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A. General Principles

The inherent powers of the State are:

(a) Police Power;
(b) Eminent Domain
(c) Taxation

a) Inherent in the State, exercised even without need of express constitutional grant.
b) Necessary and indispensable; State cannot be effective without them.
c) Methods by which State interferes with private property.
d) Presuppose equivalent compensation
e) Exercised primarily by the Legislature.


a) Police power regulates both liberty and property;

Eminent domain and taxation affect only property rights.

b) Police power and taxation are exercised only by government;

Eminent domain may be exercised by private entities.

c) Property taken in police power is usually noxious or intended for a noxious purpose and may thus be destroyed; while in Eminent
domain and taxation, the property is wholesome and devoted to public use or purpose.

d) Compensation in police power is the intangible, altruistic feeling that the individual has contributed to the public good; in eminent
domain, it is the full and fair equivalent of the property taken; while
in taxation, it is the protection given and/or public improvements instituted by government for the taxes paid. 5

Generally, the Bill of Rights, although in some cases the exercise of the power prevails over specific constitutional guarantees.
The courts may annul the improvident exercise of police power.

B. Police Power
. The power of promoting public welfare by restraining and regulating the use of liberty and property.

c. least LIMITABLE

The justification is found in the Latin maxims:

1. salus populi est suprema lex,
2 sic utere tuo ut alienum non laedas.

a. cannot be bargained away through the medium of a treaty or a contract

b. taxing power may be used as an implement of police power
c. Eminent domain may be used as an implement to attain the police objective
d. A law enacted in the exercise of police power to regulate or govern certain activities or transactions could be given retroactive effect
and may reasonably impair vested rights or contracts. (police power prevails over contracts)
e. Exercise of Constitutional rights may be regulated pursuant to the police power of the State to safeguard health, morals, peace,
education, order, safety, and the general welfare of the people.

Who may exercise the power?

Congress (inherent)
May delegate to:
1. President
2. Administrative bodies
3. LGU under welfare clause


1. LAWFUL SUBJECT- the activity or property sought to be regulated affects the general welfare
2. LAWFUL MEANS- means employed are reasonably necessary for the accomplishment of the purpose, and not unduly oppressive on

Additional Limitations [When exercised by delegate]:

a) Express grant by law [e.g., Secs. 16, 391,447, 458 and 468, R. A.7160, for local government units]
b) Within territorial limits [for local government units, except when exercised to protect water supply]
c) Must not be contrary to law. [Activity prohibited by law cannot, in the guise of regulation, be allowed; an activity allowed by law may
be regulated, but not prohibited.]

C. Power of Eminent Domain

power of expropriation


power of the State to promote public welfare by restraining and inherent right of the State to condemn private property to public
regulating the use of liberty and property. use upon payment of just co7raise defnesesmpensation.
Property condemned under police power is usually noxious or property interest is appropriated and applied to some public
intended for a noxious purpose, hence no compensation is paid. purpose, there is need to pay just compensation.
property rights of individuals are subjected to restraints and Sec. 9, Art. Ill of theConstitution
burdens in order to secure the general comfort, health and private property shall not be taken for public use without just
prosperity of the State. compensation
property interest is merely restricted because the continued use Regional Trial Court
thereof would be injurious to public interest, there is no -defendant has right to file an answer
compensable taking. -No Plaintiffs matter of right to dismiss complaint. Always with
leave of court since possible landowner suffered damages

-Eminent Domain is superior final judgment in ejectment case

Strict Construction will be made against agency exercising the
- eminent domain cases are to be strictly construed against the

GR: State cannot be put in estoppel or laches by the mistakes or

errors of its officials or agents
the strict application of the rule will defeat the effectiveness of
apolicy adopted to protect t
he public, such as the Torrens system.

