POLICE POWER

AQUINO vs. MUNICIPALITY OF MALAY AKLAN

(G.R. No. 211356. September 29, 2014)
VELASCO, JR., J.:

Facts: Petitioner, president and chief executive officer of Boracay Island West Cove Management
Philippines, Inc. (Boracay West Cove), applied for a zoning compliance with the municipal government of
Malay, Aklan. While the company was already operating a resort in the area, the application sought the
issuance of a building permit covering the construction of a three-storey hotel over a parcel of land
measuring 998 sq.m. located in Sitio Diniwid, Barangay Balagab, Boracay Island, Malay, Aklan, which is
covered by a Forest Land Use Agreement for Tourism Purposes (FLAgT) issued by the Department of
Environment and Natural Resources (DENR) in favor of Boracay West Cove.

Through a Decision on Zoning dated January 20, 2010, the Municipal Zoning Administrator denied
petitioner's application on the ground that the proposed construction site was within the "no build zone"
demarcated in Municipal Ordinance 2000-131 (Ordinance). On March 28, 2011, a Cease and Desist Order
was issued by the municipal government, enjoining the expansion of the resort, and on June 7, 2011, the
Office of the Mayor of Malay, Aklan issued the assailed EO 10, ordering the closure and demolition of
Boracay West Cove's hotel.
Alleging that the order was issued and executed with grave abuse of discretion, petitioner filed a
Petition for Certiorari with prayer for injunctive relief with the CA. He argued that judicial proceedings
should first be conducted before the respondent mayor could order the demolition of the company's
establishment. In its assailed Decision dated August 13, 2013, the CA dismissed the petition solely on
procedural ground. Petitioner sought reconsideration but this was denied by the CA on February 3, 2014
through the challenged Resolution. Hence, the instant petition.
Issue: Whether or not petitioner's right to due process was violated when the respondent mayor ordered the
closure and demolition of Boracay West Cove's hotel without first conducting judicial proceedings.
Held: Generally, LGUs have no power to declare a particular thing as a nuisance unless such a thing is a
nuisance per se. Despite the hotel's classification as a nuisance per accidens, however, in this case the LGU
may nevertheless properly order the hotel's demolition. This is because, in the exercise of police power and
the general welfare clause, property rights of individuals may be subjected to restraints and burdens in order
to fulfil the objectives of the government. Otherwise stated, the government may enact legislation that may
interfere with personal liberty, property, lawful businesses and occupations to promote the general welfare.

POLICE POWER
METROPOLITAN MANILA DEVELOPMENT AUTHORITY v. BEL-AIR VILLAGE
ASSOCIATION, INC.
(G.R. No. 135962. March 27, 2000).
PUNO, J.:

FACTS: On December 30, 1995, respondent received from petitioner a notice requesting the opening of
Neptune Street, owned by respondent, to public vehicular traffic. On the same day, respondent was apprised
that the perimeter wall separating the subdivision from the adjacent Kalayaan Avenue would be demolished.
Respondent then instituted against petitioner a petition for injunction in the Trial Court of Makati, which
after due hearing, denied the issuance of a preliminary injunction. Respondent then questioned such denial
to the Court of Appeals. The appellate court then issued a writ of preliminary injunction enjoining the
implementation of the MMDA’s proposed action, it found that the MMDA has no authority to order the
opening of Neptune Street, a private subdivision road and cause the demolition of its perimeter walls, and
such authority is lodged with the City Council of Makati by ordinance. Hence, this petition. Petitioner
claims that it has the authority to open Neptune Street to public traffic because it is an agent of the state
endowed with police power in the delivery of basic services in Metro Manila. It is alleged that the police
power of MMDA was affirmed by the Supreme Court in the consolidated cases od Sangalang v.
Intermediate Appellate Court.

ISSUE: Whether or not MMDA has police power

HELD: No. Police power is an inherent attribute of sovereignty, it has been defined as the power vested
by the Constitution in the legislature 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 be the judge to be for the good and welfare of the commonwealth, and for the subjects of the same. It
bears stressing that police power is lodged primarily in the legislature and may not be exercised by any
group or body not possessing legislative power. However, Congress may delegate this power. It will be
noted that the powers of the MMDA are limited to the following acts: formulation, coordination, regulation,
implementation, preparation, management, monitoring, setting of policies, installation of a system and
administration. There is no syllable in RA No. 7924 that grants the MMDA police power, let alone
legislative power, there is no provision that empowers MMDA or its Council to enact ordinances, approve
resolutions and appropriate funds for the general welfare off the inhabitants of Metro Manila. The MMDA
is a development authority, all its functions are administrative in nature and these are actually summed upin
the charter itself.
Petitioner cannot seek refuge in the cases if Sangalang v. Intermediate Appellate Court, these cases
do not apply to the case at bar. Firstly, such involved zoning ordinances passed by the municipal council of
Makati and the Metro Manila Commission (MMC). Secondly, the MMDA is not the same entity as its
predecessor, the MMC. It is thus beyond doubt that the MMDA is not a local government unit or a public
corporation endowed with legislative power.

POLICE POWER
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC vs. DRILON
(G.R. NO. L-81958. June 30, 1988)
SARMIENTO, J.:

FACTS The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for short),a firm
"engaged principally in the recruitment of Filipino workers, male and female, for overseas placement,"
challenges the Constitutional validity of Department Order No. 1, Series of 1988, of the Department of
Labor and Employment, in the character of "GUIDELINES GOVERNING THE TEMPORARY
SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS," in
this petition for certiorari and prohibition. Specifically, the measure is assailed for "discrimination against
males or females;" that it "does not apply to all Filipino workers but only to domestic helpers and females
with similar skills;" and that it is violative of the right to travel. It is held likewise to be an invalid exercise
of the lawmaking power, police power being legislative, and not executive, in character.
On May 25, 1988, the Solicitor General, on behalf of the respondents Secretary of Labor and
Administrator of the Philippine Overseas Employment Administration, filed a Comment informing the
Court that on March 8, 1988, the respondent Labor Secretary lifted the deployment ban in the states of Iraq,
Jordan, Qatar, Canada, Hongkong, United States, Italy, Norway, Austria, and Switzerland. In submitting
the validity of the challenged "guidelines," the Solicitor General invokes the police power of the Philippine
State.

ISSUES:
1) Whether or not police power is valid under the Constitution
2) Whether or not Department Order No. 1 is Constitutional
HELD:
1) Valid. The concept of police power is well-established in this jurisdiction. It has been defined
as the "state authority to enact legislation that may interfere with personal liberty or property in order to
promote the general welfare." As defined, it consists of (1) an imposition of restraint upon liberty or
property, (2) in order to foster the common good. It is not capable of an exact definition but has been,
purposely, veiled in general terms to underscore its all-comprehensive embrace.

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

2) Constitutional. As a general rule, official acts enjoy a presumed validity. In the absence of clear
and convincing evidence to the contrary, the presumption logically stands.

The petitioner has shown no satisfactory reason why the contested measure should be nullified.
There is no question that Department Order No. 1 applies only to "female contract workers," but it does not
thereby make an undue discrimination between the sexes. It is well-settled that "equality before the law"
under the Constitution does not import a perfect identity of rights among all men and women. It admits of
classifications, provided that (1) such classifications rest on substantial distinctions; (2) they are germane
to the purposes of the law; (3) they are not confined to existing conditions; and (4) they apply equally to all
members of the same class.

POLICE POWER
ICHONG V HERNANDEZ
(G.R. NO. L-7995. May 31, 1957)
LABRADOR, J.:

Facts: The Legislative Department passed and enacted a law, RA 1180, entitled "An Act to Regulate the
Retail Business." In effect it nationalizes the retail trade business. Petitioner, for and in his own behalf and
on behalf of other alien residents, corporations and partnerships adversely affected by the provisions of
Republic Act No.1180, brought this action to obtain a judicial declaration that said Act is unconstitutional.
This law was passed by the Legislative Department for, during that time, there is a general feeling on the
part of the public, which appears to be true to fact, about the controlling and dominant position that the
alien retailer holds in the nation's economy. The dangers arising from alien participation in the retail trade
does not seem to lie in the predominance alone; there is a prevailing feeling that such predominance may
truly endanger the national interest. The law is clearly in the interest of the public, any of the national
security itself, and indisputably falls within the scope of police power, thru which and by which the State
insures its existence and security and the supreme welfare of its citizens. Petitioner contends that (1) it
denies to alien residents the equal protection of the laws and deprives them of their liberty and property
without due process of law; (2) the subject of the Act is not expressed or comprehended in the title thereof;
(3) the Act violates international and treaty obligations of the Republic of the Philippines; (4) the provisions
of the Act against the transmission by aliens of their retail business thru hereditary succession, and those
requiring 100% Filipino capitalization for a corporation or entity to entitle it to engage in the retail business,
violate the spirit of Sections 1 and 5, Article XIII and Section 8 of Article XIV of the Constitution.

