NOTES ON THE BILL OF RIGHTS and CITIZENSHIP Excerpts from the 2017 Decisions of the Supreme Court Compiled by CARLO L. CRUZ Police Power A state of martial law is peculiar because the President, at such a time, exercises police power, which is normally a function of the Legislature. In particular, the President exercises police power, with the military's assistance, to ensure public safety and in place of government agencies which for the time being are unable to cope with the condition in a locality, which remains under the control of the State. (Lagman v. Medialdea, G.R, No. 231658, July 4, 2017) Meanwhile, on March 24, 1992, R.A. No. 7277 pertaining te the "Magna Carta for Disabled Persons" toas enacted codifying the rights and privileges of PWDs. Thereafter, on April 30, 2007, R.A. No. 9442 was enacted, amending RA.No. 7277. One of the salient amendments in the law isthe insertion of Chapter 8 in Title 2 thereof, which enumerates the other privileges and incentives of PWDs, inciuding the grant of 20% discount on the purchase of medicines. Similar to R.A. No. 9257, covered establishments shall claim the discounts given to PWDs as tax Aeductions frome the gross income, based! on the net cost of goads sol or seraices rendered. The duty to care for the elderly and the disabled lies not only upon the State, but also on the community and even private entities. As to the State, the duty emanates from its role as parens patriae which holds it under obligation to provide protection and look after the welfare of its people especially those who cannot tend to themselves. Parens patriae means parent of his or her country, and refers to the State in its role as “sovereign,” or the State in its capacity as a provider of protection to those unable to care for themselves. In fulfilling this duty, the State may resort to the exercise of its inherent powers: police power, eminent domain and power of taxation. (Southern Luzon Drug Corporation v. The Department of Social Welfare and Development, G.R. No. 1199669, April 25, 2017) It is in the exercise of its police power that the Cengress enacted R.A. Nos. 9257 and 9442, the Jaws mandating a 20% discount on purchases of medicines made by senior citizens and PWDs. It is also in further exercise of this power that the legislature opted that the said discount be claimed as tax deduction, rather than tax credit, by covered establishments. (Southern Luzon Drug Corporation v. The Department of Social Welfare and Development, G.R. No. 199669, April 25, 2017) To begin with, the issue of just compensation finds no relevance in the instant case as it had already been made clear in Carlos Superdrug that the power being exercised by the State in the imposition of senior citizen discount was its police power. Unlike in the exercise of the power of eminent domain, just compensation is not required in wielding police power. This is precisely because there is no taking involved, but only an imposition of burden. (Southern Luzon Drug Corporation v. The Department of Social Welfare anit Development, G.R. No. 199669, April 25, 2017) ‘The Court also entertains no doubt on the legality of the method taken by the legislature to implement the declared policies of the subject laws, that is, to impose discounts on the medical 1services and purchases of senior citizens and PWDs and to treat the said discounts as tax deduction rather than tax credit. The measure is fair and reasonable and no credible proof was presented to prove the claim that it was confiscatory. To be considered confiscatory, there must be taking of property without just compensation. (Southern Luzon Drug Corporation v. The Department of Social Welfare and Development, G.R. No. 199669, April 25, 2017) Still, the petitioner argues that the law is confiscatory in the sense that the State takes away a portion of its supposed profits which could have gone into its coffers and utilizes it for public purpose. The petitioner claims that the action of the State amounts to taking for which it should be compensated. To reiterate, the subject provisions only affect the petitioner's right to profit, and not earned profits. Unfortunately for the petitioner, the right to profit is not a vested right or an entitlement that has accrued on the person or entity such that its invasion or deprivation warrants compensation. Vested rights are "fixed, unalterable, or irrevocable." (Southern Luzon Drug Corporation v. The Department of Social Welfare and Development, G.R. No. 199669, April 25, 2017) Right to profits does not give the petitioner the cause of action to ask for just compensation, it being only an inchoate right or one that has not fully developed and therefore cannot be claimed as one's own. An inchoate right is a mere expectation, which may or may not come into existence. It is contingent as it only comes "into existence on an event or condition which may not happen or be performed until some other event may prevent their vesting.” Certainly, the petitioner cannot claim confiscation or taking of something that has yet to exist. It cannot claim deprivation of profit before the consummation of a sale and the purchase by a senior citizen or PWD. Right to profit is not an accrued right; itis not