FUNDAMENTAL POWERS OF THE STATE

Police Power

Philippine Association of Service Exporters [PASEI] vs. Drilon

Facts: PASEI challenges the Constitutional validity of Department Order No. 1, Series of 1988, of the
Department of Labor and Employment, in the character of "GUIDELINES GOVERNING THE
TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD
WORKERS," in this petition for certiorari and prohibition. Specifically, the measure is assailed for:

Grounds:
a. "discrimination against males or females" that it does not apply to all Filipino workers but only to
domestic helpers and females with similar skills;

b. that it is violative of the right to travel;

c. It is held likewise to be an invalid exercise of the lawmaking power, police power being legislative,
and not executive, in character.

Ruling:

a. The Court is satisfied that the classification made-the preference for female workers
rests on substantial distinctions. This Court is content that distinctions are borne by the
evidence. Discrimination in this case is justified.

As a matter of judicial notice, the Court is well aware of the unhappy plight that has befallen our female
labor force abroad, especially domestic servants, amid exploitative working conditions marked by, in not a
few cases, physical and personal abuse. The sordid tales of maltreatment suffered by migrant Filipina
workers, even rape and various forms of torture, confirmed by testimonies of returning workers, are
compelling motives for urgent Government action. As precisely the caretaker of Constitutional rights, the
Court is called upon to protect victims of exploitation. In fulfilling that duty, the Court sustains the
Government's efforts. The Court cannot, however, say the same thing as far as men are concerned.
There is simply no evidence to justify such an inference. Suffice it to state, then, that insofar as
classifications are concerned, this Court is content that distinctions are borne by the evidence.

It is well-settled that "equality before the law" under the Constitution does not import a perfect Identity of
rights among all men and women. It admits of classifications, provided that:
(1) such classifications rest on substantial distinctions;
(2) they are germane to the purposes of the law;
(3) they are not confined to existing conditions; and
(4) they apply equally to all members of the same class.

b. The consequence the deployment ban has on the right to travel does not impair the right.
The right to travel is subject, among other things, to the requirements of "public safety,"
"as may be provided by law." Department Order No. 1 is a valid implementation of the Labor
Code, in particular, its basic policy to "afford protection to labor," pursuant to the respondent
Department of Labor's rule-making authority vested in it by the Labor Code. The petitioner
assumes that it is unreasonable simply because of its impact on the right to travel, but as we
have stated, the right itself is not absolute. The disputed Order is a valid qualification thereto.

The Constitution declares that:
Article XIII, Sec. 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all.

"Protection to labor" does not signify the promotion of employment alone. What concerns the Constitution
more paramountly is that such an employment be above all, decent, just, and humane. It is bad enough
FUNDAMENTAL POWERS OF THE STATE

that the country has to send its sons and daughters to strange lands because it cannot satisfy their
employment needs at home. Under these circumstances, the Government is duty-bound to insure that
our toiling expatriates have adequate protection, personally and economically, while away from home. In
this case, the Government has evidence, evidence the petitioner cannot seriously dispute, of the lack or
inadequacy of such protection, and as part of its duty, it has precisely ordered an indefinite ban on
deployment.

c. Neither is there merit in the contention that Department Order No. 1 constitutes an invalid
exercise of legislative power. It is true that police power is the domain of the legislature, but it
does not mean that such an authority may not be lawfully delegated. As we have mentioned,
the Labor Code itself vests the Department of Labor and Employment with rulemaking powers in
the enforcement whereof.

Ichong v. Hernandez

Facts: Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." In effect it nationalizes
the retail trade business.

ISSUES:
Q: Does the law deny Petitioners equal protection of the laws?
ANS: No violation of equal protection.

The difference in status between citizens and aliens constitutes a basis for reasonable classification in
the exercise of police power.
The equal protection of the law is against undue favor and individual or class privilege, as well as hostile
discrimination or the oppression of inequality. It is not intended to prohibit legislation, which is limited
either in the object to which it is directed or by territory within which is to operate. It does not demand
absolute equality among residents; it merely requires that all persons shall be treated alike, under like
circumstances and conditions both as to privileges conferred and liabilities enforced. The equal
protection clause is not infringed by legislation which applies only to those persons falling within a
specified class, if it applies alike to all persons within such class, and reasonable grounds exists for
making a distinction between those who fall within such class and those who do not.

The disputed law is not the product of racial hostility, prejudice or discrimination, but the expression of
the legitimate desire and determination of the people, thru their authorized representatives,
to free the nation from the economic situation that has unfortunately been saddled upon it rightly or
wrongly, to its disadvantage; to free national economy from alien control and dominance.

