FUNDAMENTAL POWERS OF THE STATE; POLICE POWER

PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC vs. HON. DRILON G.R. No.
81958, June 30, 1988, SARMIENTO, J.

Facts: The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for short), a firm
"engaged principally in the recruitment of Filipino workers, male and female, for overseas
placement," challenges the Constitutional validity of Department Order No. 1, Series of 1988, of
the Department of Labor and Employment, in the character of "GUIDELINES GOVERNING THE
TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND
HOUSEHOLD WORKERS," in this petition for certiorari and prohibition. Specifically, the
measure is assailed for "discrimination against males or females;" that it "does not apply to all
Filipino workers but only to domestic helpers and females with similar skills;" and that it is
violative of the right to travel. It is held likewise to be an invalid exercise of the lawmaking
power, police power being legislative, and not executive, in character.
In this petition for certiorari and prohibition, PASEI, challenges the validity of Department Order
No. 1 (deployment ban) of the DOLE on the following grounds: 1) it is discriminatory as it only
applies to female workers; 2) it is an invalid exercise of the lawmaking power. The respondents
invoke the police power of the Philippine State.

Issue: Whether or not the enactment of DO No. 1 is a valid exercise of police power.

Held: Yes, it is a valid exercise of police power. Police power has been defined as the "state
authority to enact legislation that may interfere with personal liberty or property in order to
promote the general welfare." It finds no specific Constitutional grant for the plain reason that it
does not owe its origin to the Charter. It is a fundamental attribute of government that has
enabled it to perform the most vital functions of governance. It constitutes an implied limitation
on the Bill of Rights. However, police power is not without its own limitations. It may not be
exercised arbitrarily or unreasonably.

It is admitted that Department Order No. 1 is in the nature of a police power measure. The only
question is whether or not it is valid under the Constitution.

The concept of police power is well-established in this jurisdiction. It has been defined as the
"state authority to enact legislation that may interfere with personal liberty or property in order to
promote the general welfare." As defined, it consists of (1) an imposition of restraint upon liberty
or property, (2) in order to foster the common good. It is not capable of an exact definition but
has been, purposely, veiled in general terms to underscore its all-comprehensive embrace.

"Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future
where it could be done, provides enough room for an efficient and flexible response to
conditions and circumstances thus assuring the greatest benefits."

It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the
Charter. Along with the taxing power and eminent domain, it is inborn in the very fact of
statehood and sovereignty. It is a fundamental attribute of government that has enabled it to
perform the most vital functions of governance. Marshall, to whom the expression has been
credited, refers to it succinctly as the plenary power of the State "to govern its citizens."

"The police power of the State . . . is a power coextensive with self-protection, and it is not
inaptly termed the 'law of overwhelming necessity.' It may be said to be that inherent and
plenary power in the State which enables it to prohibit all things hurtful to the comfort, safety,
and welfare of society."

It constitutes an implied limitation on the Bill of Rights. According to Fernando, it is "rooted in the
conception that men in organizing the state and imposing upon its government limitations to
safeguard constitutional rights did not intend thereby to enable an individual citizen or a group of
citizens to obstruct unreasonably the enactment of such salutary measures calculated to ensure
communal peace, safety, good order, and welfare." Significantly, the Bill of Rights itself does not
purport to be an absolute guaranty of individual rights and liberties "Even liberty itself, the
greatest of all rights, is not unrestricted license to act according to one's will." It is subject to the
far more overriding demands and requirements of the greater number.

Notwithstanding its extensive sweep, police power is not without its own limitations. For all its
awesome consequences, it may not be exercised arbitrarily or unreasonably. Otherwise, and in
that event, it defeats the purpose for which it is exercised, that is, to advance the public good.
Thus, when the power is used to further private interests at the expense of the citizenry, there is
a clear misuse of the power.

DO No. 1 applies only to "female contract workers," but it does not thereby make an undue
discrimination between the sexes. ―Equality before the law" admits of classifications, provided
that (1) such classifications rest on substantial distinctions; (2) they are germane to the
purposes of the law; (3) they are not confined to existing conditions; and (4) they apply equally
to all members of the same class. It is the avowed objective of DO No. 1 to "enhance the
protection for Filipino female overseas workers. Discrimination in this case is justified.
Police power is the domain of the legislature, but it does not mean that such an authority may
not be lawfully delegated. The Labor Code itself vests the DOLE with rulemaking powers in the
enforcement whereof. Hence it is a valid exercise of police power.

ICHONG VS. HERNANDEZ 101 PHIL. 1155

FACTS: Republic Act 1180 or commonly known as ―An Act to Regulate the Retail Business‖
was passed. The said law provides for a prohibition against foreigners as well as corporations
owned by foreigners from engaging from retail trade in our country. Petitioner filed a suit to
invalidate the Retail Trade Nationalization Law, on the premise that it violated several treaties
which under the rule of pacta sunt servanda, a generally accepted principle of international law,
should be observed by the Court in good faith.

ISSUE: Whether or not the Retail Trade Nationalization Law is unconstitutional for it is in conflict
with treaties which are generally accepted principles of international law.

HELD: The Supreme Court said it saw no conflict. The reason given by the Court was that the
Retail Trade National Law was passed in the exercise of the police power which cannot be
bargained away through the medium of a treaty or a contract. The law in question was enacted
to remedy a real actual threat and danger to national economy posed by alien dominance and
control of the retail business and free the citizens and country from such dominance and control;
that the enactment clearly falls within the scope of the police power of the State, thru which and
by which it protects its own personality and insures its security and future. Resuming what we
have set forth above we hold that the disputed law was enacted to remedy a real actual threat
and danger to national economy posed by alien dominance and control of the retail business
and free citizens and country from such dominance and control; that the enactment clearly falls
within the scope of the police power of the state, through which and by which it protects its own
personality and insures its security and future; that the law does not violate the equal protection
clause of the Constitution because sufficient grounds exist for the distinction between alien and
citizen in the exercise of occupation regulated, nor the due process of the law clause; because
the law is prospective in operation and recognizes the privilege of aliens already engaged in the
occupation and reasonably protects their privilege; that the wisdom and efficacy of the law to
carry out its objectives appear to us to be plainly evident - as a matter of fact it seems not only
appropriate but actually necessary - and that in any case such matter falls within the prerogative
of the legislature, with whose power and discretion the judicial department of the Government
may not interfere; that the provisions of the law are clearly embraced in the title, and this suffers
from no duplicity and has not misled the legislature of the segment of the population affected;
and that it cannot be said to be void for supposed conflict with treaty obligations because no
treaty has actually been entered into on the subject and the police power may not be curtailed
or surrendered by any treaty or any other conventional agreement.

WALTER LUTZ, et. al vs. ANTONIO ARANETA, G.R. No. L-7859, December 22, 1955,
REYES, J.B L., J.

Facts: Plaintiffs seek to recover tax from the respondent alleging that such is unconstitutional
and void, being levied for the aid and support of the sugar industry exclusively, which in
plaintiff's opinion is not a public purpose for which a tax may be constitutionally levied. The
action having been dismissed by the Court of First Instance, the plaintiffs appealed the case
directly to the Supreme Court.

Issue: Whether or not the imposition of tax under the CA No. 567 is a valid exercise of police
power.

Held: Yes. The tax is levied with a regulatory purpose, to provide means for the rehabilitation
and stabilization of the threatened sugar industry. In other words, the act is primarily an exercise
of the police power. The protection of a large industry constituting one of the great sources of
the state's wealth and therefore directly or indirectly affecting the welfare of so great a portion of
the population of the State is affected to such an extent by public interests as to be within the
police power of the sovereign.The decision appealed from is affirmed.

FLORENTINA A. LOZANO vs. HONORABLE ANTONIO M. MARTINEZ, et.al

G.R. No. L-63419 December 18, 1986, YAP, J.

Facts: Batas Pambansa Bilang 22 (BP 22 for short), popularly known as the Bouncing Check
Law punishes a person "who makes or draws and issues any check on account or for value,
knowing at the time of issue that he does not have sufficient funds in or credit with the drawee
bank for the payment of said check in full upon presentment, which check is subsequently
dishonored by the drawee bank for insufficiency of funds or credit or would have been
dishonored for the same reason had not the drawer, without any valid reason, ordered the bank
to stop payment." Those who question the constitutionality of BP 22 insist that it offends the
constitutional provision forbidding imprisonment for debt and it contravenes the equal protection
clause.

Issue: Whether or not the enactment of BP 22 is a valid exercise of police power.

