LIMITATION ON RIGHTS

G. R. No. L-11748

BAUTISTA ANGELO, J.:

On February 2, 1953, an information for malicious mischief was filed
against the accused by the city attorney of Legaspi, Albay, before the
Municipal Court of Legaspi. He pleaded not guilty. After the prosecution
has presented its evidence, he moved to quash the information on the
ground that the prosecution failed to prove all the elements of the crime
charged, but the motion was denied, thereafter, the accused presented his
evidence, after which the court rendered a decision finding him guilty of the
crime of malicious mischief as defined in Article 327 of the Revised Penal
Code and sentenced him to suffer ten (10) days of arresto menor or pay a
fine of P75.00, to indemnify the offended party in same amount, with
subsidiary imprisonment in case of insolvency, and to pay the costs.
From this decision, he appealed to the court of first tanoe where again he
was charged with the same offense. On November 10, 1956, he reiterated
his motion to quash the information on the same ground that it does not
allege the necessary elements to constitute the crime of malicious mischief.
This time the court sustained the motion and dismissed case. The court
cancelled the "bond for his provisional release. The Government appealed.
The fundamental rule in considering a motion to the ground that the
averaients of the information sufficient to constitute the offense charged is
whether the facts alleged, if hypothetically admitted, would meet the
jjtential elements of the offense as defined in the law. te above ground
imports a hypothetical admission of the alleged in the information "but
challenges their sufficiency for failure to meet the essential requisites of the
as specified by substantive law." [1] However, it was held that "Prima facie,
the 'facts charged' are those deseed in the complaint, but they may be
amplified or qualified others appearing to be additional circumstances,
upon admissions made by the people's representative, which admissions
could anyway be submitted by him as amendments to same information. x
x x Of course, it may be added that upon similar motions the court and the
fiscal are not required to go beyond the averments of the information, nor is
the latter to be inveigled into a premature and risky revelation of his
evidence" (People v. Navarro, 75 Phil., 516, 518-519). Does the herein
information meet this test?
The information filed in the lower court reads :
"That on or about January 13, 1953, in the District of Daraga, City of
Legaspi, Philippines, and within the jurisdiction of this Honorable Court,
the above-named accused moved by resentment and anger and with intent
to damage another's property did then and there wilfully, unlawfully and
feloniously shoot to death a female white pig spotted brown owned by
Julian Stabella which act of the accused caused damage and prejudice to
said Julian Marbella in the amount of P75.00 Philippino Currency."
(Information, p. 31, Record; Underlining supplied)
Analyzing the information we find that, as alleged, the accused wilfully
damaged the property of one Marbella when he shot to death a pig owned
by the latter with the felonious intent of causing an injury because of
resentment and anger. In other words, the accused caused damage to the
property of another, with the'intent to cause injury, due to an evil motive,
and these are precisely the elements instituting the crime of malicious
mischief (Article 327, Revised Penal Code; see Padilla, Revised Penal Code,
Annotated, Vol. II, p. 645, 1955 ed.)
Commenting on the acts committed by the accused as irged in the
information and as admitted by the solicitor General, this official said:
"Certainly the deliberate act the accused Segovia in shooting to death the
female white pig owned by Julian Marbella was obviously due to malicious
intent on his part. As it has been established before the Municipal Court the
accused shot not only once but four times this female white pig with his
shotgun, Caliber .22 when he saw it among the plants. There was certainly
the element of vengeance and anger with malicious intent of avenging
whatever damage the pig might have done to his plants. The proper thing
which the accused should have done when he saw the pig among his plants,
was to drive it away, and after assessing the value of whatever damages the
pig might have caused to his plants, he should have filed a civil action for
damages against the owner, in accordance with the provisions of the Civil
Code. But in this case he took the law in his own hands x x x." We agree
with this comment. It is obvious that the trial court erred in sustaining the
motion to quash.
The plea is advanced that the Government can no longer appeal from the
decision of dismissal without placing the accused in double jeopardy
considering that he was already convicted by the Municipal Court of
Legaspi. This claim ignores the fact that he appealed from the judgment of
conviction and hence it was vacated. The rule is that when an appeal has
been perfected, the judgment of the justice of the peace or municipal court
is vacated and the case is tried de novo in the court of first instance as if it
were originally Instituted therein (section 8, Rule 119). No new information
need be filed in the latter court in order that it may acquire jurisdiction to
try the case (Crisostomo v. Director of Prisons, 41 Phil., 368; People v. Cu
Hiok, 62 Phil., 501). If the case, on appeal by the accused, is as originally
instituted, and the motion was filed before arraignment or plea, it is
obvious that the dismissal of the case was no bar to appeal because it does
not place the accused in jeopardy under Section 9, Rule 113, of the Rules of
Court, The claim is therefore without merit.
Wherefore, the order appealed from is hereby set aside, the case is
reiuanded to the lower court for hearing on No costs.
G.R. No. 4223            August 19, 1908

NICOLAS LUNOD, ET AL., plaintiffs-appellees,

vs.
HIGINO MENESES, defendant-appellant.

T. Icasiano, for appellant.

R. Salinas, for appellee.

TORRES, J.:

On the 14th of March, 1904, Nicolas Lunod, Juan de la Vega, Evaristo Rodriguez, Fernando
Marcelo, Esteban Villena, Benito Litao, Ventura Hernandez, and Casimiro Pantanilla, residents of
the town of Bulacan, province of the same name, filed a written complaint against Higino Meneses,
alleging that they each owned and possessed farm lands, situated in the places known as Maytunas
and Balot, near a small lake named Calalaran; that the defendant is the owner of a fish-pond and a
strip of land situated in Paraanan, adjoining the said lake on one side, and the River Taliptip on the
other; that from time immemorial, and consequently for more than twenty years before 1901, there
existed and still exists in favor of the rice fields of the plaintiffs a statutory easement permitting the
flow of water over the said land in Paraanan, which easement the said plaintiffs enjoyed until the
year 1901 and consisted in that the water collected upon their lands and in the Calalaran Lake flow
through Paraanan into the Taliptip River. From that year however, the defendant, without any right or
reason, converted the land in Paraanan into a fishpond and by means of a dam and a bamboo net,
prevented the free passage of the water through said place into the Taliptip River, that in
consequence the lands of the plaintiff became flooded and damaged by the stagnant waters, there
being no outlet except through the land in Paraanan; that their plantation were destroyed, causing
the loss and damages to the extent of about P1,000, which loss and damage will continue if the
obstructions to the flow of the water are allowed to remain, preventing its passage through said land
and injuring the rice plantations of the plaintiffs. They therefore asked that judgment be entered
against the defendant, declaring that the said tract of land in Paraanan is subject to a statutory
easement permitting the flow of water from the property of the plaintiffs, and that, without prejudice
to the issuing of a preliminary injunction, the defendant be ordered to remove and destroy the
obstructions that impede the passage of the waters through Paraanan, and that in future, and
forever, he abstain from closing in any manner the aforesaid tract of land; that, upon judgment being
entered, the said injunction be declared to be final and that the defendant be sentenced to pay to the
plaintiffs an indemnity of P1,000, and the costs in the proceedings; that they be granted any other
and further equitable or proper remedy in accordance with the facts alleged and proven.
In view of the demurrer interposed by the plaintiffs to the answer of the defendant, the latter, on the
29th of August, 1904, filed an amended answer, denying each and everyone of the allegations of the
complaint, and alleged that no statutory easement existed nor could exist in favor of the lands
described in the complaint, permitting the waters to flow over the fish pond that he, together with his
brothers, owned in the sitio of Bambang, the area and boundaries of which were stated by him, and
which he and his brothers had inherited from their deceased mother.

Apolinara de Leon; that the same had been surveyed by a land surveyor in September, 1881, he
also denied that he had occupied or converted any land in the barrio of Bambang into a fishpond;
therefore, and to sentence the plaintiffs to pay the costs and corresponding damages.

Upon the evidence adduced by both parties to the suit, the court, on the 13th of March, 1907,
entered judgment declaring that the plaintiffs were entitled to a decision in their favor, and sentenced
the defendant to remove the dam placed on the east of the Paraanan passage on the side of the
Taliptip River opposite the old dam in the barrio of Bambang, as well as to remove and destroy the
obstacles to the free passage of the waters through the strip of land in Paraanan; to abstain in
future, and forever, from obstructing or closing in any manner the course of the waters through the
said strip of land. The request that the defendant be sentenced to pay an indemnity was denied, and
no ruling was made as to costs.

The defendant excepted to the above judgment and furthermore asked for a new trial which was
denied and also excepted to, and, upon approval of the bill of exceptions, the question was
submitted to this court.

Notwithstanding the defendant's denial in his amended answer, it appears to have been clearly
proven in this case that the lands owned by the plaintiffs in the aforesaid barrio, as well as the small
adjoining lake, named Calalaran, are located in places relatively higher than the sitio called
Paraanan where the land and fish pond of the defendant are situated, and which border on the
Taliptip River; that during the rainy season the rain water which falls on he land of the plaintiffs, and
which flows toward the small Calalaran Lake at flood time, has no outlet to the Taliptip River other
than through the low land of Paraanan: that the border line between Calalaran and Paraanan there
has existed from time immemorial a dam, constructed by the community for the purpose of
preventing the salt waters from the Taliptip River, at high tide, from flooding the land in Calalaran,
passing through the lowlands of Paraanan; but when rainfall was abundant, one of the residents was
designated in his turn by the lieutenant or justice of the barrio to open the sluice gate in order to let
out the water that flooded the rice fields, through the land of Paraanan to the above-mentioned river,
that since 1901, the defendant constructed another dam along the boundary of this fishpond in
Paraanan, thereby impeding the outlet of the waters that flood the fields of Calalaran, to the serious
detriment of the growing crops.

According to article 530 of the Civil Code, an easement is charge imposed upon one estate for the
benefit of another estate belonging to a different owner, and the realty in favor of which the
easement is established is called the dominant estate, and the one charged with it the servient
estate.

The lands of Paraanan being the lower are subject to the easement of receiving and giving passage
to the waters proceeding from the higher lands and the lake of Calalaran; this easement was not
constituted by agreement between the interested parties; it is of a statutory nature, and the law had
imposed it for the common public utility in view of the difference in the altitude of the lands in the
barrio Bambang.

Article 552 of the Civil code provides:

 Lower estates must receive the waters which naturally and without the intervention of man
descend from the higher estates, as well as the stone or earth which they carry with them.

Neither may the owner of the lower estates construct works preventing this easement, nor
the one of the higher estate works increasing the burden.

Article 563 of the said code reads also:

The establishment, extent, form, and conditions of the easements of waters to which this
section refers shall be governed by the special law relating thereto in everything not provided
for in this code.

The special law cited in the Law of Waters of August 3, 1866, article 111 of which, treating of natural
easements relating to waters, provides:

Lands situated at a lower level are subject to receive the waters that flow naturally, without
the work of man, from the higher lands together with the stone or earth which they carry with
them.

Hence, the owner of the lower lands can not erect works that will impede or prevent such an
easement or charge, constituted and imposed by the law upon his estate for the benefit of the higher
lands belonging to different owners; neither can the latter do anything to increase or extend the
easement.

According to the provisions of law above referred to, the defendant, Meneses, had no right to
construct the works, nor the dam which blocks the passage, through his lands and the outlet to the
Taliptip River, of the waters which flood the higher lands of the plaintiffs; and having done so, to the
detriment of the easement charged on his estate, he has violated the law which protects and
guarantees the respective rights and regulates the duties of the owners of the fields in Calalaran and
Paraanan.

It is true that article 388 of said code authorizes every owner to enclose his estate by means of
walls, ditches fences or any other device, but his right is limited by the easement imposed upon his
estate.

The defendant Meneses might have constructed the works necessary to make and maintain a fish
pond within his own land, but he was always under the strict and necessary obligation to respect the
statutory easement of waters charged upon his property, and had no right to close the passage and
outlet of the waters flowing from the lands of the plaintiffs and the lake of Calalaran into the Taliptip
River. He could not lawfully injure the owners of the dominant estates by obstructing the outlet to the
Taliptip River of the waters flooding the upper lands belonging to the plaintiffs.

It is perhaps useful and advantageous to the plaintiffs and other owners of high lands in Calalaran, in
addition to the old dike between the lake of said place and the low lands in Paraanan, to have
another made by the defendant at the border of Paraanan adjoining the said river, for the purpose of
preventing the salt waters of the Taliptip River flooding, at high tide, not only the lowlands in
Paraanan but also the higher ones of Calalaran and its lake, since the plaintiffs can not prevent the
defendant from protecting his lands against the influx of salt water; but the defendant could never be
permitted to obstruct the flow of the waters through his lands to the Taliptip River during the heavy
rains, when the high lands in Calalaran and the lake in said place are flooded, thereby impairing the
right of the owners of the dominant estates.
For the above reasons, and accepting the findings of the court below in the judgment appealed from
in so far as they agree with the terms of this decision, we must and do hereby declare that the
defendant, Higino Meneses, as the owner of the servient estate, is obliged to give passage to and
allow the flow of the waters descending from the Calalaran Lake and from the land of the plaintiffs
through his lands in Paraanan for their discharge into the Taliptip River; and he is hereby ordered to
remove any obstacle that may obstruct the free passage of the waters whenever there may be either
a small or large volume of running water through his lands in the sitio of Paraanan for their discharge
into the Taliptip River; and in future to abstain from impeding, in any manner, the flow of the waters
coming from the higher lands. The judgment appealed from is affirmed, in so far as it agrees with
decision, and reversed in other respects, with the costs of this instance against the appellants. So
ordered.

United States Supreme Court

UNITED STATES v. CAUSBY(1946)

No. 630

Argued: May 1, 1946Decided: May 27, 1946

Military airplanes are subject to rules of Civil Aeronautics Board where there
are no army or navy regulations to the contrary. [328 U.S. 256, 257]   Mr. Walter
J. Cummings, Jr., of Washington, D.C., for petitioner.

Mr. William E. Comer, of Greensboro, N.C., for respondent.

[328 U.S. 256, 258]  

Mr. Justice DOUGLAS delivered the opinion of the Court.

This is a case of first impression. The problem presented is whether

respondents' property was taken within the meaning of the Fifth Amendment
by frequent and regular flights of army and navy aircraft over respondents'
land at low altitudes. The Court of Claims held that there was a taking and
entered judgment for respondent, one judge dissenting. 60 F.Supp. 751. The
case is here on a petition for a writ of certiorari which we granted becuase of
the importance of the question presented.

Respondents own 2.8 acres near an airport outside of Greensboro, North

Carolina. It has on it a dwelling house, and also various outbuildings which
were mainly used for raising chickens. The end of the airport's northwest-
southeast runway is 2,220 feet from respondents' barn and 2,275 feet from
their house. The path of glide to this runway passes directly over the
property-which is 100 feet wide and 1,200 feet long. The 30 to 1 safe glide
angle1 approved by the Civil Aeronautics Authority2 passes over this
property at 83 feet, which is 67 feet above the house, 63 feet above the barn
and 18 feet above the highest tree. 3 The use by the United States of this
airport is pursuant to a lease executed in May, 1942, for a term commencing
June 1, 1942 and ending June 30, 1942, with a provision for renewals until
June 30, 1967, or six [328 U.S. 256, 259]   months after the end of the national
emergency, whichever is the earlier.

Various aircraft of the United States use this airport-bombers, transports and
fighters. The direction of the prevailing wind determines when a particular
runway is used. The north-west-southeast runway in question is used about
four per cent of the time in taking off and about seven per cent of the time in
landing. Since the United States began operations in May, 1942, its four-
motored heavy bombers, other planes of the heavier type, and its fighter
planes have frequently passed over respondents' land buildings in
considerable numbers and rather close together. They come close enough at
times to appear barely to miss the tops of the trees and at times so close to
the tops of the trees as to blow the old leaves off. The noise is startling. And
at night the glare from the planes brightly lights up the place. As a result of
the noise, respondents had to give up their chicken business. As many as six
to ten of their chickens were killed in one day by flying into the walls from
fright. The total chickens lost in that manner was about 150. Production also
fell off. The result was the destruction of the use of the property as a
commercial chicken farm. Respondents are frequently deprived of their sleep
and the family has become nervous and frightened. Although there have
been no airplane accidents on respondents' property, there have been
several accidents near the airport and close to respondents' place. These are
the essential facts found by the Court of Claims. On the basis of these facts,
it found that respondents' property had depreciated in value. It held that the
United States had taken an easement over the property on June 1, 1942, and
that the value of the property destroyed and the easement taken was
$2,000. [328 U.S. 256, 260]   I. The United States relies on the Air Commerce Act
of 1926, 44 Stat. 568, 49 U.S.C. 171 et seq., 49 U.S.C.A. 171 et seq., as
amended by the Civil Aeronautics Act of 1938, 52 Stat. 973, 49 U.S.C. 401 et
seq., 49 U. S.C.A. 401 et seq. Under those statutes the United States has
'complete and exclusive national sovereignty in the air space' over this
country. 49 U.S.C. 176(a), 49 U.S.C.A. 176(a). They grant any citizen of the
United States 'a public right of freedom of transit in air commerce4 through
the navigable air space of the United States.' 49 U.S.C. 403, 49 U.S.C.A. 403.
And 'navigable air space' is defined as 'airspace above the minimum safe
altitudes of flight prescribed by the Civil Aeronautics Authority.' 49 U.S.C.
180, 49 U.S.C.A. 180. And it is provided that 'such navigable airspace shall
be subject to a public right of freedom of interstate and foreign air
navigation.' Id. It is, therefore, argued that since these flights were within the
minimum safe altitudes of flight which had been prescribed, they were an
exercise of the declared right of travel through the airspace. The United
States concludes that when flights are made within the navigable airspace
without any physical invasion of the property of the landowners, there has
been no taking of property. It says that at most there was merely incidental
damage occurring as a consequence of authorized air navigation. It also
argues that the landowner does not own superadjacent airspace which he
has not subjected to possession by the erection of structures or other
occupancy. Moreover, it is argued that even if the United States took
airspace owned by respondents, no compensable damage was shown. Any
damages are said to be merely consequential for which no compensation
may be obtained under the Fifth Amendment.

It is ancient doctrine that at common law ownership of the land extended to

the periphery of the universe-Cujus [328 U.S. 256, 261]   est solum ejus est
usque ad coelum. 5 But that doctrine has no place in the modern world. The
ai is a public highway, as Congress has declared. Were that not true, every
transcontinental flight would subject the operator to countless trespass suits.
Common sense revolts at the idea. To recognize such private claims to the
airspace would clog these highways, seriously interfere with their control and
development in the public interest, and transfer into private ownership that
to which only the public has a just claim.

But that general principle does not control the present case. For the United
States conceded on oral argument that if the flights over respondents'
property rendered it uninhabitable, there would be a taking compensable
under the Fifth Amendment. It is the owner's loss, not the taker's gain, which
is the measure of the value of the property taken. United States v. Miller, 317
U.S. 369 , 63 S.Ct. 276, 147 A.L. R. 55. Market value fairly determined is the
normal measure of the recovery. Id. And that value may reflect the use to
which the land could readily be converted, as well as the existing use. United
States v. Powelson, 319 U.S. 266, 275 , 63 S.Ct. 1047, 1053, and cases cited.
If, by reason of the frequency and altitude of the flights, respondents could
not use this land for any purpose, their loss would be complete. 6 It would be
as complete as if the United States had entered upon the surface of the land
and taken exclusive possession of it.

We agree that in those circumstances there would be a taking. Though it

would be only an easement of flight [328 U.S. 256, 262]   which was taken, that
easement, if permanent and not merely temporary, normally would be the
equivalent of a fee interest. It would be a definite exercise of complete
dominion and control over the surface of the land. The fact that the planes
never touched the surface would be as irrelevant as the absence in this day
of the feudal livery of seisin on the transfer of real estate. The owner's right
to possess and exploit the land-that is to say, his beneficial ownership of it-
would be destroyed. It would not be a case of incidental damages arising
from a legalized nuisance such as was involved in Richards v. Washington
Terminal Co., 233 U.S. 546 , 34 S.Ct. 654, L.R.A.1915A, 887. In that case
property owners whose lands adjoined a railroad line were denied recovery
for damages resulting from the noise, vibrations, smoke and the like,
incidental to the operations of the trains. In the supposed case the line of
flight is over the land. And the land is appropriated as directly and
completely as if it were used for the runways themselves.
There is no material difference between the supposed case and the present
one, except that here enjoyment and use of the land are not completely
destroyed. But that does not seem to us to be controlling. The path of glide
for airplanes might reduce a valuable factory site to grazing land, an orchard
to a vegetable patch, a residential section to a wheat field. Some value
would remain. But the use of the airspace immediately above the land would
limit the utility of the land and cause a diminution in its value. 7 That was the
philosophy of Portsmouth Harbor Land & Hotel Co. v. [328 U.S. 256, 263]  
United States, 260 U.S. 327 , 43 S.Ct. 135. In that case the petition alleged
that the United States erected a fort on nearby land, established a battery
and a fire control station there, and fired guns over petitioner's land. The
Court, speaking through Mr. Justice Holmes, reversed the Court of Claims
which dismissed the petition on a demurrer, olding that 'the specific facts set
forth would warrant a finding that a servitude has been imposed.' 8 260 U.S.
at page 330, 43 S.Ct. at page 137. And see Delta Air Corp. v. Kersey, 193 Ga.
862, 20 S.E.2d 245, 140 A.L.R. 1352. Cf. United States v. 357.25 Acres of
Land, D.C., 55 F.Supp. 461.

The fact that the path of glide taken by the planes was that approved by the
Civil Aeronautics Authority does not change the result. The navigable
airspace which Congress has placed in the public domain is 'airspace above
the minimum safe altitudes of flight prescribed by the Civil Aeronautics
Authority.' 49 U.S.C. 180, 49 U.S.C.A. 180. If that agency prescribed 83 feet
as the minimum safe altitude, then we would have presented the question of
the validity of the regulation. But nothing of the sort has been done. The
path of glide governs the method of operating- of landing or taking off. The
altitude required for that operation is not the minimum safe altitude of flight
which is the downward reach of the navigable airspace. The minimum
prescribed by the authority is 500 feet during the day and 1000 feet at night
for air carriers (Civil Air Regulations, Pt. 61, 61.7400, 61.7401, Code
Fed.Reg.Cum.Supp., Tit. 14, ch. 1) and from 300 to 1000 feet for [328 U.S. 256,
264]   other aircraft depending on the type of plane and the character of the
terrain. Id., Pt. 60, 60.350-60.3505, Fed.Reg.Cum.Supp., supra. Hence, the
flights in question were not within the navigable airspace which Congress
placed within the public domain. If any airspace needed for landing or taking
off were included, flights which were so close to the land as to render it
uninhabitable would be immune. But the United States concedes, as we have
said, that in that event there would be a taking. Thus, it is apparent that the
path of glide is not the minimum safe altitude of flight within the meaning of
the statute. The Civil Aeronautics Authority has, of course, the power to
prescribe air traffic rules. But Congress has defined navigable airspace only
in terms of one of them-the minimum safe altitudes of flight.

We have said that the airspace is a public highway. Yet it is obvious that if
the landowner is to have full enjoyment of the land, he must have exclusive
control of the immediate reaches of the enveloping atmosphere. Otherwise
buildings could not be erected, trees could not be planted, and even fences
could not be run. The principle is recognized when the law gives a remedy in
case overhanging structures are erected on adjoining land. 9 The landowner
owns at least as much of the space above the ground as the can occupy or
use in connection with the land. See Hinman v. Pacific Air Transport, 9 Cir.,
84 F.2d 755. The fact that he does not occupy it in a physical sense-by the
erection of buildings and the like-is not material. As we have said, the flight
of airplanes, which skim the surface but do not touch it, is as much an
appropriation of the use of the land as a more conventional entry upon it. We
would not doub that if the United States erected [328 U.S. 256, 265]   an
elevated railway over respondents' land at the precise altitude where its
planes now fly, there would be a partial taking, even though none of the
supports of the structure rested on the land. 10 The reason is that there
would be an intrusion so immediate and direct as to subtract from the
owner's full enjoyment of the property and to limit his exploitation of it.
While the owner does not in any physical manner occupy that stratum of
airspace or make use of it in the conventional sense, he does use it in
somewhat the same sense that space left between buildings for the purpose
of light and air is used. The superadjacent airspace at this low altitude is so
close to the land that continuous invasions of it affect the use of the surface
of the land itself. We think that the landowner, as an incident to his
ownership, has a claim to it and that invasions of it are in the same category
as invasions of the surface. 11  

In this case, as in Portsmouth Harbor Land & Hotel Co. v. United States,
supra, the damages were not merely consequential. They were the product
of a direct invasion of respondents' do- [328 U.S. 256, 266]   main. As stated in
United States v. Cress, 243 U.S. 316, 328 , 37 S.Ct. 380, 385, '... it is the
character of the invasion, not the amount of damage resulting from it, so
long as the damage is substantial, that determines the question whether it is
a taking.'

We said in United States v. Powelson, supra, 319 U.S. at page 279, 63 S.Ct.
at page 1054, that while the meaning of 'property' as used in the Fifth
Amendment was a federal question, 'it will normally obtain its content by
reference to local law.' If we look to North Carolina law, we reach the same
result. Sovereignty in the airspace rests in the State 'except where granted
to and assumed by the United States.' Gen.Stats. 1943, 63-11. The flight of
aircraft is lawful 'unless at such a low altitude as to interfere with the then
existing use to which the land or water, or the space over the land or water,
is put by the owner, or unless so conducted as to be imminently dangerous
to persons or property lawfully on the land or water beneath.' Id., 63-13.
Subject to that right of flight, 'ownership of the space above the lands and
waters of this State is declared to be vested in the several owners of the
surface beneath.' Id. 63-12. Our holding that there was an invasion of
respondents' property is thus not inconsistent with the local law governing a
landowner's claim to the immediate reaches of the superadjacent airspace.

The airplane is part of the modern environment of life, and the

inconveniences which it causes are normally not compensable under the
Fifth Amendment. The airspace, apart from the immediate reaches above the
land, is part of the public domain. We need not determine at this time what
those precise limits are. Flights over private land are not a taking, unless
they are so low and so frequent as to be a direct and immediate interference
with the enjoyment and use of the land. We need not speculate on that
phase of the present case. For the findings of the Court [328 U.S. 256, 267]   of
Claims plainly establish that there was a diminution in value of the property
and that the frequent, low-level flights were the direct and immediate cause.
We agree with the Court of Claims that a servitude has been imposed upon
the land.

II. By 145(1) of the Judicial Code, 28 U.S.C. 250(1), 28 U.S.C.A . 250(1), the
Court of Claims has jurisdiction to hear and determine 'All claims (except for
pensions) founded upon the Constitution of the United States or ... upon any
contract, express or implied, with the Government of the United States.'

We need not decide whether repeated trespasses might give rise to an

implied contract. Cf. Portsmouth Harbor Land & Hotel Co. v. United States,
supra. If there is a taking, the claim is 'founded upon the Constitution' and
within the jurisdiction of the Court of Claims to hear and determine. See
Hollister v. Benedict & Burnham Mfg. Co., 113 U.S. 59, 67 , 5 S.Ct. 717, 721;
Hurley v. Kincaid, 285 U.S. 95, 104 , 52 S.Ct. 267, 269; Yearsley v. W. A. Ross
Construction Co., 309 U.S. 18, 21 , 60 S.Ct. 413, 415. Thus, the jurisdiction of
the Court of Claims in this case is clear.

III. The Court of Claims held, as we have noted, that an easement was taken.
But the findings of fact contain no precise description as to its nature. It is
not described in terms of frequency of flight, permissible altitude, or type of
airplane. Nor is there a finding as to whether the easement taken was
temporary or permanent. Yet an accurate description of the property taken is
essential, since that interest vests in the United States. United States v.
Cress, supra, 243 U.S. 328, 329 , 37 S.Ct. 385, 386, and cases cited. It is true
that the Court of Claims stated in its opinion that the easement taken was
permanent. But the deficiency in findings cannot be rectified by statements
in the opinion. United States v. Esnault-Pelterie, 299 U.S. 201, 205 , 206 S.,
57 S.Ct. 159, 161, 162; United States v. Seminole Nation, 299 U.S. 417, 422 ,
57 S.Ct. 283, 287. Findings of fact on every 'material issue' are a statutory
[328 U.S. 256, 268]   requirement. 53 Stat. 752, 28 U.S.C. 288, 28 U.S.C.A. 288.
The importance of findings of fact based on evidence is emphasized here by
the Court of Claims' treatment of the nature of the easement. It stated in its
opinion that the easement was permanent because the United States 'no
doubt intended to make some sort of arrangement whereby it could use the
airport for its military planes whenever it had occasion to do so.' (60 F. Supp.
758.) That sounds more like conjecture rather than a conclusion from
evidence; and if so, it would not be a proper foundation for liability of the
United States. We do not stop to examine the evidence to determine
whether it would support such a finding, if made. For that is not our function.
United States v. Esnault-Pelterie, supra, 299 U.S. at page 206, 57 S.Ct. at
page 162.

Since on this record it is not clear whether the easement taken is a

permanent or a temporary one, it would be premature for us to consider
whether the amount of the award made by the Court of Claims was proper.

The judgment is reversed and the cause is remanded to the Court of Claims
so that it may make the necessary findings in conformity with this opin on.

REVERSED.

Mr. Justice JACKSON took no part in the consideration or decision of this case.

[G.R. No. 19280. March 16, 1923.]

THE MANILA RAILROAD COMPANY, Plaintiff-Appellant, v. ASUNCION MITCHEL, Defendant-

Appellant.

Moises E. Gonzalez and Jose C. Abresu, for Plaintiff-Appellant.

Fisher & DeWitt, for Defendant-Appellant.

SYLLABUS

1. EMINENT DOMAIN; NECESSITY FOR TAKING LAND. — In the exercise of the power of eminent domain,
only as much land can be taken as is necessary for the legitimate purpose of the condemnation. The term
"necessary" in this connection does not mean absolutely indispensable but requires only a reasonable
necessity of the taking for the purpose in view and the growth and future needs of the enterprise may be
considered.

2. ID.; PROCEDURE; ALLEGATION IN COMPLAINT OF RIGHT TO CONDEMNATION. — The provision in section

242 of the Code of Civil Procedure that the complaint in condemnation proceedings shall state with certainty
the right of condemnation is not of necessary application to a case where the power of eminent domain is
specially and expressly conferred upon the plaintiff by statute.

3. ID.; ID.; PREREQUISITE FOR INSTITUTING CONDEMNATION PROCEEDINGS. — Under Act No. 1510 an
effort on the part of the Manila Railroad Co. to obtain the land by amicable agreement is not an
 indispensable prerequisite for instituting condemnation proceedings by that corporation.

4. ID.; ID.; OCCUPYING LAND; CONSENT OF MUNICIPAL AUTHORITIES. — Act No. 1510 provides that no
lands within the boundaries of any city, town, or municipality shall be occupied by virtue of condemnation
proceedings without the consent of the proper authorities. Held: That this provision is for the benefit of the
city, town, or municipality, as the case may be, and cannot be taken advantage of by a third party.

5. MANILA RAILROAD COMPANY; CONCESSION GRANTED BY ACT NO. 1510; IMPLIED ACCEPTANCE. — The
concessionary grant provided for in Act No. 1510 must, in the light of the subsequent acts of the parties, be
presumed to have been duly accepted by the Manila Railroad Co. and approved by the Secretary of War.

DECISION

OSTRAND, J.:

This action was commenced February 18, 1918, in the Court of First Instance of the City of Manila, by the
plaintiff, a foreign corporation, for the purpose of condemning certain real estate situated in the District of
Tondo, City of Manila, adjacent to plaintiff’s principal terminal station.

On February 24, 1918, the trial court entered an order authorizing the plaintiff to take possession "of each
and every one of the parcels of land set forth in the complaint herein . . . ." Pursuant to this authority,
plaintiff took possession of the property of the Sy Quia estate described in its complaint (lot No. 1 on the
plan attached to the complaint), including the buildings thereon existing.

The defendant Asuncion Mitchel, Vda. de Sy Quia, was at first included in her individual capacity, and on
March 23, 1918, filed a so-called demurrer on the ground that he was not the owner of any of the property
described in the complaint and therefore had been erroneously included as a party defendant. The court
treated the demurrer as a motion for a dismissal and dismissed the complaint in regard to said defendant.
Subsequently, it was stipulated that she should be included as a party defendant in her representative
capacity as administratrix of the estate of the late Pedro Sy Quia.

On April 10, 1918, a month before the defendant was made a party to the action as administratrix, the court
issued an order authorizing the expropriation and appointing commissioners to hear the parties, inspect the
premises, fix the indemnity to be paid by plaintiff, and to make a report to the court. No exception was
taken to the order by any of the defendants. On May 3, 1918, the commissioners so appointed gave notice
by its chairman that its first meeting would be held on May 15, 1918, to hear the testimony of the heirs of
Pedro Sy Quia. Asuncion Mitchel, Vda. de Sy Quia, as adminitratrix of the estate of Pedro Sy Quia,
represented by her counsel, Aurelio A. Torres, acknowledged receipt of the notice on May 10, 1918.

The record does not show whether the commissioners met on the day announced, but on July 18, 1918,
Commissioner Campbell tendered his resignation, which was accepted by the court. On the 31st of the same
month plaintiff asked that Mr. E. S. Lyons be appointed a member of the commission in the place of Mr.
Campbell and on August 13, 1918, the defendant, Asuncion Mitchel, in her capacity of administratrix of the
estate of Pedro Sy Quia, appeared by counsel and proposed the appointment of Perez Muñoz to fill the
vacancy.

In the meantime and on June 22, 1918, the said defendant, as administratrix of the estate of Pedro Sy Quia,
filed an answer to the complaint in which she admitted, among other things, that the plaintiff is a foreign
corporation operating a railroad on the Island of Luzon under statutory authority; that it is chartered for the
purpose of constructing and operating such railroad; that it has terminal points at the City of Manila and
municipality of Antipolo, Province of Rizal. It is further admitted that said defendant, in her representative
capacity, is the owner of the land described as lot No. 1 on the attached plan.

The answer denies that the plaintiff is empowered by the law of the Philippine Islands to acquire lands
necessary for the construction, maintenance and operation of its lines or for terminals, sidings or proper
buildings and structures. As a special defense it is averred that the said lot No. 1 "has not been, is not and
never will be necessary to the plaintiff for the proper operation of its railroad" and it is prayed that judgment
be rendered excluding the property of the Sy Quia estate from condemnation. It is further averred in the
answer that the real value of the property in question is greatly in excess of the assessed value.

Nothing further appears to have been done until February 21, 1921, when the defendant, by her then
counsel, Mr. M. Torres, filed a motion praying that the proceedings be dismissed, the property seized by the
plaintiff returned, and that the defendant be paid damages for the unlawful occupation of the property by
the plaintiff. The reasons advanced were that plaintiff had made no proof that it is authorized to exercise the
right of eminent domain; that it had not shown the particular use to which it is proposed to devote the
property or the necessity for its acquisition; that plaintiff is already the owner of ample land upon which to
erect whatever buildings may be required for the extension of its terminal facilities; that it has never been
shown that plaintiff has made any attempt to obtain the property by negotiating with defendant before
taking this action, or that such an attempt has failed; that the amount of money deposited by the plaintiff,
in order to obtain possession, is very much less than the true value of the property; and that since the
property has been taken by the plaintiff, under the order of the court, no use has been made thereof. The
motion was opposed by plaintiff and on March 21, 1921, it was denied upon the ground that the issues of
fact raised by it would have to be considered at the trial of the case. To this order the defendant excepted.

On February 8, 1922, the same defendant, represented by her present counsel, filed a motion in which the
attention of the court was called to the fact that the averment of the complaint regarding the necessity of
the condemnation of defendant’s property, had been expressly denied by her answer; that the commission
appointed by the court to hear evidence had, upon defendant’s opposition, declined to proceed until the
question of the right of condemnation had been decided; and the court was asked to set the case down for
hearing. This motion was opposed by plaintiff. On February 11, 1922, the Honorable P. Concepcion, Judge of
Branch Two of the Court of First Instance of Manila entered an order overruling the opposition of plaintiff
and directing that the case be set down for trial upon the issue of the necessity for the condemnation of the
land belonging to the Sy Quia estate. To this ruling the plaintiff excepted.

The trial took place on March 13, 1922, and upon the evidence presented, the court below found as
follows: jgc:chanrobles.com.ph

"Upon consideration of the evidence adduced by plaintiff, the court is of the opinion that there is no real
necessity on the part of the Manila Railroad Company to occupy lot No. 1 of the property of the Sy Quia
estate, because lots 9, 11 and 13 which are not built upon, may be used for the same purposes as those to
which lot No. 1 is now devoted. But even upon the assumption that in order to furnish facilities for cargo
arriving from the provinces, the building marked ’E’ is needed at the place at which it has been constructed
and for the offices of some of the departments of the company, it is clear that the very large part of lot No.
1 not occupied by any building — that is, that part of it which fronts on Calle Antonio Rivera and part of the
frontage of Calle Azcarraga — is not needed by the company, because that part of the lot is only used for
trucks and carts which come to haul away the merchandise deposited in said building, and for this purpose
they can approach the building on the west side over completely open and unoccupied land belonging to the
railroad company." cralaw virtua1aw library

Upon these findings the court proceeded to render judgment, dated April 6, 1922, declaring that the railroad
company has no right of condemnation as to the unoccupied part of lot No. 1, but that." . .the Company
may make use of that right solely with respect to that part of the lot occupied by the building thereon
existing. Plaintiff is ordered to file a plan of the lot in question, excluding the land not built upon, and the
parties are directed to nominate to the court three disinterested and upright landowners to be appointed as
commissioners for the purposes prescribed by section 243 of the Code of Civil Procedure, such
commissioners to be appointed by the court on its own motion in the event that the parties shall fail to
agree upon the persons to be so appointed. . . ."
cralaw virtua1aw library

Both the plaintiff and the defendant excepted to the decision and filed motions for a new trial upon the
ground that the findings of fact were plainly and manifestly contrary to the weight of the evidence; that the
evidence did not justify the decision and that the decision was contrary to law. The motions were denied and
both parties appealed to this court.

The plaintiff makes four assignments of error of which only one, the second, need be here discussed. The
assignment reads: jgc:chanrobles.com.ph

"The court erred in declaring that the taking by the plaintiff corporation of the portion of lot No. 1, not
occupied by any building, was unnecessary and that the corporation therefore had no right to condemn the
same." cralaw virtua1aw library
In our opinion, this assignment is well taken and must be sustained. In this jurisdiction the question of the
necessity of the taking of land by condemnation becomes a judicial question by virtue of section 28 of the
Act of Congress of August 29, 1916 (the "Jones Law") which provides: jgc:chanrobles.com.ph

"That no private property shall be damaged or taken for any purpose under this section without just
compensation, and that such authority to take and occupy land shall not authorize the taking, use, or
occupation of any land except such as is required for the actual necessary purposes for which the franchise
is granted . . ." cralaw virtua1aw library

In this particular case the grant of the power of eminent domain contained in Act No. 1510 is also, by its
terms, limited to "lands necessary for . . . terminals, . . . stations, engine houses, water stations, and other
appropriate buildings and structures . . ."
cralaw virtua1aw library

It is well settled that the term "necessary" in this connection does not mean absolutely indispensable, but
requires only a reasonable necessity of the taking for the purpose in view. Upon this subject Lewis, in
section 601 of his work on Eminent Domain, 3d ed., citing numerous authorities, says: jgc:chanrobles.com.ph

"When the law says that private property may be taken or public use only when it is necessary for such use,
it means a reasonable, not an absolute necessity. What is a reasonable necessity is a question of fact, to be
determined according to the peculiar facts of each case. No general rule can be laid down for determining
the question. A necessity has been held to be shown if it appeared that the property sought to be
condemned would conduce to some extent to the accomplishment of the public object to which it was to be
devoted.’With the degree of necessity, or the extent to which the property will advance the public purpose,
the courts have nothing to do.’ The growth and future needs of the enterprise may be considered. But such
future needs must be founded upon facts and made reasonably clear. A large discretion is necessarily vested
in those who are vested with the power, in determining what property and how much is necessary. To
warrant a denial of the application, it should appear that what is sought is clearly an abuse of power on the
part of the petitioner.’It may be said to be a general rule that, unless a corporation exercising the power of
eminent domain acts in bad faith or is guilty of oppression, its discretion in the selection of land will not be
interfered with.’ If the petitioner is acting in good faith and shows a reasonable necessity for the
condemnation, in view of its present and future business, the application should be granted. If the object is
to acquire lands for speculation, or to prevent competition, or for purposes collateral to those for which the
petitioner is authorized to condemn property, then the application should be refused." cralaw virtua1aw library

In the instant case, it appears from the record that the Tondo terminal of the plaintiff’s railroad is bounded
on the south by Calle Azcarraga and on the west by Calle Dagupan. On the east it is separated from Calle
Antonio Rivera by a narrow strip of land of which the property here in question forms a part. The distance
between Calle Dagupan and Calle Antonio Rivera is only some 180 meters and the average width of the strip
of land it is sought to have expropriated is about 40 meters. The object of the taking of this strip is to have
the terminal extend to Calle Antonio Rivera so that the railway station may be made easily accessible from
that street and so as to provide space for additional buildings and yard facilities.

The evidence presented by the plaintiff to show the necessity for the condemnation establishes that there
are two sets of tracks at the Tondo terminal, one for outgoing freight and another for incoming freight; that
the strip to be condemned is intended for incoming freight and that the other part of the railroad property
adjoining Calle Dagupan is used for outgoing freight; that no incoming freight can be handled on the Calle
Dagupan side because the space is too restricted; that on a portion of lot No. 1, there is a two-story building
used as a warehouse for incoming freight and also for offices for certain departments of the company; that
there is no other place in which the employees of the medical department, the department of supplies, the
department of claims and the offices of the special agent of the railroad company can be housed or
accommodated; that the part of lot No. 1 which is vacant, is used by trucks and carts which enter through
Calle Antonio Rivera in order to receive freight from the warehouse mentioned; that hundreds of trucks and
carts enter daily for the purpose of receiving freight; that there is no other place which can be utilized for
the handling of incoming freight; that the space on the north side, adjoining Calle Dagupan, is fully covered
by railroad tracks; that while the company possesses some land on the other side of Calle Dagupan it cannot
be used for the purpose of laying tracks because it is too low, and also because the City Government would
not permit the crossing of Calle Dagupan with the requisite number of tracks.

With this evidence before us, we certainly cannot hold that the taking of the land in question is so
unnecessary as to call for judicial interference with the demand for condemnation.

A space of 180 meters in width for the service of the principal terminal of the Luzon Railroad System does
not seem excessive, and it would obviously be a matter of great inconvenience, not only to the plaintiff but
also to the public, if the railroad company should be compelled to seek a part of its necessary terminal space
on the north side of Calle Dagupan.

The defendant-appellant makes the following assignments of error: jgc:chanrobles.com.ph

"1. The trial court erred in failing to find upon the evidence that no necessity exists for the condemnation of
any part of defendant’s property by the plaintiff corporation.

"2. The trial court erred in assuming that plaintiff is vested with the power of eminent domain in the absence
of allegations and proof in its possession of such authority.

"3. The trial court erred in failing to dismiss the complaint upon the ground that no showing has been made
by plaintiff that an unsuccessful effort has been made to obtain the property in question by free
arrangement.

"4. The trial court erred in failing to find that plaintiff has failed to comply with the conditions precedent to
which its right, if any, to exercise the power of condemnation is subject.

"5. The trial court erred in directing the appointment of a committee to appraise defendant’s land.

"6. The trial court erred in holding that plaintiff was entitled to condemn land within the City of Manila in the
absence of proof that the consent of the municipal authorities or of the Governor-General has first been
obtained.

"7. The trial court erred in denying defendant’s motion for a new trial.

"8. The trial court erred in giving judgment for plaintiff." cralaw virtua1aw library

The first of these assignments of error relates to the necessity for the condemnation of the lot in question
and has already been sufficiently discussed.

Under the second assignment of error the defendant argues that the plaintiff’s failure to allege and prove
that it possesses the power of eminent domain is reversible error.

This contention seeks its support in section 242 of the Code of Civil Procedure, which reads as follows: jgc:chanrobles.com.ph

"The complaint in condemnation proceedings shall state with certainty the right of condemnation, and
describe the property sought to be condemned, showing the interest of each defendant separately." cralaw virtua1aw library

We do not think the section quoted is of necessary application to the present case where the power of
eminent domain is specially conferred upon the plaintiff by legislative acts of which this court will take
judicial notice. Section 1 of Act No. 2879 reads: jgc:chanrobles.com.ph

"Whenever, in any existing law, mention is made of the Manila Railroad Company, such mention shall be
deemed to include and to apply to the Manila Railroad Company of the Philippine Islands whenever
necessary to confer upon the latter corporation any of the benefits, privileges and immunities conferred by
such law upon the Manila Railroad Company, or to make applicable to said Manila Railroad Company of the
Philippine Islands measures adopted by the Philippine Legislature for the control or administration of the
Manila Railroad Company or for the granting of financial aid thereto." cralaw virtua1aw library

The power of eminent domain was previously granted the Manila Railroad Company by section 2 of Act No.
1610. It is true, as stated by counsel, that this Act purports to be a "concessionary grant or contract"
conditioned upon its acceptance within sixty days by the grantee of a bond in the sum of $300,000, and that
the grant was made subject to the approval of the Secretary of War, and it is argued that there is nothing to
show that these conditions have been fulfilled. However, in view of the fact that some eight years after its
passage the Act was amended by Act No. 2373 and that railroad lines were constructed on the strength of
the concession, we are justified in taking judicial notice of the fact that Act No. 1610 was in effect at the
time of the enactment of Act No. 2879 and that hence the plaintiff, by virtue of the provisions of the section
quoted from the latter Act, is vested with the power of eminent domain.