Q: Was the exercise of police power proper?
ANS: Yes, the law is clearly in the interest of the public, nay of the national security itself, and indisputably
falls within the scope of police power, thru which and by which the State insures its existence and security
and the supreme welfare of its citizens. The police power legislation is firmly grounded on public interest
and welfare, and there is a reasonable relation between the purposes and means.

Requisites for Valid exercise of Police Power

LAWFUL MEANS
The law in question is deemed absolutely necessary to bring about the desired legislative objective, i.e.,
to free national economy from alien control and dominance. It is not necessarily unreasonable because
it affects private rights and privileges (11 Am. Jur. pp. 1080-1081.) The test of reasonableness of a law is
FUNDAMENTAL POWERS OF THE STATE

the appropriateness or adequacy under all circumstances of the means adopted to carry out its purpose
into effect (Id.) Judged by this test, disputed legislation, which is not merely reasonable but actually
necessary, must be considered not to have infringed the constitutional limitation of reasonableness.

A cursory study of the provisions of the law immediately reveals how tolerant, how reasonable the
Legislature has been. The law is made prospective and recognizes the right and privilege of those
already engaged in the occupation to continue therein during the rest of their lives; and similar
recognition of the right to continue is accorded associations of aliens. The right or privilege is denied to
those only upon conviction of certain offenses. In the deliberations of the Court on this case, attention
was called to the fact that the privilege should not have been denied to children and heirs of aliens now
engaged in the retail trade. Such provision would defeat the law itself, its aims and purposes. Beside, the
exercise of legislative discretion is not subject to judicial review. It is well settled that the Court will not
inquire into the motives of the Legislature, nor pass upon general matters of legislative judgment.

LAWFUL SUBJECT
The necessity of the law in question is explained in the explanatory note that accompanied the bill,
which later was enacted into law:

This bill proposes to regulate the retail business. Its purpose is to prevent persons who are not citizens of
the Philippines from having a strangle hold upon our economic life. If the persons who control this vital
artery of our economic life are the ones who owe no allegiance to this Republic, who have no profound
devotion to our free institutions, and who have no permanent stake in our people's welfare, we are not
really the masters of our destiny. All aspects of our life, even our national security, will be at the mercy of
other people.

In seeking to accomplish the foregoing purpose, we do not propose to deprive persons who are not
citizens of the Philippines of their means of livelihood. While this bill seeks to take away from the hands
of persons who are not citizens of the Philippines a power that can be wielded to paralyze all aspects of
our national life and endanger our national security it respects existing rights.

The approval of this bill is necessary for our national survival.

If political independence is a legitimate aspiration of a people, then economic independence is none the
less legitimate. Freedom and liberty are not real and positive if the people are subject to the economic
control and domination of others, especially if not of their own race or country. The removal and
eradication of the shackles of foreign economic control and domination, is one of the noblest motives
that a national legislature may pursue. It is impossible to conceive that legislation that seeks to bring it
about can infringe the constitutional limitation of due process.

CONCLUSION
The enactment clearly falls within the scope of the police power of the State, thru which and by which it protects its own personality
and insures its security and future; that the law does not violate the equal protection clause of the Constitution because sufficient
grounds exist for the distinction between alien and citizen in the exercise of the occupation regulated, nor the due process of law
clause, because the law is prospective in operation and recognizes the privilege of aliens already engaged in the occupation and
reasonably protects their privilege; that the wisdom and efficacy of the law to carry out its objectives appear to us to be plainly
evident as a matter of fact it seems not only appropriate but actually necessary and that in any case such matter falls within
the prerogative of the Legislature, with whose power and discretion the Judicial department of the Government may not interfere.





FUNDAMENTAL POWERS OF THE STATE


Lutz v. Araneta

Facts: This case was initiated in the Court of First Instance of Negros Occidental to test the legality of the
taxes imposed by Commonwealth Act No. 567, otherwise known as the Sugar Adjustment Act. Plaintiff,
Walter Lutz, in his capacity as Judicial Administrator of the Intestate Estate of Antonio Jayme Ledesma,
seeks to recover from the Collector of Internal Revenue the sum of P14,666.40 paid by the estate as
taxes, under section 3 of the Act, for the crop years 1948-1949 and 1949-1950.

Issue: Petitioner alleges that such tax is unconstitutional and void, being levied for the aid and support
of the sugar industry exclusively, which in plaintiff's opinion is not a public purpose for which a tax may
be constitutionally levied.

Ruling:

The tax imposed is primarily an exercise of the police power; The tax provided for in Commonwealth
Act No. 567 is not 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 regulatory purpose, to provide means
for the rehabilitation and stabilization of the threatened sugar industry. In other words, the act is
primarily an exercise of the police power.

