CARLOS SUPERDRUG CORP., ET. AL.
This
vs. DSWD
G.R. No. 166494 June 29, 2007
FACTS
Petitioners are domestic
corporations and proprietors operating
drugstores in the Philippines. Meanwhile,
AO 171 or the Policies and Guidelines to
Implement the Relevant Provisions of
Republic Act 9257, otherwise known as
the Expanded Senior Citizens Act of
2003 was issued by the DOH, providing
the grant of twenty percent (20%)
discount in the purchase of unbranded
generic medicines from all
establishments dispensing medicines for
the exclusive use of the senior citizens.
DOH issued Administrative Order
No 177 amending A.O. No. 171. Under
A.O. No. 177, the twenty percent
discount shall not be limited to the
purchase of unbranded generic
medicines only, but shall extend to both
prescription and non-prescription
medicines whether branded or generic.
Thus, it stated that [t]he grant of twenty
percent (20%) discount shall be provided
in the purchase of medicines from all
establishments dispensing medicines for
the exclusive use of the senior citizens.
Petitioners assert that Section 4(a)
of the law is unconstitutional because it
constitutes deprivation of private
property. Compelling drugstore owners
and establishments to grant the discount
will result in a loss of profit and capital
because 1) drugstores impose a mark-up
of only 5% to 10% on branded medicines;
and 2) the law failed to provide a scheme
whereby drugstores will be justly
compensated for the discount.
RULING
The permanent reduction in their
total revenues is a forced subsidy
corresponding to the taking of private
property for public use or benefit.
constitutes compensable taking for which
petitioners would ordinarily become
entitled to a just compensation.
Just compensation is defined as the
full and fair equivalent of the property
taken from its owner by the expropriator.
The measure is not the takers gain but
the owners loss. The word just is used
to intensify the meaning of the word
compensation, and to convey the idea
that the equivalent to be rendered for the
property to be taken shall be real,
substantial, full and ample.
A tax deduction does not offer full
reimbursement of the senior citizen
discount. As such, it would not meet the
definition of just compensation.
Having said that, this raises the
question of whether the State, in
promoting the health and welfare of a
special group of citizens, can impose
upon private establishments the burden
of partly subsidizing a government
program.
The Court believes so.
The law grants a twenty percent
discount to senior citizens for medical
and dental services, and diagnostic and
laboratory fees; admission fees charged
by theaters, concert halls, circuses,
carnivals, and other similar places of
culture, leisure and amusement; fares for
domestic land, air and sea travel;
utilization of services in hotels and
similar lodging establishments,
restaurants and recreation centers; and
purchases of medicines for the exclusive
use or enjoyment of senior citizens. As a
form of reimbursement, the law provides
that business establishments extending
the twenty percent discount to senior
citizens may claim the discount as a tax
deduction.
 The law is a legitimate exercise of
police power which, similar to the power
of eminent domain, has general welfare
for its object. Police power is not capable
of an exact definition, but has been
purposely veiled in general terms to
underscore its comprehensiveness to
meet all exigencies and provide enough
room for an efficient and flexible
response to conditions and
circumstances, thus assuring the
greatest benefits. Accordingly, it has
been described as the most essential,
insistent and the least limitable of
powers, extending as it does to all the
great public needs. It is [t]he power
vested in the legislature by the
constitution to make, ordain, and
establish all manner of wholesome and
reasonable laws, statutes, and
ordinances, either with penalties or
without, not repugnant to the
constitution, as they shall judge to be for
the good and welfare of the
commonwealth, and of the subjects of
the same.
For this reason, when the
conditions so demand as determined by
the legislature, property rights must bow
to the primacy of police power because
property rights, though sheltered by due
process, must yield to general welfare.
Police power as an attribute to
promote the common good would be
diluted considerably if on the mere plea
of petitioners that they will suffer loss of
earnings and capital, the questioned
provision is invalidated. Moreover, in the
absence of evidence demonstrating the
alleged confiscatory effect of the
provision in question, there is no basis for
its nullification in view of the
presumption of validity which every law
has in its favor.
Given these, it is incorrect for
petitioners to insist that the grant of the
senior citizen discount is unduly
oppressive to their business, because
petitioners have not taken time to
calculate correctly and come up with a
financial report, so that they have not
been able to show properly whether or
not the tax deduction scheme really
works greatly to their disadvantage.
The Court is not oblivious of the
retail side of the pharmaceutical industry
and the competitive pricing component
of the business. While the Constitution
protects property rights, petitioners must
accept the realities of business and the
State, in the exercise of police power,
can intervene in the operations of a
business which may result in an
impairment of property rights in the
process.
Moreover, the right to property has
a social dimension. While Article XIII of
the Constitution provides the precept for
the protection of property, various laws
and jurisprudence, particularly on
agrarian reform and the regulation of
contracts and public utilities,
continuously serve as a reminder that
the right to property can be relinquished
upon the command of the State for the
promotion of public good.
Estrada vs. Sandiganbayan
G.R. No. 148560. November 19, 2001
Facts:
On 4 April 2001, an Information for
plunder was filed against former
President Joseph Ejercito Estrada.
Petitioner Joseph Ejercito Estrada, the
highest-ranking official to be prosecuted
under RA 7080 (An Act Defining and
Penalizing the Crime of Plunder), as
amended by RA 7659, assailed the said
law for being unconstitutional. He
contends that (a) it suffers from the vice
of vagueness; (b) it dispenses with the
reasonable doubt standard in criminal
prosecutions; and, (c) it abolishes the
element ofmens rea in crimes already
punishable under The Revised Penal
Code, all of which are violations of
fundamental right of due process.
Issue: Whether or not the crime of
plunder is unconstitutional for being
vague?
Decision:
The test in determining whether a
criminal statute is void for uncertainty is
whether the language conveys a
sufficiently definite warning as to the
proscribed conduct when measured by
common understanding and practice.
The vagueness doctrine merely
requires a reasonable degree of certainty
for the statute to be upheld not
absolute precision or mathematical
exactitude. A facial challenge is allowed
to be made to a vague statute and to one
which is overbroad because of possible
chilling effect upon protected speech.
The theory is that [w]hen statutes
regulate or proscribe speech and no
readily apparent construction suggests
itself as a vehicle for rehabilitating the
statutes in a single prosecution, the
transcendent value to all society of
constitutionally protected expression is
deemed to justify allowing attacks on
overly broad statutes with no
requirement that the person making the
attack demonstrate that his own conduct
could not be regulated by a statute
drawn with narrow specificity. The
possible harm to society in permitting
some unprotected speech to go
unpunished is outweighed by the
possibility that the protected speech of
others may be deterred and perceived
grievances left to fester because of
possible inhibitory effects of overly broad
statutes.
Hon. Ma. Lourdes C. Fernando vs. St.
Scholasticas College - G.R. No.
161107, March 12, 2013, J. Mendoza
Doctrine:
The LGU cannot compel or impose
restrictions of the property rights of
private persons under the guise of police
powers.
Test of Police Power: Lawful subject and
Lawful means.
Statement of Facts:
Respondents St. Scholasticas College
(SSC) and St. Scholasticas Academy-
Marikina, Inc. (SSA-Marikina) are
educational institutions organized under
the laws of the Republic of the
Philippines, with principal offices and
business addresses at Leon Guinto
Street, Malate, Manila, and at West Drive,
Marikina Heights, Marikina City,
respectively.
On April 2, 2000, the City Government of
Marikina sent a letter to the respondents
ordering them to demolish and replace
the fence of their Marikina property to
make it 80% see-thru, and, at the same
time, to move it back about six (6)
meters to provide parking space for
vehicles to park.
On April 26, 2000, the respondents
requested for an extension of time to
comply with the directive. In response,
the petitioners, through then City Mayor
Bayani F. Fernando, insisted on the
enforcement of the subject ordinance.
The respondents filed a petition for
prohibition with an application for a writ
of preliminary injunction and temporary
restraining order before the Regional Trial
Court, Marikina, Branch 273 (RTC),
docketed as SCA Case No. 2000-381-MK.
Before this Court is a petition for review
on certiorari under Rule 45 of the Rules
of Court, which seeks to set aside the
December 1, 2003 Decision of the Court
of Appeals (CA) in CA-G.R. SP No. 75691.
Issue:
1. Whether or not Section 5 of
Ordinance No. 192 is a valid use of Police
Power.
2. Whether or not Section 3.1 of
Ordinance No. 192 is a violation of St.
Scholasticas right to privacy.
Ruling:
1. No, the Government of Marikina
must show the reasonable relation
between the purpose of police power and
the means employed. The ordinance
failed the test of Police Power and shall
be struck down as an arbitrary intrusion
into private rights and a violation of the
due process clause.
The order to demolish the fence of St.
Scholastica and move it back 6 meters
would amount to an appropriation of
property which could only be done
through the power of Eminent Domain.
2. Yes. The goal of section 3.1 is to to
discourage, suppress or prevent the
concealment of prohibited or unlawful
acts. The court, however, ruled that
80% see-through would be a violation of
the right to privacy considering that
there are nuns living at St. Scholastica.
Dispositive Portion:
WHEREFORE, the petition is DENIED. The
October 2, 2002 Decision of the Regional
Trial Court in SCA Case No. 2000-381-MK
is AFFIRMED but MODIFIED to read as
follows:
WHEREFORE, the petition is GRANTED.
The writ of prohibition is hereby issued
commanding the respondents to
permanently desist from enforcing or
implementing Sections 3.1 and 5 of
Ordinance No. 192, Series of 1994, as
amended, on the petitioners' property in
question located in Marikina Heights,
Marikina, Metro Manila.
G.R. No. 211356, September 29,
2014
CRISOSTOMO B. AQUINO, Petitioner,
v.
MUNICIPALITY OF MALAY, AKLAN,
Respondent.