The defendant’s third assignment of error raises the point that the action should be dismissed because it
does not appear that the plaintiff, previously to the filing of its complaint, had unsuccessfully endeavored by
amicable agreement to obtain the land it seeks to condemn. This contention rests upon the theory that Acts
Nos. 703 and 1258, both of which provide that the power of eminent domain may be exercised when a
railroad corporation has failed to obtain the land by agreement, are applicable to the present case. But as
we have seen, the plaintiff here exercises its power under Act No. 1510, in which the following language is
used:jgc:chanrobles.com.ph

"The grantee shall also have the right to acquire by condemnation the lands necessary for the right of way,
for bridges, for terminals, including wharves and docks at harbor points and elsewhere, for sidings, stations,
engine houses, water stations and other appropriate buildings and structures for the proper and convenient
construction, operation, and maintenance of the lines of railway herein authorized; but no lands within the
boundaries of any province, city, town, or municipality shall be occupied by the grantee if the same are in
actual use for provincial, governmental, or municipal purposes, nor shall any land within the boundaries of
any city, town, or municipality be so occupied without the consent of the proper authorities of such city,
town, or municipality, unless the Governor-General shall consent to the same. The right of condemnation or
eminent domain shall be exercised by the grantee in accordance with the laws of the Philippine Islands at
the time being in force." cralaw virtua1aw library

It may be observed that the paragraph quoted contains no provision requiring the plaintiff to seek to obtain
the land by amicable agreement, nor is any such provision found elsewhere in the Act. And in the absence
thereof, we know of no legal reason for holding that an effort to obtain the land by a free agreement is a
prerequisite for instituting condemnation proceedings. The last sentence of the paragraph quoted relates to
procedure and not to the existence of the right of condemnation.

It may also be noted that even where the statutes provide that the power of eminent domain may be
exercised upon failure to obtain the land by amicable agreement, it has been held by good authority that an
attempt to agree is not a condition precedent and that failure to agree is sufficiently shown by the institution
of litigation. (Doty v. Am. Tel. & Tel. Co., 123 Tenn., 329; 130 S. W., 1053.) This would seem to be good
sense and should therefore also be good law.

The fourth and sixth assignments of error are based upon the provision in the paragraph just quoted from
Act No. 1510 to the effect that no lands within the boundaries of any city, town, or municipality shall be
occupied by virtue of condemnation proceedings without the consent of the proper authorities, and the
defendant argues that such consent is a condition precedent for the taking of such lands.

We find little merit in this contention. In the first place, the condition in question is for the benefit of the
city, town, or municipality, as the case may be, and can hardly be taken advantage of by a third party. In
the second place, it appears from the order of the court below, dated April 10, 1918, that the City of Manila,
within the boundaries of which the land here in question is situated, appeared by its Fiscal, Angel Roco, and
so far from objecting to the expropriation, agreed to the same and to the appointment of commissioners.
That the consent of the city authorities was thus sufficiently shown admits of no doubt.

The defendant’s fifth, seventh and eighth assignments of error are sufficiently covered by the discussion of
the other assignments and need not be further considered.

For the reasons stated, the order appealed from is hereby modified and it is declared that the condemnation
of all of the aforesaid lot No. 1 is necessary for the purposes for which the plaintiff’s franchise is granted and
in order to provide adequate terminal facilities for its railroad, and we hold that said plaintiff may exercise
its power of eminent domain over said lot in the present proceedings. As much of said order as relates to
the appointment of commissioners is affirmed. The record will be remanded to the court below for further
proceedings. No costs will be allowed in this instance. So ordered.

G.R. No. L-18841             January 27, 1969

REPUBLIC OF THE PHILIPPINES, plaintiff-appellant,

vs.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, defendant-appellant.
Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Antonio A. Torres and
Solicitor Camilo D. Quiason for plaintiff-appellant.
Ponce Enrile, Siguion Reyna, Montecillo and Belo for defendant-appellant.

REYES, J.B.L., J.:

  Direct appeals, upon a joint record on appeal, by both the plaintiff and the defendant from the
dismissal, after hearing, by the Court of First Instance of Manila, in its Civil Case No. 35805, of their
respective complaint and counterclaims, but making permanent a preliminary mandatory injunction
theretofore issued against the defendant on the interconnection of telephone facilities owned and
operated by said parties.

  The plaintiff, Republic of the Philippines, is a political entity exercising governmental powers
through its branches and instrumentalities, one of which is the Bureau of Telecommunications. That
office was created on 1 July 1947, under Executive Order No. 94, with the following powers and
duties, in addition to certain powers and duties formerly vested in the Director of Posts: 1awphil.ñêt

  SEC. 79. The Bureau of Telecommunications shall exercise the following powers and duties:

(a) To operate and maintain existing wire-telegraph and radio-telegraph offices, stations, and
facilities, and those to be established to restore the pre-war telecommunication service under
the Bureau of Posts, as well as such additional offices or stations as may hereafter be
established to provide telecommunication service in places requiring such service;

(b) To investigate, consolidate, negotiate for, operate and maintain wire-telephone or radio
telephone communication service throughout the Philippines by utilizing such existing
facilities in cities, towns, and provinces as may be found feasible and under such terms and
conditions or arrangements with the present owners or operators thereof as may be agreed
upon to the satisfaction of all concerned;

(c) To prescribe, subject to approval by the Department Head, equitable rates of charges for
messages handled by the system and/or for time calls and other services that may be
rendered by said system;

(d) To establish and maintain coastal stations to serve ships at sea or aircrafts and, when
public interest so requires, to engage in the international telecommunication service in
agreement with other countries desiring to establish such service with the Republic of the
Philippines; and

(e) To abide by all existing rules and regulations prescribed by the International
Telecommunication Convention relative to the accounting, disposition and exchange of
messages handled in the international service, and those that may hereafter be promulgated
by said convention and adhered to by the Government of the Republic of the Philippines. 1

  The defendant, Philippine Long Distance Telephone Company (PLDT for short), is a public service
corporation holding a legislative franchise, Act 3426, as amended by Commonwealth Act 407, to
install, operate and maintain a telephone system throughout the Philippines and to carry on the
business of electrical transmission of messages within the Philippines and between the Philippines
and the telephone systems of other countries. 2 The RCA Communications, Inc., (which is not a party
to the present case but has contractual relations with the parties) is an American corporation
authorized to transact business in the Philippines and is the grantee, by assignment, of a legislative
franchise to operate a domestic station for the reception and transmission of long distance wireless
messages (Act 2178) and to operate broadcasting and radio-telephone and radio-telegraphic
communications services (Act 3180). 3

  Sometime in 1933, the defendant, PLDT, and the RCA Communications, Inc., entered into an
agreement whereby telephone messages, coming from the United States and received by RCA's
domestic station, could automatically be transferred to the lines of PLDT; and vice-versa, for calls
collected by the PLDT for transmission from the Philippines to the United States. The contracting
parties agreed to divide the tolls, as follows: 25% to PLDT and 75% to RCA. The sharing was
amended in 1941 to 30% for PLDT and 70% for RCA, and again amended in 1947 to a 50-50 basis.
The arrangement was later extended to radio-telephone messages to and from European and
Asiatic countries. Their contract contained a stipulation that either party could terminate it on a 24-
month notice to the other. 4 On 2 February 1956, PLDT gave notice to RCA to terminate their contract
on 2 February 1958. 5

  Soon after its creation in 1947, the Bureau of Telecommunications set up its own Government
Telephone System by utilizing its own appropriation and equipment and by renting trunk lines of the
PLDT to enable government offices to call private parties. 6 Its application for the use of these trunk
lines was in the usual form of applications for telephone service, containing a statement, above the
signature of the applicant, that the latter will abide by the rules and regulations of the PLDT which
are on file with the Public Service Commission. 7 One of the many rules prohibits the public use of the
service furnished the telephone subscriber for his private use. 8 The Bureau has extended its services
to the general public since 1948, 9 using the same trunk lines owned by, and rented from, the PLDT,
and prescribing its (the Bureau's) own schedule of rates. 10 Through these trunk lines, a Government
Telephone System (GTS) subscriber could make a call to a PLDT subscriber in the same way that
the latter could make a call to the former.

  On 5 March 1958, the plaintiff, through the Director of Telecommunications, entered into an
agreement with RCA Communications, Inc., for a joint overseas telephone service whereby the
Bureau would convey radio-telephone overseas calls received by RCA's station to and from local
residents. 11 Actually, they inaugurated this joint operation on 2 February 1958, under a "provisional"
agreement. 12

  On 7 April 1958, the defendant Philippine Long Distance Telephone Company, complained to the
Bureau of Telecommunications that said bureau was violating the conditions under which their
Private Branch Exchange (PBX) is inter-connected with the PLDT's facilities, referring to the rented
trunk lines, for the Bureau had used the trunk lines not only for the use of government offices but
even to serve private persons or the general public, in competition with the business of the PLDT;
and gave notice that if said violations were not stopped by midnight of 12 April 1958, the PLDT
would sever the telephone connections. 13 When the PLDT received no reply, it disconnected the
trunk lines being rented by the Bureau at midnight on 12 April 1958. 14 The result was the isolation of
the Philippines, on telephone services, from the rest of the world, except the United States. 15

  At that time, the Bureau was maintaining 5,000 telephones and had 5,000 pending applications for
telephone connection. 16 The PLDT was also maintaining 60,000 telephones and had also 20,000
pending applications. 17 Through the years, neither of them has been able to fill up the demand for
telephone service.

  The Bureau of Telecommunications had proposed to the PLDT on 8 January 1958 that both enter
into an interconnecting agreement, with the government paying (on a call basis) for all calls passing
through the interconnecting facilities from the Government Telephone System to the PLDT. 18 The
PLDT replied that it was willing to enter into an agreement on overseas telephone service to Europe
and Asian countries provided that the Bureau would submit to the jurisdiction and regulations of the
Public Service Commission and in consideration of 37 1/2% of the gross revenues. 19 In its
memorandum in lieu of oral argument in this Court dated 9 February 1964, on page 8, the defendant
reduced its offer to 33 1/3 % (1/3) as its share in the overseas telephone service. The proposals
were not accepted by either party.

  On 12 April 1958, plaintiff Republic commenced suit against the defendant, Philippine Long
Distance Telephone Company, in the Court of First Instance of Manila (Civil Case No. 35805),
praying in its complaint for judgment commanding the PLDT to execute a contract with plaintiff,
through the Bureau, for the use of the facilities of defendant's telephone system throughout the
Philippines under such terms and conditions as the court might consider reasonable, and for a writ of
preliminary injunction against the defendant company to restrain the severance of the existing
telephone connections and/or restore those severed.

  Acting on the application of the plaintiff, and on the ground that the severance of telephone
connections by the defendant company would isolate the Philippines from other countries, the court
a quo, on 14 April 1958, issued an order for the defendant:

(1) to forthwith reconnect and restore the seventy-eight (78) trunk lines that it has
disconnected between the facilities of the Government Telephone System, including its
overseas telephone services, and the facilities of defendant; (2) to refrain from carrying into
effect its threat to sever the existing telephone communication between the Bureau of
Telecommunications and defendant, and not to make connection over its telephone system
of telephone calls coming to the Philippines from foreign countries through the said Bureau's
telephone facilities and the radio facilities of RCA Communications, Inc.; and (3) to accept
and connect through its telephone system all such telephone calls coming to the Philippines
from foreign countries — until further order of this Court.

  On 28 April 1958, the defendant company filed its answer, with counterclaims.

  It denied any obligation on its part to execute a contrary of services with the Bureau of
Telecommunications; contested the jurisdiction of the Court of First Instance to compel it to enter
into interconnecting agreements, and averred that it was justified to disconnect the trunk lines
heretofore leased to the Bureau of Telecommunications under the existing agreement because its
facilities were being used in fraud of its rights. PLDT further claimed that the Bureau was engaging in
commercial telephone operations in excess of authority, in competition with, and to the prejudice of,
the PLDT, using defendants own telephone poles, without proper accounting of revenues.

  After trial, the lower court rendered judgment that it could not compel the PLDT to enter into an
agreement with the Bureau because the parties were not in agreement; that under Executive Order
94, establishing the Bureau of Telecommunications, said Bureau was not limited to servicing
government offices alone, nor was there any in the contract of lease of the trunk lines, since the
PLDT knew, or ought to have known, at the time that their use by the Bureau was to be public
throughout the Islands, hence the Bureau was neither guilty of fraud, abuse, or misuse of the poles
of the PLDT; and, in view of serious public prejudice that would result from the disconnection of the
trunk lines, declared the preliminary injunction permanent, although it dismissed both the complaint
and the counterclaims.

  Both parties appealed.

  Taking up first the appeal of the Republic, the latter complains of the action of the trial court in
dismissing the part of its complaint seeking to compel the defendant to enter into an interconnecting
contract with it, because the parties could not agree on the terms and conditions of the
interconnection, and of its refusal to fix the terms and conditions therefor.

  We agree with the court below that parties can not be coerced to enter into a contract where no
agreement is had between them as to the principal terms and conditions of the contract. Freedom to
stipulate such terms and conditions is of the essence of our contractual system, and by express
provision of the statute, a contract may be annulled if tainted by violence, intimidation, or undue
influence (Articles 1306, 1336, 1337, Civil Code of the Philippines). But the court a quo has
apparently overlooked that while the Republic may not compel the PLDT to celebrate a contract with
it, the Republic may, in the exercise of the sovereign power of eminent domain, require the
telephone company to permit interconnection of the government telephone system and that of the
PLDT, as the needs of the government service may require, subject to the payment of just
compensation to be determined by the court. Nominally, of course, the power of eminent domain
results in the taking or appropriation of title to, and possession of, the expropriated property; but no
cogent reason appears why the said power may not be availed of to impose only a burden upon the
owner of condemned property, without loss of title and possession. It is unquestionable that real
property may, through expropriation, be subjected to an easement of right of way. The use of the
PLDT's lines and services to allow inter-service connection between both telephone systems is not
much different. In either case private property is subjected to a burden for public use and benefit. If,
under section 6, Article XIII, of the Constitution, the State may, in the interest of national welfare,
transfer utilities to public ownership upon payment of just compensation, there is no reason why the
State may not require a public utility to render services in the general interest, provided just
compensation is paid therefor. Ultimately, the beneficiary of the interconnecting service would be the
users of both telephone systems, so that the condemnation would be for public use.

  The Bureau of Telecommunications, under section 78 (b) of Executive Order No. 94, may operate
and maintain wire telephone or radio telephone communications throughout the Philippines by
utilizing existing facilities in cities, towns, and provinces under such terms and conditions or
arrangement with present owners or operators as may be agreed upon to the satisfaction of all
concerned; but there is nothing in this section that would exclude resort to condemnation
proceedings where unreasonable or unjust terms and conditions are exacted, to the extent of
crippling or seriously hampering the operations of said Bureau.

  A perusal of the complaint shows that the Republic's cause of action is predicated upon the radio
telephonic isolation of the Bureau's facilities from the outside world if the severance of
interconnection were to be carried out by the PLDT, thereby preventing the Bureau of
Telecommunications from properly discharging its functions, to the prejudice of the general public.
Save for the prayer to compel the PLDT to enter into a contract (and the prayer is no essential part
of the pleading), the averments make out a case for compulsory rendering of inter-connecting
services by the telephone company upon such terms and conditions as the court may determine to
be just. And since the lower court found that both parties "are practically at one that defendant
(PLDT) is entitled to reasonable compensation from plaintiff for the reasonable use of the former's
telephone facilities" (Decision, Record on Appeal, page 224), the lower court should have proceeded
to treat the case as one of condemnation of such services independently of contract and proceeded
to determine the just and reasonable compensation for the same, instead of dismissing the petition.

  This view we have taken of the true nature of the Republic's petition necessarily results in
overruling the plea of defendant-appellant PLDT that the court of first instance had no jurisdiction to
entertain the petition and that the proper forum for the action was the Public Service Commission.
That body, under the law, has no authority to pass upon actions for the taking of private property
under the sovereign right of eminent domain. Furthermore, while the defendant telephone company
is a public utility corporation whose franchise, equipment and other properties are under the
jurisdiction, supervision and control of the Public Service Commission (Sec. 13, Public Service Act),
yet the plaintiff's telecommunications network is a public service owned by the Republic and
operated by an instrumentality of the National Government, hence exempt, under Section 14 of the
Public Service Act, from such jurisdiction, supervision and control. The Bureau of
Telecommunications was created in pursuance of a state policy reorganizing the government offices
—

  to meet the exigencies attendant upon the establishment of the free and independent
Government of the Republic of the Philippines, and for the purpose of promoting simplicity,
economy and efficiency in its operation (Section 1, Republic Act No. 51) —

  and the determination of state policy is not vested in the Commission (Utilities Com. vs. Bartonville
Bus Line, 290 Ill. 574; 124 N.E. 373).

  Defendant PLDT, as appellant, contends that the court below was in error in not holding that the
Bureau of Telecommunications was not empowered to engage in commercial telephone business,
and in ruling that said defendant was not justified in disconnecting the telephone trunk lines it had
previously leased to the Bureau. We find that the court a quo ruled correctly in rejecting both
assertions.

  Executive Order No. 94, Series of 1947, reorganizing the Bureau of Telecommunications, expressly
empowered the latter in its Section 79, subsection (b), to "negotiate for, operate and maintain wire
telephone or radio telephone communication service throughout the Philippines", and, in subsection
(c), "to prescribe, subject to approval by the Department Head, equitable rates of charges for
messages handled by the system and/or for time calls and other services that may be rendered by
the system". Nothing in these provisions limits the Bureau to non-commercial activities or prevents it
from serving the general public. It may be that in its original prospectuses the Bureau officials had
stated that the service would be limited to government offices: but such limitations could not block
future expansion of the system, as authorized by the terms of the Executive Order, nor could the
officials of the Bureau bind the Government not to engage in services that are authorized by law. It is
a well-known rule that erroneous application and enforcement of the law by public officers do not
block subsequent correct application of the statute (PLDT vs. Collector of Internal Revenue, 90 Phil.
676), and that the Government is never estopped by mistake or error on the part of its agents
(Pineda vs. Court of First Instance of Tayabas, 52 Phil. 803, 807; Benguet Consolidated Mining Co.
vs. Pineda, 98 Phil. 711, 724).

  The theses that the Bureau's commercial services constituted unfair competition, and that the
Bureau was guilty of fraud and abuse under its contract, are, likewise, untenable.

  First, the competition is merely hypothetical, the demand for telephone service being very much
more than the supposed competitors can supply. As previously noted, the PLDT had 20,000 pending
applications at the time, and the Bureau had another 5,000. The telephone company's inability to
meet the demands for service are notorious even now. Second, the charter of the defendant
expressly provides:

  SEC. 14. The rights herein granted shall not be exclusive, and the rights and power to grant
to any corporation, association or person other than the grantee franchise for the telephone
or electrical transmission of message or signals shall not be impaired or affected by the
granting of this franchise: — (Act 3436)

  And third, as the trial court correctly stated, "when the Bureau of Telecommunications subscribed to
the trunk lines, defendant knew or should have known that their use by the subscriber was more or
less public and all embracing in nature, that is, throughout the Philippines, if not abroad" (Decision,
Record on Appeal, page 216).

  The acceptance by the defendant of the payment of rentals, despite its knowledge that the plaintiff
had extended the use of the trunk lines to commercial purposes, continuously since 1948, implies
assent by the defendant to such extended use. Since this relationship has been maintained for a
long time and the public has patronized both telephone systems, and their interconnection is to the
public convenience, it is too late for the defendant to claim misuse of its facilities, and it is not now at
liberty to unilaterally sever the physical connection of the trunk lines.

  ..., but there is high authority for the position that, when such physical connection has been
voluntarily made, under a fair and workable arrangement and guaranteed by contract and
the continuous line has come to be patronized and established as a great public
convenience, such connection shall not in breach of the agreement be severed by one of the
parties. In that case, the public is held to have such an interest in the arrangement that its
rights must receive due consideration. This position finds approval in State ex rel. vs.
Cadwaller, 172 Ind. 619, 636, 87 N.E. 650, and is stated in the elaborate and learned opinion
of Chief Justice Myers as follows: "Such physical connection cannot be required as of right,
but if such connection is voluntarily made by contract, as is here alleged to be the case, so
that the public acquires an interest in its continuance, the act of the parties in making such
connection is equivalent to a declaration of a purpose to waive the primary right of
independence, and it imposes upon the property such a public status that it may not be
disregarded" — citing Mahan v. Mich. Tel. Co., 132 Mich. 242, 93 N.W. 629, and the reasons
upon which it is in part made to rest are referred to in the same opinion, as follows: "Where
private property is by the consent of the owner invested with a public interest or privilege for
the benefit of the public, the owner can no longer deal with it as private property only, but
must hold it subject to the right of the public in the exercise of that public interest or privilege
conferred for their benefit." Allnut v. Inglis (1810) 12 East, 527. The doctrine of this early
case is the acknowledged law. (Clinton-Dunn Tel. Co. v. Carolina Tel. & Tel. Co., 74 S.E.
636, 638).

  It is clear that the main reason for the objection of the PLDT lies in the fact that said appellant did
not expect that the Bureau's telephone system would expand with such rapidity as it has done; but
this expansion is no ground for the discontinuance of the service agreed upon.

  The last issue urged by the PLDT as appellant is its right to compensation for the use of its poles
for bearing telephone wires of the Bureau of Telecommunications. Admitting that section 19 of the
PLDT charter reserves to the Government —

  the privilege without compensation of using the poles of the grantee to attach one ten-pin
cross-arm, and to install, maintain and operate wires of its telegraph system thereon;
Provided, however, That the Bureau of Posts shall have the right to place additional cross-
arms and wires on the poles of the grantee by paying a compensation, the rate of which is to
be agreed upon by the Director of Posts and the grantee; —

  the defendant counterclaimed for P8,772.00 for the use of its poles by the plaintiff, contending that
what was allowed free use, under the aforequoted provision, was one ten-pin cross-arm attachment
and only for plaintiff's telegraph system, not for its telephone system; that said section could not refer
to the plaintiff's telephone system, because it did not have such telephone system when defendant
acquired its franchise. The implication of the argument is that plaintiff has to pay for the use of
defendant's poles if such use is for plaintiff's telephone system and has to pay also if it attaches
more than one (1) ten-pin cross-arm for telegraphic purposes.
  As there is no proof that the telephone wires strain the poles of the PLDT more than the telegraph
wires, nor that they cause more damage than the wires of the telegraph system, or that the
Government has attached to the poles more than one ten-pin cross-arm as permitted by the PLDT
charter, we see no point in this assignment of error. So long as the burden to be borne by the PLDT
poles is not increased, we see no reason why the reservation in favor of the telegraph wires of the
government should not be extended to its telephone lines, any time that the government decided to
engage also in this kind of communication.

  In the ultimate analysis, the true objection of the PLDT to continue the link between its network and
that of the Government is that the latter competes "parasitically" (sic) with its own telephone
services. Considering, however, that the PLDT franchise is non-exclusive; that it is well-known that
defendant PLDT is unable to adequately cope with the current demands for telephone service, as
shown by the number of pending applications therefor; and that the PLDT's right to just
compensation for the services rendered to the Government telephone system and its users is herein
recognized and preserved, the objections of defendant-appellant are without merit. To uphold the
PLDT's contention is to subordinate the needs of the general public to the right of the PLDT to derive
profit from the future expansion of its services under its non-exclusive franchise.

  WHEREFORE, the decision of the Court of First Instance, now under appeal, is affirmed, except in
so far as it dismisses the petition of the Republic of the Philippines to compel the Philippine Long
Distance Telephone Company to continue servicing the Government telephone system upon such
terms, and for a compensation, that the trial court may determine to be just, including the period
elapsed from the filing of the original complaint or petition. And for this purpose, the records are
ordered returned to the court of origin for further hearings and other proceedings not inconsistent
with this opinion. No costs.

G.R. No. L-7012            March 26, 1913

THE ILOILO ICE AND COLD STORAGE COMPANY, plaintiff-appellee,

vs.
THE MUNICIPAL COUNCIL OF ILOILO, ET AL., defendants-appellants.

Juan de Leon, Quirico Abeto, and Crecenciano Lozano, for appellants.

Bruce, Lawrence, Ross and Block, for appellee.

TRENT, J.:

According to the pleadings, the plaintiff, upon authority granted by the defendant, constructed an ice
and cold storage plant in the city of Iloilo. Some time after the plant had been completed and was in
operation, nearby residents made complaints to the defendant that the smoke from the plant was
very injurious to their health and comfort. Thereupon the defendant appointed a committee to
investigate and report upon the matters contained in said complaints. The committee reported that
the complaints were well-founded. The defendant counsel then passed a resolution which reads in
part as follows:

That after the approval by the honorable provincial board of this resolution, a period of one
month will be granted to the said entity. The Iloilo Ice and Cold Storage Company, in which
to proceed with the elevation of said smokestacks, and if not done, the municipal president
will execute the order requiring the closing or suspension of operations of said
establishment.
Upon receipt of this resolution and order, the plaintiff commenced this action in the Court of First
Instance to enjoin the defendant from carrying into effect the said resolution. The fifth paragraph of
the complaint is as follows:

That the defendants intend and threaten to require compliance with said resolution
administratively and without the intervention of the court, and by force to compel the closing
and suspension of operations of the plaintiff's machinery and consequently of the entire
plant, should the plaintiff not proceed with the elevation of the smokestacks to one hundred
feet, which the plaintiff maintains it is not obliged to do and will not do.

Upon notice and after hearing, a preliminary injunction was issued. Subsequently thereto the
defendant answered, admitting paragraphs 1 and 4 and denying all the other allegations in the
complaint, and as a special defense alleged:

1. xxx           xxx           xxx.

2. That the factory of the plaintiff company stands in a central and populated district of the
municipality;

3. That the quantity of smoke discharged from the smokestacks of said factory is so great
and so dense that it penetrates into the dwelling houses situated near it and causes great
annoyance to the residents and prejudice to their health;

4. That the municipal board of health of the city has reported that the smoke discharged from
the smokestacks of said factory is prejudicial and injurious to the public health;

5. That the plaintiff company has no right to maintain and operate machinery in its factory
under the conditions which it is at present operating the same, without complying with the
regulations which were imposed upon it when the license for its installation was granted,
because it thereby violates the ordinances of the city now in force upon the matter.

Wherefore, the defendant prays that it be absolved from the complaint and the plaintiff be declared
to have no right to the remedy asked, and that the preliminary injunction issued in this case be set
aside, with the costs against the plaintiff.

The plaintiff demurred to this answer upon the following grounds:

1. That the facts alleged in the answer do not constitute a defense; and

2. That the answer is vague and ambiguous and contains arguments and conclusions of law
instead of facts.

This demurrer was sustained, the court saying:

The defendant will amend his answer within five days or the injunction will be permanently
granted as prayed for, with costs to the defendant.

To this order the defendant excepted and, not desiring to amend its answer, appealed to this court.

It is alleged in paragraph 1 that both the plaintiff and the defendants are corporations duly organized
under the laws of the Philippine Islands; and paragraph 4 sets forth the resolution complained of, the
dispositive part of which is inserted above. The allegations in paragraph 2, 3, 5, 6, 7, and 8, which
are specifically denied in the answer, all (except the fifth) relate to the building of the plant under
authority granted by the defendant, the cost of its construction, the legality of the resolution in
question, the power of the defendant to pass such resolution, and the damages which will result if
that resolution is carried into effect. As before stated, the allegations in paragraph 5 to the effect that
the defendants intend and are threatening to close by force and without the intervention of the courts
the plaintiff's plant is specifically denied. The issue in this case, according to the pleadings, relates to
the power of the municipal council to declare the plant of the petitioner a nuisance as operated, and
the method of abating it.

The municipal council is, under section 39 (j) of the Municipal Code, specifically empowered "to
declare and abate nuisances." A nuisance is, according to Blackstone, "Any thing that worketh hurt,
inconvenience, or damages." (3 Black. Com., 216.) They arise from pursuing particular trades or
industries in populous neighborhoods; from acts of public indecency, keeping disorderly houses, and
houses of ill fame, gambling houses, etc. (2 Bouv., 248; Miller vs. Burch, 32 Tex., 208.) Nuisances
have been divided into two classes: Nuisances per se, and nuisances per accidens. To the first
belong those which are unquestionably and under all circumstances nuisances, such as gambling
houses, houses of ill fame, etc. The number of such nuisances is necessarily limited, and by far the
greater number of nuisances are such because of particular facts and circumstances surrounding
the otherwise harmless cause of the nuisance. For this reason, it will readily be seen that whether a
particular thing is a nuisance is generally a question of fact, to be determined in the first instance
before the term nuisance can be applied to it. This is certainly true of a legitimate calling, trade, or
business such as an ice plant. Does the power delegated to a municipal council under section 39 (j)
of the Municipal Code commit to the unrestrained will of that body the absolute power of declaring
anything to be a nuisance? Is the decision of that body final despite the possibility that it may
proceed from animosity or prejudice, from partisan zeal or enmity, from favoritism and other
improper influences and motives, easy of concealment and difficult to be detected and exposed?
Upon principle and authority, we think it does not.

In Rutton vs. City of Camden, 39 N.J.L., 122, 129; 23 Am. Rep. 203, 209, the court said:

The authority to decide when a nuisance exists in an authority to find facts, to estimate their
force, and to apply rules of law to the case thus made. This is the judicial function, and it is a
function applicable to a numerous class of important interests. The use of land and buildings,
the enjoyment of water rights, the practice of many trades and occupations, and the
business of manufacturing in particular localities, all fall on some occasions, in important
respects, within its sphere. To say to a man that he shall not use his property as he pleases,
under certain conditions, is to deprive him pro tanto of the enjoyment of such property. To
find conclusively against him that a state of facts exists with respect to the use of his
property, or the pursuit of his business, which subjects him to the condemnation of the law, is
to affect his rights in a vital point. The next thing to depriving a man of his property is to
circumscribe him in its use, and the right to use property is as much under the protection of
the law as the property itself, in any other aspect, is, and the one interest can no more be
taken out of the hands of the ordinary tribunal than the other can. If a man's property cannot
be taken away from him except upon trial by jury, or by the exercise of the right of eminent
domain upon compensation made, neither can be, in any other mode, be limited in the use of
it. The right to abate public nuisances, whether we regard it as existing in the municipalities,
or in the community, or in the land of the individual, is a common law right, and is derived, in
every instance of its exercise, from the same source — that of necessity. It is akin to the right
of destroying property for the public safety, in case of the prevalence of a devastating fire or
other controlling exigency. But the necessity must be present to justify the exercise of the
right, and whether present or not, must be submitted to a jury under the guidance of a court.
The finding of a sanitary committee, or of a municipal council, or of any other body of a
 similar kind, can have no effect whatever for any purpose, upon the ultimate disposition of
the matter of this kind. It cannot be used as evidence in any legal proceeding, for the end of
establishing, finally, the fact of nuisance, and if can be made testimony for any purpose, it
would seem that it can be such only to show that the persons acting in pursuance of it were
devoid of that malicious spirit which sometimes aggravates a trespass and swells the
damages. I repeat that the question of nuisance can conclusively be decided, for all legal
uses, by the established courts of law or equity alone, and that the resolutions of officers, or
of boards organized by force of municipal charters, cannot, to any degree, control such
decision.

The leading case upon this point is Yates vs. Milwaukee, (10 Wall., 497; 19 L. ed., 984). The
following quotation from this case has been cited or quoted with approval in a great number of
cases. (See Notes to this case in 19 L. ed., Notes, page 356.)

But the mere declaration by the city council of Milwaukee that a certain structure was an
encroachment or obstruction did not make structure was an encroachment or obstruction did
not make it so, nor could such declaration make it a nuisance unless it in fact had that
character. It is a doctrine not to be tolerated in this country, that a municipal corporation,
without any general laws either of the city or of the State, within which a given structure can
be shown to be a nuisance, can, by its mere declaration that it is one, subject it to removal by
any person supposed to be aggrieved, or even by the city itself. This would place every
house, every business, and all the property of the city at the uncontrolled will of the
temporary local authorities. Yet this seems to have been the view taken by counsel who
defended this case in the circuit court; for that single ordinance of the city, declaring the
wharf of Yates a nuisance, and ordering its abatement, is the only evidence in the record that
it is a nuisance or an obstruction to navigation, or in any manner injurious to the public.

In Cole vs. Kegler (64 la., 59, 61) the court said:

We do not think the general assembly intended to confer on cities and towns the power of
finally and conclusively determine, without notice or a hearing, and without the right of
appeal, that any given thing constitutes a nuisance, unless, probably, in cases of great
emergency, so strong as to justify extraordinary measures upon the ground of paramount
necessity. The law does not contemplate such an exigency, and therefore does not provide
for it. If it did, it would no longer be the undefined law of necessity. (Nelson, J., in The People
vs. The Corporation of Albay, 11 Wend., 539.)

Nuisance may be abated by an individual, but they must in fact exist, The determination of
the individual that a nuisance exists does not make it so, and if he destroys property on the
that it is a nuisance, he is responsible, unless it is established that the property destroyed
constituted a nuisance. This precise power, and no more, is conferred by the statute on cities
and towns. In Wood on Nuisances, section 740, it is said: "If the authorities of a city abate a
nuisance under authority of an ordinance of the city, they are subject to the same perils and
liabilities as an individual, if the thing in fact is not nuisance."

In Grossman vs. City of Oakland (30 Ore., 478, 483) the court said:

In our opinion this ordinance cannot be sustained as a legitimate exercise of municipal

power. The character of the city confers upon it the power to prevent and restrain nuisances,
and to "declare what shall constitute a nuisance;" but this does not authorize it to declare a
particular use of property a nuisance, unless such use comes within the common law or
statutory idea of a nuisance. (2 Wood on Nuisances (3d ed.), 977; Yates vs. Milwaukee, 77
 U.S. (10 Wall.), 497; Village of Des Plaines vs. Poyer, 123 Ill., 348; 5 Am. St. Rep., 524; 14
N.E., 677; Quintini vs. City Board of Aldermen, 64 Miss., 483; 60 Am. Rep., 62; 1 So., 625;
Chicago & Rock Islands R.R. Co. vs. City of Joliet, 79 Ill., 44; Hutton vs. City of Camden, 39
N.J. Law, 122; 23 Am. Rep., 203.) By this provision of the charter the city is clothed with
authority to declare by general ordinance under what circumstances and conditions certain
specified acts or things injurious to the health or dangerous to the public are to constitute
and be deemed nuisances, leaving the question of fact open for judicial determination as to
whether the particular act or thing complained of comes within the prohibited class; but it
cannot by ordinance arbitrarily declare any particular thing a nuisance which has not
heretofore been so declared by law, or judicially determined to be such. (City of Dener vs.
Mullen, 7 Colo., 345).

In Western & Atlantic R. Co. vs. Atlanta (113 Ga., 537, 551), after an extensive review of the
authorities, the court, per Lumpkin, J., said:

It is our opinion that the provisions of our code require, when a municipal corporation is
seeking to abate a nuisance such as it was alleged the floor of the union passenger station
was in this case, that the parties interested be given reasonable notice of the time and place
of hearing at which the fact whether the property complained of is or is not a nuisance shall
be inquired into and determined; that, without such notice and a judgment on the facts by the
body invested with power to abate the nuisance, it is unlawful to enter thereon and remove
or destroy it as a nuisance. If the thing, as we said, is declared by law to be a nuisance, or if
it is unquestionably a nuisance, such as a rabid dog, infected clothing, the carcass of a dead
animal on a private lot, the presence of a smallpox patient on the street, it may be abated by
the municipal authorities at once, by order, from the necessity of the case, and to meet an
emergency which exists, to at once protect the health and lives of the people.

In Everett vs. City of Council Bluffs (46 Ia., 66, 67), where the council passed an ordinance declaring
trees on certain streets to be a nuisance and ordering the marshall to abate the same, the court
held:

The defendant is incorporated under a special charter, which provides that the city council
has power "to declare what shall be a nuisance, and to prevent, remove, or abate the same."
This general grant of power, however, will not authorize the council to declare anything a
nuisance which is not such at common law, or has been declared such by statute.

In Frostburg vs. Wineland (98 Md., 239, 243) the court said:

The first question, then, in the case revolves itself to this, was the summary proceeding of
the appellants in declaring the two trees in front of the appellee's property to be a nuisance
and an obstruction to the paving and curbing of the street, and directing them to be removed
and destroyed, so far final as not to be reviewable by the Courts?

This question we think was in effect settled by this court in the recent cases of New Windsor
vs. Stocksdale (95 Md., 215) and King vs. Hamil (97 Md., 103). In the latter case it is said
that equity will not lend its aid to enforce by injunction the by-laws or ordinances of a
municipal corporation, restraining an act, unless the act is shown to be a nuisance per
se. . . .

It is clear, we think, both upon reason and authority, that when a municipality undertakes to
destroy private property which is not a nuisance per se, it then transcends its powers and its
acts are reviewable by a court of equity.
In C.R.I. & P.R. Co. vs. City of Joilet (79 Ill., 25, 44) the court said:

As to the ordinance of the common council of the city of Joilet, of September, 1872, declaring
the railroad a nuisance, we regard that as without effect upon the case, although the charter
of the city confers upon the common council the power to abate and remove nuisances, and
to punish the authors thereof, and to define and declare what shall be deemed nuisances.
We will, in this respect, but refer to the language of the Supreme Court of the United State in
Yates vs. Milwaukee (10 Wall., 505). (See supra.)

In the leading case of Denver vs. Mullen (7 Colo., 345, 353) where an extended review of the
authorities is made, the court said:

The basis of authority for the action of the city in the premises is made to rest upon certain
provisions of the city charter, and certain ordinances, which are set out as exhibits in the
testimony; and the following, among other of the enumerated powers conferred by the
legislature upon the city, in said charter, is relied upon, viz: "To make regulations to secure
the general health of the inhabitants, to declare what shall be a nuisance, and to prevent and
remove the same."

The proper construction of this language is that the city is clothed with authority to declare,
by general ordinance, what shall constitute a nuisance. That is to say, the city may, by such
ordinance, define, classify and enact what things or classes of things, and under what
conditions and circumstances, such specified things are to constitute and be deemed
nuisances. For instance, the city might, under such authority, declare by ordinance that
slaughter-houses within the limits of the city, carcasses of dead animals left lying within the
city, goods, boxes, and the like, piled up or remaining for certain length of time on the
sidewalks, or other things injurious to health, or causing obstruction or danger to the public in
the use of the streets and sidewalks, should be deemed nuisances; not that the city council
may, by a mere resolution or motion, declare any particular thing a nuisance which has not
theretofore been pronounced to be such by law, or so adjudged by judicial determination.
(Everett vs. Council Bluffs, 40 Iowa, 66; Yates vs. Milwaukee, 10 Wall., 497.) No law or
ordinance, under which the city council assumed to act in respect to this ditch, has been
cited which defines nuisance, or within the meaning of which such ditch is comprehended.

xxx           xxx           xxx

It is only certain kinds of nuisances that may be removed or abated summarily by the acts of
individuals or by the public, such as those which affect the health, or interfere with the safety
of property or person, or are tangible obstructions to streets and highways under
circumstances presenting an emergency; such clear cases of nuisances per se, are well
understood, and need not to be further noticed here to distinguish them from the case before
us. If it were admitted that this ditch, by reason of its obstruction to the use of the public
streets, at the time of the acts complained of, was a nuisance, it must also be admitted that it
was not a nuisance per se. It was constructed for a necessary, useful and lawful purpose,
was used for such purpose, and therefore in its nature was not a nuisance, as a matter of
law. Nor as a matter of fact was it a nuisance while it was no hurt, detriment, or offense to
the public, or to any private citizen. If, then, it has become a nuisance, it is by reason of a
change of circumstances brought about neither by the ditch itself, nor its use. Indeed, the
sole matter complained of, to warrant its being regarded as a nuisance, is the absence of
bridges at street crossings. The town has become populous; its growth has extended beyond
the ditch and along its line for a great distance; streets laid out across its course have come
to be traveled so much, that without bridges, the ditch, as appears by the testimony, has
 become inconvenient, detrimental, and an obstruction to the full, safe and lawful use of such
streets as highways by the public. To this extent, and from these causes outside the ditch
and its use per se, has the ditch come to be a public nuisance, if, as a matter of fact, it is
such. But whether it is such or not is a fact which must first be ascertained by judicial
determination before it can be lawfully abated, either by the public or by a private person.

In Joyce vs. Woods (78 Ky., 386, 388) the court said:

There was no judicial determination that there was a nuisance, and no opportunity offered
the owner of the lot to contest that matter. Under the exercise of the police power, it may be
conceded that municipalities can declare and abate nuisances in cases of necessity, without
citation and without adjudication as to whether there is in fact a nuisance. But whenever the
action of the municipality in declaring and abating a nuisance goes so far as to fix a burden
upon the owner of the property, he is entitled to be heard upon the question as to the
existence of the nuisance. This right to a hearing upon this question may come before or
after the nuisance is abated, as circumstances may require, but there must be an opportunity
offered him to be heard upon that matter before his property can be loaded with the cost of
the removal of the nuisance. To the extent that property is thus burdened by the action of the
city council, when there is no necessity to precipitate action without adjudication, the owner
is deprived of his property, regardless of "the law of the land." The meaning of that provision
of the constitution has generally been construed to be a law that hears before condemning,
and arrives at a judgment for the divestiture of the rights of property through what is
ordinarily understood to be judicial process — the general rules that govern society in
reference, to the rights of property; and it is only in extreme cases, where the preservation
and repose of society or the protection of the property rights of a large class of the
community absolutely require a departure, that the courts recognize any exception. In this
case there is no pretense of a necessity for precipitate action. There is no reason why
appellant should not have been permitted to test the question as to the existence of the
nuisance.

In Everett vs. Marquette (53 Mich., 450, 451) the court, per Cooley, J., said:

But it is not necessary in this case to determine whether the permission given by the village
council was in due form for the purposes of a permanent appropriation, or even whether the
council had the power to consent to such an appropriation. It is undoubted that the council
had general control of the streets under the village charter; and it was a part of its duty to
prevent the creation of any public nuisance within them. It is not to be assumed that consent
would have been given to such a nuisance, and when, by formal resolution the council
assumed to give permission to complainant to make the openings and build the stairways
complained of, it must have been done in the belief that no public inconvenience would
follow. If the permission was effectual for no other purpose, it at least rebutted any
presumption which might otherwise have existed, that this partial appropriation of the street
was per se a nuisance.

If the permission was a mere license, and the subsequent action of the city council is to be
regarded as a revocation of the license, it does not follow that the plaintiff has by the
revocation immediately been converted into a wrongdoer. The question will then be whether
the act of the complainant in maintaining his structures constitutes a public nuisance; and
while the city council is entitled, under its supervisory control of the public streets, to consider
and pass upon that question for the purpose of deciding upon the institution of legal
proceedings for abatement, it cannot make itself the judge. Maintaining a nuisance is a
public offense; and the fact, as in other cases of alleged criminality, is to be tried on proper
 accusation and in the regular courts. The mere fact that the party makes use of some part of
a public street for his private purposes does not make out the public offense. This was
decided in People vs. Carpenter (1 Mich., 273), and has never been doubted in this State.

The city in this case proceeding in an act of destruction on an assumption that the structures
were already condemned as illegal. This was unwarranted, and it was quite right that the
action should be restrained.

The above authorities are collated in Judge Dillon's work on Municipal Corporations, fifth edition,
section 684, with the following comment by the author:

It is to secure and promote the public health, safety, and convenience that municipal
corporations are so generally and so liberally endowed with power to prevent and abate
nuisances. This authority and its summary exercise may be constitutionally conferred on the
incorporated place, and it authorizes its council to act against that which comes within the
legal notion of a nuisance; but such power, conferred in general terms, cannot be taken to
authorize the extrajudicial condemnation and destruction of that as a nuisance which, in its
nature, situation, or use, is not such.

The questions discussed in this august array of authorities are exactly those of the present case,
and the controlling principles and the reasoning upon which they are founded are so fully and lucidly
set forth as to justify us in refraining from comment of our own. It is clear that municipal councils
have, under the code, the power to declare and abate nuisances, but it is equally clear that they do
not have the power to find as a fact that a particular thing is a nuisance when such thing is not a
nuisance per se; nor can they authorize the extrajudicial condemnation and destruction of that as a
nuisance which in its nature, situation, or use is not such. These things must be determined in the
ordinary courts of law.

In the present case it is certain that the ice factory of the plaintiff is not a nuisance per se. It is a
legitimate industry, beneficial to the people, and conducive to their health and comfort. If it be in fact
a nuisance due to the manner of its operation, that question cannot de determined by a mere
resolution of the board. The petitioner is entitled to a fair and impartial hearing before a judicial
tribunal.