Held: Yes. The enactment of BP 22 is a valid exercise of the police power and is not repugnant
to the constitutional inhibition against imprisonment for debt. It may be constitutionally
impermissible for the legislature to penalize a person for non-payment of a debt ex contractu.
But certainly it is within the prerogative of the lawmaking body to proscribe certain acts deemed
pernicious and inimical to public welfare. Acts mala in se are not the only acts which the law can
punish. An act may not be considered by society as inherently wrong, hence, not malum in se
but because of the harm that it inflicts on the community, it can be outlawed and criminally
punished as malum prohibitum. The state can do this in the exercise of its police power. There
is no substance in the claim that the statute in question denies equal protection of the laws or is
discriminatory, since it penalizes the drawer of the check, but not the payee. Wherefore, the
decision rendered by the respondent judge is hereby set aside.

Recent statistics of the Central Bank show that one-third of the entire money supply of the
country, roughly totalling P32.3 billion, consists of peso demand deposits; the remaining two-
thirds consists of currency in circulation. These demand deposits in the banks constitute the
funds against which, among others, commercial papers like checks, are drawn. The magnitude
of the amount involved amply justifies the legitimate concern of the state in preserving the
integrity of the banking system. Flooding the system with worthless checks is like pouring
garbage into the bloodstream of the nation's economy.

The effects of the issuance of a worthless check transcends the private interests of the parties
directly involved in the transaction and touches the interests of the community at large. The
mischief it creates is not only a wrong to the payee or holder, but also an injury to the public.
The harmful practice of putting valueless commercial papers in circulation, multiplied a
thousandfold, can very well pollute the channels of trade and commerce, injure the banking
system and eventually hurt the welfare of society and the public interest.

In sum, we find the enactment of BP 22 a valid exercise of the police power and is not
repugnant to the constitutional inhibition against imprisonment for debt.

DECS v San Diego 180 SCRA 233, Cruz, J.

Facts: The petitioner disqualified the private respondent who had actually taken and failed four
times the National Medical Admission Test from taking it again under its regulation. But the
private respondent contends that he is still entitled and hence, applied to take a fifth
examination based on constitutional grounds: right to academic freedom and quality education,
due process and equal protection. He filed a petition for mandamus. The respondent judge
declared the said rule invalid and granted the petition.

Issue: Whether or not the three flunk rule is a valid exercise of police power.

Held: Yes. The police power is validly exercised if (a) the interests of the public generally, as
distinguished from those of a particular class, require the interference of the State, and (b) the
means employed are reasonably necessary to the attainment of the object sought to be
accomplished and not unduly oppressive upon individuals. Thus, the subject of the challenged
regulation is certainly within the ambit of the police power. It is the right and indeed the
responsibility of the State to insure that the medical profession is not infiltrated by incompetents
to whom patients may unwarily entrust their lives and health. While every person is entitled to
aspire to be a doctor, he does not have a constitutional right to be a doctor. The private
respondent has failed the NMAT five times and this is sufficed to say that he must yield to the
challenged rule and give way to those better prepared. The Court upheld the constitutionality of
the NMAT as a measure intended to limit the admission to medical schools only to those who
have initially proved their competence and preparation for a medical education. The decision of
the respondent judge is reversed..

Ynot v IAC 148 SCRA 659, Cruz, J.

Facts: President Marcos issued E.O. 626-A amending E.O. 626, which prohibits the transport of
carabaos or carabeefs from one province to another for the purpose of preventing indiscriminate
slaughter of these animals. The petitioner had transported six carabaos from Masbate to Iloilo
where they were confiscated for violation of the said order. He sued for recovery and challenges
the constitutionality of the said order. The lower court sustained the confiscation of the
carabaos. He appealed the decision to the Intermediate Appellate Court which upheld the lower
court. Hence this petition for review on certiorari.

Issue: Whether or not the purpose of E.O. 626-A is a valid exercise of police power.

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

Even if a reasonable relation between the means and the end were to be assumed, we would
still have to reckon with the sanction that the measure applies for violation of the prohibition.
The penalty is outright confiscation of the carabao or carabeef being transported, to be meted
out by the executive authorities, usually the police only. In the Toribio Case, the statute was
sustained because the penalty prescribed was fine and imprisonment, to be imposed by the
court after trial and conviction of the accused. Under the challenged measure, significantly, no
such trial is prescribed, and the property being transported is immediately impounded by the
police and declared, by the measure itself, as forfeited to the government.

In the instant case, the carabaos were arbitrarily confiscated by the police station commander,
were returned to the petitioner only after he had filed a complaint for recovery and given a
supersedeas bond of P12,000.00, which was ordered confiscated upon his failure to produce
the carabaos when ordered by the trial court. The executive order defined the prohibition,
convicted the petitioner and immediately imposed punishment, which was carried out forthright.
The measure struck at once and pounced upon the petitioner without giving him a chance to be
heard, thus denying him the centuries-old guaranty of elementary fair play.
In the instant case, the challenged measure is an invalid exercise of the police power because
the method employed to conserve the carabaos is not reasonably necessary to the purpose of
the law and, worse, is unduly oppressive. Moreover, there was no such pressure of time or
action calling for the petitioner's peremptory treatment. The properties involved were not even
inimical per se as to require their instant destruction. Thus, the Court cannot say with equal
certainty that it complies with the second requirement, that there be a lawful method. The
reasonable connection between the means employed and the purpose sought to be achieved
by the questioned measure is missing. Executive Order No. 626-A is hereby declared
unconstitutional.

City Gov’t of Quezon City v Ericta 122 SCRA 759, Gutierrez, Jr., J

Facts: Respondent Himlayang Pilipino filed a petition seeking to annul Section 9 of Ordinance
No. 6118, S-64, requiring private cemeteries to reserve 6% of its total area for the burial of
paupers, on the ground that it is contrary to the Constitution. The petitioner contends that the
said order was a valid exercise of police power under the general welfare clause. The
respondent court declared the said order null and void. Hence, this instant petition.

Issue: Whether or not Section 9 of the ordinance in question is a valid exercise of police power.

Held: No. Section 9 cannot be justified under the power granted to Quezon City to tax, fix the
license fee, and regulate such other business, trades, and occupation as may be established or
practice in the City.' (Subsections 'C', Sec. 12, R.A. 537). The ordinance in question not only
confiscates but also prohibits the operation of a memorial park cemetery. As defined, police
power is 'the power of promoting the public welfare by restraining and regulating the use of
liberty and property'. In the instant case, Section 9 of Ordinance No. 6118, Series of 1964 of
Quezon City is not a mere police regulation but an outright confiscation. It deprives a person of
his private property without due process of law, nay, even without compensation. There is no
reasonable relation between the setting aside of at least six (6) percent of the total area of an
private cemeteries for charity burial grounds of deceased paupers and the promotion of health,
morals, good order, safety, or the general welfare of the people. The ordinance is actually a
taking without compensation of a certain area from a private cemetery to benefit paupers who
are charges of the municipal corporation. Instead of building or maintaining a public cemetery
for this purpose, the city passes the burden to private cemeteries. As a matter of fact, the
petitioners rely solely on the general welfare clause or on implied powers of the municipal
corporation, not on any express provision of law as statutory basis of their exercise of power.
The petition for review is hereby dismissed

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., et. al vs.

HONORABLE SECRETARY OF AGRARIAN REFORM G.R. No. 78742, July 14, 1989, CRUZ,
J.

Facts: In these consolidated cases, petitioners primarily assail the constitutionality of R.A. No.
6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 arguing that no private property
shall be taken for public use without just compensation. The respondent invokes the police
power of the State.
Issue: Whether or not the taking of property under the said laws is a valid exercise of police
power or of the power of eminent domain.

Held: It is an exercise of the power of eminent domain. The cases present no knotty
complication insofar as the question of compensable taking is concerned. To the extent that the
measures under challenge merely prescribe retention limits for landowners, there is an exercise
of the police power for the regulation of private property in accordance with the Constitution. But
where, to carry out such regulation, it becomes necessary to deprive such owners of whatever
lands they may own in excess of the maximum area allowed, there is definitely a taking under
the power of eminent domain for which payment of just compensation is imperative. The taking
contemplated is not a mere limitation of the use of the land. What is required is the surrender of
the title to and the physical possession of the said excess and all beneficial rights accruing to
the owner in favor of the farmer-beneficiary. This is definitely an exercise not of the police power
but of the power of eminent domain. Wherefore, the Court holds the constitutionality of R.A. No.
6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229. However, the title to all
expropriated properties shall be transferred to the State only upon full payment of compensation
to their respective owners.