VELASCO JR., J.:
NATURE:
This is a Petition for Review on Certiorari
challenging the Decision1 and the
Resolution of the Court of Appeals. The
assailed rulings denied Crisostomo
Aquinos Petition for Certiorari for not
being the proper remedy to question the
issuance and implementation of
Executive Order No. 10, Series of 2011
(EO 10), ordering the demolition of his
hotel establishment.
FACTS:
Boracay Island West Cove Management
Philippines, Inc. applied for a building
permit covering the construction of a
three-storey hotel over a parcel of land in
Malay, Aklan, which is covered by a
Forest Land Use Agreement for Tourism
Purposes (FLAgT) issued by the
Department of Environment and Natural
Resources (DENR). The Municipal Zoning
Administrator denied petitioners
application on the ground that the
proposed construction site was within the
no build zone demarcated in Municipal
Ordinance 2000-131.
Petitioner appealed the denial action to
the Office of the Mayor but despite follow
up, no action was ever taken by the
respondent mayor.
A Cease and Desist Order was issued by
the municipal government, enjoining the
expansion of the resort, and on June 7,
2011, the Office of the Mayor of Malay,
Aklan issued the assailed EO 10, ordering
the closure and demolition of Boracay
West Coves hotel.
EO 10 was partially implemented on June
10, 2011. Thereafter, two more instances
followed wherein respondents
demolished the improvements introduced
by Boracay West Cove.
Petitioner filed a Petition for Certiorari
with prayer for injunctive relief with the
CA Alleging that the order was issued
and executed with grave abuse of
discretion
Contentions of West Cove:
1) The hotel cannot summarily be abated
because it is not a nuisance per se, given
the hundred million peso-worth of capital
infused in the venture.
2) Municipality of Malay, Aklan should
have first secured a court order before
proceeding with the demolition.
Contention of the Mayor: The demolition
needed no court order because the
municipal mayor has the express power
under the Local Government Code (LGC)
to order the removal of illegally
constructed buildings
The CA dismissed the petition solely on
procedural ground, i.e., the special writ of
certiorari can only be directed against a
tribunal, board, or officer exercising
judicial or quasi-judicial functions and
since the issuance of EO 10 was done in
the exercise of executive functions, and
not of judicial or quasi-judicial functions,
certiorari will not lie.
ISSUE:
Whether the judicial proceedings should
first be conducted before the LGU can
order the closure and demolition of the
property in question.
HELD:
The Court ruled that the property
involved cannot be classified as a
nuisance per se which can therefore be
summarily abated. Here, it is merely the
hotels particular incident, its location
and not its inherent qualities that
rendered it a nuisance. Otherwise stated,
had it not been constructed in the no
build zone, Boracay West Cove could
have secured the necessary permits
without issue. As such, even if the hotel
is not a nuisance per se, it is still a
nuisance per accidens
Generally, LGUs have no power to
declare a particular thing as a nuisance
unless such a thing is a nuisance per se.
Despite the hotels classification as a
nuisance per accidens, however, the LGU
may nevertheless properly order the
hotels demolition. This is because, in the
exercise of police power and the general
welfare clause, property rights of
individuals may be subjected to
restraints and burdens in order to fulfill
the objectives of the government.
Moreover, the Local Government Code
authorizes city and municipal
governments, acting through their local
chief executives, to issue demolition
orders. The office of the mayor has quasi-
judicial powers to order the closing and
demolition of establishments.
FERRER JR. vs. BAUTISTA
DOCTRINE: The Constitution allows local
governments to raise their own sources
of revenue but the provision of a public
service is not subject to any form of tax
imposition; taxes on idle lands and
socialized housing are valid but tax on
garbage collection is invalid.
FACTS:
Respondent Quezon City Council enacted
Ordinance No. SP-2095, S-2011 or the
Socialized Housing Tax (SHT) of Quezon
City. 0.5% that shall be collected on the
assessed value of land in excess of
100,000 that shall accrue to the
Socialized Housing Programs of the Q.C.
Government. Another ordinance was
enacted - Ordinance No. SP-2235, S-2013
for garbage fee. The proceeds collected
from garbage fees on residential
properties shall be deposited solely and
exclusively in an earmarked special
amount under the general fund to be
utilized for garbage collections.
Petitioner contends that the Quezon City
Government cannot invoke a valid
exercise of its power to create sources of
income under Sec. 5, Art. X of the 1987
Constitution. The Special Housing Tax is
tantamount to a penalty and cannot be
viewed as a charity from real property
since it is forced and not voluntary. It is
alleged also that the Special Housing Tax
is a kind of legislation that violates the
right to property owners to equal
protection laws since it favors informal
settlers who occupy property not their
own and pay no taxes over law-abiding
real property owners who pay income
and realty taxes. As to the
implementation of garbage fees,
petitioner contends that it cannot be
justified as an exercise of police power. It
is discriminatory and tantamount to
double taxation.
Respondent insisted that the questioned
ordinances are proper exercises of police
power. They assert that the SHT applies
equally to all real property owners
without discrimination. There is no way
that the ordinance could violate the
equal protection clause because real
property owners and informal settlers do
not belong to the same class.
For the Garbage Fee collection, it only
collects an average fee in the meager
amount of 33 centavos per day from
every household for garbage collection
and waste management. In addition,
there is no double taxation because the
real property tax is imposed on
ownership based on its assessed value,
while the garbage fee is required on the
domestic household.
ISSUE: Whether or not the Local
Government validly exercised their
legislative functions.
RULING:
Yes. LGUs are able to legislate only by
virtue of a valid delegation of legislative
power from the national legislature; they
are mere agents vested with what is
called the power of subordinate
legislation. With regard to the power of
taxation, it is indubitably the most
effective instrument to raise needed
revenues in financing and supporting
myriad activities of the LGUs for the
delivery of basic services essential to the
promotion of the general welfare and the
enhancement of peace, progress and
prosperity of the people.
The Constitution allows local
governments to raise their own sources
of revenue but the provision of a public
service is not subject to any form of tax
imposition; taxes on idle lands and
socialized housing are valid but tax on
garbage collection is invalid.
PHIL. HEALTH CARE PROVIDERS, INC
vs. COMMISSIONER OF INTERNAL
REVENUE
FACTS:
Petitioner is a domestic corporation
whose primary purpose is to establish,
maintain, conduct and operate a prepaid
group practice health care delivery
system or a health maintenance
organization to take care of the sick and
disabled persons enrolled in the health
care plan and to provide for the
administrative, legal, and financial
responsibilities of the organization. On
January 27, 2000, respondent CIR sent
petitioner a formal deman letter and the
corresponding assessment notices
demanding the payment of deficiency
taxes, including surcharges and interest,
for the taxable years 1996 and 1997 in
the total amount of P224,702,641.18.
The deficiency assessment was imposed
on petitioners health care agreement
with the members of its health care
program pursuant to Section 185 of the
1997 Tax Code. Petitioner protested the
assessment in a letter dated February 23,
2000.
As respondent did not act on the protest,
petitioner filed a petition for review in the
Court of Tax Appeals (CTA) seeking the
cancellation of the deficiency VAT and
DST assessments. On April 5, 2002, the
CTA rendered a decision, ordering the
petitioner to PAY the deficiency VAT
amounting to P22,054,831.75 inclusive of
25% surcharge plus 20% interest from
January 20, 1997 until fully paid for the
1996 VAT deficiency and P31,094,163.87
inclusive of 25% surcharge plus 20%
interest from January 20, 1998 until fully
paid for the 1997 VAT deficiency.
Accordingly, VAT Ruling No. [231]-88 is
declared void and without force and
effect. The 1996 and 1997 deficiency
DST assessment against petitioner is
hereby CANCELLED AND SET ASIDE.
Respondent is ORDERED to DESIST from
collecting the said DST deficiency tax.
Respondent appealed the CTA decision to
the (CA) insofar as it cancelled the DST
assessment. He claimed that petitioners
health care agreement was a contract of
insurance subject to DST under Section
185 of the 1997 Tax Code.
On August 16, 2004, the CA rendered its
decision which held that petitioners
health care agreement was in the nature
of a non-life insurance contract subject to
DST. Respondent is ordered to pay the
deficiency Documentary Stamp Tax.
Petitioner moved for reconsideration but
the CA denied it.
ISSUES:
(1) Whether or not Philippine Health Care
Providers, Inc. engaged in insurance
business.
(2) Whether or not the agreements
between petitioner and its members
possess all elements necessary in the
insurance contract.
HELD:
NO. Health Maintenance Organizations
are not engaged in the insurance
business. The SC said in June 12, 2008
decision that it is irrelevant that
petitioner is an HMO and not an insurer
because its agreements are treated as
insurance contracts and the DST is not a
tax on the business but an excise on the
privilege, opportunity or facility used in
the transaction of the business.
Petitioner, however, submits that it is of
critical importance to characterize the
business it is engaged in, that is, to
determine whether it is an HMO or an
insurance company, as this distinction is
indispensable in turn to the issue of
whether or not it is liable for DST on its
health care agreements. Petitioner is
admittedly an HMO. Under RA 7878 an
HMO is an entity that provides, offers or
arranges for coverage of designated
health services needed by plan members
for a fixed prepaid premium. The
payments do not vary with the extent,
frequency or type of services provided.
Section 2 (2) of PD 1460 enumerates
what constitutes doing an insurance
business or transacting an insurance
businesswhich are making or proposing
to make, as insurer, any insurance
contract; making or proposing to make,
as surety, any contract of suretyship as a
vocation and not as merely incidental to
any other legitimate business or activity
of the surety; doing any kind of business,
including a reinsurance business,
specifically recognized as constituting
the doing of an insurance business within
the meaning of this Code; doing or
proposing to do any business in
substance equivalent to any of the
foregoing in a manner designed to evade
the provisions of this Code.
