied at the same time as
transitory, or intended to last a year, the Castellvi land, for the purpose of
although renewable from year to year converting them into a jet air base?" It
by consent of the owner of the land. By might really have been the intention of
express provision of the lease the Republic to expropriate the lands in
agreement the Republic, as lessee, question at some future time, but
undertook to return the premises in certainly mere notice much less an
substantially the same condition as at implied notice of such intention on the
the time the property was first occupied part of the Republic to expropriate the
by the AFP . It is claimed that the lands in the future did not, and could not,
“INTENTION” of the lessee was to occupy bind the landowner, nor bind the land
the land permanently, as may be itself. The expropriation must be actually
inferred from the construction of commenced in court.
permanent improvements.
Third, the entry into the property should
But this "INTENTION " cannot prevail be under warrant or color of legal
over the clear and express terms of the authority. This circumstance in the
lease contract. Intent is to be deduced "taking" may be considered as present in
from the language employed by the the instant case, because the Republic
parties, and the terms of the contract, entered the Castellvi property as lessee.

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in the contention of Castellvi that two


Fourth, the property must be devoted to essential elements in the "taking" of
a public use or otherwise informally property under the power of eminent
appropriated or injuriously affected. It domain, namely:
may be conceded that the circumstance of
the property being devoted to public use (1) that the entrance and occupation by
is present because the property was used the condemnor must be for a permanent,
by the air force of the AFP. or indefinite period, and
(2) that in devoting the property to public
Fifth, the utilization of the property for use the owner was ousted from the
public use must be in such a way as to property and deprived of its beneficial
oust the owner and deprive him of all use, were not present when the Republic
beneficial enjoyment of the property. In entered and occupied the Castellvi
the instant case, the entry of the Republic property in 1947.
into the property and its utilization of the
same for public use did not oust Castellvi Untenable also is the Republic's
and deprive her of all beneficial contention that although the contract
enjoyment of the property. Castellvi between the parties was one of lease on a
remained as owner, and was continuously year to year basis, it was "in reality a
recognized as owner by the Republic, as more or less permanent right to occupy
shown by the renewal of the lease the premises under the guise of lease with
contract from year to year, and by the the 'right and privilege' to buy the
provision in the lease contract whereby property should the lessor wish to
the Republic undertook to return the terminate the lease," and "the right to buy
property to Castellvi when the lease was the property is merged as an integral part
terminated. Neither was Castellvi of the lease relationship . . . so much so
deprived of all the beneficial enjoyment of that the fair market value has been agreed
the property, because the Republic was upon, not as of the time of purchase, but
bound to pay, and had been paying, as of the time of occupancy". 15 We
Castellvi the agreed monthly rentals until cannot accept the Republic's contention
the time when it filed the complaint for that a lease on a year to year basis can
eminent domain on June 26, 1959. give rise to a permanent right to occupy,
since by express legal provision a lease
It is clear, therefore, that the "taking" of made for a determinate time, as was the
Castellvi's property for purposes of lease of Castellvi's land in the instant case,
eminent domain cannot be considered to ceases upon the day fixed, without need of
have taken place in 1947 when the a demand (Article 1669, Civil Code).
Republic commenced to occupy the
property as lessee thereof. We find merit

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Neither can it be said that the right of property of its true and fair market value
eminent domain may be exercised by at the time when the expropriation
simply leasing the premises to be proceedings were actually instituted in
expropriated (Rule 67, Section 1, Rules of court. The Republic's claim that it had the
Court). Nor can it be accepted that the "right and privilege" to buy the property
Republic would enter into a contract of at the value that it had at the time when it
lease where its real intention was to buy, first occupied the property as lessee
or why the Republic should enter into a nowhere appears in the lease contract.
simulated contract of lease ("under time
the Republic had the right of eminent What was agreed expressly in paragraph
domain, and could expropriate Castellvi's No. 5 of the lease agreement was that,
land if it wanted to without resorting to should the lessor require the lessee to
any guise whatsoever. Neither can we see return the premises in the same condition
how a right to buy could be merged in a as at the time the same was first occupied
contract of lease in the absence of any by the AFP, the lessee would have the
agreement between the parties to that "right and privilege" (or option) of paying
effect. To sustain the contention of the the lessor what it would fairly cost to put
Republic is to sanction a practice whereby the premises in the same condition as it
in order to secure a low price for a land was at the commencement of the lease, in
which the government intends to lieu of the lessee's performance of the
expropriate (or would eventually undertaking to put the land in said
expropriate) it would first negotiate with condition. The "fair value" at the time of
the owner of the land to lease the land occupancy, mentioned in the lease
(for say ten or twenty years) then agreement, does not refer to the value of
expropriate the same when the lease is the property if bought by the lessee, but
about to terminate, then claim that the refers to the cost of restoring the property
"taking" of the property for the purposes in the same condition as of the time when
of the expropriation be reckoned as of the the lessee took possession of the property.
date when the Government started to Such fair value cannot refer to the
occupy the property under the lease, and purchase price, for purchase was never
then assert that the value of the property intended by the parties to the lease
being expropriated be reckoned as of the contract. It is a rule in the interpretation
start of the lease, in spite of the fact that of contracts that "However general the
the value of the property, for many good terms of a contract may be, they shall not
reasons, had in the meantime increased be understood to comprehend things that
during the period of the lease. This would are distinct and cases that are different
be sanctioning what obviously is a from those upon which the parties
deceptive scheme, which would have the intended to agree" (Art. 1372, Civil Code).
effect of depriving the owner of the

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(A number of circumstances must be entered and occupied the Castellvi


present in the “taking” of property for property in 1947.
purposes of eminent domain.
Under Section 4 of Rule 67 of the Rules of
First, the expropriator must enter a Court, the “just compensation” is to be
private property. determined as of the date of the filing of
Second , the entrance into private the complaint. This Court has ruled that
property must be for more than a when the taking of the property sought
momentary period. to be expropriated coincides with the
Third , the entry into the property should commencement of the expropriation
be under warrant or color of legal proceedings, or takes place subsequent
authority. to the filing of the complaint for
Fourth , the property must be devoted to a eminent domain, the just compensation
public use or otherwise informally should be determined as of the date of the
appropriated or injuriously affected. filing of the complaint. Herein, it is
Fifth , the utilization of the property for undisputed that the Republic was
public use must be in such a way as to oust placed in possession of the Castellvi
the owner and deprive him of all beneficial property, by authority of the court, on
enjoyment of the property . 10 August 1959. The “taking” of the
Castellvi property for the purposes of
It is clear, therefore, that the "taking" of determining the just compensation to
Castellvi's property for purposes of be paid must, therefore, be reckoned as
eminent domain cannot be considered of 26 June 1959 when the complaint for
to have taken place in 1947 when the eminent domain was filed.)
Republic commenced to occupy the
property as lessee thereof. We find merit
in the contention of Castellvi that two DOCTRINE: AMIGABLE VS. CUENCA:
essential elements in the "taking" of
property under the power of eminent THE IMMUNITY FROM SUIT CANNOT
domain, namely: BE USED TO EVADE PAYMENT OF JUST
COMPENSATION. - In the case of
(1) that the entrance and occupation by Ministerio vs. Court of First Instance of
the condemnor must be for a permanent, Cebu, involving a claim for payment of the
or indefinite period , and value of a portion of land used for the
(2) that in devoting the property to public widening of the Gorordo Avenue in Cebu
use the owner was ousted from the City, this Court, through Mr. Justice
property and deprived of its beneficial use, Enrique M. Fernando, held that where the
were not present when the Republic government takes away property from a
private landowner for public use without

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going through the legal process of judicially ascertained, it makes manifest


expropriation or negotiated sale, the that it submits to the jurisdiction of a
aggrieved party may properly maintain a court. There is no thought then that the
suit against the government without doctrine of immunity from suit could still
thereby violating the doctrine of be appropriately invoked."
governmental immunity from suit
without its consent. We there said:

". . . If the constitutional mandate that the AMIGABLE VS CUENCA


owner be compensated for property GR No. 26400, August 15, 1974
taken for public use were to be respected,
as it should, then a suit of this character FACTS: Victoria Amigable, is the
should not be summarily dismissed. The registered owner of a lot in Cebu City.
doctrine of governmental immunity from Without prior expropriation or negotiated
suit cannot serve as an instrument for sale, the government used a portion of
perpetrating an injustice on a citizen. Had said lot for the construction of the Mango
the government followed the procedure and Gorordo Avenues. Amigable's counsel
indicated by the governing law at the time, wrote to the President of the Philippines,
a complaint would have been filed by it, requesting payment of the portion of her
and only upon payment of the lot which had been appropriated by the
compensation fixed by the judgment, or government. The claim was indorsed
after tender to the party entitled to such tothe Auditor General, who disallowed it
payment of the amount fixed, may it have in his 9th Endorsement. Thus, Amigable
the right to enter in and upon the land so filed in the court a quo a complaint,
condemned, to appropriate the same to against the Republic of the Philippines
the public use defined in the judgment.' If and Nicolas Cuenca(Commissioner of
there were an observance of procedural Public Highways) for the recovery of
regularity, petitioners would not be in the ownership and possession of her lot.
sad plaint they are now. It is unthinkable
then that precisely because there was a On July 29, 1959, the court rendered its
failure to abide by what the law requires, decision holding that it had no
the government would stand to benefit. It jurisdiction over the plaintiff's cause of
is just as important, if not more so, that action for the recovery of possession and
there be fidelity to legal norms on the part ownership of the lot on the ground that
of officialdom if the rule of law were to be the government cannot be sued without
maintained. It is not too much to say that its consent, that it had neither original nor
when the government takes any property appellate jurisdiction to hear and decide
for public use, which is conditioned upon plaintiff's claim for compensatory
the payment of just compensation, to be damages, being a money claim against the

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government; and that it had long addition, the government should pay for
prescribed, nor did it have jurisdiction attorney's fees, the amount of which
over said claim because the government should be fixed by the trial court after
had not given its consent to be sued. hearing.
Accordingly, the complaint was dismissed.
(NOTE: The owner does not need to file
ISSUE: Can the appellant sue the the usual claim for recovery of just
government? compensation with the Commission on
Audit if the government takes over his
HELD: Yes. Considering that no property and devotes it to public use
annotation in favor of the government without the benefit of expropriation. He
appears at the back of her certificate of may immediately file a complaint with the
title and that she has not executed any proper court for payment of his property
deed of conveyance of any portion of her as the arbitrary action of the government
lot to the government, the appellant shall be deemed a waiver of its immunity
remains the owner of the whole lot. As from suit.) Cruz, pg. 74)
registered owner, she could bring an
action to recover possession of the
portion of land in question at anytime
because possession is one of the DOCTRINE: Philippine Press Institute
attributes of ownership. vs. COMELEC
However, since restoration of
possession of said portion by the TAKING IN EMINENT DOMAIN. - To
government is neither convenient nor compel print media companies to donate
feasible at this time because it is now
"Comelec space" of the dimensions
and has been used for road purposes, specified in Section 2 of resolution No.
the only relief available isfor the 2772 (not less than one-half Page),
government to make due compensation amounts to "taking" of private personal
which it could and should have done property for public use or purposes.
years ago. To determine the due Section 2 failed to specify the intended
compensation for the land, the basis frequency of such compulsory "donation:"
should be the price or value thereof at only once during the period from 6 March
the time of the taking. 1995 (or 21 March 1995) until 12 May
1995? or everyday or once a week? or has
As regards the claim for damages, the often as Comelec may direct during the
plaintiff is entitled thereto in the form of same period? the extent of the taking or
legal interest on the price of the land from
deprivation is not insubstantial; this is not
the time it was taken up to the time that a case of a de minimis temporary
payment is made by the government. In limitation or restraint upon the use of
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private property. The monetary value of Commission would be used not only for
the compulsory "donation," measured by informing the public about the identities,
the advertising rates ordinarily charged qualifications and programs of
by newspaper publishers whether in government of candidates for elective
cities or in non-urban areas, may be very office but also for "dissemination of vital
substantial indeed. election information" (including,
presumably, circulars, regulations, notices,
The taking of print space here sought to directives, etc. issued by Comelec). It
be effected may first be appraised under seems to the Court a matter of judicial
the public of expropriation of private notice that government offices and
personal property for public use. The agencies (including the Supreme Court)
threshold requisites for a lawful taking of simply purchase print space, in the
private property for public use need to be ordinary course of events, when their
examined here: one is the necessity for rules and regulations, circulars, notices
the taking; another is the legal authority and so forth need officially to be brought
to effect the taking. The element of to the attention of the general public.
necessity for the taking has not been
shown by respondent Comelec. It has not The taking of private property for public
been suggested that the members of PPI use it, of course, authorized by the
are unwilling to sell print space at their Constitution, but not without payment of
normal rates to Comelec for election "just compensation" (Article III, Section
purposes. Indeed, the unwillingness or 9). And apparently the necessity of paying
reluctance of Comelec to buy print space compensation for "Comelec space" is
lies at the heart of the problem. Similarly, precisely what is sought to be avoided by
it has not been suggested, let alone respondent Commission, whether Section
demonstrated, that Comelec has been 2 of resolution No. 2772 is read as
granted the power of imminent domain petitioner PPI reads it, as an assertion of
either by the Constitution or by the authority to require newspaper
legislative authority. A reasonable publishers to "donate" free print space
relationship between that power and the for Comelec purpose, or as an exhortion,
enforcement and administration of or perhaps an appeal, to publishers to
election laws by Comelec must be shown; donate free print space, as Section 1 of
it is not casually to be assumed. Resolution No. 2772-A attempts to
suggest. There is nothing at all to prevent
That the taking is designed to subserve newspaper and magazine publishers from
"public use" is not contested by petitioner voluntarily giving free print space to
PPI. We note only that, under Section 3 of Comelec for the purposes contemplated in
Resolution No. 2772, the free "Comelec Resolution No. 2772. Section 2 of
space" sought by the respondent resolution No. 2772 does not, however,

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provide a constitutional basis for


compelling publishers, against their will, ISSUE: May COMELEC compel the
in the kind of factual context here present, members of print media to donate
to provide free print space for Comelec “Comelec Space”?
purposes. Section 2 does not constitute a
valid exercise of the power of eminent HELD: NO. To compel print media
domain. companies to donate "Comelec space"
amounts to "taking" of private personal
property for public use or purposes. The
PHILIPPINE PRESS INSTITUTE vs. taking of print space here sought to be
COMELEC GR No. 119694, May 22, 1995 effected may first be appraised under the
public of expropriation of private
FACTS: The Philippine Press Institute, Inc. personal property for public use. The
("PPI") is before this Court assailing the threshold requisites for a lawful taking
constitutional validity of resolution No. of private property for public use need
2772 issued by respondent Commission to be examined here: one is the
on Elections ("Comelec") and its necessity for the taking; another is the
corresponding Comelec directive dated legal authority to effect the taking. The
22 March 1995, through a Petition for element of necessity for the taking has
Certiorari and Prohibition. Petitioner PPI not been shown by respondent Comelec.
is a non-stock, non-profit organization of It has not been suggested that the
news paper and magazine publishers. members of PPI are unwilling to sell print
space at their normal rates to Comelec for
On 2 March 1995, Comelec promulgated election purposes. Indeed, the
Resolution No. 2772, providing for a unwillingness or reluctance of Comelec to
Comelec Space, which is a free print space buy print space lies at the heart of the
of not less than one half (1/2) page in at problem. Similarly, it has not been
least one newspaper of general suggested, let alone demonstrated, that
circulation in every province or city. In Comelec has been granted the power of
this Petition for Certiorari and Prohibition imminent domain either by the
with prayer for the issuance of a Constitution or by the legislative
Temporary restraining order, PPI asks us authority. A reasonable relationship
to declare Comelec resolution No. 2772 between that power and the enforcement
unconstitutional and void on the ground and administration of election laws by
that it violates the prohibition imposed by Comelec must be shown; it is not casually
the Constitution upon the government, to be assumed.
and any of its agencies, against the taking
of private property for public use without The taking of private property for public
just compensation. use it, of course, authorized by the

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Constitution, but not without payment of compliance in the instant case with the
"just compensation" (Article III, Section 9). requisites of a lawful taking under the
And apparently the necessity of paying police power.
compensation for "Comelec space" is
precisely what is sought to be avoided by Section 2 of Resolution No. 2772 is a blunt
respondent Commission. There is nothing and heavy instrument that purports,
at all to prevent newspaper and magazine without a showing of existence of a
publishers from voluntarily giving free national emergency or other imperious
print space to Comelec for the purposes public necessity, indiscriminately and
contemplated in Resolution No. 2772. without regard the the individual business
Section 2 of resolution No. 2772 does not, condition of particular newspapers or
however, provide a constitutional basis magazines located in different parts of the
for compelling publishers, against their country, to take private property of
will, in the kind of factual context here newspaper or magazine publishers. No
present, to provide free print space for attempt was made to demonstrate that
Comelec purposes. Section 2 does not a real and palpable or urgent necessity
constitute a valid exercise of the power of for the taking of print space confronted
eminent domain. the Comelec and that Section 2 of
Resolution No. 2772 was itself the only
As earlier noted, the Solicitor General also reasonable and calibrated response to
contended that Section 2 of Resolution No. such necessity available to Comelec.
2772, even if read as compelling publishers Section 2 does not constitute a valid
to "donate" "Comelec space," may be exercise of the police power of the State.
sustained as a valid exercise of the police
power of the state. This argument was,
however, made too casually to require
prolonged consideration on their part . DOCTRINE: Sumulong vs. Guerrero
Firstly, there was no effort (and Gabby: In Sumulong v Guerrero, does
apparently no inclination on the part of
size matter? (hahaha) No. Even small
Comelec) to show that the police power -
essentially a power of legislation - has properties may be expropriated.
been constitutionally delegated to -In Gido Case, only large tracts of land, not
respondent Commission. the number of beneficiaries, mat be
expropriated. This is an old case
Secondly, while private property may abandoned by the Sumulong Case.
indeed be validly taken in the legitimate
exercise of the police power of the state, What was the reason in allowing the
there was no attempt to show taking in the case of Sumulong?

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PUBLIC USE: This Court holds that use. There was a time when it was felt
"socialized housing" defined in Pres. that a literal meaning should be attached
Decree No. 1224, as amended by Pres. to such a requirement. Whatever project
Decree Nos. 1259 and 1313, constitutes is undertaken must be for the public to
"public use" for purposes of expropriation. enjoy, as in the case of streets or parks.
However, as previously held by this Court, Otherwise, expropriation is not allowable.
the provisions of such decrees on just It is not anymore. As long as the purpose
compensation are unconstitutional; and of the taking is public, then the power of
in the instant case the Court finds that the eminent domain comes into play. As just
Orders issued pursuant to the corollary noted, the constitution in at least two
provisions of those decrees authorizing cases, to remove any doubt, determines
immediate taking without notice and what is public use. One is the
hearing are violative of due process. expropriation of lands to be subdivided
Sumulong v. Guerrero, 154 SCRA 461 into small lots for resale at cost to
(1987) individuals. The other is in the transfer,
through the exercise of this power, of
utilities and other private enterprise to
the government. It is accurate to state
CONCEPT OF PUBLIC USE IN EMINENT then that at present whatever may be
DOMAIN. Petitioners contend that beneficially employed for the general
"socialized housing" as defined in Pres. welfare satisfies the requirement of
Decree No. 1224, as amended, for the public use [Heirs of Juancho Ardona v.
purpose of condemnation proceedings is Reyes, G.R. Nos. 60549, 60553-60555,
not "public use" since it will benefit only October 26, 1983, 125 SCRA 220 (1983)
"a handful of people, bereft of public at 234-5 quoting E. FERNANDO, THE
character." "Socialized housing" is defined CONSTITUTION OF THE PHILIPPINES
as, "the construction of dwelling units for 523-4, (2nd e., 1977) Emphasis
the middle and lower class members of supplied]
our society, including the construction of
the supporting infrastructure and other The term "public use" has acquired a
facilities" (Pres. Decree No. 1224, par. 1). more comprehensive coverage. To the
literal import of the term signifying strict
The "public use" requirement for a valid use or employment by the public has been
exercise of the power of eminent domain added the broader notion of indirect
is a flexible and evolving concept public benefit or advantage. As discussed
influenced by changing conditions. In this in the above cited case of Heirs of Juancho
jurisdiction, the statutory and judicial Ardona:
trend has been summarized as follows:
The taking to be valid must be for public

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The restrictive view of public use may be with the private sector, a continuing
appropriate for a nation which program of urban land reform and
circumscribes the scope of government housing which will make available at
activities and public concerns and which affordable cost decent housing and basic
possesses big and correctly located public services to underprivileged and homeless
lands that obviate the need to take private citizens in urban centers and resettlement
property for public purposes. Neither areas. It shall also promote adequate
circumstance applies to the Philippines. employment opportunities to such
We have never been a laissez faire State. citizens. In the implementation of such
And the necessities which impel the program the State shall respect the rights
exertion of sovereign power are an too of small property owners. (Art. XIII, sec. 9,
often found in areas of scarce public land Emphasis supplied)
or limited government resources.
Housing is a basic human need. Shortage
Specifically, urban renewal or in housing is a matter of state concern
redevelopment and the construction of since it directly and significantly affects
low-cost housing is recognized as a public public health, safety, the environment and
purpose, not only because of the in sum, the general welfare. The public
expanded concept of public use but also character of housing measures does not
because of specific provisions in the change because units in housing projects
Constitution. The 1973 Constitution made cannot be occupied by all but only by
it incumbent upon the State to establish, those who satisfy prescribed
maintain and ensure adequate social qualifications. A beginning has to be made,
services including housing [Art. II, sec. 7]. for it is not possible to provide housing
The 1987 Constitution goes even further for all who need it, all at once.
by providing that:

The State shall promote a just and SIZE OF THE PROPERTY IS NOT
dynamic social order that will ensure the DETERMINATIVE OF THE PROPER
prosperity and independence of the EXERCISE OF EMINENT DOMAIN.
nation and free the people from poverty Petitioners further contend that Pres.
through policies that provide adequate Decree 1224, as amended, would allow
social services, promote full employment, the taking of "any private land" regardless
a rising standard of living and an of the size and no matter how small the
improved quality of life for all. [Art. II, sec. area of the land to be expropriated.
9] Petitioners claim that "there are vast
areas of lands in Mayamot, Cupang, and
The state shall, by law, and for the San Isidro, Antipolo, Rizal hundred of
common good, undertake, in cooperation hectares of which are owned by a few

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landowners only. It is surprising benefited. Since then "there has evolved a


[therefore] why respondent National clear pattern of adherence to the `number
Housing Authority [would] include [their] of people to be benefited test'" [Mataas
two small lots . . ." na Lupa Tenants Association, Inc. v.
Dimayuga, G.R. No. 32049, June 25,
In J.M. Tuason Co., Inc. v. Land Tenure 1984, 130 SCRA 30 (1984) at 39]. Thus,
Administration, [G.R. No. L-21064, in Pulido v. Court of Appeals [G.R. No.
February 18, 1970, 31 SCRA 413 (1970, at 57625, May 3, 1983, 122 SCRA 63
428] this Court earlier ruled that (1983) at 73], this Court stated that, "it
expropriation is not confined to landed is unfortunate that the petitioner would
estates. This Court, quoting the dissenting be deprived of his landholdings, but his
opinion of Justice J.B.L. Reyes in Republic interest and that of his family should not
v. Baylosis, [96 Phil. 461 (1955)], held stand in the way of progress and the
that: benefit of the greater majority of the
inhabitants of the country."
The propriety of exercising the power of
eminent domain under Article XIII, The State acting through the NHA is
section 4 of our Constitution cannot be vested with broad discretion to designate
determined on a purely quantitative or the particular property/properties to be
area basis. taken for socialized housing purposes and
Not only does the constitutional provision how much thereof may be expropriated.
speak of lands instead of landed estates, Absent a clear showing of fraud, bad faith,
but I see no cogent reason why the or gross abuse of discretion, which
government, in its quest for social justice petitioners herein failed to demonstrate,
and peace, should exclusively devote the Court will give due weight to and
attention to conflicts of large proportions, leave undisturbed the NHA's choice and
involving a considerable number of the size of the site for the project. The
individuals, and eschew small property owner may not interpose
controversies and wait until they grow objections merely because in their
into a major problem before taking judgment some other property would
remedial action. have been more suitable, or just as
suitable, for the purpose. The right to the
The said case of J.M. Tuason Co., Inc. use, enjoyment and disposal of private
departed from the ruling in Guido v. property is tempered by and has to yield
Rural Progress Administration [84 Phil. to the demands of the common good. The
847 (1949)] which held that the test to be Constitutional provisions on the subject
applied for a valid expropriation of are clear: The state shall promote social
private lands was the area of the land and justice in all phases of national
not the number of people who stood to be development. (Art. II, sec. 10).