MANILA MEMORIAL PARK, INC v. SECRETARY OF DSWD 711 SCRA 302 G.R. No. 175356
December 3, 2013

TOPIC: Bill of Rights; Eminent Domain v. Police Power

FACTS: RA 7432 was passed into law (amended by RA 9257), granting senior citizens 20%
discount on certain establishments. To implement the tax provisions of RA 9257, the Secretary
of Finance and the DSWD issued its own Rules and Regulations. Hence, this petition.
Petitioners are not questioning the 20% discount granted to senior citizens but are only assailing
the constitutionality of the tax deduction scheme prescribed under RA 9257 and the
implementing rules and regulations issued by the DSWD and the DOF. Petitioners posit that the
tax deduction scheme contravenes Article III, Section 9 of the Constitution, which provides that:
"private property shall not be taken for public use without just compensation." Respondents
maintain that the tax deduction scheme is a legitimate exercise of the State’s police power.

ISSUE: Whether the legally mandated 20% senior citizen discount is an exercise of police
power or eminent domain.

RULING: The 20% senior citizen discount is an exercise of police power. It may not always be
easy to determine whether a challenged governmental act is an exercise of police power or
eminent domain. The judicious approach, therefore, is to look at the nature and effects of the
challenged governmental act and decide on the basis thereof. The 20% discount is intended to
improve the welfare of senior citizens who, at their age, are less likely to be gainfully employed,
more prone to illnesses and other disabilities, and, thus, in need of subsidy in purchasing basic
commodities. It serves to honor senior citizens who presumably spent their lives on contributing
to the development and progress of the nation.
In turn, the subject regulation affects the pricing, and, hence, the profitability of a private
establishment. The subject regulation may be said to be similar to, but with substantial
distinctions from, price control or rate of return on investment control laws which are traditionally
regarded as police power measures. The subject regulation differs there from in that (1) the
discount does not prevent the establishments from adjusting the level of prices of their goods
and services, and (2) the discount does not apply to all customers of a given establishment but
only to the class of senior citizens. Nonetheless, to the degree material to the resolution of this
case, the 20% discount may be properly viewed as belonging to the category of price regulatory
measures which affect the profitability of establishments subjected thereto. On its face,
therefore, the subject regulation is a police power measure.

PASCUAL VS. SEC. OF PUBLIC WORKS [110 PHIL 331; G.R. NO.L-10405; 29 DEC 1960]

Facts: Petitioner, the governor of the Province of Rizal, filed an action for declaratory relief with
injunction on the ground that RA 920, Act appropriating funds for public works, providing
P85,000 for the construction, reconstruction, repair, extension and improvement of Pasig feeder
road terminals, were nothing but projected and planned subdivision roads within Antonio
Subdivision. Antonio Subdivision is owned by the respondent, Jose Zulueta, a member of the
Senate of the Philippines. Respondent offered to donate the said feeder roads to the
municipality of Pasig and the offer was accepted by the council, subject to a condition that the
donor would submit plan of the roads and an agreement to change the names of two of the
street. However, the donation was not executed, which prompted Zuleta to write a letter to the
district engineer calling attention the approval of RA 920. The district engineer, on the other
hand, did not endorse the letter that inasmuch the feeder roads in question were private
property at the time of passage and approval of RA 920, the appropriation for the construction
was illegal and therefore, void ab initio. Petitioner, prayed for RA 920 be declared null and void
and the alleged deed of donation be declared unconstitutional. Lower court dismissed the case
and dissolved the writ of preliminary injunction.

Issue: Whether or Not the deed of donation and the appropriation of funds stipulated in RA 920
are constitutional.

Held: The ruling case law rules that the legislature is without power to appropriate public
revenue for anything but public purpose. The taxing power must be exercised for public
purposes only and the money raised by taxation can be expended only for public purposes and
not for the advantage of private individuals. In the case at bar, the legality of the appropriation of
the feeder roads depend upon whether the said roads were public or private property when the
bill was passed by congress or when it became effective. The land which was owned by
Zulueta, the appropriation sought a private purpose and hence, null and void. The donation did
not cure the nullity of the appropriation; therefore a judicial nullification of a said donation need
not precede the declaration of unconstitutionality of the said appropriation. The decision
appealed from is reversed.

PASCUAL VS. SECRETARY OF PUBLIC WORKS 110 PHIL. 331, 1960

FACTS: The sum of 85,000 pesos was appropriated by Congress for the construction of a
feeder road running through a private subdivision and over a property owned by a private
individual. Subsequently, the feeder road is donated to the government.

ISSUE: Is the appropriation valid?

HELD: The Supreme Court annulled this item, observing that the property sought to be
improved with public funds was private in nature at the time the appropriation was made. The
circumstance that the roads were later donated to the government did not cure the basic defect
of the appropriation as it was null and void ab initio.

Punsalan vs. Municipal Board of the City of Manila G.R. No. L-4817, 26 May 1954

Facts: An ordinance was approved by the Municipal Board of the City of Manila which imposes
a municipal occupation tax on persons exercising various professions in the city and penalizes
non-payment of the tax by a fine of not more than two hundred pesos or by imprisonment of not
more than six months or by both such fine and imprisonment in the discretion of the court. The
ordinance was in pursuance to paragraph (1) Section 18 of the Revised Charter of the City of
Manila which empowers the Municipal Board of said city to impose a municipal occupation tax,
not to exceed P50 per annum, on persons engaged in the various professions above referred to
the plaintiffs, after having paid their occupation tax, now being required to pay the additional tax
prescribed in the ordinance. The plaintiffs paid the said tax under protest. The lower court
declared the validity of the law authorizing the enactment of the ordinance, but declared the
latter illegal and void since its penalty provided for the non-payment of tax was not legally
authorized.

Issue: Is this ordinance and the law authorizing it constitute class legislation, are unjust and
oppressive, and authorize what amounts to double taxation?

Held: NO. To begin with defendants' appeal, we find that the lower court was in error in saying
that the imposition of the penalty provided for in the ordinance was without the authority of law.
The last paragraph (kk) of the very section that authorizes the enactment of this tax ordinance
(section 18 of the Manila Charter) in express terms also empowers the Municipal Board "to fix
penalties for the violation of ordinances which shall not exceed to(sic) two hundred pesos fine or
six months" imprisonment, or both such fine and imprisonment, for a single offense." Hence, the
pronouncement below that the ordinance in question is illegal and void because it imposes a
penalty not authorized by law is clearly without basis.

Secondly, In raising the hue and cry of "class legislation", the burden of plaintiffs' complaint is
not that the professions to which they respectively belong have been singled out for the
imposition of this municipal occupation tax; and in any event, the Legislature may, in its
discretion, select what occupations shall be taxed, and in the exercise of that discretion it may
tax all, or it may select for taxation certain classes and leave the others untaxed. (Cooley on
Taxation, Vol. 4, 4th ed., pp. 3393-3395.) Plaintiffs' complaint is that while the law has
authorized the City of Manila to impose the said tax, it has withheld that authority from other
chartered cities, not to mention municipalities. We do not think it is for the courts to judge what
particular cities or municipalities should be empowered to impose occupation taxes in addition
to those imposed by the National Government. That matter is peculiarly within the domain of the
political departments and the courts would do well not to encroach upon it. Moreover, as the
seat of the National Government and with a population and volume of trade many times that of
any other Philippine city or municipality, Manila, no doubt, offers a more lucrative field for the
practice of the professions, so that it is but fair that the professionals in Manila be made to pay a
higher occupation tax than their brethren in the provinces.

Thirdly, Plaintiffs brand the ordinance unjust and oppressive because they say that it creates
discrimination within a class in that while professionals with offices in Manila have to pay the
tax, outsiders who have no offices in the city but practice their profession therein are not subject
to the tax. Plaintiffs make a distinction that is not found in the ordinance. The ordinance imposes
the tax upon every person "exercising" or "pursuing" — in the City of Manila naturally — any
one of the occupations named, but does not say that such person must have his office in
Manila. What constitutes exercise or pursuit of a profession in the city is a matter of judicial
determination. The argument against double taxation may not be invoked where one tax is
imposed by the state and the other is imposed by the city (1 Cooley on Taxation, 4th ed., p.
492), it being widely recognized that there is nothing inherently obnoxious in the requirement
that license fees or taxes be exacted with respect to the same occupation, calling or activity by
both the state and the political subdivisions thereof.