Overall, petitioner appears to provide
insurance-type benefits to its members
(with respect to its curative medical
services), but these are incidental to the
principal activity of providing them
medical care. The insurance-like aspect
of petitioners business is miniscule
compared to its noninsurance activities.
Therefore, since it substantially provides
health care services rather than
insurance services, it cannot be
considered as being in the insurance
business.
National Power Corporation vs City
of Cabanatuan
FACTS:
Petitioner is a government-owned and
controlled corporation created under
Commonwealth Act No. 120, as
amended.
For many years now, petitioner sells
electric power to the residents of
Cabanatuan City, posting a gross income
of P107,814,187.96 in 1992.7 Pursuant to
section 37 of Ordinance No. 165-92,8 the
respondent assessed the petitioner a
franchise tax amounting to P808,606.41,
representing 75% of 1% of the latters
gross receipts for the preceding year.
Petitioner refused to pay the tax
assessment arguing that the respondent
has no authority to impose tax on
government entities. Petitioner also
contended that as a non-profit
organization, it is exempted from the
payment of all forms of taxes, charges,
duties or fees in accordance with sec. 13
of Rep. Act No. 6395, as amended.
The respondent filed a collection suit in
the RTC, demanding that petitioner pay
the assessed tax due, plus surcharge.
Respondent alleged that petitioners
exemption from local taxes has been
repealed by section 193 of the LGC,
which reads as follows:
Sec. 193. Withdrawal of Tax Exemption
Privileges.- Unless otherwise provided in
this Code, tax exemptions or incentives
granted to, or presently enjoyed by all
persons, whether natural or juridical,
including government owned or
controlled corporations, except local
water districts, cooperatives duly
registered under R.A. No. 6938, non-stock
and non-profit hospitals and educational
institutions, are hereby withdrawn upon
the effectivity of this Code.
RTC upheld NPCs tax exemption. On
appeal the CA reversed the trial courts
Order on the ground that section 193, in
relation to sections 137 and 151 of the
LGC, expressly withdrew the exemptions
granted to the petitioner.
ISSUE: W/N the respondent city
government has the authority to issue
Ordinance No. 165-92 and impose an
annual tax on businesses enjoying a
franchise
HELD:
YES. Taxes are the lifeblood of the
government, for without taxes, the
government can neither exist nor endure.
A principal attribute of sovereignty, the
exercise of taxing power derives its
source from the very existence of the
state whose social contract with its
citizens obliges it to promote public
interest and common good. The theory
behind the exercise of the power to tax
emanates from necessity;32 without
taxes, government cannot fulfill its
mandate of promoting the general
welfare and well-being of the people.
Section 137 of the LGC clearly states that
the LGUs can impose franchise tax
notwithstanding any exemption granted
by any law or other special law. This
particular provision of the LGC does not
admit any exception. In City Government
of San Pablo, Laguna v. Reyes,74
MERALCOs exemption from the payment
of franchise taxes was brought as an
issue before this Court. The same issue
was involved in the subsequent case of
Manila Electric Company v. Province of
Laguna.75 Ruling in favor of the local
government in both instances, we ruled
that the franchise tax in question is
imposable despite any exemption
enjoyed by MERALCO under special laws,
viz:
It is our view that petitioners correctly
rely on provisions of Sections 137 and
193 of the LGC to support their position
that MERALCOs tax exemption has been
withdrawn. The explicit language of
section 137 which authorizes the
province to impose franchise tax
notwithstanding any exemption granted
by any law or other special law is all-
encompassing and clear. The franchise
tax is imposable despite any exemption
enjoyed under special laws.
Section 193 buttresses the withdrawal of
extant tax exemption privileges. By
stating that unless otherwise provided in
this Code, tax exemptions or incentives
granted to or presently enjoyed by all
persons, whether natural or juridical,
including government-owned or
controlled corporations except (1) local
water districts, (2) cooperatives duly
registered under R.A. 6938, (3) non-stock
and non-profit hospitals and educational
institutions, are withdrawn upon the
effectivity of this code, the obvious
import is to limit the exemptions to the
three enumerated entities. It is a basic
precept of statutory construction that the
express mention of one person, thing,
act, or consequence excludes all others
as expressed in the familiar maxim
expressio unius est exclusio alterius. In
the absence of any provision of the Code
to the contrary, and we find no other
provision in point, any existing tax
exemption or incentive enjoyed by
MERALCO under existing law was clearly
intended to be withdrawn.
Reading together sections 137 and 193
of the LGC, we conclude that under the
LGC the local government unit may now
impose a local tax at a rate not
exceeding 50% of 1% of the gross annual
receipts for the preceding calendar based
on the incoming receipts realized within
its territorial jurisdiction. The legislative
purpose to withdraw tax privileges
enjoyed under existing law or charter is
clearly manifested by the language used
on (sic) Sections 137 and 193
categorically withdrawing such
exemption subject only to the exceptions
enumerated. Since it would be not only
tedious and impractical to attempt to
enumerate all the existing statutes
providing for special tax exemptions or
privileges, the LGC provided for an
express, albeit general, withdrawal of
such exemptions or privileges. No more
unequivocal language could have been
used.76 (emphases supplied)
Doubtless, the power to tax is the most
effective instrument to raise needed
revenues to finance and support myriad
activities of the local government units
for the delivery of basic services
essential to the promotion of the general
welfare and the enhancement of peace,
progress, and prosperity of the people.
As this Court observed in the Mactan
case, the original reasons for the
withdrawal of tax exemption privileges
granted to government-owned or
controlled corporations and all other
units of government were that such
privilege resulted in serious tax base
erosion and distortions in the tax
treatment of similarly situated
enterprises. With the added burden of
devolution, it is even more imperative for
government entities to share in the
requirements of development, fiscal or
otherwise, by paying taxes or other
charges due from them.
PEOPLE OF THE PHILIPPINES vs.
ANDRE MARTI (193 SCRA 57)
Facts:
On August 14, 1987, the appellant and
his common-law wife, Shirley Reyes went
to Manila Packaging and Export
Forwarders to send packages to Zurich,
Switzerland. It was received by Anita
Reyes and ask if she could inspect the
packages. Shirley refused and eventually
convinced Anita to seal the package
making it ready for shipment. Before
being sent out for delivery, Job Reyes,
husband of Anita and proprietor of the
courier company, conducted an
inspection of the package as part of
standard operating procedures. Upon
opening the package, he noticed a
suspicious odor which made him took
sample of the substance he found inside.
He reported this to the NBI and invited
agents to his office to inspect the
package. In the presence of the NBI
agents, Job Reyes opened the suspicious
package and found dried-marijuana
leaves inside. A case was filed against
Andre Marti in violation of R.A. 6425 and
was found guilty by the court a quo.
Andre filed an appeal in the Supreme
Court claiming that his constitutional
right of privacy was violated and that the
evidence acquired from his package was
inadmissible as evidence against him.
Issue: Can the Constitutional Right of
Privacy be enforced against private
individuals?
Ruling:
The Supreme Court held based on the
speech of Commissioner Bernas that the
Bill of Rights governs the relationship
between the individual and the state.
The constitutional proscription against
unlawful searches and seizures therefore
applies as a restraint directed only
against the government and its agencies
tasked with the enforcement of the law. It
is not meant to be invoked against acts
of private individuals. It will be recalled
that Mr Job Reyes was the one who
opened the box in the presence of the
NBI agents in his place of business. The
mere presence of the NBI agents did not
convert the reasonable search effected
by Mr. Reyes into a warrantless search
and siezure proscribed by the
constitution. Merely to observe and look
at that which is in plain sight is not a
search.
The judgement of conviction finding
appeallant guilty beyond reasonable
doubt of the crime charged was
AFFIRMED.
VIRGILIO AGABON, et al. v. NLRC
FACTS
Virgilio and Jenny Agabon worked for
respondent Riviera Home Improvements,
Inc. as gypsum and cornice installers
from January 1992 until Feb 1999. Their
employment was terminated when they
were dismissed for allegedly abandoning
their work. Petitioners Agabon then filed
a case of illegal dismissal. /// The LA
ruled in favor of the spouses and ordered
Riviera to pay them their money claims.
The NLRC reversed the LA, finding that
the Agabons were indeed guilty of
abandonment. The CA modified the LA by
ruling that there was abandonment but
ordering Riviera to pay the Agabons
money claims.
The arguments of both parties are as
follows:
The Agabons claim, among others that
Riviera violated the requirements of
notice and hearing when the latter did
not send written letters of termination to
their addresses.