Protection and promotion of the sugar industry is a matter of public concern; This Court can take
judicial notice of the fact that sugar production is one of the great industries of our nation, sugar
occupying a leading position among its export products; that it gives employment to thousands of
laborers in fields and factories; that it is a great source of the state's wealth, is one of the important
sources of foreign exchange needed by our government, and is thus pivotal in the plans of a regime
committed to a policy of currency stability. Its promotion, protection and advancement, therefore
redound greatly to the general welfare. Once it is conceded, as it must, that the protection and
promotion of the sugar industry is a matter of public concern, it follows that the Legislature may
determine within reasonable bounds what is necessary for its protection and expedient for its
promotion.

That the tax to be levied should burden the sugar producers themselves can hardly be a ground of
complaint; indeed, it appears rational that the tax be obtained precisely from those who are to be
benefited from the expenditure of the funds derived from it. At any rate, it is inherent in the power to
tax that a state be free to select the subjects of taxation, and it has been repeatedly held that
"inequalities which result from a singling out of one particular class for taxation, or exemption infringe
no constitutional limitation" (Carmichael vs. Southern Coal & Coke Co., 301 U. S. 495, 81 L. Ed. 1245,
citing numerous authorities, at p. 1251).


Association of Small Landowners vs Secretary of Agrarian Reform

Issues:
The petitioner argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines.
(2) The said executive orders are violative of the constitutional provision that no private property shall
be taken without due process or just compensation.

FUNDAMENTAL POWERS OF THE STATE


Ruling:

1. President Aquino's loss of legislative power did not have the effect of invalidating all the
measures enacted by her when and as long as she possessed it; The said measures were issued
by President Aquino before July 27, 1987, when the Congress of the Philippines was formally
convened and took over legislative power from her. They are not "midnight" enactments
intended to pre-empt the legislature.

Neither is it correct to say that these measures ceased to be valid when she lost her legislative power
for, like any statute, they continue to be in force unless modified or repealed by subsequent law or
declared invalid by the courts. A statute does not ipso facto become inoperative simply because of the
dissolution of the legislature that enacted it. By the same token, President Aquino's loss of legislative
power did not have the effect of invalidating all the measures enacted by her when and as long as she
possessed it.

Significantly, the Congress she is alleged to have undercut has not rejected but in fact substantially
affirmed the challenged measures and has specifically provided that they shall be suppletory to R.A. No.
6657 whenever not inconsistent with its provisions. Indeed, some portions of the said measures, like the
creation of the P50 billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229,
have been incorporated by reference in the CARP Law.

Q: Proc. No. 131 [creation of the P50 billion fund] is questioned on the ground that it does not conform
to the requirements of a valid appropriation as specified in the Constitution.
ANS: Proc. No. 131 is not an appropriation measure even if it does provide for the creation of said fund,
for that is not its principal purpose. An appropriation law is one the primary and specific purpose of
which is to authorize the release of public funds from the treasury.

The creation of the fund is only
incidental to the main objective of the proclamation, which is agrarian reform.

2. Eminent Domain used as an implement of Police Power; Recent trends, would indicate not a
polarization but a mingling of the police power and the power of eminent domain, with the
latter being used as an implement of the former like the power of taxation.

When there is exercise of Police Power; to the extent that the measures merely prescribe retention
limits for landowners, there is an exercise of the police power for the regulation of private property in
accordance with the Constitution.

When the deprivation of property is tantamount to the exercise of Eminent Domain; but where, to
carry out such regulation, it becomes necessary to deprive such owners of whatever lands they may own
in excess of the maximum area allowed, there is definitely a taking under the power of eminent domain
for which payment of just compensation is imperative. The taking contemplated is not a mere limitation
of the use of the land. What is required is the surrender of the title to and the physical possession of the
said excess and all beneficial rights accruing to the owner in favor of the farmer-beneficiary. This is
definitely an exercise not of the police power but of the power of eminent domain.

Balancing test; It is worth remarking at this juncture that a statute may be sustained under the police
power only if there is a concurrence of the lawful subject and the lawful method. Put otherwise, the
interests of the public generally as distinguished from those of a particular class require the interference
FUNDAMENTAL POWERS OF THE STATE

of the State and, no less important, the means employed are reasonably necessary for the attainment of
the purpose sought to be achieved and not unduly oppressive upon individuals. As the subject and
purpose of agrarian reform have been laid down by the Constitution itself, we may say that the first requirement
has been satisfied. What remains to be examined is the validity of the method employed to achieve the
constitutional goal.
-This brings us now to the power of eminent domain

Eminent Domain

Public Use; No less than the 1987 Charter calls for agrarian reform, which is the reason why private agricultural
lands are to be taken from their owners, subject to the prescribed maximum retention limits. The purposes
specified in P.D. No. 27, Proc. No. 131 and R.A. No. 6657 are only an elaboration of the constitutional injunction
that the State adopt the necessary measures "to encourage and undertake the just distribution of all agricultural
lands to enable farmers who are landless to own directly or collectively the lands they till." That public use, as
pronounced by the fundamental law itself, must be binding on us.