Issue: Whether or not RA 1180 violates due process and equal protection that results to an invalid exercise
of police power.
Held: No. It does not violate the guarantees of the Constitution, it is a valid exercise of police power. With
regard to equal protection, the difference in status between citizens and aliens constitute a basis for
reasonable classification. The equal protection clause does not demand absolute equality among residents.
It merely requires that all persons shall be treated alike, under like circumstances and conditions both as to
privileges conferred and liabilities enforced. It is the dominion and control that the Legislature aims to
target upon enacting the said Act. Statistics have proven that it is the alien that has more dominion and
control over the economy. Aliens do not naturally possess the sympathetic consideration and regard for
customers with whom they come in daily contact, nor the patriotic desire to help bolster the nation's
economy, except in so far as it enhances their profit, nor he loyalty and allegiance which the national owes
to the land. These limitations on the qualifications of aliens have been shown on many occasions and
instances, especially in times of crisis and emergency. With regard to due process, the law in question is
deemed absolutely necessary to bring about the desired legislative objective, i.e., to free national economy
from alien control and dominance. It is not necessarily unreasonable because it affects private rights and
privileges. But the Legislature has found, as we have also found and indicated, that the privilege has been
so grossly abused by the alien, thru the illegitimate use of pernicious designs and practices, that he now
enjoys a monopolistic control of the occupation and threatens a deadly stranglehold on the nation's economy
endangering the national security in times of crisis and emergency. The removal and eradication of the
shackles of foreign economic control and domination, is one of the noblest motives that a national
legislature may pursue. It is impossible to conceive that legislation that seeks to bring it about can infringe
the constitutional limitation of due process. The attainment of a legitimate aspiration of a people can never
be beyond the limits of legislative authority.

POLICE POWER
LUTZ V. ARANETA
(G.R. NO. L-7859. DECEMBER 22, 1955)
REYES, J. B. L.,

FACTS: This case was initiated in the Court of First Instance of Negros Occidental to test the legality of
the taxes imposed by the Commonwealth Act No. 567 or the Sugar Adjustment Act.

According to Section 6 of the law:

SEC. 6. All collections made under this Act shall accrue to a special fund in the Philippine Treasury, to be
known as the 'Sugar Adjustment and Stabilization Fund,' and shall be paid out only for any or all of the
following purposes or to attain any or all of the following objectives, as may be provided by law.
First, To place the sugar industry in a position to maintain itself despite the gradual loss of the preferential
position of the PH sugar in the US market
Second, to readjust the benefits derived from the sugar industry by all of the component elements thereof
– mill, landowner, planter, and the laborers
Third, to limit the production of sugar to areas more economically suited to the production thereof; and
Fourth, to afford labor employed in the industry a living wage and to improve their living and working
conditions.

Walter Lutz, plaintiff, seeks to recover from the Collector of Internal Revenue the amount of 14,
666. 40 paid by the estate as taxes covering the crop years of 1948-1949 and 1949-1950; alleging that such
tax is unconstitutional and void, being levied for the aid and support of the sugar industry exclusively,
which according to his opinion is not a public purpose for which a tax may be constitutionally levied.
The case was dismissed by the Court of First Instance. Hence, this petition.

ISSUE: Whether or not the tax levied for the aid and support of the sugar industry valid and unconstitutional

RULING: YES. The analysis of the said act will show that the tax levied with regulatory purpose, to
provide means for the rehabilitation and stabilization of the threatened sugar industry. The act is primarily
an exercise of the police power. The Court draw attention to the fact that sugar production in one of the
great industries of our nation, sugar occupying a leading position among its export products. Its promotion,
protection and advancement therefore redounds greatly to the general welfare. The legislative discretion
must be allowed full play, subject only to the test of reasonableness; and it is not contended that the means
provided in section 6 of the law (above quoted) bear no relation to the objective pursued or are oppressive
in character. If objective and methods are alike constitutionally valid, no reason is seen why the state may
not be levy taxes to raise funds for their prosecution and attainment. Taxation may be made the implement
of the state's police power (Great Atl. & Pac. Tea Co. vs. Grosjean, 301 U. S. 412, 81 L. Ed. 1193; U. S.
vs. Butler, 297 U. S. 1, 80 L. Ed. 477; M'Culloch vs. Maryland, 4 Wheat. 318, 4 L. Ed. 579). The general
welfare demanded by the sugar industry should be stabilized in turn and in the wide field of its police power,
the law-making body could provide that the distribution of benefits therefrom be readjusted among its
components to enable it to resist the added strain of the increase in taxes that it had to sustain. (Sligh vs.
Kirkwood, 237 U. S. 52, 59 L. Ed. 835; Johnson vs. State ex rel. Marey, 99 Fla. 1311, 128 So 853; Maxcy
Inc. vs. Mayo, 103 Fla. 552, 139 So. 121).

POLICE POWER
ASSOCIATION OF SMALL LAND OWNERS v. SECRETARY OF AGRARIAN REFORM
(GR. No. 78742. 14 July 1989)
CRUZ, J.:

Facts: The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of due
process and the requirement for just compensation, placed his landholding under the coverage of Operation
Land Transfer. The petitioner contends that the issuance of E.O Nos. 228 and 229 shortly before Congress
convened is anomalous and arbitrary, besides violating the doctrine of separation of powers. The legislative
power granted to the President under the Transitory Provisions refers only to emergency measures that may
be promulgated in the proper exercise of the police power. The petitioner also invokes his rights not to be
deprived of his property without due process of law and to the retention of his small parcels of riceholding
as guaranteed under Article XIII, Section 4 of the Constitution.
Issues:

1. Whether the power of eminent domain may be used as an implement of police power.
2. Whether there is a valid exercise of the power of eminent domain.
3. Whether there is a valid exercise of police power.

Held:

1. Yes. Recent trends would indicate not a polarization but a mingling of police power and the
power of eminent domain with the latter being used as an implement of the former. To the extent that the
measures under challenge merely prescribe retention limits to landowners, there is an exercise of the police
power for the regulation of private property in accordance with the Constitution.

A statute may be sustained under the police power only if there is a concurrence of the lawful
subject and the lawful method. As the subject and purpose of agrarian reform have been laid down by the
Constitution itself, it is said that the first requirement has been satisfied. What remains to be examined is
the validity of the method employed to achieve the constitutional goal.

2. Yes. The expropriation in this case affects all private agricultural lands whenever found and of
whatever kind as long as they are in excess of the maximum retention limits allowed their owners. This
kind of expropriation is intended for the benefit not only of a particular community or of a small segment
of the population but of the entire Filipino nation, from all levels of our society, from the impoverished
farmer to the land-glutted owner. Where the State itself is the expropriator, it is not necessary for it to make
a deposit upon its taking possession of the condemned property, as "the compensation is a public charge,
the good faith of the public is pledged for its payment, and all the resources of taxation may be employed
in raising the amount."|||
 3. Yes. Since the subject and purpose of agrarian reform has been laid by the Constitution itself and
the method employed which is eminent domain is valid.

POLICE POWER
LOZANO V. MARTINEZ
(G.R. No. L-63419, December 18, 1986)
PONENTE: YAP, J.

FACTS: Petitioners assail the validity of Batas Pambansa Bilang 22 (BP 22 for short), also known as the
Bouncing Check Law. BP 22 punishes a person “who makes or draws and issues any check on account or
for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee
bank for the payment of said check in full upon presentment, which check is subsequently dishonored by
the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason
had not the drawer, without any valid reason, ordered the bank to stop payment.” It is aimed at putting a
stop to the practice of issuing checks that are worthless which causes injury to the public interest.
Contentions on the law are that: 1) it offends constitutional provision forbidding imprisonment for debt; 2)
it impairs freedom of contract; 3) it contravenes the equal protection clause; 4) it unduly delegates
legislative and executive powers; and 5) its enactment is flawed because the Interim Batasan violated the
prohibition on amendments in the Third Reading.

ISSUE: Whether or not BP 22 is a valid law (police power)

HELD: The offense punished by BP 22 is the act of making and issuing a worthless check, not the non-
payment of an obligation which the law punishes. The effects of issuance of a worthless check transcends
the private interests of the parties directly involved in the transaction and touches the interests of the
community at large since putting valueless commercial papers in circulation can pollute the channels of
trade and commerce, injure the banking system and eventually hurt the welfare of society and the public
interest. Hence, the enactment of BP 22 is a valid exercise of police power and is not in conflict with the
constitutional inhibition against imprisonment for debt.

There is no valid ground to sustain the contention the BP 22 impairs freedom of contract since
contracts which contravene public policy are not lawful. The statute does not deny the equal protection
clause since it only penalizes the drawer of the check and not the payee. Additionally, BP 22 does not
constitute an undue delegation of legislative powers. Contrary to the contention, the power to define the
offense and to prescribe the penalty are not delegated to the payee. On the last contention, the Interim
Batasan investigated the matter and reported that the clause in question was an authorized amendment of
the bill. With all the foregoing reasons, the constitutionality of BP 22 is upheld.

POLICE POWER
DEPARTMENT OF EDUCATION, CULTURE AND SPORTS (DECS) AND DIRECTOR OF
CENTER FOR EDUCATIONAL MEASUREMENT v. ROBERT REY C. SAN DIEGO AND
JUDGE TERESITA DIZON-CAPULONG
(G.R. No. 89572 December 21, 1989)
CRUZ, J.:

FACTS: The private respondent is a graduate of the University of the East with a degree of Bachelor of
Science in Zoology. The petitioner claims that he took the NMAT three times and flunked it as many times.
When he applied to take it again, the petitioner rejected his application on the basis of the aforesaid rule.
The private respondent then went to the Regional Trial Court of Valenzuela, Metro Manila, to compel his
admission to the test.
 In his original petition for mandamus, he first invoked his constitutional rights to academic freedom
and quality education. By agreement of the parties, the private respondent was allowed to take the NMAT
scheduled on April 16, 1989, subject to the outcome of his petition. In an amended petition filed with leave
of court, he squarely challenged the constitutionality of MECS Order No. 12, Series of 1972, containing
the rule that “A student shall be allowed only three (3) chances to take the NMAT. After three (3) successive
failures, a student shall not be allowed to take the NMAT for the fourth time.” The additional grounds raised
were due process and equal protection.