Riviera admitted to not sending the
Agabons letters of termination to their
last known addresses because the same
would be futile, as the Agabons do not
reside there anymore. However, it also
claims that the Agabons abandoned their
work. More than once, they
subcontracted installation works for other
companies. They already were warned of
termination if the same act was
repeated, still, they disregarded the b. A clear intention to sever e-e
warning. relationship, manifested by overt acts

ISSUES: 2. Yes. While the employer has the

1. Whether the Agabons were illegally right to expect good performance,
dismissed diligence, good conduct and loyalty from
2. Whether Riviera violated the its employees, it also has the duty to
requirements of notice and hearing provide just compensation to his
3. Is the violation of the procedural employees and to observe the procedural
requirements of notice and hearing for requirements of notice and hearing in the
termination of employees a violation of termination of his employees.
the Constitutional due process? Procedure of termination (Omnibus Rules
4. What are the consequences of Implementing the Labor Code):
violating the procedural requirements of a. A written notice to the employee
termination? specifying the grounds for termination
and giving the employee reasonable
RULING: opportunity to be heard
b. A hearing where the employee is
Valid dismissal but violation of statutory given the opportunity to respond to the
due process = payment of nominal charges against him and present
damages (P30,000) & balance of 13th evidence or rebut the evidence
month pay, etc. presented against him (if he so requests)
1. No. There was just cause for their c. A written notice of termination
dismissal, i.e., abandonment. Art. 282 indicating that grounds have been
specifies the grounds for just dismissal, established to justify his termination
to wit: upon due consideration of all
a. Serious misconduct or willful circumstances
disobedience of the lawful orders of the
employer or his duly authorized 3. No. Constitutional due process is
representative in connection with the that provided under the Constitution,
employees work which involves the protection of the
b. Gross and habitual neglect of the individual against governmental
by the employee of his duties (includes oppression and the assurance of his
abandonment) rights In civil, criminal and administrative
c. Fraud or willful breach of the trust proceedings; statutory due process is
reposed by the employer or his duly that found in the Labor Code and its
authorized representative to the Implementing Rules and protects the
employee individual from being unjustly terminated
d. Commission of a crime or offense without just or authorized cause after
by the employee against the person of notice and hearing.
the employer or any member of his
immediate family or his duly authorized 4. The dismissal is valid, but Riviera
representative should pay nominal damages to the
e. Any other causes analogous to the Agabons in vindication of the latter for
foregoing. violating their right to notice and
hearing. The penalty is in the nature of a
To establish abandonment, two elements penalty or indemnification, the amount
must be present: dependent on the facts of each case,
a. The unjustified failure of the including the nature of gravity of offense
employee to report for work of the employer.
In this case, the Serrano doctrine was re-
examined.
First, in the Serrano case, the dismissal
was upheld, but it was held to be
ineffectual (without legal effect). Hence,
Serrano was still entitled to the payment
of his backwages from the time of
dismissal until the promulgation of the
court of the existence of an authorized
cause. Further, he was entitled to his
separation pay as mandated under Art.
283. The ruling is unfair to employers
and has the danger of the following
consequences:
a. The encouragement of filing
frivolous suits even by notorious
employees who were justly dismissed but
were deprived of statutory due process;
they are rewarded by invoking due
process
b. It would create absurd situations
where there is just or authorized cause
but a procedural infirmity invalidates the
termination, ie an employee who became
a criminal and threatened his co-workers
lives, who fled and could not be faound
c. It could discourage investments
that would generate employment in the
economy
Second, the payment of backwages is
unjustified as only illegal termination
gives the employee the right to be paid
full backwages. When the dismissal is
valid or upheld, the employee has no
right to backwages.
Southern Hemisphere vs Anti-
Terrorism Council
Facts:
The case consists of 6 petitions
challenging the constitutionality of RA
9372, An Act to Secure the State and
Protect our People from Terrorism, aka
Human Security Act of 2007. Petitioner-
organizations assert locus standi on the
basis of being suspected communist
fronts by the government, whereas
individual petitioners invoke the
transcendental importance doctrine
and their status as citizens and
taxpayers.
Petitioners claim that RA 9372 is vague
and broad, in that terms like widespread
and extraordinary fear and panic among
the populace and coerce the
government to give in to an unlawful
demand are nebulous, leaving law
enforcement agencies with no standard
to measure the prohibited acts.
Issue:
Whether or not a penal statute may
be assailed for being vague as applied to
petitioners.
Held:
No. A limited vagueness analysis of the
definition of terrorism in RA 9372 is
legally impossible absent an actual or
imminent charge against them.
A statute or acts suffers from the defect
of vagueness when it lacks
comprehensible standards that men of
common intelligence must necessarily
guess at its meaning and differ as to its
application.
A facial challenge is likewise different
from an as applied challenge. Facial
challenge is an examination of the entire
law, pinpointing its flaws and defects, not
only on the basis of its actual operation
to the parties, but also on the
assumption or prediction that its very
existence may cause others not before
the court to refrain from constitutionally
protected speech or activities. Under no
case may ordinary penal statutes be
subjected to a facial challenge. If facial
challenge to a penal statute is permitted,
the prosecution of crimes may be
hampered. No prosecution would be
possible.
Garcia vs. J. Drilon and Garcia, G. R.
No. 179267, 25
Facts:
Private respondent Rosalie filed a petition
before the RTC of Bacolod City a
Temporary Protection Order against her
husband, Jesus, pursuant to R.A. 9262,
entitled An Act Defining Violence Against
Women and Their Children, Providing for
Protective Measures for Victims,
Prescribing Penalties Therefor, and for
Other Purposes. She claimed to be a
victim of physical, emotional,
psychological and economic violence,
being threatened of deprivation of
custody of her children and of financial
support and also a victim of marital
infidelity on the part of petitioner.
The TPO was granted but the petitioner
failed to faithfully comply with the
conditions set forth by the said TPO,
private-respondent filed another
application for the issuance of a TPO ex
parte. The trial court issued a modified
TPO and extended the same when
petitioner failed to comment on why the
TPO should not be modified. After the
given time allowance to answer, the
petitioner no longer submitted the
required comment as it would be an
axercise in futility.
Petitioner filed before the CA a petition
for prohibition with prayer for injunction
and TRO on, questioning the
constitutionality of the RA 9262 for
violating the due process and equal
protection clauses, and the validity of the
modified TPO for being an unwanted
product of an invalid law.
The CA issued a TRO on the enforcement
of the TPO but however, denied the
petition for failure to raise the issue of
constitutionality in his pleadings before
the trial court and the petition for
prohibition to annul protection orders
issued by the trial court constituted
collateral attack on said law.
Petitioner filed a motion for
reconsideration but was denied. Thus,
this petition is filed.
Issues:
WON the CA erred in dismissing the
petition on the theory that the issue of
constitutionality was not raised at the
earliest opportunity and that the petition
constitutes a collateral attack on the
validity of the law.
WON the CA committed serious error in
failing to conclude that RA 9262 is
discriminatory, unjust and violative of the
equal protection clause.
WON the CA committed grave mistake in
not finding that RA 9262 runs counter to
the due process clause of the
Constitution
WON the CA erred in not finding that the
law does violence to the policy of the
state to protect the family as a basic
social institution
WON the CA seriously erredin declaring
RA 9262 as invalid and unconstitutional
because it allows an undue delegation of
judicial power to Brgy. Officials.
Decision:
1. Petitioner contends that the RTC has
limited authority and jurisdiction,
inadequate to tackle the complex issue
of constitutionality. Family Courts have
authority and jurisdiction to consider the
constitutionality of a statute. The
question of constitutionality must be
raised at the earliest possible time so
that if not raised in the pleadings, it may
not be raised in the trial and if not raised
in the trial court, it may not be
considered in appeal.
2. RA 9262 does not violate the guaranty
of equal protection of the laws. Equal
protection simply requires that all
persons or things similarly situated
should be treated alike, both as to rights
conferred and responsibilities imposed. In
Victoriano v. Elizalde Rope Workerkers
Union, the Court ruled that all that is
required of a valid classification is that it
be reasonable, which means that the
classification should be based on
substantial distinctions which make for
real differences; that it must be germane
to the purpose of the law; not limited to
existing conditions only; and apply
equally to each member of the class.
Therefore, RA9262 is based on a valid
classification and did not violate the
equal protection clause by favouring
women over men as victims of violence
and abuse to whom the Senate extends
its protection.
3. RA 9262 is not violative of the due
process clause of the Constitution. The
essence of due process is in the
reasonable opportunity to be heard and
submit any evidence one may have in
support of ones defense. The grant of
the TPO exparte cannot be impugned as
violative of the right to due process.
4. The non-referral of a VAWC case to a
mediator is justified. Petitioners
contention that by not allowing
mediation, the law violated the policy of
the State to protect and strengthen the
family as a basic autonomous social
institution cannot be sustained. In a
memorandum of the Court, it ruled that
the court shall not refer the case or any
issue therof to a mediator. This is so
because violence is not a subject for
compromise.
5. There is no undue delegation of
judicial power to Barangay officials.
Judicial power includes the duty of the
courts of justice to settle actual
controversies involving rights which are
legally demandable and enforceable and
to determine whether or not there has
been a grave abuse of discretion
amounting to lack or excess of
jurisdiction on any part of any branch of
the Government while executive power is
the power to enforce and administer the
laws. The preliminary investigation
conducted by the prosecutor is an
executive, not a judicial, function. The
same holds true with the issuance of
BPO. Assistance by Brgy. Officials and
other law enforcement agencies is
consistent with their duty executive
function.
The petition for review on certiorari is
denied for lack of merit.
ANTONIO M. SERRANO
VS.
GALLANT MARITIME SERVICES, INC.
FACTS:
Petitioner Antonio Serrano was hired by
respondents Gallant Maritime Services,
Inc. and Marlow Navigation Co., Inc.,
under a POEA-approved contract of
employment for 12 months, as Chief
Officer, with the basic monthly salary of
US$1,400, plus $700/month overtime
pay, and 7 days paid vacation leave per
month.
On the date of his departure, Serrano
was constrained to accept a downgraded
employment contract upon the
assurance and representation of
respondents that he would be Chief
Officer by the end of April 1998.
Respondents did not deliver on their
promise to make Serrano Chief Officer.
Hence, Serrano refused to stay on as
second Officer and was repatriated to the
Philippines, serving only two months and
7 days, leaving an unexpired portion of
nine months and twenty-three days.
Upon complaint filed by Serrano before
the Labor Arbiter (LA), the dismissal was
declared illegal.
On appeal, the NLRC modified the LA
decision based on the provision of RA
8042. Serrano filed a Motion for Partial
Reconsideration, but this time he
questioned the constitutionality of the
last clause in the 5th paragraph of
Section 10 of RA 8042.
ISSUES:
1. Whether or not the subject clause
violates Section 10, Article III of the
Constitution on non-impairment of
contracts;
2. Whether or not the subject clause
violate Section 1, Article III of the
Constitution, and Section 18, Article II
and Section 3, Article XIII on labor as a
protected sector.