fixed, absolute nor indefeasible. It does not come into being until the occurrence or realization of a condition precedent. It is a mere “contingency that might never eventuate into a right. It stands for a mere possibility of profit but nothing might ever be payable under it." The inchoate nature of the right to profit precludes the possibility of compensation because it lacks the quality or characteristic which is necessary before any act of taking or expropriation can be effected. Moreover, there is no yardstick fitting to quantify a contingency or to determine compensation for a mere possibility. Certainly, "taking" presupposes the existence of a subject that has a quantifiable or determinable value, characteristics which a mere contingency does not possess. (Soutiern Luzon Drug Corporation v. The Department of Social Welftre and Development, GR. No. 199669, April 25, 2017) Indeed, regulatory laws are within the category of police power measures from which affected persons or entities cannot claim exclusion or compensation. For instance, private establishments cannot protest that the imposition of the minimum wage is confiscatory since it eats up a considerable chunk of its profits or that the mandated remuneration is not commensurate for the work done. The compulsory nature of the provision for minimum wages underlies the effort of the State; as RA. No. 6727 expresses it, to promote productivity-improvement and gain- sharing measures to ensure a decent standard of living for the workers and their families; to guarantee the rights of labor to its just share in the fruits of production; to enhance employment generation in the countryside through industry dispersal; and to allow business and industry reasonable returns on investment, expansion and growth, and as the Constitution expresses it,to affirm labor as a primary social economic force. (Southern Luzon Drug Corporation v. The Department of Social Welfare and Development, G.R. No. 199669, April 25, 2017) Similarly, the imposition of price control on staple goods in R.A. No. 7581 is likewise a valid exercise of police power and affected establishments cannot argue that the law was depriving them of supposed gains. The law seeks to ensure the availability of basic necessities and prime commodities at reasonable prices at all times without denying legitimate business a fair return on investment. It likewise aims to provide effective and sufficient protection to consumers against hoarding, profiteering and cartels with respect to the supply, distribution, marketing and pricing of said goods, especially during pericds of calamity, emergency, widespread illegal price manipulation and other similar situations. (Southern Luzon Drug Corporation v. The Department of Social Welfare and Development, G.R. No. 199669, April 25, 2017) More relevantly, in Manila Memorial Park, Inc., it was ruled that it is within the bounds of the police power of the state to impose burden on private entities, even if it may affect their profits, such as in the imposition of price control measures. There is no compensable taking but only a recognition of the fact that they are subject to the regulation of the State ard that all personal or private interests must bow down to the more paramount interest of the State. (Southern Luzon Drug Corporation v. The Department of Social Welfare and Development, G.R. No. 199669, April 25, 2017) This notwithstanding, the regulatory power of the State does not authorize the destruction of the business. While a business may be regulated, such regulation must be within the bounds of reason, ie, the regulatory oidinance ust be reasonable, and its provision cannot be oppressive amounting to an arbitrary interference with the business or calling subject of regulation. A lawful business or calling may not, under the guise of regulation, be unreasonably interfered with even by the exercise of police power. After all, regulation only signifies control or restraint, it does not mean suppression or absolute prohibition. (Southern Luzon Drug Corporation v. The Department of Social Welfare and Development, G.R. No. 199669, April 25, 2017) Here, the petitioner failed to show that R.A. Nos. 9257 and 9442, under the guise of regulation, allow undue interference in an ctherwise legitimate business. On the contrary, it was shown that the questioned laws do not meddle in the business or take anything from it but only regulate its realization of profits. (Southern Luzon Drug Corporation v. The Department of Social Welfare and Development, G.R. No. 199669, April 25, 2017) Eminent Domain Case law states that when the acquisition process under PD 27 is still incomplete - such as in this case, where the just compensation due the landowner has yet to be settled - just compensation should be determined and the process be concluded under Republic Act No. (RA) 6657, otherwise known as the "Comprehensive Agrarian Reform Law of 1988." For purposes of determining just compensation, the fair market value of an expropriated property is determined by its character and its price at the time of taking, or the time when the landowner was deprived of the use and benefit of his property, such as when the title is transferred in the name