After hearing, Judge Capulong rendered a decision declaring the challenged order invalid and
granting the petition. Judge Teresita Dizon-Capulong held that the petitioner had been deprived of his right
to pursue a medical education through an arbitrary exercise of the police power.

ISSUES: Whether or not a person who has thrice failed the National Medical Admission Test (NMAT) is
entitled to take it again because he had been deprived of his right to pursue a medical education through an
arbitrary exercise of police power.

HELD: NO. Police power is validly exercised if (a) the interests of the public generally, as
distinguished from those of a particular class, require the interference of the State, and (b) the means
employed are reasonably necessary to the attainment of the object sought to be accomplished and not unduly
oppressive upon individuals.

The subject of the challenged regulation is certainly within the ambit of the police power. It is the
right and indeed the responsibility of the State to insure that the medical profession is not infiltrated by
incompetents to whom patients may unwarily entrust their lives and health. The method employed by the
challenged regulation is not irrelevant to the purpose of the law nor is it arbitrary or oppressive. The three-
flunk rule is intended to insulate the medical schools and ultimately the medical profession from the
intrusion of those not qualified to be doctors. The right to quality education invoked by the private
respondent is not absolute. The Constitution also provides that "every citizen has the right to choose a
profession or course of study, subject to fair, reasonable and equitable admission and academic
requirements.”

POLICE POWER
YNOT v. INTERMEDIATE APPELLATE COURT
(G.R No. 74457 March 20 1987)
Cruz, J.:

FACTS: President Ferdinand Marcos promulgated Executive Order No. 626-A amending the basic rule in
Executive Order No. 626 which states that no carabao or carabeef shall be transported from one province
to another and if violated shall be subject to confiscation and forfeiture by the government. Petitioner
Restituto Ynot had transported six carabaos from Masbate to Iloilo and was confiscated by the police station
commander for violation of the said above order. Petitioner sued for recovery saying that the said Executive
Order is unconstitutional and an invalid exercise of police power. The government said that it was a valid
exercise of police power since the preventing of the transport of the carabaos and carabeefs will prevent the
slaughtering of these carabaos which has direct relevance to the public welfare and the purpose achieved is
not unduly oppressive upon the individuals which are the two requirements for a valid exercise of police
power.

ISSUE: Whether or not Executive Order 626-A is a valid exercise of police power?
HELD: NO. There is no connection between the means employed and the purpose sought to be achieved
by the questioned measure. The prohibition does not assure that by preventing the transportation of the
carabaos from one province to another will prevent the slaughtering of the carabaos They can even be
killed anywhere with no less difficulty in one province than in another. The moving of the carabeefs as well
can easily be circumvented. To sum up, the challenged measure is an invalid exercise of police power
because the method employed to conserve the carabaos is not reasonably necessary to the purpose of the
law and worse unduly oppressive.

POLICE POWER
CITY GOVERNMENT OF QUEZON CITY v. ERICTA
G.R. No. L-34915, June 24, 1983
Gutierrez, J.R. J.:

Facts: A petition for review was filed to seek for the reversal of the decision of the Court of First Instance
of Rizal, declaring Section 9 of Ordinance No. 6118, S-64, of the Quezon City Council as null and void on
the grounds that the taking of respondent, Himlayang Pilipino, Inc.’s property is a valid and reasonable
exercise of police power for the land to be taken is intended for the construction of a burial ground for
paupers.
Section 9 of the Ordinance provides that “At least six (6) percent of the total area of the memorial
park cemetery shall be set aside for charity burial of deceased persons who are paupers and have been
residents of Quezon City for at least 5 years prior to their death, to be determined by competent City
Authorities. The area so designated shall immediately be developed and should be open for operation not
later than six months from the date of approval of the application.”

Respondent filed a petition for declaratory relief, prohibition and mandamus with preliminary
injunction in respond to petitioner’s enforcement of Section 9 of the Ordinance seeking for its annulment
for violating the Constitution, Local Autonomy Act and the Revised Administrative Code. Respondent
further contends that the confiscation of the property was the provision in question deprives the use of the
owner’s property for any reasonable purpose and the property is generally not taken for public use but is to
be destroyed for the promotion of general welfare.
Issue: Whether or not Section 9 of the ordinance in question a valid exercise of the police power
Held: No. The power to regulate does not include the power to prohibit, and confiscate. Police Power,
according to Freund and as quoted in Political Law by Tanada and Carreon, V-11, p. 50, is the “'the power
of promoting the public welfare by restraining and regulating the use of liberty and property”. It is exterted
merely for the purpose of regulating the use and enjoyment of property of the owner. It is not taken for
public use but rather to be destroyed for the general welfare. In other words, it does not include the taking
or confiscation of the property, unless necessary.

In this case, the mentioned ordinance did not only confiscate the property, but it also prohibits the
use of such property for the operation of a memorial park cemetery. It is not a mere police regulation but a
complete confiscation of the property from Himlayang Pilipino, Inc. The ordinance is merely taking the
property without just compensation for building a private cemetery instead of a public cemetery.

POLICE POWER
JACOBSON v. MASSACHUSETTS
(197 U.S. 11. February 20, 1905)
HARLAN, J.:

Facts: In 1902, the Board of Health of the city of Cambridge, Massachusetts, adopted a regulation wherein
all inhabitants of the city who have not yet been successfully vaccinated for smallpox since March 1, 1897
were required to be vaccinated. There was a fine of $5 and imprisonment for anyone who refused or
neglected to comply with the regulation. The regulation carried an exception to children, who at the time
of the vaccination, are not physically not fit to receive it. This exception was available to adults as well.
With the above regulation in force, Jacobson was proceed against by a criminal complaint for refusing and
neglecting to comply with the requirement of vaccination and refusal to pay the fine. The lower court found
Jacobson guilty and the case was continued for the opinion of the Supreme Judicial Court of Massachusetts
which also found him guilty. Jacobson insists that his liberty is invaded when the state subjects him to fine
or imprisonment for neglecting or refusing to submit to vaccination, that a compulsory vaccination law is
unreasonable, arbitrary, and oppressive, and, therefore, hostile to the inherent right of every freeman to care
for his own body and health in a such a way as to him seems best; and that the execution of such a law
against one who objects to vaccination, no matter for what reason, is nothing short of an assault upon his
person. Jacobson argues that he refused to receive the vaccination because he has had a bad experience
before with a vaccination that caused him to get sick.

Issue: Whether or not the Cambridge regulation requiring vaccination to its inhabitants is a valid exercise
of the State’s police power

Held: The Cambridge regulation is a valid exercise of the State’s police power. Decisions of the lower
courts are affirmed. The authority of the state to enact this statute is to be referred to what is commonly
called the police power. The police power of a State embraces such reasonable regulations relating to
matters completely within its territory, and not affecting the people of other States, established directly by
legislative enactment, as will protect the public health and safety.

The U.S. SC did not perceive that this legislation invaded any right secured by the Federal
Constitution. The police power of a state, whether exercised by the legislature, or by a local body acting
under its authority, may be exerted in such circumstances or by regulations so arbitrary and oppressive in
particular cases as to justify the interference of the courts to prevent wrong and oppression. It is to be
observed that the legislature of Massachusetts required the inhabitants of a city or town to be vaccinated
only when in the opinion of the board of health, that was necessary for the public health or the public safety.
Upon the principle of self-defense, of paramount necessity, a community has the right to protect itself
against an epidemic of disease which threatens the safety of its members. It is to be observed that when the
regulation in question was adopted, smallpox according to the recitals in the regulated adopted by the board
of health, was prevalent to some extent in the city of Cambridge and the disease was increasing. . It is within
the police power of a State to enact a compulsory vaccination law. The good and welfare of the
Commonwealth of which the legislature is primarily the judge, is the basis on which the police power rests
in Massachusetts. Vaccination as a means of protecting a community against smallpox, finds strong support
in the experience of this and other countries, no court, much less a jury, is justified in disregarding the
action of the legislature simply because in its or their opinion that particular method was – perhaps or
possible – not the best either for children or adults. Jacobson’s argument that he had a bad experience with
a previous vaccination does not warrant him of the exception because during the time of his supposed
vaccination, he was in perfect health and physically fit to receive the vaccination.