The respondent has, we think, joined issued by its answer denying that it was intending to proceed
with the abatement of the alleged nuisance by arbitrary administrative proceedings. This is the issue
of the present case, and upon its determination depends whether the injunction should be made
permanent (but limited in its scope to prohibiting the closing of petitioner's factory by administrative
action), or whether the injunction should be dissolved, which will be done in case it be shown that
the municipal officials intend to proceed with the abatement of the alleged nuisance in an orderly and
legal manner.

It is said that the plaintiff cannot be compelled to build its smokestack higher if said stack is in fact a
nuisance, for the reason that the stack was built under authority granted by the defendant, and in
accordance with the prescribed requirements. If the charter or license does not expressly subject the
business or industry to the exercise of the police power by the State, it is conceded by the great
preponderance of authority that such a reservation is implied to the extent that may be reasonably
necessary for the public welfare. (Freud, Police Power, § 361 et seq, and § 513 et seq.)

For the foregoing reasons, the order sustaining the plaintiff's demurrer to the defendant's answer is
reversed. The record will be returned to the court whence it came with instructions to proceed with
the trial of the cause in accordance with this opinion. No costs will be allowed in this instance. So
ordered.

G.R. No. L-5060 January 26, 1910

THE UNITED STATES, Plaintiff-Appellee, vs. LUIS TORIBIO, Defendant-

Appellant.

Rodriguez & Del Rosario, for appellant.

Attorney-General Villamor, for appellee.

CARSON, J.:

The evidence of record fully sustains the findings of the trial court that the
appellant slaughtered or caused to be slaughtered for human consumption,
the carabao described in the information, without a permit from the
municipal treasure of the municipality wherein it was slaughtered, in
violation of the provisions of sections 30 and 33 of Act No. 1147, an Act
regulating the registration, branding, and slaughter of large cattle. chanroblesvirtualawlibrary chanrobles virtual law library

It appears that in the town of Carmen, in the Province of Bohol, wherein the
animal was slaughtered there is no municipal slaughterhouse, and counsel
for appellant contends that under such circumstances the provisions of Act
No. 1147 do not prohibit nor penalize the slaughter of large cattle without a
permit of the municipal treasure. Sections 30, 31, 32, and 33 of the Act are
as follows:

SEC. 30. No large cattle shall be slaughtered or killed for food at the
municipal slaughterhouse except upon permit secured from the municipal
treasure. Before issuing the permit for the slaughter of large cattle for
human consumption, the municipal treasurer shall require for branded cattle
the production of the original certificate of ownership and certificates of
transfer showing title in the person applying for the permit, and for
unbranded cattle such evidence as may satisfy said treasurer as to the
ownership of the animals for which permit to slaughter has been
requested. chanroblesvirtualawlibrary chanrobles virtual law library

SEC. 31. No permit to slaughter has been carabaos shall be granted by the
municipal treasurer unless such animals are unfit for agricultural work or for
draft purposes, and in no event shall a permit be given to slaughter for food
any animal of any kind which is not fit for human consumption. chanroblesvirtualawlibrary chanrobles virtual law library

SEC. 32. The municipal treasurer shall keep a record of all permits for
slaughter issued by him, and such record shall show the name and residence
of the owner, and the class, sex, age, brands, knots of radiated hair
commonly know as remolinos or cowlicks, and other marks of identification
of the animal for the slaughter of which permit is issued and the date on
which such permit is issued. Names of owners shall be alphabetically
arranged in the record, together with date of permit. chanroblesvirtualawlibrary chanrobles virtual law library

A copy of the record of permits granted for slaughter shall be forwarded

monthly to the provincial treasurer, who shall file and properly index the
same under the name of the owner, together with date of permit. chanroblesvirtualawlibrary chanrobles virtual law library

SEC. 33. Any person slaughtering or causing to be slaughtered for human

consumption or killing for food at the municipal slaughterhouse any large
cattle except upon permit duly secured from the municipal treasurer, shall
be punished by a fine of not less than ten nor more than five hundred pesos,
Philippine currency, or by imprisonment for not less than one month nor
more than six months, or by both such fine and imprisonment, in the
discretion of the court.

It is contended that the proper construction of the language of these

provisions limits the prohibition contained in section 30 and the penalty
imposed in section 33 to cases (1) of slaughter of large cattle for human
consumption in a municipal slaughter without a permit duly secured from the
municipal treasurer, and (2) cases of killing of large cattle for food in a
municipal slaughterhouse without a permit duly secured from the municipal
treasurer; and it is urged that the municipality of Carmen not being provided
with a municipal slaughterhouse, neither the prohibition nor the penalty is
applicable to cases of slaughter of large cattle without a permit in that
municipality.chanroblesvirtualawlibrary chanrobles virtual law library

We are of opinion, however, that the prohibition contained in section 30

refers (1) to the slaughter of large cattle for human consumption, anywhere,
without a permit duly secured from the municipal treasurer, and (2)
expressly and specifically to the killing for food of large cattle at a municipal
slaughterhouse without such permit; and that the penalty provided in
section 33 applies generally to the slaughter of large cattle for human
consumption, anywhere, without a permit duly secured from the municipal
treasurer, and specifically to the killing for food of large cattle at a municipal
slaughterhouse without such permit. chanroblesvirtualawlibrary chanrobles virtual law library

It may be admitted at once, that the pertinent language of those sections

taken by itself and examined apart from the context fairly admits of two
constructions: one whereby the phrase "at the municipal slaughterhouse"
may be taken as limiting and restricting both the word "slaughtered" and the
words "killed for food" in section 30, and the words "slaughtering or causing
to be slaughtered for human consumption" and the words "killing for food" in
section 33; and the other whereby the phrase "at the municipal
slaughterhouse" may be taken as limiting and restricting merely the words
"killed for food" and "killing for food" as used in those sections. But upon a
reading of the whole Act, and keeping in mind the manifest and expressed
purpose and object of its enactment, it is very clear that the latter
construction is that which should be adopted. chanroblesvirtualawlibrary chanrobles virtual law library

The Act primarily seeks to protect the "large cattle" of the Philippine Islands
against theft and to make easy the recovery and return of such cattle to
their proper owners when lost, strayed, or stolen. To this end it provides an
elaborate and compulsory system for the separate branding and registry of
ownership of all such cattle throughout the Islands, whereby owners are
enabled readily and easily to establish their title; it prohibits and invalidates
all transfers of large cattle unaccompanied by certificates of transfer issued
by the proper officer in the municipality where the contract of sale is made;
and it provides also for the disposition of thieves or persons unlawfully in
possession, so as to protect the rights of the true owners. All this,
manifestly, in order to make it difficult for any one but the rightful owner of
such cattle to retain them in his possession or to dispose of them to others.
But the usefulness of this elaborate and compulsory system of identification,
resting as it does on the official registry of the brands and marks on each
separate animal throughout the Islands, would be largely impaired, if not
totally destroyed, if such animals were requiring proof of ownership and the
production of certificates of registry by the person slaughtering or causing
them to be slaughtered, and this especially if the animals were slaughtered
privately or in a clandestine manner outside of a municipal slaughterhouse.
Hence, as it would appear, sections 30 and 33 prohibit and penalize the
slaughter for human consumption or killing for food at a municipal
slaughterhouse of such animals without a permit issued by the municipal
treasurer, and section 32 provides for the keeping of detailed records of all
such permits in the office of the municipal and also of the provincial
treasurer.chanroblesvirtualawlibrary chanrobles virtual law library

If, however, the construction be placed on these sections which is contended

for by the appellant, it will readily be seen that all these carefully worked out
provisions for the registry and record of the brands and marks of
identification of all large cattle in the Islands would prove in large part
abortion, since thieves and persons unlawfully in possession of such cattle,
and naturally would, evade the provisions of the law by slaughtering them
outside of municipal slaughterhouses, and thus enjoy the fruits of their
wrongdoing without exposing themselves to the danger of detection incident
to the bringing of the animals to the public slaughterhouse, where the
brands and other identification marks might be scrutinized and proof of
ownership required. chanroblesvirtualawlibrary chanrobles virtual law library
Where the language of a statute is fairly susceptible of two or more
constructions, that construction should be adopted which will most tend to
give effect to the manifest intent of the lawmaker and promote the object for
which the statute was enacted, and a construction should be rejected which
would tend to render abortive other provisions of the statute and to defeat
the object which the legislator sought to attain by its enactment. We are of
opinion, therefore, that sections 30 and 33 of the Act prohibit and penalize
the slaughtering or causing to be slaughtered for human consumption of
large cattle at any place without the permit provided for in section 30. chanroblesvirtualawlibrary chanrobles virtual law library

It is not essential that an explanation be found for the express prohibition in

these sections of the "killing for food at a municipal slaughterhouse" of such
animals, despite the fact that this prohibition is clearly included in the
general prohibition of the slaughter of such animals for human consumption
anywhere; but it is not improbable that the requirement for the issue of a
permit in such cases was expressly and specifically mentioned out of
superabundance of precaution, and to avoid all possibility of
misunderstanding in the event that some of the municipalities should be
disposed to modify or vary the general provisions of the law by the passage
of local ordinances or regulations for the control of municipal
slaughterhouse. chanroblesvirtualawlibrary chanrobles virtual law library

Similar reasoning applied to the specific provisions of section 31 of the Act

leads to the same conclusion. One of the secondary purposes of the law, as
set out in that section, is to prevent the slaughter for food of carabaos fit for
agricultural and draft purposes, and of all animals unfit for human
consumption. A construction which would limit the prohibitions and penalties
prescribed in the statute to the killing of such animals in municipal
slaughterhouses, leaving unprohibited and unpenalized their slaughter
outside of such establishments, so manifestly tends to defeat the purpose
and object of the legislator, that unless imperatively demanded by the
language of the statute it should be rejected; and, as we have already
indicated, the language of the statute is clearly susceptible of the
construction which we have placed upon it, which tends to make effective
the provisions of this as well as all the other sections of the Act. chanroblesvirtualawlibrary chanrobles virtual law library

It appears that the defendant did in fact apply for a permit to slaughter his
carabao, and that it was denied him on the ground that the animal was not
unfit "for agricultural work or for draft purposes." Counsel for appellant
contends that the statute, in so far as it undertakes to penalize the slaughter
of carabaos for human consumption as food, without first obtaining a permit
which can not be procured in the event that the animal is not unfit "for
agricultural work or draft purposes," is unconstitutional and in violation of
the terms of section 5 of the Philippine Bill (Act of Congress, July 1, 1902),
which provides that "no law shall be enacted which shall deprive any person
of life, liberty, or property without due process of law." chanrobles virtual law library

It is not quite clear from the argument of counsel whether his contention is
that this provision of the statute constitutes a taking of property for public
use in the exercise of the right of eminent domain without providing for the
compensation of the owners, or that it is an undue and unauthorized
exercise of the police power of the State. But whatever may be the basis of
his contention, we are of opinion, appropriating, with necessary
modifications understood, the language of that great jurist, Chief Justice
Shaw (in the case of Com. vs. Tewksbury, 11 Met., 55, where the question
involved was the constitutionality of a statute prohibiting and penalizing the
taking or carrying away by any person, including the owner, of any stones,
gravel, or sand, from any of the beaches in the town of Chesea,) that the
law in question "is not a taking of the property for public use, within the
meaning of the constitution, but is a just and legitimate exercise of the
power of the legislature to regulate and restrain such particular use of the
property as would be inconsistent with or injurious to the rights of the
public. All property is acquired and held under the tacit condition that it shall
not be so used as to injure the equal rights of others or greatly impair the
public rights and interest of the community." chanrobles virtual law library

It may be conceded that the benificial use and exclusive enjoyment of the
property of all carabao owners in these Islands is to a greater or less degree
interfered with by the provisions of the statute; and that, without inquiring
what quantum of interest thus passes from the owners of such cattle, it is an
interest the deprivation of which detracts from their right and authority, and
in some degree interferes with their exclusive possession and control of their
property, so that if the regulations in question were enacted for purely
private purpose, the statute, in so far as these regulations are concerned,
would be a violation of the provisions of the Philippine Bill relied on be
appellant; but we are satisfied that it is not such a taking, such an
interference with the right and title of the owners, as is involved in the
exercise by the State of the right of eminent domain, so as to entitle these
owners to compensation, and that it is no more than "a just restrain of an
injurious private use of the property, which the legislature had authority to
impose." chanrobles virtual law library

In the case of Com. vs. Alger (7 Cush., 53, 84), wherein the doctrine laid
down in Com. vs. Tewksbury ( supra) was reviewed and affirmed, the same
eminent jurist who wrote the former opinion, in distinguishing the exercise
of the right of eminent domain from the exercise of the sovereign police
powers of the State, said:
We think it is settled principle, growing out of the nature of well-ordered civil
society, that every holder of property, however absolute and unqualified
may be his title, holds it under the implied liability that his use of it may be
so regulated that is shall not be injurious to the equal enjoyment of others
having an equal right to the enjoyment of their property, nor injurious to the
rights of the community. . . . Rights of property, like all other social and
conventional rights, are subject to such reasonable limitations in their
enjoyment as shall prevent them from being injurious, and to such
reasonable restrain and regulations establish by law, as the legislature,
under the governing and controlling power vested in them by the
constitution, may think necessary and expedient. chanroblesvirtualawlibrary chanrobles virtual law library

This is very different from the right of eminent domain, the right of a
government to take and appropriate private property to public use,
whenever the public exigency requires it; which can be done only on
condition of providing a reasonable compensation therefor. The power we
allude to is rather the police power, the power vested in the legislature by
the constitution, to make, ordain, and establish all manner of wholesome
and reasonable laws, statutes, and ordinances, either with penalties or
without, not repugnant to the constitution, as they shall judge to be for the
good and welfare of the commonwealth, and of the subjects of the same.
virtual law library
chanroblesvirtualawlibrary chanrobles

It is much easier to perceive and realize the existence and sources of this
power than to mark its boundaries or prescribe limits to its exercise.

Applying these principles, we are opinion that the restrain placed by the law
on the slaughter for human consumption of carabaos fit for agricultural work
and draft purpose is not an appropriation of property interests to a "public
use," and is not, therefore, within the principle of the exercise by the State
of the right of eminent domain. It is fact a mere restriction or limitation upon
a private use, which the legislature deemed to be determental to the public
welfare. And we think that an examination of the general provisions of the
statute in relation to the public interest which it seeks to safeguard and the
public necessities for which it provides, leaves no room for doubt that the
limitations and restraints imposed upon the exercise of rights of ownership
by the particular provisions of the statute under consideration were imposed
not for private purposes but, strictly, in the promotion of the "general
welfare" and "the public interest" in the exercise of the sovereign police
power which every State possesses for the general public welfare and which
"reaches to every species of property within the commonwealth." chanrobles virtual law library

For several years prior to the enactment of the statute a virulent contagious
or infectious disease had threatened the total extinction of carabaos in these
Islands, in many sections sweeping away seventy, eighty, and in some cases
as much as ninety and even one hundred per cent of these animals.
Agriculture being the principal occupation of the people, and the carabao
being the work animal almost exclusively in use in the fields as well as for
draft purposes, the ravages of the disease with which they were infected
struck an almost vital blow at the material welfare of the country. large
areas of productive land lay waste for years, and the production of rice, the
staple food of the inhabitants of the Islands, fell off to such an extent that
the impoverished people were compelled to spend many millions of pesos in
its importation, notwithstanding the fact that with sufficient work animals to
cultivate the fields the arable rice lands of the country could easily be made
to produce a supply more that sufficient for its own needs. The drain upon
the resources of the Islands was such that famine soon began to make itself
felt, hope sank in the breast of the people, and in many provinces the
energies of the breadwinners seemed to be paralyzed by the apparently
hopeless struggle for existence with which they were confronted. chanroblesvirtualawlibrary chanrobles virtual law library

To meet these conditions, large sums of money were expended by the

Government in relieving the immediate needs of the starving people, three
millions of dollars were voted by the Congress of the United States as a
relief or famine fund, public works were undertaken to furnish employment
in the provinces where the need was most pressing, and every effort made
to alleviate the suffering incident to the widespread failure of the crops
throughout the Islands, due in large measure to the lack of animals fit for
agricultural work and draft purposes. chanroblesvirtualawlibrary chanrobles virtual law library

Such measures, however, could only temporarily relieve the situation,

because in an agricultural community material progress and permanent
prosperity could hardly be hoped for in the absence of the work animals
upon which such a community must necessarily rely for the cultivation of the
fields and the transportation of the products of the fields to market.
Accordingly efforts were made by the Government to increase the supply of
these animals by importation, but, as appears from the official reports on
this subject, hope for the future depended largely on the conservation of
those animals which had been spared from the ravages of the diseased, and
their redistribution throughout the Islands where the need for them was
greatest.chanroblesvirtualawlibrary chanrobles virtual law library

At large expense, the services of experts were employed, with a view to the
discovery and applications of preventive and curative remedies, and it is
hoped that these measures have proved in some degree successful in
protecting the present inadequate supply of large cattle, and that the
gradual increase and redistribution of these animals throughout the
Archipelago, in response to the operation of the laws of supply and demand,
will ultimately results in practically relieving those sections which suffered
most by the loss of their work animals. chanroblesvirtualawlibrary chanrobles virtual law library

As was to be expected under such conditions, the price of carabaos rapidly

increase from the three to five fold or more, and it may fairly be presumed
that even if the conservative measures now adopted prove entirely
successful, the scant supply will keep the price of these animals at a high
figure until the natural increase shall have more nearly equalized the supply
to the demand. chanroblesvirtualawlibrary chanrobles virtual law library

Coincident with and probably intimately connected with this sudden rise in
the price of cattle, the crime of cattle stealing became extremely prevalent
throughout the Islands, necessitating the enactment of a special law
penalizing with the severest penalties the theft of carabaos and other
personal property by roving bands; and it must be assumed from the
legislative authority found that the general welfare of the Islands
necessitated the enactment of special and somewhat burdensome provisions
for the branding and registration of large cattle, and supervision and
restriction of their slaughter for food. It will hardly be questioned that the
provisions of the statute touching the branding and registration of such
cattle, and prohibiting and penalizing the slaughter of diseased cattle for
food were enacted in the due and proper exercise of the police power of the
State; and we are of opinion that, under all the circumstances, the provision
of the statute prohibiting and penalizing the slaughter for human
consumption of carabaos fit for work were in like manner enacted in the due
and proper exercise of that power, justified by the exigent necessities of
existing conditions, and the right of the State to protect itself against the
overwhelming disaster incident to the further reduction of the supply of
animals fit for agricultural work or draft purposes. chanroblesvirtualawlibrary chanrobles virtual law library

It is, we think, a fact of common knowledge in these Islands, and disclosed

by the official reports and records of the administrative and legislative
departments of the Government, that not merely the material welfare and
future prosperity of this agricultural community were threatened by the
ravages of the disease which swept away the work animals during the years
prior to the enactment of the law under consideration, but that the very life
and existence of the inhabitants of these Islands as a civilized people would
be more or less imperiled by the continued destruction of large cattle by
disease or otherwise. Confronted by such conditions, there can be no doubt
of the right of the Legislature to adopt reasonable measures for the
preservation of work animals, even to the extent of prohibiting and
penalizing what would, under ordinary conditions, be a perfectly legitimate
and proper exercise of rights of ownership and control of the private
property of the citizen. The police power rests upon necessity and the right
of self-protection and if ever the invasion of private property by police
regulation can be justified, we think that the reasonable restriction placed
upon the use of carabaos by the provision of the law under discussion must
be held to be authorized as a reasonable and proper exercise of that
power. chanroblesvirtualawlibrary chanrobles virtual law library

As stated by Mr. Justice Brown in his opinion in the case of Lawton vs.
Steele (152 U.S., 133, 136):

The extent and limits of what is known as the police power have been a
fruitful subject of discussion in the appellate courts of nearly every State in
the Union. It is universally conceded to include everything essential to the
public safely, health, and morals, and to justify the destruction or
abatement, by summary proceedings, of whatever may be regarded as a
public nuisance. Under this power it has been held that the State may order
the destruction of a house falling to decay or otherwise endangering the
lives of passers-by; the demolition of such as are in the path of a
conflagration; the slaughter of diseased cattle; the destruction of decayed or
unwholesome food; the prohibition of wooden buildings in cities; the
regulation of railways and other means of public conveyance, and of
interments in burial grounds; the restriction of objectionable trades to
certain localities; the compulsary vaccination of children; the confinement of
the insane or those afficted with contagious deceases; the restraint of
vagrants, beggars, and habitual drunkards; the suppression of obscene
publications and houses of ill fame; and the prohibition of gambling houses
and places where intoxicating liquors are sold. Beyond this, however, the
State may interfere wherever the public interests demand it, and in this
particular a large discretion is necessarily vested in the legislature to
determine, not only what the interests of the public require, but what
measures are necessary for the protection of such interests. (Barbier vs.
Connolly, 113 U. S., 27; Kidd vs. Pearson, 128 U. S., 1.) To justify the State
in thus interposing its authority in behalf of the public, it must appear, first,
that the interests of the public generally, as distinguished from those of a
particular class, require such interference; and, second, that the means are
reasonably necessary for the accomplishment of the purpose, and not unduly
oppressive upon individuals. The legislature may not, under the guise of
protecting the public interests, arbitrarily interfere with private business, or
impose unusual and unnecessary restrictions upon lawful occupations. In
other words, its determination as to what is a proper exercise of its police
powers is not final or conclusive, but is subject to the supervision of the
court.

From what has been said, we think it is clear that the enactment of the
provisions of the statute under consideration was required by "the interests
of the public generally, as distinguished from those of a particular class;"
and that the prohibition of the slaughter of carabaos for human
consumption, so long as these animals are fit for agricultural work or draft
purposes was a "reasonably necessary" limitation on private ownership, to
protect the community from the loss of the services of such animals by their
slaughter by improvident owners, tempted either by greed of momentary
gain, or by a desire to enjoy the luxury of animal food, even when by so
doing the productive power of the community may be measurably and
dangerously affected. chanroblesvirtualawlibrary chanrobles virtual law library

Chief Justice Redfield, in Thorpe vs. Rutland & Burlington R. R. Co. (27 Vt.,
140), said (p. 149) that by this "general police power of the State, persons
and property are subjected to all kinds of restraints and burdens, in order to
secure the general comfort, health, and prosperity of the State; of the
perfect right in the legislature to do which no question ever was, or, upon
acknowledge and general principles, ever can be made, so far as natural
persons are concerned." chanrobles virtual law library

And Cooley in his "Constitutional Limitations" (6th ed., p. 738) says:

It would be quite impossible to enumerate all the instances in which the

police power is or may be exercised, because the various cases in which the
exercise by one individual of his rights may conflict with a similar exercise by
others, or may be detrimental to the public order or safety, are infinite in
number and in variety. And there are other cases where it becomes
necessary for the public authorities to interfere with the control by
individuals of their property, and even to destroy it, where the owners
themselves have fully observed all their duties to their fellows and to the
State, but where, nevertheless, some controlling public necessity demands
the interference or destruction. A strong instance of this description is where
it becomes necessary to take, use, or destroy the private property of
individuals to prevent the spreading of a fire, the ravages of a pestilence,
the advance of a hostile army, or any other great public calamity. Here the
individual is in no degree in fault, but his interest must yield to that
"necessity" which "knows no law." The establishment of limits within the
denser portions of cities and villages within which buildings constructed of
inflammable materials shall not be erected or repaired may also, in some
cases, be equivalent to a destruction of private property; but regulations for
this purpose have been sustained notwithstanding this result. Wharf lines
may also be established for the general good, even though they prevent the
owners of water-fronts from building out on soil which constitutes private
property. And, whenever the legislature deem it necessary to the protection
of a harbor to forbid the removal of stones, gravel, or sand from the beach,
they may establish regulations to that effect under penalties, and make
them applicable to the owners of the soil equally with other persons. Such
regulations are only "a just restraint of an injurious use of property, which
the legislature have authority" to impose. chanroblesvirtualawlibrary chanrobles virtual law library

So a particular use of property may sometimes be forbidden, where, by a

change of circumstances, and without the fault of the power, that which was
once lawful, proper, and unobjectionable has now become a public nuisance,
endangering the public health or the public safety. Milldams are sometimes
destroyed upon this grounds; and churchyards which prove, in the advance
of urban population, to be detrimental to the public health, or in danger of
becoming so, are liable to be closed against further use for cemetery
purposes.

These citations from some of the highest judicial and text-book authorities in
the United States clearly indicate the wide scope and extent which has there
been given to the doctrine us in our opinion that the provision of the statute
in question being a proper exercise of that power is not in violation of the
terms of section 5 of the Philippine Bill, which provide that "no law shall be
enacted which shall deprive any person of life, liberty, or property without
due process of law," a provision which itself is adopted from the Constitution
of the United States, and is found in substance in the constitution of most if
not all of the States of the Union. chanroblesvirtualawlibrary chanrobles virtual law library

The judgment of conviction and the sentence imposed by the trial court
should be affirmed with the costs of this instance against the appellant. So
ordered.

G.R. No. L-106528 December 21, 1993

PHILIPPINE COLUMBIAN ASSOCIATION, petitioner,

vs.
THE HONORABLE DOMINGO D. PANIS as Judge, Regional Trial Court of Manila, Branch 41,
THE HONORABLE RICARDO DIAZ, as Judge, Regional Trial Court of Manila, Branch 27, the
CITY OF MANILA, ANTONIO GONZALES, JR., KARLO BUTIONG, LEONARDO AQUINO,
EDILBERTO LOPEZ, ANTILANO FERRER, LEONCIA DAVILLO JAMERO, LUIS FERNANDEZ,
PATRICIO DE GUZMAN, RICARDO DE LEON, VIRGILIO TORNERO, FAUSTO FERNANDEZ,
DOMINGO MEREN, EDUARDA JACINTO, MAGDALENA VELEZ, LUSITO ALMADRONES,
MYRNA BARREDO EBREO, FULGENCIO CORSINO, PEDRO VELASQUEZ, JUAN INOBAYA,
NENITA ARCE, MAGNO ORTINEZ, ARMANDO PARAGAS, HIPOLITO ESTABILLO, FELICIANO
FAUSTINO, VIRGILIO EDIC, JOSE TINGZON, JOSUE MARIANO, MARIA YERO, MA. DOLORES
QUIZON, ISIDERO TAGUILIG, CIRIACO MENDOZA, JUAN ROMERO, JOSE LAGATA,
FRUCTUSO PUSING, TEOFILO TERSOL, ANTONIO LACHICA, PIO RAJALES, REGINA
VIERNES, JUAN ROMERO, DOMINGO EDIC, EDUARDA GONZALES, PABLO QUIRANTE,
LEONORA SANTIA, MARIA RIVERA, ELENA ARCE, LAZARO GOMEZ, PEDRO MENDOZA,
DOMINADOR ADAO, JUAN PANTERA, FRISCA MANDOT, SOCORRO SANTOS AND GLORIA
JEBUNAN, respondents.
Angara, Abello, Concepcion, Regala & Cruz for petitioner.

Dennis A. Padernal for private respondents.

City Legal Officer for respondent City of Manila.

QUIASON, J.:

This is an appeal by certiorari to review: (1) the decision of the Court of Appeals in CA-G.R. SP No.
23338, which dismissed the petition for certiorari filed by herein petitioner, assailing the orders of (a)
respondent Judge Domingo D. Panis of the Regional Trial Court, Branch 41, Manila, in Civil Case
No. 90-53531, and (b) respondent Judge Ricardo D. Diaz, of the Regional Trial Court, Branch 27,
Manila, in Civil Case No. 90-53346; and (2) its Resolution dated July 30, 1992, which denied the
motion for reconsideration of the decision.

Philippine Columbian Association, petitioner herein, is a non-stock, non-profit domestic corporation

and is engaged in the business of providing sports and recreational facilities for its members.
Petitioner's office and facilities are located in the District of Paco, Manila, and adjacent thereto, is a
parcel of land consisting of 4,842.90 square meters owned by petitioner.

Private respondents are the actual occupants of the said parcel of land, while respondents Antonio
Gonzales, Jr. and Karlo Butiong were duly-elected councilors of the City of Manila.

In 1982, petitioner instituted ejectment proceedings against herein private respondents before the
metropolitan Trial Court of Manila. Judgment was rendered against the said occupants, ordering
them to vacate the lot and pay reasonable compensation therefor. This judgment was affirmed by
the Regional Trial Court, the Court of Appeals and subsequently by the Supreme Court in G.R. No.
85262.

As a result of the favorable decision, petitioner filed before the Metropolitan Trial Court of Manila, a
motion for execution of judgment, which was granted on April 9, 1990. A writ of demolition was later
prayed and likewise issued by the same court on May 30, 1990.

On June 8, 1990, private respondents filed with the Regional Trial Court, Branch 27, Manila, a
petition for injunction and prohibition with preliminary injunction and restraining order against the
Metropolitan Trial Court of Manila and petitioner herein (Civil Case No. 90-53346) to enjoin their
ejectment from and the demolition of their houses on the premises in question.

On June 28, 1990, the City of Manila filed a complaint docketed as Civil Case No. 90-53531 against
petitioner before the Regional Trial Court, Branch 41, Manila, for the expropriation of the 4,842.90
square meter lot subject of the ejectment proceedings in Civil Case No. 90-53346. Petitioner, in turn,
filed a motion to dismiss the complaint, alleging, inter alia, that the City of Manila had no power to
expropriate private land; that the expropriation is not for public use and welfare; that the
expropriation is politically motivated; and, that the deposit of P2 million in the City of Manila
representing the provisional value of the land, was insufficient and was made under P.D. 1533, a law
declared unconstitutional by the Supreme Court.

On September 14, 1990, the Regional Trial Court, Branch 41, Manila, denied petitioner's motion to
dismiss and entered an order of condemnation declaring that the expropriation proceeding was
properly instituted in accordance with law. The Court also ordered the parties to submit, within five
days, the names of their respective nominees as commissioners to ascertain just compensation for
the land in question.

Petitioner filed a motion for reconsideration of the order denying its motion to dismiss, and later a
motion to defer compliance with the order directing the submission of the names of nominees to be
appointed commissioners. The City of Manila, however, filed an ex-parte motion for the issuance of
a writ of possession over the subject lot, mentioning the P2 million deposit with the Philippine
National Bank, representing the provisional value of the land.

In separate orders dated October 5 and 8, 1990, the court issued the writ of possession, and at the
same time, denied petitioner's motion to defer compliance and motion for reconsideration.

On September 21, 1990, as a result of the expropriation proceedings, the Regional Trial Court,
Branch 27, Manila, in Civil Case No. 90-53346 issued an order, granting the writ of preliminary
injunction prayed for by the private respondents. A motion for reconsideration filed by petitioner was
denied.

Petitioner filed before the Court of Appeals a petition before the Court of Appeals a petition assailing
the orders dated September 14, 1990, and October 5 and 8, 1990 of Branch 41 of the Regional Trial
Court, and the Order dated September 21, 1990 of Branch 27 of the same court (CA-G.R. SP No.
23338). The Court of Appeals rendered a Decision on November 31, 1992, denying the petition, and
a Resolution on July 30, 1992, denying consideration thereof.

Hence, this petition.

The land subject of this case is the 4,842.90 square meter lot, which was formerly a part of the Fabie
Estate. As early as November 11, 1966, the Municipal Board of the City of Manila passed Ordinance
No. 5971, seeking to expropriate the Fabie Estate. Through negotiated sales, the City of Manila
acquired a total of 18,017.10 square meters of the estate, and thereafter subdivided the land into
home lots and distributed the portions to the actual occupants thereof.

The remaining area of 4,842.90 square meters, more or less, was sold in 1977 by its owner, Dolores
Fabie-Posadas, to petitioner. Since the time of the sale, the lot has been occupied by private
respondents. On 23, 1989, the City Council of Manila, with the approval of the Mayor, passed
Ordinance No. 7704 for the expropriation of the 4,842.90 square meter lot.

Petitioner claims that expropriation of the lot cannot prosper because:

(1) the City of Manila has no specific power to expropriate private property under the 1987
Constitution; and (2) assuming that it has such power, this was exercised improperly and illegally in
violation of the Public use requirement and petitioner's right to due process.

Petitioner argues that under the 1987 Constitution, there must be a law expressly authorizing local
governments to undertake urban land reform (Art. XIII, Sec. 9).

Petitioner forgot that the Revised Charter of the City of Manila, R.A. No. 409, expressly authorizes
the City of Manila to "condemn private property for public use" (Sec. 3) and "to acquire private
land . . . and subdivide the same into home lots for sale on easy terms to city residents" (Sec. 100).

The Revised Charter of the City of Manila expressly grants the City of Manila general powers over its
territorial jurisdiction, including the power of eminent domain, thus:
 General powers. — The city may have a common seal and alter the same at
pleasure, and may take, purchase, receive, hold, lease, convey, and dispose of real
and personal property for the general interest of the city, condemn private property
for public use, contract and be contracted with, sue and be sued, and prosecute and
defend to final judgment and execution, and exercise all the powers hereinafter
conferred (R.A. 409, Sec. 3; Emphasis supplied).

Section 100 of said Revised Charter authorizes the City of Manila to undertake urban land reform,
thus:

Sec. 100. The City of Manila is authorized to acquire private lands in the city and to
subdivide the same into home lots for sale on easy terms for city residents, giving
first priority to the bona fide tenants or occupants of said lands, and second priority to
laborers and low-salaried employees. For the purpose of this section, the city may
raise the necessary funds by appropriations of general funds, by securing loans or by
issuing bonds, and, if necessary, may acquire the lands through expropriation
proceedings in accordance with law, with the approval of the President . . .
(Emphasis supplied).

The City of Manila, acting through its legislative branch, has the express power to acquire private
lands in the city and subdivide these lands into home lots for sale to bona fide tenants or occupants
thereof, and to laborers and low-salaried employees of the city. That only a few could actually benefit
from the expropriation of the property does not diminish its public use character. It is simply not
possible to provide all at once land and shelter for all who need them (Sumulong v. Guerrero, 154
SCRA 461 [1987] ).

Corollary to the expanded notion of public use, expropriation is not anymore confined to vast tracts
of land and landed estates (Province of Camarines Sur v. Court of Appeals, G.R. No. 103125, May
17, 1993; J.M. Tuason and Co., Inc. v. Land Tenure Administration, 31 SCRA 413 [1970] ). It is
therefore of no moment that the land sought to be expropriated in this case is less than half a
hectare only (Pulido v. Court of Appeals, 122 SCRA 63 [1983]).

Through the years, the public use requirement in eminent domain has evolved into a flexible
concept, influenced by changing conditions (Sumulong v. Guerrero, supra; Manotok v. National
Housing Authority, 150 SCRA 89 [1987]; Heirs of Juancho Ardona v. Reyes, 125 SCRA 220 [1983]).
Public use now includes the broader notion of indirect public benefit or advantage, including in
particular, urban land reform and housing.

This concept is specifically recognized in the 1987 Constitution which provides that:

xxx xxx xxx

The state shall, by law, and for the common good, undertake, in cooperation with the
private sector, a continuing program of urban land reform and housing which will
make available at affordable cost decent housing and basic services to
underprivileged and homeless citizens in urban centers and resettlement areas. It
shall also promote adequate employment opportunities to such citizens. In the
implementation of such program the State shall respect the rights of small property
owners (Art. XIII, Sec. 9; Emphasis supplied).

x x x           x x x          x x x
The due process requirement in the expropriation of subject lot has likewise been complied with.
Although the motion to dismiss filed by petitioner was not set for hearing as the court is required to
do (National Housing Authority v. Valenzuela, 159 SCRA 396 [1988]), it never questioned the lack of
hearing before the trial and appellate courts. It is only now before us that petitioner raises the issue
of due process.

Indeed, due process was afforded petitioner when it filed its motion for reconsideration of the trial
court's order, denying its motion to dismiss.

The Court of Appeals, in determining whether grave abuse of discretion was committed by
respondent courts, passed upon the very same issues raised by petitioner in its motion to dismiss,
which findings we uphold. Petitioner therefore cannot argue that it was denied its day in court.

The amount of P2 million representing the provisional value of the land is an amount not only fixed
by the court, but accepted by both parties. The fact remains that petitioner, albeit reluctantly, agreed
to said valuation and is therefore estopped from assailing the same. It must be remembered that the
valuation is merely provisional. The parties still have the second stage in the proceedings in the
proper court below to determine specifically the amount of just compensation to be paid the
landowner (Revised Rules of Court, Rule 67, Sec. 5; National Power Corporation v. Jocson, 206
SCRA 520 [1992] ).

WHEREFORE, the petition is DENIED for lack of merit.

SO ORDERED.

G.R. No. L-10572 December 21, 1915

FRANCIS A. CHURCHILL and STEWART TAIT, plaintiffs-appellees,

vs.
JAMES J. RAFFERTY, Collector of Internal Revenue, defendant-appellant.

Attorney-General Avanceña for appellant.

Aitken and DeSelms for appellees.

TRENT, J.:

The judgment appealed from in this case perpetually restrains and prohibits the defendant and his
deputies from collecting and enforcing against the plaintiffs and their property the annual tax
mentioned and described in subsection (b) of section 100 of Act No. 2339, effective July 1, 1914,
and from destroying or removing any sign, signboard, or billboard, the property of the plaintiffs, for
the sole reason that such sign, signboard, or billboard is, or may be, offensive to the sight; and
decrees the cancellation of the bond given by the plaintiffs to secure the issuance of the preliminary
injunction granted soon after the commencement of this action.

This case divides itself into two parts and gives rise to two main questions; (1) that relating to the
power of the court to restrain by injunction the collection of the tax complained of, and (2) that
relating to the validity of those provisions of subsection (b) of section 100 of Act No. 2339, conferring
power upon the Collector of Internal Revenue to remove any sign, signboard, or billboard upon the
ground that the same is offensive to the sight or is otherwise a nuisance.
The first question is one of the jurisdiction and is of vital importance to the Government. The sections
of Act No. 2339, which bear directly upon the subject, are 139 and 140. The first expressly forbids
the use of an injunction to stay the collection of any internal revenue tax; the second provides a
remedy for any wrong in connection with such taxes, and this remedy was intended to be exclusive,
thereby precluding the remedy by injunction, which remedy is claimed to be constitutional. The two
sections, then, involve the right of a dissatisfied taxpayers to use an exceptional remedy to test the
validity of any tax or to determine any other question connected therewith, and the question whether
the remedy by injunction is exceptional.

Preventive remedies of the courts are extraordinary and are not the usual remedies. The origin and
history of the writ of injunction show that it has always been regarded as an extraordinary, preventive
remedy, as distinguished from the common course of the law to redress evils after they have been
consummated. No injunction issues as of course, but is granted only upon the oath of a party and
when there is no adequate remedy at law. The Government does, by section 139 and 140, take
away the preventive remedy of injunction, if it ever existed, and leaves the taxpayer, in a contest with
it, the same ordinary remedial actions which prevail between citizen and citizen. The Attorney-
General, on behalf of the defendant, contends that there is no provisions of the paramount law which
prohibits such a course. While, on the other hand, counsel for plaintiffs urge that the two sections are
unconstitutional because (a) they attempt to deprive aggrieved taxpayers of all substantial remedy
for the protection of their property, thereby, in effect, depriving them of their property without due
process of law, and (b) they attempt to diminish the jurisdiction of the courts, as conferred upon them
by Acts Nos. 136 and 190, which jurisdiction was ratified and confirmed by the Act of Congress of
July 1, 1902.

In the first place, it has been suggested that section 139 does not apply to the tax in question
because the section, in speaking of a "tax," means only legal taxes; and that an illegal tax (the one
complained of) is not a tax, and, therefore, does not fall within the inhibition of the section, and may
be restrained by injunction. There is no force in this suggestion. The inhibition applies to all internal
revenue taxes imposes, or authorized to be imposed, by Act No. 2339. (Snyder vs. Marks, 109 U.S.,
189.) And, furthermore, the mere fact that a tax is illegal, or that the law, by virtue of which it is
imposed, is unconstitutional, does not authorize a court of equity to restrain its collection by
injunction. There must be a further showing that there are special circumstances which bring the
case under some well recognized head of equity jurisprudence, such as that irreparable injury,
multiplicity of suits, or a cloud upon title to real estate will result, and also that there is, as we have
indicated, no adequate remedy at law. This is the settled law in the United States, even in the
absence of statutory enactments such as sections 139 and 140. (Hannewinkle vs. Mayor, etc., of
Georgetown, 82 U.S., 547; Indiana Mfg. Co. vs. Koehne, 188 U.S., 681; Ohio Tax cases, 232 U. S.,
576, 587; Pittsburgh C. C. & St. L. R. Co. vs. Board of Public Works, 172 U. S., 32; Shelton vs. Plat,
139 U.S., 591; State Railroad Tax Cases, 92 U. S., 575.) Therefore, this branch of the case must be
controlled by sections 139 and 140, unless the same be held unconstitutional, and consequently,
null and void.

The right and power of judicial tribunals to declare whether enactments of the
legislature exceed the constitutional limitations and are invalid has always been
considered a grave responsibility, as well as a solemn duty. The courts invariably
give the most careful consideration to questions involving the interpretation and
application of the Constitution, and approach constitutional questions with great
deliberation, exercising their power in this respect with the greatest possible caution
and even reluctance; and they should never declare a statute void, unless its
invalidity is, in their judgment, beyond reasonable doubt. To justify a court in
pronouncing a legislative act unconstitutional, or a provision of a state constitution to
be in contravention of the Constitution of the United States, the case must be so
clear to be free from doubt, and the conflict of the statute with the constitution must
 be irreconcilable, because it is but a decent respect to the wisdom, the integrity, and
the patriotism of the legislative body by which any law is passed to presume in favor
of its validity until the contrary is shown beyond reasonable doubt. Therefore, in no
doubtful case will the judiciary pronounce a legislative act to be contrary to the
constitution. To doubt the constitutionality of a law is to resolve the doubt in favor of
its validity. (6 Ruling Case Law, secs. 71, 72, and 73, and cases cited therein.)

It is also the settled law in the United States that "due process of law" does not always require, in
respect to the Government, the same process that is required between citizens, though it generally
implies and includes regular allegations, opportunity to answer, and a trial according to some well
settled course of judicial proceedings. The case with which we are dealing is in point. A citizen's
property, both real and personal, may be taken, and usually is taken, by the government in payment
of its taxes without any judicial proceedings whatever. In this country, as well as in the United States,
the officer charged with the collection of taxes is authorized to seize and sell the property of
delinquent taxpayers without applying to the courts for assistance, and the constitutionality of the law
authorizing this procedure never has been seriously questioned. (City of Philadelphia vs. [Diehl] The
Collector, 5 Wall., 720; Nicholl vs. U.S., 7 Wall., 122, and cases cited.) This must necessarily be the
course, because it is upon taxation that the Government chiefly relies to obtain the means to carry
on its operations, and it is of the utmost importance that the modes adopted to enforce the collection
of the taxes levied should be summary and interfered with as little as possible. No government could
exist if every litigious man were permitted to delay the collection of its taxes. This principle of public
policy must be constantly borne in mind in determining cases such as the one under consideration.

With these principles to guide us, we will proceed to inquire whether there is any merit in the two
propositions insisted upon by counsel for the plaintiffs. Section 5 of the Philippine Bill provides: "That
no law shall be enacted in said Islands which shall deprive any person of life, liberty, or property
without due process of law, or deny to any person therein the equal protection of the law."

The origin and history of these provisions are well-known. They are found in substance in the
Constitution of the United States and in that of ever state in the Union.

Section 3224 of the Revised Statutes of the United States, effective since 1867, provides that: "No
suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any
court."

Section 139, with which we have been dealing, reads: "No court shall have authority to grant an
injunction to restrain the collection of any internal-revenue tax."

A comparison of these two sections show that they are essentially the same. Both expressly prohibit
the restraining of taxes by injunction. If the Supreme Court of the United States has clearly and
definitely held that the provisions of section 3224 do not violate the "due process of law" and "equal
protection of the law" clauses in the Constitution, we would be going too far to hold that section 139
violates those same provisions in the Philippine Bill. That the Supreme Court of the United States
has so held, cannot be doubted.

In Cheatham vs. United States (92 U.S., 85,89) which involved the validity of an income tax levied by
an act of Congress prior to the one in issue in the case of Pollock vs. Farmers' Loan & Trust Co.
(157 U.S., 429) the court, through Mr. Justice Miller, said: "If there existed in the courts, state or
National, any general power of impeding or controlling the collection of taxes, or relieving the
hardship incident to taxation, the very existence of the government might be placed in the power of a
hostile judiciary. (Dows vs. The City of Chicago, 11 Wall., 108.) While a free course of remonstrance
and appeal is allowed within the departments before the money is finally exacted, the General
Government has wisely made the payment of the tax claimed, whether of customs or of internal
revenue, a condition precedent to a resort to the courts by the party against whom the tax is
assessed. In the internal revenue branch it has further prescribed that no such suit shall be brought
until the remedy by appeal has been tried; and, if brought after this, it must be within six months after
the decision on the appeal. We regard this as a condition on which alone the government consents
to litigate the lawfulness of the original tax. It is not a hard condition. Few governments have
conceded such a right on any condition. If the compliance with this condition requires the party
aggrieved to pay the money, he must do it."

Again, in State Railroad Tax Cases (92 U.S., 575, 613), the court said: "That there might be no
misunderstanding of the universality of this principle, it was expressly enacted, in 1867, that "no suit
for the purpose of restraining the assessment or collection of any tax shall be maintained in any
court." (Rev, Stat., sec. 3224.) And though this was intended to apply alone to taxes levied by the
United States, it shows the sense of Congress of the evils to be feared if courts of justice could, in
any case, interfere with the process of collecting taxes on which the government depends for its
continued existence. It is a wise policy. It is founded in the simple philosophy derived from the
experience of ages, that the payment of taxes has to be enforced by summary and stringent means
against a reluctant and often adverse sentiment; and to do this successfully, other instrumentalities
and other modes of procedure are necessary, than those which belong to courts of justice."