Lladoc v. Commissioner of Internal Revenue GR L-19201, 16 June 1965

Facts: In 1957, the MB Estate Inc., of Bacolod City, donated P10,000.00 in cash to Fr. Crispin
Ruiz then parish priest of Victorias, Negros Occidental, and predecessor of Fr. Casimiro Lladoc,
for the construction of a new Catholic Church in the locality. The total samount was actually
spent for the purpose intended. On 3 March 1958, MB Estate filed the donor‘s gift tax return.
Under date of 29 April 1960, the Commissioner of Internal Revenue issued as assessment for
donee‘s gift tax against the Catholic Parish of Victorias, Negros Occidental, of which petitioner
was the priest. The tax amounted to P1,370.00 including surcharges, interest of 1% monthly
from 15 May 1958 to 15 June 1960, and the compromise for the late filing of the return.
Petitioner lodged a protest to the assessment and requested the withdrawal thereof. The protest
and the motion for reconsideration presented to the Commissioner of Internal Revenue were
denied. The petitioner appealed to the CTA on 2 November 1960. After hearing, the CTA
affirmed the decision of the Commissioner of Internal Revenue except the imposition of
compromise penalty of P20. Fr. Lladoc appealed to the Supreme Court.

Issue: Whether a donee‘s gift tax may be assessed against the Catholic Church.

Held: Yes. The phrase ―exempt from taxation,‖ as employed in the Constitution should not be
interpreted to mean exemption from all kinds of taxes. Section 22(3), Art. VI of the Constitution
of the Philippines, exempts from taxation cemeteries, churches and personages or convents,
appurtenant thereto, and all lands, buildings, and improvements used exclusively for religious
purposes. The exemption is only from the payment of taxes assessed on such properties
enumerated, as property taxes, as contra-distinguished from excise taxes. A donee‘s gift tax is
not a property tax but an excise tax imposed on the transfer of property by way of gift inter
vivos. Its assessment was not on the property themeselves. It does not rest upon general
ownership, but an excise upon the use made of the properties, upon the exercise of the
privilege of receiving the properties. The imposition of such excise tax on property used for
religious purposes does not constitute an impairment of the Constitution.

Abra Valley College vs. Aquino GR L-39086, 15 June 1988

Facts: Petitioner Abra Valley College is an educational corporation and institution of higher
learning duly incorporated with the SEC in 1948. On 6 July 1972, the Municipal and Provincial
treasurers (Gaspar Bosque and Armin Cariaga, respectively) and issued a Notice of Seizure
upon the petitioner for the college lot and building (OCT Q-83) for the satisfaction of said taxes
thereon. The treasurers served upon the petitioner a Notice of Sale on 8 July 1972, the sale
being held on the same day. Dr. Paterno Millare, then municipal mayor of Bangued, Abra,
offered the highest bid of P 6,000 on public auction involving the sale of the college lot and
building. The certificate of sale was correspondingly issued to him. The petitioner filed a
complaint on 10 July 1972 in the court a quo to annul and declare void the ―Notice of Seizure‖
and the ―Notice of Sale‖ of its lot and building located at Bangued, Abra, for non-payment of
real estate taxes and penalties amounting to P5,140.31. On 12 April 1973, the parties entered
into a stipulation of facts adopted and embodied by the trial court in its questioned decision. The
trial court ruled for the government, holding that the second floor of the building is being used by
the director for residential purposes and that the ground floor used and rented by Northern
Marketing Corporation, a commercial establishment, and thus the property is not being used
―exclusively‖ for educational purposes. Instead of perfecting an appeal, petitioner availed of
the instant petition for review on certiorari with prayer for preliminary injunction before the
Supreme Court, by filing said petition on 17 August 1974.

Issue: Whether the College is exempt from taxes.

Held: Yes. While the Court allows a more liberal and non-restrictive interpretation of the phrase
―exclusively used for educational purposes,‖ reasonable emphasis has always been made that
exemption extends to facilities which are incidental to and reasonably necessary for the
accomplishment of the main purposes. While the second floor‘s use, as residence of the
director, is incidental to education; the lease of the first floor cannot by any stretch of
imagination be considered incidental to the purposes of education. The test of exemption from
taxation is the use of the property for purposes mentioned in the Constititution.

Adonis Notes: The SC stated that if only the judge had read the 1973 Constitution, he
should have known the difference between the 1935 and the 1973 Constitution and he
could not have summarily dismissed the case. There is a substantial distinction between
the 1935 and the 1973 Constitution. In the 1935 Constitution the requirement for
exemption for real property taxes is “exclusively” , while the 1973 Constitution requires
“actually, directly & exclusively”. The SC remanded to the Court of Origin for further
hearing. (excerpts from Sababan Notes)

Sison vs Ancheta GR No. L-59431, 25 July 1984

Facts: Section 1 of BP Blg 135 amended the Tax Code and petitioner Antero M. Sison, as
taxpayer, alleges that "he would be unduly discriminated against by the imposition of higher
rates of tax upon his income arising from the exercise of his profession vis-a-vis those which are
imposed upon fixed income or salaried individual taxpayers. He characterizes said provision as
arbitrary amounting to class legislation, oppressive and capricious in character. It therefore
violates both the equal protection and due process clauses of the Constitution as well asof the
rule requiring uniformity in taxation.

Issue: Whether or not the assailed provision violates the equal protection and due process
clauses of the Constitution while also violating the rule that taxes must be uniform and
equitable.

Held: The petition is without merit.

On due process - it is undoubted that it may be invoked where a taxing statute is so arbitrary
that it finds no support in the Constitution. An obvious example is where it can be shown to
amount to the confiscation of property from abuse of power. Petitioner alleges arbitrariness but
his mere allegation does not suffice and there must be a factual foundation of such
unconsitutional taint.
On equal protection - it suffices that the laws operate equally and uniformly on all persons under
similar circumstances, both in the privileges conferred and the liabilities imposed.
On the matter that the rule of taxation shall be uniform and equitable - this requirement is met
when the tax operates with the same force and effect in every place where the subject may be
found." Also, :the rule of uniformity does not call for perfect uniformity or perfect equality,
because this is hardly unattainable." When the problem of classification became of issue, the
Court said: "Equality and uniformity in taxation means that all taxable articles or kinds of
property of the same class shall be taxed the same rate. The taxing power has the authority to
make reasonable and natural classifications for purposes of taxation..." As provided by this
Court, where "the differentation" complained of "conforms to the practical dictates of justice and
equity" it "is not discriminatory within the meaning of this clause and is therefore uniform."

SECTION 24 – SHALL ORIGINATE EXCLUSIVELY IN HOR

TOLENTINO VS. SECRETARY OF FINANCE 235 SCRA 630, 1994

FACTS: The value-added tax (VAT) is levied on the sale, barter or exchange of goods and
properties as well as on the sale or exchange of services. It is equivalent to 10% of the gross
selling price or gross value in money of goods or properties sold, bartered or exchanged or of
the gross receipts from the sale or exchange of services. Republic Act No. 7716 seeks to widen
the tax base of the existing VAT system and enhance its administration by amending the
National Internal Revenue Code. It was challenged for alleged constitutional infirmities (defects),
among others: Law did not originate exclusively in the House of Representative as required by
Section 24, Article VI – they contended that to be considered as having originated in the HOR, it
should retain the essence of the House Bill.

ISSUE: Whether or not there are constitutional defects in RA 7716, since it did not originate
exclusively in the House of Representative as required by Sec. 24, Article VI.

HELD: No. The Supreme Court held that the Senate is empowered by the Constitution to concur
with amendments and propose amendments, even substitute the entire bill as a whole. A bill
originating in the HOR may undergo such extensive changes in the Senate that the result
maybe rewriting of the whole; As a result of the Senate action, a distinct bill may be produced
AND to insist that a revenue statute must substantially be the same as the House bill would be
to deny the Senate‘s power not only to ―concur with amendments‖ but also to ―propose
amendments.‖G.R. No. L-31195 June 5, 1973

PHILIPPINE BLOOMING MILLS EMPLOYEES ORGANIZATION v. PHILIPPINE BLOOMING

MILLS CO. INC. G.R. No. L-31195, June 5, 1973, Makasiar, J.

Facts: Sometime in 1969, petitioner decided to stage a mass demonstration in Malacañang in

protest against alleged abuses of the Pasig Police. Respondent Company, however requested
petitioner that the first-shift workers should not participate in the strike for it will unduly prejudice
the normal operation of the company. Despite the warning, all the workers including those who
were in first-shift still participated in the rally. Prior to that, respondent company informed that
workers who belong in the first-shift, who were without previous leave of absence approved by
the company, who shall participate in the rally shall be dismissed for it is a clear violation of the
existing CBA and is tantamount to an illegal strike. Respondent company then filed a charge
against petitioners and later dismissed some of its employees.