POLICE POWER
PENNSYLVANIA COAL CO. v. MAHON
(G.R. No. 43 S. Ct. 158, 260 U.S. 393)
FACTS: On August 26, 1921, the Mahons were bound by a valid covenant to permit Pennsylvania Coal
Company to mine out all the coal located beneath surface-level property ‘only’ without liability to them
for damages occasioned thereby, which damages had been expressly waived as a condition for the grant.
However, on August 27, 1921, when Pennsylvania Coal notified Mahon that it would mine coal beneath
his property, Mahon filed suit in the Court of Common Pleas to prohibit mining in accordance with the
Kohler Act. Such act completely annulled this covenant, by giving the Mahons the right, by injuction, to
prevent such mining. It speaks as a regulation of the mining of anthracite coal below-surface that supported
surface-level buildings, to protect the lives and safety of the public. The court denied respondent’s suit but
the Supreme Court of Pennsylvania reversed and allowed the ban on mining. Pennsylvania Coal contended
that the Takings Clause of the Fifth Amendment protected its contractual rights to the coal.
The plaintiffs say that whatever may have been the Coal Company's rights, they were taken by the
Koler Act. The Court of Common Pleas found that if not restrained the defendant would cause the damage
to. prevent which the bill"was brought, but denied an injunction, holding that the statute if applied to this
case would be unconstitutional. On appeal the Supreme Court of the State agreed that the defendant-had
contract and property rights protected by the Constitution of the United State!s, but' held that the statute
was a legitimate exercise of police power and directed a decree for the plaintiffs.

ISSUE/S: Whether or not the Kohler Act is a legitimate exercise of police power which restricted coal
mining to an extent that violated the Takings Clause of the Fifth Amendment by depriving mine owners of
coal without compensation?

HELD: The Kohler Act is not a police regulation. It is not a valid exercise of the right of eminent domain
because, first, it is not exercised for the benefit of the public generally, and second, because it affects the
mining of coal under streets or cities in places where the right to mine such coal has been reserved. As said
in the case, 'For practical purposes, the right to coal consists in the right to mine it.' The state exceeded its
police powers by significantly diminishing the value of the land estates without having a strong public
interest reason to do so. Moreover, the Court reasoned that "so far as private persons or communities have
seen fit to take the risk of acquiring only surface rights, we cannot see that the fact that their risk has become
a danger warrants the giving to them greater rights than they bought."

The only interests not heretofore fully protected both by the right to damages and to injunctive
relief, were those individuals who were owners of surface, rights merely. The act shows on its face that its
purpose is not to protect the lives or safety of the public generally but merely to augment the property rights
of a favored few. It is obvious that the Kohler Act is not directed to the safety of the public, but is for the
benefit, solely of a particular class thus violating the Takings Clause of the Fifth Amendment. A prohibition
of mining which causes subsidence of such structures and facilities is obviously enacted for a public
purpose; and it seems, likewise, clear that mere notice of intention to mine would not in this connection
secure the public safety. Yet it is said that these provisions of the act cannot be sustained as an exercise of
the police-power where the right to mine such coal has been reserved. The confusion seems to rest upon
the assumption that in order to justify such exercise of the police power there must be an average reciprocity
of advantage as between the owner of the property restricted and the rest of the community; and that here
such reciprocity is absent.

POWER OF EMINENT DOMAIN

REPUBLIC v. MUPAS
(G.R. No. 181892. September 8, 2015)
BRION, J.:

FACTS: On October 5, 1994, Asia's Emerging Dragon Corp. (AEDC) submitted an unsolicited proposal
to the Government—through the Department of Transportation and Communications (DOTC) and the
Manila International Airport Authority (MIAA)—for the construction and development of the NAIA-IPT
III under a build-operate-and-transfer (BOT) arrangement. The DOTC and the MIAA invited the public to
submit proposals to AEDC's unsolicited proposal in accordance with the BOT Law and its implementing
rules. DOTC awarded the NAIA-IPT III project to the Paircargo Consortium (that later organized itself as
PIATCO), who submitted a much superior bid, which AEDC failed to match. On July 12, 1997, the
Government executed a Concession Agreement with PIATCO for the construction, development, and
operation of the NAIA-IPT III under a BOT scheme. On May 2002, PIATCO defaulted on its obligation to
pay Takenaka and Asahikosa. On November 29, 2002, President Arroyo declared in her speech that the
Government would not honor the PIATCO contracts. On the same day, Takenaka and Asahikosan notified
PIATCO that they were suspending the construction of the NAIA-IPT III for PIATCO's failure to provide
adequate security. On May 3, 2007, during the proceedings of Civil Case No. 04-0876, the RTC appointed
DG Jones and Partners as independent appraiser to determine the amount of the just compensation for
NAIA-IPT III. On May 18, 2007, the RTC directed the Government to submit a Certificate of Availability
of Funds to cover DG Jones and Partners' $1.9 Million appraisal fee. The Government argues that Rule 67
of the Rules of Court does not require the appointment of an appraiser in eminent domain cases. On January
7, 2008, the RTC sustained the appointment of DG Jones and Partners. The RTC ruled that its power to
appoint the members of the BOC under Section 5, Rule 67 of the Rules of Court includes the power to
appoint an independent appraiser. On 2011, the Government expressed its desire to exercise full ownership
rights over the NAIA-IPT III. However, it stated that it could not directly pay PIATCO who had various
creditors. The Government asserted that just compensation should only be paid to claimants who are legally
entitled to receive just compensation. PIATCO opposed the Manifestation and Motion arguing that the
Government could not vary the terms of the May 23, 2011 Decision as well as the Court's rulings in Agan
and Gingoyon. PIATCO denied the Government's allegations that there were several claimants on the just
compensation. CA upheld the RTC’s decision.
ISSUES:
1. Whether or not the issue on the appointment of an independent appraiser for the RTC's
promulgation of its rulings in Civil Case No. 04-0876 regarding eminent domain case is moot and academic.
2. Whether or not the PIATCO is the sole receiver of the just compensation.
RULING:
1. YES. The issues of the propriety of the appointment of DG Jones and Partners as an independent
appraiser in the valuation of the NAIA-IPT III and who should shoulder DG Jones and Partners' appraisal
fee are already moot and academic. The purpose of appointing DG Jones and Partners as an independent
appraiser was to assist the BOC in the appraisal of NAIA-IPT III. As with the BOC, the independent
appraiser's recommendation to the RTC was merely recommendatory and advisory in character. Since the
RTC has already ruled on the just compensation in Civil Case No. 04-0876, the appointment of an
independent appraiser no longer serves any practical purpose.
2. YES. PIATCO, as the owner of the NAIA-IPT III, shall solely receive the just compensation.
Based on the last paragraph, Section 4 of RA 8974 and the prevailing jurisprudence, it is the owner of the
expropriated property who is constitutionally entitled to just compensation. Other claimants should be
impleaded or may intervene in the eminent domain case if the ownership of the property is uncertain or
there are conflicting claims on the property pursuant to Section 9, Rule 67 of the Rules of Court.

POWER OF EMINENT DOMAIN

NATIONAL POWER CORPORATION v. POSADA
(G.R. No. 191945. March 11, 2015)
LEONEN, J.:

FACTS: The National Power Corporation (NAPOCOR) instituted expropriation proceedings for the
acquisition of a right-of-way easement over parcels of land located in Barangay Marinawa, Bato,
Catanduanes owned by respondents Socorro T. Posada, Renato Bueno, Alice Balin, Adrian Tablizo, Teofilo
Tablizo, and Lydia Tablizo. The expropriation was for the construction and maintenance of its Substation
Island Grid Project. The National Power Corporation offered the price of P500.00 per square meter. In their
Answer, respondents objected to the offer and alleged that the value of the properties was P2,000.00 per
square meter. The delay of the possession of the desired property caused NAPOCOR to withdraw the
petition to acquire said land because it affected the implementation of the Codon-Virac Transmission Lines.

ISSUES:
1. Whether the National Power Corporation may be allowed to withdraw its Petition for Review
2. Whether the withdrawal has the effect of dismissing its Amended Complaint before the trial
court

HELD: 1. The Motion to Withdraw is granted insofar as it withdraws the Petition for Review. Since the
National Power Corporation is no longer using respondents' properties for the purpose of building the
Substation Project, it may be allowed to discontinue the expropriation proceedings, subject to the approval
of the court.

2. With regards to the effects of the dismissal of the Amended Complaint, the case is remanded to
the Regional Trial Court of Virac, Catanduanes, Branch 43 for appropriate action. The National Power
Corporation should file the proper Motion to Withdraw before the trial court. It is now the burden of the
National Power Corporation to plead and prove to the trial court its reasons for discontinuing the
expropriation.

POWER OF EMINENT DOMAIN

SECRETARY OF DPWH vs. TECSON
(G.R. No. 179334. April 21, 2015)
Peralta, J.:

FACTS: In 1940, DPWH took respondents-movants' subject property without the benefit of expropriation
proceedings for the construction of the MacArthur Highway. In a letter dated December 15, 1994,
respondents-movants demanded the payment of the fair market value of the subject parcel of land. Celestino
R. Contreras (Contreras), then District Engineer of the First Bulacan Engineering District of the DPWH,
offered to pay for the subject land at the rate of Seventy Centavos (P0.70) per square meter, per Resolution
of the Provincial Appraisal Committee (PAC) of Bulacan. Unsatisfied with the offer, respondents-movants
demanded the return of their property, or the payment of compensation at the current fair market value.
Hence, the complaint for recovery of possession with damages filed by respondents-movants. Respondents-
movants were able to obtain favorable decisions in the RTC and CA, with the subject property valued at
One Thousand Five Hundred Pesos (P1, 500.00) per square meter, with interest at six percent (6%) per
annum. Petitioners thus elevated the matter to the Court in a petition for review on certiorari. The only issue
resolved by the Court in the assailed decision is the amount of just compensation which respondents-
movants are entitled to receive from the government for the taking of their property. Both the RTC and the
CA valued the property at P1,500.00 per square meter, plus 6% interest from the time of the filing of the
complaint until full payment. The court, however, did not agree with both lower courts and ruled instead
that just compensation should be based on the value of the property at the time of taking in 1940, which is
Seventy Centavos (P0.70) per square meter. In addition, and by way of compensation, court also awarded
an interest of six percent (6%) per annum from 1940 until full payment. Aggrieved, respondents-movants
move for the reconsideration of said decision.