EMINENT DOMAIN requisites:

1. NECESSITY Exercised by:
a. CONGRESS- political question
b. DELEGATE- justiciable question

- RTC has power to inquire legality and to determine whether there is a genuine necessity for it
-genuine necessity and necessity of public character

2 PRIVATE - Private property already devoted to public use cannot be expropriated by a delegate of legislature
PROPERTY acting under a general grant of authority

GR: all private property capable of ownership may be expropriated (even services)
EXCEPT: money and choses in action


1. expropriator must enter a private property
2. entry must be for more than a momentary period
3. entry must be under warrant or color of authority
4. property must be devoted to public use or informally appropriated or injuriously affected


5. utilization of the property must be in such a way as to oust the owner and deprive him of
beneficial enjoyment of the property


- May include trespass without actual eviction of the owner, material impairment of the value of
the property or prevention of the ordinary uses for which the property was intended

- Includes imposition of burden upon the owner of the condemned property without loss of title
or possession.
- owner need not file a claim for just compensation with the Commission on Audit; He may go
directly to court to demand payment.

4. PUBLIC USE public use

- meeting public need or public exigency.
- not confined to actual use by the public in its traditional sense.
- strictly limited to clear cases of use by the public has been abandoned.
- synonymous with public interest, public benefit,public welfare, and public convenience
- cover uses which, while not directly available to the public, redound to their indirect advantage or
5. JUST -The full and fair equivalent of the property taken;
COMPENSATION - it is the fair market value of the property.
- without prompt payment, compensation cannot be considered just,
(Money only)
- sum of money which a person, desirous but not compelled to buy, and an owner, willing but
not compelled to sell, would agree on as a price to be given and received therefor

- modified where only a part of a certain property is expropriated. In such a case, the owner is
not restricted to payment of the market value of the portion actually taken. In addition to the
market value of the portion taken, he is also entitled to payment of consequential damages, if
any, to the remaining part of the property.

- Payment within reasonable time

- Judicial prerogative

GR: a trial before the commissioners is indispensable

EXCEPT: Agrarian reform cases

Reckoning point of market value of the property

either as of the date of the taking or the filing of the complaint, whichever comes first.
(principal criterion in determining just compensation is the character of the land at the time of the

If exercised by LOCAL GOVERNMENT fair market value at the time of the taking of the

Entitlement of owner to interest

once the value of the property is fixed by the court, the amount shall earn interest at the legal rate until
full payment is effected.

Who else may be entitled to just compensation?

All those who have lawful interest in the property to be condemned. (mortgagee, lessee, vendee)

Title does not pass until after payment. Thus, the owner of land subject to expropriation may
still dispose of the same before payment of just compensation
Taxes paid by owner after taking by the expropriator are reimbursable

Right of landowner in case of non-payment of just compensation

GR: non-payment of just compensation in an expropriation proceeding does not entitle the private
landowners to recover possession of the expropriated lots, but only to demand payment of the fair
market value of theproperty


where the government fails to pay iust compensation within five years from the finality of the judgment
in the expropriation proceedings, the owners concerned shall have the right to
recover possession of their property.

Due process of law

defendant must be given an opportunity to be heard.
Notice must be given

Writ of Possession
The issuance of the writ of possession becomes ministerial upon the
[i] filing of a complaint for expropriation sufficient in form and substance, and
[ii] upon deposit made by the government of the amount equivalent to 15% of the FMV

A hearing will have to be held to determine whether or not the expropriator complied with the
requirements of R.A. 7279
determination of whether the taking of the property is for a public purpose is not a condition
precedent before the court may issue a writ of possession. Once the requisites mentioned
above are established, the issuance of the writ becomes a ministerial matter for the
expropriation court.