Issues: Whether or not the constitutional freedoms of speech and expression of the petitioner
were violated by the respondent company in preventing some of its employees to participate in
the rally and later dismissed some of them.

Held: No. There is need of briefly restating basic concepts and principles which underlie the
issues posed by the case at bar.

(1) In a democracy, the preservation and enhancement of the dignity and worth of the human
personality is the central core as well as the cardinal article of faith of our civilization. The
inviolable character of man as an individual must be "protected to the largest possible extent in
his thoughts and in his beliefs as the citadel of his person.

(2) The Bill of Rights is designed to preserve the ideals of liberty, equality and security "against
the assaults of opportunism, the expediency of the passing hour, the erosion of small
encroachments, and the scorn and derision of those who have no patience with general
principles.
In the pithy language of Mr. Justice Robert Jackson, the purpose of the Bill of Rights is to
withdraw "certain subjects from the vicissitudes of political controversy, to place them beyond
the reach of majorities and officials, and to establish them as legal principles to be applied by
the courts. One's rights to life, liberty and property, to free speech, or free press, freedom of
worship and assembly, and other fundamental rights may not be submitted to a vote; they
depend on the outcome of no elections." Laski proclaimed that "the happiness of the individual,
not the well-being of the State, was the criterion by which its behaviour was to be judged. His
interests, not its power, set the limits to the authority it was entitled to exercise.

(3) The freedoms of expression and of assembly as well as the right to petition are included
among the immunities reserved by the sovereign people, in the rhetorical aphorism of Justice
Holmes, to protect the ideas that we abhor or hate more than the ideas we cherish; or as
Socrates insinuated, not only to protect the minority who want to talk, but also to benefit the
majority who refuse to listen. And as Justice Douglas cogently stresses it, the liberties of one
are the liberties of all; and the liberties of one are not safe unless the liberties of all are
protected.

(4) The rights of free expression, free assembly and petition, are not only civil rights but also
political rights essential to man's enjoyment of his life, to his happiness and to his full and
complete fulfillment. Thru these freedoms the citizens can participate not merely in the periodic
establishment of the government through their suffrage but also in the administration of public
affairs as well as in the discipline of abusive public officers. The citizen is accorded these rights
so that he can appeal to the appropriate governmental officers or agencies for redress and
protection as well as for the imposition of the lawful sanctions on erring public officers and
employees.

(5) While the Bill of Rights also protects property rights, the primacy of human rights over
property rights is recognized. Because these freedoms are "delicate and vulnerable, as well as
supremely precious in our society" and the "threat of sanctions may deter their exercise almost
as potently as the actual application of sanctions," they "need breathing space to survive,"
permitting government regulation only "with narrow specificity."

Property and property rights can be lost thru prescription; but human rights are imprescriptible. If
human rights are extinguished by the passage of time, then the Bill of Rights is a useless
attempt to limit the power of government and ceases to be an efficacious shield against the
tyranny of officials, of majorities, of the influential and powerful, and of oligarchs - political,
economic or otherwise.

In the hierarchy of civil liberties, the rights of free expression and of assembly occupy a
preferred position as they are essential to the preservation and vitality of our civil and political
institutions; and such priority "gives these liberties the sanctity and the sanction not permitting
dubious intrusions." The superiority of these freedoms over property rights is underscored by
the fact that a mere reasonable or rational relation between the means employed by the law and
its object or purpose that the law is neither arbitrary nor discriminatory nor oppressive would
suffice to validate a law which restricts or impairs property rights. On the other hand, a
constitutional or valid infringement of human rights requires a more stringent criterion, namely
existence of a grave and immediate danger of a substantive evil which the State has the right to
prevent.
So it has been stressed that the (1)―FREEDOMS OF SPEECH‖ and (2)―OF THE PRESS‖ as
well as (3)―OF PEACEFUL ASSEMBLY AND OF PETITION FOR REDRESS OF
GRIEVANCES‖ are absolute when directed against public officials or "when exercised in
relation to our right to choose the men and women by whom we shall be governed," even
relying on the balancing-of-interests test.

The respondent Court of Industrial Relations, after opining that the mass demonstration was not
a declaration of strike, concluded that by their "concerted act and the occurrence of a temporary
stoppage of work," herein petitioners are guilty of bargaining in bad faith and hence violated the
collective bargaining agreement with private respondent Philippine Blooming Mills Co., Inc. Set
against and tested by the foregoing principles governing a democratic society, such a
conclusion cannot be sustained. The demonstration held by petitioners was against alleged
abuses of some Pasig policemen, NOT against their employer, herein private respondent firm,
said demonstration was purely and completely an exercise of their freedom of expression in
general and of their right of assembly and of petition for redress of grievances in particular
before the appropriate governmental agency, the Chief Executive, against the police officers of
the municipality of Pasig. They exercised their civil and political rights for their mutual aid and
protection from what they believe were police excesses. As a matter of fact, it was the duty of
herein private respondent firm to protect herein petitioner Union and its members from the
harassment of local police officers. It was to the interest of herein private respondent firm to rally
to the defense of, and to take up the cudgels for, its employees, so that they can report to work
free from harassment, vexation or peril and as a consequence perform more efficiently their
respective tasks to enhance its productivity as well as profits. Herein respondent employer did
not even offer to intercede for its employees with the local police. Was it securing peace for
itself at the expense of its workers? Was it also intimidated by the local police or did it
encourage the local police to terrorize or vex its workers? Its failure to defend its own
employees all the more weakened the position of its laborers vis-a-vis the alleged oppressive
police, who might have been all the more emboldened thereby to subject its lowly employees to
further indignities.

In seeking sanctuary behind their freedom of expression as well as their right of assembly and
of petition against alleged persecution of local officialdom, the employees and laborers of herein
private respondent firm were fighting for their very survival, utilizing only the weapons afforded
them by the Constitution he untrammelled enjoyment of their basic human rights. The
pretension of their employer that it would suffer loss or damage by reason of the absence of its
employees, is a plea for the preservation merely of their property rights. Such apprehended loss
or damage would not spell the difference between the life and death of the firm or its owners or
its management. The employees' pathetic situation was a stark reality abused, harassed and
persecuted as they believed they were by the peace officers of the municipality. As above
intimated, the condition in which the employees found themselves vis-a-vis the local police of
Pasig, was a matter that vitally affected their right to individual existence as well as that of their
families. Material loss can be repaired or adequately compensated. The debasement of the
human being broken in morale and brutalized in spirit can never be fully evaluated in monetary
terms. The wounds fester and the scars remain to humiliate him to his dying day, even as he
cries in anguish for retribution, denial of which is like rubbing salt on bruised tissues.

As heretofore stated, THE PRIMACY OF HUMAN RIGHTS, FREEDOM OF EXPRESSION, OF

PEACEFUL ASSEMBLY AND OF PETITION FOR REDRESS OF GRIEVANCES over
PROPERTY RIGHTS has been sustained. Emphatic reiteration of this basic tenet as a coveted
boon at once the shield and armor of the dignity and worth of the human personality, the all-
consuming ideal of our enlightened civilization becomes Our duty, if freedom and social justice
have any meaning at all for him who toils so that capital can produce economic goods that can
generate happiness for all. To regard the demonstration against police officers, not against the
employer, as evidence of bad faith in collective bargaining and hence a violation of the collective
bargaining agreement and a cause for the dismissal from employment of the demonstrating
employees, stretches unduly the compass of the collective bargaining agreement, is "a potent
means of inhibiting speech" and therefore inflicts a moral as well as mortal wound on the
constitutional guarantees of free expression, of peaceful assembly and of petition.

The collective bargaining agreement which fixes the working shifts of the employees, according
to the respondent Court of Industrial Relations, in effect imposes on the workers the "duty . . . to
observe regular working hours." The strained construction of the Court of Industrial Relations
that such stipulated working shifts deny the workers the right to stage a mass demonstration
against police abuses during working hours, constitutes a virtual tyranny over the mind and life
of the workers and deserves severe condemnation. Renunciation of the freedom should not be
predicated on such a slender ground.

The mass demonstration staged by the employees on March 4, 1969 could not have been
legally enjoined by any court, for such an injunction would be trenching upon the freedom of
expression of the workers, even if it legally appears to be an illegal picketing or strike. The
respondent Court of Industrial Relations in the case at bar concedes that the mass
demonstration was not a declaration of a strike "as the same is not rooted in any industrial
dispute although there is a concerted act and the occurrence of a temporary stoppage of work."