HELD:
On the first issue.
The answer is in the negative.
Petitioners claim that the subject clause
unduly interferes with the stipulations in
his contract on the term of his
employment and the fixed salary
package he will receive is not tenable.
The subject clause may not be declared
unconstitutional on the ground that it
impinges on the impairment clause, for
the law was enacted in the exercise of
the police power of the State to regulate
a business, profession or calling,
particularly the recruitment and
deployment of OFWs, with the noble end
in view of ensuring respect for the dignity
and well-being of OFWs wherever they
may be employed.
On the second issue.
The answer is in the affirmative.
To Filipino workers, the rights guaranteed
under the foregoing constitutional
provisions translate to economic security
and parity.
Upon cursory reading, the subject clause
appears facially neutral, for it applies to
all OFWs. However, a closer examination
reveals that the subject clause has a
discriminatory intent against, and an
invidious impact on, OFWs at two levels:
First, OFWs with employment contracts of
less than one year vis--vis OFWs with
employment contracts of one year or
more;
Second, among OFWs with employment
contracts of more than one year; and
Third, OFWs vis--vis local workers with
fixed-period employment;
The subject clause singles out one
classification of OFWs and burdens it with
a peculiar disadvantage.
Thus, the subject clause in the 5th
paragraph of Section 10 of R.A. No. 8042
is violative of the right of petitioner and
other OFWs to equal protection.
The subject clause or for three months
for every year of the unexpired term,
whichever is less in the 5th paragraph
of Section 10 of Republic Act No. 8042 is
DECLARED UNCONSTITUTIONAL.
White Light Corp., vs City of Manila
FACTS:
On 3 Dec 1992, then Mayor Lim signed
into law Ord 7774 entitled An
Ordinance prohibiting short time
admission in hotels, motels, lodging
houses, pension houses and similar
establishments in the City of Manila.
White Light Corp is an operator of mini
hotels and motels who sought to have
the Ordinance be nullified as the said
Ordinance infringes on the private rights
of their patrons. The RTC ruled in favor of
WLC. It ruled that the Ordinance strikes
at the personal liberty of the individual
guaranteed by the Constitution. The City
maintains that the ordinance is valid as it
is a valid exercise of police power. Under
the LGC, the City is empowered to
regulate the establishment, operation
and maintenance of cafes, restaurants,
beerhouses, hotels, motels, inns, pension
houses, lodging houses and other similar
establishments, including tourist guides
and transports. The CA ruled in favor of
the City.
ISSUE: Whether or not Ord 7774 is valid.
HELD:
The SC ruled that the said ordinance is
null and void as it indeed infringes upon
individual liberty. It also violates the due
process clause which serves as a
guaranty for protection against arbitrary
regulation or seizure. The said ordinance
invades private rights. Note that not all
who goes into motels and hotels for wash
up rate are really there for obscene
purposes only. Some are tourists who
needed rest or to wash up or to freshen
up. Hence, the infidelity sought to be
avoided by the said ordinance is more or
less subjected only to a limited group of
people. The SC reiterates that individual
rights may be adversely affected only to
the extent that may fairly be required by
the legitimate demands of public interest
or public welfare.
Lim vs. Pacquing [G.R. No. 115044.
January 27, 1995]
FACTS:
The Charter of the City of Manila was
enacted by Congress on 18 June 1949
(R.A. No. 409).
On 1 January 1951, Executive Order No.
392 was issued transferring the authority
to regulate jai-alais from local
government to the Games and
Amusements Board (GAB).
On 07 September 1971, however, the
Municipal Board of Manila nonetheless
passed Ordinance No. 7065 entitled An
Ordinance Authorizing the Mayor To Allow
And Permit The Associated Development
Corporation To Establish, Maintain And
Operate A Jai-Alai In The City Of Manila,
Under Certain Terms And Conditions And
For Other Purposes.
On 20 August 1975, Presidential Decree
No. 771 was issued by then President
Marcos. The decree, entitled Revoking
All Powers and Authority of Local
Government(s) To Grant Franchise,
License or Permit And Regulate Wagers
Or Betting By The Public On Horse And
Dog Races, Jai-Alai Or Basque Pelota, And
Other Forms Of Gambling, in Section 3
thereof, expressly revoked all existing
franchises and permits issued by local
governments.
In May 1988, Associated Development
Corporation (ADC) tried to operate a Jai-
Alai. The government through Games
and Amusement Board intervened and
invoked Presidential Decree No. 771
which expressly revoked all existing
franchises and permits to operate all
forms of gambling facilities (including Jai-
Alai) by local governments. ADC assails
the constitutionality of P.D. No. 771.
ISSUE:
Whether or not P.D. No. 771 is violative of
the equal protection and non-impairment
clauses of the Constitution.
HELD:
NO. P.D. No. 771 is valid and
constitutional.
RATIO:
Presumption against unconstitutionality.
There is nothing on record to show or
even suggest that PD No. 771 has been
repealed, altered or amended by any
subsequent law or presidential issuance
(when the executive still exercised
legislative powers). Neither can it be
tenably stated that the issue of the
continued existence of ADCs franchise
by reason of the unconstitutionality of PD
No. 771 was settled in G.R. No. 115044,
for the decision of the Courts First
Division in said case, aside from not
being final, cannot have the effect of
nullifying PD No. 771 as unconstitutional,
since only the Court En Banc has that
power under Article VIII, Section 4(2) of
the Constitution.
And on the question of whether or not
the government is estopped from
contesting ADCs possession of a valid
franchise, the well-settled rule is that the
State cannot be put in estoppel by the
mistakes or errors, if any, of its officials
or agents. (Republic v. Intermediate
Appellate Court, 209 SCRA 90)
G.R. No. 168081, October 17, 2008
ARMANDO G. YRASUEGUI,
petitioners,
vs.
PHILIPPINE AIRLINES, INC.,
respondents.
FACTS:
THIS case portrays the peculiar story of
an international flight steward who was
dismissed because of his failure to
adhere to the weight standards of the
airline company.
The proper weight for a man of his height
and body structure is from 147 to 166
pounds, the ideal weight being 166
pounds, as mandated by the Cabin and
Crew Administration Manual of PAL.
In 1984, the weight problem started,
which prompted PAL to send him to an
extended vacation until November 1985.
He was allowed to return to work once he
lost all the excess weight. But the
problem recurred. He again went on
leave without pay from October 17, 1988
to February 1989.
Despite the lapse of a ninety-day period
given him to reach his ideal weight,
petitioner remained overweight. On
January 3, 1990, he was informed of the
PAL decision for him to remain grounded
until such time that he satisfactorily
complies with the weight standards.
Again, he was directed to report every
two weeks for weight checks, which he
failed to comply with.
On April 17, 1990, petitioner was formally
warned that a repeated refusal to report
for weight check would be dealt with
accordingly. He was given another set of
weight check dates, which he did not
report to.
On November 13, 1992, PAL finally
served petitioner a Notice of
Administrative Charge for violation of
company standards on weight
requirements. Petitioner insists that he is
being discriminated as those similarly
situated were not treated the same.
On June 15, 1993, petitioner was formally
informed by PAL that due to his inability
to attain his ideal weight, and
considering the utmost leniency
extended to him which spanned a period
covering a total of almost five (5) years,
his services were considered terminated
effective immediately.
LABOR ARBITER: held that the weight
standards of PAL are reasonable in view
of the nature of the job of petitioner.
However, the weight standards need not
be complied with under pain of dismissal
since his weight did not hamper the
performance of his duties.
NLRC affirmed.
CA: the weight standards of PAL are
reasonable. Thus, petitioner was legally
dismissed because he repeatedly failed
to meet the prescribed weight standards.
It is obvious that the issue of
discrimination was only invoked by
petitioner for purposes of escaping the
result of his dismissal for being
overweight.
ISSUE: WON he was validly dismissed.
HELD:
YES
A reading of the weight standards of PAL
would lead to no other conclusion than
that they constitute a continuing
qualification of an employee in order to
keep the job. The dismissal of the
employee would thus fall under Article
282(e) of the Labor Code.
In the case at bar, the evidence on
record militates against petitioners
claims that obesity is a disease. That he
was able to reduce his weight from 1984
to 1992 clearly shows that it is possible
for him to lose weight given the proper
attitude, determination, and self-
discipline. Indeed, during the clarificatory
hearing on December 8, 1992, petitioner
himself claimed that [t]he issue is could
I bring my weight down to ideal weight
which is 172, then the answer is yes. I
can do it now.
Petitioner has only himself to blame. He
could have easily availed the assistance
of the company physician, per the advice
of PAL.
In fine, We hold that the obesity of
petitioner, when placed in the context of
his work as flight attendant, becomes an
analogous cause under Article 282(e) of
the Labor Code that justifies his dismissal
from the service. His obesity may not be
unintended, but is nonetheless voluntary.
As the CA correctly puts it,
[v]oluntariness basically means that the
just cause is solely attributable to the
employee without any external force
influencing or controlling his actions. This
element runs through all just causes
under Article 282, whether they be in the
nature of a wrongful action or omission.
Gross and habitual neglect, a recognized
just cause, is considered voluntary
although it lacks the element of intent
found in Article 282(a), (c), and (d).
METROPOLITAN MANILA
DEVELOPMENT AUTHORITY,
petitioner, vs. BEL-AIR VILLAGE
ASSOCIATION, INC., respondent.
Facts:
1. Petitioner MMDA is a government
agency tasked with the delivery of basic
services in Metro Manila, including
transport and traffic management.
Respondent Bel-Air Village Association,
Inc. is the registered owner of Neptune
Street, a private road inside Bel-Air
Village.
2. Neptune runs parallel to Kalayaan
Avenue, a national road open to the
general public.