ISSUES:
1. Whether or not the respondents-movants are entitled to just compensation
2. Whether or not the valuation would be based on the corresponding value at the time of the taking
or at the time of the filing of the action.
Held:
1. Government's failure to initiate necessary expropriation proceedings prior to actual taking cannot
simply invalidate the State's exercise of eminent domain power, given that the property subject of
expropriation is for public use, and public policy imposes upon the public utility the obligation to continue
its services to the public. To hastily nullify said expropriation in the guise of lack of due process would
certainly diminish or weaken one of the State's inherent powers, the ultimate objective of which is to serve
the greater good. Thus, the non-filing of the case for expropriation will not necessarily lead to the return of
the property to the landowner. What is left to the landowner is the right of compensation.

2. The court found no reason to depart from earlier doctrines laid down. Government took control
and possession of the subject properties for public use without initiating expropriation proceedings and
without payment of just compensation; while the landowners failed for a long period of time to question
such government act and later instituted actions for recovery of possession with damages. The Court has
uniformly ruled that the fair market value of the property at the time of taking is controlling for purposes
of computing just compensation.

POWER OF EMINENT DOMAIN

CITY OF MANILA v. CHINESE COMMUNITY OF MANILA
(G.R. No. 14355. October 31, 1919)
JOHNSON, J.:

FACTS: On December 11, 1916, plaintiff presented a petition in the Court of First Instance praying that
certain lands be expropriated for the purpose of constructing a public movement, namely, the extension of
Rizal Avenue, Manila. Defendants mainly argue that there exists no necessity for said expropriation and
that the land in question was a cemetery, which had been used as such for many years, and that the same
should not be converted into a street for public purposes. The Court of First Instance, after hearing the
petition and various answers, decided that there was no necessity for the expropriation of the particular-
strip of land in question. Plaintiff appealed to the Supreme Court with the question of “In expropriation
proceedings by the City of Manila, may the courts inquire into, and hear proof upon, the necessity of the
expropriation?”. Plaintiff supposes that under the law, it has authority to expropriate any land it may desire;
that the only function of the court in such proceedings is to ascertain the value of the land in question; that
neither the court nor the owners of the land can inquire into the advisable purpose of the expropriation or
ask any questions concerning the necessities therefor; that the courts are mere appraisers of the land, and,
when the value of the land is fixed, by the method adopted by the law, to render a judgement in favor of he
defendant for its value.

ISSUES:
1. Whether or not Courts may look into the necessities of expropriations
2. Whether or not the petition of expropriation of the City of Manila be granted

HELD:
1. YES. We are of the opinion that the power of the court is not limited to that question. The right
of expropriation is not an inherent power in a municipal corporation, and before it can exercise the right
some law must exist conferring the power upon it. When the courts come to determine the question, they
must not only find that a law or authority exists for the exercise of the right of eminent domain, but also
that the right or authority is being exercised in accordance with the law. In the present case there are two
conditions imposed upon the authority conceded to the City of Manila: First, the land must be private; and,
second, the purpose must be public. If the court, upon trial, finds that neither of these conditions exists or
that either one of them fails, certainly it cannot be contended that the right is being exercised in accordance
with law. When the necessity for the exercise of the right of eminent domain is presented to the legislative
department, and that department decides that there exists a necessity for the exercise of such, in that case,
the courts will not go behind the action of the legislature and make inquiry in its necessity. But when the
legislature merely conferred general authority to take land for public use when a necessity exists therefore,
it can be asserted that, the allegation of the necessity for the appropriation is an issuable allegation which it
is competent for the courts to decide. By the weight of authorities, the courts have the power of restricting
the exercise of eminent domain to the actual reasonable necessities of the case and for the purposes
designated by the law.
2. NO. The record does not show conclusively that the plaintiff has definitely decided that there
exists a necessity for the appropriation of the particular land described in the complaint. There is a clear
indication that the municipal board merely believed at one time that other land might be used for the
proposed improvement, thereby avoiding the necessity of disturbing the quiet resting place of the dead.
And also, the cemetery in question seems to have been established under governmental authority and is a
public property which may not be subject for expropriation.

POWER OF EMINENT DOMAIN

REPUBLIC v. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
(G.R. NO. L-18841. January 27, 1969)
REYES, J.:

FACTS: 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. 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. In its memorandum in lieu of oral argument in this
Court dated 9 February 1964, 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.

ISSUE:
Whether or not the Republic may, in the exercise of the sovereign power of eminent domain, require
PLDT to permit interconnection of the government telephone system

HELD:
YES. Supreme Court held that parties cannot 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. Normally, 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.

POWER OF EMINENT DOMAIN

PEOPLE v. FAJARDO
(G.R. NO. L-12172. August 29, 1958)
REYES, J.:

FACTS: Defendant Fajardo was the Mayor of Baao, Camarines Sur when the municipal council passed
Municipal Ordinance No. 7, Series of 1950, of the Municipality of Baao, Camarines Sur, prohibiting the
construction of buildings that block the view of the town plaza, and that construction requires the permission
of the mayor. When he stepped down as mayor, he applied for a permit to construct a building beside the
gasoline station near the plaza, and his request was repeatedly denied. Nevertheless, he continued
construction with the reason that he needed a house to stay because his previous house was destroyed by
the typhoon. The lower courts affirmed conviction and required Fajardo to pay a fine of P35 each and the
costs, as well as to demolish the building in question because it destroys the view of the public plaza of
Baao, in that "it hinders the view of travelers from the National Highway to the said public plaza." From
this decision, the accused appealed to the Court of Appeals, but the latter forwarded the records to us
because the appeal attacks the constitutionality of the ordinance in question.

ISSUE: Whether or not the ordinance is constitutional.

HELD: No. The ordinance is arbitrary and provides unlimited conferment of power to the mayor because
it does not state any standard that limits the grant of power to the mayor. Ordinances which thus invest a
city council with a discretion which is purely arbitrary, and which may be exercised in the interest of a
favored few, are unreasonable and invalid. The ordinance should have established a rule by which its
impartial enforcement could be secured. The ordinance is unreasonable and oppressive, in that it operates
to permanently deprive appellants of the right to use their own property; hence, it oversteps the bounds of
police power, and amounts to a taking of appellants’ property without just compensation. An ordinance
which permanently so restricts the use of property that it cannot be used for any reasonable purpose goes,
it is plain, beyond regulation and must be recognized as a taking of the property.

The validity was also refuted by the Admin Code which states: SEC. 2243. Certain legislative
powers of discretionary character. — The municipal council shall have authority to exercise the following
discretionary powers: (c) To establish fire limits in populous centers, prescribe the kinds of buildings that
may be constructed or repaired within them, and issue permits for the creation or repair thereof, charging a
fee which shall be determined by the municipal council and which shall not be less than two pesos for each
building permit and one peso for each repair permit issued. The fees collected under the provisions of this
subsection shall accrue to the municipal school fund.

Since, there was absolutely no showing in this case that the municipal council had either established
fire limits within the municipality or set standards for the kind or kinds of buildings to be constructed or
repaired within them before it passed the ordinance in question, it is clear that said ordinance was not
conceived and promulgated under the express authority of sec. 2243 (c).

POWER OF EMINENT DOMAIN

REPUBLIC vs. VDA DE CASTELLVI
(G.R. No. L-20620. August 15, 1974)
ZALDIVAR, J.:

FACTS: The Republic through the Armed Forces of the Philippines (AFP), entered into lease agreement
over a two parcels of land in Pampanga with Castellvi on a year-to-year basis. Castellvi gave notice to
terminate the lease on year 1956 and thereafter wrote a letter to the Chief of Staff demanding that the
property be vacated in 30 days. But AFP refused because of the permanent installations and other facilities
that were established on the property worth P 500,000.00 and there is no recourse to acquire her property
other than expropriation proceeding to be recommended to the President. Castellvi instituted an ejectment
proceeding against the AFP.