of the beneficiaries. In addition, the factors enumerated under Section 317 of RA 6657, as amended, i, (a) the acquisition cost of the land, (b) the current value of like properties, (c) the nature and actual use of the property, and the income therefrom, (d) the ‘owner's sworn valuation, (¢) the tax declarations, (/) the assessment made by government assessors, (g) the social and economic benefits contributed by the farmers and the farmworkers, and by the government to the property, and (jt) the non-payment of taxes or loans secured from any government financing institution on the said land, if any, must be equally considered. However, it bears pointing out that while Congress passed RA 9700 on August 7, 2009, further amending certain provisions of RA 6657, as amended, among them, Section 17, its implementing rules, ie., DAR AO 2, Series of 2008, clarified that the said law shall not apply to claims/cases where the claim folders were received by the LBP prior to July 1, 2009. In such a situation, just compensation shall be determined in accordance with Section 17 of RA 6657, as amended, prior to its further amendment by RA $700. In LBP ». Kho, the Court had succinctly explained the "cut-off rule" in the application of RA 9700: Itis significant to stress, however, that DAR AD 1, series of 2010 which was issued in line with Section 31 of RA 9700 empowering the DAR to pravide the necessary rules and regulations for its implementation, became effective only subsequent to uly 1. 2009. Consequently, it cannot be applied in the determination of just compensation for the ‘subject land where the claim folders were undisputedly received by the LBP prior to July 1, 2009, and, as such, should be valued in acccrdance with Section 17 of RA 6657 prior to its further amendment by RA 9700 pursuant to the cut-off date set under DAR AO 2, series of 2009 (cut-off rule). Notably, DAR AO 1, series of 2010 did not expressly or impliedly repeal the cutoff rule set under DAR AO 2, series of 2009, having made no reference to any cut-off date with respect to land valuation for previously acquired lands under PD 27 and EO 228 wherein valuation is subject to challenge by landowners. Consequently, the application of DAR AO 1, series of 2010 should be, thus, limited to those where the claim folders were received 1 or subsequent to July 1, 2009. (Emphases and underlining supplied) Following the above dictum, since the claim folder covering the subject land was received by the LBP on December 2, 1997, or prior to July 1, 2009, the RTC should have computed just compensation using pertinent DAR regulations applying Section 17 of RA 6657 prior to its amendment by RA 9700 instead of adopting the new DAR issuance. While the RTC, acting as a Special Agrarian Court (SAO), is not strictly bourd by the different formula created by the DAR since the valuation of property or the determination of just compensation is essentially a judicial function which is vested with the courts, and not with administrative agencies, it must explain and justify in clear terms the reason for any deviation from the prescribed factors and the applicable formula. (Heirs of Pablo Feliciano Jr. v. Land Bank of the Philippines, G.R. No. 215290, January 11, 2017) To this end, the RTC is hereby directed to observe the following guidelines in the remand of the case: 1, Just compensation must be valued at the time of taking, or the time when the owner was deprived of the use and benefit of his property, in this case, when emancipation patents were 4issued in the names of the farmer beneficiaries in1989. Hence, the evidence to be presented by the parties before the RTC for the valuation of the subject land must be based on the values ‘prevalent on such time of taking for like agricultural lands. 2. Just compensation must be arrived at pursuant to the guidelines set forth in Section 17 of RA 6657, as amended, prior to its amendment by RA 9700. However, the RTC is reminded that while it should take into account the different formula created by the DAR in arriving at the just, compensation for the subject land, it is not strictly bound thereto if the situations before it do not warrant their application. In any event, should the RTC find the said guidelines to be inapplicable, it must clearly explain the reasons for deviating therefrom, and for using other factors or formula in arriving at the reasonable just compensation for the acquired property. 3, Interest may be awarded as may be warrastted by the circumstances of the case and based on prevailing jurisprudence. In previous cases, the Court has allowed the grant of legal interest in expropriation cases where there is delay in the payment since the just compensation due to the landowners was deemed to be an effective forbearance on the part of the State. Legal interest on the unpaid balance shall be pegged at the rate of 12% p.a. from the time of taking in 1989 when Emancipation Patents were issued, until June 30, 2013 only. Thereafter, or beginning July 1, 2013, until fully paid, the just compensation due the landowners shall earn interest at the new legal rate of 6% p.a. in line with the amendment introduced by Bangko Sentral ng Pilipinas- Monetary Board Circular No. 799, Series