Determination of Just Compensation

Q: Whether the manner of fixing the just compensation, which is claimed to be entrusted to the administrative
authorities is in violation of judicial prerogatives

ANS:
The determination made by the DAR is only preliminary unless accepted by all parties concerned;
although the proceedings are described as summary, the landowner and other interested parties are
nevertheless allowed an opportunity to submit evidence on the real value of the property. But more
importantly, the determination of the just compensation by the DAR is not by any means final and
conclusive upon the landowner or any other interested party, for Section 16(f) clearly provides:

Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for
final determination of just compensation.

The courts of justice will still have the right to review with finality the said determination in the exercise
of what is admittedly a judicial function.

Q: May JUST COMPENSATION be in a form other than money?
Re: the provision in Section 18 of the CARP Law requires the owners of the expropriated properties to accept
shares of stocks in GOCCs, tax credits and LBP bonds.

ANS:
Revolutionary kind of expropriation; It cannot be denied from these cases that the traditional medium
for the payment of just compensation is money and no other. And so, conformably, has just
compensation been paid in the past solely in that medium. However, we do not deal here with the
traditional exercise of the power of eminent domain. This is not an ordinary expropriation where only a
specific property of relatively limited area is sought to be taken by the State from its owner for a specific
and perhaps local purpose. What we deal with here is a revolutionary kind of expropriation.

This kind of expropriation is intended for the benefit not only of a particular community or of a small
segment of the population but of the entire Filipino nation; The expropriation before us affects all
private agricultural lands whenever found and of whatever kind as long as they are in excess of the
FUNDAMENTAL POWERS OF THE STATE

maximum retention limits allowed their owners. This kind of expropriation is intended for the benefit
not only of a particular community or of a small segment of the population but of the entire Filipino
nation, from all levels of our society, from the impoverished farmer to the land-glutted owner. And,
finally, let it not be forgotten that it is no less than the Constitution itself that has ordained this
revolution in the farms, calling for "a just distribution" among the farmers of lands that have heretofore
been the prison of their dreams but can now become the key at least to their deliverance.

Such a program will involve not mere millions of pesos. The cost will be tremendous. Considering the
vast areas of land subject to expropriation under the laws before us, we estimate that hundreds of
billions of pesos will be needed, far more indeed than the amount of P50 billion initially appropriated,
which is already staggering as it is by our present standards. Such amount is in fact not even fully
available at this time.

No transfer of title before the land is fully paid; The CARP Law, for its part, conditions the transfer of
possession and ownership of the land to the government on receipt by the landowner of the
corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an
accessible bank. Until then, title also remains with the landowner. No outright change of ownership is
contemplated either.

Lozano v. Martinez [Constitutionality of BP 22]

The enactment of BP 22 is a valid exercise of the police power and is not repugnant to the
constitutional inhibition against imprisonment for debt; The gravamen of the offense punished by BP
22 is the act of making and issuing a worthless check or a check that is dishonored upon its presentation
for payment. It is not the non-payment of an obligation which the law punishes. The law is not intended
or designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit, under pain of penal
sanctions, the making of worthless checks and putting them in circulation. The law punishes the act not
as an offense against property, but an offense against public order.

The making and issuance of a worthless check is deemed public nuisance; The enactment of BP 22 is a
declaration by the legislature that, as a matter of public policy, the making and issuance of a worthless
check is deemed public nuisance to be abated by the imposition of penal sanctions. The effects of the
issuance of a worthless check transcends the private interests of the parties directly involved in the
transaction and touches the interests of the community at large. The harmful practice of putting
valueless commercial papers in circulation, multiplied a thousand fold, can very well pollute the
channels of trade and commerce, injure the banking system and eventually hurt the welfare of society
and the public interest.

DepEd vs San Diego

Facts/Issue: The issue before us is mediocrity. The question is whether a person who has thrice failed
the National Medical Admission Test (NMAT) is entitled to take it again. The private respondent insists
he can, on constitutional grounds.