ISSUES:
Whether or not the lower court erred in the ff. decisions:
1. In finding the price of P10 per square meter of the lands subject of the instant proceedings as just
compensation
2. In holding that the "taking" of the properties under expropriation commenced with the filing of
this
action
3. In ordering plaintiff-appellant to pay 6% interest on the adjudged value of the Castellvi property
to
start from July of 1956
4. In denying plaintiff-appellant's motion for new trial based on newly discovered evidence

RULING:
1.YES. There is an evidence showing that the lands in question became adaptable for residential
purposes and that the appellees had actually taken steps to convert their residential subdivisions even before
the Republic filed complaint for eminent domain. The price of P10.00 per square meter, as recommended
by the commissioners and adopted by the lower court, is quite high. It is viewed that the price of P5.00 per
square meter would be a fair valuation of the lands in question and would constitute a just compensation to
the owners thereof.
2. NO. Castellvi maintains that the "taking" of property under the power of eminent domain
requires two essential elements: (1) entrance and occupation by condemnor upon the private property for
more than a momentary or limited period, and (2) devoting it to a public use in such a way as to oust the
owner and deprive him of all beneficial enjoyment of the property. Under Section 4 of Rule 67 of the Rules
of Court, 16 the "just compensation" is to be determined as of the date of the filing of the complaint. The
Court has ruled that when the taking of the property sought to be expropriated coincides with the
commencement of the expropriation proceedings, or takes place subsequent to the filing of the complaint
for eminent domain, the just compensation should be determined as of the date of the filing of the complaint.
(Republic vs. Philippine National Bank, L-14158, April 12, 1961, 1 SCRA 957, 961-962)
3. YES. The Republic, therefore, should pay Castellvi interest at the rate of 6% per annum on the
value of her land, minus the provisional value that was deposited, only from July 10, 1959 when it deposited
in court the provisional value of the land.
4. NO. The lower court acted correctly when it denied the motions for a new trial. To warrant the
granting of new trial, the evidence must be discovered after the trial; that even with the exercise of due
diligence, the evidence could not have been discovered and produced at the trial; and that evidence is of
such a nature as to alter the result of the case if admitted. These requisites were not complied.

POWER OF EMINENT DOMAIN

VICTORIA AMIGABLE v. NICOLAS CUENCA
(GR. No. L-26400. 29 February 1972)
MAKALINTAl, J.:

FACTS:Victoria Amigable is the owner of Lot No. 639 of the Banilad Estate in Cebu City as shown by a
transfer certificate issued to her by the Register of Deeds of Cebu, which shows no annotation in favor of
the government at the back of the certificate. Without prior expropriation or negotiated sale, the government
used a portion of the said lot for the construction of the Mango and Gorordo Avenues.

Amigable filed a complaint against the Republic of the Philippines and Nicolas Cuenca, in his
capacity as Commissioner of Public Highways for the recovery of ownership and possession of the land
traversed by Mango and Gorordo Avenues, and sought payment for moral and compensatory damages. The
defendants denied the allegations of the complaint and argued among others that the state may not be sued
without its consent.

ISSUE/S:
Whether the state may be sued in the exercise of the power of eminent domain.
HELD:
Yes. Where the government takes away property from a private landowner for public use without
going through the legal process of expropriation or negotiated sale, the aggrieved party may properly
maintain a suit against the government without thereby violating the doctrine of governmental immunity
from suit without its consent. Considering that no annotation in favor of the government appears at the back
of her certificate of title and that she has not executed any deed of conveyance of any portion of her lot to
the government, the appellant remains the owner of the whole lot. As registered owner, she could bring an
action to recover possession of the portion of land in question at anytime because possession is one of the
attributes of ownership.

POWER OF EMINENT DOMAIN

PHILIPPINE PRESS INSTITUTE v. COMELEC
(G.R. No. 119694, May 22, 1995)
FELICIANO, J.:

FACTS: COMELEC issued resolution 2772 directing newspapers to provide free print space of not less
than one half (1/2) page for use as “COMELEC Space” which shall be allocated by the Commission, free
of charge, among all candidates within the area in which the newspaper, magazine or periodical is circulated
to enable the candidates to make known their qualifications, their stand on public issues and their platforms
and programs of government. Philippine Press Institute, a non-stock, non-profit organization of newspaper
and magazine publishers asks the Court to declare said resolution unconstitutional and void on the ground
that it violates the prohibition imposed by the Constitution upon the government, and any of its agencies,
against the taking of private property for public use without just compensation.
The Office of the Solicitor General, on behalf of COMELEC alleged that the resolution does not
impose upon the publishers any obligation to provide free print space in the newspapers. It merely
established guidelines to be followed in connection with the procurement of “COMELEC space”. And if it
is viewed as mandatory, the same would nevertheless be valid as an exercise of the police power of the
State- a permissible exercise of the power of supervision or regulation of the COMELEC over the
communication and information operations of print media enterprises during the election period to
safeguard and ensure a fair, impartial and credible election.

ISSUE: Whether or not the resolution was a valid exercise of the power of eminent domain

HELD: The Supreme Court declared the Resolution as unconstitutional. It held that to compel print media
companies to donate “COMELEC space” amounts to “taking” of private personal property without payment
of the just compensation required in expropriation cases. The threshold requisites for a lawful taking of
private property for public use are the necessity for the taking and the legal authority to effect the taking.
The element of necessity for the taking has not been established by respondent COMELEC considering that
the newspapers were not unwilling to sell advertising space. The taking of private property for public use
is authorized by the constitution, but not without payment of just compensation. Also Resolution No. 2772
does not constitute a valid exercise of the police power of the state. In the case at bench, there is no showing
of existence of a national emergency to take private property of newspaper or magazine publishers.
However, Sec 8 still stands as it is within the power of COMELEC to control the media influences of
candidates to prevent unequal campaigns.

POWER OF EMINENT DOMAIN

SUMULONG vs. GUERRERO
(G.R. No. L-48685 September 30, 1987)
CORTES, J:

FACTS: The National Housing Authority filed a complaint for expropriation of parcels of land covering
approximately 25 hectares, including the lots of petitioners. The land sought to be expropriated were valued
by the NHA at P1.00 per square meter adopting the market value fixed by the provincial assessor in
accordance with presidential decrees prescribing the valuation of property in expropriation proceedings.
Together with the complaint was a motion for immediate possession of the properties. The NHA
deposited the amount of P158,980.00 with the Philippine National Bank, representing the "total market
value" of the subject twenty five hectares of land, pursuant to Presidential Decree 1224 which defines "the
policy on the expropriation of private property for socialized housing upon payment of just compensation."
The respondent Judge issued an Order to issue a writ of possession. Petitioners filed a motion for
reconsideration on the ground that they had been deprived of the possession of their property without due
process of law. This was however, denied.
They contend that PD l224, as amended, is unconstitutional for being violative of the due process
clause. Specifically, the Decree would allow the taking of property regardless of size and no matter how
small the area to be expropriated. Petitioners claim that "there are vast areas of lands in Mayamot, Cupang,
and San Isidro, Antipolo, Rizal. It is surprising [therefore] why the respondent [would] include [their] two
man lots.” Further, they argue that "socialized housing" for the purpose of condemnation proceeding, as
defined in said Decree, is not really for a public purpose.

ISSUE/S:
1. Whether or not “socialized housing” is considered public use.
 2. Whether or not size of the land is material in expropriation.
HELD:
1. YES. In Heirs of Juancho Ardona v. Reyes, the Court held that “whatever may be beneficially
employed for the general welfare satisfies the requirement of public use”. Housing is a basic human need.
Shortage in housing is a matter of state concern since it directly and significantly affects public health,
safety, the environment and in sum, the general welfare. In this case, the lands in question are being
expropriated by the NHA for the expansion of Bagong Nayon Housing Project to provide housing facilities
to low-salaried government employees.
2. NO. The State acting through the NHA is vested with broad discretion to designate the particular
property to be taken for socialized housing purposes and how much thereof may be expropriated. Absent a
clear showing of fraud, bad faith, or gross abuse of discretion, which petitioners herein failed to
demonstrate, the Court will give due weight to and leave undisturbed the NHA's choice and the size of the
site for the project. The property owner may not interpose objections merely because in their judgment
some other property would have been more suitable, or just as suitable, for the purpose. The right to the
use, enjoyment and disposal of private property is tempered by and has to yield to the demands of the
common good.

POWER OF EMINENT DOMAIN

MANOSCA vs. COURT OF APPEALS
(G.R No 106440 January 29 1996 )
VITUG, J.:

FACTS: Petitioners Alejandro Manosca, Asuncion Manosca and Leonica Manosca inherited a piece of
land at Taguig City with an area of about 492 square meters. The said parcel of land was ascertained by the
National Historical Institute(NHI) to have been the birth site of Felix Y. Manalo, the founder of “Iglesia ni
Cristo”. Resolution 1, Series of 1986, pursuant to Section 4 of Presidential Decree No. 260, declaring the
land to be a national historical landmark. The Republic, through the Office of the Solicitor General instituted
a complaint for expropriation for the reason that the land as such is a national historical landmark which is
a public purpose. Respondent Republic filed an urgent motion for the issuance of an order to permit it to
take immediate possession of the property which was opposed by the petitioners. Petitioners said that the
intended expropriation was not for a public purpose.

ISSUE:
Whether or not the term “public use” as a requirement of Eminent Domain is extant in the attempted
expropriation by the Republic of the 492 square-meter parcel of land

HELD:
YES. The term “public use” is one which confers some benefit or advantage to the public and is
not confined to actual use by the public. It means a use concerning the whole community as distinguished
from particular individuals and if the object is to satisfy a great public want or exigency that is sufficient.
As long as the purpose of the taking is public, the power of eminent domain is present. In this case, what
should be significant is the principal objective of the consequences that might follow from the exercise of
the power which is to recognize the distinctive contribution of the late Felix Manalo to the culture of the
Philippines rather than to commemorate his founding and leadership of the “Iglesia ni Cristo”. It is true that
this will benefit the members of Iglesia ni Cristo than others but this is merely incidental and secondary in
nature and does not necessarily diminish the essence of public use.