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The Congress shall give highest priority to Tax values can serve as guides but cannot
the enactment of measures that protect be absolute substitutes for just
and enhance the right of all the people to compensation. To say that the owners are
human dignity, reduce social, economic, estopped to question the valuations made
and political inequalities, and remove by assessors since they had the
cultural inequities by equitably diffusing opportunity to protest is illusory. The
wealth and political power for the overwhelming mass of landowners accept
common good. To this end, the State shall unquestioningly what is found in the tax
regulate the acquisition, ownership, use declarations prepared by local assessors
and disposition of property and its or municipal clerks for them. They do not
increments. (Art. XIII, sec. 1) even look at, much less analyze, the
statements. The idea of expropriation
JUST COMPENSATION. Just simply never occurs until a demand is
compensation means the value of the made or a case filed by an agency
property at the time of the taking. It authorized to do so.
means a fair and full equivalent for the
loss sustained. All the facts as to the
condition of the property and its
surroundings, its improvements and SUMULONG VS GUERRERO
capabilities, should be considered. GR 48685, Sept 30,1987

Various factors can come into play in the FACTS: On December 5,1977, the
valuation of specific properties singled National Housing Authority (NHA) filed a
out for expropriation. The values given by complaint for expropriation of parcels of
provincial assessors are usually uniform land covering approximately 25 hectares,
for very wide areas covering several (in Antipolo Rizal) including the lots of
barrios or even an entire town with the Lorenzo Sumulong and Emilia Vidanes-
exception of the poblacion. Individual Balaoing with an area of 6,667 square
differences are never taken into account. meters and 3,333 square meters
The value of land is based on such respectively. The land sought to be
generalities as its possible cultivation for expropriated were valued by the NHA at
rice, corn, coconuts, or other crops. Very P1.00 per square meter adopting the
often land described as "cogonal" has market value fixed by the provincial
been cultivated for generations. Buildings assessor in accordance with presidential
are described in terms of only two or decrees prescribing the valuation of
three classes of building materials and property in expropriation proceedings.
estimates of areas are more often
inaccurate than correct.

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Together with the complaint was a import of the term signifying strict use or
motion for immediate possession of the employment by the public has been added
properties. The NHA deposited the the broader notion of indirect public
amount of P158,980.00 with the benefit or advantage. Specifically, urban
Philippine National Bank, representing renewal or redevelopment and the
the “total market value” of the subject 25 construction of low-cost housing is
hectares of land, pursuant to Presidential recognized as a public purpose, not only
Decree 1224 which defines “the policy on because of the expanded concept of public
the expropriation of private property for use but also because of specific provisions
socialized housing upon payment of just in the Constitution. The 1973 Constitution
compensation.” On 17 January 1978, made it incumbent upon the State to
Judge Buenaventura Guerrero issued the establish, maintain and ensure adequate
order issuing a writ of possession in favor social services including housing [Art. II,
of NHA. Sumulong and Vidanes-Balaoing sec. 7]. Shortage in housing is a matter
filed a motion for reconsideration on the of state concern since it directly and
ground that they had been deprived of the significantly affects public health, safety,
possession of their property without due the environment and in sum, the
process of law. This was, however, denied. general welfare. The public character of
They filed a petition for certiorari with housing measures does not change
the Supreme Court. because units in housing projects cannot
be occupied by all but only by those who
ISSUE: Whether the taking of private satisfy prescribed qualifications. A
property for “socialized housing,” which beginning has to be made, for it is not
would benefit a few and not all citizens, possible to provide housing for all who
constitutes taking for “public use.” need it, all at once. “Socialized housing”
falls within the confines of “public use”.
HELD: Yes. The exercise of the power of
eminent domain is subject to certain Various factors can come into play in the
limitations imposed by the constitution valuation of specific properties singled
(1973), i.e. that private property shall not out for expropriation. The values given
be taken for public use without just by provincial assessors are usually
compensation” (Art. IV, sec. 9); and that uniform for very wide areas covering
no person shall be deprived of life, liberty, several barrios or even an entire town
or property without due process of law, with the exception of the poblacion.
nor shall any person be denied the equal Individual differences are never taken
protection of the laws” (Art. IV, sec. 1). into account.

The term “public use” has acquired a more The value of land is based on such
comprehensive coverage. To the literal generalities as its possible cultivation for

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rice, corn, coconuts, or other crops. Very it is not at all to be said, however, that
often land described as "cogonal" has public use should thereby be restricted to
been cultivated for generations. Buildings such traditional uses. The idea that
are described in terms of only two or "public use" is strictly limited to clear
three classes of building materials and cases of "use by the public" has long been
estimates of areas are more often discarded. Manosca v. Court of Appeals,
inaccurate than correct. Tax values can 252 SCRA 412 (1996)
serve as guides but cannot be absolute
substitutes for just compensation. To
say that the owners are estopped to PUBLIC USE IN EMINENT DOMAIN. The
question the valuations made by term "public use," not having been
assessors since they had the otherwise defined by the constitution,
opportunity to protest is illusory. The must be considered in its general concept
overwhelming mass of landowners accept of meeting a public need or a public
unquestioningly what is found in the tax exigency. Black summarizes the
declarations prepared by local assessors characterization given by various courts
or municipal clerks for them. They do not to the term: thus:
even look at, much less analyze, the "Public Use. Eminent domain. The
statements. The idea of expropriation constitutional and statutory basis for
simply never occurs until a demand is taking property by eminent domain. For
made or a case filed by an agency condemnation purposes, 'public use' is
authorized to do so. one which confers some benefit or
advantage to the public; it is not confined
to actual use by public. It is measured in
DOCTRINE: Manosca vs. Court of terms of right of public to use proposed
Appeals facilities for which condemnation is
sought and, as long as public has right of
PUBLIC USE: This Court is asked to use, whether exercised by one or many
resolve whether or not the "public use" members of public, a 'public advantage' or
requirement of Eminent Domain is extant 'public benefit' accrues sufficient to
in the attempted expropriation by the constitute a public use.
Republic of a 492-square- meter parcel of
land so declared by the National "Public use, in constitutional provisions
Historical Institute ("NHI") as a national restricting the exercise of the right to take
historical landmark. x x x (the birthsite of private property in virtue of eminent
Felix Y. Manalo, the founder of Iglesia Ni domain, means a use concerning the
Cristo) x x x The validity of the exercise of whole community as distinguished from
the power of eminent domain for particular individuals. But each and every
traditional purposes is beyond question; member of society need not be equally

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interested in such use, or be personally not the casual consequences that might
and directly affected by it; if the object is follow from, the exercise of the power.
to satisfy a great public want or exigency,
that is sufficient. Rindge Co. vs. Los The purpose in setting up the marker is
Angeles County, 262 U.S. 700, 43 S.Ct. essentially to recognize the distinctive
689, 692, 67 L.Ed. 1186. contribution of the late Felix Manalo to
the culture of the Philippines, rather than
The term may be said to mean public to commemorate his founding and
usefulness, utility, or advantage, or what leadership of the Iglesia ni Cristo. The
is productive of general benefit. It may be practical reality that greater benefit may
limited to the inhabitants of a small or be derived by members of the Iglesia ni
restricted locality, but must be in common, Cristo than by most others could well be
and not for a particular individual. The true but such a peculiar advantage still
use must be a needful one for the public, remains to be merely incidental and
which cannot be surrendered without secondary in nature. Indeed, that only a
obvious general loss and inconvenience. A few would actually benefit from the
'public use' for which land may be taken expropriation of property does not
defies absolute definition for it changes necessarily diminish the essence and
with varying conditions of society, new character of public use.
appliances in the sciences, changing
conceptions of scope and functions of
government, and other differing MANOSCA VS COURT OF APPEALS
circumstances brought about by an G.R. No. 106440 , 29 January 1996
increase in population and new modes of
communication and transportation. Katz FACTS: Petitioners inherited a piece of
v. Brandon, 156 Conn., 521, 245 A.2d land which was later declared as national
579,586." landmark due to being ascertained by
National Historic Institute (NHI) as the
etitioners ask: But "(w)hat is the so-called birthplace of Felix Y. Manalo, the founder
unusual interest that the expropriation of of Iglesia ni Cristo. On the opinion of
(Felix Manalo's) birthplace become so Secretary of Justice, he said that the place
vital as to be a public use appropriate for must be subjected to the power of
the exercise of the power of eminent eminent domain since places invested
domain" when only members of the with unusual historical interest is a public
Iglesia ni Cristo would benefit? This use which such power may be authorized.
attempt to give some religious Thus, Republic, through the office of
perspective to the case deserves little Solicitor General instituted a complaint
consideration, for what should be for expropriation and filed an urgent
significant is the principal objective of, motion for the issuance for an order to

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permit it to take immediate possession of statutory basis for taking property by


the property. The trial court issued an eminent domain. For condemnation
order authorizing Republic to take over purposes, "public use" is one which
the property once the required sum confers same benefit or advantage to the
would have been deposited with the public; it is not confined to actual use by
Municipal Treasurer of Taguig, Metro public. It is measured in terms of right of
Manila. public to use proposed facilities for which
condemnation is sought and, as long as
The petitioners moved to dismiss the public has right of use, whether exercised
complaint since such expropriation would by one or many members of public, a
constituted an "public advantage" or "public benefit"
application of funds directly or indirectly accrues sufficient to constitute a public
for the use, benefit, or support of Iglesia ni use. Montana Power Co. vs. Bokma,
Cristo, which is contrary to the provision of Mont. 457 P. 2d 769, 772, 773.
Section 29 (2) Article VI of the 1987
Constitution. Public use, in constitutional provisions
restricting the exercise of the right to take
ISSUE: Whether or not the “public use” private property in virtue of eminent
requirement of Eminent Domain is extant domain, means a use concerning the
in the attempted expropriation by the whole community as distinguished from
Republic of a 492-squaremeter parcel of particular individuals. But each and every
land as declared by the NHI as a national member of society need not be equally
landmark? interested in such use, or be personally
and directly affected by it; if the object is
HELD: Yes. According to Justice Black, to satisfy a great public want or exigency,
term “public use” means one which that is sufficient. Rindge Co. vs. Los
confers benefit or advantage to the Angeles County, 262 U.S. 700, 43 S.Ct.
public and it is not confined to actual 689, 692, 67 L.Ed. 1186.
use by public. It may also be said to
mean public usefulness, utility or The term may be said to mean public
advantage, or what is productive of usefulness, utility, or advantage, or what
general benefit. The term "public use," is productive of general benefit. It may be
not having been otherwise defined by the limited to the inhabitants of a small or
constitution, must be considered in its restricted locality, but must be in common,
general concept of meeting a public need and not for a particular individual. The
or a public exigency. 16 Black summarizes use must be a needful one for the public,
the characterization given by various which cannot be surrendered without
courts to the term; thus: Public Use. obvious general loss and inconvenience. A
Eminent domain. The constitutional and "public use" for which land may be taken

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defies absolute definition for it changes beneficially employed for the general
with varying conditions of society, new welfare satisfies the requirement of
appliances in the sciences, changing public use. Chief Justice Fernando, writing
conceptions of scope and functions of the ponencia in J.M. Tuason & Co. vs.
government, and other differing Land Tenure Administration, has viewed
circumstances brought about by an the Constitution a dynamic instrument
increase in population and new modes of and one that "is not to be construed
communication and transportation. Katz narrowly or pedantically" so as to enable
v. Brandon, 156 Conn., 521, 245 A.2d it "to meet adequately whatever problems
579,586. 17 the future has in store." Fr. Joaquin
Bernas, a noted constitutionalist himself,
The validity of the exercise of the power has aptly observed that what, in fact, has
of eminent domain for traditional ultimately emerged is a concept of public
purposes is beyond question; it is not at use which is just as broad as "public
all to be said, however, that public use welfare."
should thereby be restricted to such
traditional uses. The idea that "public use" Petitioners ask: But "(w)hat is the so-
is strictly limited to clear cases of "use by called unusual interest that the
the public" has long been discarded. The expropriation of (Felix Manalo's)
taking to be valid must be for public use. birthplace become so vital as to be a
There was a time when it was felt that a public use appropriate for the exercise of
literal meaning should be attached to such the power of eminent domain" when only
a requirement. Whatever project is members of the Iglesia ni Cristo would
undertaken must be for the public to benefit? This attempt to give some
enjoy, as in the case of streets or parks. religious perspective to the case deserves
Otherwise, expropriation is not allowable. little consideration, for what should be
It is not so any more. As long as the significant is the principal objective of,
purpose of the taking is public, then the not the casual consequences that might
power of eminent domain comes into play. follow from, the exercise of the power.
As just noted, the constitution in at least
two cases, to remove any doubt, The purpose in setting up the marker is
determines what is public use. One is the essentially to recognize the distinctive
expropriation of lands to be subdivided contribution of the late Felix Manalo to
into small lots for resale at cost to the culture of the Philippines, rather
individuals. The other is the transfer, than to commemorate his founding and
through the exercise of this power, of leadership of the Iglesia ni Cristo. The
utilities and other private enterprise to practical reality that greater benefit
the government. It is accurate to state may be derived by members of the
then that at present whatever may be Iglesia ni Cristo than by most others

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SALUD, VANIA | CAPCO, REINIER | REYES, LOUISA | ASAYO, MERRY JEOYA|

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could well be true but such a peculiar eminent domain cases is a judicial
advantage still remains to be merely function. The executive department or the
incidental and secondary in nature. legislature may make the initial
Indeed, that only a few would actually determinations but when a party claims a
benefit from the expropriation of violation of the guarantee in the Bill of
property does not necessarily diminish Rights that private property may not be
the essence and character of public use. taken for public use without just
compensation, no statute, decree, or
executive order can mandate that its own
determination shall prevail over the
DOCTRINE: EPZA vs. Dulay court's findings. Much less can the courts
be precluded from looking into the "just-
DETERMINATION OF JUST ness" of the decreed compensation.
COMPENSATION: It is violative of due
process to deny to the owner the The method of ascertaining just
opportunity to prove that the valuation in compensation under the aforecited
the tax documents is unfair or wrong. And decrees constitutes impermissible
it is repulsive to basic concepts of justice encroachment on judicial prerogatives. It
and fairness to allow the haphazard work tends to render this Court initial in a
of a minor bureaucrat or clerk to matter which under the Constitution is
absolutely prevail over the judgment of a reserved to it for final determination.
court promulgated only after expert Thus, although in an expropriation
commissioners have actually viewed the proceeding the court technically would
property, after evidence and arguments still have the power to determine the just
pro and con have been presented, and compensation for the property, following
after all factors and considerations the applicable decrees, its task would be
essential to a fair and just determination relegated to simply stating the lower
have been judiciously evaluated. x x x P.D. value of the property as declared either
No. 1533, which eliminates the court's by the owner or the assessor. As a
discretion to appoint commissioners necessary consequence, it would be
pursuant to Rule 67 of the Rules of Court, useless for the court to appoint
is unconstitutional and void. EPZA v. commissioners under Rule 67 of the
Dulay, 149 SCRA 305 (1987) Rules of Court. Moreover, the need to
satisfy the due process clause in the
taking of private property is seemingly
DETERMINATION OF JUST fulfilled since it cannot be said that a
COMPENSATION IS A POWER THAT judicial proceeding was not had before
BELONGS TO THE COURT. The the actual taking.
determination of "just compensation" in

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However, the strict application of the means the value of the property at the
decrees during the proceedings would be time of the taking. It means a fair and full
nothing short of a mere formality or equivalent for the loss sustained. All the
charade as the court has only to choose facts as to the condition of the property
between the valuation of the owner and and its surroundings, its improvements
that of the assessor, and its choice is and capabilities, should be considered. In
always limited to the lower of the two. this particular case, the tax declarations
The court cannot exercise its discretion or presented by the petitioner as basis for
independence in determining what is just just compensation were made by the
or fair. Even a grade school pupil could Lapu-Lapu municipal, later city assessor
substitute for the judge insofar as the long before martial law, when land was
determination of constitutional just not only much cheaper but when assessed
compensation is concerned. We are values of properties were stated in figures
convinced and so rule that the trial court constituting only a fraction of their true
correctly stated that the valuation in the market value. The private respondent was
decree may only serve as a guiding not even the owner of the properties at
principle or one of the factors in the time. It purchased the lots for
determining just compensation but it may development purposes. To peg the value
not substitute the court's own judgment of the lots on the basis of documents
as to what amount should be awarded which are out of date and at prices below
and how to arrive at such amount. A the acquisition cost of present owners
return to the earlier well-established would be arbitrary and confiscatory.
doctrine, to our mind, is more in keeping
with the principle that the judiciary
should live up to its mission "by vitalizing
and not denigrating constitutional rights." EPZA vs. DULAY
(See Salonga v. Cruz Paño, 134 SCRA G.R. No. L-59609, 29 April 1987
438, 462; citing Mercado v. Court of
First Instance of Rizal, 116 SCRA 93.) FACTS: A certain parcel of land was
reserved by the President of the
The doctrine we enunciated in National Philippines for petitioner Export
Housing Authority v. Reyes, supra, Processing Zone Authority (EPZA) for the
therefore, must necessarily be abandoned establishment of an export processing
if we are to uphold this Court's role as the zone. However, not all of the reserved
guardian of the fundamental rights area was public land. The petitioner made
guaranteed by the due process and equal an offer to purchase the lands registered
protection clauses and as the final arbiter
in the name of the private respondent, but,
over transgressions committed against the parties failed to have an agreement on
constitutional rights. Just compensation the sale of the property. Thus, the
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petitioner filed a complaint for commissioners pursuant to Rule 67 of the


expropriation with a prayer for the Rules of Court, is unconstitutional and
issuance of a writ of possession against void, since constitutes an impermissible
private respondent on the Court of First encroachment on judicial prerogatives.
Instance of Cebu. The respondent judge The determination of "just compensation"
favored the petition and issued a writ of in eminent domain cases is a judicial
possession authorizing the petitioner to function. The executive department or the
take into possession the said property. legislature may make the initial
Having determined the just compensation determinations but when a party claims a
as only the issue to be resolved, the violation of the guarantee in the Bill of
respondent judge issued an order Rights that private property may not be
regarding the appointment of certain taken for public use without just
persons as commissioners who are tasked compensation, no statute, decree, or
to report to the court the just executive order can mandate that its own
compensation for the properties sought to determination shag prevail over the
be expropriated. Consequently, court's findings. Much less can the courts
commissioners were appointed and, be
afterwards, recommended in their report
that the amount of P15.00 per square
meter as the fair and reasonable value of
just compensation for the properties. DOCTRINE: Municipality of Parañaque
vs. V.M. Realty Corp.
Subsequently, petitioners objected to the
said order on the grounds that P.D. No. CONDITIONS FOR THE VALID EXERCISE
1533 has superseded Section 5 to 8 of
OF EMINENT DOMAIN BY LOCAL
Rule 67 of the Rules of court on the GOVERNMENT UNITS. Petitioner
ascertainment of just compensation contends that a resolution approved by
through commissioners. the municipal council for the purpose of
initiating an expropriation case
ISSUE: Whether or not Sections 5 to 8, "substantially complies with the
Rule 67 of the Revised Rules of Court had requirements of the law" because the
been repealed or deemed amended by P.D. terms "ordinance" and "resolution" are
No. 1533 insofar as the appointment of synonymous for "the purpose of
commissioners to determine the just bestowing authority on the local
compensation is concerned. government unit through its chief
executive to initiate the expropriation
HELD: The Supreme Court ruled that the
proceedings in court in the exercise of the
P.D. No. 1533, which eliminates the power of eminent domain."
court’s discretion to appoint

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Petitioner seeks to bolster this contention Provided, however, That the power of
by citing Article 36, Rule VI of the Rules eminent domain may not be exercised
and Regulations Implementing the Local unless a valid and definite offer has been
Government Code, which provides: previously made to the owner, and such
offer was not accepted:
"If the LGU fails to acquire a private
property for public use, purpose, or Provided, further, That the local
welfare through purchase, the LGU may government unit may immediately take
expropriate said property through a possession of the property upon the filing
resolution of the Sanggunian authorizing of the expropriation proceedings and upon
its chief executive to initiate making a deposit with the proper court of
expropriation proceedings." at least fifteen percent (15%) of the fair
market value of the property based on the
The Court disagrees. The power of current tax declaration of the property to
eminent domain is lodged in the be expropriated: Provided, finally, That, the
legislative branch of government, which amount to be paid for the
may delegate the exercise thereof to LGUs, expropriated .property shall be determined
other public entities and public utilities. by the proper court, based on the fair
An LGU may therefore exercise the power market value at the time of the taking of
to expropriate private property only the property."
when authorized by Congress and subject
to the latter's control and restraints Thus, the following essential requisites
imposed "through the law conferring the must concur before an LGU can exercise
power or in other legislations." In this the
case, Section 19 of RA 7160, which power of eminent domain:
delegates to LGUs the power of eminent
domain, also lays down the parameters 1. An ordinance is enacted by the local
for its exercise. It provides as follows: legislative council authorizing the local
chief executive, in behalf of the LGU, to
exercise the power of eminent domain or
"Section 19. Eminent Domain. — A local pursue expropriation proceedings over a
government unit may, through its chief particular private property.
executive and acting pursuant to an
ordinance, exercise the power of eminent 2. The power of eminent domain is
domain for public use, or purpose, or exercised for public use, purpose or welfare,
welfare for the benefit of the poor and the or for the benefit of the poor and the
landless, upon payment of just landless.
compensation, pursuant to the provisions
of the Constitution and pertinent laws.

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3. There is payment of just compensation, Thus, petitioner appealed to the Court of


as required under Section 9, Article III of Appeals. But the appellate court affirmed
the Constitution, and other pertinent laws. in toto the trial court’s decision.