The respondent firm claims that there was no need for all its employees to participate in the
demonstration and that they suggested to the Union that only the first and regular shift from 6
A.M. to 2 P.M. should report for work in order that loss or damage to the firm will be averted.
This stand failed to appreciate the sine qua non of an effective demonstration especially by a
labor union, namely the complete unity of the Union members as well as their total presence at
the demonstration site in order to generate the maximum sympathy for the validity of their cause
but also immediate action on the part of the corresponding government agencies with
jurisdiction over the issues they raised against the local police. Circulation is one of the aspects
of freedom of expression. If demonstrators are reduced by one-third, then by that much the
circulation of the issues raised by the demonstration is diminished. The more the participants,
the more persons can be apprised of the purpose of the rally. Moreover, the absence of one-
third of their members will be regarded as a substantial indication of disunity in their ranks which
will enervate their position and abet continued alleged police persecution. At any rate, the Union
notified the company two days in advance of their projected demonstration and the company
could have made arrangements to counteract or prevent whatever losses it might sustain by
reason of the absence of its workers for one day, especially in this case when the Union
requested it to excuse only the day-shift employees who will join the demonstration on March 4,
1969 which request the Union reiterated in their telegram received by the company at 9:50 in
the morning of March 4, 1969, the day of the mass demonstration (pp. 42-43, rec.). There was a
lack of human understanding or compassion on the part of the firm in rejecting the request of
the Union for excuse from work for the day shifts in order to carry out its mass demonstration.
And to regard as a ground for dismissal the mass demonstration held against the Pasig police,
not against the company, is gross vindictiveness on the part of the employer, which is as
unchristian as it is unconstitutional.

III
The respondent company is the one guilty of unfair labor practice. Because the refusal on the
part of the respondent firm to permit all its employees and workers to join the mass
demonstration against alleged police abuses and the subsequent separation of the eight (8)
petitioners from the service constituted an unconstitutional restraint on their freedom of
expression, freedom of assembly and freedom to petition for redress of grievances, the
respondent firm committed an unfair labor practice defined in Section 4(a-1) in relation to
Section 3 of Republic Act No. 875, otherwise known as the Industrial Peace Act. Section 3 of
Republic Act No. 875 guarantees to the employees the right "to engage in concerted activities
for . . . mutual aid or protection"; while Section 4(a-1) regards as an unfair labor practice for an
employer "to interfere with, restrain or coerce employees in the exercise of their rights
guaranteed in Section Three."

We repeat that the obvious purpose of the mass demonstration staged by the workers of the
respondent firm on March 4, 1969, was for their mutual aid and protection against alleged police
abuses, denial of which was interference with or restraint on the right of the employees to
engage in such a common action to better shield themselves against such alleged police
indignities. The insistence on the part of the respondent firm that the workers for the morning
and regular shifts should not participate in the mass demonstration, under pain of dismissal,
was as heretofore stated, "a potent means of inhibiting speech."

Such a concerted action for their mutual help and protection, deserves at least equal protection
as the concerted action of employees in giving publicity to a letter complaint charging a bank
president with immorality, nepotism, favoritism and discrimination in the appointment and
promotion of bank employees. We further ruled in the Republic Savings Bank case, supra, that
for the employees to come within the protective mantle of Section 3 in relation to Section 4(a-1)
of Republic Act No. 875, "it is not necessary that union activity be involved or that collective
bargaining be contemplated," as long as the concerted activity is for the furtherance of their
interests.

As stated clearly in the stipulation of facts embodied in the questioned order of respondent
Court dated September 15, 1969, the company, "while expressly acknowledging, that the
demonstration is an inalienable right of the Union guaranteed by the Constitution," nonetheless
emphasized that "any demonstration for that matter should not unduly prejudice the normal
operation of the company" and "warned the PBMEO representatives that workers who belong to
the first and regular shifts, who without previous leave of absence approved by the Company,
particularly the officers present who are the organizers of the demonstration, who shall fail to
report for work the following morning (March 4, 1969) shall be dismissed, because such failure
is a violation of the existing CBA and, therefore, would be amounting to an illegal strike (;)" (p.
III, petitioner's brief). Such threat of dismissal tended to coerce the employees from joining the
mass demonstration. However, the issues that the employees raised against the local police,
were more important to them because they had the courage to proceed with the demonstration,
despite such threat of dismissal. The most that could happen to them was to lose a day's wage
by reason of their absence from work on the day of the demonstration. One day's pay means
much to a laborer, more especially if he has a family to support. Yet, they were willing to forego
their one-day salary hoping that their demonstration would bring about the desired relief from
police abuses. But management was adamant in refusing to recognize the superior legitimacy of
their right of free speech, free assembly and the right to petition for redress.

Because the respondent company ostensibly did not find it necessary to demand from the
workers proof of the truth of the alleged abuses inflicted on them by the local police, it thereby
concedes that the evidence of such abuses should properly be submitted to the corresponding
authorities having jurisdiction over their complaint and to whom such complaint may be referred
by the President of the Philippines for proper investigation and action with a view to disciplining
the local police officers involved.

On the other hand, while the respondent Court of Industrial Relations found that the
demonstration "paralyzed to a large extent the operations of the complainant company," the
respondent Court of Industrial Relations did not make any finding as to the fact of loss actually
sustained by the firm. This significant circumstance can only mean that the firm did not sustain
any loss or damage. It did not present evidence as to whether it lost expected profits for failure
to comply with purchase orders on that day; or that penalties were exacted from it by customers
whose orders could not be filled that day of the demonstration; or that purchase orders were
cancelled by the customers by reason of its failure to deliver the materials ordered; or that its
own equipment or materials or products were damaged due to absence of its workers on March
4, 1969. On the contrary, the company saved a sizable amount in the form of wages for its
hundreds of workers, cost of fuel, water and electric consumption that day. Such savings could
have amply compensated for unrealized profits or damages it might have sustained by reason
of the absence of its workers for only one day.

IV

Apart from violating the constitutional guarantees of free speech and assembly as well as the
right to petition for redress of grievances of the employees, the dismissal of the eight (8) leaders
of the workers for proceeding with the demonstration and consequently being absent from work,
constitutes a denial of social justice likewise assured by the fundamental law to these lowly
employees. Section 5 of Article II of the Constitution imposes upon the State "the promotion of
social justice to insure the well-being and economic security of all of the people," which
guarantee is emphasized by the other directive in Section 6 of Article XIV of the Constitution
that "the State shall afford protection to labor . . ." Respondent Court of Industrial Relations as
an agency of the State is under obligation at all times to give meaning and substance to these
constitutional guarantees in favor of the working man; for otherwise these constitutional
safeguards would be merely a lot of "meaningless constitutional patter." Under the Industrial
Peace Act, the Court of Industrial Relations is enjoined to effect the policy of the law "to
eliminate the causes of industrial unrest by encouraging and protecting the exercise by
employees of their right to self-organization for the purpose of collective bargaining and for the
promotion of their moral, social and economic well-being." It is most unfortunate in the case at
bar that respondent Court of Industrial Relations, the very governmental agency designed
therefor, failed to implement this policy and failed to keep faith with its avowed mission its raison
d'etre as ordained and directed by the Constitution.

It has been likewise established that a violation of a constitutional right divests the court of
jurisdiction; and as a consequence its judgment is null and void and confers no rights. Relief
from a criminal conviction secured at the sacrifice of constitutional liberties, may be obtained
through habeas corpus proceedings even long after the finality of the judgment. Thus, habeas
corpus is the remedy to obtain the release of an individual, who is convicted by final judgment
through a forced confession, which violated his constitutional right against self-incrimination; or
who is denied the right to present evidence in his defense as a deprivation of his liberty without
due process of law, even after the accused has already served sentence for twenty-two years.
Both the respondents Court of Industrial Relations and private firm trenched upon these
constitutional immunities of petitioners. Both failed to accord preference to such rights and
aggravated the inhumanity to which the aggrieved workers claimed they had been subjected by
the municipal police. Having violated these basic human rights of the laborers, the Court of
Industrial Relations ousted itself of jurisdiction and the questioned orders it issued in the instant
case are a nullity. Recognition and protection of such freedoms are imperative on all public
offices including the courts 28 as well as private citizens and corporations, the exercise and
enjoyment of which must not be nullified by mere procedural rule promulgated by the Court
Industrial Relations exercising a purely delegate legislative power, when even a law enacted by
Congress must yield to the untrammelled enjoyment of these human rights. There is no time
limit to the exercise of the freedoms. The right to enjoy them is not exhausted by the delivery of
one speech, the printing of one article or the staging of one demonstration. It is a continuing
immunity to be invoked and exercised when exigent and expedient whenever there are errors to
be rectified, abuses to be denounced, inhumanities to be condemned. Otherwise these
guarantees in the Bill of Rights would be vitiated by rule on procedure prescribing the period for
appeal. The battle then would be reduced to a race for time. And in such a contest between an
employer and its laborer, the latter eventually loses because he cannot employ the best an
dedicated counsel who can defend his interest with the required diligence and zeal, bereft as he
is of the financial resources with which to pay for competent legal services.