POWER OF EMINENT DOMAIN

EPZA V. DULAY
G.R. No. L-59603, April 29, 1987
Gutierrez, J.R. J.:

FACTS: The President of the Philippines issued Proclamation No. 1811, reserving a certain parcel of land
of the public domain situated in the City of Lapu-Lapu, Island of Mactan, Cebu, for the establishment of
an export processing zone by petitioner Export Processing Zone Authority (EPZA).”. It covers a total area
of 1,193,669 square meters, including four parcels of land with an area of 22,328 square meters that was
owned and registered by a private respondent. Thus, the petitioner offered respondent to purchase the
parcels of land in accordance with Section 92 of Presidential Decree No. 464. However, the parties failed
to reach an agreement to sell the property.
Petitioner filed a complaint for expropriation with the then Court of First Instance of Cebu praying
for “the issuance of a writ of possession against the private respondent, to expropriate the aforesaid parcels
of land.”
On 21 October 1980, the respondent judge issued the writ of possession that authorized the
petitioner to take possession of the properties. However, respondent judge issued the order of condemnation
against petitioner for having the lawful right over the properties sought to be condemned upon the payment
of just compensation to be determined prior to the filing of the complaint. The three commissioner
submitted a report recommending that the amount of P15.00 per square meter is the fair and reasonable
value for the properties.
Petitioner filed a Motion for Reconsideration on the grounds that P.D. 1533 has superseded
Sections 5 to 8 of Rule 67 of the Rules of Court regarding the determining of just compensation through
the commissioners and compensation must not exceed to the amount stated in P.D. 1533. The court denied
the motion for reconsideration on 14 November 1981. Hence, this petition was filed on the ground that
respondent judge acted in excess jurisdiction and with grave abuse of discretion in setting hearings on the
commissioners’ report as P.D. 1533 provided that just compensation should be fair and “current market
value declared by the owner of the property sought to be expropriated or such market value as determined
by the assessor, whichever is lower.”

ISSUE: Is the exclusive and mandatory mode of determining just compensation in P.D. No. 1533 valid
and constitutional?

HELD: No. The Court is convinced that the trial correctly stated that the valuation in the decree may only
serve as the guide for the determination of compensation of the properties, but it cannot substitute a court’s
ruling as to the amount of the property sought to be awarded. It is a judicial function that just compensation
in eminent domain cases is to be determined. While the executive and legislative departments can make
determinations, no statue or decree may prevail over the court’s findings if such determination violates the
party’s rights without just compensation. It is a violation of due process to deny the owner of the property
to prove that the valuation is wrong and unfair.

POWER OF EMINENT DOMAIN

MUNICIPALITY OF PARANAQUE V. V.M. REALTY CORPORATION
(G.R. No. 127820. July 20, 1998)
PANGANIBAN, J.:

FACTS: Pursuant to a Sangguniang Bayan Resolution, the municipality of Paranaque fled on 20 Sept 1993
a complaint for expropriation against V.M. Realty Corporation over two parcels of land. The complaint was
filed for the “purpose of alleviating the living conditions of the underprivileged by providing homes for the
homeless through a socialized housing project.” For the same purpose and pursuant to the Sangguniang
Bayan resolution, petitioner made an offer to enter into a negotiated sale of the property with private
respondent, which the latter did not accept. The RTC of Makati gave the complaint due course and
authorized the petitioner to take possession of the subject property upon deposit with its clerk of court.
Private respondent filed its answer alleging that (a) the complaint failed to state a cause of actions because
it was filed pursuant to a resolution and not an ordinance as required by RA 7160 (Local Government Code)
and (b) the cause of action, if any, was barred by a prior judgment or res judicata. The RTC thereafter
nullified its previous ruling and dismissed the case. Petitioner then argued that a resolution and an ordinance
were synonymous and that their resolution was in accord with RA 7160. Petitioners also contend that the
res judicata was not applicable to. The case was brought to the Court of Appeals wherein the RTC’s decision
was affirmed in toto.

ISSUES:
1. Whether or not the municipality of Paranaque can validly exercise the power of eminent domain
with a resolution and not an ordinance
2. Whether or not the principle of res judicata is applicable to the present case

HELD:
1. The SC was not convinced by petitioner's insistence that the terms "resolution" and "ordinance"
are synonymous. A municipal ordinance is different from a resolution. An ordinance is a law, but a
resolution is merely a declaration of the sentiment or opinion of a lawmaking body on a specific matter.

In accordance with Sec. 19 of RA 7160, the following essential requisites must concur before an
LGU can exercise the power of eminent domain: (1) An ordinance is enacted by the local legislative council
authorizing the local chief executive to exercise the power of eminent domain. (2) The power of eminent
domain is exercised fr public use/purpose/welfare, or for the benefit of the poor and landless. (3) There is
payment of just compensation, as required under Sec. 9 Art. III of the Constitution. Lastly, (4) a valid and
definite offer has been previously made to the owener of the property and was not accepted.

Thus, in the case at bar, there was no compliance with the first requisite since a resolution is
different from an ordinance, and therefore the power of eminent domain cannot be validly exercised.

2. The SC held that the principle of res judicata cannot bar the right of the State or its agents to
expropriate private property. The very nature of eminent domain, as an inherent power of the State, dictates
that the right to exercise the power be absolute and unfettered even by a prior judgment. The power of the
State or its agents to exercise eminent domain is not diminished by the mere fact that a prior final judgment
over the property to be expropriated has become the law of the case as to the parties. The State may still
subsequently exercise its right to expropriate the same property, once all legal requirements are complied
with. To rule otherwise will not only improperly diminish the power of eminent domain but also clearly
defeat social justice.

POWER OF EMINENT DOMAIN

REPUBLIC vs. HEIRS OF BORBON
(G.R. NO. 165354. January 12, 2015)
BERSAMIN, J.:

FACTS: The National Power Corporation (NAPOCOR) is a government-owned and - controlled

corporation (R.A. No. 6395) to undertake the development of hydro-electric generation of power,
production of electricity from any and all sources in the PH and to supply such power to the inhabitants
thereof. NAPOCOR entered a property located in Brgy. San Isidro, Batangas City in order to construct and
maintain transmission lines for the 230 KV Mahabang Parang-Pinamucan Power Transmission Project.
Respondents heirs of Saturnino Q. Borbon owned the property, with a total area of 14,257 sq.m..
NAPOCOR filed a complaint for expropriation in the RTC in Batangas, seeking the acquisition of a portion
of the property involving an area of only 6,326 sq.m., alleging that negotiations were made but failed to
reach any agreement; and that it was willing to deposit for the assessed value of the portion sought.
Respondents staunchly maintained that NAPOCOR entered the property without the owners' consent and
without paying just compensation for the disturbance of their property rights from the time of entry.
Respondents also contended that the area being expropriated only covered the portion directly affected by
the transmission lines; that the remaining portion of the property was also affected because the transmission
line passed through the center of the land, thereby dividing the land into three lots; that the presence of the
high tension transmission line had rendered the entire property inutile for any future use and capabilities.
Respondents therefore demand NAPOCOR to pay just compensation not only for the portion sought to be
expropriated but for the entire property whose potential was greatly diminished, if not totally lost, due to
the project considering that their property was classified as industrial land. Thus, they sought the dismissal
of the complaint NAPOCOR seeks to discontinue the expropriation proceedings on the ground that the
transmission lines constructed on the respondents' property had already been retired. Verily, the retirement
of the transmission lines necessarily stripped the expropriation proceedings of the element of public use.
NAPOCOR contends that the expropriation has become without basis for lack of public purpose as a result
of the retirement of the transmission lines; that if expropriation still proceeds, the Government will be
unduly burdened by payment of just compensation for property it no longer requires.

ISSUE: Whether or not expropriation proceedings should be discontinued or dismissed considering that
the property sought was no longer necessary for ‘public purpose.’

HELD: Public use is the fundamental basis for expropriation under the power of eminent domain; hence,
NAPOCOR's motion to discontinue the proceedings is warranted and should be granted. In view of
the discontinuance of the proceedings and the eventual return of the property to the respondents, there is no
need to pay "just compensation" to them because their property would not be taken by NAPOCOR. Instead
of full market value of the property, NAPOCOR should compensate the respondents for the disturbance of
their property rights from the time of entry in March 1993 until the time of restoration of the possession by
paying to them actual or other compensatory damages. This should mean that the compensation must be
based on what they actually lost as a result and by reason of their dispossession of the property and of its
use, including the value of the fruit trees, plants and crops destroyed by NAPOCOR's construction of the
transmission lines. The compensation must be based on what respondents actually lost as a result and by
reason of their dispossession of the property and of its use, including the value of the fruit trees, plants and
crops destroyed by NAPOCOR's construction of the transmission lines. The Court also held that it would
be unfair for NAPOCOR not to be made liable to the respondents for the disturbance of their property rights
from the time of entry until the time of restoration of the possession of the property. The Court has already
declared that "since the high-tension electric current passing through the transmission lines will perpetually
deprive the property owners of the normal use of their land, it is only just and proper to require NAPOCOR
to recompense them for the full market value of their property."