4. A valid and definite offer has been ISSUE: Whether or not the exercise of the
previously made to the owner of the power of eminent domain is valid.
property sought to be expropriated, but
said offer was not accepted. HELD:The following essential requisites
must concur before an LGU can exercise
the power of eminent domain:
Municipality of Parañaque vs. V.M.
Realty Corporation (1) An ordinance is enacted by the
G.R. No. 127820, 20 July 1998 local legislative council
authorizing the local chief
FACTS: A complaint for expropriation executive, in behalf of the LGU, to
was filed by the Municipality of exercise the power of eminent
Parañaque against V.M. Realty domain or pursue expropriation
Corporation involving two parcels of land proceedings over a particular
located at Parañaque, Metro Manila. The private property.
complaint was in pursuant to
Sangguniang Bayan Resolution No. 93-95, (2) The power of eminent domain is
Series of 1993. The complaint was for the exercised for public use, purpose
purpose of alleviateing the living or welfare, or for the benefit of
conditions of the underprivileged by the poor and the landless.
providing homes for the homeless
through a socialized housing project. (3) There is payment of just
compensation, as required
Previously, an offer for the sale of the under Section 9, Article III of the
property was made by the petitioner, Constitution, and other pertinent
however, the latter did not accept. The laws.
Regional Trial Court of Makati issued
order authorizing the petitioner to take (4) A valid and definite offer has
possession of the subject property upon been previously made to the
deposit to the Clerk of Court of an amount owner of the property sought to
equivalent to 15 percent of its fair market be expropriated, but said offer
value base on its current tax declaration. was not accepted.
However, upon the private respondent’s
motion to dismiss, the trial court nullified The Supreme Court ruled that there was
its previous order and dismissed the case. no compliance with the first requisite

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since the mayor sought to exercise the payment of just compensation. In


power of eminent domain pursuant to a Cosculluela v. Court of Appeals, we defined
resolution only. Ordinance is not just compensation as not only the correct
synonymous to resolution. An ordinance determination of the amount to be paid to
is a law, possesses a general or the property owner but also the payment
permanent character, and makes third of the property within a reasonable time.
reading for its enactment necessary. On Without prompt payment, compensation
the other hand, a resolution is merely a cannot be considered "just." Republic v.
declaration of the sentiment or opinion of Lim, G.R. 161656, June 29, 2005
a lawmaking body on a specific matter,
temporary in nature and its enactment
required only the decision of majority of REPUBLIC VS VICENTE LIM
all the Sanggunian members June 29, 2005 SANDOVAL-GUTIERREZ,
J.:

FACTS: The petitioner, Republic


instituted expropriation proceedings with
DOCTRINE: REPUBLIC VS. LIM
RECOVERY OF EXPROPRIATED LAND: the CFI of Cebu for Lots 932 and 939 of
In summation, while the prevailing the Banilad Friar Land Estate, Lahug,
doctrine is that "the non- payment of just Cebu City owned by the Denzons, for the
purpose of establishing a military
compensation does not entitle the private
reservation for the Philippine Army. RTC
landowner to recover possession of the
ordered the land to be expropriated upon
expropriated lots, however, in cases
where the government failed to pay just payment of just compensation.
compensation within five (5) years from
For failure of the petitioner to pay the just
the finality of the judgment in the
compensation, in 1961, Valdehueza and
expropriation proceedings, the owners
concerned shall have the right to recover Panerio, the successor in interest of the
possession of their property. This is in Denzons filed a suit for damages and
consonance with the principle that "the recovery of possession of the land against
AFP. CFI ruled in favor of Valdehueza and
government cannot keep the property
Panerio but held that they were not
and dishonor the judgment." To be sure,
entitled to the return of the property
the five-year period limitation will
because of the notation in the TCT which
encourage the government to pay just
stated that, “subject to the priority of the
compensation punctually. This is in
National Airports Corporation to acquire
keeping with justice and equity. After all,
said parcels of land, Lots 932 and 939
it is the duty of the government,
whenever it takes property from private upon previous payment of a reasonable
persons against their will, to facilitate the market value.” They were ordered to

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execute a deed of sale in favor the government, and the government may
Republic. take them whenever the necessity or the
exigency of the occasion demands,
In 1964, since the Republic still failed to however, the Constitution guarantees
pay the just compensation Valdehueza that when this governmental right of
and Panerio mortgaged the land to expropriation is exercised, it shall be
Vicente Lim, who later foreclosed the attended by compensation. From the
mortgage in 1976 for the former’s failure taking of private property by the
to pay. In 1991, Lim instituted a suit for government under the power of eminent
quieting of title against AFP and the domain, there arises an implied promise
Republic. The RTC held that Lim was the to compensate the owner for his loss.
absolute and exclusive owner of the
property. This decision was sustained by There are two stages in expropriation.
the CA. A petition for certiorari was filed The first stage determines the authority
with SC but the SC affirmed the CA to exercise the power of eminent domain
decision. A second motion for and the propriety of its exercise in the
reconsideration was filed. context of the facts involved in the suit.
The second phase of the eminent domain
ISSUE: Whether or not the Republic has action is concerned with the
retained ownership of the land despite its determination by the court of the just
failure to pay respondent’s predecessors- compensation for the property sought to
in-interest the just compensation. be taken. It is only upon the completion of
these two stages that expropriation is
HELD: As early as May 19, 1966, in said to have been completed
Valdehueza, this Court mandated the
Republic to pay respondent’s The recognized rule is that title to the
predecessors-in-interest the sum of P16, property expropriated shall pass from the
248.40 as “reasonable market value of the owner to the expropriator only upon full
two lots in question.” payment of the just compensation, and
that “non-payment of just compensation
Unfortunately, it did not comply and (in an expropriation proceedings) does
allowed several decades to pass without not entitle the private landowners to
obeying this Court’s mandate. Such recover possession of the expropriated
prolonged obstinacy bespeaks of lack of lots.” However, the facts of the present
respect to private rights and to the rule of case do not justify its application. It bears
law, which we cannot countenance. It is stressing that the Republic was ordered
tantamount to confiscation of private to pay just compensation twice; the first
property. While it is true that all private was in the expropriation proceedings and
properties are subject to the need of the second, in Valdehueza. Fifty-seven

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(57) years have passed since then. We title is otherwise obscure or doubtful so
cannot but construe the Republic’s failure that the plaintiff cannot with accuracy or
to pay just compensation as a deliberate certainty specify who are the real owners,
refusal on its part. Under such averment to that effect shall be made in
circumstance, recovery of possession is in the complaint. (1a)
order. In cases where the government
failed to pay just compensation within Section 2. Entry of plaintiff upon
five (5) years from the finality of the depositing value with authorized
judgment in the expropriation government depositary. — Upon the filing
proceedings, the owners concerned shall of the complaint or at any time thereafter
have the right to recover possession of and after due notice to the defendant, the
their property. This is in consonance with plaintiff shall have the right to take or
the principle that “the government cannot enter upon the possession of the real
keep the property and dishonor the property involved if he deposits with the
judgment.” authorized government depositary an
amount equivalent to the assessed value
of the property for purposes of taxation to
be held by such bank subject to the orders
of the court. Such deposit shall be in
money, unless in lieu thereof the court
authorizes the deposit of a certificate of
RULE 67
deposit of a government bank of the
Republic of the Philippines payable on
Expropriation
demand to the authorized government
Section 1. The complaint. — The right of depositary.
eminent domain shall be exercised by the
If personal property is involved, its value
filing of a verified complaint which shall
shall be provisionally ascertained and the
state with certainty the right and purpose
amount to be deposited shall be promptly
of expropriation, describe the real or
fixed by the court.
personal property sought to be
expropriated, and join as defendants all
persons owning or claiming to own, or After such deposit is made the court shall
occupying, any part thereof or interest order the sheriff or other proper officer to
forthwith place the plaintiff in possession
therein, showing, so far as practicable, the
of the property involved and promptly
separate interest of each defendant. If the
submit a report thereof to the court with
title to any property sought to be
service of copies to the parties. (2a)
expropriated appears to be in the
Republic of the Philippines, although
occupied by private individuals, or if the
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Section 3. Defenses and objections. — If a Section 4. Order of expropriation. — If the


defendant has no objection or defense to objections to and the defenses against the
the action or the taking of his property, he right of the plaintiff to expropriate the
may file and serve a notice of appearance property are overruled, or when no party
and a manifestation to that effect, appears to defend as required by this
specifically designating or identifying the Rule, the court may issue an order of
property in which he claims to be expropriation declaring that the plaintiff
interested, within the time stated in the has a lawful right to take the property
summons. Thereafter, he shall be entitled sought to be expropriated, for the public
to notice of all proceedings affecting the use or purpose described in the
same. complaint, upon the payment of just
compensation to be determined as of the
If a defendant has any objection to the date of the taking of the property or the
filing of or the allegations in the filing of the complaint, whichever came
complaint, or any objection or defense to first.
the taking of his property, he shall serve
his answer within the time stated in the A final order sustaining the right to
summons. The answer shall specifically expropriate the property may be
designate or identify the property in appealed by any party aggrieved thereby.
which he claims to have an interest, state Such appeal, however, shall not prevent
the nature and extent of the interest the court from determining the just
claimed, and adduce all his objections and compensation to be paid.
defenses to the taking of his property. No
counterclaim, cross-claim or third-party After the rendition of such an order, the
complaint shall be alleged or allowed in plaintiff shall not be permitted to dismiss
the answer or any subsequent pleading. or discontinue the proceeding except on
such terms as the court deems just and
A defendant waives all defenses and equitable. (4a)
objections not so alleged but the court, in
the interest of justice, may permit Section 5. Ascertainment of compensation.
amendments to the answer to be made — Upon the rendition of the order of
not later than ten (10) days from the filing expropriation, the court shall appoint not
thereof. However, at the trial of the issue more than three (3) competent and
of just compensation whether or not a disinterested persons as commissioners
defendant has previously appeared or to ascertain and report to the court the
answered, he may present evidence as to just compensation for the property
the amount of the compensation to be sought to be taken. The order of
paid for his property, and he may share in appointment shall designate the time and
the distribution of the award. (n) place of the first session of the hearing to

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be held by the commissioners and specify business of the corporation or person


the time within which their report shall taking the property. But in no case shall
be submitted to the court. the consequential benefits assessed
exceed the consequential damages
Copies of the order shall be served on the assessed, or the owner be deprived of the
parties. Objections to the appointment of actual value of his property so taken. (6a)
any of the commissioners shall be filed
with the court within ten (10) days from Section 7. Report by commissioners and
service, and shall be resolved within judgment thereupon. — The court may
thirty (30) days after all the order the commissioners to report when
commissioners shall have received copies any particular portion of the real estate
of the objections. (5a) shall have been passed upon by them, and
may render judgment upon such partial
Section 6. Proceedings by commissioners. report, and direct the commissioners to
— Before entering upon the performance proceed with their work as to subsequent
of their duties, the commissioners shall portions of the property sought to be
take and subscribe an oath that they will expropriated, and may from time to time
faithfully perform their duties as so deal with such property. The
commissioners, which oath shall be filed commissioners shall make a full and
in court with the other proceedings in the accurate report to the court of all their
case. Evidence may be introduced by proceedings, and such proceedings shall
either party before the commissioners not be effectual until the court shall have
who are authorized to administer oaths accepted their report and rendered
on hearings before them, and the judgment in accordance with their
commissioners shall, unless the parties recommendations. Except as otherwise
consent to the contrary, after due notice expressly ordered by the court, such
to the parties, to attend, view and report shall be filed within sixty (60) days
examine the property sought to be from the date the commissioners were
expropriated and its surroundings, and notified of their appointment, which time
may measure the same, after which either may be extended in the discretion of the
party may, by himself or counsel, argue court. Upon the filing of such report, the
the case. The commissioners shall assess clerk of the court shall serve copies
the consequential damages to the thereof on all interested parties, with
property not taken and deduct from such notice that they are allowed ten (10) days
consequential damages the consequential within which to file objections to the
benefits to be derived by the owner from findings of the report, if they so desire.
the public use or purpose of the property (7a)
taken, the operation of its franchise by the
corporation or the carrying on of the

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Section 8. Action upon commissioners' Section 10. Rights of plaintiff after


report. — Upon the expiration of the judgment and payment. — Upon payment
period of ten (10) days referred to in the by the plaintiff to the defendant of the
preceding section, or even before the compensation fixed by the judgment, with
expiration of such period but after all the legal interest thereon from the taking of
interested parties have filed their the possession of the property, or after
objections to the report or their tender to him of the amount so fixed and
statement of agreement therewith, the payment of the costs, the plaintiff shall
court may, after hearing, accept the report have the right to enter upon the property
and render judgment in accordance expropriated and to appropriate it for the
therewith, or, for cause shown, it may public use or purpose defined in the
recommit the same to the commissioners judgment, or to retain it should he have
for further report of facts, or it may set taken immediate possession thereof
aside the report and appoint new under the provisions of section 2 hereof.
commissioners; or it may accept the If the defendant and his counsel absent
report in part and reject it in part and it themselves from the court, or decline to
may make such order or render such receive the amount tendered, the same
judgment as shall secure to the plaintiff shall be ordered to be deposited in court
the property essential to the exercise of and such deposit shall have the same
his right of expropriation, and to the effect as actual payment thereof to the
defendant just compensation for the defendant or the person ultimately
property so taken. (8a) adjudged entitled thereto. (10a)

Section 9. Uncertain ownership; Section 11. Entry not delayed by appeal;


conflicting claims. — If the ownership of effect of reversal. — The right of the
the property taken is uncertain, or there plaintiff to enter upon the property of the
are conflicting claims to any part thereof, defendant and appropriate the same for
the court may order any sum or sums public use or purpose shall not be delayed
awarded as compensation for the by an appeal from the judgment. But if the
property to be paid to the court for the appellate court determines that plaintiff
benefit of the person adjudged in the has no right of expropriation, judgment
same proceeding to be entitled thereto. shall be rendered ordering the Regional
But the judgment shall require the Trial Court to forthwith enforce the
payment of the sum or sums awarded to restoration to the defendant of the
either the defendant or the court before possession of the property, and to
the plaintiff can enter upon the property, determine the damages which the
or retain it for the public use or purpose if defendant sustained and may recover by
entry has already been made. (9a) reason of the possession taken by the
plaintiff. (11a)

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Section 12. Costs, by whom paid. — The could do in such proceedings if he were of
fees of the commissioners shall be taxed age or competent. (14a)
as a part of the costs of the proceedings.
All costs, except those of rival claimants
litigating their claims, shall be paid by the
plaintiff, unless an appeal is taken by the
owner of the property and the judgment
is affirmed, in which event the costs of the POWER OF TAXATION
appeal shall be paid by the owner. (12a)

Section 13. Recording judgment, and its What is Taxation?


effect. — The judgment entered in
expropriation proceedings shall state Is a mode of raising revenue for public
definitely, by an adequate description, the purposes. (Cooley)
particular property or interest therein
expropriated, and the nature of the public
use or purpose for which it is
What is the power of taxation?
expropriated. When real estate is
expropriated, a certified copy of such Taxation is the power inherent in
judgment shall be recorded in the registry sovereignty to raise revenue to defray the
of deeds of the place in which the necessary expenses of government, that is,
property is situated, and its effect shall be for any public purpose. (COOLEY-alam n
to vest in the plaintiff the title to the real this memorize by heart)
estate so described for such public use or
purpose. (13a)

Section 14. Power of guardian in such What are taxes?


proceedings. — The guardian or guardian Are enforced proportional contributions
ad litem of a minor or of a person from persons and property, levied by the
judicially declared to be incompetent state by virtue of its sovereignty for the
may, with the approval of the court first support of the government and for all its
had, do and perform on behalf of his ward public needs (Cooley)
any act, matter, or thing respecting the
expropriation for public use or purpose of
property belonging to such minor or
person judicially declared to be • ATTY. GAB: Does power to tax include
incompetent, which such minor or person the power to destroy?
judicially declared to be incompetent 
 DEPENDS

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Justice Malcolm believed that the the tax may be successfully attacked as an
power to tax “is an attribute of inordinate and unconstitutional exercise
sovereignty. It is the strongest of all of the discretion that is usually vested
the powers of government.” This led exclusively in the legislature in
Chief Justice Marshall of the US ascertaining the amount of the tax.
Supreme Court, in the celebrated case of Justice Isagani Cruz
McCulloch v. Maryland, to declare: “The
power to tax involves the power to It is not the purpose of the government
destroy.” This might be construed to to throttle private business. On the
mean that the power to tax includes the contrary, the government ought to
power to regulate even to the extent of encourage private enterprise. Taxpayer,
prohibition or destruction (Cooley) since just like any concern organized for a
the inherent power to tax vested who to tax, lawful economic activity, has a right to
what to tax and how much tax is to be maintain a legitimate business. As aptly
imposed. held in Roxas, et al v. CA, et al.:

However, instead of being “The power of taxation is sometimes


regarded as a blanket authorization of called also the power to destroy. Therefore
unrestrained use of the taxing power for it should be exercised with caution to
any and all purposes, it is more minimize injury to the propriety rights of a
reasonable to say that the maxim “ the taxpayer. It must be exercised fairly,
power to tax is the power to destroy” is equally and uniformly, lest the tax collector
to describe not the purposes for which kill the ‘hen that lays the golden egg.”
the taxing power may be used but the
degree of vigor with which the taxing Who may exercise the power?
power may be employed in order to
raise revenue-Cooley Primarily, the legislature; also: local
legislative bodies
The power to tax includes the power
to destroy if it is used validly as an [Sec. 5, Art. X, Constitution]; and to a
implement of the police power in limited extent, the President when
discouraging and in effect, ultimately granted
prohibiting certain things or
enterprises inimical to the public Lifeblood Doctrine: The lifeblood theory
welfare. X x x But where the power to constitutes the theory of taxation, which
tax is used soley for the purpose of provides that the existence of government
raising revenues, the modern view is is a necessity; that government cannot
that it cannot be allowed to confiscate continue without means to pay its
or destroy. If this is sought to be done, expenses; and that for these means it has

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a right to compel its citizens and property


within its limits to contribute.
*pag di ganyan ang recit mo sabihan
masasabihan ka ng “your foundaaation in
taxaaation is very weak!!!” at “your
At dahil addict ako isama din natin si J. answer is off tangent” (gusto ko idagdag
Japar Dimaapao ang co-tangent, sine, co-sine, secant at co-
secant sa trigonometry..hahaha pero kung
di dahil sa kanya di ko mamemorize yan
Question: How is Lifeblood Doctrine at di maganda ang tax ko )
manifested? Answer in 4 sentences
Answer: (ahm ahm in his voice) In the
case of CIR vs. ALGUE, Inc., 158 SCRA 17, THEORIES IN TAXATION:
“Taxes are what we pay for civilized society.
Without taxes, the government would be
paralyzed for lack of the motive power to 1. Necessity Theory –It is a
activate and operate it. Hence, despite the necessary burden to preserve the
natural reluctance to surrender part of State’s sovereignty and a means to
one’s hard-earned income to the taxing give the citizenry an army to resist
authorities, every person who is able to aggression, a navy to defend its
must contribute his share in the burden of shores from invasion, a corps of
running the government. The government, civil servants to serve, public
for its part, is expected to respond in the improvements for the enjoyment
form of tangible and intangible benefits of the citizenry, and those which
intended to improve the lives of the people come within the State’s territory
and enhance their material and moral and facilities and protection which
values.” a government is supposed to
provide.

Improved the ruling of CIR v. ALGUE this 2. Benefits-Protection Theory –


was asked in 2005 bar examination bases the power of the State to
Taxes are the lifeblood of the nation demand and receive taxes on the
through which the government reciprocal duties of support and
protection. The citizen supports
agencies continue to operate and with
the State by paying the portion
which the State effects its functions for
from his property that is
the welfare of its constituents. (CIR v.
demanded in order that he may, by
CTA)
means thereof, be secured in the

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enjoyment of the benefits of an same class shall be taxed at the same


organized society. rate. (Dimaapao, Tax Principles and
Remedies)

3. Symbiotic Relationship Theory –


case of CIR v. Algue mentioned
above Atty. Gab: What is the system of
taxation in the Philippine?

Atty. Gab: What is the difference of PROGRESSIVE. Basis: Congress shall


Uniformity and Equality in Taxation? evolve a progressive system of taxation.
(Art. VI, Sec. 28[1])
Equality in taxation is
accomplished when the burden of the tax
fails equally and impartially upon all the *Taxation is progressive when its
persons and property subject to it, so that rate goes up depending on the resources
no higher rate or greater levy in
of the person affected.
proportion to value is imposed upon one
person or species or property than upon
others similarly situated or of like
character. Progressive taxation is built on the
principle of the taxpayer’s ability to pay.
This principle has its provenance in Adam
Smith’s Canons of Taxation, viz.:
Uniformity requires that all
taxable property shall be alike subjected “The subjects of every state ought
to the tax, and this requirement is to contribute towards the support of the
violated if particular kinds, species or government, as nearly as possible, in
items of property are selected to bear the proportion to their respective abilitites:
whole burden of the tax, while others, that is, in proportion to the revenue
which should be equally subject to it, are which they respectively enjoy under the
left untaxed. protection of the state.”

In other words, equality in What about Regressive taxation? - to


taxation simply means that the tax shall increase productivity
be strictly proportional to the relative
value of the property (Cooley) In
contrast, uniformity in taxation means
that persons or things belonging to the

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Is a tax law adopting a regressive moral incentives to legislation, not


system of taxation valid? judicially enforceable rights.

The Constitution does not really


prohibit the imposition of regressive
taxes. What it simply provides is that *kay Justice Dimaapao ko yan nakuha
Congress shall evolve a progressive
system of taxation. The Constitutional
provision should be construed to mean Atty. Gab: what is Public Use?- has this
simply that “direct taxes are to be been expanded in taxation as well? Yes,
preferred and indirect taxes, as much as pascual v 
public works
[however in my
possible, should be minimized.” (E. Notes: Public use is strict in taxation, it
Fernando, Constitution of the Philippines) must be direct while public use in ED is
Indeed, the mandate to Congress is not to expanded which includes indirect
prescribe, but to evolve a progressive tax advantage] (it’s for you to decide kung
system. This is a mere directive upon expanded or not sa taxation ang public
Congress, not a justiciable right or a use baka na-bingi lang ako. LOL hehe) 

legally enforceable one. We cannot avoid
regressive taxes but only minimize them. Alternative Answer:
(Tolentino v. Sec. of Finance [1995]).
The term “public purpose” is not
defined. It is an elastic concept that can be
Tolentino v. Sec. of Finance instructs: hammered to fit modern standards.
Jurisprudence states that “public purpose”
should be given a broad interpretation. It
“Regressive is not a negative does not only pertain to those purposes
standard for courts to enforce. What which traditionally viewed as essentially
Congress is required by the Constitution government functions, such as building
to do is to “evolve a progressive system of roads and delivery of basic services, but
taxation.” This is a directive to Congress, also includes those purposes designed to
just like the directive to it to give priority promote social justice. Thus, public
to the enactment of laws for the money may now be used for the
enhancement of human dignity and the relocation of illegal settlers, low-cost
reduction of social, economic and political housing and urban or agrarian reform.
inequalities [Art. XIII, Sec. 1] or for the (PPI vs. Fertphil Corp)
promotion to the right to “quality
education” [Art. XIV, Sec.1] These Justice Isagani Cruz defines “public
provisions are put in the Constitution as purpose” as embracing not merely direct
public benefit or advantage but also
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indirect public benefit. 3. To a limited extent, the President


when granted delegated tariff
Why is taxation important? powers [Sec. 28(2), Art. VI]

Taxation is important because:


LIMITATIONS ON THE EXERCISE
1. No constitutional government can
exist without it; 1. Due process of law
2. It is one great power upon which
- Tax should not be confiscatory. With the
the whole national fabric is based;
legislature primarily lies the discretion to
3. It is necessary for the existence
determine the nature, object, extent,
and prosperity of the nation; and
coverage and situs of taxation. But where
4. It is the lifeblood of the nation.
a tax measure becomes so unconscionable
(ALBANO)
and unjust as to amount to confiscation of
property, courts will not hesitate to strike
Upon which is taxation based? it down, for despite all its plenitude, the
power to tax cannot override
Taxation is based on necessity and the constitutional prescriptions.
reciprocal duties of protection and
support between the State and those that
are subject to its authority, and in the
exclusive sovereignty and jurisdiction of 2. Equal protection clause
the State over all persons and property - Taxes should be uniform and equitable
within its limits for governmental [Sec28. (1), Art. VI]
purposes. (Cooley, Albano). The power of
taxation rests on necessity and is an
essential and inherent attribute of
sovereignty. 3. It must be for a PUBLIC PURPOSE
If the taxation was made for a special
purpose [Sec. 29(3), Art. VI] – it must be
Who may exercise this power? treated as a special fund and paid out for
such purpose only; when purpose is
1. Primarily, the legislature (plenary fulfilled, the balance, if any, shall be
power) transferred to the general funds of the
2. Local legislative bodies as Government.
delegated (Sec. 5, Art. X,
Constitution)

Atty. Gab: What is double taxation?