of 2013. For guidance of the bench, the bar, and the public, we reiterate the rule: Out of regard for the DAR's expertise as the concerned implementing agency, courts should henceforth consider the factors stated in Section 17 of RA 6657, as amended, as translated into the applicable DAR formulas in their determination of just compensation for the properties covered by the said law. Af, in the exercise of their judicial discretion, courts find that a strict application of said formulas is not warranted under the specific circumstances of the case before them, they may deviate or depart therefrom, provided that this departure or deviation is supported by a reasoned explanation grounded on the evidence on record. In other words, courts of law possess the power to make a final determination of just compensation. (Heirs of Pablo Feliciano Jr. 0. Land Bank of the Philippines, G.R. No. 215290, January 11, 2017) ‘The Department of Public Works and Highways insists that the road lots are not compensable since they have “already been withdrawn from the commerce of man." It relies chiefly on this Court's 1991 Decision in White Plains Association, Inc. v. Legaspi, which pertained to "the widening of the Katipunan Road in the White Plains Subdivision in Quezon City." More specifically, it capitalizes on the following statement in the 1991 White Plains Decision that shows a compulsion for subdivision owners to set aside open spaces for public use, such as roads, and for which they need not be compensated by government: Subdivision owners are mandated to set aside such open spaces before their proposed subdivision plans may be approved by the government authorities, and that such open spaces shall be devoted exclusively for the use of the general public and the subdivision owner need not be compensated for the same. A subdivision owner must comply with such requirement before the subdivision plan is approved and the authority to sell is, issued.Under this compulsion, the dispositive portion of the 1991 White Plains Decision proceeds to state: WHEREFORE, the petition is GRANTED. The questioned orders of respondent judge dated July 10, 1990 and September 26, 1990 are hereby reversed and set aside. Respondent QCDEC is hereby directed to execute a deed of douation of the remaining undeveloped portion of Road Lot 1 consisting of about 18 meters wide in fevor ofthe Quezon City government, otherwise, the Register of Deeds of Quezon City is hereby directed to cancel the registration of said Road Lot 1 in the name of respondent QCDFC under TCT No. 112637 and to issue a new title covering said property in the name of the Quezon City government. Costs against respondent QCDEC. SO ORDERED. (Emphasis supplied) ‘The Department of Public Works and Highways is in grave error. Petitioner's reliance on the 1991 White Plains Decision is misplaced. The same 1991 Decision was not the end of litigation relating to the widening of Katipunan Road. The owner and developer of White Plains Subdivision, Quezon City Development and Financing Corporation (QCDFC), went on to file motions for reconsideration. The second of these motions was granted in this Court's July 27, 1994 Resolution. This Resolution expressly discarded the compulsion underscored by the Department of Public Works and Highways, and the dispositive portion of the 1991 White Plains Decision was modified accordingly. As this Court recounted in its 1998 Decision in White Plains Homeowners Association, Inc. v. Court of Appeals [The dictum in G.R. No. 95522, White Plains Association, Inc. vs. Legaspif,] that the developer can be compelled to execute a dee of donation of the undeveloped strip of Road Lot 1 and, in the event QCDFC refuses to donate the land, that the Register of Deeds of Quezon City may be ordered to cancel its old title and issue a new one in the xname of the city was questioned by the resporddent QCDFC as contrary to Jaw. We agree with QCDFC that the final judgment in G.R. No. 95522 is not what appears in the published on February 7, 1991 decision in White Plains Association, Inc. vs. Legaspi. [Rather, it] is the following resolution issued three (3) years later, on July 27, 1991 [sic], which states, inter alia: *... (Dhe Court is constrained to grant the Instant Motion for Reconsideration but only insofar as the motion seeks to delete from the dispositive portion of the decision of 07 February 1991 the order of this Court requiring the execution of the deed of donation in ‘question and directing the Register of Deeds of Quezon City, in the event that such deed is not executed, to cancel the ttle of QCDFC and to issue a new one in the name of the ‘Quezon City government. It may well be that the public respondents would not be aversed [sic] to such modification of the Court's decision since they shall in effect have everything to gain and nothing to lose. WHEREFORE the second motion for reconsideration is hereby partly granted by MODIFYING the dispositive portion of this Court's decision of 07 February 1991 and to row read as follows: "WHEREFORE the petition is GRANTED. The questioned orders of respondent judge dated July 10, 1990 and September 25 1990 are hereby reversed and set aside. Costs against respondent QCDFC. 6