Ruling:

It is the right and indeed the responsibility of the State to insure that the medical profession is not
infiltrated by incompetents to whom patients may unwarily entrust their lives and health; the subject
FUNDAMENTAL POWERS OF THE STATE

of the challenged regulation is certainly within the ambit of the police power. The method employed by
the challenged regulation is not irrelevant to the purpose of the law nor is it arbitrary or oppressive. The
three-flunk rule is intended to insulate the medical schools and ultimately the medical profession from
the intrusion of those not qualified to be doctors.

The Constitution also provides that "every citizen has the right to choose a profession or course of
study, subject to fair, reasonable and equitable admission and academic requirements; While every
person is entitled to aspire to be a doctor, he does not have a constitutional right to be a doctor. This is
true of any other calling in which the public interest is involved; and the closer the link, the longer the
bridge to one's ambition. The State has the responsibility to harness its human resources and to see to it
that they are not dissipated or, no less worse, not used at all. These resources must be applied in a
manner that will best promote the common good while also giving the individual a sense of satisfaction.
The right to quality education invoked by the private respondent is not absolute.

A substantial distinction exists between medical students and other students who are not subjected to
the NMAT and the three-flunk rule. The medical profession directly affects the very lives of the people, unlike
other careers which, for this reason, do not require more vigilant regulation. The accountant, for example, while
belonging to an equally respectable profession, does not hold the same delicate responsibility as that of the
physician and so need not be similarly treated.

There would be unequal protection if some applicants who have passed the tests are admitted and
others who have also qualified are denied entrance. In other words, what the equal protection requires
is equality among equals.

The Court feels that it is not enough to simply invoke the right to quality education as a guarantee of the
Constitution: one must show that he is entitled to it because of his preparation and promise. The private
respondent has failed the NMAT five times. While his persistence is noteworthy, to say the least, it is certainly
misplaced, like a hopeless love.

Ynot v. IAC

Facts: Executive Order No. 626-A imposes an absolute ban not on the slaughter of the carabaos but on
their movement, providing that "no carabao regardless of age, sex, physical condition or purpose (sic)
and no carabeef shall be transported from one province to another."

Issue: Whether EO No. 626-A is a valid exercise of police power

Ruling: No.

No reasonable connection between the means employed and the purpose sought to be achieved; there
is no doubt that by banning the slaughter of these animals except where they are at least seven years
old if male and eleven years old if female upon issuance of the necessary permit, the executive order
will be conserving those still fit for farm work or breeding and preventing their improvident depletion.

But while conceding that the amendatory measure has the same lawful subject as the original executive
order, we cannot say with equal certainty that it complies with the second requirement, viz., that there
be a lawful method. The object of the prohibition escapes us. We do not see how the prohibition of the
FUNDAMENTAL POWERS OF THE STATE

inter-provincial transport of carabaos can prevent their indiscriminate slaughter, considering that they
can be killed anywhere, with no less difficulty in one province than in another. Obviously, retaining the
carabaos in one province will not prevent their slaughter there, any more than moving them to another
province will make it easier to kill them there. As for the carabeef, the prohibition is made to apply to it
as otherwise, so says executive order, it could be easily circumvented by simply killing the animal.
However, if the movement of the live animals for the purpose of preventing their slaughter cannot be
prohibited, it should follow that there is no reason either to prohibit their transfer as, not to be flippant
dead meat.

There is denial of due process; under the challenged measure, significantly, no such trial is prescribed,
and the property being transported is immediately impounded by the police and declared, by the
measure itself, as forfeited to the government. In the instant case, the carabaos were arbitrarily
confiscated by the police station commander, were returned to the petitioner only after he had filed a
complaint for recovery and given a supersedeas bond of P12,000.00, which was ordered confiscated
upon his failure to produce the carabaos when ordered by the trial court. The executive order defined
the prohibition, convicted the petitioner and immediately imposed punishment, which was carried out
forthright. The measure struck at once and pounced upon the petitioner without giving him a chance to
be heard, thus denying him the centuries-old guaranty of elementary fair play.


Conclusion
The challenged measure is an invalid exercise of the police power because the method employed to conserve the
carabaos is not reasonably necessary to the purpose of the law and, worse, is unduly oppressive. Due process is
violated because the owner of the property confiscated is denied the right to be heard in his defense and is
immediately condemned and punished. The conferment on the administrative authorities of the power to adjudge
the guilt of the supposed offender is a clear encroachment on judicial functions and militates against the doctrine
of separation of powers. There is, finally, also an invalid delegation of legislative powers to the officers
mentioned therein who are granted unlimited discretion in the distribution of the properties arbitrarily taken.
For these reasons, we hereby declare Executive Order No. 626-A unconstitutional.