VI.

Does the mere fact that the motion for reconsideration was filed two (2) days late defeat the
rights of the petitioning employees? Or more directly and concretely, does the inadvertent
omission to comply with a mere Court of Industrial Relations procedural rule governing the
period for filing a motion for reconsideration or appeal in labor cases, promulgated pursuant to a
legislative delegation, prevail over constitutional rights? The answer should be obvious in the
light of the aforecited cases. To accord supremacy to the foregoing rules of the Court of
Industrial Relations over basic human rights sheltered by the Constitution, is not only
incompatible with the basic tenet of constitutional government that the Constitution is superior to
any statute or subordinate rules and regulations, but also does violence to natural reason and
logic. The dominance and superiority of the constitutional right over the aforesaid Court of
Industrial Relations procedural rule of necessity should be affirmed. Such a Court of Industrial
Relations rule as applied in this case does not implement or reinforce or strengthen the
constitutional rights affected,' but instead constrict the same to the point of nullifying the
enjoyment thereof by the petitioning employees. Said Court of Industrial Relations rule,
promulgated as it was pursuant to a mere legislative delegation, is unreasonable and therefore
is beyond the authority granted by the Constitution and the law. A period of five (5) days within
which to file a motion for reconsideration is too short, especially for the aggrieved workers, who
usually do not have the ready funds to meet the necessary expenses therefor. In case of the
Court of Appeals and the Supreme Court, a period of fifteen (15) days has been fixed for the
filing of the motion for re hearing or reconsideration (See. 10, Rule 51; Sec. 1, Rule 52; Sec. 1,
Rule 56, Revised Rules of Court). The delay in the filing of the motion for reconsideration could
have been only one day if September 28, 1969 was not a Sunday. This fact accentuates the
unreasonableness of the Court of Industrial are concerned.

It is a procedural rule that generally all causes of action and defenses presently available must
be specifically raised in the complaint or answer; so that any cause of action or defense not
raised in such pleadings, is deemed waived. However, a constitutional issue can be raised any
time, even for the first time on appeal, if it appears that the determination of the constitutional
issue is necessary to a decision of the case, the very lis mota of the case without the resolution
of which no final and complete determination of the dispute can be made. It is thus seen that a
procedural rule of Congress or of the Supreme Court gives way to a constitutional right. In the
instant case, the procedural rule of the Court of Industrial Relations, a creature of Congress,
must likewise yield to the constitutional rights invoked by herein petitioners even before the
institution of the unfair labor practice charged against them and in their defense to the said
charge.

SIMON JR. vs COMMISSION ON HUMAN RIGHTS

Facts:

 A "Demolition Notice," dated 9 July 1990, signed by Carlos Quimpo (one of the petitioners)
in his capacity as an Executive Officer of the Quezon City Integrated Hawkers Management
Council under the Office of the City Mayor, was sent to, and received by, the private
respondents (being the officers and members of the North EDSA Vendors Association,
Incorporated). In said notice, the respondents were given a grace-period of 3 days within
which to vacate the questioned premises of North EDSA to give way to the construction of
the"People's Park".
 On 12 July 1990, private respondents, led by their President Roque Fermo, filed a letter-
complaint with the CHR against the petitioners, asking for a letter to be addressed to then
Mayor Brigido Simon, Jr. of Quezon City to stop the demolition of the private
respondents'stalls, sari-sari stores, and carinderia along North EDSA. CHR issued a
preliminary order directing the petitioners to desist from demolishing the stalls and shanties
at North EDSA pending resolution of the vendors/squatters' complaint before the
Commission" and ordering said petitioners to appear before the CHR.
 Petitioners started the demolition despite CHR’s order to desist. Respondents consequently
asked that petitioner’s be cited in contempt.
 Meanwhile, petitioners filed a motion to dismiss the complaint filed by respondents. They
alleged that the Commission has no jurisdiction over the complaint as it involved
respondents’ privilege to engage in business, not their civil and political rights.
 In an Order, 11 dated 25 September 1990, the CHR cited the petitioners in contempt for
carrying out the demolition of the stalls, sari-sari stores and carinderia despite the "order to
desist", and it imposed a fine of P500.00 on each of them. On 1 March 1991, the CHR
issued an Order, denying petitioners' motion to dismiss. The CHR opined that "it was not the
intention of the (Constitutional) Commission to create only a paper tiger limited only to
investigating civil and political rights, but it (should) be (considered) a quasi-judicial body
with the power to provide appropriate legal measures for the protection of human rights of all
persons within the Philippines "
 Their Motion for Reconsideration having been denied, petioners Simon Jr. et al filed a
petition for prohibition to enjoin the CHR from hearing private respondents’ complaint.

Issue/s: WON CHR has jurisdiction to hear the complaint and grant the relief prayed for by
respondents.WON the CHR can investigate the subject matter of respondents’ complaint.

Held: No. Under the constitution, the CHR has no power to adjudicate. No. Complaint does not
involve civil and political rights.
Rationale:

 Art XIII, Section 18 of the Constitution provides that the CHR has the power to investigate,
on its own or on complaint by any party, all forms of human rights violations involving civil
and political rights.
 In Cariño v. Commission on Human Rights, the Court through Justice Andres Narvasa
observed that:

(T)he Commission on Human Rights . . . was not meant by the fundamental law to be another
court or quasi-judicial agency in this country, or duplicate much less take over the functions of
the latter.

The most that may be conceded to the Commission in the way of adjudicative power is that it
may investigate, i.e., receive evidence and make findings of fact as regards claimed human
rights violations involving civil and political rights. But fact finding is not adjudication, and cannot
be likened to the judicial function of a court of justice, or even a quasi-judicial agency or official.
The function of receiving evidence and ascertaining therefrom the facts of a controversy is not a
judicial function, properly speaking. To be considered such, the faculty of receiving evidence
and making factual conclusions in a controversy must be accompanied by the authority of
applying the law to those factual conclusions to the end that the controversy may be decided or
determined authoritatively, finally and definitively, subject to such appeals or modes of review as
may be provided by law. This function, to repeat, the Commission does not have

CHR’s investigative power encompasses all forms of human rights violations involving civil and
political rights.

 The term civil rights has been defined as referring to those rights that belong to every citizen
of the state or country, or, in wider sense, to all its inhabitants, and are not connected with
the organization or administration of the government. They include the rights of property,
marriage, equal protection of the laws, freedom of contract, etc. Political rights, on the other
hand, are said to refer to the right to participate, directly or indirectly, in the establishment or
administration of government, the right of suffrage, the right to hold public office, the right of
petition and, in general, the rights appurtenant to citizenship vis-a-vis the management of
government.
 Recalling the deliberations of the Constitutional Commission, it is readily apparent that the
delegates envisioned a Commission on Human Rights that would focus its attention to the
more severe cases of human rights violations. Delegate Garcia, for instance, mentioned
such areas as the "(1) protection of rights of political detainees, (2) treatment of prisoners
and the prevention of tortures, (3) fair and public trials, (4) cases of disappearances, (5)
salvagings and hamletting, and (6) other crimes committed against the religious."
 In the particular case at hand, there is no cavil that what are sought to be demolished are
the stalls, sari-sari stores and carinderia, as well as temporary shanties, erected by private
respondents on a land which is planned to be developed into a "People's Park." Looking at
the standards hereinabove discoursed vis-a-vis the circumstances obtaining in this instance,
we are not prepared to conclude that the order for the demolition of the stalls, sari-sari
stores and carinderia of the private respondents can fall within the compartment of "human
rights violations involving civil and political rights" intended by the Constitution.
El Banco Espanol-Filipino vs. Palanca

Facts: Engracio Palanca Tanquinyeng executed a mortgage upon various parcels of real
property situated in Manila in favor of El Banco Espanol-Filipino as security for a loan. After he
executed the mortgage, Engracio returned to China and never went back to RP until he
eventually died. Because of non-payment, the bank filed a suit to foreclose the mortgage (at this
point Engracio was still alive). Since defendant was a non-resident, the bank gave notice by
publication. The Clerk of Court was also directed to send copy of the summons to the
defendant’s last known address, which was in China. However, it was not shown whether the
Clerk complied with this requirement. Nevertheless, the CFI proceeded with the case and a
judgment by default was rendered in favor of the bank. Mortgage was foreclosed and the
properties were sold in a public auction. After 7 years, Vicente Palanca, as administrator of
Engracio’s estate, filed a motion to set aside the judgment by default and to vacate all
subsequent proceedings on the ground that the judgment rendered was void since the court
never acquired jurisdiction over the person of the defendant.