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Double Taxation 1. DIRECT – constitutes double


taxation in the objectionable or
- It happens when additional taxes are prohibited sense. This occurs
laid on the same subject by the same when the same property is taxed
taxing jurisdiction during the same taxing twice when it should be taxed but
period and for the same purpose. once; both taxes must be imposed
on the same property or subject
- It is not prohibited as long as equal
matter, for the same purpose, by
protection clause is not violated.
the same State, Government, or
- What is prohibited is DOUBLED taxing authority, within the same
TAXATION because it applies only to jurisdiction or taxing district,
specific individual which is a violation of during the same taxing period, and
equal protection clause. they must be of the same kind or
character of tax.
2. INDIRECT- is permissible double
taxation. This is allowed if the
There is double where one tax is
taxes are of different nature or
imposed by the State and other is
character, imposed by different
imposed by the city; it being widely
taxing authorities. It has been held
recognized that there is nothing
that a real estate tax and the
inherently obnoxious in the tenement tax imposed by local
requirement that license fees or taxes
ordinace although imposed by the
be enacted with respect to the same
same taxing authority, are not of
occupation, calling or activity by both
the same kind or character.
the state and the political subdivision
(Villanueva v. Iloilo City)
thereof. (Cooley) 3. DOMESTIC – this arises when the
Double Taxation. Additional taxes are taxes are imposed by the local or
laid on the same subject by the same national government (within the
taxing jurisdiction during the same taxing same state).
period and for the same purpose. See: 4. INTERNATIONAL- refers to the
Punzalan v. Municipal Board of Manila, imposition of comparable taxes in
95 Phil 46. two or more states on the same
taxpayer in respect of the same
subject matter and for identical
periods. Double taxation usually
takes place when a person is
Kinds of Double Taxation: resident of a contracting state and
derives income from, or owns
capital in, the other contracting

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state and both states impose tax on • Tax exemption- required vote?
that income or capital. (CIR vs. S.C. Majority

Johnson and Son, Inc)
• Avelino v Cuenco (how is majority
construed)
The Supreme Court declared that
double taxation, in general, is not
forbidden by our Constitution since It was held that there is a quorum
we have not adopted as part thereof that 12 being the majority of 23. In fine,
the injunction against double all the four justice agree that the Court
taxation found in the Constitution being confronted with the practical
of the United States and some states situation that of the twenty three
of the Union. Double taxation senators who may participate in the
becomes obnoxious only where the Senate deliberations in the days
taxpayer is taxed twice for the immediately after this decision, twelve
benefit of the same governmental senators will support Senator Cuenco
entity or by the same jurisdiction and, at most, eleven will side with
for the same purpose, but not in a Senator Avelino, it would be most
case where one tax is imposed by injudicious to declare the latter as the
the State and the other by the city rightful President of the Senate, that
or municipality. (Pepsi-Cola office being essentially one that
Bottling Co. v. Mun. of Tanauan, depends exclusively upon the will of
Leyte) the majority of the senators, the rule of
the Senate about tenure of the
President of that body being amenable
at any time by that majority. And at any
Despite the lack of a specific session hereafter held with thirteen or
prohibition, however double more senators, in order to avoid all
taxation will not be allowed if it controversy arising from the
results in a violation of the equal divergence of opinion here about
protection clause. Hence, if certain quorum and for the benefit of all
properties are subjected to an concerned, the said twelve senators
additional tax whereas others who approved the resolutions herein
similarly situated are not similarly involved could ratify all their acts and
taxed, the owners of the properties thereby place them beyond the shadow
would have a right to complain. of a doubt.

(Cruz, Constitutional Law)
• Majority of ALL members of house
(fixed), majority of the house

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(variable) 
 religious, charitable, or educational


purposes shall be exempt from taxation.
• Quorum- majority of the house 


• Senate preside- majority of all members (4) No law granting any tax exemption
of the house 
 shall be passed without the concurrence
of a majority of all the Members of the
• 23 senators, 1 vacant. Out 5 of 23 went Congress.
to US. Quorum? Senate

 President? 
 Atty. Gab: Religious org has two
parcels of land. TCT 1- church TCT 2-
Atty. Gab? Does the constitution directly 
convent. Are both tax exempt? Kahit
grants exemption? Yes living quarters lang ang TCT 
2?
Exclusively includes incidental 

Section 28. (1) The rule of taxation shall
be uniform and equitable. The Congress LLadoc v CIR 

shall evolve a progressive system of
taxation. • RC church owns a property and is being
asses for RPT. Church 
presented
as evidence its ownership. Is that
(2) The Congress may, by law, authorize enough? No, it must be 
actually,
the President to fix within specified limits, exclusively and directly used for
and subject to such limitations and religious purpose 

restrictions as it may impose, tariff rates,
import and export quotas, tonnage and • RC built a church on the property of A.
wharfage dues, and other duties or May be A be assessed for 
RPT?
imposts within the framework of the No, ownership is not important but
national development program of the USE. 

Government.
• Meaning of ADE? Include incidental 


(3) Charitable institutions, churches • Lung center case- charitable purpose 



and personages or convents
appurtenant thereto, mosques, non-
profit cemeteries, and all lands,
buildings, and improvements, actually, 5. Tax Exemptions
directly, and exclusively used for

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Requisite: No law granting any tax C) Sec. 4 (4), Art. XIV: Subject to
exemption shall be passed without the conditions prescribed by law, all
concurrence of a majority of all the grants, endowments, donations, or
members of the Congress. [Sec28. (4), Art. contributions used actually,
VI] directly, and exclusively for
educational purposes shall be
- In granting tax exemption, is ownership exempt from tax.
material? NO, the USE determines D) Where tax exemption is granted
exemption. gratuitously, it may be revoked at
will; but not if granted for a
valuable consideration.
A) Sec. 28 (3), Art. VI: Charitable
institutions, churches and
parsonages or convents 6. Police Power vs. Taxation
appurtenant thereto, mosques, The distinction between the two rests in
non-profit cemeteries, and all the purpose.
lands, buildings and improvements,
actually, directly and exclusively - If generation of revenue is the
used for religious, charitable or primary purpose and the
educational purposes shall be regulation is merely incidental, the
exempt from taxation. imposition is a tax; but if
B) Sec. 4 (3), Art. XIV: All revenues regulation is the primary purpose,
and assets of non-stock, non-profit the fact that revenue is incidentally
educational institutions used raised does not make the
actually, directly, and exclusively imposition a tax.
for educational purposes shall be
exempt from taxes and duties.
Upon the dissolution or cessation Atty. Gab: difference of License fee
of the corporate existence of such from tax?
institutions, their assets shall be 7. License Fee vs. Tax
disposed of in the manner
provided by law. Proprietary LICENSE FEE TAX
educational institutions, including
those cooperatively owned, may It is a police It is a revenue
likewise be entitled to such measure. measure.
exemptions, subject to the
limitations provided by law, Amount collected Amount of tax may
including restrictions on dividends for a license fee is be unlimited
and provisions for reinvestment. limited to the cost provided it is not

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of permit and confiscatory Atty. G. Question: What are regressive


reasonable police taxes?
regulation (except
when the license Answer: In terms of individual income
fee is imposed on a and wealth, a regressive tax imposes a
non-useful greater burden (relative to resources) on
occupation) the poor than on the rich: there is an
inverse relationship between the tax rate
It is paid for the Tax is imposed on and the taxpayer's ability to pay, as
privilege of doing persons or measured by assets, consumption, or
something and may property for income. These taxes tend to reduce
be revoked when revenue. the tax burden of the people with a higher
public interest so ability to pay, as they shift the relative
inquires burden increasingly to those with a lower
ability to pay.

Kinds of License Fee:


Inherent Limitations:
1. For useful occupations or
enterprises 1. Public Purpose
2. For non-useful occupations or 2. International Comity
enterprises. When a license fee is 3. Territoriality
imposed in order to discourage 4. Non-Delegation of the Power to
non-useful occupations or Tax
enterprises, the amount imposed 5. Exemption from taxation of
may be a bit exorbitant. [Physical Government
Therapy Organ v. Municipal Board Agencies/Instrumetalities (J.
of Manila] Dimaapao book)

7. Supremacy of the national government Constitutional Limitations:


over local governments in taxation.
1. due process of law;
When local governments invoke the 2. equal protection of laws;
power is construed strictly against local 3. uniformity;
governments. The rule is that a tax is 4. progressive system of taxation;
never presumed and there must be clear 5. non-impairment of contracts;
language in the law imposing the tax. 6. non-imprisonment for non-
payment of poll tax;

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7. appropriation, revenue and tariff obvious example is where it can be shown


bills must originate exclusively in to amount to the confiscation of property
the House of Representative; from abuse of power. Petitioner alleges
8. presidential veto; arbitrariness but his mere allegation does
9. presidential power to fix tariff not suffice and there must be a factual
rates; foundation of such unconsitutional taint.
10. freedom of the press;
11. freedom of religion;
12. exemption from property tax of Limitation on equal protection clause. It
properties of religious, educational, suffices that the laws operate equally and
charitable institutions; uniformly on all persons under similar
13. tax exemptions granted to non- circumstances, both in the privileges
stock, non-profit educational conferred and the liabilities imposed.
institutions;
On the matter that the rule of taxation
14. no public money or property used
shall be uniform and equitable - this
for a particular sect, priest, requirement is met when the tax operates
religious minister, etc; with the same force and effect in every
15. grant of tax exemptions; place where the subject may be found."
16. grant of power of taxation to local Also, :the rule of uniformity does not call
government units; for perfect uniformity or perfect equality,
17. money collected for a special because this is hardly unattainable."
purpose shall be considered When the problem of classification
special fund; became of issue, the Court said: "Equality
18. exclusive appellate jurisdiction of and uniformity in taxation means that all
the Supreme Court over judgments
taxable articles or kinds of property of the
of lower courts involving the same class shall be taxed the same rate.
legality of taxes, imports, The taxing power has the authority to
assessment, fees, penalty. make reasonable and natural
(Dimaapao) classifications for purposes of taxation..."
As provided by this Court, where "the
differentation" complained of "conforms
to the practical dictates of justice and
DOCTRINES: SISON VS ANCHETA equity" it "is not discriminatory within
the meaning of this clause and is
therefore uniform."
Limitation on due process. It is
undoubted that it may be invoked where
a taxing statute is so arbitrary that it finds
no support in the Constitution. An SISON VS ANCHETA

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"Almost Always, the creative dedicated minority has made the world better."
SUBIJANO, CHRISTOPHER | DE TORRES, RECHEL | SIERRA, DONNABELLE | DIOKNO ANNE LORAIINE |
SALUD, VANIA | CAPCO, REINIER | REYES, LOUISA | ASAYO, MERRY JEOYA|

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Facts: Batas Pambansa 135 was enacted. expense, while professionals and
Sison, as taxpayer, alleged that its businessmen have no uniform costs or
provision (Section 1) unduly expenses necessary to produce their
discriminated against him by the income. There is ample justification to
imposition of higher rates upon his adopt the gross system of income taxation
income as a professional, that it amounts to compensation income, while
to class legislation, and that it continuing the system of net income
transgresses against the equal protection taxation as regards professional and
and due process clauses of the business income.
Constitution as well as the rule requiring
uniformity in taxation.
Issue: Whether BP 135 violates the due * On due process - it is undoubted that it
process and equal protection clauses, and may be invoked where a taxing statute is
the rule on uniformity in taxation. so arbitrary that it finds no support in the
Constitution. An obvious example is
Held: There is a need for proof of such where it can be shown to amount to the
persuasive character as would lead to a confiscation of property from abuse of
conclusion that there was a violation of power. Petitioner alleges arbitrariness
the due process and equal protection but his mere allegation does not suffice
clauses. Absent such showing, the and there must be a factual foundation of
presumption of validity must prevail. such unconsitutional taint.
Equality and uniformity in taxation means
that all taxable articles or kinds of On equal protection - it suffices that the
property of the same class shall be taxed laws operate equally and uniformly on all
at the same rate. The taxing power has the persons under similar circumstances,
authority to make reasonable and natural both in the privileges conferred and the
classifications for purposes of taxation. liabilities imposed.
Where the differentitation conforms to On the matter that the rule of taxation
the practical dictates of justice and equity, shall be uniform and equitable - this
similar to the standards of equal requirement is met when the tax operates
protection, it is not discriminatory within with the same force and effect in every
the meaning of the clause and is therefore
place where the subject may be found."
uniform. Taxpayers may be classified into
Also, :the rule of uniformity does not call
different categories, such as recipients of for perfect uniformity or perfect equality,
compensation income as against because this is hardly unattainable."
professionals. Recipients of compensation When the problem of classification
income are not entitled to make became of issue, the Court said: "Equality
deductions for income tax purposes as and uniformity in taxation means that all
there is no practically no overhead
MILKTEA NOTES 2017 | POLITICAL LAW COMPENDIUM
"Almost Always, the creative dedicated minority has made the world better."
SUBIJANO, CHRISTOPHER | DE TORRES, RECHEL | SIERRA, DONNABELLE | DIOKNO ANNE LORAIINE |
SALUD, VANIA | CAPCO, REINIER | REYES, LOUISA | ASAYO, MERRY JEOYA|

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taxable articles or kinds of property of the and the prosperity of private


same class shall be taxed the same rate. enterprises or business, does not
The taxing power has the authority to justify their aid by the use public
make reasonable and natural money.
classifications for purposes of taxation..."
As provided by this Court, where "the The rule is set forth in Corpus Juris
differentation" complained of "conforms Secundum in the following language:
to the practical dictates of justice and
equity" it "is not discriminatory within In accordance with the rule that
the meaning of this clause and is the taxing power must be exercised
therefore uniform." for public purposes only,
discussed suprasec. 14, money
raised by taxation can be
DOCTRINE: Pascual v Secretary of expended only for public purposes
Public Works and not for the advantage of
private individuals. (85 C.J.S. pp.
Public money may only be appropriated 645-646; emphasis supplied.)
for public purpose. As regards the legal
feasibility of appropriating public funds Explaining the reason underlying said
for a public purpose, the principle rule, Corpus Juris Secundum states:
according to Ruling Case Law, is this:
Generally, under the express or
It is a general rule that the implied provisions of the
legislature is without power to constitution, public funds may be
appropriate public revenue for used only for public purpose. The
anything but a public purpose. . . . It right of the legislature to
is the essential character of the appropriate funds is correlative
direct object of the expenditure with its right to tax, and, under
which must determine its validity constitutional provisions against
as justifying a tax, and not the taxation except for public
magnitude of the interest to be purposes and prohibiting the
affected nor the degree to which collection of a tax for one purpose
the general advantage of the and the devotion thereof to
community, and thus the public another purpose, no appropriation
welfare, may be ultimately of state funds can be made for other
benefited by their than for a public purpose.
promotion. Incidental to the public
or to the state, which results from xxx xxx xxx
the promotion of private interest

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"Almost Always, the creative dedicated minority has made the world better."
SUBIJANO, CHRISTOPHER | DE TORRES, RECHEL | SIERRA, DONNABELLE | DIOKNO ANNE LORAIINE |
SALUD, VANIA | CAPCO, REINIER | REYES, LOUISA | ASAYO, MERRY JEOYA|

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The test of the constitutionality of operation, the constitutional limitation


a statute requiring the use of infringed by said statute. Referring to the
public funds is whether the statute P85,000.00 appropriation for the
is designed to promote the public projected feeder roads in question, the
interest, as opposed to the legality thereof depended upon whether
furtherance of the advantage of said roads were public or private
individuals, although each property when the bill, which, latter on,
advantage to individuals became Republic Act 920, was passed by
might incidentally serve the public. Congress, or, when said bill was approved
(81 C.J.S. pp. 1147; emphasis by the President and the disbursement of
supplied.) said sum became effective, or on June 20,
1953 (see section 13 of said Act).
Needless to say, this Court is fully in Inasmuch as the land on which the
accord with the foregoing views which, projected feeder roads were to be
apart from being patently sound, are a constructed belonged then to respondent
necessary corollary to our democratic Zulueta, the result is that said
system of government, which, as such, appropriation sought a private purpose,
exists primarily for the promotion of the and hence, was null and void. 4 The
general welfare. Besides, reflecting as donation to the Government, over five (5)
they do, the established jurisprudence in months after the approval and effectivity
the United States, after whose of said Act, made, according to the
constitutional system ours has been petition, for the purpose of giving a
patterned, said views and jurisprudence "semblance of legality", or legalizing, the
are, likewise, part and parcel of our own appropriation in question, did not cure its
constitutional law.lawphil.net aforementioned basic defect.
Consequently, a judicial nullification of
The validity of the appropriation is said donation need not precede the
determined under the circumstances declaration of unconstitutionality of said
prevailing at the time of appropriation and appropriation.
not on subsequent events.

PASCUAL VS SECRETARY OF PUBLIC


The validity of a statute depends upon the WORKS
powers of Congress at the time of its
passage or approval, not upon events Facts:
occurring, or acts performed, On August 31, 1954, petitioner Wenceslao
subsequently thereto, unless the latter Pascual, as Provincial Governor of Rizal,
consists of an amendment of the organic instituted this action for declaratory relief,
law, removing, with retrospective
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SUBIJANO, CHRISTOPHER | DE TORRES, RECHEL | SIERRA, DONNABELLE | DIOKNO ANNE LORAIINE |
SALUD, VANIA | CAPCO, REINIER | REYES, LOUISA | ASAYO, MERRY JEOYA|

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with injunction, upon the ground that approval of Republic Act. No. 920, and the
Republic Act No. 920, entitled "An Act sum of P85,000.00 appropriated therein
Appropriating Funds for Public Works", for the construction of the projected feeder
approved on June 20, 1953, contained, in roads in question; that the municipal
section 1-C (a) thereof, an item (43[h]) of council of Pasig endorsed said letter of
P85,000.00 "for the construction, respondent Zulueta to the District
reconstruction, repair, extension and Engineer of Rizal, who, up to the present
improvement" of Pasig feeder road "has not made any endorsement
terminals, that, at the time of the passage thereon" that inasmuch as the projected
and approval of said Act, the said feeder feeder roads in question were private
roads were "nothing but projected and property at the time of the passage and
planned subdivision roads within the approval of Republic Act No. 920, the
Antonio Subdivision situated at Pasig, appropriation of P85,000.00 therein
Rizal" near Shaw Boulevard, not far away made, for the construction,
from the intersection between the latter reconstruction, repair, extension and
and EDSA, which projected feeder roads improvement of said projected feeder
"do not connect any government property roads, was illegal and, therefore, void
or any important premises to the main ab initio"; that said appropriation of
highway"; that the aforementioned P85,000.00 was made by Congress
Antonio Subdivision (as well as the lands because its members were made to
on which said feeder roads were to be believe that the projected feeder roads
construed) were private properties of in question were "public roads and not
respondent Jose C. Zulueta, who, at the time private streets of a private
of the passage and approval of said Act, subdivision"'; that, "in order to give a
was a member of the Senate of the semblance of legality, when there is
Philippines; that on May, 1953, respondent absolutely none, to the aforementioned
Zulueta, addressed a letter to the appropriation", respondents Zulueta
Municipal Council of Pasig, Rizal, offering executed on December 12, 1953, while
to donate said projected feeder roads to he was a member of the Senate of the
the municipality of Pasig, Rizal; that, on Philippines, an alleged deed of donation
June 13, 1953, the offer was accepted by of the four (4) parcels of land
the council, subject to the condition "that constituting said projected feeder roads,
the donor would submit a plan of the said in favor of the Government of the
roads and agree to change the names of Republic of the Philippines; that said
two of them"; that no deed of donation in alleged deed of donation was, on the
favor of the municipality of Pasig was, same date, accepted by the then
however, executed; that on July 10, 1953, Executive Secretary; that being subject
respondent Zulueta wrote another letter to to an onerous condition, said donation
said council, calling attention to the partook of the nature of a contract; that,

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"Almost Always, the creative dedicated minority has made the world better."
SUBIJANO, CHRISTOPHER | DE TORRES, RECHEL | SIERRA, DONNABELLE | DIOKNO ANNE LORAIINE |
SALUD, VANIA | CAPCO, REINIER | REYES, LOUISA | ASAYO, MERRY JEOYA|

Page | 102
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such, said donation violated the "semblance of legality", or legalizing, the


provision of our fundamental law appropriation in question, did not cure its
prohibiting members of Congress from aforementioned basic defect.
being directly or indirectly financially Consequently, a judicial nullification of
interested in any contract with the said donation need not precede the
Government, and, hence, is declaration of unconstitutionality of said
unconstitutional, as well as null and appropriation.
voidab initio, for the construction of the
projected feeder roads in question with Again, it is well-stated that the validity of
public funds would greatly enhance or a statute may be contested only by one
increase the value of the who will sustain a direct injury in
aforementioned subdivision of consequence of its enforcement. Yet,
respondent Zulueta, there are many decisions nullifying, at
the instance of taxpayers, laws
Issue: Whether the contested item of providing for the disbursement of
Republic Act No. 920 unconstitutional and, public funds, upon the theory that "the
therefor, illegal? expenditure of public funds by an officer
of the State for the purpose of
Held: No. The P85,000.00 appropriation administering an unconstitutional act
for the projected feeder roads in question, constitutes a misapplication of such
the legality thereof depended upon funds," which may be enjoined at the
whether said roads were public or private request of a taxpayer.
property when the bill, which, latter on,
became Republic Act 920, was passed by Republic Act No. 920 is unconstitutional,
Congress, or, when said bill was approved since the legislature is without power to
by the President and the disbursement of appropriate public revenue for anything
said sum became effective, or on June 20, but a public purpose and the project
1953 (see section 13 of said Act). feeder roads are at the time private
Inasmuch as the land on which the properties. The right of the legislature
projected feeder roads were to be to appropriate funds is correlative with
constructed belonged then to respondent its right to tax, and, under
Zulueta, the result is that said constitutional provisions against
appropriation sought a private purpose, taxation except for public purposes and
and hence, was null and void. prohibiting the collection of a tax for
one purpose and the devotion thereof to
The donation to the Government, over another purpose, no appropriation of
five (5) months after the approval and state funds can be made for other than
effectivity of said Act, made, according to for a public purpose.
the petition, for the purpose of giving a

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"Almost Always, the creative dedicated minority has made the world better."
SUBIJANO, CHRISTOPHER | DE TORRES, RECHEL | SIERRA, DONNABELLE | DIOKNO ANNE LORAIINE |
SALUD, VANIA | CAPCO, REINIER | REYES, LOUISA | ASAYO, MERRY JEOYA|