City of Quezon City v. Ericta

Facts: This is a petition for review which seeks the reversal of the decision of the Court of First Instance of Rizal,
Branch XVIII declaring Section 9 of Ordinance No. 6118, S-64, of the Quezon City Council null and void. Section 9 of
Ordinance No. 6118, S-64, entitled "ORDINANCE REGULATING THE ESTABLISHMENT, MAINTENANCE AND
OPERATION OF PRIVATE MEMORIAL TYPE CEMETERY OR BURIAL GROUND WITHIN THE JURISDICTION OF QUEZON
CITY AND PROVIDING PENALTIES FOR THE VIOLATION THEREOF" provides:

Sec. 9. At least six (6) percent of the total area of the memorial park cemetery shall be set aside for charity burial
of deceased persons who are paupers and have been residents of Quezon City for at least 5 years prior to their
death, to be determined by competent City Authorities. The area so designated shall immediately be developed
and should be open for operation not later than six months from the date of approval of the application.

Q: Pano mo malalaman kalian ang 5 years before death? Sino ang competent authority?

Issue: Whether Section 9 of the ordinance in question a valid exercise of the police power

Ruling:
NO. Ordinance No. 6118,S-64 is not a mere police regulation but an outright confiscation; there is no
reasonable relation between the setting aside of at least six (6) percent of the total area of private cemeteries for
charity burial grounds of deceased paupers and the promotion of health, morals, good order, safety, or the general
FUNDAMENTAL POWERS OF THE STATE

welfare of the people. The ordinance is actually a taking without compensation of a certain area from a private
cemetery to benefit paupers who are charges of the municipal corporation. Instead of building or maintaining a
public cemetery for this purpose, the city passes the burden to private cemeteries. The challenged ordinance is
not a mere police regulation but an outright confiscation. It deprives a person of his private property
without due process of law, nay, even without compensation.

When the Local Government Code, Batas Pambansa Blg. 337 provides in Section 177 (q) that a Sangguniang
panlungsod may "provide for the burial of the dead in such place and in such manner as prescribed by law or
ordinance" it simply authorizes the city to provide its own city owned land or to buy or expropriate private
properties to construct public cemeteries. This has been the law and practise in the past. It continues to the
present. Expropriation, however, requires payment of just compensation.

Petitioners reliance on the general welfare clause is misplaced; the clause has always received broad and liberal
interpretation but we cannot stretch it to cover this particular taking.

Moreover, the questioned ordinance was passed after Himlayang Pilipino, Inc. had incorporated, received
necessary licenses and permits and commenced operating. The sequestration of six percent of the cemetery
cannot even be considered as having been impliedly acknowledged by the private respondent when it accepted
the permits to commence operations.

Manila Memorial Park v. Secretary of DSWD [20% Senior Citizen Discount]

Police power versus eminent domain

Police power is the inherent power of the State to regulate or to restrain the use of liberty and property
for public welfare. The only limitation is that the restriction imposed should be reasonable, not
oppressive. In other words, to be a valid exercise of police power, it must have a lawful subject or
objective and a lawful method of accomplishing the goal. Under the police power of the State, property
rights of individuals may be subjected to restraints and burdens in order to fulfill the objectives of the
government. The State may interfere with personal liberty, property, lawful businesses and
occupations to promote the general welfare [as long as] the interference [is] reasonable and not
arbitrary. Eminent domain, on the other hand, is the inherent power of the State to take or appropriate
private property for public use. The Constitution, however, requires that private property shall not be
taken without due process of law and the payment of just compensation.

Traditional distinctions between police power and eminent domain

In the exercise of police power, a property right is impaired by regulation, or the use of property is
merely prohibited, regulated or restricted to promote public welfare. In such cases, there is no
compensable taking, hence, payment of just compensation is not required. Examples of these
regulations are property condemned for being noxious or intended for noxious purposes (e.g., a building
on the verge of collapse to be demolished for public safety, or obscene materials to be destroyed in the
interest of public morals) as well as zoning ordinances prohibiting the use of property for purposes
injurious to the health, morals or safety of the community (e.g., dividing a citys territory into residential
and industrial areas). It has, thus, been observed that, in the exercise of police power (as distinguished
from eminent domain), although the regulation affects the right of ownership, none of the bundle of
rights which constitute ownership is appropriated for use by or for the benefit of the public.