And again, in Snyder vs. Marks (109 U.S., 189), the court said: "The remedy of a suit to recover
back the tax after it is paid is provided by statute, and a suit to restrain its collection is forbidden. The
remedy so given is exclusive, and no other remedy can be substituted for it. Such has been the
current of decisions in the Circuit Courts of the United States, and we are satisfied it is a correct view
of the law."itc-a1f

In the consideration of the plaintiffs' second proposition, we will attempt to show (1) that the
Philippine courts never have had, since the American occupation, the power to restrain by injunction
the collection of any tax imposed by the Insular Government for its own purpose and benefit, and (2)
that assuming that our courts had or have such power, this power has not been diminished or
curtailed by sections 139 and 140.

We will first review briefly the former and present systems of taxation. Upon the American
occupation of the Philippine, there was found a fairly complete system of taxation. This system was
continued in force by the military authorities, with but few changes, until the Civil Government
assumed charge of the subject. The principal sources of revenue under the Spanish regime were
derived from customs receipts, the so-called industrial taxes, the urbana taxes, the stamp tax, the
personal cedula tax, and the sale of the public domain. The industrial and urbana taxes constituted
practically an income tax of some 5 per cent on the net income of persons engaged in industrial and
commercial pursuits and on the income of owners of improved city property. The sale of stamped
paper and adhesive stamp tax. The cedula tax was a graduated tax, ranging from nothing up to
P37.50. The revenue derived from the sale of the public domain was not considered a tax. The
American authorities at once abolished the cedula tax, but later restored it in a modified form,
charging for each cedula twenty centavos, an amount which was supposed to be just sufficient to
cover the cost of issuance. The urbana tax was abolished by Act No. 223, effective September 6,
1901.

The "Municipal Code" (Act No. 82) and the Provincial Government Act (No. 83), both enacted in
1901, authorize municipal councils and provincial boards to impose an ad valorem tax on real estate.
The Municipal Code did not apply to the city of Manila. This city was given a special charter (Act No.
183), effective August 30, 1901; Under this charter the Municipal Board of Manila is authorized and
empowered to impose taxes upon real estate and, like municipal councils, to license and regulate
certain occupations. Customs matters were completely reorganized by Act No. 355, effective at the
port of Manila on February 7, 1902, and at other ports in the Philippine Islands the day after the
receipt of a certified copy of the Act. The Internal Revenue Law of 1904 (Act No. 1189), repealed all
existing laws, ordinances, etc., imposing taxes upon the persons, objects, or occupations taxed
under that act, and all industrial taxes and stamp taxes imposed under the Spanish regime were
eliminated, but the industrial tax was continued in force until January 1, 1905. This Internal Revenue
Law did not take away from municipal councils, provincial boards, and the Municipal Board of the
city of Manila the power to impose taxes upon real estate. This Act (No. 1189), with its amendments,
was repealed by Act No. 2339, an act "revising and consolidating the laws relative to internal
revenue."

Section 84 of Act No. 82 provides that "No court shall entertain any suit assailing the validity of a tax
assessed under this act until the taxpayer shall have paid, under protest, the taxes assessed against
him, . . . ."

This inhibition was inserted in section 17 of Act No. 83 and applies to taxes imposed by provincial
boards. The inhibition was not inserted in the Manila Charter until the passage of Act No. 1793,
effective October 12, 1907. Act No. 355 expressly makes the payment of the exactions claimed a
condition precedent to a resort to the courts by dissatisfied importers. Section 52 of Act No. 1189
provides "That no courts shall have authority to grant an injunction restraining the collection of any
taxes imposed by virtue of the provisions of this Act, but the remedy of the taxpayer who claims that
he is unjustly assessed or taxed shall be by payment under protest of the sum claimed from him by
the Collector of Internal Revenue and by action to recover back the sum claimed to have been
illegally collected."

Sections 139 and 140 of Act No. 2339 contain, as we have indicated, the same prohibition and
remedy. The result is that the courts have been expressly forbidden, in every act creating or
imposing taxes or imposts enacted by the legislative body of the Philippines since the American
occupation, to entertain any suit assailing the validity of any tax or impost thus imposed until the tax
shall have been paid under protest. The only taxes which have not been brought within the express
inhibition were those included in that part of the old Spanish system which completely disappeared
on or before January 1, 1905, and possibly the old customs duties which disappeared in February,
1902.

Section 56 of the Organic Act (No. 136), effective June 16, 1901, provides that "Courts of First
Instance shall have original jurisdiction:

x x x           x x x          x x x

2. In all civil actions which involve the ... legality of any tax, impost, or assessment, . .
..

x x x           x x x          x x x

7. Said courts and their judges, or any of them, shall have power to issue writs of
injunction, mandamus, certiorari, prohibition, quo warranto, and habeas corpus in
their respective provinces and districts, in the manner provided in the Code of Civil
Procedure.

The provisions of the Code of Civil Procedure (Act No. 190), effective October 1, 1901, which deals
with the subject of injunctions, are sections 162 to 172, inclusive. Injunctions, as here defined, are of
two kinds; preliminary and final. The former may be granted at any time after the commencement of
the action and before final judgment, and the latter at the termination of the trial as the relief or part
of the relief prayed for (sec. 162). Any judge of the Supreme Court may grant a preliminary injunction
in any action pending in that court or in any Court of First Instance. A preliminary injunction may also
be granted by a judge of the Court of First Instance in actions pending in his district in which he has
original jurisdiction (sec. 163). But such injunctions may be granted only when the complaint shows
facts entitling the plaintiff to the relief demanded (sec. 166), and before a final or permanent
injunction can be granted, it must appear upon the trial of the action that the plaintiff is entitled to
have commission or continuance of the acts complained of perpetually restrained (sec. 171). These
provisions authorize the institution in Courts of First Instance of what are known as "injunction suits,"
the sole object of which is to obtain the issuance of a final injunction. They also authorize the
granting of injunctions as aiders in ordinary civil actions. We have defined in Davesa vs. Arbes (13
Phil. Rep., 273), an injunction to be "A "special remedy" adopted in that code (Act 190) from
American practice, and originally borrowed from English legal procedure, which was there issued by
the authority and under the seal of a court of equity, and limited, as in other cases where equitable
relief is sought, to those cases where there is no "plain, adequate, and complete remedy at
law,"which will not be granted while the rights between the parties are undetermined, except in
extraordinary cases where material and irreparable injury will be done,"which cannot be
compensated in damages . . .

By paragraph 2 of section 56 of Act No. 136, supra, and the provisions of the various subsequent
Acts heretofore mentioned, the Insular Government has consented to litigate with aggrieved persons
the validity of any original tax or impost imposed by it on condition that this be done in ordinary civil
actions after the taxes or exactions shall have been paid. But it is said that paragraph 2 confers
original jurisdiction upon Courts of First Instance to hear and determine "all civil actions" which
involve the validity of any tax, impost or assessment, and that if the all-inclusive words "all" and "any"
be given their natural and unrestricted meaning, no action wherein that question is involved can
arise over which such courts do not have jurisdiction. (Barrameda vs. Moir, 25 Phil. Rep., 44.) This is
true. But the term "civil actions" had its well defined meaning at the time the paragraph was enacted.
The same legislative body which enacted paragraph 2 on June 16, 1901, had, just a few months
prior to that time, defined the only kind of action in which the legality of any tax imposed by it might
be assailed. (Sec. 84, Act 82, enacted January 31, 1901, and sec. 17, Act No. 83, enacted February
6, 1901.) That kind of action being payment of the tax under protest and an ordinary suit to recover
and no other, there can be no doubt that Courts of First Instance have jurisdiction over all such
actions. The subsequent legislation on the same subject shows clearly that the Commission, in
enacting paragraph 2, supra, did not intend to change or modify in any way section 84 of Act No. 82
and section 17 of Act No. 83, but, on the contrary, it was intended that "civil actions," mentioned in
said paragraph, should be understood to mean, in so far as testing the legality of taxes were
concerned, only those of the kind and character provided for in the two sections above mentioned. It
is also urged that the power to restrain by injunction the collection of taxes or imposts is conferred
upon Courts of First Instance by paragraph 7 of section 56, supra. This paragraph does empower
those courts to grant injunctions, both preliminary and final, in any civil action pending in their
districts, provided always, that the complaint shows facts entitling the plaintiff to the relief demanded.
Injunction suits, such as the one at bar, are "civil actions," but of a special or extraordinary character.
It cannot be said that the Commission intended to give a broader or different meaning to the word
"action," used in Chapter 9 of the Code of Civil Procedure in connection with injunctions, than it gave
to the same word found in paragraph 2 of section 56 of the Organic Act. The Insular Government, in
exercising the power conferred upon it by the Congress of the United States, has declared that the
citizens and residents of this country shall pay certain specified taxes and imposts. The power to tax
necessarily carries with it the power to collect the taxes. This being true, the weight of authority
supports the proposition that the Government may fix the conditions upon which it will consent to
litigate the validity of its original taxes. (Tennessee vs. Sneed, 96 U.S., 69.)
We must, therefore, conclude that paragraph 2 and 7 of section 56 of Act No. 136, construed in the
light of the prior and subsequent legislation to which we have referred, and the legislative and
judicial history of the same subject in the United States with which the Commission was familiar, do
not empower Courts of firs Instance to interfere by injunction with the collection of the taxes in
question in this case.1awphil.net

If we are in error as to the scope of paragraph 2 and 7, supra, and the Commission did intend to
confer the power upon the courts to restrain the collection of taxes, it does not necessarily follow that
this power or jurisdiction has been taken away by section 139 of Act No. 2339, for the reason that all
agree that an injunction will not issue in any case if there is an adequate remedy at law. The very
nature of the writ itself prevents its issuance under such circumstances. Legislation forbidding the
issuing of injunctions in such cases is unnecessary. So the only question to be here determined is
whether the remedy provided for in section 140 of Act No. 2339 is adequate. If it is, the writs which
form the basis of this appeal should not have been issued. If this is the correct view, the authority to
issue injunctions will not have been taken away by section 139, but rendered inoperative only by
reason of an adequate remedy having been made available.

The legislative body of the Philippine Islands has declared from the beginning (Act No. 82) that
payment under protest and suit to recover is an adequate remedy to test the legality of any tax or
impost, and that this remedy is exclusive. Can we say that the remedy is not adequate or that it is
not exclusive, or both? The plaintiffs in the case at bar are the first, in so far as we are aware, to
question either the adequacy or exclusiveness of this remedy. We will refer to a few cases in the
United States where statutes similar to sections 139 and 140 have been construed and applied.

In May, 1874, one Bloomstein presented a petition to the circuit court sitting in Nashville, Tennessee,
stating that his real and personal property had been assessed for state taxes in the year 1872 to the
amount of $132.60; that he tendered to the collector this amount in "funds receivable by law for such
purposes;" and that the collector refused to receive the same. He prayed for an alternative writ of
mandamus to compel the collector to receive the bills in payment for such taxes, or to show cause to
the contrary. To this petition the collector, in his answer, set up the defense that the petitioner's suit
was expressly prohibited by the Act of the General Assembly of the State of Tennessee, passed in
1873. The petition was dismissed and the relief prayed for refused. An appeal to the supreme court
of the State resulted in the affirmance of the judgment of the lower court. The case was then carried
to the Supreme Court of the United States (Tennessee vs. Sneed, 96 U. S., 69), where the judgment
was again affirmed.

The two sections of the Act of [March 21,] 1873, drawn in question in that cases, read as follows:

1. That in all cases in which an officer, charged by law with the collection of revenue
due the State, shall institute any proceeding, or take any steps for the collection of
the same, alleged or claimed to be due by said officer from any citizen, the party
against whom the proceeding or step is taken shall, if he conceives the same to be
unjust or illegal, or against any statute or clause of the Constitution of the State, pay
the same under protest; and, upon his making said payment, the officer or collector
shall pay such revenue into the State Treasury, giving notice at the time of payment
to the Comptroller that the same was paid under protest; and the party paying said
revenue may, at any time within thirty days after making said payment, and not
longer thereafter, sue the said officer having collected said sum, for the recovery
thereof. And the same may be tried in any court having the jurisdiction of the amount
and parties; and, if it be determined that the same was wrongfully collected, as not
being due from said party to the State, for any reason going to the merits of the
same, then the court trying the case may certify of record that the same was
 wrongfully paid and ought to be refunded; and thereupon the Comptroller shall issue
his warrant for the same, which shall be paid in preference to other claims on the
Treasury.

2. That there shall be no other remedy, in any case of the collection of revenue, or
attempt to collect revenue illegally, or attempt to collect revenue in funds only
receivable by said officer under the law, the same being other or different funds than
such as the tax payer may tender, or claim the right to pay, than that above provided;
and no writ for the prevention of the collection of any revenue claimed, or to hinder or
delay the collection of the same, shall in anywise issue, either injunction,
supersedeas, prohibition, or any other writ or process whatever; but in all cases in
which, for any reason, any person shall claim that the tax so collected was wrongfully
or illegally collected, the remedy for said party shall be as above provided, and in no
other manner."

In discussing the adequacy of the remedy provided by the Tennessee Legislature, as above set
forth, the Supreme Court of the United States, in the case just cited, said: "This remedy is simple
and effective. A suit at law to recover money unlawfully exacted is as speedy, as easily tried, and
less complicated than a proceeding by mandamus. ... In revenue cases, whether arising upon its
(United States) Internal Revenue Laws or those providing for the collection of duties upon foreign
imports, it (United States) adopts the rule prescribed by the State of Tennessee. It requires the
contestant to pay the amount as fixed by the Government, and gives him power to sue the collector,
and in such suit to test the legality of the tax. There is nothing illegal or even harsh in this. It is a wise
and reasonable precaution for the security of the Government."

Thomas C. Platt commenced an action in the Circuit Court of the United States for the Eastern
District of Tennessee to restrain the collection of a license tax from the company which he
represented. The defense was that sections 1 and 2 of the Act of 1873, supra, prohibited the
bringing of that suit. This case also reached the Supreme Court of the United States. (Shelton vs.
Platt, 139 U. 591.) In speaking of the inhibitory provisions of sections 1 and 2 of the Act of 1873, the
court said: "This Act has been sanctioned and applied by the Courts of Tennessee. (Nashville vs.
Smith, 86 Tenn., 213; Louisville & N. R. Co. vs. State, 8 Heisk., 663, 804.) It is, as counsel observe,
similar to the Act of Congress forbidding suit for the purpose of restraining the assessment or
collection of taxes under the Internal Revenue Laws, in respect to which this court held that the
remedy by suit to recover back the tax after payment, provided for by the Statute, was exclusive.
(Snyder vs. Marks, of this character has been called for by the embarrassments resulting from the
improvident employment of the writ of injunction in arresting the collection of the public revenue; and,
even in its absence, the strong arm of the court of chancery ought not to be interposed in that
direction except where resort to that court is grounded upon the settled principles which govern its
jurisdiction."

In Louisville & N.R. Co. vs. State (8 Heisk. [64 Tenn.], 663, 804), cited by the Supreme Court of the
United States in Shelton vs. Platt, supra, the court said: "It was urged that this statute (sections 1
and 2 of the Act of 1873, supra) is unconstitutional and void, as it deprives the citizen of the remedy
by certiorari, guaranteed by the organic law."

By the 10th section of the sixth article of the Constitution, [Tennessee] it is provided that: "The
judges or justices of inferior courts of law and equity shall have power in all civil cases to issue writs
of certiorari, to remove any cause, or the transcript of the record thereof, from any inferior jurisdiction
into such court of law, on sufficient cause, supported by oath or affirmation."

The court held the act valid as not being in conflict with these provisions of the State constitution.
In Eddy vs. The Township of Lee (73 Mich., 123), the complainants sought to enjoin the collection of
certain taxes for the year 1886. The defendants, in support of their demurrer, insisted that the
remedy by injunction had been taken away by section 107 of the Act of 1885, which section reads as
follows: "No injunction shall issue to stay proceedings for the assessment or collection of taxes
under this Act."

It was claimed by the complainants that the above quoted provisions of the Act of 1885 were
unconstitutional and void as being in conflict with article 6, sec. 8, of the Constitution, which provides
that: "The circuit courts shall have original jurisdiction in all matters, civil and criminal, not excepted
in this Constitution, and not prohibited by law. ... They shall also have power to issue writs of habeas
corpus, mandamus, injunction, quo warranto, certiorari, and other writs necessary to carry into effect
their orders, judgments, and decrees."

Mr. Justice Champlin, speaking for the court, said: "I have no doubt that the Legislature has the
constitutional authority, where it has provided a plain, adequate, and complete remedy at law to
recover back taxes illegally assessed and collected, to take away the remedy by injunction to
restrain their collection."

Section 9 of the Philippine Bill reads in part as follows: "That the Supreme Court and the Courts of
First Instance of the Philippine Islands shall possess and exercise jurisdiction as heretofore provided
and such additional jurisdiction as shall hereafter be prescribed by the Government of said Islands,
subject to the power of said Government to change the practice and method of procedure."

It will be seen that this section has not taken away from the Philippine Government the power to
change the practice and method of procedure. If sections 139 and 140, considered together, and this
must always be done, are nothing more than a mode of procedure, then it would seem that the
Legislature did not exceed its constitutional authority in enacting them. Conceding for the moment
that the duly authorized procedure for the determination of the validity of any tax, impost, or
assessment was by injunction suits and that this method was available to aggrieved taxpayers prior
to the passage of Act No. 2339, may the Legislature change this method of procedure? That the
Legislature has the power to do this, there can be no doubt, provided some other adequate remedy
is substituted in lieu thereof. In speaking of the modes of enforcing rights created by contracts, the
Supreme Court of the United States, in Tennessee vs. Sneed, supra, said: "The rule seems to be
that in modes of proceedings and of forms to enforce the contract the Legislature has the control,
and may enlarge, limit or alter them, provided that it does not deny a remedy, or so embarrass it with
conditions and restrictions as seriously to impair the value of the right."

In that case the petitioner urged that the Acts of 1873 were laws impairing the obligation of the
contract contained in the charter of the Bank of Tennessee, which contract was entered into with the
State in 1838. It was claimed that this was done by placing such impediments and obstructions in
the way of its enforcement, thereby so impairing the remedies as practically to render the obligation
of no value. In disposing of this contention, the court said: "If we assume that prior to 1873 the
relator had authority to prosecute his claim against the State by mandamus, and that by the statutes
of that year the further use of that form was prohibited to him, the question remains. whether an
effectual remedy was left to him or provided for him. We think the regulation of the statute gave him
an abundant means of enforcing such right as he possessed. It provided that he might pay his claim
to the collector under protest, giving notice thereof to the Comptroller of the Treasury; that at any
time within thirty days thereafter he might sue the officer making the collection; that the case should
be tried by any court having jurisdiction and, if found in favor of the plaintiff on the merits, the court
should certify that the same was wrongfully paid and ought to be refunded and the Comptroller
should thereupon issue his warrant therefor, which should be paid in preference to other claim on
the Treasury."
But great stress is laid upon the fact that the plaintiffs in the case under consideration are unable to
pay the taxes assessed against them and that if the law is enforced, they will be compelled to
suspend business. This point may be best answered by quoting from the case of Youngblood vs.
Sexton (32 Mich., 406), wherein Judge Cooley, speaking for the court, said: "But if this consideration
is sufficient to justify the transfer of a controversy from a court of law to a court of equity, then every
controversy where money is demanded may be made the subject of equitable cognizance. To
enforce against a dealer a promissory note may in some cases as effectually break up his business
as to collect from him a tax of equal amount. This is not what is known to the law as irreparable
injury. The courts have never recognized the consequences of the mere enforcement of a money
demand as falling within that category."

Certain specified sections of Act No. 2339 were amended by Act No. 2432, enacted December 23,
1914, effective January 1, 1915, by imposing increased and additional taxes. Act No. 2432 was
amended, were ratified by the Congress of the United States on March 4, 1915. The opposition
manifested against the taxes imposed by Acts Nos. 2339 and 2432 is a matter of local history. A
great many business men thought the taxes thus imposed were too high. If the collection of the new
taxes on signs, signboards, and billboards may be restrained, we see no well-founded reason why
injunctions cannot be granted restraining the collection of all or at least a number of the other
increased taxes. The fact that this may be done, shows the wisdom of the Legislature in denying the
use of the writ of injunction to restrain the collection of any tax imposed by the Acts. When this was
done, an equitable remedy was made available to all dissatisfied taxpayers.

The question now arises whether, the case being one of which the court below had no jurisdiction,
this court, on appeal, shall proceed to express an opinion upon the validity of provisions of
subsection (b) of section 100 of Act No. 2339, imposing the taxes complained of. As a general rule,
an opinion on the merits of a controversy ought to be declined when the court is powerless to give
the relief demanded. But it is claimed that this case is, in many particulars, exceptional. It is true that
it has been argued on the merits, and there is no reason for any suggestion or suspicion that it is not
a bona fide controversy. The legal points involved in the merits have been presented with force,
clearness, and great ability by the learned counsel of both sides. If the law assailed were still in
force, we would feel that an opinion on its validity would be justifiable, but, as the amendment
became effective on January 1, 1915, we think it advisable to proceed no further with this branch of
the case.

The next question arises in connection with the supplementary complaint, the object of which is to
enjoin the Collector of Internal Revenue from removing certain billboards, the property of the
plaintiffs located upon private lands in the Province of Rizal. The plaintiffs allege that the billboards
here in question "in no sense constitute a nuisance and are not deleterious to the health, morals, or
general welfare of the community, or of any persons." The defendant denies these allegations in his
answer and claims that after due investigation made upon the complaints of the British and German
Consuls, he "decided that the billboard complained of was and still is offensive to the sight, and is
otherwise a nuisance." The plaintiffs proved by Mr. Churchill that the "billboards were quite a
distance from the road and that they were strongly built, not dangerous to the safety of the people,
and contained no advertising matter which is filthy, indecent, or deleterious to the morals of the
community." The defendant presented no testimony upon this point. In the agreed statement of facts
submitted by the parties, the plaintiffs "admit that the billboards mentioned were and still are
offensive to the sight."

The pertinent provisions of subsection (b) of section 100 of Act No. 2339 read: "If after due
investigation the Collector of Internal Revenue shall decide that any sign, signboard, or billboard
displayed or exposed to public view is offensive to the sight or is otherwise a nuisance, he may by
summary order direct the removal of such sign, signboard, or billboard, and if same is not removed
within ten days after he has issued such order he my himself cause its removal, and the sign,
signboard, or billboard shall thereupon be forfeited to the Government, and the owner thereof
charged with the expenses of the removal so effected. When the sign, signboard, or billboard
ordered to be removed as herein provided shall not comply with the provisions of the general
regulations of the Collector of Internal Revenue, no rebate or refund shall be allowed for any portion
of a year for which the tax may have been paid. Otherwise, the Collector of Internal Revenue may in
his discretion make a proportionate refund of the tax for the portion of the year remaining for which
the taxes were paid. An appeal may be had from the order of the Collector of Internal Revenue to
the Secretary of Finance and Justice whose decision thereon shall be final."

The Attorney-General, on behalf of the defendant, says: "The question which the case presents
under this head for determination, resolves itself into this inquiry: Is the suppression of advertising
signs displayed or exposed to public view, which are admittedly offensive to the sight, conducive to
the public interest?"

And cunsel for the plaintiffs states the question thus: "We contend that that portion of section 100 of
Act No. 2339, empowering the Collector of Internal Revenue to remove billboards as nuisances, if
objectionable to the sight, is unconstitutional, as constituting a deprivation of property without due
process of law."

From the position taken by counsel for both sides, it is clear that our inquiry is limited to the question
whether the enactment assailed by the plaintiffs was a legitimate exercise of the police power of the
Government; for all property is held subject to that power.

As a consequence of the foregoing, all discussion and authorities cited, which go to the power of the
state to authorize administrative officers to find, as a fact, that legitimate trades, callings, and
businesses are, under certain circumstances, statutory nuisances, and whether the procedure
prescribed for this purpose is due process of law, are foreign to the issue here presented.

There can be no doubt that the exercise of the police power of the Philippine Government belongs to
the Legislature and that this power is limited only by the Acts of Congress and those fundamentals
principles which lie at the foundation of all republican forms of government. An Act of the Legislature
which is obviously and undoubtedly foreign to any of the purposes of the police power and interferes
with the ordinary enjoyment of property would, without doubt, be held to be invalid. But where the
Act is reasonably within a proper consideration of and care for the public health, safety, or comfort, it
should not be disturbed by the courts. The courts cannot substitute their own views for what is
proper in the premises for those of the Legislature. In Munn vs. Illinois (94 U.S., 113), the United
States Supreme Court states the rule thus: "If no state of circumstances could exist to justify such
statute, then we may declare this one void because in excess of the legislative power of this state;
but if it could, we must presume it did. Of the propriety of legislative interference, within the scope of
the legislative power, a legislature is the exclusive judge."

This rule very fully discussed and declared in Powell vs. Pennsylvania (127 U.S., 678) — "oleo-
margarine" case. (See also Crowley vs. Christensen, 137 U.S., 86, 87; Camfield vs. U.S., 167 U.S.,
518.) While the state may interfere wherever the public interests demand it, and in this particular a
large discretion is necessarily vested in the legislature to determine, not only what the interest of the
public require, but what measures are necessary for the protection of such interests; yet, its
determination in these matters is not final or conclusive, but is subject to the supervision of the
courts. (Lawton vs. Steele, 152 U.S., 133.) Can it be said judicially that signs, signboards, and
billboards, which are admittedly offensive to the sight, are not with the category of things which
interfere with the public safety, welfare, and comfort, and therefore beyond the reach of the police
power of the Philippine Government?
The numerous attempts which have been made to limit by definition the scope of the police power
are only interesting as illustrating its rapid extension within comparatively recent years to points
heretofore deemed entirely within the field of private liberty and property rights. Blackstone's
definition of the police power was as follows: "The due regulation and domestic order of the
kingdom, whereby the individuals of the state, like members of a well governed family, are bound to
conform their general behavior to the rules of propriety, good neigborhood, and good manners, to be
decent, industrious, and inoffensive in their respective stations." (Commentaries, vol. 4, p. 162.)

Chanceller Kent considered the police power the authority of the state "to regulate unwholesome
trades, slaughter houses, operations offensive to the senses." Chief Justice Shaw of Massachusetts
defined it as follows: "The power vested in the legislature by the constitution to make, ordain, and
establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with
penalties or without, not repugnant to the constitution, as they shall judge to be for the good and
welfare of the commonwealth, and of the subjects of the same." (Com. vs. Alger, 7 Cush., 53.)

In the case of Butchers' Union Slaughter-house, etc. Co. vs. Crescent City Live Stock Landing, etc.
Co. (111 U.S., 746), it was suggested that the public health and public morals are matters of
legislative concern of which the legislature cannot divest itself. (See State vs. Mountain Timber Co.
[1913], 75 Wash., 581, where these definitions are collated.)

In Champer vs. Greencastle (138 Ind., 339), it was said: "The police power of the State, so far, has
not received a full and complete definition. It may be said, however, to be the right of the State, or
state functionary, to prescribe regulations for the good order, peace, health, protection, comfort,
convenience and morals of the community, which do not ... violate any of the provisions of the
organic law." (Quoted with approval in Hopkins vs. Richmond [Va., 1915], 86 S.E., 139.)

In Com. vs. Plymouth Coal Co. ([1911] 232 Pa., 141), it was said: "The police power of the state is
difficult of definition, but it has been held by the courts to be the right to prescribe regulations for the
good order, peace, health, protection, comfort, convenience and morals of the community, which
does not encroach on a like power vested in congress or state legislatures by the federal
constitution, or does not violate the provisions of the organic law; and it has been expressly held that
the fourteenth amendment to the federal constitution was not designed to interfere with the exercise
of that power by the state."

In People vs. Brazee ([Mich., 1914], 149 N.W., 1053), it was said: "It [the police power] has for its
object the improvement of social and economic conditioned affecting the community at large and
collectively with a view to bring about "he greatest good of the greatest number."Courts have
consistently and wisely declined to set any fixed limitations upon subjects calling for the exercise of
this power. It is elastic and is exercised from time to time as varying social conditions demand
correction."

In 8 Cyc., 863, it is said: "Police power is the name given to that inherent sovereignty which it is the
right and duty of the government or its agents to exercise whenever public policy, in a broad sense,
demands, for the benefit of society at large, regulations to guard its morals, safety, health, order or to
insure in any respect such economic conditions as an advancing civilization of a high complex
character requires." (As quoted with approval in Stettler vs. O'Hara [1914], 69 Ore, 519.)

Finally, the Supreme Court of the United States has said in Noble State Bank vs. Haskell (219 U.S.
[1911], 575: "It may be said in a general way that the police power extends to all the great public
needs. It may be put forth in aid of what is sanctioned by usage, or held by the prevailing morality or
strong and preponderant opinion to be greatly and immediately necessary to the public welfare."
This statement, recent as it is, has been quoted with approval by several courts. (Cunningham vs.
Northwestern Imp. Co. [1911], 44 Mont., 180; State vs. Mountain Timber Co. [1913], 75 Wash., 581;
McDavid vs. Bank of Bay Minette [Ala., 1915], 69 Sou., 452; Hopkins vs. City of Richmond [Va.,
1915], 86 S.E., 139; State vs. Philipps [Miss. 1915], 67 Sou., 651.)

It was said in Com. vs. Alger (7 Cush., 53, 85), per Shaw, C.J., that: "It is much easier to perceive
and realize the existence and sources of this police power than to mark its boundaries, or to
prescribe limits to its exercise." In Stone vs. Mississippi (101 U.S., 814), it was said: "Many attempts
have been made in this court and elsewhere to define the police power, but never with entire
success. It is always easier to determine whether a particular case comes within the general scope
of the power, than to give an abstract definition of the power itself, which will be in all respects
accurate."

Other courts have held the same vow of efforts to evolve a satisfactory definition of the police power.
Manifestly, definitions which fail to anticipate cases properly within the scope of the police power are
deficient. It is necessary, therefore, to confine our discussion to the principle involved and determine
whether the cases as they come up are within that principle. The basic idea of civil polity in the
United States is that government should interfere with individual effort only to the extent necessary
to preserve a healthy social and economic condition of the country. State interference with the use of
private property may be exercised in three ways. First, through the power of taxation, second,
through the power of eminent domain, and third, through the police power. Buy the first method it is
assumed that the individual receives the equivalent of the tax in the form of protection and benefit he
receives from the government as such. By the second method he receives the market value of the
property taken from him. But under the third method the benefits he derived are only such as may
arise from the maintenance of a healthy economic standard of society and is often referred to as
damnum absque injuria. (Com. vs. Plymouth Coal Co. 232 Pa., 141; Bemis vs. Guirl Drainage Co.,
182 Ind., 36.) There was a time when state interference with the use of private property under the
guise of the police power was practically confined to the suppression of common nuisances. At the
present day, however, industry is organized along lines which make it possible for large
combinations of capital to profit at the expense of the socio-economic progress of the nation by
controlling prices and dictating to industrial workers wages and conditions of labor. Not only this but
the universal use of mechanical contrivances by producers and common carriers has enormously
increased the toll of human life and limb in the production and distribution of consumption goods. To
the extent that these businesses affect not only the public health, safety, and morals, but also the
general social and economic life of the nation, it has been and will continue to be necessary for the
state to interfere by regulation. By so doing, it is true that the enjoyment of private property is
interfered with in no small degree and in ways that would have been considered entirely
unnecessary in years gone by. The regulation of rates charged by common carriers, for instance, or
the limitation of hours of work in industrial establishments have only a very indirect bearing upon the
public health, safety, and morals, but do bear directly upon social and economic conditions. To
permit each individual unit of society to feel that his industry will bring a fair return; to see that his
work shall be done under conditions that will not either immediately or eventually ruin his health; to
prevent the artificial inflation of prices of the things which are necessary for his physical well being
are matters which the individual is no longer capable of attending to himself. It is within the province
of the police power to render assistance to the people to the extent that may be necessary to
safeguard these rights. Hence, laws providing for the regulation of wages and hours of labor of coal
miners (Rail & River Coal Co. vs. Taylor, 234 U.S., 224); requiring payment of employees of
railroads and other industrial concerns in legal tender and requiring salaries to be paid semimonthly
(Erie R.R. Co. vs. Williams, 233 U.S., 685); providing a maximum number of hours of labor for
women (Miller vs. Wilson, U.S. Sup. Ct. [Feb. 23, 1915], Adv. Opns., p. 342); prohibiting child labor
(Sturges & Burn vs. Beauchamp, 231 U.S., 320); restricting the hours of labor in public laundries (In
re Wong Wing, 167 Cal., 109); limiting hours of labor in industrial establishment generally (State vs.
Bunting, 71 Ore., 259); Sunday Closing Laws (State vs. Nicholls [Ore., 1915], 151 Pac., 473; People
vs. C. Klinck Packing Co. [N.Y., 1915], 108 N. E., 278; Hiller vs. State [Md., 1914], 92 Atl., 842; State
vs. Penny, 42 Mont., 118; City of Springfield vs. Richter, 257 Ill., 578, 580; State vs. Hondros [S.C.,
1915], 84 S.E., 781); have all been upheld as a valid exercise of the police power. Again, workmen's
compensation laws have been quite generally upheld. These statutes discard the common law
theory that employers are not liable for industrial accidents and make them responsible for all
accidents resulting from trade risks, it being considered that such accidents are a legitimate charge
against production and that the employer by controlling the prices of his product may shift the burden
to the community. Laws requiring state banks to join in establishing a depositors' guarantee fund
have also been upheld by the Federal Supreme Court in Noble State Bank vs. Haskell (219 U. S.,
104), and Assaria State Bank vs. Dolley (219 U.S., 121).

Offensive noises and smells have been for a long time considered susceptible of suppression in
thickly populated districts. Barring livery stables from such locations was approved of in Reinman vs.
Little Rock (U.S. Sup. Ct. [Apr. 5, 1915], U.S. Adv. Opns., p. 511). And a municipal ordinance was
recently upheld (People vs. Ericsson, 263 Ill., 368), which prohibited the location of garages within
two hundred feet of any hospital, church, or school, or in any block used exclusively for residential
purposes, unless the consent of the majority of the property owners be obtained. Such statutes as
these are usually upheld on the theory of safeguarding the public health. But we apprehend that in
point of fact they have little bearing upon the health of the normal person, but a great deal to do with
his physical comfort and convenience and not a little to do with his peace of mind. Without entering
into the realm of psychology, we think it quite demonstrable that sight is as valuable to a human
being as any of his other senses, and that the proper ministration to this sense conduces as much to
his contentment as the care bestowed upon the senses of hearing or smell, and probably as much
as both together. Objects may be offensive to the eye as well as to the nose or ear. Man's esthetic
feelings are constantly being appealed to through his sense of sight. Large investments have been
made in theaters and other forms of amusement, in paintings and spectacular displays, the success
of which depends in great part upon the appeal made through the sense of sight. Moving picture
shows could not possible without the sense of sight. Governments have spent millions on parks and
boulevards and other forms of civic beauty, the first aim of which is to appeal to the sense of sight.
Why, then, should the Government not interpose to protect from annoyance this most valuable of
man's senses as readily as to protect him from offensive noises and smells?

The advertising industry is a legitimate one. It is at the same time a cause and an effect of the great
industrial age through which the world is now passing. Millions are spent each year in this manner to
guide the consumer to the articles which he needs. The sense of sight is the primary essential to
advertising success. Billboard advertising, as it is now conducted, is a comparatively recent form of
advertising. It is conducted out of doors and along the arteries of travel, and compels attention by the
strategic locations of the boards, which obstruct the range of vision at points where travelers are
most likely to direct their eyes. Beautiful landscapes are marred or may not be seen at all by the
traveler because of the gaudy array of posters announcing a particular kind of breakfast food, or
underwear, the coming of a circus, an incomparable soap, nostrums or medicines for the curing of all
the ills to which the flesh is heir, etc. It is quite natural for people to protest against this indiscriminate
and wholesale use of the landscape by advertisers and the intrusion of tradesmen upon their hours
of leisure and relaxation from work. Outdoor life must lose much of its charm and pleasure if this
form of advertising is permitted to continue unhampered until it converts the streets and highways
into veritable canyons through which the world must travel in going to work or in search of outdoor
pleasure.

The success of billboard advertising depends not so much upon the use of private property as it
does upon the use of the channels of travel used by the general public. Suppose that the owner of
private property, who so vigorously objects to the restriction of this form of advertising, should
require the advertiser to paste his posters upon the billboards so that they would face the interior of
the property instead of the exterior. Billboard advertising would die a natural death if this were done,
and its real dependency not upon the unrestricted use of private property but upon the unrestricted
use of the public highways is at once apparent. Ostensibly located on private property, the real and
sole value of the billboard is its proximity to the public thoroughfares. Hence, we conceive that the
regulation of billboards and their restriction is not so much a regulation of private property as it is a
regulation of the use of the streets and other public thoroughfares.

We would not be understood as saying that billboard advertising is not a legitimate business any
more than we would say that a livery stable or an automobile garage is not. Even a billboard is more
sightly than piles of rubbish or an open sewer. But all these businesses are offensive to the senses
under certain conditions.

It has been urged against ministering to the sense of sight that tastes are so diversified that there is
no safe standard of legislation in this direction. We answer in the language of the Supreme Court in
Noble State Bank vs. Haskell (219 U.S., 104), and which has already been adopted by several state
courts (see supra), that "the prevailing morality or strong and preponderating opinion" demands such
legislation. The agitation against the unrestrained development of the billboard business has
produced results in nearly all the countries of Europe. (Ency. Britannica, vol. 1, pp. 237-240.) Many
drastic ordinances and state laws have been passed in the United States seeking to make the
business amenable to regulation. But their regulation in the United states is hampered by what we
conceive an unwarranted restriction upon the scope of the police power by the courts. If the police
power may be exercised to encourage a healthy social and economic condition in the country, and if
the comfort and convenience of the people are included within those subjects, everything which
encroaches upon such territory is amenable to the police power. A source of annoyance and
irritation to the public does not minister to the comfort and convenience of the public. And we are of
the opinion that the prevailing sentiment is manifestly against the erection of billboards which are
offensive to the sight.

We do not consider that we are in conflict with the decision in Eubank vs. Richmond (226 U.S., 137),
where a municipal ordinance establishing a building line to which property owners must conform was
held unconstitutional. As we have pointed out, billboard advertising is not so much a use of private
property as it is a use of the public thoroughfares. It derives its value to the power solely because the
posters are exposed to the public gaze. It may well be that the state may not require private property
owners to conform to a building line, but may prescribe the conditions under which they shall make
use of the adjoining streets and highways. Nor is the law in question to be held invalid as denying
equal protection of the laws. In Keokee Coke Co. vs. Taylor (234 U.S., 224), it was said: "It is more
pressed that the act discriminates unconstitutionally against certain classes. But while there are
differences of opinion as to the degree and kind of discrimination permitted by the Fourteenth
Amendment, it is established by repeated decisions that a statute aimed at what is deemed an evil,
and hitting it presumably where experience shows it to be most felt, is not to be upset by thinking up
and enumerating other instances to which it might have been applied equally well, so far as the court
can see. That is for the legislature to judge unless the case is very clear."

But we have not overlooked the fact that we are not in harmony with the highest courts of a number
of the states in the American Union upon this point. Those courts being of the opinion that statutes
which are prompted and inspired by esthetic considerations merely, having for their sole purpose the
promotion and gratification of the esthetic sense, and not the promotion or protection of the public
safety, the public peace and good order of society, must be held invalid and contrary to constitutional
provisions holding inviolate the rights of private property. Or, in other words, the police power cannot
interfere with private property rights for purely esthetic purposes. The courts, taking this view, rest
their decisions upon the proposition that the esthetic sense is disassociated entirely from any
relation to the public health, morals, comfort, or general welfare and is, therefore, beyond the police
power of the state. But we are of the opinion, as above indicated, that unsightly advertisements or
signs, signboards, or billboards which are offensive to the sight, are not disassociated from the
general welfare of the public. This is not establishing a new principle, but carrying a well recognized
principle to further application. (Fruend on Police Power, p. 166.)

For the foregoing reasons the judgment appealed from is hereby reversed and the action dismissed
upon the merits, with costs. So ordered.

G.R. No. 6295           September 1, 1911

THE UNITED STATES, plaintiff-appellee,

vs.
IGNACIO CARLOS, defendant-appellant.

A. D. Gibbs for appellant.

Acting Attorney-General Harvey for appellee.

PER CURIAM:

The information filed in this case is as follows:

The undersigned accuses Ignacio Carlos of the crime of theft, committed as follows:

That on, during, and between the 13th day of February, 1909, and the 3d day of March,
1910, in the city of Manila, Philippine Islands, the said Ignacio Carlos, with intent of gain and
without violence or intimidation against the person or force against the thing, did then and
there, willfully, unlawfully, and feloniously, take, steal , and carry away two thousand two
hundred and seventy-three (2,273) kilowatts of electric current, of the value of nine hundred
and nine (909) pesos and twenty (20) cents Philippine currency, the property of the Manila
Electric Railroad and Light Company, a corporation doing business in the Philippine Islands,
without the consent of the owner thereof; to the damage and prejudice of the said Manila
Electric Railroad and Light Company in the said sum of nine hundred and nine (909) pesos
and twenty (20) cents Philippine currency, equal to and equivalent of 4,546 pesetas
Philippine currency. All contrary to law.

(Sgd.) L. M. SOUTWORTH,
Prosecuting Attorney.

Subscribed and sworn to before me this 4th day of March, 1910, in the city of Manila,
Philippine Islands, by L. M. Southworth, prosecuting attorney for the city of Manila.

(Sgd.) CHARLES S. LOBINGIER,

Judge, First Instance.

A preliminary investigation has heretofore been conducted in this case, under my direction,
having examined the witness under oath, in accordance with the provisions of section 39 of
Act No. 183 of the Philippine Commission, as amended by section 2 of Act No. 612 of the
Philippine Commission.
 (Sgd) L. M. SOUTHWORTH,
Prosecuting Attorney.

Subscribed and sworn to before me this 4th day of March, 1910, in the city of Manila,
Philippine Islands, by L. M. Southworth, prosecuting attorney for the city of Manila.

(Sgd.) CHARLES LOBINGIER,

Judge, First Instance.

A warrant for the arrest of the defendant was issued by the Honorable J. C. Jenkins on the 4th of
March and placed in the hands of the sheriff. The sheriff's return shows that the defendant gave
bond for his appearance. On the 14th of the same month counsel for the defendant demurrer to the
complaint on the following grounds:

1 That the court has no jurisdiction over the person of the accused nor of the offense
charged because the accused has not been accorded a preliminary investigation or
examination as required by law and no court, magistrate, or other competent authority has
determined from a sworn complaint or evidence adduced that there is probable cause to
believe that a crime has been committed, or that this defendant has committed any crime.

2 That the facts charged do not constitute a public offense.

The demurrer was overruled on the same day and the defendant having refused to plead, a plea of
not guilty was entered by direction of the court for him and the trial proceeded.

After due consideration of all the proofs presented and the arguments of counsel the trial court found
the defendant guilty of the crime charged and sentenced him to one year eight months and twenty-
one days' presidio correccional, to indemnify the offended party, The Manila Electric Railroad and
Light Company, in the sum of P865.26, to the corresponding subsidiary imprisonment in case of
insolvency and to the payment of the costs. From this judgment the defendant appealed and makes
the following assignments of error:

I.

The court erred in overruling the objection of the accused to the jurisdiction of the court,
because he was not given a preliminary investigation as required by law, and in overruling
his demurrer for the same reason.

II.

The court erred in declaring the accused to be guilty, in view of the evidence submitted.

III.

The court erred in declaring that electrical energy may be stolen.

IV.

The court erred in not declaring that the plaintiff consented to the taking of the current.

V.
 The court erred in finding the accused guilty of more than one offense.

VI.

The court erred in condemning the accused to pay P865.26 to the electric company as
damages.

Exactly the same question as that raised in the first assignment of error, was after a through
examination and due consideration, decided adversely to appellant's contention in the case of U. S.
vs. Grant and Kennedy (18 Phil. Rep., 122). No sufficient reason is presented why we should not
follow the doctrine enunciated in that case.