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and imprisonment in the discretion of the


court. The ordinance was in pursuance to
paragraph (1) Section 18 of the Revised
Charter of the City of Manila which
DOCTRINES: Punsalan v Municipal
empowers the Municipal Board of said city
Board of Manila
to impose a municipal occupation tax, not
to exceed P50 per annum, on persons
CASE DOCTRINE: Double taxation is not engaged in the various professions above
prohibited under the Constitution unless it referred to the plaintiffs, after having paid
is unduly oppressive and violates equal their occupation tax, now being required to
protection clause. pay the additional tax prescribed in the
ordinance. The plaintiffs paid the said tax
under protest. The lower court declared
the validity of the law authorizing the
The argument against double taxation
enactment of the ordinance, but
may not be invoked where one tax is
declared the latter illegal and void since
imposed by the state and the other is
its penalty provided for the non- payment
imposed by the city (1 Cooley on Taxation,
of tax was not legally authorized.
4th ed., p. 492), it being widely recognized
that there is nothing inherently obnoxious Issue: Is this ordinance and the law
in the requirement that license fees or authorizing it constitute class legislation,
taxes be exacted with respect to the same are unjust and oppressive, and authorize
occupation, calling or activity by both the what amounts to double taxation?
state and the political subdivisions
thereof. (51 Am. Jur., 341.) Held: NO. To begin with defendants'
appeal, we find that the lower court was
in error in saying that the imposition of
Punsalan vs. Municipal Board of the the penalty provided for in the ordinance
City of Manila G.R. No. L-4817, 26 May was without the authority of law. The last
1954 paragraph (kk) of the very section that
authorizes the enactment of this tax
Facts: An ordinance was approved by the ordinance (section 18 of the Manila
Municipal Board of the City of Manila Charter) in express terms also empowers
which imposes a municipal occupation tax the Municipal Board "to fix penalties for
on persons exercising various professions the violation of ordinances which shall not
in the city and penalizes non-payment of exceed to(sic) two hundred pesos fine or six
the tax by a fine of not more than two months" imprisonment, or both such fine
hundred pesos or by imprisonment of not and imprisonment, for a single
more than six months or by both such fine offense."Hence, the pronouncement below

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"Almost Always, the creative dedicated minority has made the world better."
SUBIJANO, CHRISTOPHER | DE TORRES, RECHEL | SIERRA, DONNABELLE | DIOKNO ANNE LORAIINE |
SALUD, VANIA | CAPCO, REINIER | REYES, LOUISA | ASAYO, MERRY JEOYA|

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that the ordinance in question is illegal brethren in the provinces.


and void because it imposes a penalty not
authorized by law is clearly without basis. Thirdly, Plaintiffs brand the ordinance
unjust and oppressive because they say
Secondly, In raising the hue and cry of that it creates discrimination within a
"class legislation", the burden of plaintiffs' class in that while professionals with
complaint is not that the professions to offices in Manila have to pay the tax,
which they respectively belong have been outsiders who have no offices in the city
singled out for the imposition of this but practice their profession therein are
municipal occupation tax; and in any not subject to the tax. Plaintiffs make a
event, the Legislature may, in its distinction that is not found in the
discretion, select what occupations ordinance. The ordinance imposes the tax
shall be taxed, and in the exercise of upon every person "exercising" or
that discretion it may tax all, or it may "pursuing" — in the City of Manila
select for taxation certain classes and naturally — any one of the occupations
leave the others untaxed. (Cooley on named, but does not say that such person
Taxation, Vol. 4, 4th ed., pp. 3393-3395.) must have his office in Manila. What
Plaintiffs' complaint is that while the law constitutes exercise or pursuit of a
has authorized the City of Manila to profession in the city is a matter of judicial
impose the said tax, it has withheld that determination. The argument against
authority from other chartered cities, not double taxation may not be invoked where
to mention municipalities. We do not one tax is imposed by the state and the
think it is for the courts to judge what other is imposed by the city (1 Cooley on
particular cities or municipalities Taxation, 4th ed., p. 492), it being widely
should be empowered to impose recognized that there is nothing
occupation taxes in addition to those inherently obnoxious in the
imposed by the National Government. requirement that license fees or taxes
That matter is peculiarly within the be exacted with respect to the same
domain of the political departments occupation, calling or activity by both
and the courts would do well not to the state and the political subdivisions
encroach upon it. Moreover, as the seat thereof.
of the National Government and with a
population and volume of trade many
times that of any other Philippine city
or municipality, Manila, no doubt, offers
a more lucrative field for the practice of DOCTRINES: Lladoc v Commissioner of
the professions, so that it is but fair that Internal Revenue
the professionals in Manila be made to
pay a higher occupation tax than their

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"Almost Always, the creative dedicated minority has made the world better."
SUBIJANO, CHRISTOPHER | DE TORRES, RECHEL | SIERRA, DONNABELLE | DIOKNO ANNE LORAIINE |
SALUD, VANIA | CAPCO, REINIER | REYES, LOUISA | ASAYO, MERRY JEOYA|

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CASE DOCTRINE: positive or express grant of such privilege


by law, in favor of petitioner, the
The tax exemption under Section 28(3), Art. exemption herein must be denied.
VI, applies only to real property tax and not
to excise taxes.
Lladoc v. Commissioner of Internal
Revenue GR L-19201, 16 June 1965
Section 22 (3), Art. VI of the Constitution
of the Philippines, exempts from taxation
cemeteries, churches and parsonages or
convents, appurtenant thereto, and Facts:
all lands, buildings, and improvements
used exclusively for religious purposes. In 1957, the MB Estate Inc., of Bacolod
The exemption is only from the payment City, donated P10,000.00 in cash to Fr.
of taxes assessed on such properties Crispin Ruiz then parish priest of
enumerated, as property taxes, as contra Victorias, Negros Occidental, and
distinguished from excise taxes. In the predecessor of Fr. Casimiro Lladoc, for the
present case, what the Collector assessed construction of a new Catholic Church in
was a donee's gift tax; the assessment was the locality. The total samount was
not on the properties themselves. It did actually spent for the purpose intended.
not rest upon general ownership; it was On 3 March 1958, MB Estate filed the
an excise upon the use made of the donor’s gift tax return. Under date of 29
properties, upon the exercise of the April 1960, the Commissioner of Internal
privilege of receiving the properties Revenue issued as assessment for donee’s
(Phipps vs. Com. of Int. Rec. 91 F 2d 627). gift tax against the Catholic Parish of
Manifestly, gift tax is not within the Victorias, Negros Occidental, of which
exempting provisions of the section just petitioner was the priest. The tax
mentioned. A gift tax is not a property tax, amounted to P1,370.00 including
but an excise tax imposed on the transfer surcharges, interest of 1% monthly from
of property by way of giftinter vivos, the 15 May 1958 to 15 June 1960, and the
imposition of which on property used compromise for the late filing of the
exclusively for religious purposes, does return. Petitioner lodged a protest to the
not constitute an impairment of the assessment and requested the withdrawal
Constitution. As well observed by the thereof. The protest and the motion for
learned respondent Court, the phrase reconsideration presented to the
"exempt from taxation," as employed in Commissioner of Internal Revenue were
the Constitution (supra) should not be denied. The petitioner appealed to the
interpreted to mean exemption from all CTA on 2 November 1960. After hearing,
kinds of taxes. And there being no clear, the CTA affirmed the decision of the

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"Almost Always, the creative dedicated minority has made the world better."
SUBIJANO, CHRISTOPHER | DE TORRES, RECHEL | SIERRA, DONNABELLE | DIOKNO ANNE LORAIINE |
SALUD, VANIA | CAPCO, REINIER | REYES, LOUISA | ASAYO, MERRY JEOYA|

Page | 106
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Commissioner of Internal Revenue except Exemption extends to uses which are


the imposition of compromise penalty of incidental to the main purposes. As
P20. Fr. Lladoc appealed to the Supreme early as 1916 in YMCA of Manila vs.
Court. Collector of lnternal Revenue, 33 Phil. 217
[1916], this Court ruled that while it may
Issue: Whether a donee’s gift tax may be be true that the YMCA keeps a lodging and
assessed against the Catholic Church. a boarding house and maintains a
restaurant for its members, still these do
Held: Yes. The phrase “exempt from not constitute business in the ordinary
taxation,” as employed in the acceptance of the word, but an institution
Constitution should not be interpreted to used exclusively for religious, charitable
mean exemption from all kinds of taxes. and educational purposes, and as such, it
Section 22(3), Art. VI of the Constitution is entitled to be exempted from taxation.
of the Philippines, exempts from taxation
cemeteries, churches and personages or In the case of Bishop of Nueva Segovia v.
convents, appurtenant thereto, and all Provincial Board of Ilocos Norte, 51 Phil.
lands, buildings, and improvements used 352 [1972], this Court included in the
exclusively for religious purposes. The exemption a vegetable garden in an
exemption is only from the payment of adjacent lot and another lot formerly used
taxes assessed on such properties as a cemetery. It was clarified that the
enumerated, as property taxes, as term "used exclusively" considers
contra-distinguished from excise taxes. incidental use also. Thus, the exemption
A donee’s gift tax is not a property tax but from payment of land tax in favor of the
an excise tax imposed on the transfer of convent includes, not only the land
property by way of gift inter vivos. Its actually occupied by the building but also
assessment was not on the property the adjacent garden devoted to the
themeselves. It does not rest upon general incidental use of the parish priest. The lot
ownership, but an excise upon the use which is not used for commercial
made of the properties, upon the exercise purposes but serves solely as a sort of
of the privilege of receiving the properties. lodging place, also qualifies for exemption
The imposition of such excise tax on because this constitutes incidental use in
property used for religious purposes does religious functions.
not constitute an impairment of the
Constitution. The phrase "exclusively used for
educational purposes" was further
clarified by this Court in the cases
DOCTRINE: Abra Valley College v Aquino of Herrera vs. Quezon City Board of
assessment Appeals, 3 SCRA 186 [1961]
and Commissioner of Internal Revenue vs.

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"Almost Always, the creative dedicated minority has made the world better."
SUBIJANO, CHRISTOPHER | DE TORRES, RECHEL | SIERRA, DONNABELLE | DIOKNO ANNE LORAIINE |
SALUD, VANIA | CAPCO, REINIER | REYES, LOUISA | ASAYO, MERRY JEOYA|

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Bishop of the Missionary District, 14 SCRA It must be stressed however, that while
991 [1965], thus — this Court allows a more liberal and non-
restrictive interpretation of the phrase
Moreover, the exemption in "exclusively used for educational
favor of property used purposes" as provided for in Article VI,
exclusively for charitable or Section 22, paragraph 3 of the 1935
educational purposes is 'not Philippine Constitution, reasonable
limited to property actually emphasis has always been made that
indispensable' therefor exemption extends to facilities which are
(Cooley on Taxation, Vol. 2, incidental to and reasonably necessary
p. 1430), but extends to for the accomplishment of the main
facilities which are purposes. Otherwise stated, the use of the
incidental to and school building or lot for commercial
reasonably necessary for purposes is neither contemplated by law,
the accomplishment of said nor by jurisprudence. Thus, while the use
purposes, such as in the of the second floor of the main building in
case of hospitals, "a school the case at bar for residential purposes of
for training nurses, a the Director and his family, may find
nurses' home, property use justification under the concept of
to provide housing facilities incidental use, which is complimentary to
for interns, resident the main or primary purpose—
doctors, superintendents, educational, the lease of the first floor
and other members of the thereof to the Northern Marketing
hospital staff, and Corporation cannot by any stretch of the
recreational facilities for imagination be considered incidental to
student nurses, interns, and the purpose of education.
residents' (84 CJS 6621),
such as "Athletic fields"
including "a firm used for
the inmates of the Abra Valley College vs. Aquino GR L-
institution. (Cooley on 39086, 15 June 1988
Taxation, Vol. 2, p. 1430).
Facts:
The test of exemption from taxation is the
The petitioner filed a complaint on 10 July
use of the property for purposes
1972 in the court a quo to annul and
mentioned in the Constitution (Apostolic
declare void the “Notice of Seizure” and
Prefect v. City Treasurer of Baguio, 71
the “Notice of Sale” of its lot and building
Phil, 547 [1941]).
located at Bangued, Abra, for non-

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"Almost Always, the creative dedicated minority has made the world better."
SUBIJANO, CHRISTOPHER | DE TORRES, RECHEL | SIERRA, DONNABELLE | DIOKNO ANNE LORAIINE |
SALUD, VANIA | CAPCO, REINIER | REYES, LOUISA | ASAYO, MERRY JEOYA|

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payment of real estate taxes and penalties Adonis Notes: The SC stated that if only
amounting to P5,140.31. On 12 April 1973, the judge had read the 1973 Constitution,
the parties entered into a stipulation of he should have known the difference
facts adopted and embodied by the trial between the 1935 and the 1973
court in its questioned decision. The trial Constitution and he could not have
court ruled for the government, holding summarily dismissed the case. There is a
that the second floor of the building is substantial distinction between the 1935
being used by the director for residential and the 1973 Constitution. In the 1935
purposes and that the ground floor used Constitution the requirement for
and rented by Northern Marketing exemption for real property taxes is
Corporation, a commercial establishment, “exclusively” , while the 1973
and thus the property is not being used Constitution requires
“exclusively” for educational purposes.
Instead of perfecting an appeal, petitioner Petitioner Abra Valley College is an
availed of the instant petition for review educational corporation and institution of
on certiorari with prayer for preliminary higher learning duly incorporated with
injunction before the Supreme Court, by the SEC in 1948. On 6 July 1972, the
filing said petition on 17 August 1974. Municipal and Provincial treasurers
(Gaspar Bosque and Armin Cariaga,
Issue: Whether the College is exempt respectively) and issued a Notice of
from taxes. Seizure upon the petitioner for the college
lot and building (OCT Q-83) for the
Held: Yes. While the Court allows a more satisfaction of said taxes thereon. The
liberal and non-restrictive interpretation treasurers served upon the petitioner a
of the phrase “exclusively used for Notice of Sale on 8 July 1972, the sale
educational purposes,” reasonable being held on the same day. Dr. Paterno
emphasis has always been made that Millare, then municipal mayor of Bangued,
exemption extends to facilities which are Abra, offered the highest bid of P 6,000 on
incidental to and reasonably necessary public auction involving the sale of the
for the accomplishment of the main college lot and building. The certificate of
purposes. While the second floor’s use, as sale was correspondingly issued to him.
residence of the director, is incidental to
education; the lease of the first floor “actually, directly & exclusively”. The SC
cannot by any stretch of imagination be remanded to the Court of Origin for
considered incidental to the purposes of further hearing. (excerpts from Sababan
education. The test of exemption from Notes)
taxation is the use of the property for
purposes mentioned in the Constititution.

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From ALBANO: under certain circumstances. (Manila Gas


v. collector)
When is a tax considered for a public
purpose?

It is considered for public purpose if the


proceeds thereof are used for the support
of the government, or for some organized What is the taxable situs of personal
object of government, or for the welfare of properties?
the community. (Beach vs. Branch Sheet).
A public purpose in taxation implies a The situs is the place where the property
direct relation between the primary is situated. However, with respect to
object of an appropriation to the public intangible personal properties, the situs
enjoyment. The essential point is that it follows the domicile of the owner under
affects them as a community and not the principle of mobilia sequntur
merely as individuals. (loan Assn. vs. personam. This is a legal fiction intended
Topeka) to prevent tax owners of certain forms of
personal property from escaping just
*The determination of Public Purpose of taxation. (State Deposit and T. Co. v.
tax is a legislative prerogative. Virginia)

Is a law imposing tax on the sale or X, an American citizen, is the owner of


lease of videotapes valid? shares of stock of Y Company. If he is
taxed in the Philippines, can he be
Yes, because it is designed to answer for taxed again in the USA without
the need to regulate the video industry, violating his right against double
particularly because of rampant film taxation?
piracy, the flagrant violation of
intellectual property rights and Yes, in cases of shares of stock, its situs
proliferation of pornographic video tapes. for the purposes of taxation is the state in
(Tio vs. Videogram regulatory Board). which they are permanently kept
regardless of the domicile of the owner or
Explain the requirement of the state in which the corporation was
territoriality in taxation. organized. This is best illustrated in the
case of Wells Fargo Bank v. Collector
It means that the power to tax operates where the Supreme Court ruled that the
only within the territorial jurisdiction of shares of stock left by a non-resident alien
the taxing authority. It cannot be decedent in an anonymous partnership in
exercised beyond the boundaries except the Philippines are subject to Philippine

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inheritance tax notwithstanding the It depends. If the tax exemption is based


mobilia rule. According to the Court, the on valuable consideration, it is
mobilia rule should yield to reason. The irrevocable since it takes the form and
shares of stock are also taxable in the essence of a contract. (Manila Railroad Co.
situs of their actual location, i.e., the v. Insular Collector of Customs). However,
Philippines. if it is spontaneous on the part of the
Legislature and no service or duty or
What is the meaning of the maxim other remunerative conditions have been
mobilia sequntur personam? imposed on the private party receiving
the exemption, it may be revoked at will
It means that intangible personal by the Legislature. (Christ Church vs.
property such as credits, bank deposits, Philadelpia)
bonds, corporate stocks which do not
admit of actual location and do not have Cooperatives, under RA 6938 as
inherent value but mere evidence of debts amended by RA 9520 enjoy
or property are usually taxable in the preferential tax treatment. Does the
state of residence of the owner. tax preferential treatment include the
(Louisville and Jeffersonville F Co. v. members? Explain.
Kentucky)
Yes. Under Article 2 of RA 6938, as
What is meant by uniformity in amended by RA 9520, it is a declared
taxation? policy of the State to foster the creation
and growth of cooperatives as a practical
It means that all taxable articles, or kinds vehicle for promoting self-reliance and
of property of the same class, shall be harnessing people power towards the
taxed at the same rate. (De Villata v. attainment of economic development and
Stanley). There is uniformity in taxation social justice. Thus, to encourage the
when a tax operates with the same force formation of cooperatives and to create
and effect on its subject wherever found. an atmosphere conducive to their growth
and development, the State extends all
What is meant by equality in taxation? forms of assistance to them, one of which
is providing cooperatives as preferential
It means that taxes shall be strictly tax treatment.
proportional to the relative value of the
taxable property. Cooperatives, including their members,
deserve a preferential tax treatment
If a tax exemption is revoked, is it because of the vital role they play in the
violative of the non-impairment of attainment of economic development and
contract clause? Explain. social justice. Thus, although taxes are the

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lifeblood of the government, the State’s cloak of authority and waives its
power to tax must give way to foster the governmental immunity. Truly, tax
creation and growth of cooperatives. To exemptions of this kind may not be
borrow the words of Justice Isagani Cruz: revoked without impairing the
“The power of taxation, while obligations of contracts. These
indispensable, is not absolute and may be contractual tax exemptions, however, are
subordinated to the demands of social not to be confused with tax exemptions
justice.” (Dumaguete Credit Cooperative granted under franchises. A franchise
v. CIR) partakes the nature of a grant which is
beyond the purview of the non-
Is there a distinction between the right impairment clause of the constitution.
of the State or any of its subdivisions to (Cagayan Electric vs. Commissioner).
revoke a contractual tax exemption Indeed, Article XII, Section 11, of the 1987
from that of tax exemption granted in a Constitution, like its precursor provisions
franchise? Explain. in the 1935 and the 1973 Constitutions, is
explicit that no franchise for the operation
There is. Contractual tax exemptions of a public utility shall be granted except
cannot be revoked without impairing the under the condition that such privilege
obligations of contracts. (Cassanova vs. shall be subject to amendment, alteration
Hord). If the tax exemption is granted in a or repeal by Congress as and when the
franchise, it can be revoked without common good requires.
impairing the obligations of contracts
because it partakes of the nature of a When is notice and hearing necessary
grant. In Meralco vs. Province of Laguna, in taxation?
it was ruled that tax exemptions
contained in special franchises are in As a rule, notice and hearing is not
nature of contracts and part of the necessary in the collection of all kinds of
inducement for carrying on the franchise taxes. In all cases of specific taxes on
but are far from being strictly contractual things, persons, or occupations or poll
in nature. Contractual tax exemptions, in taxes, where the amounts are fixed by
the real sense of the term and where the law, notice is not necessary. But if a tax is
non-impairment clause of the levied on property not specifically, but
Constitution can rightly be invoked, are according to its value, to be ascertained
those agreed to by the taxing authority in by assessors appointed for that purpose,
contracts, such as those contained in notice and hearing are requisites of due
government bonds or debentures, process. This is so in ad valorem taxes. But
lawfully entered into by them under the hearing need not be held in court. The
enabling laws in which the government, necessity for speedy and prompt
acting in its private capacity, sheds its collection requires that administrative

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officials perform this work. This is directly and exclusively used for
sufficient compliance with due process. educational purpose. (Abra Valley College
The personal presence of the taxpayer is vs. Aquino)
not indispensable for the validity of the
assessment. In 1957, the M.B. Estate, Inc. of Bacolod
City donated P10,000.00 in cash to Rev.
How are tax exemptions construed? Crispin Ruiz, then parish priest of
Why? Victorias, Negros Occ., for the
construction of a new Catholic Church
Exemptions from taxation are construed in the locality. On April 29, 1960,
in istrictissimi juri I against the taxpayer respondent issued an assessment for
and liberally in favor of the taxing donee’s gift tax against the Catholic
authority, primarily because taxes are the Parish of Victoria, of which petitioner
lifeblood of the government and their was the priest. Petitioner protested the
prompt and certain availability is an assessment and it was denied, he
imperious need. (Province of Tarlac v. appealed to the Tax Court claiming,
Hon. Fernando Alcantara, et al) among others that said tax is a clear
violation of the Constitution. The Tax
Under what condition may tax Court affirmed the decision of the
exemption be granted? respondent hence this appeal.