FUNDAMENTAL POWERS OF THE STATE

In the exercise of the power of eminent domain, property interests are appropriated and applied to
some public purpose which necessitates the payment of just compensation therefor. Normally, the title
to and possession of the property are transferred to the expropriating authority. Examples include the
acquisition of lands for the construction of public highways as well as agricultural lands acquired by the
government under the agrarian reform law for redistribution to qualified farmer beneficiaries. However,
it is a settled rule that the acquisition of title or total destruction of the property is not essential for
taking under the power of eminent domain to be present.
Examples of these include establishment of easements such as where the land owner is perpetually
deprived of his proprietary rights because of the hazards posed by electric transmission lines
constructed above his property or the compelled interconnection of the telephone system between the
government and a private company. In these cases, although the private property owner is not divested
of ownership or possession, payment of just compensation is warranted because of the burden placed
on the property for the use or benefit of the public.

The 20% senior citizen discount is an exercise of police power.

It may not always be easy to determine whether a challenged governmental act is an exercise of police
power or eminent domain. The very nature of police power as elastic and responsive to various social
conditions as well as the evolving meaning and scope of public use and just compensation in eminent
domain evinces that these are not static concepts. Because of the exigencies of rapidly changing times,
Congress may be compelled to adopt or experiment with different measures to promote the general
welfare which may not fall squarely within the traditionally recognized categories of police power and
eminent domain. The judicious approach, therefore, is to look at the nature and effects of the
challenged governmental act and decide, on the basis thereof, whether the act is the exercise of police
power or eminent domain. Thus, we now look at the nature and effects of the 20% discount to
determine if it constitutes an exercise of police power or eminent domain.

The 20% discount is intended to improve the welfare of senior citizens who, at their age, are less likely
to be gainfully employed, more prone to illnesses and other disabilities, and, thus, in need of subsidy
in purchasing basic commodities. It may not be amiss to mention also that the discount serves to
honor senior citizens who presumably spent the productive years of their lives on contributing to the
development and progress of the nation. This distinct cultural Filipino practice of honoring the elderly
is an integral part of this law.

As to its nature and effects, the 20% discount is a regulation affecting the ability of private
establishments to price their products and services relative to a special class of individuals, senior
citizens, for which the Constitution affords preferential concern. In turn, this affects the amount of
profits or income/gross sales that a private establishment can derive from senior citizens. In other
words, the subject regulation affects the pricing, and, hence, the profitability of a private
establishment. However, it does not purport to appropriate or burden specific properties, used in the
operation or conduct of the business of private establishments, for the use or benefit of the public, or
senior citizens for that matter, but merely regulates the pricing of goods and services relative to, and the
amount of profits or income/gross sales that such private establishments may derive from, senior
citizens.

The subject regulation may be said to be similar to, but with substantial distinctions from, price control
or rate of return on investment control laws which are traditionally regarded as police power
measures.
77
These laws generally regulate public utilities or industries/enterprises imbued with public
FUNDAMENTAL POWERS OF THE STATE

interest in order to protect consumers from exorbitant or unreasonable pricing as well as temper
corporate greed by controlling the rate of return on investment of these corporations considering that
they have a monopoly over the goods or services that they provide to the general public. The subject
regulation differs therefrom in that (1) the discount does not prevent the establishments from adjusting
the level of prices of their goods and services, and (2) the discount does not apply to all customers of a
given establishment but only to the class of senior citizens. Nonetheless, to the degree material to the
resolution of this case, the 20% discount may be properly viewed as belonging to the category of price
regulatory measures which affect the profitability of establishments subjected thereto.

On its face, therefore, the subject regulation is a police power measure.

The law prescribing the 20% discount is not an exercise of eminent domain; The obiter in Central Luzon
Drug Corporation, however, describes the 20% discount as an exercise of the power of eminent domain
and the tax credit, under the previous law, equivalent to the amount of discount given as the just
compensation therefor. The reason is that (1) the discount would have formed part of the gross sales of
the establishment were it not for the law prescribing the 20% discount, and (2) the permanent reduction
in total revenues is a forced subsidy corresponding to the taking of private property for public use or
benefit.

The flaw in this reasoning is in its premise. It presupposes that the subject regulation, which impacts the
pricing and, hence, the profitability of a private establishment, automatically amounts to a deprivation
of property without due process of law. If this were so, then all price and rate of return on investment
control laws would have to be invalidated because they impact, at some level, the regulated
establishments profits or income/gross sales, yet there is no provision for payment of just
compensation. It would also mean that government cannot set price or rate of return on investment
limits, which reduce the profits or income/gross sales of private establishments, if no just compensation
is paid even if the measure is not confiscatory. The obiter is, thus, at odds with the settled doctrine that
the State can employ police power measures to regulate the pricing of goods and services, and, hence,
the profitability of business establishments in order to pursue legitimate State objectives for the
common good, provided that the regulation does not go too far as to amount to taking.