3. Bel-Air received from MMDA,
through its Chairman, a notice requesting
it to open Neptune Street to public
vehicular traffic for the safe and
convenient movement of persons. Bel-
Air was also apprised that the perimeter
wall separating the subdivision from the
adjacent Kalayaan Avenue would be
demolished.
4. Bel-Air instituted against MMDA a
case for injunction and prayed for the
issuance of a temporary restraining order
and preliminary injunction enjoining the
opening of Neptune Street and
prohibiting the demolition of the
perimeter wall.
5. MMDA claims that it has the
authority to open Neptune Street to
public traffic because it is an agent of the
state endowed with police power in the
delivery of basic services in Metro Manila
so that there is no need for the City of
Makati to enact an ordinance opening
Neptune Street to the public.
Issue: Whether or not the Metropolitan
Manila Development Authority (MMDA)
has the mandate to open Neptune Street
to public traffic pursuant to its regulatory
and police powers?
Decision: No.
Ratio:
1. Police power is lodged primarily in
the National Legislature. It cannot be
exercised by any group or body of
individuals not possessing legislative
power. Our Congress delegated police
power to the local government units in
the Local Government Code of 1991. But
the MMDA is not a local government unit
or a public corporation endowed with
legislative power. Even its governing
board, the Metro Manila Council has not
been delegated any legislative power,
unlike the legislative bodies of local
government units.
2. The functions of MMDA are
administrative in nature. According to its
Charter, R.A. 7924:
"Sec. 2. Creation of the Metropolitan
Manila Development Authority. -- x x x.
The MMDA shall perform planning,
monitoring and coordinative functions,
and in the process exercise regulatory
and supervisory authority over the
delivery of metro-wide services within
Metro Manila, without diminution of the
autonomy of the local government units
concerning purely local matters."
3. Petitioner cannot seek refuge in the
cases of Sangalang v. Intermediate
Appellate Court where the Court upheld
certain ordinances as a legitimate
exercise of police power because both
Makati and the then Metro Manila
Commission which issued the said
ordinances had the power to enact them.
The MMC under P. D. No. 824 is not the
same entity as the MMDA under R. A. No.
7924. Unlike the MMC, the MMDA has no
power to enact ordinances for the welfare
of the community.
REPUBLIC OF THE PHILIPPINES VS.
HON. LUCENITO TAGLE AND HELENA
BENITEZ
G.R. No. 129079; December 2, 1998;
PANGANIBAN, J:
Eminent Domain. It is well-settled that
eminent domain is an inherent power on
the State that need not be granted even
by the fundamental law.
FACTS:
Private respondent Benitez signed a
Memorandum of Agreement with
Philippine Human Resources
Development Center (PHRDC) allowing
PHRDC to lease her lands for a period of
20 years and/or buy the property site. As
Benitez donated to PWU the parcel of
land, they entered into a contract of
lease with PHRDC to occupy and use the
land in question and to make all and
necessary development to attain its
objectives. One of PRHDCs proposed
projects involved the establishment of a
Construction Manpower Development
Center (CMDC), an agency new under
DTI.
At the expiration of the lease contract,
the parties agreed to cease the lease
payments and to proceed with the
negotiations for its sale. However, when
the Deed of Absolute Sale was done,
Benitez refused to sign it, thereafter
ordering the payment of rentals and to
vacate the premises in 30 days from
notice. She later filed an unlawful
detainer suit against the petitioner.
The petitioner also filed a Motion for the
issuance of a Writ of Possession which
the TC granted but later quashed due to
the motion for reconsideration of the
respondents, stating that the writ is only
used as a leverage in the ejectment suit
filed against it wherein the issue in
possession.
ISSUE:
Whether or not respondent judge may
quash a Writ of Possession on the ground
that the expropriating government
agency is already occupying the property
sought to be expropriated.
HELD:
The expropriation proceeding in this case
involves a project covered nu EO 1035.
Under this provision, when the
government or its authorized agent
makes the required deposit, the TC has
the ministerial duty to issue a Writ of
Possession.
The expropriation of real property does
not include mere physical entry or
occupation of the land. Although Eminent
Domain usually involves a taking of the
title, there may also be compensable
taking of only some, not all, of the
property interests in the bundle of rights
constituting ownership. The Court merely
enforced the Constitutional limitation
regarding the payment of just
compensation. Clearly, an ejectment suit
should not prevail over the States power
of Eminent Domain.
Wherefore, the petition is granted. The
assailed orders are annulled and set
aside. No costs.
NURSERY CARE CORPORATION;
SHOEMART, INC.; STAR APPLIANCE
CENTER, INC.; H&B, INC.; SUPPLIES
STATION, INC.; AND HARDWARE
WORKSHOP, INC., Petitioners, v.
ANTHONY ACEVEDO, IN HIS
CAPACITY AS THE TREASURER OF
MANILA; AND THE CITY OF
MANILA,Respondents.
DECISION
BERSAMIN, J.:
FACTS:
The City of Manila assessed and collected
taxes from the individual petitioners
pursuant to Section 15 (Tax on
Wholesalers, Distributors, or Dealers) and
Section 17 (Tax on Retailers) of the
Revenue Code of Manila.3 At the same
time, the City of Manila imposed
additional taxes upon the petitioners
pursuant to Section 21 of the Revenue
Code of Manila,4 as amended, as a
condition for the renewal of their
respective business licenses for the year
1999.
By letter dated March 1, 1999, the
petitioners formally requested the Office
of the City Treasurer for the tax credit or
refund of the local business taxes paid on
the first quarter of 1999 in compliance
with the Section 21. However, then City
Treasurer Anthony Acevedo (Acevedo)
denied the request through his letter of
March 10, 1999. On April 29, 1999, the
petitioners files their respective petitions
for certitorari in the RTC on the issue as
consolidated whether or not the
collection of taxes under Section 21 of
rdinance No. 7794 as amended
constitutes double taxation.
The RTC ruled that thhe tax imposed
under Section 15 and 17, as against that
imposed under Section 21, are levied
against different tax objects or subject
matter. The tax under Section 15 is
imposed upon wholesalers, distributors
or dealers, while that under Section 17 is
imposed upon retailers. In short, taxes
imposed under Section 15 and 17 is a tax
on the business of wholesalers,
distributors, dealers and retailers. On the
other hand, the tax imposed upon herein
petitioners under Section 21 is not a tax
against the business of the petitioners
(as wholesalers, distributors, dealers or
retailers) but is rather a tax against
consumers or end-users of the articles
sold by petitioners.
Moreover, the petitioners only act as the
collection agent of the City while the
ones actually paying the tax are the
consumers or end-users of the articles
being sold by petitioners. The taxes
imposed under Sec. 21 represent
additional amounts added by the
business establishment to the basic
prices of its goods and services which are
paid by the end-users to the businesses.
It is actually not taxes on the business of
petitioners but on the consumers. Hence,
there is no double taxation. This in effect
resolves in favor of the constitutionality
of the assailed sections of Ordinance No.
7807 of the City of Manila.
Petitioners appealed to the CA which
was dismissed for lack of jurisdiction.
ISSUE:
Whether the act of the City Treasurer of
Manila in imposing , assessing, and
collecting the additional business tax
under section 21 of Ordinance No. 7794
as amended by Ordinance No. 7807 is
constitutive of double taxation and
violative of the local government code of
1991.
RULING:

The imposition of the tax under Section
21 of the Revenue Code of Manila
constituted double taxation.
Double taxation means taxing the same
property twice when it should be taxed
only once; that is, taxing the same
person twice by the same jurisdiction for
the same thing. It is obnoxious when the
taxpayer is taxed twice, when it should
be but once. Otherwise described as
direct duplicate taxation, the two taxes
must be imposed on the same subject
matter, for the same purpose, by the
same taxing authority, within the same
jurisdiction, during the same taxing
period; and the taxes must be of the
same kind or character.
The Court holds that all the elements of
double taxation concurred upon the City
of Manilas assessment on and collection
from the petitioners of taxes for the first
quarter of 1999 pursuant to Section 21 of
the Revenue Code of Manila.
Firstly, because Section 21 of the
Revenue Code of Manila imposed the tax
on a person who sold goods and services
in the course of trade or business based
on a certain percentage of his gross sales
or receipts in the preceding calendar
year, while Section 15 and Section 17
likewise imposed the tax on a person
who sold goods and services in the
course of trade or business but only
identified such person with particularity,
namely, the wholesaler, distributor or
dealer (Section 15), and the retailer
(Section 17), all the taxes being
imposed on the privilege of doing
business in the City of Manila in order to
make the taxpayers contribute to the
citys revenues were imposed on the
same subject matter and for the same
purpose.
Secondly, the taxes were imposed by the
same taxing authority (the City of Manila)
and within the same jurisdiction in the
same taxing period (i.e., per calendar
year).
Thirdly, the taxes were all in the nature
of local business taxes.
Republic vs. CA
Principle:
The power of eminent domain is an
inherent and indispensable power of the
State. Also called the power of
expropriation, it is described as the
highest and most exact idea of property
remaining in the government that may
be acquired for some public purpose
through a method in the nature of a
compulsory sale to the State.By virtue of
its sovereign character, the exercise of
the power prevails over the non-
impairment clause, and is clearly
superior to the final and executory
judgment rendered by a court in an
ejectment case.
Albeit the power partakes of a sovereign
character, it is by no means absolute. Its
exercise is subject to limitations, one of
which is, precisely, Section 9, Article III of
the Constitution.
Over the years and in a plethora of
cases, this Court has recognized the
following requisites for the valid exercise
of the power of eminent domain: (1) the
property taken must be private property;
(2) there must be genuine necessity to
take the private property; (3) the taking
must be for public use; (4) there must be
payment of just compensation; and (5)
the taking must comply with due process
of law.