The Constitution provides that no law Sec. 28(3) of Art. VI of the Constitution
granting any tax exemptions shall be exempts from taxation, cemeteries,
passed without the concurrence of a churches and parsonages or convents,
majority of all the Members of Congress appurtenant thereto, and all lands,
(Sec. 28[4], Art. VI, 1987 Constitution) buildings and improvements used
exclusively for religious purposes. The
If a part of a building of a school in exemption is only from the payment of
Abra is used as quarters of visiting taxes assessed on such properties
officials from Manila, may the enumerated as property taxes as
Commissioner of Internal revenue distinguished from excise taxes. In the
assess tax on the said portion of the present case, what the Commission
building? Why? assessed was a donee’s gift tax, the
assessment was not on the properties
No. Because the fact that a part of the themselves. It did not rest upon general
building is used as quarters does not ownership, it was an excise tax upon the
remove its primary purpose, for it is use made of the properties. Manifestly,
merely incidental to the purpose it is gift tax is not within the exemption
intended. It is still considered as actually, provisions. A gift tax is not a property tax,

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but an excise tax imposed on the transfer incumbent upon the state of residence to
of the property used exclusively for allow relief in order to avoid double
religious purposes does not constitute an taxation. There are two methods of relief –
impairment of the Constitution. (Lladoc the exemption method and the credit
vs. CIR) method. In the exemption method, the
income or capital which is taxable in the
What is double taxation? state of source or situs is exempted in the
state of residence, although in some
When additional taxes are laid on the instances it may be taken into account in
same subject by the same taxing determining the rate of tax applicable to
jurisdiction during the same taxing period the taxpayer’s remaining income or
and for the same purpose, there is double capital. On the other hand, in the credit
taxation.(Punzalan v. Mun. Board of method, although the income or capital
Manila) which is taxed in the state of source is still
taxable in the state of residence, the tax
Double taxation usually takes place when a paid in the former is credited against the
person is a resident of a contracting state tax levied in the latter. The basic difference
and derives income from, or owns capital between the two methods is that in the
in, the other contracting state and both exemption method, the focus is on the
impose tax on that income or capital. income or capital itself, whereas the credit
method focuses upon the tax (Justice
In order to eliminate double taxation, a tax Dimaapao citing CIR v. Johnson and Sons,
resorts to several methods. FIRST, it sets Inc.,)
out the respective rights to tax of the
state of source or situs and of the state Respondent spouses are both
of residence with regard to certain American citizens residing in the
classes of income or capital. In some Philippines and have derived all their
cases, an exclusive right to tax is conferred income from Philippine sources for the
on one of the contracting states; however, taxable years under question. In
for other items of income or capital, both compliance with local law, they filed
states are given the right to tax, although their income tax returns and paid the
the amount of tax that may be imposed by assessed taxes. Thereafter, they
the state of source is limited. claimed for refund of the amount paid
to the United States Government as
The SECOND method for the elimination federal income taxes. When petitioner
of double taxation applies whenever the failed to answer the claim,
state of source is given a full or limited respondents filed their petition with
right to tax together with the state of the Tax Court which rendered
residence. In this case, the treaties make it judgment in their favor. The issue

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raised on appeal to the Supreme Court increasing the tax rates on the alien
is whether or not a citizen of the resident. Every time the rate is increased,
United States residing in the the deduction from Philippine taxes
Philippines, who derives income would correspondingly increase and the
wholly from sources within the proceeds for the Philippines diminished,
Republic of the Philippines, may thereby subordinating the latter country’s
deduct from his gross income the taxes to those levied by the foreign
income taxes he has paid to the US government. Such a result is incompatible
Government. with the status of the Philippines as an
independent and sovereign state. (CIR v.
Respondents contend that if they are not V.E Lednickey, et al.)
allowed to deduct the income taxes in
question, they would be subjected to What is the nature of the Manila
double taxation. Respondents fail to International Airport Authority?
observe that double taxation becomes
obnoxious only where the taxpayer is It is an instrumentality of the National
taxed twice for the benefit of the same government, not a government-owned or
government entity (CF Manila vs. controlled corporation. (MIAA v. CA)
Interisland Gas Service). In the present
case, while the taxpayers would have to Instrumentality- refers to any agency of
pay two (2) taxes on the same income, the the national government, not integrated
Philippines where the income was earned within the department framework, vested
and where the taxpayers are domiciled, with special functions or jurisdiction by
and the United States, it is undisputable law, endowed with some if not all
that justice and equity demand that the corporate powers, administering special
tax on the income should accrue to the funds, and enjoying operational
benefit of the Philippines. Any relief from autonomy, usually through a charter. (Sec.
the alleged double taxation should come 2(10), Administrative Code)
from the United States and not from the
Philippines, since the former’s right to GOCC- refers to any agency organized as a
burden the taxpayers is solely predicated stock or non-stock corporation, vested
on their citizenship without contributing with functions relating to public needs
to the production of the wealth that is whether governmental or proprietary in
being taxed. Finally, to allow an alien nature, and owned by the Government
resident to deduct from his gross income directly or through its instrumentalities
whatever taxes he pays to his own either wholly, or, where applicable as in
government amounts to conferring on the the case of stock corporations, to the
latter the power to reduce the tax income extent of at least fifty-one (51) percent of
of the Philippine government simply by its capital stock: Provided, That

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government-owned or controlled government instrumentalities. (MIAA vs.


corporations may further be categorized CA)
by the Department of Budget, the Civil
Service Commission, and the Commission How is tax exemption construed?
on Audit for the purpose of the exercise Explain.
and discharge of their respective powers,
functions and responsibilities with Tax exemption is strictly construed
respect to such corporations. (Sec. 2(13), against the taxpayer claiming the
Administrative Code) exemption. However, when Congress
grants an exemption to a national
Are the Airport Lands and Buildings of government instrumentality from local
MIAA exempt from real estate tax taxation, such exemption is construed
under existing laws? Explain. liberally in favor of the national
government instrumentality. In Maceda
Yes. First, MIAA is not a government- vs. Macaraig, Jr., it was said that the
owned or controlled corporation but an reason for the rule does not apply in the
instrumentality of the National case of exemptions running to the benefit
Government and thus exempt from local of the government itself or its agencies. In
taxation. Second, the real properties of such case the practical effect of an
MIAA are owned by the Republic of the exemption is merely to reduce the
Philippines and thus exempt from real amount of money that has to be handled
estate tax.(MIAA v. CA) by government in the course of its
operations. For these reasons, provisions
How is the power of taxation of granting exemptions to government
national government instrumentalities agencies may be construed liberally, in
invoked by local government favor of non tax-liability of such agencies.
construed? Explain. (MIAA vs. CA)

When local governments invoke the Lung Center of the Philippines, a non-
power to tax on national government stock and non-profit entity, is the
instrumentalities, such power is registered owner of a real estate
construed strictly against local property in Quezon City. Erected in the
governments. The rule is that a tax is middle of the lot is a hospital known,
never presumed and there must be clear as the Lung Center of the Philippines.
language in the law imposing the tax. Any The ground floor s being leased to
doubt whether a person, article or activity private parties, for canteen and small
is taxable is resolved against taxation. store spaces and to medical or
This rule applies with greater force when professional practitioners who use the
local governments seek to tax national same as their private clinics. The

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hospital accepts paying and non- and no money inures to the private
paying patients. Aside from its income benefit. (Lung Center of the Phils. v.
from paying patients, it receives Quezon City)
annual subsidies from government.
As a charitable institution, are all the
In 1993, both the land and the hospital properties of the Lung Center exempt
were assessed for real property taxes from taxation? Explain.
by the City Assessor of Quezon City.
Lung Center filed a claim for No. Even if it is a charitable institution,
exemption from real property taxes those portions of its real properties that
predicated on its claim that it is a are leased to private entities are not
charitable institution. It was denied on exempt from real property taxes as they
the basis that the Lung Center is not a are not actually directly and exclusively
charitable institution and its real used for charitable purposes.
estate properties were not actually,
directly and exclusively used for Under the 1987 Constitution, lands,
charitable purpose. Is the contention buildings and improvements of the
that it is a charitable institution charitable institutions to be considered
correct? Explain. exempt should not only be exclusively
used for charitable purposes but should
Yes, it is a charitable institution. The test be used actually and directly for such
whether, an enterprise is charitable or not purposes.
is whether it exists to carry out a purpose
recognized in law as charitable or Exclusively is defined as possessed and
whether it is maintained for gain, profit or enjoyed to the exclusion of others. It is
private advantage. synonymous with “solely”. What is meant
by actual, direct , and exclusive use of the
Under its charter, it was organized for the property is the direct and immediate
welfare and benefit of the Filipino people actual application of the property itself to
principally to help combat the high the purposes for which it is organized. It
incidence of lung and pulmonary diseases is not the use of the income from the real
in the Philippines. property that is determinative of whether
the property is used for tax exempt
It does not lose its character as such and purposes. (Lung Center of the Phils. v.
its exemption from taxes simply because Quezon City)
it derives income from paying patients or
receives subsidies from the government It was contended that charging rentals
so long as the money received is devoted for the offices used by its accredited
or used altogether to a charitable object physicians can be equated to a

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commercial venture. Is the contention BONUS:


correct? Why?
ALBA-NOTES
No. The charging of rentals for the offices
and clinics its accredited physicians
occupy cannot be equated to a
commercial venture, which is mainly for POLICE POWER
profit.

First, CHHMAC is only for its consultants


or accredited doctors and medical Q- what is police power?
specialists. Second, the charging of rentals
is a practical necessity: (1) to recoup the A- police power is the power vested
investment cost of the building; (2) to in the legislature by the
cover the rentals for the lot CHHMAC is Constitution to make, ordane,
built on; (3) to maintain the CHHMAC establish all manner of wholesome
building and its facilities. Third, as and reasonable laws, statutes,
correctly pointed out by respondent, it ordinances, either with penalties,
pays the proper taxes for its rental or without, not repugnant to the
income. And, fourth, if there is indeed any constitution, as they shall judge to
net income from the lease income of be for the good and welfare of the
CHHMAC, such does not inure to any state and its subjects
private or individual person as it will be
used for respondent’s other charitable Q- what is the basis of the exercise of
projects. the police power of the state?

In view of these reasons, there is no A- the exercise of police power is


reason why the CHHMAC building should founded on the basic principles of
be classified as “commercial” and be salus populi estsuprema lex and sic
imposed the commercial level of 35% as it uteretu et alienum non laedas
is not operated primarily for profit but as
an integral part of CHH. The CHHMAC, Q- who has the ultimate power to
with operations being devoted for the determine the necessity and the means
benefit of the CHH’s patients, should be of exercising the police power of the
accorded the 10% special assessment. state? Why?
(City Assessor of Cebu City v. Association
A- Congress has the ultimate power,
de Benevola De Cebu, Inc.,)
because it is the judge of necessity,
adequacy, reasonableness and

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wisdom of any law. The Congress policies, which is outside their field”
is the constitutional repository of
the police power and exercises the Q- what are the basic limitations on
prerogative of determining the the State’s exercise of police power?
policy of the state
A- they are
Q- is there a need to provide for the (1) the due process clause which
exercise of police power in the provides that no person shall be
constitution? Why? deprived of life, liberty or property
without due process of law and
A- there is no need. Police power is an (2) vehicle protection clause which
inherent attribute of sovereignty. provides that x xx nor shall any
It can exist even without the person be denied the equal
reservation in the Constitution, as protection of the laws
it is the most illimitable of the
powers of the government. It is
based on the society, as without it, Q- Illustrate how the due process
there can be no effective clause limits the exercise of the police
government. power(PP) of the state

Q- can the courts interfere with A- The Due Process clause has
determination by the Congress of the something to do with the
necessity and means of the exercise of reasonableness of the laws enacted
police power? Why? in the implementation of the PP of
the State. Laws implementing the
A- as a rule yes for it is not conclusive. PP concern public interest, public
The purpose of judicial purpose and general welfare
interference, however, is to (Ichong v Hernandez)
ascertain whether or not the
exertion of that authority is within
or outside lawful limits. Cinco, in
his book of Constitutional Law said Q- Illustrate how the equal protection
that “this does not mean that the clause limits the exercise of PP
courts may substitute their
A- In Ichong v Hernandez, the SC said
judgment for that of the legislature
that the Equal Protection Clause is
as to whether the purpose is good
against undue favor and individual
or bad, advisable or not, expedient
or class privileges, as well as
or otherwise. To do so would
hostile discrimination ot
permit the courts to usurp the
oppression or inequality. It is not
legislative function of determining
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intended to prohibit legislation, A- No. Because the issuance of the


which is limited either in the order was based on the PP of the
object to which it is to operate. It State. In Pollution Adjudication
does not demand absolute equality Board vs CA, it was said that the
among residents, it merely relevant pollution control statute
requires that all persons be treated and implementing regulations
alike under like circumstances and were enacted and promulgated in
conditions, both as to privileges the exercise of the pervasive
conferred and liabilities enforced sovereign power to protect the
safety, health and general welfare
and comfort of public as well as
the protection of plant and animal
Q- What are the basic purposes of PP? life, commonly designated as PP.
Ordinary requirements of
A- (1) to serve the general welfare,
procedural due process yield to
comfort and convenience of the
the necessities of protecting vital
popel
public interest
(2) to promote and preserve pubic
health
(3) to promote and protect public
safety Q- Petitioners seek to annul PD No.
(4) maintain and safeguard public 1869, the law creating PAGCOR.
order Alleging that the same is void for being
(5) protect public morals contrary to morals, public policy and
(6) to promote the economic public order monopolistic and is
security of the people violative of the equal protection clause
and local autonomy. It was also
Q- Sometime on Sept 22 1988, the alleged as running counter to the
pollution adjudication Board issued an provisions on the family you with
ex parte order directing the Solar social justice and education values in
Textile Finishing Corp. to cease and the Constitution. Is the petition
desist from using pollution source meritorious?
installations which were discharging
untreated waste water directly into a
canal leading to TullahanTenejeros
River. The order was contested on the A- no. The allegation that PD No.
ground of lack of Due Process. Was the 1869 violate the provisions and
contention correct? Why? the family, youth and social justice
under the constitution is without
merit.those provisions are merely
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a statement of principles and as Violative of the right against non-


policies. As such they are basically imprisonment for nonpayment of debt.
not self executing, meaning, should Is the contention valid? Why?
be passed by Congress to clearly
define and effectuate such A- no. Because the law is a valid
principles. Monopolies are not exercise of the police power of the
necessarily prohibited by the state. Section 13 of the law makes
Constitution. The state must still violation of trust receipt
decide whether public interest agreement punishable as Estafa
demands that monopolies be under the Penal Code. This does
regulated or prohibited. This is a not violate the right against
matter for the legislature to decide. imprisonment for nonpayment of
debt since the law does not seek to
PD No. 1869 was enacted pursuant to the enforce a loan but to punish this
policy of government to regulate and honesty and abuse of confidence in
centralize through an appropriate the handling of money or goods to
institution all games of chance authorized the prejudice of another. Such an
by existing franchise or permitted by law. act is not an offense against
Regulating and centralizing gambling has property but against public order.
been proven to be beneficial to the (people v Nitafan)
government and society. It is a reliable
source of much needed revenue for the Q- what is the nature and purpose of
cash strapped government. It provides the stabilization fees collected from
funds for social projects and subjects sugar planters under PD 338? Explain.
gambling to close scrutiny, regulation,
supervision and control of the
government.
A- the stabilization fees under PD No.
With the creation of the PAGCOR and the 338 are in the nature of a tax,
direct intervention of the government the which is within the power of the
evil practices in corruptions that go with state to impose for the promotion
gambling will be minimized if not totally of sugar in the street. They
eradicated. Public welfare lice at the constitute sugar liens. The
bottom of the enactment of PD 1869 connections made accrue to a
(Basco v PAGCOR) special fund, a development and
stabilization fund, almost identical
to the Sugar Adjustment and
Stabilization Fund created under
Q- PD No. 115, otherwise known as the section 6 of the Commonwealth
trust receipts law has been questioned Act No. 567. The tax is livied with
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the purpose of stabilizing the sugar the owner by discontinuing use.


industry. The levee is primarily in But as long as use of the property
the exercise of the police power of is continued, the same is subject to
the state. Sec & of BP Blg 337, public regulation.
otherwise known as the local
government code authorizes the
local government units to exercise
such powers as are necessary and Q- an ordinance was passed by the city
proper for governance such as to of Manila for the purpose of collecting
promote health and safety, fees for operating massage clinic’s
enhance prosperity, improve separately from operating barbershop
morals and maintain peace and and to prevent immorality which
order. (Gaston v Republic Panters might arise from the construction of
Bank) separate rooms. Is the ordinance
valid? Why?

A- the said ordinance is valid under


Q- what is the nature of the states the police power of the state based
power to regulate rates in post by on the general welfare clause. The
Public utilities? ordinance is designed to protect
the public morals. For an
A- it is beyond cavil that the state, in ordinance to be valid it must not
the exercise of police power, can only be with in the corporate
regulate the rates imposed by a powers of that municipality but it
public utility. As held in Republic (a)must not contravene the
of the Philippines vs Manila Constitution or any statute
Electric Company, it was said that (b) must not be unfair or
the regulation of rates to be oppressive
charged by Public utilities is (c) must not be partial or
founded upon the police powers of discriminatory
the state and statutes prescribing (d) must not prohibit but may
the rules for the control and regulate trade
regulation of public utilities and is (e) must be general and consistent
affected with public interest, it with public policy and
ceases to be juris private only and (f) must not be unreasonable
become subject to regulation. The
regulation is to promote the
common good. Submission to
regulation maybe withdrawn by Q- an ordinance was passed by the
municipality of Bocaue Bulacan ,

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prohibiting the operation of nightclubs, with plate H and EH on weekends and


cabarets and dance halls in the holidays was banned from 12:00 AM
municipality or the renewal of licenses on Saturday to 5:00 AM Monday
to operate them. Petitioners, owners morning or 1:00 AM of the holiday to
and operators of nightclubs in Bocaue 5:00 AM of the day after the holiday.
filed a petition questioning the validity Motor vehicles with plates S, T, DPL, CC
of the ordinance and to prohibit the and TC were exempted. The penalties
said municipality from enforcing the of fine and confiscation of the vehicle
same. The court of first instance of and cancellation of registration on
Bulacan Dismissed the petition and owners of the above specified vehicles
upheld the validity of the ordinance. will be imposed on anyone found
Hence a petition for certiorari was violating such LOI. It is alleged that the
filed with the Supreme Court. Will this purpose is unfair, discriminatory
prosper? Why? arbitrary, and contravenes be equal
protection clause. Is the contention
correct? Why?

A- A municipal corporation cannot


prohibit the operation of
nightclubs. They may be regulated A- the question statute deals with a
but not prevented from carrying subject clearly within the scope of police
on their business. Under the local power the court was asked to declare it
government code, Municipal void on the ground that the specific
Corporations are only empowered method of regulation prescribed is
to regulate the establishment and unconstitutional, hence, deprives the
operation of billiard pools, plaintiff of due process of law. But there is
Theatrical performances, circuses a presumption of constitutionality of a
and other forms of entertainment legislation of this character

There may be instances where a police


Q- the validity of an energy power measure me, because of its
conservation measure LOI No. 868 arbitrary, oppressive or unjust character,
issued on May 31 1979 was put to issue be held offensive to the due process
in the petition for prohibition filed by clause and therefore may when
the spouses Mary conception Bautista challenged in an appropriate legal
and Enrique Bautista for being proceeding, be declared void on its face.
allegedly violative of the due process That is not one of them. What is
and equal protection clauses in the undeniable is that the action taken is an
constitution. The use of motor vehicles
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appropriate response to a problem that


presses urgently for resolution. In the
interplay between such right and police A- in so far as movie houses and other
power, especially so where the SCO places also amusements are
governmental action deals with the use of concerned, the lease doubt cannot
one’s property, the latter is a accorded be entertained as to the validity of
such leeway a measure prohibiting a proprietor,
Lessee or operator of an
amusement place to admit to or
more persons with only one ticket,
It was raise that there was no rational not only in the interest of
basis for the classification of the vehicles. preventing fraud in so far as
The Supreme Court said that tested by municipal taxes are concerned, but
applicable standards that must be also in accordance with Public
satisfied to avoid the charge of a denial of Safety, public health, and general
equal protection, the objection of the welfare. As in Calalangvs Williams
petitioners lack merit. A governmental act the Supreme Court said that public
may not be offensive to the due process welfare and then lies at the bottom
clause, but may run counter to such a of the enactment of said law, and
guarantee (Bautista vs Juinio) the State in order to promote
general welfare may interpose
with personal liberty, that
property may be subjected to all
Q- A complaint was filed by the
kinds of restraints and burden, in
plaintiff alleging that they were movie
order to secure the general
operators of the city of the colored,
comfort, health, and prosperity of
seeking to nullify ordinance no. 1074
the state. (Samson v Mayor of
for being ultra vires and contrary to
Bacolod City)
the due process provision of the
Constitution, that is, the limitation on
the right “to manage their respective
theaters in the manner they wish”. Q- section 14 of RA No. 1119 as
More specifically such ordinance amended authorizes the tenant to
prohibiting the admission of two or change the tenancy contract from one
more persons in amusement places of Sarah tendency to a leasehold
with the use of only one ticket. The tendency or vice versa and from one
court of first instance granted this crop sharing agreement to another of
petition, hence, the petition for the share tenancy. It is being attacked
certiorari was filed with the Supreme on the ground that impairs the
Court. Will the petition prosper? Why?
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obligations of contract. Is the ground that the freedom of contract is


contention valid? Why? violated and that it is a deprivation of
the right to due process. Rule on the
contention.

A- no. The promotion of social justice A- such legislation is justified under


end of the well-being and the right of the state to exercise its
economic security of all the people police powers. Individual rights to
is a primary aim of the contract and property has to give
Constitution. It is justified by the way to the police power exercised
directive contained in the for the public welfare. The exercise
Constitution to do justice enjoined of such power was the result of the
in the Constitution. It may be intention of the Congress to do
considered as an exercise of the away with share tenancy.
police power of the state. It is Furthermore the police power is
legally justified in impairing the broad enough to be exercised on
obligations of existing contracts the basis of the economic need for
between the tenant and the the public welfare. When public
landlord. Obligations of contracts welfare clashes with the individual
must yield to a proper exercise of rights to property, the latter
the police power. (Mateo de should not be made to prevail
Ramas v CAR) through the state exercise of police
power. (Vda de Genuino v CAR)

Q- Sec 4 of RA 3844, otherwise known


as the agricultural land reform code, Q- what is the effect if a tenant –
provides that agricultural share recipient of a parcel of land under PD
tenancy as herein defined is hereby 27 transfers the land to another?
declared to be contrary to public policy Explain.
and shall be abolished, provided that
existing share tenancy contracts may A- the transfer is void because it is
continue in form and effect in any prohibited by law. Our loan agrarian
region or locality to be governed by RA reform is a legislate promise to
No. 1119 until the end of the emancipate poor farm families from the
agricultural year, unless a shorter bondage of the soil. It was promulgated in
period has been fixed or the tenant the exact same spirit, with mechanisms
sooner exercises option to elect which hope to forestall a reversion to the
leasehold system. It is being antiquated and inequitable feudal system
questioned as unconstitutional on the of land ownership. It aims to ensure the
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continued possession, cultivation and just compensation of a certain area


enjoyment by the beneficiary of the land from a private cemetery to benefit
that he tills which would certainly not be paupers who are charges of the
possible where the former owner is local government unit. Instead of
allowed to reacquire the land at any time building or maintaining a public
following the award – in contravention of cemetery for this purpose, the
the governments objective to emancipate local government units passed the
tenant – farmer from the bondage of the burden to the private cemetery.
soil (Toralba v Mercado)

In order to ensure the tenant – farmer’s


continued enjoyment and possession of Q- X, a businessman engaged in the
the property, the explicit terms of PD 27 import and export of abaca and other
prohibit the transfer by the tenant of the products, owns a warehouse which the
ownership, right, or possession of a municipal counsel declared as public
landholding to another persons, or the nuisance within the purview of Article
surrender of the same to the former 694 of the new Civil Code. The
landowner. In other words, a tenant – municipal official contended that said
farmer may not transfer his ownership or warehouse was constructed in
possession of, or his Rights to the violation of municipal ordinance
property, except only in favor of the number 13 series of 1952, prohibiting
government or by the hereditary the construction of warehouses near a
succession in favor of his successors block of houses either in poblacion or
barrios without maintain he ate 200 –
meter distance to avoid loss of lives
and property by accidental fire.
Q- maybe a local government units
pass and ordinance requiring a private 1. is ordinance no. 13
cemetery to reserve 6% of the total unconstitutional?
area for the burial of paupers on the 2. Was ordinance no. 13 passed in
pretext that it is exercising police accordance with the law?
power to promote the general
welfare?\ A- ordinance no. 13 is constitutional, it
being an exercise of the State’s police
A- no, because the property to be power delegated to the local government
taken under the police power must units through the general welfare clause.
be destroyed, and must not be There is no valid reason for petitioner to
devoted to public use. In that case , complain that Ordinance 13 is
There is taking of private property discriminatory, in the absence of proof
for public use without payment of that the other bodegas mentioned by him
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are operating in violation of Ordinance 13 controlling economic way of life.