The question raised in the second assignment of error is purely one fact. Upon this point the trial
court said:

For considerably more than a year previous to the filing of this complaint the accused had
been a consumer of electricity furnished by the Manila Electric Railroad and Light Company
for a building containing the residence of the accused and three other residences, and which
was equipped, according to the defendant's testimony, with thirty electric lights. On March
15, 1909, the representatives of the company, believing that more light was being used than
their meter showed, installed an additional meter (Exhibit A) on a pole outside of defendant's
house, and both it and the meter (Exhibit B) which had been previously installed in the house
were read on said date. Exhibit A read 218 kilowatt hours; Exhibit B, 745 kilowatt hours. On
March 3, 1910 each was read again, Exhibit A showing 2,718 kilowatt hours and Exhibit B,
968. It is undisputed that the current which supplied the house passed through both meters
and the city electrician testifies that each meter was tested on the date of the last reading
and was "in good condition." The result of this registration therefore is that while the outsider
meter (Exhibit A) showed a consumption in defendant's building of 2,500 kilowatt hours of
electricity, this inside meter (Exhibit B) showed but 223 kilowatt hours. In other words the
actual consumption, according to the outside meter, was more than ten times as great as
that registered by the one inside. Obviously this difference could not be due to normal
causes, for while the electrician called by the defense (Lanusa) testifies to the possibility of a
difference between two such meters, he places the extreme limit of such difference between
them 5 per cent. Here, as we have seen, the difference is more than 900 per cent. Besides,
according to the defendant's electrician, the outside meter should normally run faster, while
according to the test made in this case the inside meter (Exhibit B) ran the faster. The city
electrician also testifies that the electric current could have been deflected from the inside
meter by placing thereon a device known as a "jumper" connecting the two outside wires,
and there is other testimony that there were marks on the insulation of the meter Exhibit B
which showed the use of such a device. There is a further evidence that the consumption of
223 kilowatt hours, registered by the inside meter would not be a reasonable amount for the
number of lights installed in defendant's building during the period in question, and the
accused fails to explain why he should have had thirty lights installed if he needed but four or
five.

On the strength of this showing a search warrant was issued for the examination of
defendant's premises and was duly served by a police officer (Hartpence). He was
accompanied at the time by three employees of the Manila Electric Railroad and Light
Company, and he found there the accused, his wife and son, and perhaps one or two others.
There is a sharp conflict between the several spectators on some points but on one there is
no dispute. All agree that the "jumper" (Exhibit C) was found in a drawer of a small cabinet in
the room of defendant's house where the meter was installed and not more than 20 feet
 therefrom. In the absence of a satisfactory explanation this constituted possession on
defendant's part, and such possession, under the Code of Civil Procedure, section 334 (10),
raises the presumption that the accused was the owner of a device whose only use was to
deflect the current from the meter.

Is there any other "satisfactory explanation" of the "jumper's" presence? The only one sought
to be offered is the statement by the son of the accused, a boy of twelve years, that he saw
the "jumper" placed there by the witness Porter, an employee of the Light Company. The boy
is the only witness who so testifies and Porter himself squarely denies it. We can not agree
with counsel for the defense that the boy's interest in the outcome of this case is less than
that of the witness for the prosecution. It seems to us that his natural desire to shield his
father would far outweight any interest such an employee like Porter would have and which,
at most, would be merely pecuniary.

There is, however, one witness whom so far as appears, has no interest in the matter
whatsoever. This is officer Hartpence, who executed the search warrant. He testifies that
after inspecting other articles and places in the building as he and the other spectators,
including the accused, approached the cabinet in which the "jumper" was found, the officer's
attention was called to the defendant's appearance and the former noticed that the latter was
becoming nervous. Where the only two witnesses who are supposed to know anything of the
matter thus contradict each other this item of testimony by the officer is of more than ordinary
significance; for if, as the accused claims, the "jumper" was placed in the cabinet for the first
time by Porter there would be no occasion for any change of demeanor on the part of the
accused. We do not think that the officer's declination to wait until defendant should secure a
notary public shows bias. The presence of such an official was neither required nor
authorized by law and the very efficacy of a search depends upon its swiftness.

We must also agree with the prosecuting attorney that the attending circumstances do not
strengthen the story told by the boy; that the latter would have been likely to call out at the
time he saw the "jumper" being placed in the drawer, or at least directed his father's attention
to it immediately instead of waiting, as he says, until the latter was called by the officer.
Finally, to accept the boy's story we must believe that this company or its representatives
deliberately conspired not merely to lure the defendant into the commission of a crime but to
fasten upon him a crime which he did not commit and thus convict an innocent man by
perjured evidence. This is a much more serious charge than that contained in the complaint
and should be supported by very strong corroborating circumstances which we do not find
here. We are, accordingly, unable to consider as satisfactory defendant's explanation of the
"jumper's" presence.

The only alternative is the conclusion that the "jumper" was placed there by the accused or
by some one acting for him and that it was the instrument by which the current was deflected
from the matter Exhibit B and the Light Company deprived of its lawful compensation.

After a careful examination of the entire record we are satisfied beyond peradventure of a doubt that
the proofs presented fully support the facts as set forth in the foregoing finding.

Counsel for the appellant insists that the only corporeal property can be the subject of the crime of
larceny, and in the support of this proposition cites several authorities for the purpose of showing
that the only subjects of larceny are tangible, movable, chattels, something which could be taken in
possession and carried away, and which had some, although trifling, intrinsic value, and also to
show that electricity is an unknown force and can not be a subject of larceny.
In the U. S. vs. Genato (15 Phi. Rep., 170) the defendant, the owner of the store situated at No. 154
Escolta, Manila, was using a contrivance known as a "jumper" on the electric meter installed by the
Manila Electric Railroad and the Light Company. As a result of the use of this "jumper" the meter,
instead of making one revolution in every four seconds, registered one in seventy-seven seconds,
thereby reducing the current approximately 95 per cent. Genato was charged in the municipal court
with a violation of a certain ordinance of the city of Manila, and was sentenced to pay a fine of P200.
He appealed to the Court of First Instance, was again tried and sentenced to pay the same fine. An
appeal was taken from the judgment of the Court of First Instance to the Supreme Court on the
ground that the ordinance in question was null and void. It is true that the only question directly
presented was of the validity of the city ordinance. The court, after holding that said ordinance was
valid, said:

Even without them (ordinances), the right of ownership of electric current is secured by
articles 517 and 518 of the Penal Code; the application of these articles in case of
subtraction of gas, a fluid used for lighting, and in some respects resembling electricity, is
confirmed by the rule laid down in the decisions of the supreme court of Spain January 20,
1887, and April 1, 1897, construing and enforcing the provisions of articles 530 and 531 of
the penal code of that country, articles identical with articles 517 and 518 of the code in force
in these Islands.

Article 517 of the Penal Code above referred to reads as follows:

The following are guilty of larceny:

(1) Those who with intent of gain and without violence or intimidation against the person, or
force against things, shall take another's personal property without the owner's consent.

And article 518 fixes the penalty for larceny in proportion to the value of the personal property stolen.

It is true that electricity is no longer, as formerly, regarded by electricians as a fluid, but its
manifestation and effects, like those of gas, may be seen and felt. The true test of what is a proper
subject of larceny seems to be not whether the subject is corporeal, but whether it is capable of
appropriation by another than the owner.

It is well-settled that illuminating gas may be the subject of larceny, even in the absence of a statute
so providing. (Decisions of supreme court of Spain, January 20, 1887, and April 1, 1897, supra; also
(England) Queen vs. Firth, L. R. 1 C. C., 172, 11 Cox C. C., 234; Queen vs. White, 3 C. & K., 363, 6
Cox C. C., 213; Woods vs. People, 222 III., 293, 7 L. R. A., 520; Commonwealth vs. Shaw, 4 Allen
(Mass), 308; State vs. Wellman, 34 Minn., 221, N. W. Rep., 385, and 25 Cyc., p. 12, note 10.)

In the case of Commonwealth vs. Shaw, supra, the court, speaking through Chief Justice Bigelow,
said:

There is nothing in the nature of gas used for illuminating purposes which renders it
incapable of being feloniously taken and carried away. It is a valuable article of merchandise,
bought and sold like other personal property, susceptible of being severed from a mass or
larger quantity, and of being transported from place to place. In the present case it appears
that it was the property of the Boston Gas Light Company; that it was in their possession by
being confined in conduits and tubes which belonged to them, and that the defendant
severed a portion of that which was in the pipes of the company by taking it into her house
and there consuming it. All this being proved to have been done by her secretly and with
 intent to deprive the company of their property and to appropriate it to her own use, clearly
constitutes the crime of larceny.

Electricity, the same as gas, is a valuable article of merchandise, bought and sold like other personal
property and is capable of appropriation by another. So no error was committed by the trial court in
holding that electricity is a subject of larceny.

It is urged in support of the fourth assignment of error that if it be true that the appellant did
appropriate to his own use the electricity as charged he can not be held guilty of larceny for any part
of the electricity thus appropriated, after the first month, for the reason that the complaining party,
the Manila Electric Road and Light Company, knew of this misappropriation and consented thereto.

The outside meter was installed on March 15, 1909, and read 218 kilowatt hours. On the same day
the inside meter was read and showed 745 kilowatt hours. Both meters were again read on March 3,
1910, and the outside one showed 2,718 kilowatt hours while the one on the inside only showed
968, the difference in consumption during this time being 2,277 kilowatt hours. The taking of this
current continued over a period of one year, less twelve days. Assuming that the company read both
meters at the end of each month; that it knew the defendant was misappropriating the current to that
extent; and that t continued to furnish the current, thereby giving the defendant an opportunity to
continue the misppropriation, still, we think, that the defendant is criminally responsible for the taking
of the whole amount, 2,277 kilowatt hours. The company had a contract with the defendant to furnish
him with current for lighting purposes. It could not stop the misappropriation without cutting off the
current entirely. It could not reduce the current so as to just furnish sufficient for the lighting of two,
three, or five lights, as claimed by the defendant that he used during the most of this time, but the
current must always be sufficiently strong to furnish current for the thirty lights, at any time the
defendant desired to use them.

There is no pretense that the accused was solicited by the company or any one else to commit the
acts charged. At most there was a mere passive submission on the part of the company that the
current should be taken and no indication that it wished it to be taken, and no knowledge by the
defendant that the company wished him to take the current, and no mutual understanding between
the company and the defendant, and no measures of inducement of any kind were employed by the
company for the purpose of leading the defendant into temptation, and no preconcert whatever
between him and company. The original design to misappropriate this current was formed by the
defendant absolutely independent of any acts on the part of the company or its agents. It is true, no
doubt, as a general proposition, that larceny is not committed when the property is taken with the
consent of its owner. It may be difficult in some instances to determine whether certain acts
constitute, in law, such "consent." But under the facts in the case at bar it is not difficult to reach a
conclusion that the acts performed by the plaintiff company did not constitute a consent on its part
the defendant take its property. We have been unable to find a well considered case holding
contrary opinion under similar facts, but, there are numerous cases holding that such acts do not
constitute such consent as would relieve the taker of criminal responsibility. The fourth assignment
of error is, therefore, not well founded.

It is also contended that since the "jumper" was not used continuously, the defendant committed not
a single offense but a series of offenses. It is, no doubt, true that the defendant did not allow the
"jumper" to remain in place continuously for any number of days as the company inspected monthly
the inside meter. So the "jumper" was put on and taken off at least monthly, if not daily, in order to
avoid detection, and while the "jumper" was off the defendant was not misappropriating the current.
The complaint alleged that the defendant did on, during, and between the 13th day of February,
1909, and the 3d of March, 1910. willfully, unlawfully, and feloniously take, steal, and carry away
2,277 kilowatts of electric current of the value of P909. No demurrer was presented against this
complaint on the ground that more than one crime was charged. The Government had no
opportunity to amend or correct this error, if error at all. In the case of U. S. vs. Macaspac (12 Phil.
Rep., 26), the defendant received from one Joquina Punu the sum of P31.50, with the request to
deliver it to Marcelina Dy-Oco. The defendant called upon Marcelina, but instead of delivering the
said amount she asked Marcelina for P30 in the name of Joaquina who had in no way authorized
her to do so. Marcelina gave her P30, believing that Joaquina had sent for it. Counsel for the
defendant insisted that the complaint charged his client with two different crimes of estafa in violation
of section 11 of General Orders, No. 58. In disposing of this question this court said:

The said defect constitutes one of the dilatory pleas indicated by section 21, and the
accused ought to have raised the point before the trial began. Had this been done, the
complaint might have been amended in time, because it is merely a defect of form easily
remedied. . . . Inasmuch as in the first instance the accused did not make the corresponding
dilatory plea to the irregularity of the complaint, it must be understood that has waived such
objection, and is not now entitled to raise for the first time any question in reference thereto
when submitting to this court her assignment of errors. Apart from the fact that the defense
does not pretend that any of the essential rights of the accused have been injured, the
allegation of the defect above alluded to, which in any case would only affect form of the
complaint, can not justify a reversal of the judgment appealed from, according to the
provisions of section 10 of General Orders, No. 58.

In the case at bar it is not pointed out wherein any of the essential rights of the defendant have been
prejudiced by reason of the fact that the complaint covered the entire period. If twelve distinct and
separate complaints had been filed against the defendant, one for each month, the sum total of the
penalties imposed might have been very much greater than that imposed by the court in this case.
The covering of the entire period by one charge has been beneficial, if anything, and not prejudicial
to the rights of the defendant. The prosecuting attorney elected to cover the entire period with one
charge and the accused having been convicted for this offense, he can not again be prosecuted for
the stealing of the current at any time within that period. Then, again, we are of the opinion that the
charge was properly laid. The electricity was stolen from the same person, in the same manner, and
in the same place. It was substantially one continuous act, although the "jumper" might have been
removed and replaced daily or monthly. The defendant was moved by one impulse to appropriate to
his own use the current, and the means adopted by him for the taking of the current were in the
execution of a general fraudulent plan.

A person stole gas for the use of a manufactory by means of pipe, which drew off the gas
from the main without allowing it to pass through the meter. The gas from this pipe was burnt
every day, and turned off at night. The pipe was never closed at this junction with the main,
and consequently always remained full of gas. It was held, that if the pipe always remained
full, there was, in fact, a continuous taking of the gas and not a series of separate talkings. It
was held also that even if the pipe had not been kept full, the taking would have been
continuous, as it was substantially all one transaction. (Regina vs. Firth, L. R., 1 C. C., 172;
11 Cox C. C., 234. Cited on p. 758 of Wharton's Criminal Law, vol. 1, 10th ed.)

The value of the electricity taken by the defendant was found by the trial court to be P865.26. This
finding is fully in accordance with the evidence presented. So no error was committed in sentencing
the defendant to indemnify the company in this amount, or to suffer the corresponding subsidiary
imprisonment in case of insolvency.

The judgment being strictly in accordance with the law and the merits of the case, same is hereby
affirmed, with costs against the appellant.
G.R. No. 127876 December 17, 1999

ROXAS & CO., INC., petitioner,

vs.
THE HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN
REFORM, SECRETARY OF AGRARIAN REFORM, DAR REGIONAL DIRECTOR
FOR REGION IV, MUNICIPAL AGRARIAN REFORM OFFICER OF NASUGBU,
BATANGAS and DEPARTMENT OF AGRARIAN REFORM ADJUDICATION
BOARD, respondents.

PUNO, J.:

This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and the validity
of the acquisition of these haciendas by the government under Republic Act No. 6657, the
Comprehensive Agrarian Reform Law of 1988.

Petitioner Roxas & Co. is a domestic corporation and is the registered owner of three haciendas,
namely, Haciendas Palico, Banilad and Caylaway, all located in the Municipality of Nasugbu,
Batangas. Hacienda Palico is 1,024 hectares in area and is registered under Transfer Certificate
of Title (TCT) No. 985. This land is covered by Tax Declaration Nos. 0465, 0466, 0468, 0470,
0234 and 0354. Hacienda Banilad is 1,050 hectares in area, registered under TCT No. 924 and
covered by Tax Declaration Nos. 0236, 0237 and 0390. Hacienda Caylaway is 867.4571 hectares
in area and is registered under TCT Nos. T-44662, T-44663, T-44664 and T-44665.

The events of this case occurred during the incumbency of then President Corazon C. Aquino. In
February 1986, President Aquino issued Proclamation No. 3 promulgating a Provisional
Constitution. As head of the provisional government, the President exercised legislative power
"until a legislature is elected and convened under a new Constitution." In the exercise of this
1

legislative power, the President signed on July 22, 1987, Proclamation No. 131 instituting a
Comprehensive Agrarian Reform Program and Executive Order No. 229 providing the
mechanisms necessary to initially implement the program.

On July 27, 1987, the Congress of the Philippines formally convened and took over legislative
power from the President. This Congress passed Republic Act No. 6657, the Comprehensive
2

Agrarian Reform Law (CARL) of 1988. The Act was signed by the President on June 10, 1988
and took effect on June 15, 1988.

Before the law's effectivity, on May 6, 1988, petitioner filed with respondent DAR a voluntary
offer to sell Hacienda Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico
and Banilad were later placed under compulsory acquisition by respondent DAR in accordance
with the CARL.

Hacienda Palico
On September 29, 1989, respondent DAR, through respondent Municipal Agrarian Reform
Officer (MARO) of Nasugbu, Batangas, sent a notice entitled "Invitation to Parties" to petitioner.
The Invitation was addressed to "Jaime Pimentel, Hda. Administrator, Hda. Palico." Therein,
3

the MARO invited petitioner to a conference on October 6, 1989 at the DAR office in Nasugbu
to discuss the results of the DAR investigation of Hacienda Palico, which was "scheduled for
compulsory acquisition this year under the Comprehensive Agrarian Reform Program." 4

On October 25, 1989, the MARO completed three (3) Investigation Reports after investigation
and ocular inspection of the Hacienda. In the first Report, the MARO found that 270 hectares
under Tax Declaration Nos. 465, 466, 468 and 470 were "flat to undulating (0-8% slope)" and
actually occupied and cultivated by 34 tillers of sugarcane. In the second Report, the MARO
5

identified as "flat to undulating" approximately 339 hectares under Tax Declaration No. 0234
which also had several actual occupants and tillers of sugarcane; while in the third Report, the
6

MARO found approximately 75 hectare under Tax Declaration No. 0354 as "flat to undulating"
with 33 actual occupants and tillers also of sugarcane.
7

On October 27, 1989, a "Summary Investigation Report" was submitted and signed jointly by the
MARO, representatives of the Barangay Agrarian Reform Committee (BARC) and Land Bank
of the Philippines (LBP), and by the Provincial Agrarian Reform Officer (PARO). The Report
recommended that 333.0800 hectares of Hacienda Palico be subject to compulsory acquisition at
a value of P6,807,622.20. The following day, October 28, 1989, two (2) more Summary
8

Investigation Reports were submitted by the same officers and representatives. They
recommended that 270.0876 hectares and 75.3800 hectares be placed under compulsory
acquisition at a compensation of P8,109,739.00 and P2,188,195.47, respectively. 9

On December 12, 1989, respondent DAR through then Department Secretary Miriam D.
Santiago sent a "Notice of Acquisition" to petitioner. The Notice was addressed as follows:

Roxas y Cia, Limited

Soriano Bldg., Plaza Cervantes

Manila, Metro Manila. 10

Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were subject to
immediate acquisition and distribution by the government under the CARL; that based on the
DAR's valuation criteria, the government was offering compensation of P3.4 million for
333.0800 hectares; that whether this offer was to be accepted or rejected, petitioner was to
inform the Bureau of Land Acquisition and Distribution (BLAD) of the DAR; that in case of
petitioner's rejection or failure to reply within thirty days, respondent DAR shall conduct
summary administrative proceedings with notice to petitioner to determine just compensation for
the land; that if petitioner accepts respondent DAR's offer, or upon deposit of the compensation
with an accessible bank if it rejects the same, the DAR shall take immediate possession of the
land.11
Almost two years later, on September 26, 1991, the DAR Regional Director sent to the LBP
Land Valuation Manager three (3) separate Memoranda entitled "Request to Open Trust
Account." Each Memoranda requested that a trust account representing the valuation of three
portions of Hacienda Palico be opened in favor of the petitioner in view of the latter's rejection of
its offered value. 12

Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR for conversion of
Haciendas Palico and Banilad from agricultural to non-agricultural lands under the provisions of
the CARL. On July 14, 1993, petitioner sent a letter to the DAR Regional Director reiterating
13

its request for conversion of the two haciendas. 14

Despite petitioner's application for conversion, respondent DAR proceeded with the acquisition
of the two Haciendas. The LBP trust accounts as compensation for Hacienda Palico were
replaced by respondent DAR with cash and LBP bonds. On October 22, 1993, from the mother
15

title of TCT No. 985 of the Hacienda, respondent DAR registered Certificate of Land Ownership
Award (CLOA) No. 6654. On October 30, 1993, CLOA's were distributed to farmer
beneficiaries. 16

Hacienda Banilad

On August 23, 1989, respondent DAR, through respondent MARO of Nasugbu, Batangas, sent a
notice to petitioner addressed as follows:

Mr. Jaime Pimentel

Hacienda Administrator

Hacienda Banilad

Nasugbu, Batangas 17

The MARO informed Pimentel that Hacienda Banilad was subject to compulsory
acquisition under the CARL; that should petitioner wish to avail of the other schemes
such as Voluntary Offer to Sell or Voluntary Land Transfer, respondent DAR was willing
to provide assistance thereto. 18

On September 18, 1989, the MARO sent an "Invitation to Parties" again to Pimentel inviting the
latter to attend a conference on September 21, 1989 at the MARO Office in Nasugbu to discuss
the results of the MARO's investigation over Hacienda Banilad. 19

On September 21, 1989, the same day the conference was held, the MARO submitted two (2)
Reports. In his first Report, he found that approximately 709 hectares of land under Tax
Declaration Nos. 0237 and 0236 were "flat to undulating (0-8% slope)." On this area were
discovered 162 actual occupants and tillers of sugarcane. In the second Report, it was found
20

that approximately 235 hectares under Tax Declaration No. 0390 were "flat to undulating," on
which were 92 actual occupants and tillers of sugarcane. 21
The results of these Reports were discussed at the conference. Present in the conference were
representatives of the prospective farmer beneficiaries, the BARC, the LBP, and Jaime Pimentel
on behalf of the landowner. After the meeting, on the same day, September 21, 1989, a
22

Summary Investigation Report was submitted jointly by the MARO, representatives of the
BARC, LBP, and the PARO. They recommended that after ocular inspection of the property,
234.6498 hectares under Tax Declaration No. 0390 be subject to compulsory acquisition and
distribution by CLOA. The following day, September 22, 1989, a second Summary
23

Investigation was submitted by the same officers. They recommended that 737.2590 hectares
under Tax Declaration Nos. 0236 and 0237 be likewise placed under compulsory acquisition for
distribution.24

On December 12, 1989, respondent DAR, through the Department Secretary, sent to petitioner
two (2) separate "Notices of Acquisition" over Hacienda Banilad. These Notices were sent on the
same day as the Notice of Acquisition over Hacienda Palico. Unlike the Notice over Hacienda
Palico, however, the Notices over Hacienda Banilad were addressed to:

Roxas y Cia. Limited

7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.

Makati, Metro Manila. 25

Respondent DAR offered petitioner compensation of P15,108,995.52 for 729.4190

hectares and P4,428,496.00 for 234.6498 hectares. 26

On September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager a
"Request to Open Trust Account" in petitioner's name as compensation for 234.6493 hectares of
Hacienda Banilad. A second "Request to Open Trust Account" was sent on November 18, 1991
27

over 723.4130 hectares of said Hacienda. 28

On December 18, 1991, the LBP certified that the amounts of P4,428,496.40 and P21,234,468.78
in cash and LBP bonds had been earmarked as compensation for petitioner's land in Hacienda
Banilad.29

On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad.

Hacienda Caylaway

Hacienda Caylaway was voluntarily offered for sale to the government on May 6, 1988 before
the effectivity of the CARL. The Hacienda has a total area of 867.4571 hectares and is covered
by four (4) titles — TCT Nos. T-44662, T-44663, T-44664 and T-44665. On January 12, 1989,
respondent DAR, through the Regional Director for Region IV, sent to petitioner two (2)
separate Resolutions accepting petitioner's voluntary offer to sell Hacienda Caylaway,
particularly TCT Nos. T-44664 and T-44663. The Resolutions were addressed to:
30

Roxas & Company, Inc.

 7th Flr. Cacho-Gonzales Bldg.

Aguirre, Legaspi Village

Makati, M. M 31

On September 4, 1990, the DAR Regional Director issued two separate Memoranda to the LBP
Regional Manager requesting for the valuation of the land under TCT Nos. T-44664 and T-
44663. On the same day, respondent DAR, through the Regional Director, sent to petitioner a
32

"Notice of Acquisition" over 241.6777 hectares under TCT No. T-44664 and 533.8180 hectares
under TCT No. T-44663. Like the Resolutions of Acceptance, the Notice of Acquisition was
33

addressed to petitioner at its office in Makati, Metro Manila.

Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo J. Roxas, sent a letter
to the Secretary of respondent DAR withdrawing its VOS of Hacienda Caylaway. The
Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda
Caylaway from agricultural to non-agricultural. As a result, petitioner informed respondent DAR
that it was applying for conversion of Hacienda Caylaway from agricultural to other
uses.34

In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner that a
reclassification of the land would not exempt it from agrarian reform. Respondent Secretary also
denied petitioner's withdrawal of the VOS on the ground that withdrawal could only be based on
specific grounds such as unsuitability of the soil for agriculture, or if the slope of the land is over
18 degrees and that the land is undeveloped. 35

Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner
filed its application for conversion of both Haciendas Palico and Banilad. On July 14, 1993,
36

petitioner, through its President, Eduardo Roxas, reiterated its request to withdraw the VOS over
Hacienda Caylaway in light of the following:

1) Certification issued by Conrado I. Gonzales, Officer-in-Charge, Department of

Agriculture, Region 4, 4th Floor, ATI (BA) Bldg., Diliman, Quezon City dated
March 1, 1993 stating that the lands subject of referenced titles "are not feasible
and economically sound for further agricultural development.

2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas approving

the Zoning Ordinance reclassifying areas covered by the referenced titles to non-
agricultural which was enacted after extensive consultation with government
agencies, including [the Department of Agrarian Reform], and the requisite public
hearings.

3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated March

8, 1993 approving the Zoning Ordinance enacted by the Municipality of Nasugbu.
 4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the
Municipal Planning & Development, Coordinator and Deputized Zoning
Administrator addressed to Mrs. Alicia P. Logarta advising that the Municipality
of Nasugbu, Batangas has no objection to the conversion of the lands subject of
referenced titles to non-agricultural.37

On August 24, 1993 petitioner instituted Case No. N-0017-96-46 (BA) with respondent DAR
Adjudication Board (DARAB) praying for the cancellation of the CLOA's issued by respondent
DAR in the name of several persons. Petitioner alleged that the Municipality of Nasugbu, where
the haciendas are located, had been declared a tourist zone, that the land is not suitable for
agricultural production, and that the Sangguniang Bayan of Nasugbu had reclassified the land to
non-agricultural.

In a Resolution dated October 14, 1993, respondent DARAB held that the case involved the
prejudicial question of whether the property was subject to agrarian reform, hence, this question
should be submitted to the Office of the Secretary of Agrarian Reform for determination. 38

On October 29, 1993, petitioner filed with the Court of Appeals CA-G.R. SP No. 32484. It
questioned the expropriation of its properties under the CARL and the denial of due process in
the acquisition of its landholdings.

Meanwhile, the petition for conversion of the three haciendas was denied by the MARO on
November 8, 1993.

Petitioner's petition was dismissed by the Court of Appeals on April 28, 1994. Petitioner moved
39

for reconsideration but the motion was denied on January 17, 1997 by respondent court. 40

Hence, this recourse. Petitioner assigns the following errors:

A. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING

THAT PETITIONER'S CAUSE OF ACTION IS PREMATURE FOR FAILURE
TO EXHAUST ADMINISTRATIVE REMEDIES IN VIEW OF THE PATENT
ILLEGALITY OF THE RESPONDENTS' ACTS, THE IRREPARABLE
DAMAGE CAUSED BY SAID ILLEGAL ACTS, AND THE ABSENCE OF A
PLAIN, SPEEDY AND ADEQUATE REMEDY IN THE ORDINARY
COURSE OF LAW — ALL OF WHICH ARE EXCEPTIONS TO THE SAID
DOCTRINE.

B. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING

THAT PETITIONER'S LANDHOLDINGS ARE SUBJECT TO COVERAGE
UNDER THE COMPREHENSIVE AGRARIAN REFORM LAW, IN VIEW OF
THE UNDISPUTED FACT THAT PETITIONER'S LANDHOLDINGS HAVE
BEEN CONVERTED TO NON-AGRICULTURAL USES BY PRESIDENTIAL
PROCLAMATION NO. 1520 WHICH DECLARED THE MUNICIPALITY
NASUGBU, BATANGAS AS A TOURIST ZONE, AND THE ZONING
ORDINANCE OF THE MUNICIPALITY OF NASUGBU RE-CLASSIFYING
 CERTAIN PORTIONS OF PETITIONER'S LANDHOLDINGS AS NON-
AGRICULTURAL, BOTH OF WHICH PLACE SAID LANDHOLDINGS
OUTSIDE THE SCOPE OF AGRARIAN REFORM, OR AT THE VERY
LEAST ENTITLE PETITIONER TO APPLY FOR CONVERSION AS
CONCEDED BY RESPONDENT DAR.

C. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT

FAILED TO DECLARE THE PROCEEDINGS BEFORE RESPONDENT DAR
VOID FOR FAILURE TO OBSERVE DUE PROCESS, CONSIDERING THAT
RESPONDENTS BLATANTLY DISREGARDED THE PROCEDURE FOR
THE ACQUISITION OF PRIVATE LANDS UNDER R.A. 6657, MORE
PARTICULARLY, IN FAILING TO GIVE DUE NOTICE TO THE
PETITIONER AND TO PROPERLY IDENTIFY THE SPECIFIC AREAS
SOUGHT TO BE ACQUIRED.

D. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT

FAILED TO RECOGNIZE THAT PETITIONER WAS BRAZENLY AND
ILLEGALLY DEPRIVED OF ITS PROPERTY WITHOUT JUST
COMPENSATION, CONSIDERING THAT PETITIONER WAS NOT PAID
JUST COMPENSATION BEFORE IT WAS UNCEREMONIOUSLY
STRIPPED OF ITS LANDHOLDINGS THROUGH THE ISSUANCE OF
CLOA'S TO ALLEGED FARMER BENEFICIARIES, IN VIOLATION OF R.A.
6657. 41

The assigned errors involve three (3) principal issues: (1) whether this Court can take cognizance
of this petition despite petitioner's failure to exhaust administrative remedies; (2) whether the
acquisition proceedings over the three haciendas were valid and in accordance with law; and (3)
assuming the haciendas may be reclassified from agricultural to non-agricultural, whether this
court has the power to rule on this issue.

I. Exhaustion of Administrative Remedies.

In its first assigned error, petitioner claims that respondent Court of Appeals gravely erred in
finding that petitioner failed to exhaust administrative remedies. As a general rule, before a party
may be allowed to invoke the jurisdiction of the courts of justice, he is expected to have
exhausted all means of administrative redress. This is not absolute, however. There are instances
when judicial action may be resorted to immediately. Among these exceptions are: (1) when the
question raised is purely legal; (2) when the administrative body is in estoppel; (3) when the act
complained of is patently illegal; (4) when there is urgent need for judicial intervention; (5) when
the respondent acted in disregard of due process; (6) when the respondent is a department
secretary whose acts, as an alter ego of the President, bear the implied or assumed approval of
the latter; (7) when irreparable damage will be suffered; (8) when there is no other plain, speedy
and adequate remedy; (9) when strong public interest is involved; (10) when the subject of the
controversy is private land; and (11) in quo warranto proceedings. 42
Petitioner rightly sought immediate redress in the courts. There was a violation of its rights and
to require it to exhaust administrative remedies before the DAR itself was not a plain, speedy and
adequate remedy.

Respondent DAR issued Certificates of Land Ownership Award (CLOA's) to farmer

beneficiaries over portions of petitioner's land without just compensation to petitioner. A
Certificate of Land Ownership Award (CLOA) is evidence of ownership of land by a beneficiary
under R.A. 6657, the Comprehensive Agrarian Reform Law of 1988. Before this may be
43

awarded to a farmer beneficiary, the land must first be acquired by the State from the landowner
and ownership transferred to the former. The transfer of possession and ownership of the land to
the government are conditioned upon the receipt by the landowner of the corresponding payment
or deposit by the DAR of the compensation with an accessible bank. Until then, title remains
with the landowner. There was no receipt by petitioner of any compensation for any of the
44

lands acquired by the government.

The kind of compensation to be paid the landowner is also specific. The law provides that the
deposit must be made only in "cash" or "LBP bonds." Respondent DAR's opening of trust
45

account deposits in petitioner' s name with the Land Bank of the Philippines does not constitute
payment under the law. Trust account deposits are not cash or LBP bonds. The replacement of
the trust account with cash or LBP bonds did not ipso facto cure the lack of compensation; for
essentially, the determination of this compensation was marred by lack of due process. In fact, in
the entire acquisition proceedings, respondent DAR disregarded the basic requirements of
administrative due process. Under these circumstances, the issuance of the CLOA's to farmer
beneficiaries necessitated immediate judicial action on the part of the petitioner.

II. The Validity of the Acquisition Proceedings Over the Haciendas.

Petitioner's allegation of lack of due process goes into the validity of the acquisition proceedings
themselves. Before we rule on this matter, however, there is need to lay down the procedure in
the acquisition of private lands under the provisions of the law.

A. Modes of Acquisition of Land under R. A. 6657

Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL), provides for
two (2) modes of acquisition of private land: compulsory and voluntary. The procedure for the
compulsory acquisition of private lands is set forth in Section 16 of R.A. 6657, viz:

Sec. 16. Procedure for Acquisition of Private Lands. — For purposes of

acquisition of private lands, the following procedures shall be followed:

a). After having identified the land, the landowners and the
beneficiaries, the DAR shall send its notice to acquire the land to
the owners thereof, by personal delivery or registered mail, and
post the same in a conspicuous place in the municipal building and
barangay hall of the place where the property is located. Said
notice shall contain the offer of the DAR to pay a corresponding
 value in accordance with the valuation set forth in Sections 17, 18,
and other pertinent provisions hereof.

b) Within thirty (30) days from the date of receipt of written notice
by personal delivery or registered mail, the landowner, his
administrator or representative shall inform the DAR of his
acceptance or rejection of the offer.

c) If the landowner accepts the offer of the DAR, the LBP shall
pay the landowner the purchase price of the land within thirty (30)
days after he executes and delivers a deed of transfer in favor of
the Government and surrenders the Certificate of Title and other
muniments of title.

d) In case of rejection or failure to reply, the DAR shall conduct

summary administrative proceedings to determine the
compensation for the land requiring the landowner, the LBP and
other interested parties to submit evidence as to the just
compensation for the land, within fifteen (15) days from receipt of
the notice. After the expiration of the above period, the matter is
deemed submitted for decision. The DAR shall decide the case
within thirty (30) days after it is submitted for decision.

e) Upon receipt by the landowner of the corresponding payment,

or, in case of rejection or no response from the landowner, upon
the deposit with an accessible bank designated by the DAR of the
compensation in cash or in LBP bonds in accordance with this Act,
the DAR shall take immediate possession of the land and shall
request the proper Register of Deeds to issue a Transfer Certificate
of Title (TCT) in the name of the Republic of the Philippines. The
DAR shall thereafter proceed with the redistribution of the land to
the qualified beneficiaries.

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

In the compulsory acquisition of private lands, the landholding, the landowners and the farmer
beneficiaries must first be identified. After identification, the DAR shall send a Notice of
Acquisition to the landowner, by personal delivery or registered mail, and post it in a
conspicuous place in the municipal building and barangay hall of the place where the property is
located. Within thirty days from receipt of the Notice of Acquisition, the landowner, his
administrator or representative shall inform the DAR of his acceptance or rejection of the offer.
If the landowner accepts, he executes and delivers a deed of transfer in favor of the government
and surrenders the certificate of title. Within thirty days from the execution of the deed of
transfer, the Land Bank of the Philippines (LBP) pays the owner the purchase price. If the
landowner rejects the DAR's offer or fails to make a reply, the DAR conducts summary
administrative proceedings to determine just compensation for the land. The landowner, the LBP
representative and other interested parties may submit evidence on just compensation within
fifteen days from notice. Within thirty days from submission, the DAR shall decide the case and
inform the owner of its decision and the amount of just compensation. Upon receipt by the owner
of the corresponding payment, or, in case of rejection or lack of response from the latter, the
DAR shall deposit the compensation in cash or in LBP bonds with an accessible bank. The DAR
shall immediately take possession of the land and cause the issuance of a transfer certificate of
title in the name of the Republic of the Philippines. The land shall then be redistributed to the
farmer beneficiaries. Any party may question the decision of the DAR in the regular courts for
final determination of just compensation.

The DAR has made compulsory acquisition the priority mode of the land acquisition to hasten
the implementation of the Comprehensive Agrarian Reform Program (CARP). Under Section
46

16 of the CARL, the first step in compulsory acquisition is the identification of the land, the
landowners and the beneficiaries. However, the law is silent on how the identification process
must be made. To fill in this gap, the DAR issued on July 26, 1989 Administrative Order No. 12,
Series or 1989, which set the operating procedure in the identification of such lands. The
procedure is as follows:

II. OPERATING PROCEDURE

A. The Municipal Agrarian Reform Officer, with the assistance of the pertinent
Barangay Agrarian Reform Committee (BARC), shall:

1. Update the masterlist of all agricultural lands covered under the

CARP in his area of responsibility. The masterlist shall include
such information as required under the attached CARP Masterlist
Form which shall include the name of the landowner, landholding
area, TCT/OCT number, and tax declaration number.

2. Prepare a Compulsory Acquisition Case Folder (CACF) for each

title (OCT/TCT) or landholding covered under Phase I and II of
the CARP except those for which the landowners have already
filed applications to avail of other modes of land acquisition. A
case folder shall contain the following duly accomplished forms:

a) CARP CA Form 1 — MARO Investigation

Report

b) CARP CA Form 2 — Summary Investigation

Report of Findings and Evaluation

c) CARP CA Form 3 — Applicant's Information

Sheet
 d) CARP CA Form 4 — Beneficiaries Undertaking

e) CARP CA Form 5 — Transmittal Report to the

PARO

The MARO/BARC shall certify that all information contained in

the above-mentioned forms have been examined and verified by
him and that the same are true and correct.

3. Send a Notice of Coverage and a letter of invitation to a

conference/meeting to the landowner covered by the Compulsory
Case Acquisition Folder. Invitations to the said
conference/meeting shall also be sent to the prospective farmer-
beneficiaries, the BARC representative(s), the Land Bank of the
Philippines (LBP) representative, and other interested parties to
discuss the inputs to the valuation of the property. He shall discuss
the MARO/BARC investigation report and solicit the views,
objection, agreements or suggestions of the participants thereon.
The landowner shall also be asked to indicate his retention area.
The minutes of the meeting shall be signed by all participants in
the conference and shall form an integral part of the CACF.

4. Submit all completed case folders to the Provincial Agrarian

Reform Officer (PARO).

B. The PARO shall:

1. Ensure that the individual case folders are forwarded to him by

his MAROs.

2. Immediately upon receipt of a case folder, compute the

valuation of the land in accordance with A.O. No. 6, Series of
1988. The valuation worksheet and the related CACF valuation
47

forms shall be duly certified correct by the PARO and all the
personnel who participated in the accomplishment of these forms.

3. In all cases, the PARO may validate the report of the MARO
through ocular inspection and verification of the property. This
ocular inspection and verification shall be mandatory when the
computed value exceeds = 500,000 per estate.

4. Upon determination of the valuation, forward the case folder,

together with the duly accomplished valuation forms and his
recommendations, to the Central Office. The LBP representative
and the MARO concerned shall be furnished a copy each of his
report.
 C. DAR Central Office, specifically through the Bureau of Land
Acquisition and Distribution (BLAD), shall:

1. Within three days from receipt of the case folder from the
PARO, review, evaluate and determine the final land valuation of
the property covered by the case folder. A summary review and
evaluation report shall be prepared and duly certified by the BLAD
Director and the personnel directly participating in the review and
final valuation.

2. Prepare, for the signature of the Secretary or her duly authorized

representative, a Notice of Acquisition (CARP CA Form 8) for the
subject property. Serve the Notice to the landowner personally or
through registered mail within three days from its approval. The
Notice shall include, among others, the area subject of compulsory
acquisition, and the amount of just compensation offered by DAR.

3. Should the landowner accept the DAR's offered value, the

BLAD shall prepare and submit to the Secretary for approval the
Order of Acquisition. However, in case of rejection or non-reply,
the DAR Adjudication Board (DARAB) shall conduct a summary
administrative hearing to determine just compensation, in
accordance with the procedures provided under Administrative
Order No. 13, Series of 1989. Immediately upon receipt of the
DARAB's decision on just compensation, the BLAD shall prepare
and submit to the Secretary for approval the required Order of
Acquisition.

4. Upon the landowner's receipt of payment, in case of acceptance,

or upon deposit of payment in the designated bank, in case of
rejection or non-response, the Secretary shall immediately direct
the pertinent Register of Deeds to issue the corresponding Transfer
Certificate of Title (TCT) in the name of the Republic of the
Philippines. Once the property is transferred, the DAR, through the
PARO, shall take possession of the land for redistribution to
qualified beneficiaries.

Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform
Officer (MARO) keep an updated master list of all agricultural lands under the CARP in his area
of responsibility containing all the required information. The MARO prepares a Compulsory
Acquisition Case Folder (CACF) for each title covered by CARP. The MARO then sends the
landowner a "Notice of Coverage" and a "letter of invitation" to a "conference/meeting" over the
land covered by the CACF. He also sends invitations to the prospective farmer-beneficiaries the
representatives of the Barangay Agrarian Reform Committee (BARC), the Land Bank of the
Philippines (LBP) and other interested parties to discuss the inputs to the valuation of the
property and solicit views, suggestions, objections or agreements of the parties. At the meeting,
the landowner is asked to indicate his retention area.

The MARO shall make a report of the case to the Provincial Agrarian Reform Officer (PARO)
who shall complete the valuation of the land. Ocular inspection and verification of the property
by the PARO shall be mandatory when the computed value of the estate exceeds P500,000.00.
Upon determination of the valuation, the PARO shall forward all papers together with his
recommendation to the Central Office of the DAR. The DAR Central Office, specifically, the
Bureau of Land Acquisition and Distribution (BLAD), shall review, evaluate and determine the
final land valuation of the property. The BLAD shall prepare, on the signature of the Secretary or
his duly authorized representative, a Notice of Acquisition for the subject property. From this
48

point, the provisions of Section 16 of R.A. 6657 then apply. 49

For a valid implementation of the CAR program, two notices are required: (1) the Notice of
Coverage and letter of invitation to a preliminary conference sent to the landowner, the
representatives of the BARC, LBP, farmer beneficiaries and other interested parties pursuant to
DAR A.O. No. 12, Series of 1989; and (2) the Notice of Acquisition sent to the landowner under
Section 16 of the CARL.

The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to the
conference, and its actual conduct cannot be understated. They are steps designed to comply with
the requirements of administrative due process. The implementation of the CARL is an exercise
of the State's police power and the power of eminent domain. To the extent that the CARL
prescribes retention limits to the landowners, there is an exercise of police power for the
regulation of private property in accordance with the Constitution. But where, to carry out such
50

regulation, the owners are deprived of lands they own in excess of the maximum area allowed,
there is also a taking under the power of eminent domain. 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 physical
possession of the said excess and all beneficial rights accruing to the owner in favor of the
farmer beneficiary. The Bill of Rights provides that "[n]o person shall be deprived of life,
51

liberty or property without due process of law." The CARL was not intended to take away
52

property without due process of law. The exercise of the power of eminent domain requires that
53

due process be observed in the taking of private property.

DAR A.O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung, was
amended in 1990 by DAR A.O. No. 9, Series of 1990 and in 1993 by DAR A.O. No. 1, Series of
1993. The Notice of Coverage and letter of invitation to the conference meeting were expanded
and amplified in said amendments.

DAR A.O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of
Agricultural Lands Subject of Voluntary Offer to Sell and Compulsory Acquisition Pursuant to
R.A. 6657," requires that:

B. MARO
 1. Receives the duly accomplished CARP Form
Nos. 1 & 1.1 including supporting documents.

2. Gathers basic ownership documents listed under

1.a or 1.b above and prepares corresponding
VOCF/CACF by landowner/landholding.

3. Notifies/invites the landowner and

representatives of the LBP, DENR, BARC and
prospective beneficiaries of the schedule of ocular
inspection of the property at least one week in
advance.

4. MARO/LAND BANK FIELD OFFICE/BARC

a) Identify the land and landowner,

and determine the suitability for
agriculture and productivity of the
land and jointly prepare Field
Investigation Report (CARP Form
No. 2), including the Land Use Map
of the property.

b) Interview applicants and assist

them in the preparation of the
Application For Potential CARP
Beneficiary (CARP Form No. 3).

c) Screen prospective farmer-

beneficiaries and for those found
qualified, cause the signing of the
respective Application to Purchase
and Farmer's Undertaking (CARP
Form No. 4).

d) Complete the Field Investigation

Report based on the result of the
ocular inspection/investigation of the
property and documents submitted.
See to it that Field Investigation
Report is duly accomplished and
signed by all concerned.