Facts:
Sometime in the 1960s, RCAM allowed a
number of individuals to occupy the
Grace Park property on condition that
they would vacate the premises should
the former push through with the plan to
construct a school in the area. The plan,
however, did not materialize, thus, the
occupants offered to purchase the
portions they occupied. Later, as they
could not afford RCAMs proposed price,
the occupants, organizing themselves,
petitioned the Government for the
acquisition of the said property at a low
price.
The Government, in 1963, through the
Land Tenure Administration (LTA),
succeeded by Peoples Homesite and
Housing Corporation (PHHC), negotiated
for the acquisition of the property from
RCAM/PRC. But because of the high
asking price of RCAM and the latters
effort to purchase and/or to expropriate
the property was discontinued. RCAM
then decided to effect, on its own, the
subdivision of the property and the sale
of the individual subdivided lots to the
public which the petitioners were among
those who purchased individual
subdivided lots of Grace Park directly
from RCAM and/or PRC.
In 1977 when President Marcos issued
(PD) No. 1072, appropriating P1.2M out of
the Presidents Special Operations Funds
to cover the additional amount needed
for the expropriation of Grace Park. The
National Housing Authority (NHA), PHHCs
successor, then filed several
expropriation proceedings over the
already subdivided lots for the purpose of
developing Grace Park under the Zonal
Improvement Program (ZIP) and
subdividing it into small lots for
distribution and resale at a low cost to
the residents of the area.
NHA ordered the condemnation of the
involved lots and fixed the amount of just
compensation at P180.00 per square
meter. Petitioner elevated the matter to
CA in which the CA reversed some cases
and affirmed others.
Issue: Whether or Not the NHA may
validly expropriate the parcels of land
subject of these cases?
Ruling:
The power of eminent domain is an
inherent and indispensable power of the
State. Also called the power of
expropriation, it is described as the
highest and most exact idea of property
remaining in the government that may
be acquired for some public purpose
through a method in the nature of a
compulsory sale to the State.By virtue of
its sovereign character, the exercise of
the power prevails over the non-
impairment clause,and is clearly superior
to the final and executory judgment
rendered by a court in an ejectment
case.
Being inherent, the power need not be
specifically conferred on the government
by the Constitution. Section 9, Article III
of the Constitution, which mandates that
private property shall not be taken for a
public use without just compensation,
merely imposes a limit on the
governments exercise of the power and
provides a measure of protection to the
individuals right to property.
Just like its two companion fundamental
powers of the State, the power of
eminent domain is exercised by the
Legislature. However, it may be
delegated by Congress to the President,
administrative bodies, local government
units, and even to private enterprises
performing public services.
Albeit the power partakes of a sovereign
character, it is by no means absolute. Its
exercise is subject to limitations, one of
which is, precisely, Section 9, Article III of
the Constitution.
Over the years and in a plethora of
cases, this Court has recognized the
following requisites for the valid exercise
of the power of eminent domain and
accordingly, the question that this Court
must resolve is whether these requisites
have been adequately addressed.
(1)the property taken must be private
property
It is incontrovertible that the
parcels of land subject of these
consolidated petitions are private
property
(2)there must be genuine necessity to
take the private property
Genuine necessity must be of a
public character. As a rule, the
determination of whether there is
genuine necessity for the exercise is a
justiciable question. However, when the
power is exercised by the Legislature, the
question of necessity is essentially a
political question. Thus, in City of Manila
v. Chinese Community,[57] we held: The
legislature, in providing for the exercise
of the power of eminent domain, may
directly determine the necessity for
appropriating private property for a
particular improvement for public use,
and it may select the exact location of
the improvement. In such a case, it is
well-settled that the utility of the
proposed improvement, the extent of the
public necessity for its construction, the
expediency of constructing it, the
suitableness of the location selected and
the consequent necessity of taking the
land selected for its site, are all
questions exclusively for the legislature
to determine, and the courts have no
power to interfere, or to substitute their
own views for those of the
representatives of the people.
In the instant cases, the authority to
expropriate came from Presidential
Decree No. 1072, issued by then
President Ferdinand E. Marcos in 1977. At
that time, and as explicitly recognized
under the 1973 Constitution, President
Marcos had legislative powers. Perforce,
the expropriation of the subject
properties identified with specificity in
the P.D. --- was directed by legislation.
The issue of necessity then assumed the
nature of a political question.
(3)the taking must be for public use
As set forth in its petition, NHA justifies
the taking of the subject property for the
purpose of improving and upgrading the
area by constructing roads and installing
facilities thereon under the Governments
zonal improvement program and
subdividing them into much smaller lots
for distribution and sale at a low cost to
qualified beneficiaries, mostly
underprivileged long-time occupants of
Grace Park. It need only be added, at this
juncture, that the public use requisite for
the valid exercise of the power of
eminent domain is a flexible and evolving
concept influenced by changing
conditions. At present, it may not be
amiss to state that whatever is
beneficially employed for the general
welfare satisfies the requirement of
public use.
(4)there must be payment of just
compensation
To satisfy the fourth requisite, we
affirm the appellate courts disposition
that the subject cases be remanded to
the trial court for the determination of
the amount of just compensation. Under
case law, the said determination is a
judicial prerogative.
(5)the taking must comply with due
process of law.
In the expropriation proceedings,
all the parties have been given their day
in court. That they are now before this
Court is attestation enough that they
were not denied due process of law.
WHEREFORE, PREMISES CONSIDERED,
the May 27, 1993 Decision of the Court of
Appeals in CA-G.R. CV No. 10200-10212
and the June 28, 1994 Decision in CA-
G.R. CV No. 27159 are AFFIRMED; and
the March 2, 1994 and the July 25, 1994
Resolutions in CA-G.R. CV Nos. 10200-
10212 are REVERSED and SET ASIDE.
Dartmouth College v. Woodward
Contract Clause, Limitations on the
Powers of the States
Facts:
In 1769 the King of England granted a
charter to Dartmouth College. This
document spelled out the purpose of the
school, set up the structure to govern it,
and gave land to the college. In 1816,
the state legislature of New Hampshire
passed laws that revised the charter.
These laws changed the school from
private to public. They changed the
duties of the trustees. They changed how
the trustees were selected.
The existing trustees filed suit. They
claimed that the legislature violated the
Constitution. They said that Article 1,
Section 10, of the Constitution prevented
a state from "impairing" (that is,
weakening or canceling) a contract.
The Issue
W/N under the Constitution, can a state
legislature change the charter of a
college?
W/N Dartmouth College would remain
private or become a state school. More
broadly, what is protected by the
Constitution's "contract" clause?
Ruling:
By a 5-1 margin, the Court agreed with
Dartmouth. The Court struck down the
law, so Dartmouth continued as a private
college. Chief Justice Marshall wrote the
majority opinion. He said that the charter
was, in essence, a contract between the
King and the trustees. Even though we
were no longer a royal colony, the
contract is still valid because the
Constitution says that a state cannot
pass laws to impair a contract.
Mary Grace Natividad S. Poe-
Llamanzares vs. COMELEC- G.R. No.
221697 & 221698-700, March 8,
2016, J. Perez
Doctrine: A foundling is a natural-born
citizen.
Public officers who must be natural-born
citizens: (Please commit to memory)
1. President and Vice-President, Art.
VII, Sec. 2
2. Members of Congress, Art. VI, Sec.
3&6
3. Justices of the Supreme Court and
lower collegiate courts, Art. VIII, Sec. 7
(1)
4. Ombudsman and his deputies, Art.
XI, Sec. 8
5. Members of the Constitutional
Commission, Art. IX, B, Sec. 1 (1); and D,
Sec. 1(1)
6. Members of the Central Monetary
Authority, Art. XII, Sec. 20
7. Members of the Commission on
Human Rights Art. XIII, Sec. 17 (2)
Statement of Facts:
Mary Grace Natividad S. Poe-Llamanzares
(petitioner) was found abandoned as a
newborn infant in the Parish Church of
Jaro, Iloilo by a certain Edgardo Militar
(Edgardo) on 3 September 1968.
On 15 October 2015, petitioner filed her
COC for the Presidency for the May 2016
Elections. 56 In her COC, the petitioner
declared that she is a natural-born citizen
Petitioner's filing of her COC for President
in the upcoming elections triggered the
filing of several COMELEC cases against
her which were the subject of these
consolidated cases. Respondent's
contention is that petitioner committed
material misrepresentation when she
stated in her COC that she is a natural-
born Filipino citizen on account that she
is a foundling, and that such position
could only be filled by natural-born
Filipinos.
Issue: Whether or not are foundlings
considered as natural-born citizens
Ruling:
Yes, the Supreme Court ruled in favor of
Mary Grace Natividad S. Poe-Llamanzares
and declared her as qualified to be a
candidate for President in the National
and local Elections of May 2016.
First, statistically during the years 1965-
1975, the chances of any child in the
Philippines being born as a natural-born
Filipino was 99.83% according to the PSA.
Second, with the silence og the 1935
Constitution on the nationality of
foundlings, the courts referred to the
1934 Constitutional Convention, where it
was settled that there was no need to
include such a provision since such cases
were too few, and by international law,
the principle was that children of
unknown parents are deemed citizens of
the country where they are found.
Third, Universal Declaration of Human
Rights ("UDHR") has been interpreted by
this Court as part of the generally
accepted principles of international law
and binding on the State.130 Article 15
thereof states:
1. Everyone has the right to a nationality.
2. No one shall be arbitrarily deprived of
his nationality nor denied the right to
change his nationality.
Fourth, The Philippines has also ratified
the UN Convention on the rights of a
child. Article 14 reads that A child whose
parents are both unknown shall have the
nationality of the country of birth.
Commissioner of internal Revenue
vs. S. C. Johnson & son, Inc., 309
SCRA 87
In negotiating tax treaties, the
underlying rationale for reducing the tax
rate is that the Philippines will give up a
part of the tax in the expectation that
the tax given up for this particular
investment is not taxed by the other
country.