and that complaints have been lodged
against the bodegas concerned with out Q- Ortigas and Co. Sold the property to
the municipal authorities doing anything Emilia Hermoso located at Greenhills
about it subdivision Metro Manila. One of the
conditions annotated in the contract of
sale was that the land should be used
exclusively for residential purposes. In
Q- the Philippine ports Authority did 1981 the MMDA enacted ordinance
not renew the stevedoring contracts of number 81-01, otherwise known as the
23 stevedoring and arrastreoperators . comprehensive zoning for the NCR
Instead it awarded the contract reclassifying the place as a commercial
exclusively to Ocean Services Inc. The area. In 1984 Ismael Mathay III leased
former questioned the award the property from Hermoso and
contending that their contractual right constructed a single – storey
with foreign clients have been commercial building. Ortigas and Co.
impaired. Decide. filed the petition for demolition and
injunction invoking the restriction on
A- there is no impairment of contract. the contract. Imosa contended that the
Police power is more superior ordinance should prevail as it is an
than contractual obligations. In exercise of police power. It can even be
PernitoArrestre Services vs applied retroactively. The trial court
Mendoza the Supreme Court ruled issued an injunction order but the CA
that the State’s police power may reversed the same.
interfere with personal liberty,
with property and even business Will the restriction prevail over the
occupation. Stevedoring is a ordinance as an exercise of police
business occupation subject to the power, or vice versa explain.
regulatory powers of the state. In
fact, it has been said time and
again that the non-impairment
clause of the Constitution must Ortigas and Co. contended that a
yield to the loftier purposes contractual right is not automatically
targeted by the government. discarded when the claim is made that
Freedom of contract in enterprise, it conflicts with police power. It
like all other freedoms, is not free contended that the restriction and the
from restrictions, more so in this ordinance did not conflict with one
jurisdiction, where laissez-faire another. They can even agree on the
has never been fully accepted as a exclusive use of the land despite the
ordinance, hence, the ruling of the CA
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that the restriction imposing exclusive contracts or vested rights clauses


use was effectively nullified by the will have to yield to the superior
zoning ordinance. Hermoso on the and legitimate exercise by the state
other hand, contended that police of police power to promote the
power is superior to the non- health, morals, peace, education,
impairment of contact clause. Who’s good order, safety and general
contention is correct? Why? welfare of the people. Moreover
statutes in exercise of valid police
power must be read into every
contact.
A- the contention of Hermoso is
correct. Police power is more The contractual stipulations
superior to the non- impairment of annotated on the torrents title
contract clause. must yield to the ordinance. When
In fact the ordinance is even that stretch of ortigas Avenue from
retroactive in nature. Roosevelt Street to Madison Street
In general, laws are to be was reclassified as a commercial
construed as having only zone by the Metropolitan Manila
perspective operation. commission in March 1981,
Lexprospicitnon respicit. limiting all construction on the
disputed lot to single-family
Equally settled, only laws existing residential buildings, were deemed
at the time of the execution of the extinguished by the retroactive
contract applicable thereto and not operation of the zoning ordinance
later statutes, unless the latter are and could no longer be enforced.
specifically intended to have While our legal system upholds the
retroactive effect. A latter law sanctity of contract so that a
which enlarges, abridges or in any contract is deemed law between
manner changes the intent of the the contracting parties,
parties to the contract necessarily nonetheless, stipulations in the
impairs the contract itself and contract cannot contravene “law,
cannot be given retroactivate morals, good customs, public order,
effect without violating the or public policy.” Otherwise such
Constitutional prohibition against stipulations would be deemed null
impairment of contact. Police and void
power legislation is applicable not
only for future contracts, but Q- an order of the LTO decreed the
equally to those already in phaseout of six-year-old taxicabs in
existence. None impairment of Metro Manila. It was assailed as

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violative of the equal protection clause. giving him a fair chance to be heard thus
Decide. denying him the centuries–old guarantee
of fair play. It cannot even be justified
under the police power because it is
unreasonable and unduly oppressive. The
A - the phasing out of six-year-old authority given to the public officers
taxicabs in Metro Manila is a valid named in the EO phrase “may see fit” is
exercise of police power to protect laden with perilous opportunities for
the riding public from dilapidated, partiality and abuse and the commission
word out and unsafe vehicles of graft. It is an authority so sweeping and
considering the traffic in Metro broad that it is not canalized within banks
Manila is different from those in that keeps it from overflowing. (Ynot v
other places in the country. The IAC)
phase out is designed to ensure the
safety convenience and comfort of
the riding public (Taxicab
Operators of Metro Manila v Q- RA No. 2382 otherwise known as the
BOT) medical act of 1959 is a law primarily
designed to standardize and regulate
Q- EO No. 626-A is being questioned as the medical profession. Pursue want to
violent eve of the due process clause said law DECS issued an order
for the reason that it prohibits the establishing a uniform admission test
transporting of carabao, regardless of called the national medical admission
sex, age and physical condition, and test (NMAT) as an additional
Carabeef from one province to another requirement for the issuance of a
violation of the order will result in the certificate of eligibility for admission
confiscation and forfeiture of Caribeef. to medical school beginning the school
The chairman of the national meat year 19 86–87. The order is being
commission is authorized to dispose questioned because it is violative of
the Carabeef to charitable agencies as the Constitution which states that “The
he may deem fit. Likewise, the director State shall protect and promote the
of the bureau of animal industry is rights of all citizens to quality
authorized to distribute the carabeef education at all levels and shall take
in pursuance with the program of the appropriate steps to make such
government. Decide. education accessible to all, “and of the
due process clause. Decide.
A-the order is oppressive and
confiscatory. It is patently offensive to the A- the NMAT requirement relates to
due process clause as the order the wisdom and desirability which
immediately convict the violator without
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is beyond the competence of the Manila area) may be abated


court to pass upon. In Tabularin v without judicial proceedings under
Gutierrez, the Supreme Court said our civil code. As stated in
that an important component of Sitchonvs Aquino, the police power
public order is the health and of the state justifies the abatement
physical safety and well-being of or destruction by summary
the population. The prescription of proceedings of public nuisance per
an admission test in the medical se.
schools is a means of achieving the
objective of upgrading the Q- without the consent of respondent –
selection of applicants and of lessor, petitioner–lessee subleased the
improving the quality of medical premises to a third-party hence
services in the country. respondent filed a complaint for
ejectment based on Sec 5 BP Blg. 25,
“an act regulating rentals of dwelling
units or of land on which another’s
Q- there is an action for declaratory dwelling is located and for other
relief to declare null and void and as ex purposes”. It is petitioners defense
post facto legislation, Mun. Ordinance that BP Blg 25 cannot be applied in this
No. 89 as amended of respondent case because there was a perfected
municipality of San Juan prohibiting contract to lease without any express
squatting on public property and prohibition on subleasing which had
providing a penalty therefor, and been in effect between petitioner and
under which ordinands petitioners respondent long before the enactment
claim, respondents were summarily of BP blg 25. Is the application of BP
demolishing and removing their Blg. 25 unconstitutional as an
houses and improvement. Explain. impairment of the obligation of
contracts? Why?
A- independently of said ordinance,
petitioners constructions which A- BP Blg 25 is derived from PD No. 20
have found duly found to be public which has been declared by the court as a
nuisance per se (without provision police power legislation so that the
for accumulation or disposal of applicability thereof to existing contracts
waste matters and constructed cannot be denied. It is beyond question
without building permits that the constitutional guarantee of non-
contiguously to and therefore impairment of obligations of contracts is
liable to pollute one of the main limited by and subject to the exercise of
water pipelines which supplies police power of the state.
potable water to the greater

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within its territorial sovereignty


for a public purpose. Fundamental
Q- what is the purpose of requiring all to the independent existence of a
official and employees to file their State, it requires no recognition by
annual detailed statement of assets the Constitution, whose provisions
and liabilities? are taken as being merely
confirmatory of its presence and as
A- the law is intended to curtail and being regulatory, at most, in the
minimize the opportunity for graft and due exercise of the power. In the
corruption and the maintenance of high hands of the legislature, the power
standards of honesty in government is inherent, its scope matching that
services. It is justified by the police power of taxation, even that of police
of the state. power itself, in many respects. It
reaches to every form of property
the State needs for public use and,
as an old case so puts it, all
EMINENT DOMAIN separate interests of individuals in
property are held under a tacit
agreement or implied reservation
Q— Give the concept of the power of vesting upon the sovereign the
eminent domain. right to resume the possession of
the property whenever the public
ANS: It is the right of the State, as a interest so requires it. (US vs.
sovereign, to take or expropriate Certain Land in Highlands (DY NY)
property for public use upon 48 F Supp. 306.
payment of just compensation. It is
based on political necessity; it is
inseparable from the State unless The ubiquitous character of
it is denied to it by its fundamental eminent domain is manifest in the
law. (Kohl vs. US, 91 U.S. 371). nature of the expropriation
proceedings. Expropriation
proceedings are not adversarial in
Q— State the nature of the right of the conventional sense, for the
eminent domain condemning authority is not
required to assert any conflicting
ANS: The right of eminent domain is interest in the property. Thus, by
usually understood to be an filing the action, the condemner in
ultimate right of the sovereign effect merely serves notice that it
power to appropriate any property is taking title and possession of the
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property, and the defendant power of eminent domain on


asserts title or interest in the behalf of the government. Hence, it
property, not to prove a right to can be properly substituted as the
possession, but to prove a right to real party in interest in an
compensation for the taking. expropriation proceeding, when
(Palileo, et al. vs. NIA, G.R. No. the term of the government agency
148574, October 11, 2005). has expired. In this case, ISA had a
term of only five (5) years. (Iron
and Steel Authority vs. CA, 65
Q— What are the constraint of the SCAD 261, G.R. No. 102976, Oct. 25,
exercise of the power of eminent 1995).
domain?
ANS: The exercise of the power of Q— What is the foundation of the
eminent domain is constrained by exercise of the power of eminent
two constitutional provisions: (1) domain?
that private property shall not be
taken for public use without just ANS: The foundation of the right to
compensation under Article III exercise the power of eminent
(Bill of Rights), Section 9; and (2) domain is genuine necessity of a
that no person shall be deprived of public character. Condemnation of
his/her life, liberty, or property private property is justified only if
without due process of law under it is for the public good.
Article III, Sec. 1. (Barangay Consequently, the courts have the
Sindalan, et al. vs. CA, et al., G.R. No. power to inquire into the legality
150640, March 22, 2007; Manapat of the exercise of the right of
vs. CA, G.R. No. 114078 and other eminent domain and to determine
case October 15, 2007). whether there is a genuine
necessity therefor. (Municipality of
Meycauayan vs. Intermediate
Q— If the personality of a Appellate Court, G.R. No. 72126,
government-owned corporation Jan. 29, 1988). While Congress may
have the power to designate the
which has the power to
property to be taken, it is still a
expropriate has expired, who
judicial question whether in the
shall be substituted? Why?
exercise of such power, the party
ANS: There is a long standing delegation adversely affected is the victim of
of authority to the President to injustice, which the law will not
exercise or cause to exercise the allow.

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retention limits as the Congress


may prescribe, taking into
Q— Are there provisions in the
account ecological,
Constitution relating to eminent
domain? developmental, or equity
considerations, and subject to
ANS: Yes, they are the following: the payment of just
(1) Private property shall not be compensation. In determining
taken for public use without the retention limits, the State
payment of just compensation shall respect the rights of small
(Sec. 9, Art. III, Constitution); land owners. The State shall
(2) The State may, in the interest of further provide incentives for
national welfare and defense, voluntary land-sharing. (Sec. 4,
establish and operate vital Art. XIII, 1987 Constitution).
industries and, upon payment
of just compensation, transfer
to public ownership, utilities Q— What are the limitations on the
and other private enterprises exercise of the power of eminent
to be operated by the domain?
government (Sec. 18, Art. XII, ANS: (1) The property taken must be
1987 Constitution); private property;
(3) The State shall, by law, (2) The taking must be within
undertake an agrarian reform constitutional sense;
(3) The taking must be for
program founded on the right
public use;
of farmers and regular (4) Just compensation must be
farmworkers, who are landless, paid; and
to own directly or collectively, (5) There must be due process
the lands they till or, in the case of law.
of other farmworkers, to
receive a just share of the fruits The power is not without its limits:
first, the taking must be for public
thereof. To this end, the State
use, and the second, that just
shall encourage and undertake compensation must be given to the
the just distribution of all private owner of the property.
agricultural lands, subject to (Sena vs. Manila Railroad Co., 42
such priorities and reasonable Phil. 102). Their origin in the

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recognition of the necessity for necessity is essentially a political


achieving balance between the question. The legislature in
State interests, on the one hand, providing for the exercise of the
and private rights, upon the other power of eminent domain,may
hand, by effectively restraining the directly determine thenecessity for
former and affording protection to appropriating private property for
the latter. In determining “public a particular improvement for
use,” two approaches are public use,and it may select the
utilized— the first is public exact location of the improvement.
employment or the actual use by In such case, it is well-settled that
the public, and the second is public the utility of the proposed
advantage or benefit. (Thornton improvement, the extent of the
Development Authority vs. Upah public necessity for its
(DC Colo) 6490 F Supp. 1071). It is construction, the necessity of
also useful to view the matter as constructing it, the suitableness of
being subject to constant growth, the location selected and
which is to say that as society consequent necessity of taking the
advances, its demands upon land selected for its site, are all
individuals so increases and each questions exclusively for the
demand is a new use to which the legislature to determine, and the
resources of the individuals may courts have nopower to interfere,
be deviled. or to substitute their own views
for those of the representatives of
Q— When may the court inquire into the people. (City of Manila vs.
the necessity of the exercise of Chinese Community, 48 Phil. 349;
the power of eminent domain? Manapat vs. CA, G.R. No. 114078
and other cases October 15, 2007).
ANS: When there is arbitrary or
capricious choice of the property
to be taken by the government. (De
Knecht vs. Bautista, 100 SCRA 660). Q— To what extent may the courts
As a rule, the determination of review the exercise of the power
whether there is genuine necessity of eminent domain? Explain.
for the exercise is a justiceable ANS: Judicial review of the exercise of
question. (Bardillon vs.Barangay
eminent domain is limited to the
Masili, Calamba, Laguna, 402 SCRA following areas of concern: (a) the
402 (2003)). However, when the adequacy of the compensation, (b)
power is exercised by the the necessity of the taking, and (c)
legislature, the question of

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the public use character of the properties along Cuneta Avenue,


purpose of the taking. Pasay City. After a period of 10
years, however, the Ministry of
The right to take private property Public Works (now Dept. of
for public purposes necessarily Public Works & Highways)
originates from “the necessity” and changed the plan, such that
the taking must be limited to such instead of Cuneta Avenue as the
necessity. In City of Manila vs. link to Roxas Boulevard, the
Chinese Community of Manila, 40 properties along Fernando Rei
Phil. 349 (1919),it was held that and Del Pan Streets in Pasay City
the very foundation of the right to were proposed to be
exercise eminent domain is expropriated. There were
genuine necessity and that protests made by the residents
necessity must be of public along the area. The government
character. Moreover, the filed expropriation proceedings
ascertainment of the necessity against some properties along
must precede or accompany and Fernando Rei and Del Pan
not follow, the taking of the land. Streets, among them, that of the
In City of Manila vs .Arellano petitioner. The respondent
LawCollege, 85 Phil. 663 (1950), it Judge issued a writ of
was ruled that “necessity must be possession authorizing thae
necessary, does not mean an government to enter into the
absolute but only a reasonable or properties sought to be
practical necessity, such as would condemned. The petitioner went
combine the greatest benefit to the on certiorari to the Supreme
public with the least Court contending that the
inconvenience and expense to the respondent Judge exceeded his
condemning party and the jurisdiction as he failed to
property owner consistent with resolve first the issue raised
such benefit. (Masikip vs. The City that the choice of properties to
of Pasig, et al., G.R. No. 136249, be expropriated was arbitrary
January 23, 2006). and erroneous. Rule on the
contention.
ANS: It is beyond question that the State
Q— In a plan to connect Roxas
may take private property for
Boulevard and EDSA to be
linked to the Coastal Road public use upon payment of just
compensation. (Sec. 9, Art. III,
Project, the government found
1987 Constitution). It is however,
the need to expropriate

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recognized that the government


may not capriciously or arbitrarily
choose what private property Q— What is the extent of properties
should be taken. (De Knecht vs. that may be taken in the
Bautista,supra). It must be exercise of the power of eminent
assumed that the MPH made domain? Explain.
studies before deciding on Cuneta ANS: In the exercise of eminent domain,
Avenue. It is indeed odd why only as must hand can be taken as
suddenly, the proposed extension is necessary for legitimate purpose
was changed to make it pass thru of the condemnation may be taken.
Fernando Rei and Del Pan Streets. The term “necessary,” in this
From a functional point of view, connection, does not mean
the Cuneta Line, otherwise known absolutely indispensable but
as the First Alignment, is straighter
requires only a reasonable
that the Fernando Rei-Del Pan Line.
necessity of the taking for the
It is also necessary to have stated purpose, growth and future
interchanges to prevent traffic needs of the enterprise. (Manila
from slowing down while going up Railroad Co. vs. Mitchel, 50 Phil.
to the slope of the interchanges.
832).
From the view point of social
impact, it reveals that the social
impact is greater on the residents
of Cuneta Avenue than on those of Q— Mactan-Cebu International
Fernando Rei and Del Pan Streets. Airport Authority (MCIAA)
From the point of view of cost, the expropriated a parcel of land
Supreme Court said that the choice belonging to the respondent
of the Fernando Rei-Del Pan Line Virginia Chiongbian for the
was arbitrary and should not expansion of the Lahug Airport.
receive judicial approval, for while It was granted and title was
the issue in this case seemed to issued under MCIAA. The project
have boiled down to the choice did not push through, hence, the
between people and progress and public use was abandoned. The
development, it is to be judgment did not make a
remembered that the progress and reservation that in case the
development are carried out for public use was abandoned, the
the people. (De Knecht vs. Hon. property would revert to the
Pedro Bautista, G.R. No. L-51078, former owner. The former
October 30, 1980). owner sought to recover the
property but MCIAA refused to

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reconvey. A suit was filed where (1) There must be entry;


the RTC ordered the restoration (2) The entry must be for more
of the property to the former than a momentary period;
owner. The CA affirmed the
(3) Entry must be under warrant
decision on appeal. Is the
or color of authority;
decision correct? Why?
(4) Property must be devoted to
ANS: No, because the decision rendered public use or otherwise
granting the petition for informally appropriated or
expropriation was unconditional
injuriously affected; and
and did not contain any stipulation
that ownership would revert to the (5) The utilization of the property
former owner or that it did not must be in such a way as to
give her the right to repurchase oust the owner and deprive
the same in the event the lot was him of beneficial enjoyment of
no longer used for the purpose it the property. (Republic vs.
was expropriated. In short, the Castelvi, 58 SCRA 336; NPC vs.
Republic was granted was granted
CA, 69 SCAD 310,G.R. No.
a fee simple title. In Fery vs. Mun.
Cabanatuan (now a City), 42 Phil. 113194, March 11, 1996).
28, it was held that when land has
been acquired for public use in fee
simple, unconditionally, either by Q— What is meant by public use?
the exercise of eminent domain or
by purchase, the former owner ANS: It may cover a use affecting the
retains no rights in the land, and public generally or any number
the public use may be abandoned, thereof, as distinguished from
or the land may be devoted to a particular individuals. (Guido vs.
different use, without any Rural Progress Administration,L-
impairment of the estate or title 2889,Oct. 31, 1949). The meaning
acquired, or any reversion to the has been broadened in Heirs of
former owner. Ardona vs. Reyes, 125 SCRA 220,
where the Supreme Court said that
public use may cover uses which
may not directly be available to the
Q— What are the requisites of
public, but may redound to their
taking in expropriation?
indirect advantage or benefit.
ANS: The requisites are:

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Q— What is just compensation? Q— The government took a property


under the Comprehensive
ANS: It is fair and full equivalent of the Agrarian Reform program of the
loss sustained, which means, the government but there was no
market value to which must be payment for twelve (12) years.
added the consequential damages, State the effect of the delay in
if any, minus the consequential the payment? Explain.
benefits, if any, but in no case shall
the consequential benefits ANS: There was no more just
assessed exceed the consequential compensation. Section 9, Article III
damages, or the owner thereof be of the 1987 Constitution expresses
deprived of the actual value of his the constitutional rule on eminent
property so taken. (Manila domain- “Private property shall
Railways Co. vs. Velasquez, 32 Phil. not be taken for public use without
286, cited in Neptali Gonzales, just compensation.” While
Constitutional Law, pp. 123-124, confirming the State’s inherent
1975 Edition). power and right to take private
property for public use, this
provision at the same time lays
down the limitation in the exercise
Q— What does due process require
of this power. When it takes
in the exercise of the power of
property pursuant to its inherent
eminent domain?
right and power, the State has the
ANS: Due process requires that: corresponding obligation to pay
the owner just compensation for
(1) Private property be the property taken. For
taken for public use; compensation to be considered
(2) The owner shall have “just,” it must not only be full and
due notice and hearing fair equivalent of the property
taken; it must also be paid to the
in the condemnation
landowner without delay.
proceedings; and
(3) Just and reasonable
compensation be paid.
Inevitably, it he government falters
(DyVay vs. Crossfield, 39 or is seen to be faltering through
Phil. 521). lack of good faith in implementing
the needed reforms, including any
hesitation in paying the
landowners just compensation,

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this reform program and its said parcel of land and the owner did
objectives would suffer major not challenge the right of the
setbacks. That the government’s government to expropriate the
agrarian reform program and its property. The only issue then is the
success are matters of public compensation to be paid to the owner,
interest, to our mind, cannot be whether it should be determined as of
disputed as the program seeks to 1947, when the government started
remedy long existing and possessing the land or should it be
widespread social justice and computed in 1959, when the
economic problems. (Apo Fruits government filed its expropriation
Corp. vs. LBP, et al., G.R. No. proceedings. It was contended by the
164195, April5, 2011). government that the compensation
should be reckoned from 1947, when
the government took possession of the
property. Castelvi, on the other hand,
Q -What matters may be considered in
contended that it should be computed
determining just compensation?
as of the filing of the complaint for
Explain.
expropriation. Rule on the contention.