5. MARO
 a) Assists the DENR Survey Party in
the conduct of a boundary/
subdivision survey delineating areas
covered by OLT, retention, subject
of VOS, CA (by phases, if possible),
infrastructures, etc., whichever is
applicable.

b) Sends Notice of Coverage (CARP

Form No. 5) to landowner concerned
or his duly authorized representative
inviting him for a conference.

c) Sends Invitation Letter (CARP

Form No. 6) for a conference/public
hearing to prospective farmer-
beneficiaries, landowner,
representatives of BARC, LBP,
DENR, DA, NGO's, farmers'
organizations and other interested
parties to discuss the following
matters:

Result of Field
Investigation

Inputs to valuation

Issues raised

Comments/recommen
dations by all parties
concerned.

d) Prepares Summary of Minutes of

the conference/public hearing to be
guided by CARP Form No. 7.

e) Forwards the completed

VOCF/CACF to the Provincial
Agrarian Reform Office (PARO)
using CARP Form No. 8
(Transmittal Memo to PARO).

x x x           x x x          x x x
DAR A.O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell (VOS) and
Compulsory Acquisition (CA) transactions involving lands enumerated under Section 7 of the
CARL. In both VOS and CA. transactions, the MARO prepares the Voluntary Offer to Sell
54

Case Folder (VOCF) and the Compulsory Acquisition Case Folder (CACF), as the case may be,
over a particular landholding. The MARO notifies the landowner as well as representatives of
the LBP, BARC and prospective beneficiaries of the date of the ocular inspection of the property
at least one week before the scheduled date and invites them to attend the same. The MARO,
LBP or BARC conducts the ocular inspection and investigation by identifying the land and
landowner, determining the suitability of the land for agriculture and productivity, interviewing
and screening prospective farmer beneficiaries. Based on its investigation, the MARO, LBP or
BARC prepares the Field Investigation Report which shall be signed by all parties concerned. In
addition to the field investigation, a boundary or subdivision survey of the land may also be
conducted by a Survey Party of the Department of Environment and Natural Resources (DENR)
to be assisted by the MARO. This survey shall delineate the areas covered by Operation Land
55

Transfer (OLT), areas retained by the landowner, areas with infrastructure, and the areas subject
to VOS and CA. After the survey and field investigation, the MARO sends a "Notice of
Coverage" to the landowner or his duly authorized representative inviting him to a conference or
public hearing with the farmer beneficiaries, representatives of the BARC, LBP, DENR,
Department of Agriculture (DA), non-government organizations, farmer's organizations and
other interested parties. At the public hearing, the parties shall discuss the results of the field
investigation, issues that may be raised in relation thereto, inputs to the valuation of the subject
landholding, and other comments and recommendations by all parties concerned. The Minutes of
the conference/public hearing shall form part of the VOCF or CACF which files shall be
forwarded by the MARO to the PARO. The PARO reviews, evaluates and validates the Field
Investigation Report and other documents in the VOCF/CACF. He then forwards the records to
the RARO for another review.

DAR A.O. No. 9, Series of 1990 was amended by DAR A.O. No. 1, Series of 1993. DAR A.O.
No. 1, Series of 1993 provided, among others, that:

IV. OPERATING PROCEDURES:

Steps Responsible Activity Forms/

Agency/Unit Document

(requirements)

A. Identification and

Documentation

x x x           x x x          x x x

5 DARMO Issue Notice of Coverage CARP

to LO by personal delivery Form No. 2

with proof of service, or

registered mail with return

card, informing him that his

property is now under CARP

coverage and for LO to select

his retention area, if he desires

to avail of his right of retention;

and at the same time invites him

to join the field investigation to

be conducted on his property

which should be scheduled at

least two weeks in advance of

said notice.

A copy of said Notice shall CARP

be posted for at least one Form No. 17

week on the bulletin board of

the municipal and barangay

halls where the property is

located. LGU office concerned

notifies DAR about compliance

with posting requirements thru

return indorsement on CARP

Form No. 17.

6 DARMO Send notice to the LBP, CARP

BARC, DENR representatives Form No. 3

and prospective ARBs of the schedule of the field investigation

to be conducted on the subject

property.

7 DARMO With the participation of CARP

BARC the LO, representatives of Form No. 4

LBP the LBP, BARC, DENR Land Use

DENR and prospective ARBs, Map

Local Office conducts the investigation on

subject property to identify

the landholding, determines

its suitability and productivity;

and jointly prepares the Field

Investigation Report (FIR)

and Land Use Map. However,

the field investigation shall

proceed even if the LO, the

representatives of the DENR and

prospective ARBs are not available

provided, they were given due

notice of the time and date of

investigation to be conducted.

Similarly, if the LBP representative

is not available or could not come

on the scheduled date, the field

investigation shall also be conducted,

after which the duly accomplished

Part I of CARP Form No. 4 shall

be forwarded to the LBP

representative for validation. If he agrees

to the ocular inspection report of DAR,

he signs the FIR (Part I) and

accomplishes Part II thereof.

In the event that there is a

difference or variance between

the findings of the DAR and the

LBP as to the propriety of

covering the land under CARP,

whether in whole or in part, on

the issue of suitability to agriculture,

degree of development or slope,

and on issues affecting idle lands,

the conflict shall be resolved by

a composite team of DAR, LBP,

DENR and DA which shall jointly

conduct further investigation

thereon. The team shall submit its

report of findings which shall be

binding to both DAR and LBP,

pursuant to Joint Memorandum

Circular of the DAR, LBP, DENR

and DA dated 27 January 1992.

8 DARMO Screen prospective ARBs

BARC and causes the signing of CARP

the Application of Purchase Form No. 5

and Farmer's Undertaking

(APFU).

9 DARMO Furnishes a copy of the CARP

duly accomplished FIR to Form No. 4

the landowner by personal

delivery with proof of

service or registered mail

will return card and posts

a copy thereof for at least

one week on the bulletin

board of the municipal

and barangay halls where

the property is located.

LGU office concerned CARP

notifies DAR about Form No. 17

compliance with posting

requirement thru return

endorsement on CARP

Form No. 17.

B. Land Survey

10 DARMO Conducts perimeter or Perimeter

And/or segregation survey or

DENR delineating areas covered Segregation

Local Office by OLT, "uncarpable Survey Plan

areas such as 18% slope

and above, unproductive/

unsuitable to agriculture,

retention, infrastructure.

In case of segregation or

subdivision survey, the

plan shall be approved

by DENR-LMS.

C. Review and Completion

of Documents

11. DARMO Forward VOCF/CACF CARP

 to DARPO. Form No. 6

xxx xxx xxx.

DAR A.O. No. 1, Series of 1993, modified the identification process and increased the number
of government agencies involved in the identification and delineation of the land subject to
acquisition. This time, the Notice of Coverage is sent to the landowner before the conduct of
56

the field investigation and the sending must comply with specific requirements. Representatives
of the DAR Municipal Office (DARMO) must send the Notice of Coverage to the landowner by
"personal delivery with proof of service, or by registered mail with return card," informing him
that his property is under CARP coverage and that if he desires to avail of his right of retention,
he may choose which area he shall retain. The Notice of Coverage shall also invite the
landowner to attend the field investigation to be scheduled at least two weeks from notice. The
field investigation is for the purpose of identifying the landholding and determining its suitability
for agriculture and its productivity. A copy of the Notice of Coverage shall be posted for at least
one week on the bulletin board of the municipal and barangay halls where the property is
located. The date of the field investigation shall also be sent by the DAR Municipal Office to
representatives of the LBP, BARC, DENR and prospective farmer beneficiaries. The field
investigation shall be conducted on the date set with the participation of the landowner and the
various representatives. If the landowner and other representatives are absent, the field
investigation shall proceed, provided they were duly notified thereof. Should there be a variance
between the findings of the DAR and the LBP as to whether the land be placed under agrarian
reform, the land's suitability to agriculture, the degree or development of the slope, etc., the
conflict shall be resolved by a composite team of the DAR, LBP, DENR and DA which shall
jointly conduct further investigation. The team's findings shall be binding on both DAR and
LBP. After the field investigation, the DAR Municipal Office shall prepare the Field
Investigation Report and Land Use Map, a copy of which shall be furnished the landowner "by
personal delivery with proof of service or registered mail with return card." Another copy of the
Report and Map shall likewise be posted for at least one week in the municipal or barangay halls
where the property is located.

Clearly then, the notice requirements under the CARL are not confined to the Notice of
Acquisition set forth in Section 16 of the law. They also include the Notice of Coverage first laid
down in DAR A.O. No. 12, Series of 1989 and subsequently amended in DAR A.O. No. 9,
Series of 1990 and DAR A.O. No. 1, Series of 1993. This Notice of Coverage does not merely
notify the landowner that his property shall be placed under CARP and that he is entitled to
exercise his retention right; it also notifies him, pursuant to DAR A.O. No. 9, Series of 1990, that
a public hearing, shall be conducted where he and representatives of the concerned sectors of
society may attend to discuss the results of the field investigation, the land valuation and other
pertinent matters. Under DAR A.O. No. 1, Series of 1993, the Notice of Coverage also informs
the landowner that a field investigation of his landholding shall be conducted where he and the
other representatives may be present.

B. The Compulsory Acquisition of Haciendas Palico and Banilad

In the case at bar, respondent DAR claims that it, through MARO Leopoldo C. Lejano, sent a
letter of invitation entitled "Invitation to Parties" dated September 29, 1989 to petitioner
corporation, through Jaime Pimentel, the administrator of Hacienda Palico. The invitation was
57

received on the same day it was sent as indicated by a signature and the date received at the
bottom left corner of said invitation. With regard to Hacienda Banilad, respondent DAR claims
that Jaime Pimentel, administrator also of Hacienda Banilad, was notified and sent an invitation
to the conference. Pimentel actually attended the conference on September 21, 1989 and signed
the Minutes of the meeting on behalf of petitioner corporation. The Minutes was also signed by
58

the representatives of the BARC, the LBP and farmer beneficiaries. No letter of invitation was
59

sent or conference meeting held with respect to Hacienda Caylaway because it was subject to a
Voluntary Offer to Sell to respondent DAR. 60

When respondent DAR, through the Municipal Agrarian Reform Officer (MARO), sent to the
various parties the Notice of Coverage and invitation to the conference, DAR A.O. No. 12,
Series of 1989 was already in effect more than a month earlier. The Operating Procedure in DAR
Administrative Order No. 12 does not specify how notices or letters of invitation shall be sent to
the landowner, the representatives of the BARC, the LBP, the farmer beneficiaries and other
interested parties. The procedure in the sending of these notices is important to comply with the
requisites of due process especially when the owner, as in this case, is a juridical entity.
Petitioner is a domestic
corporation, and therefore, has a personality separate and distinct from its shareholders, officers
61

and employees.

The Notice of Acquisition in Section 16 of the CARL is required to be sent to the landowner by
"personal delivery or registered mail." Whether the landowner be a natural or juridical person to
whose address the Notice may be sent by personal delivery or registered mail, the law does not
distinguish. The DAR Administrative Orders also do not distinguish. In the proceedings before
the DAR, the distinction between natural and juridical persons in the sending of notices may be
found in the Revised Rules of Procedure of the DAR Adjudication Board (DARAB). Service of
pleadings before the DARAB is governed by Section 6, Rule V of the DARAB Revised Rules of
Procedure. Notices and pleadings are served on private domestic corporations or partnerships in
the following manner:

Sec. 6. Service upon Private Domestic Corporation or Partnership. — If the

defendant is a corporation organized under the laws of the Philippines or a
partnership duly registered, service may be made on the president, manager,
secretary, cashier, agent, or any of its directors or partners.

Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14 provides:

Sec. 13. Service upon private domestic corporation or partnership. — If the

defendant is a corporation organized under the laws of the Philippines or a
partnership duly registered, service may be made on the president, manager,
secretary, cashier, agent, or any of its directors.
Summonses, pleadings and notices in cases against a private domestic corporation before the
DARAB and the regular courts are served on the president, manager, secretary, cashier, agent or
any of its directors. These persons are those through whom the private domestic corporation or
partnership is capable of action.62

Jaime Pimentel is not the president, manager, secretary, cashier or director of petitioner
corporation. Is he, as administrator of the two Haciendas, considered an agent of the
corporation?

The purpose of all rules for service of process on a corporation is to make it reasonably certain
that the corporation will receive prompt and proper notice in an action against it. Service must
63

be made on a representative so integrated with the corporation as to make it a priori supposable

that he will realize his responsibilities and know what he should do with any legal papers served
on him, and bring home to the corporation notice of the filing of the action. Petitioner's
64 65

evidence does not show the official duties of Jaime Pimentel as administrator of petitioner's
haciendas. The evidence does not indicate whether Pimentel's duties is so integrated with the
corporation that he would immediately realize his responsibilities and know what he should do
with any legal papers served on him. At the time the notices were sent and the preliminary
conference conducted, petitioner's principal place of business was listed in respondent DAR's
records as "Soriano Bldg., Plaza Cervantes, Manila," and "7th Flr. Cacho-Gonzales Bldg., 101
66

Aguirre St., Makati, Metro Manila." Pimentel did not hold office at the principal place of
67

business of petitioner. Neither did he exercise his functions in Plaza Cervantes, Manila nor in
Cacho-Gonzales Bldg., Makati, Metro Manila. He performed his official functions and actually
resided in the haciendas in Nasugbu, Batangas, a place over two hundred kilometers away from
Metro Manila.

Curiously, respondent DAR had information of the address of petitioner's principal place of
business. The Notices of Acquisition over Haciendas Palico and Banilad were addressed to
petitioner at its offices in Manila and Makati. These Notices were sent barely three to four
months after Pimentel was notified of the preliminary conference. Why respondent DAR chose
68

to notify Pimentel instead of the officers of the corporation was not explained by the said
respondent.

Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the notices and
letters of invitation were validly served on petitioner through him, there is no showing that
Pimentel himself was duly authorized to attend the conference meeting with the MARO, BARC
and LBP representatives and farmer beneficiaries for purposes of compulsory acquisition of
petitioner's landholdings. Even respondent DAR's evidence does not indicate this authority. On
the contrary, petitioner claims that it had no knowledge of the letter-invitation, hence, could not
have given Pimentel the authority to bind it to whatever matters were discussed or agreed upon
by the parties at the preliminary conference or public hearing. Notably, one year after Pimentel
was informed of the preliminary conference, DAR A.O. No. 9, Series of 1990 was issued and
this required that the Notice of Coverage must be sent "to the landowner concerned or his duly
authorized representative." 69
Assuming further that petitioner was duly notified of the CARP coverage of its haciendas, the
areas found actually subject to CARP were not properly identified before they were taken over
by respondent DAR. Respondents insist that the lands were identified because they are all
registered property and the technical description in their respective titles specifies their metes
and bounds. Respondents admit at the same time, however, that not all areas in the haciendas
were placed under the comprehensive agrarian reform program invariably by reason of elevation
or character or use of the land.70

The acquisition of the landholdings did not cover the entire expanse of the two haciendas, but
only portions thereof. Hacienda Palico has an area of 1,024 hectares and only 688.7576 hectares
were targetted for acquisition. Hacienda Banilad has an area of 1,050 hectares but only 964.0688
hectares were subject to CARP. The haciendas are not entirely agricultural lands. In fact, the
various tax declarations over the haciendas describe the landholdings as "sugarland," and "forest,
sugarland, pasture land, horticulture and woodland." 71

Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically requires
that the land subject to land reform be first identified. The two haciendas in the instant case cover
vast tracts of land. Before Notices of Acquisition were sent to petitioner, however, the exact
areas of the landholdings were not properly segregated and delineated. Upon receipt of this
notice, therefore, petitioner corporation had no idea which portions of its estate were subject to
compulsory acquisition, which portions it could rightfully retain, whether these retained
portions were compact or contiguous, and which portions were excluded from CARP coverage.
Even respondent DAR's evidence does not show that petitioner, through its duly authorized
representative, was notified of any ocular inspection and investigation that was to be conducted
by respondent DAR. Neither is there proof that petitioner was given the opportunity to at least
choose and identify its retention area in those portions to be acquired compulsorily. The right of
retention and how this right is exercised, is guaranteed in Section 6 of the CARL, viz:

Sec. 6. Retention Limits. — . . . .

The right to choose the area to be retained, which shall be compact or contiguous,
shall pertain to the landowner; Provided, however, That in case the area selected
for retention by the landowner is tenanted, the tenant shall have the option to
choose whether to remain therein or be a beneficiary in the same or another
agricultural land with similar or comparable features. In case the tenant chooses to
remain in the retained area, he shall be considered a leaseholder and shall lose his
right to be a beneficiary under this Act. In case the tenant chooses to be a
beneficiary in another agricultural land, he loses his right as a leaseholder to the
land retained by the landowner. The tenant must exercise this option within a
period of one (1) year from the time the landowner manifests his choice of the
area for retention.

Under the law, a landowner may retain not more than five hectares out of the total area of his
agricultural land subject to CARP. The right to choose the area to be retained, which shall be
compact or contiguous, pertains to the landowner. If the area chosen for retention is tenanted, the
tenant shall have the option to choose whether to remain on the portion or be a beneficiary in the
same or another agricultural land with similar or comparable features.

C. The Voluntary Acquisition of Hacienda Caylaway

Petitioner was also left in the dark with respect to Hacienda Caylaway, which was the subject of
a Voluntary Offer to Sell (VOS). The VOS in the instant case was made on May 6, 1988, 72

before the effectivity of R.A. 6657 on June 15, 1988. VOS transactions were first governed by
DAR Administrative Order No. 19, series of 1989, and under this order, all VOS filed before
73

June 15, 1988 shall be heard and processed in accordance with the procedure provided for in
Executive Order No. 229, thus:

III. All VOS transactions which are now pending before the DAR and for which
no payment has been made shall be subject to the notice and hearing requirements
provided in Administrative Order No. 12, Series of 1989, dated 26 July 1989,
Section II, Subsection A, paragraph 3.

All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall be
heard and processed in accordance with the procedure provided for in Executive
Order No. 229.

xxx xxx xxx.

Sec. 9 of E.O. 229 provides:

Sec. 9. Voluntary Offer to Sell. — The government shall purchase all agricultural
lands it deems productive and suitable to farmer cultivation voluntarily offered for
sale to it at a valuation determined in accordance with Section 6. Such transaction
shall be exempt from the payment of capital gains tax and other taxes and fees.

Executive Order 229 does not contain the procedure for the identification of private land as set
forth in DAR A.O. No. 12, Series of 1989. Section 5 of E.O. 229 merely reiterates the procedure
of acquisition in Section 16, R.A. 6657. In other words, the E.O. is silent as to the procedure for
the identification of the land, the notice of coverage and the preliminary conference with the
landowner, representatives of the BARC, the LBP and farmer beneficiaries. Does this mean that
these requirements may be dispensed with regard to VOS filed before June 15, 1988? The
answer is no.

First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land, landowner
and beneficiaries of the land subject to agrarian reform be identified before the notice of
acquisition should be issued. Hacienda Caylaway was voluntarily offered for sale in 1989. The
74

Hacienda has a total area of 867.4571 hectares and is covered by four (4) titles. In two separate
Resolutions both dated January 12, 1989, respondent DAR, through the Regional Director,
formally accepted the VOS over the two of these four
titles. The land covered by two titles has an area of 855.5257 hectares, but only 648.8544
75
hectares thereof fell within the coverage of R.A. 6657. Petitioner claims it does not know where
76

these portions are located.

Respondent DAR, on the other hand, avers that surveys on the land covered by the four titles
were conducted in 1989, and that petitioner, as landowner, was not denied participation therein,
The results of the survey and the land valuation summary report, however, do not indicate
whether notices to attend the same were actually sent to and received by petitioner or its duly
authorized representative. To reiterate, Executive Order No. 229 does not lay down the
77

operating procedure, much less the notice requirements, before the VOS is accepted by
respondent DAR. Notice to the landowner, however, cannot be dispensed with. It is part of
administrative due process and is an essential requisite to enable the landowner himself to
exercise, at the very least, his right of retention guaranteed under the CARL.

III. The Conversion of the three Haciendas.

It is petitioner's claim that the three haciendas are not subject to agrarian reform because they
have been declared for tourism, not agricultural
purposes. In 1975, then President Marcos issued Proclamation No. 1520 declaring the
78

municipality of Nasugbu, Batangas a tourist zone. Lands in Nasugbu, including the subject
haciendas, were allegedly reclassified as non-agricultural 13 years before the effectivity of R. A.
No. 6657. In 1993, the Regional Director for Region IV of the Department of Agriculture
79

certified that the haciendas are not feasible and sound for agricultural development. On March
80

20, 1992, pursuant to Proclamation No. 1520, the Sangguniang Bayan of Nasugbu, Batangas
adopted Resolution No. 19 reclassifying certain areas of Nasugbu as non-agricultural. This 81

Resolution approved Municipal Ordinance No. 19, Series of 1992, the Revised Zoning
Ordinance of Nasugbu which zoning ordinance was based on a Land Use Plan for Planning
82

Areas for New Development allegedly prepared by the University of the Philippines. 83

Resolution No. 19 of the Sangguniang Bayan was approved by the Sangguniang Panlalawigan of
Batangas on March 8, 1993. 84

Petitioner claims that proclamation No. 1520 was also upheld by respondent DAR in 1991 when
it approved conversion of 1,827 hectares in Nasugbu into a tourist area known as the Batulao
Resort Complex, and 13.52 hectares in Barangay Caylaway as within the potential tourist belt. 85

Petitioner present evidence before us that these areas are adjacent to the haciendas subject of this
petition, hence, the haciendas should likewise be converted. Petitioner urges this Court to take
cognizance of the conversion proceedings and rule accordingly. 6

We do not agree. Respondent DAR's failure to observe due process in the acquisition of
petitioner's landholdings does not ipso facto give this Court the power to adjudicate over
petitioner's application for conversion of its haciendas from agricultural to non-agricultural.
The agency charged with the mandate of approving or disapproving applications for conversion
is the DAR.

At the time petitioner filed its application for conversion, the Rules of Procedure governing the
processing and approval of applications for land use conversion was the DAR A.O. No. 2, Series
of 1990. Under this A.O., the application for conversion is filed with the MARO where the
property is located. The MARO reviews the application and its supporting documents and
conducts field investigation and ocular inspection of the property. The findings of the MARO are
subject to review and evaluation by the Provincial Agrarian Reform Officer (PARO). The PARO
may conduct further field investigation and submit a supplemental report together with his
recommendation to the Regional Agrarian Reform Officer (RARO) who shall review the same.
For lands less than five hectares, the RARO shall approve or disapprove applications for
conversion. For lands exceeding five hectares, the RARO shall evaluate the PARO Report and
forward the records and his report to the Undersecretary for Legal Affairs. Applications over
areas exceeding fifty hectares are approved or disapproved by the Secretary of Agrarian Reform.

The DAR's mandate over applications for conversion was first laid down in Section 4 (j) and
Section 5 (l) of Executive Order No. 129-A, Series of 1987 and reiterated in the CARL and
Memorandum Circular No. 54, Series of 1993 of the Office of the President. The DAR's
jurisdiction over applications for conversion is provided as follows:

A. The Department of Agrarian Reform (DAR) is mandated to

"approve or disapprove applications for conversion, restructuring
or readjustment of agricultural lands into non-agricultural uses,"
pursuant to Section 4 (j) of Executive Order No. 129-A, Series of
1987.

B. Sec. 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR,

exclusive authority to approve or disapprove applications for
conversion of agricultural lands for residential, commercial,
industrial and other land uses.

C. Sec. 65 of R.A. No. 6657, otherwise known as the

Comprehensive Agrarian Reform Law of 1988, likewise empowers
the DAR to authorize under certain conditions, the conversion of
agricultural lands.

D. Sec. 4 of Memorandum Circular No. 54, Series of 1993 of the

Office of the President, provides that "action on applications for
land use conversion on individual landholdings shall remain as the
responsibility of the DAR, which shall utilize as its primary
reference, documents on the comprehensive land use plans and
accompanying ordinances passed upon and approved by the local
government units concerned, together with the National Land Use
Policy, pursuant to R.A. No. 6657 and E.O. No. 129-A. 87

Applications for conversion were initially governed by DAR A.O. No. 1, Series of 1990 entitled
"Revised Rules and Regulations Governing Conversion of Private Agricultural Lands and Non-
Agricultural Uses," and DAR A.O. No. 2, Series of 1990 entitled "Rules of Procedure Governing
the Processing and Approval of Applications for Land Use Conversion." These A.O.'s and other
implementing guidelines, including Presidential issuances and national policies related to land
use conversion have been consolidated in DAR A.O. No. 07, Series of 1997. Under this recent
issuance, the guiding principle in land use conversion is:

to preserve prime agricultural lands for food production while, at the same time,
recognizing the need of the other sectors of society (housing, industry and
commerce) for land, when coinciding with the objectives of the Comprehensive
Agrarian Reform Law to promote social justice, industrialization and the optimum
use of land as a national resource for public welfare.88

"Land Use" refers to the manner of utilization of land, including its allocation, development and
management. "Land Use Conversion" refers to the act or process of changing the current use of a
piece of agricultural land into some other use as approved by the DAR. The conversion of
89

agricultural land to uses other than agricultural requires field investigation and conferences with
the occupants of the land. They involve factual findings and highly technical matters within the
special training and expertise of the DAR. DAR A.O. No. 7, Series of 1997 lays down with
specificity how the DAR must go about its task. This time, the field investigation is not
conducted by the MARO but by a special task force, known as the Center for Land Use Policy
Planning and Implementation (CLUPPI-DAR Central Office). The procedure is that once an
application for conversion is filed, the CLUPPI prepares the Notice of Posting. The MARO only
posts the notice and thereafter issues a certificate to the fact of posting. The CLUPPI conducts
the field investigation and dialogues with the applicants and the farmer beneficiaries to ascertain
the information necessary for the processing of the application. The Chairman of the CLUPPI
deliberates on the merits of the investigation report and recommends the appropriate action. This
recommendation is transmitted to the Regional Director, thru the Undersecretary, or Secretary of
Agrarian Reform. Applications involving more than fifty hectares are approved or disapproved
by the Secretary. The procedure does not end with the Secretary, however. The Order provides
that the decision of the Secretary may be appealed to the Office of the President or the Court of
Appeals, as the case may be, viz:

Appeal from the decision of the Undersecretary shall be made to the Secretary,
and from the Secretary to the Office of the President or the Court of Appeals as
the case may be. The mode of appeal/motion for reconsideration, and the appeal
fee, from Undersecretary to the Office of the Secretary shall be the same as that of
the Regional Director to the Office of the Secretary.90

Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto itself
authority to resolve a controversy the jurisdiction over which is initially lodged with an
administrative body of special competence. Respondent DAR is in a better position to resolve
91

petitioner's application for conversion, being primarily the agency possessing the necessary
expertise on the matter. The power to determine whether Haciendas Palico, Banilad and
Caylaway are non-agricultural, hence, exempt from the coverage of the CARL lies with the
DAR, not with this Court.

Finally, we stress that the failure of respondent DAR to comply with the requisites of due
process in the acquisition proceedings does not give this Court the power to nullify the CLOA's
already issued to the farmer beneficiaries. To assume the power is to short-circuit the
administrative process, which has yet to run its regular course. Respondent DAR must be given
the chance to correct its procedural lapses in the acquisition proceedings. In Hacienda Palico
alone, CLOA's were issued to 177 farmer beneficiaries in 1993. Since then until the present,
92

these farmers have been cultivating their lands. It goes against the basic precepts of justice,
93

fairness and equity to deprive these people, through no fault of their own, of the land they till.
Anyhow, the farmer beneficiaries hold the property in trust for the rightful owner of the land.

IN VIEW WHEREOF, the petition is granted in part and the acquisition proceedings over the
three haciendas are nullified for respondent DAR's failure to observe due process therein. In
accordance with the guidelines set forth in this decision and the applicable administrative
procedure, the case is hereby remanded to respondent DAR for proper acquisition proceedings
and determination of petitioner's application for conversion.

SO ORDERED.

G.R. No. L-43938 April 15, 1988

REPUBLIC OF THE PHILIPPINES (DIRECTOR OF FOREST DEVELOPMENT), petitioner,

vs.
HON. COURT OF APPEALS (THIRD DIVISION) and JOSE Y. DE LA ROSA, respondents.

G.R. No. L-44081 April 15, 1988

BENGUET CONSOLIDATED, INC., petitioner,

vs.
HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORIA, BENJAMIN and EDUARDO, all
surnamed DE LA ROSA, represented by their father JOSE Y. DE LA ROSA, respondents.

G.R. No. L-44092 April 15, 1988

ATOK-BIG WEDGE MINING COMPANY, petitioner,

vs.
HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORlA, BENJAMIN and EDUARDO, all
surnamed DE LA ROSA, represented by their father, JOSE Y. DE LA ROSA, respondents.

CRUZ, J.:

The Regalian doctrine reserves to the State all natural wealth that may be found in the bowels of the earth even if the land where the
discovery is made be private. 1 In the cases at bar, which have been consolidated because they pose a common issue, this doctrine was not
correctly applied.

These cases arose from the application for registration of a parcel of land filed on February 11,
1965, by Jose de la Rosa on his own behalf and on behalf of his three children, Victoria, Benjamin
and Eduardo. The land, situated in Tuding, Itogon, Benguet Province, was divided into 9 lots and
covered by plan Psu-225009. According to the application, Lots 1-5 were sold to Jose de la Rosa
and Lots 6-9 to his children by Mamaya Balbalio and Jaime Alberto, respectively, in 1964. 2
The application was separately opposed by Benguet Consolidated, Inc. as to Lots 1-5, Atok Big
Wedge Corporation, as to Portions of Lots 1-5 and all of Lots 6-9, and by the Republic of the
Philippines, through the Bureau of Forestry Development, as to lots 1-9. 3

In support of the application, both Balbalio and Alberto testified that they had acquired the subject
land by virtue of prescription Balbalio claimed to have received Lots 1-5 from her father shortly after
the Liberation. She testified she was born in the land, which was possessed by her parents under
claim of ownership. Alberto said he received Lots 6-9 in 1961 from his mother, Bella Alberto, who
4

declared that the land was planted by Jaime and his predecessors-in-interest to bananas, avocado,
nangka and camote, and was enclosed with a barbed-wire fence. She was corroborated by Felix
Marcos, 67 years old at the time, who recalled the earlier possession of the land by Alberto's father. 5

Balbalio presented her tax declaration in 1956 and the realty tax receipts from that year to 1964, 6

Alberto his tax declaration in 1961 and the realty tax receipts from that year to 1964. 7

Benguet opposed on the ground that the June Bug mineral claim covering Lots 1-5 was sold to it on
September 22, 1934, by the successors-in-interest of James Kelly, who located the claim in
September 1909 and recorded it on October 14, 1909. From the date of its purchase, Benguet had
been in actual, continuous and exclusive possession of the land in concept of owner, as evidenced
by its construction of adits, its affidavits of annual assessment, its geological mappings, geological
samplings and trench side cuts, and its payment of taxes on the land. 8

For its part, Atok alleged that a portion of Lots 1-5 and all of Lots 6-9 were covered by the Emma
and Fredia mineral claims located by Harrison and Reynolds on December 25, 1930, and recorded
on January 2, 1931, in the office of the mining recorder of Baguio. These claims were purchased
from these locators on November 2, 1931, by Atok, which has since then been in open, continuous
and exclusive possession of the said lots as evidenced by its annual assessment work on the
claims, such as the boring of tunnels, and its payment of annual taxes thereon. 9

The location of the mineral claims was made in accordance with Section 21 of the Philippine Bill of
1902 which provided that:

SEC. 21. All valuable mineral deposits in public lands in the philippine Islands both
surveyed and unsurveyed are hereby declared to be free and open to exploration,
occupation and purchase and the land in which they are found to occupation and
purchase by the citizens of the United States, or of said islands.

The Bureau of Forestry Development also interposed its objection, arguing that the land sought to be
registered was covered by the Central Cordillera Forest Reserve under Proclamation No. 217 dated
February 16, 1929. Moreover, by reason of its nature, it was not subject to alienation under the
Constitutions of 1935 and 1973. 10

The trial court * denied the application, holding that the applicants had failed to prove their claim of possession and ownership of the
land sought to be registered. 11 The applicants appealed to the respondent court, * which reversed the trial court and recognized the claims of
the applicant, but subject to the rights of Benguet and Atok respecting their mining claims. 12 In other words, the Court of Appeals affirmed the
surface rights of the de la Rosas over the land while at the same time reserving the sub-surface rights of Benguet and Atok by virtue of their
mining claims.

Both Benguet and Atok have appealed to this Court, invoking their superior right of ownership. The
Republic has filed its own petition for review and reiterates its argument that neither the private
respondents nor the two mining companies have any valid claim to the land because it is not
alienable and registerable.
It is true that the subject property was considered forest land and included in the Central Cordillera
Forest Reserve, but this did not impair the rights already vested in Benguet and Atok at that time.
The Court of Appeals correctly declared that:

There is no question that the 9 lots applied for are within the June Bug mineral claims
of Benguet and the "Fredia and Emma" mineral claims of Atok. The June Bug
mineral claim of plaintiff Benguet was one of the 16 mining claims of James E. Kelly,
American and mining locator. He filed his declaration of the location of the June Bug
mineral and the same was recorded in the Mining Recorder's Office on October 14,
1909. All of the Kelly claims ha subsequently been acquired by Benguet
Consolidated, Inc. Benguet's evidence is that it had made improvements on the June
Bug mineral claim consisting of mine tunnels prior to 1935. It had submitted the
required affidavit of annual assessment. After World War II, Benguet introduced
improvements on mineral claim June Bug, and also conducted geological mappings,
geological sampling and trench side cuts. In 1948, Benguet redeclared the "June
Bug" for taxation and had religiously paid the taxes.

The Emma and Fredia claims were two of the several claims of Harrison registered in
1931, and which Atok representatives acquired. Portions of Lots 1 to 5 and all of Lots
6 to 9 are within the Emma and Fredia mineral claims of Atok Big Wedge Mining
Company.

The June Bug mineral claim of Benguet and the Fredia and Emma mineral claims of
Atok having been perfected prior to the approval of the Constitution of the Philippines
of 1935, they were removed from the public domain and had become private
properties of Benguet and Atok.

It is not disputed that the location of the mining claim under

consideration was perfected prior to November 15, 1935, when the
Government of the Commonwealth was inaugurated; and according
to the laws existing at that time, as construed and applied by this
court in McDaniel v. Apacible and Cuisia (42 Phil. 749), a valid
location of a mining claim segregated the area from the public
domain. Said the court in that case: The moment the locator
discovered a valuable mineral deposit on the lands located, and
perfected his location in accordance with law, the power of the United
States Government to deprive him of the exclusive right to the
possession and enjoyment of the located claim was gone, the lands
had become mineral lands and they were exempted from lands that
could be granted to any other person. The reservations of public
lands cannot be made so as to include prior mineral perfected
locations; and, of course, if a valid mining location is made upon
public lands afterwards included in a reservation, such inclusion or
reservation does not affect the validity of the former location. By such
location and perfection, the land located is segregated from the public
domain even as against the Government. (Union Oil Co. v. Smith,
249 U.S. 337; Van Mess v. Roonet, 160 Cal. 131; 27 Cyc. 546).

"The legal effect of a valid location of a mining claim is not only to

segregate the area from the public domain, but to grant to the locator
the beneficial ownership of the claim and the right to a patent therefor
upon compliance with the terms and conditions prescribed by law.
 Where there is a valid location of a mining claim, the area becomes
segregated from the public domain and the property of the locator."
(St. Louis Mining & Milling Co. v. Montana Mining Co., 171 U.S. 650;
655; 43 Law ed., 320, 322.) "When a location of a mining claim is
perfected it has the effect of a grant by the United States of the right
of present and exclusive possession, with the right to the exclusive
enjoyment of all the surface ground as well as of all the minerals
within the lines of the claim, except as limited by the extralateral right
of adjoining locators; and this is the locator's right before as well as
after the issuance of the patent. While a lode locator acquires a
vested property right by virtue of his location made in compliance with
the mining laws, the fee remains in the government until patent
issues."(18 R.C.L. 1152) (Gold Creek Mining Corporation v. Hon.
Eulogio Rodriguez, Sec. of Agriculture and Commerce, and Quirico
Abadilla, Director of the Bureau of Mines, 66 Phil. 259, 265-266)

It is of no importance whether Benguet and Atok had secured a patent for as held in
the Gold Creek Mining Corp. Case, for all physical purposes of ownership, the owner
is not required to secure a patent as long as he complies with the provisions of the
mining laws; his possessory right, for all practical purposes of ownership, is as good
as though secured by patent.

We agree likewise with the oppositors that having complied with all the requirements
of the mining laws, the claims were removed from the public domain, and not even
the government of the Philippines can take away this right from them. The reason is
obvious. Having become the private properties of the oppositors, they cannot be
deprived thereof without due process of law. 13

Such rights were not affected either by the stricture in the Commonwealth Constitution against the
alienation of all lands of the public domain except those agricultural in nature for this was made
subject to existing rights. Thus, in its Article XIII, Section 1, it was categorically provided that:

SEC. 1. All agricultural, timber and mineral lands of the public domain, waters,
minerals, coal, petroleum and other mineral oils, all forces of potential energy and
other natural resources of the Philipppines belong to the State, and their disposition,
exploitation, development, or utilization shall be limited to citizens of the Philippines
or to corporations or associations at least 60% of the capital of which is owned by
such citizens, subject to any existing right, grant, lease or concession at the time of
the inauguration of the government established under this Constitution. Natural
resources with the exception of public agricultural lands, shall not be alienated, and
no license, concession, or lease for the exploitation, development or utilization of any
of the natural resources shall be granted for a period exceeding 25 years, except as
to water rights for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which case beneficial use may be the measure and
the limit of the grant.

Implementing this provision, Act No. 4268, approved on November 8, 1935, declared:

Any provision of existing laws, executive order, proclamation to the contrary

notwithstanding, all locations of mining claim made prior to February 8, 1935 within
lands set apart as forest reserve under Sec. 1826 of the Revised Administrative
Code which would be valid and subsisting location except to the existence of said
 reserve are hereby declared to be valid and subsisting locations as of the date of
their respective locations.

The perfection of the mining claim converted the property to mineral land and under the laws then in
force removed it from the public domain. By such act, the locators acquired exclusive rights over
14

the land, against even the government, without need of any further act such as the purchase of the
land or the obtention of a patent over it. As the land had become the private property of the
15

locators, they had the right to transfer the same, as they did, to Benguet and Atok.

It is true, as the Court of Appeals observed, that such private property was subject to the
"vicissitudes of ownership," or even to forfeiture by non-user or abandonment or, as the private
respondents aver, by acquisitive prescription. However, the method invoked by the de la Rosas is
not available in the case at bar, for two reasons.

First, the trial court found that the evidence of open, continuous, adverse and exclusive possession
submitted by the applicants was insufficient to support their claim of ownership. They themselves
had acquired the land only in 1964 and applied for its registration in 1965, relying on the earlier
alleged possession of their predecessors-in-interest. The trial judge, who had the opportunity to
16

consider the evidence first-hand and observe the demeanor of the witnesses and test their credibility
was not convinced. We defer to his judgment in the absence of a showing that it was reached with
grave abuse of discretion or without sufficient basis. 17

Second, even if it be assumed that the predecessors-in-interest of the de la Rosas had really been in
possession of the subject property, their possession was not in the concept of owner of the mining
claim but of the property as agricultural land, which it was not. The property was mineral land, and
they were claiming it as agricultural land. They were not disputing the lights of the mining locators
nor were they seeking to oust them as such and to replace them in the mining of the land. In fact,
Balbalio testified that she was aware of the diggings being undertaken "down below" but she did
18

not mind, much less protest, the same although she claimed to be the owner of the said land.

The Court of Appeals justified this by saying there is "no conflict of interest" between the owners of
the surface rights and the owners of the sub-surface rights. This is rather doctrine, for it is a well-
known principle that the owner of piece of land has rights not only to its surface but also to
everything underneath and the airspace above it up to a reasonable height. Under the aforesaid
19

ruling, the land is classified as mineral underneath and agricultural on the surface, subject to
separate claims of title. This is also difficult to understand, especially in its practical application.

Under the theory of the respondent court, the surface owner will be planting on the land while the
mining locator will be boring tunnels underneath. The farmer cannot dig a well because he may
interfere with the operations below and the miner cannot blast a tunnel lest he destroy the crops
above. How deep can the farmer, and how high can the miner, go without encroaching on each
other's rights? Where is the dividing line between the surface and the sub-surface rights?

The Court feels that the rights over the land are indivisible and that the land itself cannot be half
agricultural and half mineral. The classification must be categorical; the land must be either
completely mineral or completely agricultural. In the instant case, as already observed, the land
which was originally classified as forest land ceased to be so and became mineral — and completely
mineral — once the mining claims were perfected. As long as mining operations were being
20

undertaken thereon, or underneath, it did not cease to be so and become agricultural, even if only
partly so, because it was enclosed with a fence and was cultivated by those who were unlawfully
occupying the surface.
What must have misled the respondent court is Commonwealth Act No. 137, providing as follows:

Sec. 3. All mineral lands of the public domain and minerals belong to the State, and
their disposition, exploitation, development or utilization, shall be limited to citizens of
the Philippines, or to corporations, or associations, at least 60% of the capital of
which is owned by such citizens, subject to any existing right, grant, lease or
concession at the time of the inauguration of government established under the
Constitution.

SEC. 4. The ownership of, and the right to the use of land for agricultural, industrial,
commercial, residential, or for any purpose other than mining does not include the
ownership of, nor the right to extract or utilize, the minerals which may be found on or
under the surface.

SEC. 5. The ownership of, and the right to extract and utilize, the minerals included
within all areas for which public agricultural land patents are granted are excluded
and excepted from all such patents.

SEC. 6. The ownership of, and the right to extract and utilize, the minerals included
within all areas for which Torrens titles are granted are excluded and excepted from
all such titles.

This is an application of the Regalian doctrine which, as its name implies, is intended for the benefit
of the State, not of private persons. The rule simply reserves to the State all minerals that may be
found in public and even private land devoted to "agricultural, industrial, commercial, residential or
(for) any purpose other than mining." Thus, if a person is the owner of agricultural land in which
minerals are discovered, his ownership of such land does not give him the right to extract or utilize
the said minerals without the permission of the State to which such minerals belong.

The flaw in the reasoning of the respondent court is in supposing that the rights over the land could
be used for both mining and non-mining purposes simultaneously. The correct interpretation is that
once minerals are discovered in the land, whatever the use to which it is being devoted at the time,
such use may be discontinued by the State to enable it to extract the minerals therein in the exercise
of its sovereign prerogative. The land is thus converted to mineral land and may not be used by any
private party, including the registered owner thereof, for any other purpose that will impede the
mining operations to be undertaken therein, For the loss sustained by such owner, he is of course
entitled to just compensation under the Mining Laws or in appropriate expropriation proceedings. 21

Our holding is that Benguet and Atok have exclusive rights to the property in question by virtue of
their respective mining claims which they validly acquired before the Constitution of 1935 prohibited
the alienation of all lands of the public domain except agricultural lands, subject to vested rights
existing at the time of its adoption. The land was not and could not have been transferred to the
private respondents by virtue of acquisitive prescription, nor could its use be shared simultaneously
by them and the mining companies for agricultural and mineral purposes.

WHEREFORE, the decision of the respondent court dated April 30, 1976, is SET ASIDE and that of
the trial court dated March 11, 1969, is REINSTATED, without any pronouncement as to costs.

SO ORDERED.

[G.R. No. 161107, March 12, 2013]

 HON. MA. LOURDES C. FERNANDO, IN HER CAPACITY AS CITY MAYOR OF MARIKINA CITY,
JOSEPHINE C. EVANGELISTA, IN HER CAPACITY AS CHIEF, PERMIT DIVISION, OFFICE OF
THE CITY ENGINEER, AND ALFONSO ESPIRITU, IN HIS CAPACITY AS CITY ENGINEER OF
MARIKINA CITY, Petitioners, v. ST. SCHOLASTICA'S COLLEGE AND ST. SCHOLASTICA'S
ACADEMY-MARIKINA, INC., Respondents.