Right to repurchase or re-acquire the property

depends upon the character of the title acquired by the expropriator, i.e., if land is expropriated for a
particular purpose with the condition that when that purpose is ended or abandoned, the property shall
revert to the former owner, then the former owner can re-acquire


Sec. 18, Art. XII Sec. 17, Art. XII

The State may, in the interest of national welfare or defense, In times of national emergency, when the public interest so
establish and operate vital industries and, upon requires, the State may, during the emergency and under
payment of just compensation, transfer to public ownership reasonable terms prescribed by it, temporarily take over or direct
utilities and other private enterprises to be operated by the the operation of any privately owned public utility or business
Government. affected with public interest

The taking over of private businesses affected with public

interest is just another facet of the emergency powers generally
reposed in Congress.

it refers to Congress, not the President. Whether the President

may exercise such power is dependent on whether Congress
delegates it to the former pursuant to a law prescribing the
reasonable terms thereof.

Expropriation under Secs. 4 and 9, Art. XIII

a) Comprehensive Agrarian Reform Law

- exercise of the police power of the State, using eminent domain as an instrument to accomplish the police objective.
b) R.A. 7279 fUrban Development and Housing Act of 1992
- the governing law which deals with the subject of urban land reform and housing provides the order in which lands may be
acquired for socialized housing, and very explicit in Secs. 9 and 10 thereof is the fact that privately-owned
lands rank last (6th) in the order of priority for purposes of socialized housing. Expropriation proceedings may, therefore, be
resorted to only when the other modes of acquisition have been exhausted. Compliance with these conditions must be
deemed mandatory because they are the only safeguards in securing the right of owners of private property to due process
when their property is expropriated for public use.


D. Power of TAXATION
1. Definition; nature and scope of power.
2. Who may exercise. Primarily, the legislature; also: local legislative bodies[Sec. 5, Art. X, Constitution]; and to a limited extent, the
President when granted delegated tariff powers [Sec. 28 (2), Art. VI],

. Limitations on the exercise.

a) Due process of law: tax should not be confiscatory.
b) Equal protection clause: Taxes should be uniform and equitable
c) Public purpose

Double Taxation
Additional taxes are laid on the same subject by the same taxing jurisdiction during the same taxing period and for the same

Tax Exemptions
Requisite: No law granting any tax exemption shall be passed without the concurrence of a majority of all the Members of Congress
[Sec. 28 (4), Art. VI, Constitution].

a) Sec. 28 (31 Art. VI)

Charitable institutions, churches and parsonages or convents appurtenant thereto, mosques, non-profit
cemeteries, and all lands, buildings and improvements, actually, directly and exclusively used for religious, charitable
or educational purposes shall be exempt from taxation.

b) Sec. 4 (3) Art. XIV

All revenues and assets of non-stock, non-profit educational institutions used actually, directly and exclusively for
educational purposes shall be exempt from taxes and duties, x x x Proprietary educational institutions, including those co-
operatively owned, may likewise be entitled to such exemptions subject to the limitations provided by law including restrictions
on dividends and provisions for reinvestment.

c) Sec. 4 (41 Art. XIV

Subject to conditions prescribed by law, ail grants,endowments, donations, or contributions used actually, directly and
exclusively for educational purposes shall be exempt from tax.

d) Where tax exemption is granted gratuitously, it may be revoked atwill; but not if granted for a valuable consideration

Police Power v. Taxation

regulation is the generation of revenue is the primary purpose and
primary purpose, the fact that revenue is incidentally raised regulation is merely incidental

a) License fee v. Tax

police measure revenue measure
Amount collected for a license fee is limited to the cost of permit amount of tax may be unlimited provided it is not confiscatory
and reasonable police regulation [except when the license fee is
imposed on a non-useful occupation
paid for the privilege of doing something, and may imposed on persons or property for revenue
be revoked when public interest so requires
Kinds of license fee
i) For useful occupations or enterprises.
ii) For non-useful occupations or enterprises. When a license fee
is imposed in order to discourage non-useful occupations or
enterprises, the amount imposed may be a bit exorbitant

Supremacy of the national government over local governments in taxation

When local governments invoke the power to tax on national government instrumentalities, the exercise of the power is
construed strictly against local governments. The rule is that a tax is never presumed and there must be clear language in the
law imposing the tax