In City of Manila v. Laguio, Jr.,
80
we recognized that

x x x a taking also could be found if government regulation of the use of property went too far. When
regulation reaches a certain magnitude, in most if not in all cases there must be an exercise of eminent
domain and compensation to support the act. While property may be regulated to a certain extent, if
regulation goes too far it will be recognized as a taking.

The issue of when regulation constitutes a taking is a matter of considering the facts in each case; no
formula or rule can be devised to answer the questions of what is too far and when regulation becomes
a taking. In Mahon, Justice Holmes recognized that it was a question of degree and therefore cannot be
disposed of by general propositions. On many other occasions as well, the U.S. Supreme Court has said
that the issue of when regulation constitutes a taking is a matter of considering the facts in each case.
The Court asks whether justice and fairness require that the economic loss caused by public action must
be compensated by the government and thus borne by the public as a whole, or whether the loss should
remain concentrated on those few persons subject to the public action. The impact or effect of a
regulation, such as the one under consideration, must, thus, be determined on a case-to-case basis.
Whether that line between permissible regulation under police power and taking under eminent
FUNDAMENTAL POWERS OF THE STATE

domain has been crossed must, under the specific circumstances of this case, be subject to proof and
the one assailing the constitutionality of the regulation carries the heavy burden of proving that the
measure is unreasonable, oppressive or confiscatory. The time-honored rule is that the burden of
proving the unconstitutionality of a law rests upon the one assailing it and the burden becomes heavier
when police power is at issue.ChanRoblesVirtu

The 20% senior citizen discount has not been shown to be unreasonable, oppressive or confiscatory.

We adopted a similar line of reasoning in Carlos Superdrug Corporation
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when we ruled that petitioners
therein failed to prove that the 20% discount is arbitrary, oppressive or confiscatory. We noted that no
evidence, such as a financial report, to establish the impact of the 20% discount on the overall
profitability of petitioners was presented in order to show that they would be operating at a loss due to
the subject regulation or that the continued implementation of the law would be unconscionably
detrimental to the business operations of petitioners.

Because all laws enjoy the presumption of constitutionality, courts will uphold a laws validity if any set
of facts may be conceived to sustain it. On its face, we find that there are at least two conceivable bases
to sustain the subject regulations validity absent clear and convincing proof that it is unreasonable,
oppressive or confiscatory. Congress may have legitimately concluded that business establishments
have the capacity to absorb a decrease in profits or income/gross sales due to the 20% discount without
substantially affecting the reasonable rate of return on their investments considering:
(1) not all customers of a business establishment are senior citizens; and
(2) the level of its profit margins on goods and services offered to the general public.

Concurrently, Congress may have, likewise, legitimately concluded that the establishments, which will
be required to extend the 20% discount, have the capacity to revise their pricing strategy so that
whatever reduction in profits or income/gross sales that they may sustain because of sales to senior
citizens, can be recouped through higher mark-ups or from other products not subject of discounts. As a
result, the discounts resulting from sales to senior citizens will not be confiscatory or unduly oppressive.

In sum, we sustain our ruling in Carlos Superdrug Corporation that the 20% senior citizen discount and
tax deduction scheme are valid exercises of police power of the State absent a clear showing that it is
arbitrary, oppressive or confiscatory.

Conclusion

In closing, we note that petitioners hypothesize, consistent with our previous ratiocinations, that the
discount will force establishments to raise their prices in order to compensate for its impact on overall
profits or income/gross sales. The general public, or those not belonging to the senior citizen class, are,
thus, made to effectively shoulder the subsidy for senior citizens. This, in petitioners view, is unfair.

This law pursues its social equity objective in a non-traditional manner; as already mentioned,
Congress may be reasonably assumed to have foreseen this eventuality. But, more importantly, this
goes into the wisdom, efficacy and expediency of the subject law which is not proper for judicial review.
In a way, this law pursues its social equity objective in a non-traditional manner unlike past and existing
direct subsidy programs of the government for the poor and marginalized sectors of our society. Verily,
Congress must be given sufficient leeway in formulating welfare legislations given the enormous
challenges that the government faces relative to, among others, resource adequacy and administrative
FUNDAMENTAL POWERS OF THE STATE

capability in implementing social reform measures which aim to protect and uphold the interests of
those most vulnerable in our society. In the process, the individual, who enjoys the rights, benefits and
privileges of living in a democratic polity, must bear his share in supporting measures intended for the
common good. This is only fair.

In fine, without the requisite showing of a clear and unequivocal breach of the Constitution, the validity
of the assailed law must be sustained.