Issue: WON the CFI acquired jurisdiction over the defendant

Held: YES.

Ratio: Tanquinyeng is a non-resident and having refused to appear in court voluntarily, the court
never acquired jurisdiction over him. This is, however, not essential since the foreclosure of
mortgage is an action quasi in rem and what is essential is the court’s jurisdiction over the res.

Jurisdiction over the property is based on the following:

(1) That the property is located within the district;

(2) That the purpose of the litigation is to subject the property by sale to an obligation fixed
upon it by the mortgage; and

(3) That the court at a proper stage of the proceedingstakes the property into custody, if
necessary, andexpose it to sale for the purpose of satisfying themortgage debt.

And since jurisdiction is exlusively over property, the relief granted by the court must be limited
only to that which can beenforced against the property itself.

Therefore, whatever may be the effect in other respects of the failure of the Clerk of the Court to
mail the proper papers to the defendant in Amoy, China, such irregularity could impair or defeat
the jurisdiction of the court.

Galvez v. Court of Appeals 691 SCRA 455 (2013)

Brief Facts: Accused in this case are directors/officers of RMSI, possessing substantial capital
and a congressional telecom franchise. Accused thereafter, created the Smart Philippines
(“Smartnet”) division of RMSI. In the meantime same accused also formed a subsidiary
corporation named, Smartnet Philippines Inc. (SPI), with very minimal capital. Smartnet applied
for a Letter of Credit with Asia United Bank (AUB), which was subsequently granted since AUB
was satisfied of its credit worthiness. In the meantime, SPI also applied for a letter of credit,
making it appear to AUB that smartnet and SPI are one and the same entity, which the latter
granted. SPI thereafter refused to make good with its obligation to pay. AUB then went after
Smartnet to collect however the latter refused contending that SPI and Smartnet are different
entities.

Ruling: Accused were convicted of estafa, having made AUB believe that Smartnet and SPI are
the same entity and resulting with the former parting with its property.

“Lest it be misunderstood, we reiterate that this Courts finding of probable cause is grounded on
fraud committed through deceit which surrounded Gilbert Guy, et al.transaction with AUB, thus,
violating Article 315 (2) (a) of the Revised Penal Code; it is neither their act of borrowing money
and not paying them, nor their denial thereof, but their very act of deceiving AUB in order for the
latter to part with its money. As early as the Penal Code of Spain, which was enforced in the
Philippines as early as 1887 until it was replaced by the Revised Penal Code in 1932, the act of
fraud through false pretenses or similar deceit was already being punished. Article 335 of the
Penal Code of Spain punished a person who defrauded another by falsely pretending to
possess any power, influence, qualification, property, credit, agency or business, or by means of
similar deceit.”

“We emphasize that fraud in its general sense, is deemed to comprise anything calculated to
deceive, including all acts, omissions, and concealment involving a breach of legal duty or
equitable duty, trust, or confidence justly reposed, resulting in damage to another, or by which
an undue and unconscientious advantage is taken of another. It is a generic term embracing all
multifarious means which human ingenuity can device and which are resorted to by one
individual to secure an advantage over another by false suggestions or by suppression of truth
and includes all surprise, trick, cunning, dissembling and any unfair way by which another is
cheated.”

State Prosecutors vs. Muro [A.M. No. RTJ-92-876. September 19, 1994]

FACTS:

1. The state prosecutors who are members of the DOJ Panel of Prosecution filed a complaint
against respondent Judge Muro on the ground of ignorance of the law, grave misconduct and
violation of the provisions in the Code of Judicial Conduct.

2. The case at bar involves the prosecution of the 11 charges against Imelda Marcos in violation
of the Central Bank Foreign Exchange Restriction in the Central Bank Circular 960.

3. The respondent judge dismissed all 11 cases solely on the basis of the report published from
the 2 newspapers (Inquirer and Daily Globe), which the judge believes to be reputable and of
national circulation, that the Pres. of the Philippines lifted all foreign exchange restrictions.

4. The respondent’s decision was founded on his belief that the reported announcement of the
Executive Department in the newspaper in effect repealed the CB 960 and thereby divested the
court of its jurisdiction to further hear the pending case thus motu propio dismissed the case.

5. He further contends that the announcement of the President as published in the newspaper
has made such fact a public knowledge that is sufficient for the judge to take judicial notice
which is discretionary on his part.
6. Hence, the complainants contend that the respondent judge erred in taking judicial notice on
matters he purported to be a public knowledge based merely on the account of the newspaper
publication that the Pres. has lifted the foreign exchange restriction.

a. It was also an act of inexcusable ignorant of the law not to accord due process to the
prosecutors who were already at the stage of presenting evidence (trial)thereby depriving the
government the right to be heard.

b. The judge also exercised grave abuse of discretion by taking judicial notice on the published
statement of the President in the newspaper which is a matter that has not yet been officially in
force and effect of the law.

ISSUE: Did the respondent judge commit grave abuse of discretion in taking judicial notice on
the statement of the president lifting the foreign exchange restriction published in the newspaper
as basis for dismissing the case? YES

HELD: It is a mandatory requirement that a new law should be published for 15 days in a
newspaper of general circulation before its effectivity. When the President’s statement was
published in the newspaper, the respondent judge admitted of not having seen the official text of
CB circular 1353 thus it was premature for him to take judicial notice on this matter which is
merely based on his personal knowledge and is not based on the public knowledge that the law
requires for the court to take judicial notice of. The doctrine of judicial notice rests on the
wisdom and discretion of the courts. The power to take judicial notice is to be exercised by
courts with caution; care must be taken that the requisite notoriety exists; and every reasonable
doubt on the subject should be promptly resolved in the negative.

Generally speaking, matters of judicial notice have three material requisites:

(1) the matter must be one of common and general knowledge;

(2) it must be well and authoritatively settled and not doubtful or uncertain; and

(3) it must be known to be within the limits of the jurisdiction of the court.

The principal guide in determining what facts may be assumed to be judicially known is that of
notoriety. Hence, it can be said that judicial notice is limited to facts evidenced by public records
and facts of general notoriety.

To say that a court will take judicial notice of a fact is merely another way of saying that the
usual form of evidence will be dispensed with if knowledge of the fact can be otherwise
acquired. This is because the court assumes that the matter is so notorious that it will not be
disputed. But judicial notice is not judicial knowledge.

• The mere personal knowledge of the judge is not the judicial knowledge of the court, and he is
not authorized to make his individual knowledge of a fact, not generally or professionally known,
the basis of his action. Judicial cognizance is taken only of those matters which are “commonly”
known.
Things of “common knowledge,” of which courts take judicial notice, may be matters coming to
the knowledge of men generally in the course of the ordinary experiences of life, or they may be
matters which are generally accepted by mankind as true and are capable of ready and
unquestioned demonstration. Thus, facts which are universally known, and which may be found
in encyclopedias, dictionaries or other publications, are judicially noticed, provided they are of
such universal notoriety and so generally understood that they may be regarded as forming part
of the common knowledge of every person.

In this case, respondent judge, in the guise of exercising discretion and on the basis of a mere
newspaper account which is sometimes even referred to as hearsay evidence twice removed,
took judicial notice of the supposed lifting of foreign exchange controls, a matter which was not
and cannot be considered of common knowledge or of general notoriety. Worse, he took
cognizance of an administrative regulation which was not yet in force when the order of
dismissal was issued.

Jurisprudence dictates that judicial notice cannot be taken of a statute before it becomes
effective. The reason is simple. A law which is not yet in force and hence, still inexistent, cannot
be of common knowledge capable of ready and unquestionable demonstration, which is one of
the requirements before a court can take judicial notice of a fact.

Hence, it was impossible for Judge Muro and was improper for him to have taken cognizance of
the CB Circular No. 1353 when it was not yet in force at the time the improvident order of
dismissal was issued.