A- The nature and character of the land at


A - Just compensation should be
the time of its taking is the principal
determined as of the filing of the
criterion for determining how much just
complaint. It is true that the government
compensation should be given to the
has taken possession of the property in
landowner. All the facts as to the
condition of the property and its 1947, but the question is that, the taking
surroundings, as well as its improvements then, was not possession. To constitute
and capabilities, should be considered. taking, the following must concur:
(NHA vs. Heirs of Isidro Guivelondo, et (1) that there must be an entry in the
al.) property by the plaintiff in expropriation;
(2) that the entrance must have been
done under legal title or color of the right
Q- Carmen Vda. De Castelvi is the
owner of a parcel of land in Pasay City. or title thereto;
The same has been leased by the (3) that there must be the element of
government for the use of the permanence, not merely for a moment;
Philippine Air Force since 1947. After and
12 years, the government instituted
expropriation proceedings over the

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(4) that it is necessary that the owner of


the property be deprived completely of
the right of ownership. In the case at bar, Q - When should the compensation be
at least two elements are lacking and fixed? Why?
these are the lack of permanence in the
possession of the government since it has
been in possession of the property as a It should be computed at the time the
lessee, and that the government has not government took possession of the land
deprived the owner of the right of in question, such that the owner would be
ownership as evidenced by the payment deprived of his ownership. If the taking is
of rentals to her. not permanent, its value should be
computed as of the filing of the action for
expropriation. (Com. Of Pubic Highways
The leasing of the property to the vs. Burgos)
government is an act of ownership and
the latter has to pay rentals, hence, the
owner still enjoyed the constitutional A parcel of land consisting of 429
sense. Therefore, in the absence of taking square meters in Taguig, MM was
preceding the filing of the complaint for found to be the birth site of Felix
eminent domain, the general rule that the Manalo, the founder of INC. it was
just compensation should be computed as declared by the National Historical
of the time of the filing of the complaint Institute as a national landmark with
must be applied (Republic vs. Vda. De the approval of the DECS pursuant to
Castelvi, et al, Manotok vs. NHA) P.D. 260, Sec 4. Then, a complaint for
expropriation was filed but it was
opposed on the ground that the
Q - In the computation of just intended expropriation was not for
compensation, may the courts apply public purpose. Decide.
the provision of Article 1250 of the Gone are the days when public use was
New Civil Code calling for the interpreted to refer to roads, schools,
adjustment of the peso rate in times of plazas, and other public exigency. It
extraordinary inflation or deflation? means the use by the whole community.
Every member of the community need not
be personally or directly affected by it. It
A- No, because in eminent domain cases, is sufficient if it satisfies great public want
the obligation to pay arises from law, or exigency. It means public usefulness,
independent of contract. (Commissioner utility or advantage or what is productive
of Public Highway vs Burgos) of general benefit. It may be limited to

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the inhabitants of a small or restricted power of eminent domain exercise of the


locality and not to a particular individual. power of eminent domain is a flexible and
The term refers to constant growth. evolving concept influenced by changing
conditions. In this jurisdiction, the
statutory and judicial trend has been
summarized as follows where it has been
The purpose of the expropriation is to
said that for as long as the purpose of the
give recognition to the distinctive
taking is public, then the power of
contribution of Felix Manalo as the
founder of INC, a contribution to the eminent domain comes into play (Heirs of
Philippine culture rather than to Juancho Ardona vs Reyes)
commemorate his founding and
leadership. The greater benefit of the
members of the INC is merely incidental The term “public use” has acquired a
and secondary in nature. What is more comprehensive coverage. To the
significant is the principal objective and literal import of the term signifying strict
not the consequences that follow. Indeed, use or employment by the public has been
that only a few would actually benefit added the broader notion of indirect
from the expropriation of the property public benefit or advantage.
does not diminish the essence and
character of public use. (Manosco vs. CA)
In Manosca vs. CA it was also held that the
ultimately emerged is a concept of public
Q - PEPZ filed an expropriation use which is just as broad as “public
proceedings over parcels of land for welfare”
the construction of terminal facilities,
structures and approaches. It was
contended that it had no authority to EPZA has authority to expropriate
expropriate and that the expropriation pursuant to Proc. No. 1980 dated May 30,
was not for public purpose. Rule on 1980. The expropriation was intended
the contention? Explain. for the construction of terminal facilities,
structures and approaches thereto. The
authority is broad enough to give the
A- The contention is not correct. PEPZ is expropriator substantial leeway in
authorized under its charter and that the deciding for what public use the
expropriation was intended for public expropriated property would be utilized.
purpose. In Sumulong vs Guerrero it has Pursuant to this broad authority, it can
been ruled that het public use lease a portion of the lot to commercial
requirement for a valid exercise of the banks while the rest for transportation

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terminals. This is inspite of the fact that it A - No. socialized housing has been
was not mentioned in the original charter. recognized as public use for purposes of
But it was said that EPZA was to be exercising the power of eminent domain.
created as a viable commercial, industrial
and investment area. The Decree creating
it did not intend to limit the The public purpose of the socialized
establishment of an export processing housing project is not in any way
zone but it was bestowed with authority diminished by the amount of just
to expropriate parcels of land for the compensation that the court has fixed.
construction of terminal facilities, The need to provide decent housing to the
structures and approaches thereto. The urban poor dwellers in the locality was
leasing of portions of the lots to banks not just by mere fact that the land cost
and the construction of terminals have
more than petitioner had expected.
the purpose of making banking and
transportation facilities easily accessible
for the persons working at the industries
located in the EPZA. This is so because of The landowners had already been
EPZA’s goal of being a major force in the prejudiced by the expropriation case.
economic development of the country and NHA cannot be permitted to institute
this has to be realized. (estate of Salud condemnation proceedings against the
Jimenez vs. Phil. Export Processing Zone) owners only to abandon it later when it
finds the amount of just compensation
unacceptable. Coscuellueta vs CA it is
arbitrary and capricious for a government
Q - In an expropriation proceeding the
agency to initiate expropriation
NHA which sought to expropriate proceedings, seize a person’s property,
properties for socialized housing allow the judgment of the court to become
sought to dismiss the petition final and executor and then refuse to pay
contending that the intended public on the ground that there are no
use was rendered nugatory by the appropriation for the property earlier
unreasonable just compensation fixed taken and profitably used. We condemn
by the court, which is beyond the in the strongest possible terms the
means of the intended beneficiaries of
cavalier attitude of government officials
the socialized housing project. Is the
who adopt such a despotic and
contention correct? Why? irresponsible stance. (NHA vs. Heirs of
Isidro Guivelondo)

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Q - What could be some of the bases in certiorari with the Supreme Court
the change of the interpretation of the contending that:
term “public use”?
(a) the intended taking is not for public
use;
A - A public use for which a parcel of land (b) the land was covered by the land
may be taken defies absolute definition reform program; and
for it changes with varying conditions of
society, newly appliances in the sciences, (c) expropriation would impair the
changes conceptions of scope and obligation of contracts. Decide.
functions of government and other
differing circumstances brought about by
an increase in population and new modes A - The concept of public use is not
of communication and transportation. At limited to the traditional purposes for the
present, it may not be amiss to state that construction of roads and bridges. The
whatever is beneficially employed for the idea that public use means “use by the
general welfare satisfies the requirement public” has been discarded. As long as the
of public use. (Estate of Salud vs. PEZA) purpose of the taking is for the use of the
public, then the power of eminent domain
comes into play. In at least 2 cases, the SC
Q - May the State take private property decided to remove any doubt as to the
for tourism purposes? determination of public use. One is the
expropriation of lands to be subdivided
A - Yes, because its taking may likewise into small lots for sale at cost to
satisfy the public purpose clause. individuals. The other is in the transfer
through the exercise of this power, of
utilities and other private enterprises to
Q - The Philippine Tourism Authority the government. It is accurate to state
sought the expropriation of 282 then that at present, whatever, may be
beneficially employed for the general
hectares of land in Barangay Malubog
welfare satisfies the requirement of
and Babag, Cebu City for the
public use. The petitioners have not
development of a sports complex.
After depositing the amount shown that the area being developed is
land reform area and that the affected
equivalent to 10% of the value of the
persons have been given emancipation
property, the court authorized the PTA
parents and certificate of land transfer.
to take immediate possession of the
The contract clause has never been
property. The petitioners, occupants
of the land, filed a petition for regarded as a barrier to the exercise of

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the police power of the State and likewise Estero Sunog Apog, in both petitions,
eminent domain. (heirs of ardona vs the petitioners questioned the
reyes) constitutionality of the laws as
depriving them of property without
due process of law, denying them their
right to just compensation and equal
Q - If a private property is taken for the
protection of the laws. P.D. No. 1669
establishment of a sports and
provides that the just compensation
recreational facility despite the
existence of the same facility nearby, is shall be the market value determined
by the City Assessor pursuant to P.D.
it considered public use? Explain.
No. 76 and P.D. No. 1533, but shall in
no case exceed P17, 000,000.00 which
shall be payable within 5 years. The
A - No, since there is no genuine necessity same provision is true in P.D. No. 1670
to take it. The rule is that where the but the just compensation shall in no
taking by the state of private property is case exceed P8,000,000.00 payable in
done for the benefit of a small community 5 years. Rule on the petition.
which seeks to have its own sports and
recreational facility, notwithstanding that
there is such a recreational facility only a
A - The power of eminent domain is
short distance away, such taking cannot
inherent in every State and the provisions
be considered to be for public use. Its
in the Constitution pertaining to such
expropriation is not valid.
power only serve to limit its exercise in
order to protect individuals against
whose property the power is sought to be
The reason for the rule is that, the enforced. In Republic vs. Juan, it was said
expropriating authority must establish a that the sovereign right of the state is not
genuine necessity which justifies the subject to any limitations other than those
condemnation of the property. If there is imposed by the Constitution which are:
no genuine necessity, the expropriation
would not be justified. (Lourdes De La (1) payment of just compensation; and
Paz Masikip vs. The City of Pasig)
(2) due process must be observed in the
taking.

Q - P.D. No. 1669 provides for the


expropriation of the Tambunting
The challenged decrees are uniquely
Estate. P.D. No. 1670 provides for the
unfair in the procedure adopted and the
expropriation of the property along
powers given to the NHA. The

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expropriation is instant and automatic to encroachment of its independence and


take effect immediately upon the signing prerogatives. (Manotok vs NHA)
of the decree. No deposit before taking is
required. There is no opportunity to
contest the expropriation, plead their side Q - A property was converted into an
or question the amount of payment fixed airport by the Air Transport Office
by the decree. Constitutionally, suspect (ATO) depriving the owners of the
methods or procedures cannot be the beneficial use and enjoyment of the
basis for social justice. A program in same as early as 1948 without an
alieviate problems of the urban poor expropriation proceeding. It was
which is well studied, adequately funded, contended that there was taking hence,
genuinely sincere, and solidly grounded just compensation should be reckoned
on basic rights and democratic from 1948. Is the contention correct?
procedures is needed. The due process
Why?
clause cannot be rendered nugatory
everytime a specific decree or law orders
the expropriation of somebody’s property
provides its own peculiar manner of A - No. as a rule the determination of just
taking the same. The due process clause compensation in eminent domain case is
guarantees protection from arbitrariness reckoned from the time of taking
of the power of eminent domain. (Gabatin vs LBO) in this case, however,
application of the said rule would lead to
grave injustice. Note that the ATO had
been using the property as airport since
Although due process does not always
1948 without having instituted the
necessarily demand hearing, it mandates proper expropriation proceedings. To
some from of proceeding wherein notice peg the value of the property at the time
and reasonable opportunity to be heard of taking in 1948, despite the exponential
are given to the owner to protect his increase in its value considering the lapse
property rights. There may exceptional of over half a century, would be iniquitous.
situations when hearing is not necessary, ATO cannot conveniently invoke the right
but when it is alleged that in the taking of of eminent domain to take advantage of
a person’s property, his right to due
the ridiculously low value of the property
process of law has been violated, the
at the time of taking that it arbitrarily
courts will have to step and probe into
chooses to the prejudice of the owners.
such alleged violation. To enjoin the
courts by decree from looking into alleged
violations of the due process, equal
protection and eminent domain clauses in Justice and fairness dictate that the
the constitution is an impermissible appropriate reckoning point for the

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valuation of the property is when the trial institution on the said land, if
court made its order of expropriation in any.
2001 (heirs of Mateo Pidacan and
Romana Eligo vs. ATO) In Land Bank v Banal, 478 Phil.
701 (2004); LBP v Rivera, GR No.
182431 November 17, 2010, 635
SCRA 285, it was said that these
factors and formula are mandatory
Q- What are the factors that should be and not mere guides that the SAC
taken into consideration in the may disregard. While the
computation of just compensation determination of just
under RA 6657? Explain compensation is essentially a
judicial function vested in the RTC
Ans- In determining the just acting as a (SAC), the judge cannot
compensation, the RTC is required to abuse his discretion by not taking
consider the following factors into consideration the factors
enumerated in Sec. 17 of RA 6657: specially identified by law and
implementing rules. (SACs) are not
1. The acquisition cost of the land
at liberty to disregard the formula
2. The current value of the laid down (by the DAR), because
properties unless a administrative orders is
3. Its nature, actual use and declared invalid, courts have no
income option but to apply it. The (SAC)
4. The sworn valuation by the cannot ignore, without violating
the agrarian law, the formula
owner
provided by the DAR for the
5. The tax declarations determination of just
6. The assessments made by compensation. (LBP v Heirs of
government assessors Encinas, GR No. 167735, April 18,
7. The social and economic 2012; NPC v Sps. Zabala, GR No.
benefits contributed by the 173520, January 30, 2013.)
farmers and the farmworkers,
and by the government to the
property Q- In the exercise of the power of
8. The non-payment of taxes or eminent domain, what value shall be
paid to the owner? Explain.
loans secured from any
government financing Ans- The general rule in determining just
compensation in eminent domain is the

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value of the property as of the date of the compensation and would discourage the
filing of the complaint. construction of important public
improvements.
Normally, the time of the taking coincides
with the filing of the complaint for In subsequent cases, the Court, following
expropriation, Hence, many rulings of the the above doctrine, invariably held that
court have equated just compensation the time of taking is the critical date in
with the value of the property as of the determining lawful or just compensation.
time of the filing of the complaint Justifying this stance, Mr. Justice later
consistent with the Rules. So too, where Chief Justice) Enrique Fernando, speaking
the institution of the action precedes for the Court in Municipality of La Carlota
entry to the property; just compensation v Sps Felicidad Baltazar and Vicente Gan,
is to be ascertained as of the time of the said, the owner as is the constitutional
filing of the complaint. intent is paid what he is entitled to
according to the value of the property so
The general rule however admits of an devoted to public use as of the date of the
exception: where the Court fixed the value taking. From that time, he had been
of the property as of the date it was taken deprived thereof. He had no choice but to
and not the date of the commencement of submit. He is not however, to be
the expropriation proceedings. (NPC v despoiled of such a right. No less than the
Ibrahim et al., GR No. 168732, June 29, fundamental law guarantees just
2007; NPC v Zabala, GR No. 173520, compensation. It would be injustice to
January 30, 2013) him certainly if from such a period, he
could not recover the value of what was
lost. There could be on the other hand,
Q- Give an example of such exception injustice to the expropriator if by a delay
in the collection, the increment in price
Ans- In the case of Provincial Government would accrue to the owner. The doctrine
of Rizal v. Caro de Araullo, it was ruled to which this Court has been committed is
that the owners of the land have no right intended precisely to avoid either
to recover damages for this unearned contingency fraught with unfairness.
increment resulting from the construction
of the public improvement (lengthening Simply stated, the exception finds the
of Taft Avenue from Manila to Pasay) application where the owner would be
from which the land was taken. To permit given undue increment advantages
them do to so would be to allow them to arising from the use to which the
recover more than the value of the land at government devoted the property
the time it was taken, which is the true expropriated- as for instance, the
measure of the damages, or just extension of a main thoroughfare as was
in the case in Caro de Araullo. In the
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instant case, however, it is difficult to eminent domain to acquire the easement


conceive of how there could have been an over respondent’s property as this power
extra-ordinary increase in the value of the encompasses not only the taking or
owner’s of the land arising from the appropriation of title to and possession of
expropriation, as indeed the records do the expropriated but likewise covers even
not show any evidence that the valuation the imposition of a mere burden upon the
of P1,000.00 reached in 1992 was due to owner of the condemned property.
increments directly caused by petitioner’s Significantly, though, landowners cannot
use of the land. Since the petitioner is be deprived of their right over their land
claiming an exception to Rule 67, Sec 4, it until expropriation proceedings are
has the burden in proving its claim that its instituted in court. The court must then
occupancy and use- not ordinary inflation see to it that the taking is for public use,
and increase in land values- was the that there is payment of just
direct cause of the increase in valuation compensation and that there is due
from 1978 to 1992. (NPC v Ibrahim, et al,. process of law.
GR No. 168732, June 29, 2007).
In disregarding this procedure and failing
to recognize respondent’s ownership of
the sub-terrain portion, petitioner tool a
Q- The NPC constructed underground risk and exposed itself to greater liability
tunnels on the property of the with the passage of time. It must be
respondents without their knowledge emphasized that the acquisition of the
and consent and without any easement is not without expense. The
expropriation proceedings. It is underground tunnels impose limitations
contended that it constructed an on respondent’s use of the property for an
easement on the property. Was there indefinite period and deprive them of its
taking of the property considering that ordinary use. Based upon the foregoing,
the owners were deprived of their respondents are clearly entitled to the
beneficial use and enjoyment of the payment of just compensation.
same hence, entitled to just Notwithstanding the fact that the
compensation? Explain. petitioner only occupies the sub-terrain
portion, it is liable to pay not merely an
Ans- Yes. The manner in which the
easement was created by petitioner, easement fee but rather the full
however, violates the due process rights compensation for land. This is so because
in this case, the nature of the easement
of respondents as it was without notice
practically deprives the owners of its
and indemnity to them and did not go
through proper expropriation normal beneficial use. Respondents, as
the owners of the property thus
proceedings. Petitioner could have, at any
expropriated, are entitled to a just
time, validly exercised the power of

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compensation which should be neither Public Land Act. Section 112 of the
more nor less, whenever it is possible to Public Land Act provides that land
make the assessment, than the money granted by patent shall be subject to a
equivalent of said property. (NPC v right-of-way not exceeding 60 meters
Ibrahim et al., GR No. 168732, June 29, in width for public highways, irrigation
2007). ditches, aqueducts, and other similar
works of the government or any public
enterprise, free of charge, except only
Q- NPC contended that if ever it is for the value of the improvements
liable, it should be made to pay the existing thereon that may be affected.
value of the land from the time it In view of this, the Court of Appeals
declared that all the Republic needs to
constructed the tunnels. Is the
do is to enforce such right without
contention correct? Why?
having to pay any just compensation.
Ans- No. To allow it to use the date it Hence, the Republic may appropriate
constructed the tunnels as the date of the 701 square meters necessary for
valuation would be grossly unfair. First, it the construction of the floodwalls
did not enter the land under warrant or without paying for it. Is the Republic
color of legal authority or with intent to liable for just compensation if in
expropriate the same. It did not notify the enforcing the legal easement of right-
owners and wrongly assume that it had of-way if on a property, the remaining
the right to dig the tunnels under their area would be rendered unusable and
property. Secondly, the improvements uninhabitable? Explain?
introduced in no way contributed to an
Ans- Yes, it is liable to pay consequential
increase in the value of the land. The
damages if in enforcing the legal
valuation should be based at the time of
the discovery of the construction of the easement on Andaya’s property, the
remaining area would be rendered
underground tunnels. (NPC v Ibrahim, et
unusable and uninhabitable. “Taking” in
al supra.)
the exercise of the power of eminent
domain, occurs not only when the
government actually deprives or
Q- It is undisputed that there is a legal dispossess the property owner of his
easement of right-of-way in favor of property or of its ordinary use, but also
the Republic. Andaya’s transfer when there is a practical destruction or
certificates of title contained the material impairment of the value of his
reservation that the lands covered property. Using this standard, there was
thereby are subject to the provisions of undoubtedly a taking of the remaining
the Land Registration Act and the area of Andaya’s property. True, no

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burden was imposed thereon and Andaya acquisition only of a right-of-way


still retained title and possession of the easement for its transmission lines
property. But, the nature and effect of the and the payment of an easement fee. Is
floodwalls would deprive Andaya of the the contention correct? Explain.
normal use of the remaining areas. It
would prevent ingress and egress to the Ans- No. The determination of just
property and turn it into a catch basin for compensation is a judicial function. No
the floodwaters coming from the Agusan statute, decree, or executive order can
River. mandate that its own determination shall
prevail over the court’s findings.
For this reason, Andaya is entitled to
payment of just compensation, which In National Power Corporation v
must be neither more nor less than the Manubay Agro-Industrial Development
monetary equivalent of the land. One of Corporation, GR No. 150936, August 18,
the basic principles enshrined in our 2004, 437 SCRA 60, it was that granting
Constitution is that no person shall be arguendo that what petitioner acquired
deprived of his private property without over respondent’s property was purely
due process of law; and in expropriation easement of a right of way, still the Court
cases, an essential elements of due cannot sustain its view that it should pay
process is that there must be just only an easement fee, and not the full
compensation whenever private property value of the property. The acquisition of
is taken for public use. Noteworthy, Sec. 9, such an easement falls within the purview
Art III of our Constitution mandates that of the power of eminent domain.
private property shall not be taken for (Republic v PLDT, 136 Phil. 20 (1969)).
public use without just compensation. True, an easement of a right of way
(Rep v Lim, GR No.161656, June 29,
transmits no right except the easement
2005, 462 SCRA 205; Rep v Andaya, GR itself, and owner retains the full
No. 160656, June 15, 2007). ownership of the property. The
acquisition of such easement is,
nevertheless, not gratis. Considering the
Q- In an expropriation case, NPC nature and the effect of the installation of
insisted that if any amount should be power lines, the limitations on the use of
paid to the landowners, it should only the land for an indefinite period would
be an easement fee of 10% the value of deprive owner of normal use of the
the property, not the full value, since it property. For this reason, the latter is
acquired only a simple right-of-way entitled to payment of just compensation
easement for the passage of its which must be neither more nor less than
overhead transmission lines. It pointed the monetary equivalent of the land. (NPC
out that it charter authorizes the v Dr. Antero Bongbong, et al., GR No.

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164079, April 3, 2007; LBP v Livioco, GR


No. 170685, September 22, 2010; NPC v
Villamor, GR No. 160080, June 19, 2009). Q- May a franchise of a corporation be
expropriated?
Ans- Yes, provided that it is for public use.
Q- May the potential use of the (Long Island Water Supply v Brooklyn,
property be the basis of just 166 US 685).
compensation? Explain.
Ans- No. While the potential use of an
expropriated property is sometimes Q- A private property has been taken
considered in cases where there is a great for the use of the public as cemetery.
improvement in the general vicinity of the Can it be taken for another public use?
expropriated property, (NPC v. Manubay Why?
Agro-Industrial Dev. Corp., 480 SCRA Ans- Yes, if the national government is the
Phil 470 (2004)), it should never control one that would take it. But if the power is
the determination of just compensation. merely delegated to the local government
The potential use of the property should under a general grant of authority, the
not be the principal criterion for
latter cannot. (City of Manila v Chinese
determining just compensation for this
Community, 40 Phil. 349).
will be contrary to the well settled
doctrine that the fair market value of an
expropriated property is determined by
its character and its price at the time of Q- Who can determine the necessity of
taking, not its potential uses. If at all, the the exercise of the power of eminent
potential use of the property or its domain?
“adaptability for conversion in the future
Ans- The Congress determines the
is a factor, not the ultimate in determining
necessity if the power is directly
just compensation.” (Curata v PPA, GR No.
exercised by the legislature. (City of
154211-12, June 12, 2009, 590 SCRA
Manila v Chinese Com. 40 Phil 349).
214).

Q- The transmission lines of the


Q- May a contract be expropriated?
National Power Corporation traversed
Ans- Yes, provided it would not impair the the land or Mr. and Mrs. G, such that no
obligations of contracts. A contract can be plant higher than 3 meters was
expropriated like any tangible property allowed to be planted. Is the NPC liable
for public use. to pay the full market value of the

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property or simple easement fee? Ans- Yes, while it is true that said final
Why? judgment of the Supreme Court on the
subject becomes the law of the case, it is
Ans- NPC should pay the full market value equally true that the right of the Republic
of the property because under the to take private property for public use
premises, the acquisition of the right of upon payment of just compensation is so
way easement falls within the purview of provided in the Constitution and our law.
the power of eminent domain, hence, just Such expropriation proceedings may be
compensation should be paid. The undertaken by the Republic not only by
easement of right or way is definitely a voluntary negotiation with the owners
taking under the power of eminent but also by taking appropriate action or
domain. Considering the nature and effect by legislation. When the Batasang
f the installation of 230 KV transmission Pambansa passed B.P. Blg. 340 on
lines, the limitation imposed by NPC February17, 1993, expropriating the very
against the use of the land for an properties subject if the present
indefinite period deprives the owners of proceedings, and for the same purpose, it
its ordinary use. (NPC v Sps Gutierrez, GR appears that it was based on supervening
No. 60077, Jan 18, 1991; NPC v Manubay events that occurred after the decision of
Agr-Industrial Devs. Corp., GR No. the SC was rendered in 1980 justifying
150936, August 18, 2003; NPC v Sps the expropriation.
Saludares, GR No. 189127, April 25,
2012). The said decision is no obstacle to the
legislative arm of the Government
thereafter making its own independent
assessment of the circumstances then
Q- In De Knecht v Bautista, Oct 30,
prevailing as to the propriety of the
1980, it set aside the power of the State
to take possession of the properties expropriation of the properties in
question and thereafter in enacting the
sought to be condemned. The
corresponding legislation. The SC agreed
judgment became final. Later on, B.P.
in the wisdom and necessity of enacting
Blg. 340 was enacted, expropriating
Batas Pambansa Blg. 340. Thus, the
the same properties which are the
subject in the case above-cited. The anterior decision of the SC must yield to
basis issue was whether or not an
expropriation proceeding that was
determined in a final judgment of the
SC can be the subject of a subsequent
legislation expropriating the same
property for the same purpose. Is the
law valid?

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