DECISION

MENDOZA, J.:

Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court, which seeks
to set aside the December 1, 2003 Decision of the Court of Appeals (CA) in CA-G.R. SP No. 75691.
1

The Facts

Respondents St. Scholastica’s College (SSC) and St. Scholastica’s Academy-Marikina, Inc. (SSA-
Marikina) are educational institutions organized under the laws of the Republic of the Philippines, with
principal offices and business addresses at Leon Guinto Street, Malate, Manila, and at West Drive,
Marikina Heights, Marikina City, respectively. 2

Respondent SSC is the owner of four (4) parcels of land measuring a total of 56,306.80 square
meters, located in Marikina Heights and covered by Transfer Certificate Title (TCT) No. 91537. Located
within the property are SSA-Marikina, the residence of the sisters of the Benedictine Order, the
formation house of the novices, and the retirement house for the elderly sisters. The property is
enclosed by a tall concrete perimeter fence built some thirty (30) years ago. Abutting the fence along
the West Drive are buildings, facilities, and other improvements. 3

The petitioners are the officials of the City Government of Marikina. On September 30, 1994, the
Sangguniang Panlungsod of Marikina City enacted Ordinance No. 192, entitled “Regulating the
4

Construction of Fences and Walls in the Municipality of Marikina.” In 1995 and 1998, Ordinance Nos.
217 and 200 were enacted to amend Sections 7 and 5, respectively. Ordinance No. 192, as amended,
5 6

is reproduced hereunder, as follows:

ORDINANCE No. 192

Series of 1994

ORDINANCE REGULATING THE CONSTRUCTION OF FENCES AND WALLS IN THE MUNICIPALITY OF

MARIKINA

WHEREAS, under Section 447.2 of Republic Act No. 7160 otherwise known as the Local Government
Code of 1991 empowers the Sangguniang Bayan as the local legislative body of the municipality to “x
x x Prescribe reasonable limits and restraints on the use of property within the jurisdiction of the
municipality, x x x”;
WHEREAS the effort of the municipality to accelerate its economic and physical development, coupled
with urbanization and modernization, makes imperative the adoption of an ordinance which shall
embody up-to-date and modern technical design in the construction of fences of residential,
commercial and industrial buildings;

WHEREAS, Presidential Decree No. 1096, otherwise known as the National Building Code of the
Philippines, does not adequately provide technical guidelines for the construction of fences, in terms of
design, construction, and criteria;

WHEREAS, the adoption of such technical standards shall provide more efficient and effective
enforcement of laws on public safety and security;

WHEREAS, it has occurred in not just a few occasions that high fences or walls did not actually
discourage but, in fact, even protected burglars, robbers, and other lawless elements from the view of
outsiders once they have gained ingress into these walls, hence, fences not necessarily providing
security, but becomes itself a “security problem”;

WHEREAS, to discourage, suppress or prevent the concealment of prohibited or unlawful acts earlier
enumerated, and as guardian of the people of Marikina, the municipal government seeks to enact and
implement rules and ordinances to protect and promote the health, safety and morals of its
constituents;

WHEREAS, consistent too, with the “Clean and Green Program” of the government, lowering of fences
and walls shall encourage people to plant more trees and ornamental plants in their yards, and when
visible, such trees and ornamental plants are expected to create an aura of a clean, green and
beautiful environment for Marikeños;

WHEREAS, high fences are unsightly that, in the past, people planted on sidewalks to “beautify” the
façade of their residences but, however, become hazards and obstructions to pedestrians;

WHEREAS, high and solid walls as fences are considered “un- neighborly” preventing community
members to easily communicate and socialize and deemed to create “boxed-in” mentality among the
populace;

WHEREAS, to gather as wide-range of opinions and comments on this proposal, and as a requirement
of the Local Government Code of 1991 (R.A. 7160), the Sangguniang Bayan of Marikina invited
presidents or officers of homeowners associations, and commercial and industrial establishments in
Marikina to two public hearings held on July 28, 1994 and August 25, 1994;

WHEREAS, the rationale and mechanics of the proposed ordinance were fully presented to the
attendees and no vehement objection was presented to the municipal government;

NOW, THEREFORE, BE IT ORDAINED BY THE SANGGUINANG BAYAN OF MARIKINA IN SESSION DULY

ASSEMBLED:

Section 1. Coverage: This Ordinance regulates the construction of all fences, walls and gates on lots
classified or used for residential, commercial, industrial, or special purposes.

Section 2. Definition of Terms:

a. Front Yard – refers to the area of the lot fronting a street, alley or public thoroughfare.

b. Back Yard – the part of the lot at the rear of the structure constructed therein.

c. Open fence – type of fence which allows a view of “thru-see” of the inner yard and the
improvements therein. (Examples: wrought iron, wooden lattice, cyclone wire)

d. Front gate – refers to the gate which serves as a passage of persons or vehicles fronting a
street, alley, or public thoroughfare.

Section 3. The standard height of fences or walls allowed under this ordinance are as
follows:

(1) Fences on the front yard – shall be no more than one (1) meter in height. Fences in
excess of one (1) meter shall be of an open fence type, at least eighty percent (80%) see-
thru; and
(2) Fences on the side and back yard – shall be in accordance with the provisions of P.D. 1096
otherwise known as the National Building Code.

Section 4. No fence of any kind shall be allowed in areas specifically reserved or classified as parks.

Section 5. In no case shall walls and fences be built within the five (5) meter parking area
allowance located between the front monument line and the building line of commercial and
industrial establishments and educational and religious institutions. 7

Section 6. Exemption.

(1) The Ordinance does not cover perimeter walls of residential subdivisions.
(2) When public safety or public welfare requires, the Sangguniang Bayan may allow the
construction and/or maintenance of walls higher than as prescribed herein and shall issue a
special permit or exemption.

Section 7. Transitory Provision. Real property owners whose existing fences and walls do not conform
to the specifications herein are allowed adequate period of time from the passage of this Ordinance
within which to conform, as follows:

(1) Residential houses – eight (8) years

(2) Commercial establishments – five (5) years
(3) Industrial establishments – three (3) years
(4) Educational institutions – five (5) years 8

(public and privately owned)

Section 8. Penalty. Walls found not conforming to the provisions of this Ordinance shall be demolished
by the municipal government at the expense of the owner of the lot or structure.

Section 9. The Municipal Engineering Office is tasked to strictly implement this ordinance, including
the issuance of the necessary implementing guidelines, issuance of building and fencing permits, and
demolition of non-conforming walls at the lapse of the grace period herein provided.

Section 10. Repealing Clause. All existing Ordinances and Resolutions, Rules and Regulations
inconsistent with the foregoing provisions are hereby repealed, amended or modified.

Section 11. Separability Clause. If for any reason or reasons, local executive orders, rules and
regulations or parts thereof in conflict with this Ordinance are hereby repealed and/or modified
accordingly.

Section 12. Effectivity. This ordinance takes effect after publication. APPROVED: September 30, 1994

(Emphases supplied)

On April 2, 2000, the City Government of Marikina sent a letter to the respondents ordering them to
demolish and replace the fence of their Marikina property to make it 80% see-thru, and, at the same
time, to move it back about six (6) meters to provide parking space for vehicles to park. On April 26, 9

2000, the respondents requested for an extension of time to comply with the directive. In response, 10

the petitioners, through then City Mayor Bayani F. Fernando, insisted on the enforcement of the
subject ordinance.

Not in conformity, the respondents filed a petition for prohibition with an application for a writ of
preliminary injunction and temporary restraining order before the Regional Trial Court, Marikina,
Branch 273 (RTC), docketed as SCA Case No. 2000-381-MK. 11

The respondents argued that the petitioners were acting in excess of jurisdiction in enforcing
Ordinance No. 192, asserting that such contravenes Section 1, Article III of the 1987 Constitution.
That demolishing their fence and constructing it six (6) meters back would result in the loss of at least
1,808.34 square meters, worth about P9,041,700.00, along West Drive, and at least 1,954.02 square
meters, worth roughly P9,770,100.00, along East Drive. It would also result in the destruction of the
garbage house, covered walk, electric house, storage house, comfort rooms, guards’ room, guards’
post, waiting area for visitors, waiting area for students, Blessed Virgin Shrine, P.E. area, and the
multi-purpose hall, resulting in the permanent loss of their beneficial use. The respondents, thus,
asserted that the implementation of the ordinance on their property would be tantamount to an
appropriation of property without due process of law; and that the petitioners could only appropriate a
portion of their property through eminent domain. They also pointed out that the goal of the
provisions to deter lawless elements and criminality did not exist as the solid concrete walls of the
school had served as sufficient protection for many years. 12

The petitioners, on the other hand, countered that the ordinance was a valid exercise of police power,
by virtue of which, they could restrain property rights for the protection of public safety, health,
morals, or the promotion of public convenience and general prosperity. 13

On June 30, 2000, the RTC issued a writ of preliminary injunction, enjoining the petitioners from
implementing the demolition of the fence at SSC’s Marikina property. 14

Ruling of the RTC

On the merits, the RTC rendered a Decision, 15

dated October 2, 2002, granting the petition and
ordering the issuance of a writ of prohibition commanding the petitioners to permanently desist from
enforcing or implementing Ordinance No. 192 on the respondents’ property.

The RTC agreed with the respondents that the order of the petitioners to demolish the fence at the
SSC property in Marikina and to move it back six (6) meters would amount to an appropriation of
property which could only be done through the exercise of eminent domain. It held that the petitioners
could not take the respondents’ property under the guise of police power to evade the payment of just
compensation.

It did not give weight to the petitioners’ contention that the parking space was for the benefit of the
students and patrons of SSA-Marikina, considering that the respondents were already providing for
sufficient parking in compliance with the standards under Rule XIX of the National Building Code.

It further found that the 80% see-thru fence requirement could run counter to the respondents’ right
to privacy, considering that the property also served as a residence of the Benedictine sisters, who
were entitled to some sense of privacy in their affairs. It also found that the respondents were able to
prove that the danger to security had no basis in their case. Moreover, it held that the purpose of
beautification could not be used to justify the exercise of police power.

It also observed that Section 7 of Ordinance No. 192, as amended, provided for retroactive
application. It held, however, that such retroactive effect should not impair the respondents’ vested
substantive rights over the perimeter walls, the six-meter strips of land along the walls, and the
building, structures, facilities, and improvements, which would be destroyed by the demolition of the
walls and the seizure of the strips of land.

The RTC also found untenable the petitioners’ argument that Ordinance No. 192 was a remedial or
curative statute intended to correct the defects of buildings and structures, which were brought about
by the absence or insufficiency of laws. It ruled that the assailed ordinance was neither remedial nor
curative in nature, considering that at the time the respondents’ perimeter wall was built, the same
was valid and legal, and the ordinance did not refer to any previous legislation that it sought to
correct.

The RTC noted that the petitioners could still take action to expropriate the subject property through
eminent domain.

The RTC, thus, disposed:

WHEREFORE, the petition is GRANTED. The writ of prohibition is hereby issued commanding the
respondents to permanently desist from enforcing or implementing Ordinance No. 192, Series of 1994,
as amended, on petitioners’ property in question located at Marikina Heights, Marikina, Metro Manila.

No pronouncement as to costs.

SO ORDERED. 16

Ruling of the CA

In its December 1, 2003 Decision, the CA dismissed the petitioners’ appeal and affirmed the RTC
decision.

The CA reasoned out that the objectives stated in Ordinance No. 192 did not justify the exercise of
police power, as it did not only seek to regulate, but also involved the taking of the respondents’
property without due process of law. The respondents were bound to lose an unquantifiable sense of
security, the beneficial use of their structures, and a total of 3,762.36 square meters of property. It,
thus, ruled that the assailed ordinance could not be upheld as valid as it clearly invaded the personal
and property rights of the respondents and “[f]or being unreasonable, and undue restraint of trade.” 17

It noted that although the petitioners complied with procedural due process in enacting Ordinance No.
192, they failed to comply with substantive due process. Hence, the failure of the respondents to
attend the public hearings in order to raise objections did not amount to a waiver of their right to
question the validity of the ordinance.

The CA also shot down the argument that the five-meter setback provision for parking was a legal
easement, the use and ownership of which would remain with, and inure to, the benefit of the
respondents for whom the easement was primarily intended. It found that the real intent of the
setback provision was to make the parking space free for use by the public, considering that such
would cease to be for the exclusive use of the school and its students as it would be situated outside
school premises and beyond the school administration’s control.

In affirming the RTC ruling that the ordinance was not a curative statute, the CA found that the
petitioner failed to point out any irregularity or invalidity in the provisions of the National Building
Code that required correction or cure. It noted that any correction in the Code should be properly
undertaken by the Congress and not by the City Council of Marikina through an ordinance.

The CA, thus, disposed:

WHEREFORE, all foregoing premises considered, the instant appeal is DENIED. The October 2, 2002
Decision and the January 13, 2003 Order of the Regional Trial Court (RTC) of Marikina City, Branch
273, granting petitioners-appellees’ petition for Prohibition in SCA Case No. 2000-381-MK are hereby
AFFIRMED.

SO ORDERED. 18

Aggrieved by the decision of the CA, the petitioners are now before this Court presenting the following

ASSIGNMENT OF ERRORS

1. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN DECLARING THAT

CITY ORDINANCE NO. 192, SERIES OF 1994 IS NOT A VALID EXERCISE OF POLICE
POWER;

2. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT

THE AFOREMENTIONED ORDINANCE IS AN EXERCISE OF THE CITY OF THE POWER OF
EMINENT DOMAIN;

3. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN DECLARING THAT

THE CITY VIOLATED THE DUE PROCESS CLAUSE IN IMPLEMENTING ORDINANCE NO.
192, SERIES OF 1994; AND

4. WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT

THE ABOVE-MENTIONED ORDINANCE CANNOT BE GIVEN RETROACTIVE APPLICATION. 19

In this case, the petitioners admit that Section 5 of the assailed ordinance, pertaining to the five-
meter setback requirement is, as held by the lower courts, invalid. Nonetheless, the petitioners argue
20

that such invalidity was subsequently cured by Zoning Ordinance No. 303, series of 2000. They also
contend that Section 3, relating to the 80% see-thru fence requirement, must be complied with, as it
remains to be valid.

Ruling of the Court

The ultimate question before the Court is whether Sections 3.1 and 5 of Ordinance No. 192 are valid
exercises of police power by the City Government of Marikina.

“Police power is the plenary power vested in the legislature to make statutes and ordinances to
promote the health, morals, peace, education, good order or safety and general welfare of the
people.” 21
The State, through the legislature, has delegated the exercise of police power to local
government units, as agencies of the State. This delegation of police power is embodied in Section 16 22

of the Local Government Code of 1991 (R.A. No. 7160), known as the General Welfare Clause, which 23

has two branches. “The first, known as the general legislative power, authorizes the municipal council
to enact ordinances and make regulations not repugnant to law, as may be necessary to carry into
effect and discharge the powers and duties conferred upon the municipal council by law. The second,
known as the police power proper, authorizes the municipality to enact ordinances as may be
necessary and proper for the health and safety, prosperity, morals, peace, good order, comfort, and
convenience of the municipality and its inhabitants, and for the protection of their property.” 24

White Light Corporation v. City of Manila, 25

discusses the test of a valid ordinance:

The test of a valid ordinance is well established. A long line of decisions including City of Manila has
held that for an ordinance to be valid, it must not only be within the corporate powers of the local
government unit to enact and pass according to the procedure prescribed by law, it must also conform
to the following substantive requirements: (1) must not contravene the Constitution or any statute;
(2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit
but may regulate trade; (5) must be general and consistent with public policy; and (6) must not be
unreasonable. 26

Ordinance No. 192 was passed by the City Council of Marikina in the apparent exercise of its police
power. To successfully invoke the exercise of police power as the rationale for the enactment of an
ordinance and to free it from the imputation of constitutional infirmity, two tests have been used by
the Court – the rational relationship test and the strict scrutiny test:

We ourselves have often applied the rational basis test mainly in analysis of equal protection
challenges. Using the rational basis examination, laws or ordinances are upheld if they rationally
further a legitimate governmental interest. Under intermediate review, governmental interest is
extensively examined and the availability of less restrictive measures is considered. Applying strict
scrutiny, the focus is on the presence of compelling, rather than substantial, governmental interest
and on the absence of less restrictive means for achieving that interest. 27

Even without going to a discussion of the strict scrutiny test, Ordinance No. 192, series of 1994 must
be struck down for not being reasonably necessary to accomplish the City’s purpose. More
importantly, it is oppressive of private rights.

Under the rational relationship test, an ordinance must pass the following requisites as discussed in
Social Justice Society (SJS) v. Atienza, Jr.: 28

As with the State, local governments may be considered as having properly exercised their police
power only if the following requisites are met: (1) the interests of the public generally, as
distinguished from those of a particular class, require its exercise and (2) the means employed are
reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon
individuals. In short, there must be a concurrence of a lawful subject and lawful method. 29

Lacking a concurrence of these two requisites, the police power measure shall be struck down as an
arbitrary intrusion into private rights and a violation of the due process clause. 30

Section 3.1 and 5 of the assailed ordinance are pertinent to the issue at hand, to wit:

Section 3. The standard height of fences of walls allowed under this ordinance are as follows:

(1) Fences on the front yard – shall be no more than one (1) meter in height. Fences in excess of one
(1) meter shall be an open fence type, at least eighty percent (80%) see-thru;

x x x      x x x      x x x

Section 5. In no case shall walls and fences be built within the five (5) meter parking area allowance
located between the front monument line and the building line of commercial and industrial
establishments and educational and religious institutions.

The respondents, thus, sought to prohibit the petitioners from requiring them to (1) demolish their
existing concrete wall, (2) build a fence (in excess of one meter) which must be 80% see-thru, and
(3) build the said fence six meters back in order to provide a parking area.

Setback Requirement
The Court first turns its attention to Section 5 which requires the five- meter setback of the fence to
provide for a parking area. The petitioners initially argued that the ownership of the parking area to be
created would remain with the respondents as it would primarily be for the use of its students and
faculty, and that its use by the public on non-school days would only be incidental. In their Reply,
however, the petitioners admitted that Section 5 was, in fact, invalid for being repugnant to the
Constitution. 31

The Court agrees with the latter position.

The Court joins the CA in finding that the real intent of the setback requirement was to make the
parking space free for use by the public, considering that it would no longer be for the exclusive use of
the respondents as it would also be available for use by the general public. Section 9 of Article III of
the 1987 Constitution, a provision on eminent domain, provides that private property shall not be
taken for public use without just compensation.

The petitioners cannot justify the setback by arguing that the ownership of the property will continue
to remain with the respondents. It is a settled rule that neither the acquisition of title nor the total
destruction of value is essential to taking. In fact, it is usually in cases where the title remains with the
private owner that inquiry should be made to determine whether the impairment of a property is
merely regulated or amounts to a compensable taking. 32
The Court is of the view that the
implementation of the setback requirement would be tantamount to a taking of a total of 3,762.36
square meters of the respondents’ private property for public use without just compensation, in
contravention to the Constitution.

Anent the objectives of prevention of concealment of unlawful acts and “un-neighborliness,” it is

obvious that providing for a parking area has no logical connection to, and is not reasonably necessary
for, the accomplishment of these goals.

Regarding the beautification purpose of the setback requirement, it has long been settled that the
State may not, under the guise of police power, permanently divest owners of the beneficial use of
their property solely to preserve or enhance the aesthetic appearance of the community. The Court, 33

thus, finds Section 5 to be unreasonable and oppressive as it will substantially divest the respondents
of the beneficial use of their property solely for aesthetic purposes. Accordingly, Section 5 of
Ordinance No. 192 is invalid.

The petitioners, however, argue that the invalidity of Section 5 was properly cured by Zoning
Ordinance No. 303, 34
Series of 2000, which classified the respondents’ property to be within an
institutional zone, under which a five-meter setback has been required.

The petitioners are mistaken. Ordinance No. 303, Series of 2000, has no bearing to the case at hand.

The Court notes with displeasure that this argument was only raised for the first time on appeal in this
Court in the petitioners’ Reply. Considering that Ordinance No. 303 was enacted on December 20,
2000, the petitioners could very well have raised it in their defense before the RTC in 2002. The
settled rule in this jurisdiction is that a party cannot change the legal theory of this case under which
the controversy was heard and decided in the trial court. It should be the same theory under which
the review on appeal is conducted. Points of law, theories, issues, and arguments not adequately
brought to the attention of the lower court will not be ordinarily considered by a reviewing court,
inasmuch as they cannot be raised for the first time on appeal. This will be offensive to the basic rules
of fair play, justice, and due process. 35

Furthermore, the two ordinances have completely different purposes and subjects. Ordinance No. 192
aims to regulate the construction of fences, while Ordinance No. 303 is a zoning ordinance which
classifies the city into specific land uses. In fact, the five-meter setback required by Ordinance No. 303
does not even appear to be for the purpose of providing a parking area.

By no stretch of the imagination, therefore, can Ordinance No. 303, “cure” Section 5 of Ordinance No.
192.

In any case, the clear subject of the petition for prohibition filed by the respondents is Ordinance No.
192 and, as such, the precise issue to be determined is whether the petitioners can be prohibited from
enforcing the said ordinance, and no other, against the respondents.

80% See-Thru Fence Requirement

The petitioners argue that while Section 5 of Ordinance No. 192 may be invalid, Section 3.1 limiting
the height of fences to one meter and requiring fences in excess of one meter to be at least 80% see-
thru, should remain valid and enforceable against the respondents.

The Court cannot accommodate the petitioner.

For Section 3.1 to pass the rational relationship test, the petitioners must show the reasonable
relation between the purpose of the police power measure and the means employed for its
accomplishment, for even under the guise of protecting the public interest, personal rights and those
pertaining to private property will not be permitted to be arbitrarily invaded. 36

The principal purpose of Section 3.1 is “to discourage, suppress or prevent the concealment of
prohibited or unlawful acts.” The ultimate goal of this objective is clearly the prevention of crime to
ensure public safety and security. The means employed by the petitioners, however, is not reasonably
necessary for the accomplishment of this purpose and is unduly oppressive to private rights.

The petitioners have not adequately shown, and it does not appear obvious to this Court, that an 80%
see-thru fence would provide better protection and a higher level of security, or serve as a more
satisfactory criminal deterrent, than a tall solid concrete wall. It may even be argued that such
exposed premises could entice and tempt would-be criminals to the property, and that a see-thru
fence would be easier to bypass and breach. It also appears that the respondents’ concrete wall has
served as more than sufficient protection over the last 40 years. `

As to the beautification purpose of the assailed ordinance, as previously discussed, the State may not,
under the guise of police power, infringe on private rights solely for the sake of the aesthetic
appearance of the community. Similarly, the Court cannot perceive how a see-thru fence will foster
“neighborliness” between members of a community.

Compelling the respondents to construct their fence in accordance with the assailed ordinance is, thus,
a clear encroachment on their right to property, which necessarily includes their right to decide how
best to protect their property.

It also appears that requiring the exposure of their property via a see- thru fence is violative of their
right to privacy, considering that the residence of the Benedictine nuns is also located within the
property. The right to privacy has long been considered a fundamental right guaranteed by the
Constitution that must be protected from intrusion or constraint. The right to privacy is essentially the
right to be let alone, as governmental powers should stop short of certain intrusions into the personal
37

life of its citizens. 38

It is inherent in the concept of liberty, enshrined in the Bill of Rights (Article III) in Sections 1, 2, 3(1),
6, 8, and 17, Article III of the 1987 Constitution. 39

The enforcement of Section 3.1 would, therefore, result in an undue interference with the
respondents’ rights to property and privacy. Section 3.1 of Ordinance No. 192 is, thus, also invalid and
cannot be enforced against the respondents.

No Retroactivity

Ordinance No. 217 amended Section 7 of Ordinance No. 192 by including the regulation of educational
institutions which was unintentionally omitted, and giving said educational institutions five (5) years
from the passage of Ordinance No. 192 (and not Ordinance No. 217) to conform to its provisions. The 40

petitioners argued that the amendment could be retroactively applied because the assailed ordinance
is a curative statute which is retroactive in nature.

Considering that Sections 3.1 and 5 of Ordinance No. 192 cannot be enforced against the
respondents, it is no longer necessary to rule on the issue of retroactivity. The Court shall,
nevertheless, pass upon the issue for the sake of clarity.

“Curative statutes are enacted to cure defects in a prior law or to validate legal proceedings which
would otherwise be void for want of conformity with certain legal requirements. They are intended to
supply defects, abridge superfluities and curb certain evils. They are intended to enable persons to
carry into effect that which they have designed or intended, but has failed of expected legal
consequence by reason of some statutory disability or irregularity in their own action. They make valid
that which, before the enactment of the statute was invalid. Their purpose is to give validity to acts
done that would have been invalid under existing laws, as if existing laws have been complied with.
Curative statutes, therefore, by their very essence, are retroactive.” 41

The petitioners argue that Ordinance No. 192 is a curative statute as it aims to correct or cure a defect
in the National Building Code, namely, its failure to provide for adequate guidelines for the
construction of fences. They ultimately seek to remedy an insufficiency in the law. In aiming to cure
this insufficiency, the petitioners attempt to add lacking provisions to the National Building Code. This
is not what is contemplated by curative statutes, which intend to correct irregularities or invalidity in
the law. The petitioners fail to point out any irregular or invalid provision. As such, the assailed
ordinance cannot qualify as curative and retroactive in nature.

At any rate, there appears to be no insufficiency in the National Building Code with respect to parking
provisions in relation to the issue of the respondents. Paragraph 1.16.1, Rule XIX of the Rules and
Regulations of the said code requires an educational institution to provide one parking slot for every
ten classrooms. As found by the lower courts, the respondents provide a total of 76 parking slots for
their 80 classrooms and, thus, had more than sufficiently complied with the law.

Ordinance No. 192, as amended, is, therefore, not a curative statute which may be applied
retroactively.

Separability

Sections 3.1 and 5 of Ordinance No. 192, as amended, are, thus, invalid and cannot be enforced
against the respondents. Nonetheless, "the general rule is that where part of a statute is void as
repugnant to the Constitution, while another part is valid, the valid portion, if susceptible to being
separated from the invalid, may stand and be enforced." 42
Thus, the other sections of the assailed
ordinance remain valid and enforceable.

Conclusion

Considering the invalidity of Sections 3.1 and 5, it is clear that the petitioners were acting in excess of
their jurisdiction in enforcing Ordinance No. 1 92 against the respondents. The CA was correct in
affirming the decision of the RTC in issuing the writ of prohibition. The petitioners must permanently
desist from enforcing Sections 3.1 and 5 of the assailed ordinance on the respondents' property in
Marikina City.

WHEREFORE, the petition is DENIED. The October 2, 2002 Decision of the Regional Trial Court in
SCA Case No. 2000-381-MK is AFFIRMED but MODIFIED to read as follows:

WHEREFORE, the petition is GRANTED. The writ of prohibition is hereby issued commanding the
respondents to permanently desist from enforcing or implementing Sections 3.1 and 5 of Ordinance
No. 192, Series of 1994, as amended, on the petitioners' property in question located in Marikina
Heights, Marikina, Metro Manila.

No pronouncement as to costs.

SO ORDERED.

G.R. No. 118712 October 6, 1995

LAND BANK OF THE PHILIPPINES, petitioner,

vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL
MANAGEMENT & DEVELOPMENT CORP., respondents.

G.R. No. 118745 October 6, 1995

DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform,

petitioner,
vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL
MANAGEMENT & DEVELOPMENT CORP., ET AL., respondents.

FRANCISCO, R., J.:

It has been declared that the duty of the court to protect the weak and the underprivileged should not
be carried out to such an extent as deny justice to the landowner whenever truth and justice happen
to be on his side. As eloquently stated by Justice Isagani Cruz:
1

. . . social justice — or any justice for that matter — is for the deserving, whether he
be a millionaire in his mansion or a pauper in his hovel. It is true that, in case of
reasonable doubt, we are called upon to tilt the balance in favor of the poor, to whom
the Constitution fittingly extends its sympathy and compassion. But never is it
justified to prefer the poor simply because they are poor, or to reject the rich simply
because they are rich, for justice must always be served, for poor and rich alike,
according to the mandate of the law. 2

In this agrarian dispute, it is once more imperative that the aforestated principles be applied in its
resolution.

Separate petitions for review were filed by petitioners Department of Agrarian Reform (DAR) (G.R.
No. 118745) and Land Bank of the Philippines (G.R. No. 118712) following the adverse ruling by the
Court of Appeals in CA-G.R. SP No. 33465. However, upon motion filed by private respondents, the
petitions were ordered consolidated. 3
Petitioners assail the decision of the Court of Appeals promulgated on October 20, 1994, which
granted private respondents' Petition for Certiorari and Mandamus and ruled as follows:

WHEREFORE, premises considered, the Petition for Certiorari and Mandamus is

hereby GRANTED:

a) DAR Administrative Order No. 9, Series of 1990 is declared null

and void insofar as it provides for the opening of trust accounts in lieu
of deposits in cash or bonds;

b) Respondent Landbank is ordered to immediately deposit — not

merely "earmark", "reserve" or "deposit in trust" — with an accessible
bank designated by respondent DAR in the names of the following
petitioners the following amounts in cash and in government financial
instruments — within the parameters of Sec. 18 (1) of RA 6657:

P 1,455,207.31 Pedro L. Yap

P 135,482.12 Heirs of Emiliano Santiago

P 15,914,127.77 AMADCOR;

c) The DAR-designated bank is ordered to allow the petitioners to

withdraw the above-deposited amounts without prejudice to the final
determination of just compensation by the proper authorities; and

d) Respondent DAR is ordered to 1) immediately conduct summary

administrative proceedings to determine the just compensation for
the lands of the petitioners giving the petitioners 15 days from notice
within which to submit evidence and to 2) decide the cases within 30
days after they are submitted for decision. 4

Likewise, petitioners seek the reversal of the Resolution dated January 18, 1995, denying
5

their motion for reconsideration.

Private respondents are landowners whose landholdings were acquired by the DAR and subjected
to transfer schemes to qualified beneficiaries under the Comprehensive Agrarian Reform Law
(CARL, Republic Act No. 6657).

Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the valuation
and payment of compensation for their land pursuant to the provisions of RA 6657, private
respondents filed with this Court a Petition for Certiorari and Mandamus with prayer for
preliminary mandatory injunction. Private respondents questioned the validity of DAR
Administrative Order No. 6, Series of 1992 and DAR Administrative Order No. 9, Series of
6

1990, and sought to compel the DAR to expedite the pending summary administrative
7

proceedings to finally determine the just compensation of their properties, and the Landbank
to deposit in cash and bonds the amounts respectively "earmarked", "reserved" and
"deposited in trust accounts" for private respondents, and to allow them to withdraw the
same.
Through a Resolution of the Second Division dated February 9, 1994, this Court referred the petition
to respondent Court of Appeals for proper determination and disposition.

As found by respondent court , the following are undisputed:

Petitioner Pedro Yap alleges that "(o)n 4 September 1992 the transfer certificates of
title (TCTs) of petitioner Yap were totally cancelled by the Registrar of Deeds of
Leyte and were transferred in the names of farmer beneficiaries collectively, based
on the request of the DAR together with a certification of the Landbank that the sum
of P735,337.77 and P719,869.54 have been earmarked for Landowner Pedro L. Yap
for the parcels of lands covered by TCT Nos. 6282 and 6283, respectively, and
issued in lieu thereof TC-563 and TC-562, respectively, in the names of listed
beneficiaries (ANNEXES "C" & "D") without notice to petitioner Yap and without
complying with the requirement of Section 16 (e) of RA 6657 to deposit the
compensation in cash and Landbank bonds in an accessible bank. (Rollo, p. 6).

The above allegations are not disputed by any of the respondents.

Petitioner Heirs of Emiliano Santiago allege that the heirs of Emiliano F. Santiago are
the owners of a parcel of land located at Laur, NUEVA ECIJA with an area of
18.5615 hectares covered by TCT No. NT-60359 of the registry of Deeds of Nueva
Ecija, registered in the name of the late Emiliano F. Santiago; that in November and
December 1990, without notice to the petitioners, the Landbank required and the
beneficiaries executed Actual tillers Deed of Undertaking (ANNEX "B") to pay rentals
to the LandBank for the use of their farmlots equivalent to at least 25% of the net
harvest; that on 24 October 1991 the DAR Regional Director issued an order
directing the Landbank to pay the landowner directly or through the establishment of
a trust fund in the amount of P135,482.12, that on 24 February 1992, the Landbank
reserved in trust P135,482.12 in the name of Emiliano F. Santiago. (ANNEX "E";
Rollo,
p. 7); that the beneficiaries stopped paying rentals to the landowners after they
signed the Actual Tiller's Deed of Undertaking committing themselves to pay rentals
to the LandBank (Rollo, p. 133).

The above allegations are not disputed by the respondents except that respondent
Landbank claims 1) that it was respondent DAR, not Landbank which required the
execution of Actual Tillers Deed of Undertaking (ATDU, for brevity); and 2) that
respondent Landbank, although armed with the ATDU, did not collect any amount as
rental from the substituting beneficiaries (Rollo, p. 99).

Petitioner Agricultural Management and Development Corporation (AMADCOR, for

brevity) alleges — with respect to its properties located in San Francisco, Quezon —
that the properties of AMADCOR in San Francisco, Quezon consist of a parcel of
land covered by TCT No. 34314 with an area of 209.9215 hectares and another
parcel covered by TCT No. 10832 with an area of 163.6189 hectares; that a
summary administrative proceeding to determine compensation of the property
covered by TCT No. 34314 was conducted by the DARAB in Quezon City without
notice to the landowner; that a decision was rendered on 24 November 1992
(ANNEX "F") fixing the compensation for the parcel of land covered by TCT No.
34314 with an area of 209.9215 hectares at P2,768,326.34 and ordering the
Landbank to pay or establish a trust account for said amount in the name of
AMADCOR; and that the trust account in the amount of P2,768,326.34 fixed in the
 decision was established by adding P1,986,489.73 to the first trust account
established on 19 December 1991 (ANNEX "G"). With respect to petitioner
AMADCOR's property in Tabaco, Albay, it is alleged that the property of AMADCOR
in Tabaco, Albay is covered by TCT No. T-2466 of the Register of Deeds of Albay
with an area of 1,629.4578 hectares'; that emancipation patents were issued
covering an area of 701.8999 hectares which were registered on 15 February 1988
but no action was taken thereafter by the DAR to fix the compensation for said land;
that on 21 April 1993, a trust account in the name of AMADCOR was established in
the amount of P12,247,217.83', three notices of acquisition having been previously
rejected by AMADCOR. (Rollo, pp. 8-9)

The above allegations are not disputed by the respondents except that respondent
Landbank claims that petitioner failed to participate in the DARAB proceedings (land
valuation case) despite due notice to it (Rollo, p. 100).
8

Private respondents argued that Administrative Order No. 9, Series of 1990 was issued without
jurisdiction and with grave abuse of discretion because it permits the opening of trust accounts by
the Landbank, in lieu of depositing in cash or bonds in an accessible bank designated by the DAR,
the compensation for the land before it is taken and the titles are cancelled as provided under
Section 16(e) of RA 6657. Private respondents also assail the fact that the DAR and the Landbank
9

merely "earmarked", "deposited in trust" or "reserved" the compensation in their names as

landowners despite the clear mandate that before taking possession of the property, the
compensation must be deposited in cash or in bonds. 10

Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid exercise of its rule-
making power pursuant to Section 49 of RA 6657. Moreover, the DAR maintained that the issuance
11

of the "Certificate of Deposit" by the Landbank was a substantial compliance with Section 16(e) of
RA 6657 and the ruling in the case of Association of Small Landowners in the Philippines, Inc., et al.
vs. Hon. Secretary of Agrarian Reform, G.R. No. 78742, July 14, 1989 (175 SCRA 343). 12

For its part, petitioner Landbank declared that the issuance of the Certificates of Deposits was in
consonance with Circular Nos. 29, 29-A and 54 of the Land Registration Authority where the words
"reserved/deposited" were also used. 13

On October 20, 1994, the respondent court rendered the assailed decision in favor of private
respondents. Petitioners filed a motion for reconsideration but respondent court denied the same.
14 15

Hence, the instant petitions.

On March 20, 1995, private respondents filed a motion to dismiss the petition in G.R. No. 118745
alleging that the appeal has no merit and is merely intended to delay the finality of the appealed
decision. The Court, however, denied the motion and instead required the respondents to file their
16

comments. 17

Petitioners submit that respondent court erred in (1) declaring as null and void DAR Administrative
Order No. 9, Series of 1990, insofar as it provides for the opening of trust accounts in lieu of deposit
in cash or in bonds, and (2) in holding that private respondents are entitled as a matter of right to the
immediate and provisional release of the amounts deposited in trust pending the final resolution of
the cases it has filed for just compensation.

Anent the first assignment of error, petitioners maintain that the word "deposit" as used in Section
16(e) of RA 6657 referred merely to the act of depositing and in no way excluded the opening of a
trust account as a form of deposit. Thus, in opting for the opening of a trust account as the
acceptable form of deposit through Administrative Circular No. 9, petitioner DAR did not commit any
grave abuse of discretion since it merely exercised its power to promulgate rules and regulations in
implementing the declared policies of RA 6657.

The contention is untenable. Section 16(e) of RA 6657 provides as follows:

Sec. 16. Procedure for Acquisition of Private Lands —

xxx xxx xxx

(e) Upon receipt by the landowner of the corresponding payment or, in case of
rejection or no response from the landowner, upon the deposit with an accessible
bank designated by the DAR of the compensation in cash or in LBP bonds in
accordance with this Act, the DAR shall take immediate possession of the land and
shall request the proper Register of Deeds to issue a Transfer Certificate of Title
(TCT) in the name of the Republic of the Philippines. . . . (emphasis supplied)

It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP bonds". Nowhere
does it appear nor can it be inferred that the deposit can be made in any other form. If it were the
intention to include a "trust account" among the valid modes of deposit, that should have been made
express, or at least, qualifying words ought to have appeared from which it can be fairly deduced
that a "trust account" is allowed. In sum, there is no ambiguity in Section 16(e) of RA 6657 to warrant
an expanded construction of the term "deposit".

The conclusive effect of administrative construction is not absolute. Action of an administrative

agency may be disturbed or set aside by the judicial department if there is an error of law, a grave
abuse of power or lack of jurisdiction or grave abuse of discretion clearly conflicting with either the
letter or the spirit of a legislative enactment. In this regard, it must be stressed that the function of
18

promulgating rules and regulations may be legitimately exercised only for the purpose of carrying the
provisions of the law into effect. The power of administrative agencies is thus confined to
implementing the law or putting it into effect. Corollary to this is that administrative regulations
cannot extend
the law and amend a legislative enactment, for settled is the rule that administrative regulations
19

must be in harmony with the provisions of the law. And in case there is a discrepancy between the
basic law and an implementing rule or regulation, it is the former that prevails.20

In the present suit, the DAR clearly overstepped the limits of its power to enact rules and regulations
when it issued Administrative Circular No. 9. There is no basis in allowing the opening of a trust
account in behalf of the landowner as compensation for his property because, as heretofore
discussed, Section 16(e) of RA 6657 is very specific that the deposit must be made only in "cash" or
in "LBP bonds". In the same vein, petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54
because these implementing regulations cannot outweigh the clear provision of the law. Respondent
court therefore did not commit any error in striking down Administrative Circular No. 9 for being null
and void.

Proceeding to the crucial issue of whether or not private respondents are entitled to withdraw the
amounts deposited in trust in their behalf pending the final resolution of the cases involving the final
valuation of their properties, petitioners assert the negative.

The contention is premised on the alleged distinction between the deposit of compensation under
Section 16(e) of RA 6657 and payment of final compensation as provided under Section 18 of the 21
same law. According to petitioners, the right of the landowner to withdraw the amount deposited in
his behalf pertains only to the final valuation as agreed upon by the landowner, the DAR and the
LBP or that adjudged by the court. It has no reference to amount deposited in the trust account
pursuant to Section 16(e) in case of rejection by the landowner because the latter amount is only
provisional and intended merely to secure possession of the property pending final valuation. To
further bolster the contention petitioners cite the following pronouncements in the case of
"Association of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform". 22

The last major challenge to CARP is that the landowner is divested of his property
even before actual payment to him in full of just compensation, in contravention of a
well-accepted principle of eminent domain.

xxx xxx xxx

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

xxx xxx xxx

Hence the argument that the assailed measures violate due process by arbitrarily
transferring title before the land is fully paid for must also be rejected.

Notably, however, the aforecited case was used by respondent court in discarding petitioners'
assertion as it found that:

. . . despite the "revolutionary" character of the expropriation envisioned under RA

6657 which led the Supreme Court, in the case of Association of Small Landowners
in the Phil. Inc. vs. Secretary of Agrarian Reform (175 SCRA 343), to conclude that
"payments of the just compensation is not always required to be made fully in
money" — even as the Supreme Court admits in the same case "that the traditional
medium for the payment of just compensation is money and no other" — the
Supreme Court in said case did not abandon the "recognized rule . . . that title to the
property expropriated shall pass from the owner to the expropriator only upon full
payment of the just compensation." (Emphasis supplied)
23

We agree with the observations of respondent court. The ruling in the "Association" case merely
recognized the extraordinary nature of the expropriation to be undertaken under RA 6657 thereby
allowing a deviation from the traditional mode of payment of compensation and recognized payment
other than in cash. It did not, however, dispense with the settled rule that there must be full payment
of just compensation before the title to the expropriated property is transferred.

The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA
6657 and determination of just compensation under Section 18 is unacceptable. To withhold the
right of the landowners to appropriate the amounts already deposited in their behalf as
compensation for their properties simply because they rejected the DAR's valuation, and
notwithstanding that they have already been deprived of the possession and use of such properties,
is an oppressive exercise of eminent domain. The irresistible expropriation of private respondents'
properties was painful enough for them. But petitioner DAR rubbed it in all the more by withholding
that which rightfully belongs to private respondents in exchange for the taking, under an authority
(the "Association" case) that is, however, misplaced. This is misery twice bestowed on private
respondents, which the Court must rectify.

Hence, we find it unnecessary to distinguish between provisional compensation under Section 16(e)
and final compensation under Section 18 for purposes of exercising the landowners' right to
appropriate the same. The immediate effect in both situations is the same, the landowner is deprived
of the use and possession of his property for which he should be fairly and immediately
compensated. Fittingly, we reiterate the cardinal rule that:

. . . within the context of the State's inherent power of eminent domain, just
compensation means not only the correct determination of the amount to be paid to
the owner of the land but also the payment of the land within a reasonable time from
its taking. Without prompt payment, compensation cannot be considered "just" for
the property owner is made to suffer the consequence of being immediately deprived
of his land while being made to wait for a decade or more before actually receiving
the amount necessary to cope with his loss. (Emphasis supplied)
24

The promulgation of the "Association" decision endeavored to remove all legal obstacles in the
implementation of the Comprehensive Agrarian Reform Program and clear the way for the true
freedom of the farmer. But despite this, cases involving its implementation continue to multiply and
25

clog the courts' dockets. Nevertheless, we are still optimistic that the goal of totally emancipating the
farmers from their bondage will be attained in due time. It must be stressed, however, that in the
pursuit of this objective, vigilance over the rights of the landowners is equally important because
social justice cannot be invoked to trample on the rights of property owners, who under our
Constitution and laws are also entitled to protection.26

WHEREFORE, the foregoing premises considered, the petition is hereby DENIED for lack of merit
and the appealed decision is AFFIRMED in toto.

SO ORDERED.

G. R. No. 147511 - January 20, 2003

MARINA Z. REYES; ALFREDO A. FRANCISCO; ANGELITA Z. GARCIA; ALFREDO Z. FRANCISCO,

JR; ARMANDO Z. FRANCISCO; ALMA C. FRANCISCO; EUGENIA Z. LUNA; CLARITA Z.
ZABALLERO, LEONARDO Z. ZABALLERO, JR, and TEODORO Z. ZABALLERO, in substitution of
LEONARDO M. ZABALLERO; AUGUSTO M. ZABALLERO; FRINE A. ZABALLERO; ELENA FRONDA
ZABALLERO; VICTOR GREGORIO F. ZABALLERO; MARIA ELENA F. ZABALLERO; LOURDES
ZABALLERO-LAVA; SOCORRO EMILIA ZABALLERO-YAP; and TERESITA F. ZABALLERO,
Petitioners, vs. NATIONAL HOUSING AUTHORITY, Respondent.

PUNO, J.:

This is an appeal by certiorari from the decision of the Court of Appeals in CA-GR CV No. 51641 dated
September 29, 20001 affirming the judgment of the Regional Trial Court of Quezon City, Branch 79
which dismissed the complaint for forfeiture of rights filed by herein petitioners, as well as the
Resolution dated March 13, 2001 denying petitioners' motion for reconsideration.

Records show that in 1977, respondent National Housing Authority (NHA) filed separate complaints for
the expropriation of sugarcane lands, particularly Lot Nos. 6450, 6448-E, 6198-A and 6199 of the
cadastral survey of Dasmariñas, Cavite belonging to the petitioners, before the then Court of First
Instance of Cavite, and docketed as Civil Case Nos. T.G.-392, T.G.-396 and T.G.-417. The stated
public purpose of the expropriation was the expansion of the Dasmariñas Resettlement Project to
accommodate the squatters who were relocated from the Metropolitan Manila area. The trial court
rendered judgment ordering the expropriation of these lots and the payment of just compensation.
This was affirmed by the Supreme Court in a decision rendered on October 29, 1987 in the case of
NHA vs. Zaballero2 and which became final on November 26, 1987. 3

On February 24, 1989, the expropriation court (now Branch 18, Regional Trial Court of Tagaytay City)
issued an Order4 the dispositive portion of which reads:

"WHEREFORE, and resolving thus, let an Alias Writ of Execution be immediately issued and that:

(1) The Register of Deeds of the Province of Cavite is hereby ordered to transfer, in the name of the
plaintiff National Housing Authority, the following:

(a) Transfer Certificate No. RT-638 containing an area of 79,167 square meters situated in Barrio
Bangkal, Dasmariñas, Cavite;

(b) Transfer Certificate of Title No. T-55702 containing an area of 20,872 square meters situated in
Barrio Bangkal, Dasmariñas, Cavite;

(c) Transfer Certificate of Title No. RT-639 and RT-4641 covering Lot Nos. 6198-A and 6199 with an
aggregate area of 159,985 square meters also situated in Barrio Bangkal, Dasmariñas, Cavite.

(2) Plaintiff National Housing Authority is likewise hereby ordered, under pain of contempt, to
immediately pay the defendants, the amounts stated in the Writ of Execution as the adjudicated
compensation of their expropriated properties, which process was received by it according to the
records, on September 26, 1988, segregating therefrom, and in separate check, the lawyer's fees in
favor of Atty. Bobby P. Yuseco, in the amount of P322,123.05, as sustained by their contract as
gleaned from the records, with no other deduction, paying on its own (NHA) account, the necessary
legal expenses incident to the registration or issuance of new certificates of title, pursuant to the
provisions of the Property Registration Law (PD 1529);

(3) Defendants, however, are directed to pay the corresponding capital gains tax on the subject
properties, directing them additionally, to coordinate with the plaintiff NHA in this regard, in order to
facilitate the termination of this case, put an end to this controversy and consign the same to its final
rest."