In order to eliminate double
taxation, a tax treaty resorts to
several methods. First, it sets out
the respective rights to tax of the
state of source or situs and of the
state of residence with regard to
certain classes of income or capital.
The second method for the elimination of
double taxation applies whenever the
state of source is given a full or limited
right to tax together with the state of
residence. In this case, the treaties
make it incumbent upon the state of
residence to allow relief in order to avoid
double taxation.
Facts:
Respondent is a domestic corporation
organized and operating under the
Philippine Laws, entered into a
licensed agreement with the SC Johnson
and Son, USA, a non-resident foreign
corporation based in the USA pursuant to
which the respondent was granted the
right to use the trademark, patents and
technology owned by the later including
the right to manufacture, package and
distribute the products covered by the
Agreement and secure assistance in
management, marketing and production
from SC Johnson and Son USA.
For the use of trademark or technology,
respondent was obliged to pay SC
Johnson and Son, USA royalties based on
a percentage of net sales and subjected
the same to 25% withholding tax on
royalty payments which respondent paid
for the period covering July 1992 to May
1993 in the total amount of
P1,603,443.00.
On October 29, 1993, respondent filed
with the International Tax Affairs Division
(ITAD) of the BIR a claim for refund of
overpaid withholding tax on royalties
arguing that, the antecedent facts
attending respondents case fall squarely
within the same circumstances under
which said MacGeorge and Gillette
rulings were issued. Since
the agreement was approved by the
Technology Transfer Board, the
preferential tax rate of 10% should apply
to the respondent. So, royalties paid by
the respondent to SC Johnson and Son,
USA is only subject to 10% withholding
tax.
The Commissioner did not act on said
claim for refund. Private respondent SC
Johnson & Son, Inc. then filed a petition
for review before the CTA, to claim a
refund of the overpaid withholding tax on
royalty payments from July 1992 to May
1993.
On May 7, 1996, the CTA rendered its
decision in favor of SC Johnson and
ordered the CIR to issue a methods. First, it sets out the respective
tax credit certificate in the amount of
P163,266.00 representing overpaid
withholding tax on royalty payments
beginning July 1992 to May 1993.
The CIR thus filed a petition for review
with the CA which rendered the decision
subject of this appeal on November 7,
1996 finding no merit in the petition and
affirming in toto the CTA ruling.
Issue: Whether or not SC Johnson is right
in assailing their claims.
Held:
The RP-US Tax Treaty is just one of a
number of bilateral treaties which the
Philippines has entered into for the
avoidance of double taxation. The
purpose of these international
agreements is to reconcile the national
fiscal legislations of the contracting
parties in order to help the taxpayer
avoid simultaneous taxation in two
different jurisdictions. More precisely, the
tax conventions are drafted with a view
towards the elimination of international
juridical double taxation, which is defined
as the imposition of comparable taxes in
two or more states on the same taxpayer
in respect of the same subject matter
and for identical periods. The apparent
rationale for doing away with double
taxation is to encourage the free flow of
goods and services and the movement of
capital, technology and persons between
countries, conditions deemed vital in
creating robust and dynamic economies.
Foreign investments will only thrive in a
fairly predictable and reasonable
international investment climate and the
protection against double taxation is
crucial in creating such a climate.
Double taxation usually takes place when
a person is resident of a contracting state
and derives income from, or owns capital
in, the other contracting state and both
states impose tax on that income or
capital. In order to eliminate double
taxation, a tax treaty resorts to several
rights to tax of the state of source or
situs and of the state of residence with
regard to certain classes of income or
capital. In some cases, an exclusive right
to tax is conferred on one of the
contracting states; however, for other
items of income or capital, both states
are given the right to tax, although the
amount of tax that may be imposed by
the state of source is limited.
The second method for the elimination of
double taxation applies whenever the
state of source is given a full or limited
right to tax together with the state of
residence. In this case, the treaties make
it incumbent upon the state of residence
to allow relief in order to avoid double
taxation. There are two methods of relief-
the exemption method and the credit
method. In the exemption method, the
income or capital which is taxable in the
state of source or situs is exempted in
the state of residence, although in some
instances it may be taken into account in
determining the rate of tax applicable to
the taxpayers remaining income or
capital. On the other hand, in the credit
method, although the income or capital
which is taxed in the state of source is
still taxable in the state of residence, the
tax paid in the former is credited against
the tax levied in the latter. The basic
difference between the two methods is
that in the exemption method, the focus
is on the income or capital itself, whereas
the credit method focuses upon the tax.
In negotiating tax treaties, the underlying
rationale for reducing the tax rate is that
the Philippines will give up a part of the
tax in the expectation that the tax given
up for this particular investment is not
taxed by the other country. Thus the
petitioner correctly opined that the
phrase royalties paid under similar
circumstances in the most favored nation
clause of the US-RP Tax Treaty
necessarily contemplated circumstances
that are tax-related.
Given the purpose underlying tax treaties
and the rationale for the most favored
nation clause, the concessional tax rate
of 10 percent provided for in the RP-
Germany Tax Treaty should apply only if
the taxes imposed upon royalties in the
RP-US Tax Treaty and in the RP-Germany
Tax Treaty are paid under similar
circumstances. This would mean that
private respondent must prove that the
RP-US Tax Treaty grants similar tax reliefs
to residents of the United States in
respect of the taxes imposable upon
royalties earned from sources within the
Philippines as those allowed to their
German counterparts under the RP-
Germany Tax Treaty.
The intention behind the adoption of the
provision on relief from double taxation
in the two tax treaties in question should
be considered in light of the purpose
behind the most favored nation clause.
The purpose of a most favored nation
clause is to grant to the contracting party
treatment not less favorable than that
which has been or may be granted to the
most favored among other countries. The
most favored nation clause is intended to
establish the principle of equality of
international treatment by providing that
the citizens or subjects of the contracting
nations may enjoy the privileges
accorded by either party to those of the
most favored nation. The essence of the
principle is to allow the taxpayer in one
state to avail of more liberal provisions
granted in another tax treaty to which
the country of residence of such taxpayer
is also a party provided that the subject
matter of taxation, in this case royalty
income, is the same as that in the tax
treaty under which the taxpayer is liable.
The court accordingly agree with
petitioner that since the RP-US Tax Treaty
does not give a matching tax credit of 20
percent for the taxes paid to the
Philippines on royalties as allowed under
the RP-West Germany Tax Treaty, private
respondent cannot be deemed entitled to
the 10 percent rate granted under the
latter treaty for the reason that there is
no payment of taxes on royalties under
similar circumstances.
It bears stress that tax refunds are in the
nature of tax exemptions. As such they
are regarded as in derogation of
sovereign authority and to be
construed strictissimi juris against the
person or entity claiming the
exemption. The burden of proof is upon
him who claims the exemption in his
favor and he must be able to justify his
claim by the clearest grant of organic or
statute law. Private respondent is
claiming for a refund of the alleged
overpayment of tax on royalties;
however, there is nothing on record to
support a claim that the tax on royalties
under the RP-US Tax Treaty is paid under
similar circumstances as the tax on
royalties under the RP-West Germany Tax
Treaty.
WHEREFORE, for all the foregoing, the
instant petition is GRANTED.
Mactan-Cebu International Airport
Authority vs. Bernardo L. Lozada, Sr.
- G.R. No. 176625, February 25,
2010, J. Nachura
Doctrine:
Limitation on the exercise of power;
right of the private owner.
Expropriation of property is always
subject to a specific condition for the
public. Abandonment of said specific
condition entitles the former owner to
reconveyance/repurchase of the
expropriated property.
Statement of Facts:

MCIAA using the power of eminent
domain granted by the Government
expropriated lot 88 from the Lozadas for
the purpose of expanding Lahug airport.
The expansion was abandoned, and the
Lozadas seek to repurchase the said lot.
MCIAA however anchors its contention
that the expropriation proceedings did
not provide for the condition that should
the intended use of lot 88 be abandoned,
the property would revert back to the
Lozadas.
Issue: Whether or not the Lozadas are
entitled to a repurchase of lot 88.
Ruling:
1. Yes, Expropriation of property is
always subject to the condition that it
would be used for a specific public
purpose. The expansion of Lahug airport
having been abandoned entitles the
former owners to reacquire their
ownership. Return of the property is
subject to the return of the just
compensation with the necessary
expenses incurred by MCIAA in
maintaining the lot.
to the extent that respondents were
benefited thereby;
3. Petitioners are ENTITLED to keep
whatever fruits and income they may
have obtained from Lot No. 88; and
4. Respondents are also ENTITLED to
keep whatever interests the amounts
they received as just compensation may
have earned in the meantime, as well as
the appreciation in value of Lot No. 88,
which is a natural consequence of nature
and time;
In light of the foregoing modifications,
the case is REMANDED to the Regional
Trial Court, Branch 57, Cebu City, only for
the purpose of receiving evidence on the
amounts that respondents will have to
pay petitioners in accordance with this
Courts decision. No costs.
SO ORDERED.

Dispositive Portion:

WHEREFORE, the petition is DENIED. The

February 28, 2006 Decision of the Court
of Appeals, affirming the October 22,
1999 Decision of the Regional Trial Court,
Branch 87, Cebu City, and its February 7,
2007 Resolution are AFFIRMED with
MODIFICATION as follows:
1. Respondents are ORDERED to return to
petitioners the just compensation they
received for the expropriation of Lot No.
88, plus legal interest, in the case of
default, to be computed from the time
petitioners comply with their obligation
to reconvey Lot No. 88 to them;
2. Respondents are ORDERED to pay
petitioners the necessary expenses the
latter incurred in maintaining Lot No. 88,
plus the monetary value of their services