For the alleged failure of respondent NHA to comply with the above order, petitioners filed on April 28,
1992 a complaint5 for forfeiture of rights before the Regional Trial Court of Quezon City, Branch 79, in
Civil Case No. Q-92-12093. They alleged that respondent NHA had not relocated squatters from the
Metropolitan Manila area on the expropriated lands in violation of the stated public purpose for
expropriation and had not paid the just compensation fixed by the court. They prayed that respondent
NHA be enjoined from disposing and alienating the expropriated properties and that judgment be
rendered forfeiting all its rights and interests under the expropriation judgment. In its Answer, 6
respondent NHA averred that it had already paid a substantial amount to herein petitioners and that
the expropriation judgment could not be executed in view of several issues raised by respondent NHA
before the expropriation court (now Branch 18, RTC, Tagaytay City) concerning capital gains tax,
registration fees and other expenses for the transfer of title to respondent NHA, as well as the claims
for attorney's fees of Atty. Joaquin Yuseco, Jr., collaborating counsel for petitioners.

Ocular inspections7 conducted by the trial court on the subject properties show that:

"1. 80% of Lot No. 6198-A with an area of 120,146 square meters is already occupied by relocatees
whose houses are made of light materials with very few houses partly made of hollow blocks. The
relocatees were relocated only on (sic) March of 1994;
2. Most of the area covered by Lot No. 2075 is almost occupied by houses and structures, most of
which are made of concrete materials. These houses are not being occupied by squatters relocated to
the said lot by the defendant NHA;

3. Lot No. 6199 is also occupied by concrete houses and structures but likewise there are no
relocatees in said lot. A large area of the same is still unoccupied."

On September 29, 1995, the trial court rendered judgment dismissing the complaint. Finding that the
failure of respondent NHA to pay just compensation and of petitioners to pay capital gains tax are both
unjustified and unreasonable, the trial court held that: (1) respondent NHA is not deemed to have
abandoned the public purpose for which the subject properties were expropriated because the
relocation of squatters involves a long and tedious process. It ruled that respondent NHA actually
pursued the public purpose of the expropriation when it entered into a contract with Arceo C. Cruz
involving the construction of low cost housing on the expropriated lots to be sold to qualified low
income beneficiaries; (2) there is no condition imposed in the expropriation judgment that the subject
properties shall revert back to its original owners in case the purpose of expropriation is terminated or
abandoned; (3) the payment of just compensation is independent of the obligation of herein
petitioners to pay capital gains tax; and (4) in the payment of just compensation, the basis should be
the value at the time the property was taken. On appeal, the Court of Appeals affirmed the decision of
the trial court.

Petitioners are now before us raising the following assignment of errors:

"1. The Honorable Court of Appeals had decided a question of substance not in accord with justice and
equity when it ruled that, as the judgment of the expropriation court did not contain a condition that
should the expropriated property be not used for the intended purpose it would revert to the
condemnee, the action to declare the forfeiture of rights under the expropriation judgment can not
prosper;

2. The Honorable Court of Appeals decided a question of substance not in accord with jurisprudence,
justice and equity when it ruled that the non-payment is not a ground for forfeiture;

3. The Honorable Court of Appeals erred in not declaring the judgment of expropriation forfeited in
light of the failure of respondent to use the expropriated property for the intended purpose but for a
totally different purpose."

The petition is not impressed with merit.

Petitioners contend that respondent NHA violated the stated public purpose for the expansion of the
Dasmariñas Resettlement Project when it failed to relocate the squatters from the Metro Manila area,
as borne out by the ocular inspection conducted by the trial court which showed that most of the
expropriated properties remain unoccupied. Petitioners likewise question the public nature of the use
by respondent NHA when it entered into a contract for the construction of low cost housing units,
which is allegedly different from the stated public purpose in the expropriation proceedings. Hence, it
is claimed that respondent NHA has forfeited its rights and interests by virtue of the expropriation
judgment and the expropriated properties should now be returned to herein petitioners. We are not
persuaded.

The 1987 Constitution explicitly provides for the exercise of the power of eminent domain over private
properties upon payment of just compensation. More specifically, section 9, Article III states that
private property shall not be taken for public use without just compensation. The constitutional
restraints are public use and just compensation.

Petitioners cannot insist on a restrictive view of the eminent domain provision of the Constitution by
contending that the contract for low cost housing is a deviation from the stated public use. It is now
settled doctrine that the concept of public use is no longer limited to traditional purposes. Here, as
elsewhere, the idea that "public use" is strictly limited to clear cases of "use by the public" has been
abandoned. The term "public use" has now been held to be synonymous with "public interest," "public
benefit," "public welfare," and "public convenience." 8 The rationale for this new approach is well
explained in the case of Heirs of Juancho Ardona, et al. vs. Reyes, et al.,9 to wit:

"The restrictive view of public use may be appropriate for a nation which circumscribes the scope of
government activities and public concerns and which possesses big and correctly located public lands
that obviate the need to take private property for public purposes. Neither circumstance applies to the
Philippines. We have never been a laissez faire State. And the necessities which impel the exertion of
sovereign power are all too often found in areas of scarce public land or limited government resources.

xxx-xxx-xxx

The taking to be valid must be for public use. There was a time when it was felt that a literal meaning
should be attached to such a requirement. Whatever project is undertaken must be for the public to
enjoy, as in the case of streets or parks. Otherwise, expropriation is not allowable. It is not anymore.
As long as the purpose of the taking is public, then the power of eminent domain comes into play. As
just noted, the constitution in at least two cases, to remove any doubt, determines what is public use.
One is the expropriation of lands to be subdivided into small lots for resale at cost to individuals. The
other is in the transfer, through the exercise of this power, of utilities and other private enterprise to
the government. It is accurate to state then that at present whatever may be beneficially
employed for the general welfare satisfies the requirement of public use." (emphasis
supplied)

The act of respondent NHA in entering into a contract with a real estate developer for the construction
of low cost housing on the expropriated lots to be sold to qualified low income beneficiaries cannot be
taken to mean as a deviation from the stated public purpose of their taking. Jurisprudence has it that
the expropriation of private land for slum clearance and urban development is for a public purpose
even if the developed area is later sold to private homeowners, commercials firms, entertainment and
service companies, and other private concerns. 10

Moreover, the Constitution itself allows the State to undertake, for the common good and in
cooperation with the private sector, a continuing program of urban land reform and housing
which will make at affordable cost decent housing and basic services to underprivileged and homeless
citizens in urban centers and resettlement areas.11 The expropriation of private property for the
purpose of socialized housing for the marginalized sector is in furtherance of the social justice
provision under Section 1, Article XIII of the Constitution which provides that:

"SECTION 1. The Congress shall give highest priority to the enactment of measures that protect and
enhance the right of all the people to human dignity, reduce social, economic, and political
inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the
common good.

To this end, the State shall require the acquisition, ownership, use and disposition of property and its
increments."

It follows that the low cost housing project of respondent NHA on the expropriated lots is compliant
with the "public use" requirement.

We likewise do not subscribe to petitioners' contention that the stated public purpose was abandoned
when respondent NHA failed to occupy the expropriated lots by relocating squatters from the Metro
Manila area. The expropriation judgment declared that respondent NHA has a lawful right to take
petitioners properties "for the public use or purpose of expanding the Dasmariñas Resettlement
Project." The taking here is absolute, without any condition, restriction or qualification. Contrary to
petitioners' submission, the ruling enunciated in the early case of Fery vs. Municipality of
Cabanatuan,12 is still good and sound doctrine, viz.:
"x x x If, for example, land is expropriated for a particular purpose, with the condition that when that
purpose is ended or abandoned the property shall return to its former owner, then, of course, when
the purpose is terminated or abandoned the former owner reacquires the property so expropriated. x
x x If, upon the contrary, however, the decree of expropriation gives to the entity a fee simple title,
then, of course, the land becomes the absolute property of the expropriator x x x.

When land has been acquired for public use in fee simple unconditionally, either by the
exercise of eminent domain or by purchase, the former owner retains no rights in the land,
and the public use may be abandoned, or the land may be devoted to a different use,
without any impairment of the estate or title acquired, or any reversion to the former
owner."

Petitioners further aver that the continued failure of respondent NHA to pay just compensation for a
long period of time justifies the forfeiture of its rights and interests over the expropriated lots. They
demand the return of the expropriated lots. Respondent NHA justifies the delay to pay just
compensation by reason of the failure of petitioners to pay the capital gains tax and to surrender the
owners' duplicate certificates of title.

In the recent case of Republic of the Philippines vs. Court of Appeals, et al.,13 the Court ruled that non-
payment of just compensation does not entitle the private landowners to recover possession of their
expropriated lots. Thus:

"Thus, in Valdehueza vs. Republic where the private landowners had remained unpaid ten years after
the termination of the expropriation proceedings, this Court ruled

'The points in dispute are whether such payment can still be made and, if so, in what amount. Said
lots have been the subject of expropriation proceedings. By final and executory judgment in said
proceedings, they were condemned for public use, as part of an airport, and ordered sold to the
government. x x x. It follows that both by virtue of the judgment, long final, in the expropriation suit,
as well as the annotations upon their title certificates, plaintiffs are not entitled to recover possession
of their expropriated lots which are still devoted to the public use for which they were expropriated but
only to demand the market value of the same.

Said relief may be granted under plaintiffs' prayer for such other remedies, which may be deemed just
and equitable under the premises.'

The Court proceeded to reiterate its pronouncement in Alfonso vs. Pasay City where the recovery of
possession of property taken for public use prayed for by the unpaid landowner was denied even while
no requisite expropriation proceedings were first instituted. The landowner was merely given the relief
of recovering compensation for his property computed at its market value at the time it was taken and
appropriated by the State.

The judgment rendered by the Bulacan RTC in 1979 on the expropriation proceedings provides not
only for the payment of just compensation to herein respondents but likewise adjudges the
property condemned in favor of petitioner over which parties, as well as their privies, are
bound. Petitioner has occupied, utilized and, for all intents and purposes, exercised
dominion over the property pursuant to the judgment. The exercise of such rights vested to
it as the condemnee indeed has amounted to at least a partial compliance or satisfaction of
the 1979 judgment, thereby preempting any claim of bar by prescription on grounds of non-
execution. In arguing for the return of their property on the basis of non-payment,
respondents ignore the fact that the right of the expropriating authority is far from that of
an unpaid seller in ordinary sales, to which the remedy of rescission might perhaps apply.
An in rem proceeding, condemnation acts upon the property. After condemnation, the
paramount title is in the public under a new and independent title; thus, by giving notice to all
claimants to a disputed title, condemnation proceedings provide a judicial process for securing better
title against all the world than may be obtained by voluntary conveyance." (emphasis supplied)
We, however, likewise find the refusal of respondent NHA to pay just compensation, allegedly for
failure of petitioners to pay capital gains tax and surrender the owners' duplicate certificates of title, to
be unfounded and unjustified.

First, under the expropriation judgment the payment of just compensation is not subject to any
condition. Second, it is a recognized rule that although the right to enter upon and appropriate the
land to public use is completed prior to payment, title to the property expropriated shall pass from the
owner to the expropriator only upon full payment of the just compensation. In the case of Association
of Small Landowners in the Phils., Inc., et al. vs. Secretary of Agrarian Reform,14 it was held that:

"Title to property which is the subject of condemnation proceedings does not vest the condemnor until
the judgment fixing just compensation is entered and paid, but the condemnor's title relates back to
the date on which the petition under the Eminent Domain Act, or the commissioner's report under the
Local Improvement Act, is filed.

x x x Although the right to appropriate and use land taken for a canal is complete at the
time of entry, title to the property taken remains in the owner until payment is actually
made.

In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding that title to property
does not pass to the condemnor until just compensation had actually been made. In fact, the
decisions appear to be uniformly to this effect. As early as 1838, in Rubottom v. McLure, it was held
that 'actual payment to the owner of the condemned property was a condition precedent to the
investment of the title to the property in the State' albeit 'not to the appropriation of it to public use.'
In Rexford v. Knight, the Court of Appeals of New York said that the construction upon the statutes
was that the fee did not vest in the State until the payment of the compensation although the
authority to enter upon and appropriate the land was complete prior to the payment. Kennedy further
said that 'both on principle and authority the rule is x x x that the right to enter on and use the
property is complete, as soon as the property is actually appropriated under the authority
of law for a public use, but that the title does not pass from the owner without his consent,
until just compensation has been made to him.'"

Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, that:

If the laws which we have exhibited or cited in the preceding discussion are attentively examined it
will be apparent that the method of expropriation adopted in this jurisdiction is such as to afford
absolute reassurance that no piece of land can be finally and irrevocably taken from an unwilling
owner until compensation is paid. x x x." (emphasis supplied)

With respect to the amount of the just compensation still due and demandable from respondent NHA,
the lower courts erred in not awarding interest computed from the time the property is actually taken
to the time when compensation is actually paid or deposited in court. In Republic, et al. vs. Court of
Appeals, et al.,15 the Court imposed interest at 12% per annum in order to help eliminate the issue of
the constant fluctuation and inflation of the value of the currency over time, thus:

"The constitutional limitation of 'just compensation' is considered to be the sum equivalent to the
market value of the property, broadly described to be the price fixed by the seller in open market in
the usual and ordinary course of legal action and competition or the fair value of the property as
between one who receives, and one who desires to sell, it being fixed at the time of the actual taking
by the government. Thus, if property is taken for public use before compensation is deposited with the
court having jurisdiction over the case, the final compensation must include interests on its just value
to be computed from the time the property is taken to the time when compensation is actually paid or
deposited with the court. In fine, between the taking of the property and the actual payment, legal
interests accrue in order to place the owner in a position as good as (but not better than) the position
he was in before the taking occurred.
x x x This allowance of interest on the amount found to be the value of the property as of the time of
the taking computed, being an effective forbearance, at 12% per annum should help eliminate the
issue of the constant fluctuation and inflation of the value of the currency over time. Article 1250 of
the Civil Code, providing that, in case of extraordinary inflation or deflation, the value of the currency
at the time of the establishment of the obligation shall be the basis for the payment when no
agreement to the contrary is stipulated, has strict application only to contractual obligations. In other
words, a contractual agreement is needed for the effects of extraordinary inflation to be taken into
account to alter the value of the currency."

Records show that there is an outstanding balance of P1,218,574.35 that ought to be paid to
petitioners.16 It is not disputed that respondent NHA took actual possession of the expropriated
properties in 1977.17 Perforce, while petitioners are not entitled to the return of the expropriated
property, they are entitled to be paid the balance of P1,218,574.35 with legal interest thereon at 12%
per annum computed from the taking of the property in 1977 until the due amount shall have been
fully paid.

WHEREFORE, the appealed judgment is modified as follows:

1. Ordering respondent National Housing Authority to pay petitioners the amount of P1,218,574.35
with legal interest thereon at 12% per annum computed from the taking of the expropriated
properties in 1997 until the amount due shall have been fully paid;

2. Ordering petitioners to pay the capital gains tax; and

3. Ordering petitioners to surrender to respondent National Housing Authority the owners' duplicate
certificates of title of the expropriated properties upon full payment of just compensation.

SO ORDERED.

G.R. No. 168732              June 29, 2007

NATIONAL POWER CORPORATION, petitioner,

vs.
LUCMAN G. IBRAHIM, OMAR G. MARUHOM, ELIAS G.MARUHOM, BUCAY G. MARUHOM,
FAROUK G. MARUHOM, HIDJARA G. MARUHOM, ROCANIA G. MARUHOM, POTRISAM G.
MARUHOM, LUMBA G. MARUHOM, SINAB G. MARUHOM, ACMAD G. MARUHOM, SOLAYMAN
G. MARUHOM, MOHAMAD M. IBRAHIM, and CAIRONESA M. IBRAHIM, respondents.

DECISION

AZCUNA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to annul the
Decision1 dated June 8, 2005 rendered by the Court of Appeals (CA) in C.A.-G.R. CV No. 57792.

The facts are as follows:

On November 23, 1994, respondent Lucman G. Ibrahim, in his personal capacity and in behalf of his
co-heirs Omar G. Maruhom, Elias G. Maruhom, Bucay G. Maruhom, Mamod G. Maruhom, Farouk
G. Maruhom, Hidjara G. Maruhom, Rocania G. Maruhom, Potrisam G. Maruhom, Lumba G.
Maruhom, Sinab G. Maruhom, Acmad G. Maruhom, Solayman G. Maruhom, Mohamad M. Ibrahim
and Caironesa M. Ibrahim, instituted an action against petitioner National Power Corporation
(NAPOCOR) for recovery of possession of land and damages before the Regional Trial Court (RTC)
of Lanao del Sur.

In their complaint, Ibrahim and his co-heirs claimed that they were owners of several parcels of land
described in Survey Plan FP (VII-5) 2278 consisting of 70,000 square meters, divided into three (3)
lots, i.e. Lots 1, 2, and 3 consisting of 31,894, 14,915, and 23,191 square meters each respectively.
Sometime in 1978, NAPOCOR, through alleged stealth and without respondents’ knowledge and
prior consent, took possession of the sub-terrain area of their lands and constructed therein
underground tunnels. The existence of the tunnels was only discovered sometime in July 1992 by
respondents and then later confirmed on November 13, 1992 by NAPOCOR itself through a
memorandum issued by the latter’s Acting Assistant Project Manager. The tunnels were apparently
being used by NAPOCOR in siphoning the water of Lake Lanao and in the operation of NAPOCOR’s
Agus II, III, IV, V, VI, VII projects located in Saguiran, Lanao del Sur; Nangca and Balo-i in Lanao del
Norte; and Ditucalan and Fuentes in Iligan City.

On September 19, 1992, respondent Omar G. Maruhom requested the Marawi City Water District for
a permit to construct and/or install a motorized deep well in Lot 3 located in Saduc, Marawi City but
his request was turned down because the construction of the deep well would cause danger to lives
and property. On October 7, 1992, respondents demanded that NAPOCOR pay damages and
vacate the sub-terrain portion of their lands but the latter refused to vacate much less pay damages.
Respondents further averred that the construction of the underground tunnels has endangered their
lives and properties as Marawi City lies in an area of local volcanic and tectonic activity. Further,
these illegally constructed tunnels caused them sleepless nights, serious anxiety and shock thereby
entitling them to recover moral damages and that by way of example for the public good, NAPOCOR
must be held liable for exemplary damages.

Disputing respondents’ claim, NAPOCOR filed an answer with counterclaim denying the material
allegations of the complaint and interposing affirmative and special defenses, namely that (1) there
is a failure to state a cause of action since respondents seek possession of the sub-terrain portion
when they were never in possession of the same, (2) respondents have no cause of action because
they failed to show proof that they were the owners of the property, and (3) the tunnels are a
government project for the benefit of all and all private lands are subject to such easement as may
be necessary for the same.2

On August 7, 1996, the RTC rendered a Decision, the decretal portion of which reads as follows:

WHEREFORE, judgment is hereby rendered:

1. Denying plaintiffs’ [private respondents’] prayer for defendant [petitioner] National Power
Corporation to dismantle the underground tunnels constructed between the lands of plaintiffs in Lots
1, 2, and 3 of Survey Plan FP (VII-5) 2278;

2. Ordering defendant to pay to plaintiffs the fair market value of said 70,000 square meters of land
covering Lots 1, 2, and 3 as described in Survey Plan FP (VII-5) 2278 less the area of 21,995 square
meters at ₱1,000.00 per square meter or a total of ₱48,005,000.00 for the remaining unpaid portion
of 48,005 square meters; with 6% interest per annum from the filing of this case until paid;

3. Ordering defendant to pay plaintiffs a reasonable monthly rental of ₱0.68 per square meter of the
total area of 48,005 square meters effective from its occupancy of the foregoing area in 1978 or a
total of ₱7,050,974.40.

4. Ordering defendant to pay plaintiffs the sum of ₱200,000.00 as moral damages; and
5. Ordering defendant to pay the further sum of ₱200,000.00 as attorney’s fees and the costs.

SO ORDERED.3

On August 15, 1996, Ibrahim, joined by his co-heirs, filed an Urgent Motion for Execution of
Judgment Pending Appeal. On the other hand, NAPOCOR filed a Notice of Appeal by registered
mail on August 19, 1996. Thereafter, NAPOCOR filed a vigorous opposition to the motion for
execution of judgment pending appeal with a motion for reconsideration of the Decision which it had
received on August 9, 1996.

On August 26, 1996, NAPOCOR filed a Manifestation and Motion withdrawing its Notice of Appeal
purposely to give way to the hearing of its motion for reconsideration.

On August 28, 1996, the RTC issued an Order granting execution pending appeal and denying
NAPOCOR’s motion for reconsideration, which Order was received by NAPOCOR on September 6,
1996.

On September 9, 1996, NAPOCOR filed its Notice of Appeal by registered mail which was denied by
the RTC on the ground of having been filed out of time. Meanwhile, the Decision of the RTC was
executed pending appeal and funds of NAPOCOR were garnished by respondents Ibrahim and his
co-heirs.

On October 4, 1996, a Petition for Relief from Judgment was filed by respondents Omar G.
Maruhom, Elias G. Maruhom, Bucay G. Maruhom, Mamod G. Maruhom, Farouk G. Maruhom,
Hidjara G. Maruhom, Potrisam G. Maruhom and Lumba G. Maruhom asserting as follows:

1) they did not file a motion to reconsider or appeal the decision within the reglementary period of
fifteen (15) days from receipt of judgment because they believed in good faith that the decision was
for damages and rentals and attorney’s fees only as prayed for in the complaint:

2) it was only on August 26, 1996 that they learned that the amounts awarded to the plaintiffs
represented not only rentals, damages and attorney’s fees but the greatest portion of which was
payment of just compensation which in effect would make the defendant NPC the owner of the
parcels of land involved in the case;

3) when they learned of the nature of the judgment, the period of appeal has already expired;

4) they were prevented by fraud, mistake, accident, or excusable negligence from taking legal steps
to protect and preserve their rights over their parcels of land in so far as the part of the decision
decreeing just compensation for petitioners’ properties;

5) they would never have agreed to the alienation of their property in favor of anybody, considering
the fact that the parcels of land involved in this case were among the valuable properties they
inherited from their dear father and they would rather see their land crumble to dust than sell it to
anybody.4

The RTC granted the petition and rendered a modified judgment dated September 8, 1997, thus:

WHEREFORE, a modified judgment is hereby rendered:

1) Reducing the judgment award of plaintiffs for the fair market value of ₱48,005,000.00 by
9,526,000.00 or for a difference by ₱38,479,000.00 and by the further sum of ₱33,603,500.00
subject of the execution pending appeal leaving a difference of 4,878,500.00 which may be the
subject of execution upon the finality of this modified judgment with 6% interest per annum from the
filing of the case until paid.

2) Awarding the sum of ₱1,476,911.00 to herein petitioners Omar G. Maruhom, Elias G. Maruhom,
Bucay G. Maruhom, Mahmod G. Maruhom, Farouk G. Maruhom, Hidjara G. Maruhom, Portrisam G.
Maruhom and Lumba G. Maruhom as reasonable rental deductible from the awarded sum of
₱7,050,974.40 pertaining to plaintiffs.

3) Ordering defendant embodied in the August 7, 1996 decision to pay plaintiffs the sum of
₱200,000.00 as moral damages; and further sum of ₱200,000.00 as attorney’s fees and costs.

SO ORDERED.5

Subsequently, both respondent Ibrahim and NAPOCOR appealed to the CA.

In the Decision dated June 8, 2005, the CA set aside the modified judgment and reinstated the
original Decision dated August 7, 1996, amending it further by deleting the award of moral damages
and reducing the amount of rentals and attorney’s fees, thus:

WHEREFORE, premises considered, herein Appeals are hereby partially GRANTED, the Modified
Judgment is ordered SET ASIDE and rendered of no force and effect and the original Decision of the
court a quo dated 7 August 1996 is hereby RESTORED with the MODIFICATION that the award of
moral damages is DELETED and the amounts of rentals and attorney’s fees are REDUCED to
₱6,888,757.40 and ₱50,000.00, respectively.

In this connection, the Clerk of Court of RTC Lanao del Sur is hereby directed to reassess and
determine the additional filing fee that should be paid by Plaintiff-Appellant IBRAHIM taking into
consideration the total amount of damages sought in the complaint vis-à-vis the actual amount of
damages awarded by this Court. Such additional filing fee shall constitute a lien on the judgment.

SO ORDERED.6

Hence, this petition ascribing the following errors to the CA:

(a) RESPONDENTS WERE NOT DENIED THE BENEFICIAL USE OF THEIR SUBJECT
PROPERTIES TO ENTITLE THEM TO JUST COMPENSATION BY WAY OF DAMAGES;

(b) ASSUMING THAT RESPONDENTS ARE ENTITLED TO JUST COMPENSATION BY WAY OF

DAMAGES, NO EVIDENCE WAS PRESENTED ANENT THE VALUATION OF RESPONDENTS’
PROPERTY AT THE TIME OF ITS TAKING IN THE YEAR 1978 TO JUSTIFY THE AWARD OF
ONE THOUSAND SQUARE METERS (₱1000.00/SQ. M.) EVEN AS PAYMENT OF BACK
RENTALS IS ITSELF IMPROPER.

This case revolves around the propriety of paying just compensation to respondents, and, by
extension, the basis for computing the same. The threshold issue of whether respondents are
entitled to just compensation hinges upon who owns the sub-terrain area occupied by petitioner.
Petitioner maintains that the sub-terrain portion where the underground tunnels were constructed
does not belong to respondents because, even conceding the fact that respondents owned the
property, their right to the subsoil of the same does not extend beyond what is necessary to enable
them to obtain all the utility and convenience that such property can normally give. In any case,
petitioner asserts that respondents were still able to use the subject property even with the existence
of the tunnels, citing as an example the fact that one of the respondents, Omar G. Maruhom, had
established his residence on a part of the property. Petitioner concludes that the underground
tunnels 115 meters below respondents’ property could not have caused damage or prejudice to
respondents and their claim to this effect was, therefore, purely conjectural and speculative. 7

The contention lacks merit.

Generally, in an appeal by certiorari under Rule 45 of the Rules of Court, the Court does not pass
upon questions of fact. Absent any showing that the trial and appellate courts gravely abused their
discretion, the Court will not examine the evidence introduced by the parties below to determine if
they correctly assessed and evaluated the evidence on record. 8 The jurisdiction of the Court in cases
brought to it from the CA is limited to reviewing and revising the errors of law imputed to it, its
findings of fact being as a rule conclusive and binding on the Court.

In the present case, petitioner failed to point to any evidence demonstrating grave abuse of
discretion on the part of the CA or to any other circumstances which would call for the application of
the exceptions to the above rule. Consequently, the CA’s findings which upheld those of the trial
court that respondents owned and possessed the property and that its substrata was possessed by
petitioner since 1978 for the underground tunnels, cannot be disturbed. Moreover, the Court sustains
the finding of the lower courts that the sub-terrain portion of the property similarly belongs to
respondents. This conclusion is drawn from Article 437 of the Civil Code which provides:

ART. 437. The owner of a parcel of land is the owner of its surface and of everything under it, and he
can construct thereon any works or make any plantations and excavations which he may deem
proper, without detriment to servitudes and subject to special laws and ordinances. He cannot
complain of the reasonable requirements of aerial navigation.

Thus, the ownership of land extends to the surface as well as to the subsoil under it. In Republic of
the Philippines v. Court of Appeals,9 this principle was applied to show that rights over lands are
indivisible and, consequently, require a definitive and categorical classification, thus:

The Court of Appeals justified this by saying there is "no conflict of interest" between the owners of
the surface rights and the owners of the sub-surface rights. This is rather strange doctrine, for it is a
well-known principle that the owner of a piece of land has rights not only to its surface but also to
everything underneath and the airspace above it up to a reasonable height. Under the aforesaid
ruling, the land is classified as mineral underneath and agricultural on the surface, subject to
separate claims of title. This is also difficult to understand, especially in its practical application.

Under the theory of the respondent court, the surface owner will be planting on the land while the
mining locator will be boring tunnels underneath. The farmer cannot dig a well because he may
interfere with the mining operations below and the miner cannot blast a tunnel lest he destroy the
crops above. How deep can the farmer, and how high can the miner go without encroaching on each
others rights? Where is the dividing line between the surface and the sub-surface rights?

The Court feels that the rights over the land are indivisible and that the land itself cannot be half
agricultural and half mineral. The classification must be categorical; the land must be either
completely mineral or completely agricultural.
Registered landowners may even be ousted of ownership and possession of their properties in the
event the latter are reclassified as mineral lands because real properties are characteristically
indivisible. For the loss sustained by such owners, they are entitled to just compensation under the
Mining Laws or in appropriate expropriation proceedings. 10

Moreover, petitioner’s argument that the landowners’ right extends to the sub-soil insofar as
necessary for their practical interests serves only to further weaken its case. The theory would limit
the right to the sub-soil upon the economic utility which such area offers to the surface owners.
Presumably, the landowners’ right extends to such height or depth where it is possible for them to
obtain some benefit or enjoyment, and it is extinguished beyond such limit as there would be no
more interest protected by law.11

In this regard, the trial court found that respondents could have dug upon their property motorized
deep wells but were prevented from doing so by the authorities precisely because of the construction
and existence of the tunnels underneath the surface of their property. Respondents, therefore, still
had a legal interest in the sub-terrain portion insofar as they could have excavated the same for the
construction of the deep well. The fact that they could not was appreciated by the RTC as proof that
the tunnels interfered with respondents’ enjoyment of their property and deprived them of its full use
and enjoyment, thus:

Has it deprived the plaintiffs of the use of their lands when from the evidence they have already
existing residential houses over said tunnels and it was not shown that the tunnels either destroyed
said houses or disturb[ed] the possession thereof by plaintiffs? From the evidence, an affirmative
answer seems to be in order. The plaintiffs and [their] co-heirs discovered [these] big underground
tunnels in 1992. This was confirmed by the defendant on November 13, 1992 by the Acting Assistant
Project Manager, Agus 1 Hydro Electric Project (Exh. K). On September 16, 1992, Atty. Omar
Maruhom (co-heir) requested the Marawi City Water District for permit to construct a motorized deep
well over Lot 3 for his residential house (Exh. Q). He was refused the permit "because the
construction of the deep well as (sic) the parcels of land will cause danger to lives and property." He
was informed that "beneath your lands are constructed the Napocor underground tunnel in
connection with Agua Hydroelectric plant" (Exh. Q-2). There in fact exists ample evidence that this
construction of the tunnel without the prior consent of plaintiffs beneath the latter’s property
endangered the lives and properties of said plaintiffs. It has been proved indubitably that Marawi City
lies in an area of local volcanic and tectonic activity. Lake Lanao has been formed by extensive earth
movements and is considered to be a drowned basin of volcano/tectonic origin. In Marawi City, there
are a number of former volcanoes and an extensive amount of faulting. Some of these faults are still
moving. (Feasibility Report on Marawi City Water District by Kampsa-Kruger, Consulting Engineers,
Architects and Economists, Exh. R). Moreover, it has been shown that the underground tunnels
[have] deprived the plaintiffs of the lawful use of the land and considerably reduced its value. On
March 6, 1995, plaintiffs applied for a two-million peso loan with the Amanah Islamic Bank for the
expansion of the operation of the Ameer Construction and Integrated Services to be secured by said
land (Exh. N), but the application was disapproved by the bank in its letter of April 25, 1995 (Exh. O)
stating that:

"Apropos to this, we regret to inform you that we cannot consider your loan application due to the
following reasons, to wit:

That per my actual ocular inspection and verification, subject property offered as collateral has an
existing underground tunnel by the NPC for the Agus I Project, which tunnel is traversing underneath
your property, hence, an encumbrance. As a matter of bank policy, property with an existing
encumbrance cannot be considered neither accepted as collateral for a loan."
All the foregoing evidence and findings convince this Court that preponderantly plaintiffs have
established the condemnation of their land covering an area of 48,005 sq. meters located at Saduc,
Marawi City by the defendant National Power Corporation without even the benefit of expropriation
proceedings or the payment of any just compensation and/or reasonable monthly rental since
1978.12

In the past, the Court has held that if the government takes property without expropriation and
devotes the property to public use, after many years, the property owner may demand payment of
just compensation in the event restoration of possession is neither convenient nor feasible. 13 This is
in accordance with the principle that persons shall not be deprived of their property except by
competent authority and for public use and always upon payment of just compensation. 14

Petitioner contends that the underground tunnels in this case constitute an easement upon the
property of respondents which does not involve any loss of title or possession. The manner in which
the easement was created by petitioner, however, violates the due process rights of respondents as
it was without notice and indemnity to them and did not go through proper expropriation
proceedings. Petitioner could have, at any time, validly exercised the power of eminent domain to
acquire the easement over respondents’ property as this power encompasses not only the taking or
appropriation of title to and possession of the expropriated property but likewise covers even the
imposition of a mere burden upon the owner of the condemned property. 15 Significantly, though,
landowners cannot be deprived of their right over their land until expropriation proceedings are
instituted in court. The court must then see to it that the taking is for public use, that there is payment
of just compensation and that there is due process of law. 16

In disregarding this procedure and failing to recognize respondents’ ownership of the sub-terrain
portion, petitioner took a risk and exposed itself to greater liability with the passage of time. It must
be emphasized that the acquisition of the easement is not without expense. The underground
tunnels impose limitations on respondents’ use of the property for an indefinite period and deprive
them of its ordinary use. Based upon the foregoing, respondents are clearly entitled to the payment
of just compensation.17 Notwithstanding the fact that petitioner only occupies the sub-terrain portion,
it is liable to pay not merely an easement fee but rather the full compensation for land. This is so
because in this case, the nature of the easement practically deprives the owners of its normal
beneficial use. Respondents, as the owners of the property thus expropriated, are entitled to a just
compensation which should be neither more nor less, whenever it is possible to make the
assessment, than the money equivalent of said property. 18

The entitlement of respondents to just compensation having been settled, the issue now is on the
manner of computing the same. In this regard, petitioner claims that the basis for the computation of
the just compensation should be the value of the property at the time it was taken in 1978. Petitioner
also impugns the reliance made by the CA upon National Power Corporation v. Court of Appeals
and Macapanton Mangondato19 as the basis for computing the amount of just compensation in this
action. The CA found that "the award of damages is not excessive because the ₱1000 per square
meter as the fair market value was sustained in a case involving a lot adjoining the property in
question which case involved an expropriation by [petitioner] of portion of Lot 1 of the subdivision
plan (LRC) PSD 116159 which is adjacent to Lots 2 and 3 of the same subdivision plan which is the
subject of the instant controversy."20

Just compensation has been understood to be the just and complete equivalent of the loss 21 and is
ordinarily determined by referring to the value of the land and its character at the time it was taken
by the expropriating authority. 22 There is a "taking" in this sense when the owners are actually
deprived or dispossessed of their property, where there is a practical destruction or a material
impairment of the value of their property, or when they are deprived of the ordinary use thereof.
There is a "taking" in this context when the expropriator enters private property not only for a
momentary period but for more permanent duration, for the purpose of devoting the property to a
public use in such a manner as to oust the owner and deprive him of all beneficial enjoyment
thereof.23 Moreover, "taking" of the property for purposes of eminent domain entails that the entry
into the property must be under warrant or color of legal authority. 24

Under the factual backdrop of this case, the last element of taking mentioned, i.e., that the entry into
the property is under warrant or color of legal authority, is patently lacking. Petitioner justified its
nonpayment of the indemnity due respondents upon its mistaken belief that the property formed part
of the public dominion.

This situation is on all fours with that in the Mangondato case. NAPOCOR in that case took the
property of therein respondents in 1979, using it to build its Aqua I Hydroelectric Plant Project,
without paying any compensation, allegedly under the mistaken belief that it was public land. It was
only in 1990, after more than a decade of beneficial use, that NAPOCOR recognized therein
respondents’ ownership and negotiated for the voluntary purchase of the property.

In Mangondato, this Court held:

The First Issue: Date of Taking or Date of Suit?

The general rule in determining "just compensation" in eminent domain is the value of the property
as of the date of the filing of the complaint, as follows:

"Sec. 4. Order of Condemnation. When such a motion is overruled or when any party fails to defend
as required by this rule, the court may enter an order of condemnation declaring that the plaintiff has
a lawful right to take the property sought to be condemned, for the public use or purpose described
in the complaint, upon the payment of just compensation to be determined as of the date of the filing
of the complaint. x x x" (Italics supplied).

Normally, the time of the taking coincides with the filing of the complaint for expropriation. Hence,
many ruling of this Court have equated just compensation with the value of the property as of the
time of filing of the complaint consistent with the above provision of the Rules. So too, where the
institution of the action precedes entry to the property, the just compensation is to be ascertained as
of the time of filing of the complaint.

The general rule, however, admits of an exception: where this Court fixed the value of the property
as of the date it was taken and not the date of the commencement of the expropriation proceedings.

In the old case of Provincial Government of Rizal vs. Caro de Araullo, the Court ruled that "x x x the
owners of the land have no right to recover damages for this unearned increment resulting from the
construction of the public improvement (lengthening of Taft Avenue from Manila to Pasay) from
which the land was taken. To permit them to do so would be to allow them to recover more than the
value of the land at the time it was taken, which is the true measure of the damages, or just
compensation, and would discourage the construction of important public improvements."

In subsequent cases, the Court, following the above doctrine, invariably held that the time of taking
is the critical date in determining lawful or just compensation. Justifying this stance, Mr. Justice (later
Chief Justice) Enrique Fernando, speaking for the Court in Municipality of La Carlota vs. The
Spouses Felicidad Baltazar and Vicente Gan, said, "x x x the owner as is the constitutional intent, is
paid what he is entitled to according to the value of the property so devoted to public use as of the
date of taking. From that time, he had been deprived thereof. He had no choice but to submit. He is
not, however, to be despoiled of such a right. No less than the fundamental law guarantees just
compensation. It would be injustice to him certainly if from such a period, he could not recover the
value of what was lost. There could be on the other hand, injustice to the expropriator if by a delay in
the collection, the increment in price would accrue to the owner. The doctrine to which this Court has
been committed is intended precisely to avoid either contingency fraught with unfairness."

Simply stated, the exception finds the application where the owner would be given undue
incremental advantages arising from the use to which the government devotes the property
expropriated -- as for instance, the extension of a main thoroughfare as was in the case in Caro de
Araullo. In the instant case, however, it is difficult to conceive of how there could have been an extra-
ordinary increase in the value of the owner’s land arising from the expropriation, as indeed the
records do not show any evidence that the valuation of P1,000.00 reached in 1992 was due to
increments directly caused by petitioner’s use of the land. Since the petitioner is claiming an
exception to Rule 67, Section 4, it has the burden in proving its claim that its occupancy and use --
not ordinary inflation and increase in land values -- was the direct cause of the increase in valuation
from 1978 to 1992.

Side Issue: When is there "Taking" of Property?

But there is yet another cogent reason why this petition should be denied and why the respondent
Court should be sustained. An examination of the undisputed factual environment would show that
the "taking" was not really made in 1978.

This Court has defined the elements of "taking" as the main ingredient in the exercise of power of
eminent domain, in the following words:

"A number of circumstances must be present in "taking" of property for purposes of eminent domain:
(1) the expropriator must enter a private property; (2) the entrance into private property must be for
more than a momentary period; (3) the entry into the property should be under warrant or color of
legal authority; (4) the property must be devoted to a public use or otherwise informally appropriated
or injuriously affected; and (5) the utilization of the property for public use must be in such a way to
oust the owner and deprive him of all beneficial enjoyment of the property."(Italics supplied)

In this case, the petitioner’s entrance in 1978 was without intent to expropriate or was not made
under warrant or color of legal authority, for it believed the property was public land covered by
Proclamation No. 1354. When the private respondent raised his claim of ownership sometime in
1979, the petitioner flatly refused the claim for compensation, nakedly insisted that the property was
public land and wrongly justified its possession by alleging it had already paid "financial assistance"
to Marawi City in exchange for the rights over the property. Only in 1990, after more than a decade
of beneficial use, did the petitioner recognize private respondent’s ownership and negotiate for the
voluntary purchase of the property. A Deed of Sale with provisional payment and subject to
negotiations for the correct price was then executed. Clearly, this is not the intent nor the
expropriation contemplated by law. This is a simple attempt at a voluntary purchase and sale.
Obviously, the petitioner neglected and/or refused to exercise the power of eminent domain.

Only in 1992, after the private respondent sued to recover possession and petitioner filed its
Complaint to expropriate, did petitioner manifest its intention to exercise the power of eminent
domain. Thus the respondent Court correctly held:

"If We decree that the fair market value of the land be determined as of 1978, then We would be
sanctioning a deceptive scheme whereby NAPOCOR, for any reason other than for eminent domain
would occupy another’s property and when later pressed for payment, first negotiate for a low price
and then conveniently expropriate the property when the land owner refuses to accept its offer
claiming that the taking of the property for the purpose of the eminent domain should be reckoned as
of the date when it started to occupy the property and that the value of the property should be
computed as of the date of the taking despite the increase in the meantime in the value of the
property."

In Noble vs. City of Manila, the City entered into a lease-purchase agreement of a building
constructed by the petitioner’s predecessor-in-interest in accordance with the specifications of the
former. The Court held that being bound by the said contract, the City could not expropriate the
building. Expropriation could be resorted to "only when it is made necessary by the opposition of the
owner to the sale or by the lack of any agreement as to the price." Said the Court:

"The contract, therefore, in so far as it refers to the purchase of the building, as we have interpreted
it, is in force, not having been revoked by the parties or by judicial decision. This being the case, the
city being bound to buy the building at an agreed price, under a valid and subsisting contract, and
the plaintiff being agreeable to its sale, the expropriation thereof, as sought by the defendant, is
baseless. Expropriation lies only when it is made necessary by the opposition of the owner to the
sale or by the lack of any agreement as to the price. There being in the present case a valid and
subsisting contract, between the owner of the building and the city, for the purchase thereof at an
agreed price, there is no reason for the expropriation." (Italics supplied)

In the instant case, petitioner effectively repudiated the deed of sale it entered into with the private
respondent when it passed Resolution No. 92-121 on May 25, 1992 authorizing its president to
negotiate, inter alia, that payment "shall be effective only after Agus I HE project has been placed in
operation." It was only then that petitioner’s intent to expropriate became manifest as private
respondent disagreed and, barely a month, filed suit. 25

In the present case, to allow petitioner to use the date it constructed the tunnels as the date of
valuation would be grossly unfair. First, it did not enter the land under warrant or color of legal
authority or with intent to expropriate the same. In fact, it did not bother to notify the owners and
wrongly assumed it had the right to dig those tunnels under their property. Secondly, the
"improvements" introduced by petitioner, namely, the tunnels, in no way contributed to an increase in
the value of the land. The trial court, therefore, as affirmed by the CA, rightly computed the valuation
of the property as of 1992, when respondents discovered the construction of the huge underground
tunnels beneath their lands and petitioner confirmed the same and started negotiations for their
purchase but no agreement could be reached.26

As to the amount of the valuation, the RTC and the CA both used as basis the value of the adjacent
property, Lot 1 (the property involved herein being Lots 2 and 3 of the same subdivision plan), which
was valued at ₱1,000 per sq. meter as of 1990, as sustained by this Court in Mangondato, thus:

The Second Issue: Valuation

We now come to the issue of valuation.

The fair market value as held by the respondent Court, is the amount of ₱1,000.00 per square
meter. In an expropriation case where the principal issue is the determination of just compensation,
as is the case here, a trial before Commissioners is indispensable to allow the parties to present
evidence on the issue of just compensation. Inasmuch as the determination of just compensation in
eminent domain cases is a judicial function and factual findings of the Court of Appeals are
conclusive on the parties and reviewable only when the case falls within the recognized exceptions,
which is not the situation obtaining in this petition, we see no reason to disturb the factual findings as
to valuation of the subject property. As can be gleaned from the records, the court-and-the-parties-
appointed commissioners did not abuse their authority in evaluating the evidence submitted to them
nor misappreciate the clear preponderance of evidence. The amount fixed and agreed to by the
respondent appellate Court is not grossly exorbitant. To quote:

"Commissioner Ali comes from the Office of the Register of Deeds who may well be considered an
expert, with a general knowledge of the appraisal of real estate and the prevailing prices of land in
the vicinity of the land in question so that his opinion on the valuation of the property cannot be
lightly brushed aside.

"The prevailing market value of the land is only one of the determinants used by the commissioners’
report the other being as herein shown:

xxx

xxx

"Commissioner Doromal’s report, recommending P300.00 per square meter, differs from the 2
commissioners only because his report was based on the valuation as of 1978 by the City Appraisal
Committee as clarified by the latter’s chairman in response to NAPOCOR’s general counsel’s
query."

In sum, we agree with the Court of Appeals that petitioner has failed to show why it should be
granted an exemption from the general rule in determining just compensation provided under
Section 4 of Rule 67. On the contrary, private respondent has convinced us that, indeed, such
general rule should in fact be observed in this case. 27

Petitioner has not shown any error on the part of the CA in reaching such a valuation. Furthermore,
these are factual matters that are not within the ambit of the present review.

WHEREFORE, the petition is DENIED and the Decision of the Court of Appeals in C.A.-G.R. CV No.
57792 dated June 8, 2005 is AFFIRMED.

No costs.

SO ORDERED.