POWER OF TAXATION
PASCUAL vs. THE SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS, ET AL.
(G.R. No. L-10405. December 29, 1960)
CONCEPCION, J.:

FACTS: In June 20, 1953, Republic Act No. 920 entitled as An Act Appropriating Funds for Public Works
was passed. This law appropriated P85,000.00 “for the construction, reconstruction, repair, extension and
improvement Pasig feeder road terminals”. On August 31, 1954, Wenceslao Pascual, then governor of
Rizal, instituted an action for declaratory relief with injunction and assailed the validity of the law. He
argued that some of the feeder roads, as alleged and as contained in the tracings attached to the petition,
were nothing but projected and planned subdivision roads, not yet constructed within the Antonio
Subdivision, which said property belongs to private respondent Zulueta, situated at Pasig, Rizal. He further
alleged that the projected feeder roads do not connect any government property or any important premises
to the main highway. He claimed that the appropriation was actually going to be used for private use for
the terminals sought to be improved were part of the Antonio Subdivision. Senator Jose Zulueta, who was
a member of the same Senate that passed and approved the same RA, owns the said subdivision. Pascual
claimed that Zulueta misrepresented in Congress the fact that he owns those terminals and that his property
would be unlawfully enriched at the expense of the taxpayers if the said RA would be upheld. Pascual
then prayed that the Secretary of Public Works and Communications be restrained from releasing funds for
such purpose. Zulueta’s contention is that there is public purpose because people living in the subdivision
will directly be benefitted from the construction of the roads, and the government also gains from the
donation of the land supposed to be occupied by the streets, made by its owner to the government.

ISSUE: Whether or not the appropriation intended by RA 920 is constitutional.

RULING: No, it is not constitutional. It is a general rule that the legislature is without power to appropriate
public revenue for anything but a public purpose. It is the essential character of the direct object of the
expenditure, which must determine its validity as justifying a tax, and not the magnitude of the interest to
be affected nor the degree to which the general advantage of the community, and thus the public welfare,
may be ultimately benefited by their promotion. Incidental to the public or to the state, which results from
the promotion of private interest and the prosperity of private enterprises or business, does not justify their
aid by the use public money. Where the land on which projected feeder roads are to be constructed belongs
to a private person, an appropriation made by Congress for that purpose is null and void, and a donation to
the Government, made over five (5) months after the approval and effectivity of the Act for the purpose of
giving a "semblance of legality" to the appropriation, does not cure the basic defect. Consequently, a judicial
nullification of said donation need not precede the declaration of unconstitutionality of said appropriation.
The fact that the law was passed when the said property was still a private property cannot be ignored. “In
accordance with the rule that the taxing power must be exercised for public purposes only, money raised
by taxation can be expanded only for public purposes and not for the advantage of private
individuals.” Inasmuch as the land on which the projected feeder roads were to be constructed belonged
then to Zulueta, the result is that said appropriation sought a private purpose, and, hence, was null and void.

The test of the constitutionality of a statute requiring the use of public funds is whether the statute
is designed to promote the public interest, as opposed to the furtherance of the advantage of individuals,
although each advantage to individuals might incidentally serve the public.

POWER OF TAXATION
PUNSALAN v. MUNICIPAL BOARD OF THE CITY OF MANILA
(G.R. No. L-4817. May 26, 1954)
Reyes, J.:
Facts: Ordinance No. 3398 of the City of Manila imposes a municipal occupation tax on persons exercising
various professions in the city and penalizes non-payment of the tax "by a fine of not more than two hundred
pesos or by imprisonment of not more than six months, or by both such fine and imprisonment in the
discretion of the court." Among the professions taxed were those to which plaintiffs belong to, which are
lawyers, medical practitioners, public accountant, a dental surgeon, and a pharmacist, on behalf of those
professionals practicing the same profession within the City of Manila. The ordinance was enacted pursuant
to paragraph (1) of section 18 of the Revised Charter of the City of Manila (as amended by Republic Act
No. 409), which empowers the Municipal Board of said city to impose a municipal occupation tax, not to
exceed P50 per annum, on persons engaged in the various professions above referred to.
Under section 201 of the National Internal Revenue Code, the plaintiffs have already paid their
taxes. However, with the imposition of the new ordinance, plaintiffs are being required to pay the additional
tax prescribed therein.

Plaintiffs herein are seeking the annulment of the Ordinance 3398 and requesting for a refund of
taxes collected but paid under protest.

Issue: Whether or not the ordinance and law authorizing it constitute class legislation, and authorize what
amounts to double taxation.

Held: The Court declared Ordinance No. 3398 of the City of Manila illegal and void and affirmed in so far
as it holds the validity of the provision of the Manila charter authorizing it. The argument against double
taxation cannot be invoked where one is imposed by the city and the other is imposed by the city. It is not
for the Court to decide which particular cities or municipalities should be allowed to impose occupation
taxes in addition to those imposed by the National Government. That matter is exclusively within the
domain of the political departments and the courts would do well not to encroach upon it by the Doctrine
of Separation of Powers.
However, with regards to the concern regarding the “class legislation”, the Legislature may, in its
discretion, select what occupations shall be taxed, and in the exercise of that discretion it may tax all, or it
may select for taxation certain classes and leave the others untaxed.

POWER OF TAXATION
LLADOC vs. COMMISSIONER OF INTERNAL REVENUE
(G.R. No. L-19201. June 16, 1965)
PAREDES, J.:

Facts: In 1957, the M.B. Estate, Inc., of Bacolod City, donated P10,000.00 in cash to Rev. Fr. Crispin Ruiz
then parish priest of Victorias, Negros Occidental, and predecessor of herein petitioner, for the construction
of a new Catholic Church in the locality. The total amount was actually spent for the purpose intended. On
March 3, 1958, the donor M.B. Estate, Inc., filed the donor's gift tax return. Under date of April 29, 1960,
the respondent Commissioner of Internal Revenue issued as assessment for donee's gift tax against the
Catholic Parish of Victorias, of which petitioner was the priest. The tax amounted to P1,370.00 including
surcharges. Petitioner lodged a protest to the assessment and requested the withdrawal thereof. The protest
and the motion for reconsideration presented to the Commissioner of Internal Revenue were denied. The
petitioner appealed to the Court of Tax Appeals on November 2, 1960. In the petition for Review, the Rev.
Fr. Casimiro Lladoc, claimed among others, that at the time of the donation, he was not the parish priest in
Victorias; that there is no legal entity or juridical person known as the "Catholic Parish Priest of Victorias,"
and therefore, he should not be liable for the donee's gift tax. It was also asserted that the assessment of the
gift tax, even against the Roman Catholic Church, would not be valid, for such would be a clear violation
of the provisions of the Constitution.
Issue: Whether or not the imposition of tax is valid despite the fact that the Constitution provides
exemptions and that Fr. Lladoc was not the Parish priest at the time of donation.

Held: Section 22 (3), Art. VI of the Constitution of the Philippines, exempts from taxation cemeteries,
churches and personages or convents, appurtenant thereto, and all lands, buildings, and improvements used
exclusively for religious purposes. The exemption is only from the payment of taxes assessed on such
properties enumerated, as property taxes, as contra-distinguished from excise taxes. In the present case,
what the Collector assessed was a donee's gift tax; the assessment was not on the properties themselves. It
did not rest upon general ownership; it was an excise upon the use made of the properties, upon the exercise
of the privilege of receiving the properties (Phipps vs. Com. of Int. Rev., 91 F [2d] 627.) Manifestly, gift
tax is not within the exempting provisions of the section just mentioned. A gift tax is not a property tax, but
an excise tax imposed on the transfer of property by way of gift inter vivos, the imposition of which on
property used exclusively for religious purposes, do not constitute an impairment of the Constitution. As
well observed by the learned respondent Court, the phrase "exempt from taxation," as employed in the
Constitution supra should not be interpreted to mean exemption from all kinds of taxes. And there being no
clear, positive or express grant of such privilege by law, in favor of the petitioner, the exemption must be
denied. The Head of the Diocese to which the parish of Victorias pertains is liable for the payment.

POWER OF TAXATION
ABRA VALLEY COLLEGE v. AQUINO
(G.R. No. L-39086. June 15, 1988)
PARAS, J.:

FACTS: On July 6, 1972, respondents Municipal and Provincial Treasurer sent a notice of seizure to
petitioner for non-payment of real estate taxes and penalties amounting to ₱5,140.31 for the college lot and
building, and a notice of sale for its sale at a public auction, which was sold to then respondent Municipal
Mayor of Bangued, Abra. Petitioner then filed a complaint in the court of first instance of Abra to annul
and declare void the notice of seizure and sale of its lot and building on the grounds that the lot and building
was exempted from the payment of real property taxes under CA No. 470, for being used for educational
purposes. The Court found, among others that the Director with his family is in the second floor of the main
building. On October 12, 1972, the court of first instance disagreed because of the use of the second floor
by the Director of petitioner school for residential purposes, and ordered petitioner to pay all its back taxes.
Hence, this petition. Petitioner argues that the primary use of the school lot and building is the basic and
controlling guide, norm and standard to determine tax exemption, and not the mere incidental use thereof.
Private respondents maintained, however, that the lot and building were subject for seizure and sale because
it is used as the permanent residence of the President and Director thereof and his family including the in-
laws and grandchildren; and for commercial purposes because the ground floor of the college building is
being used and rented by a commercial establishment, the Northern Marketing Corporation.

ISSUE: Whether or not petitioner is exempted for the payment of property taxes under CA No. 45

HELD: NO. CA No. 45, Sec. 54 (c), provides that: The Following are exempted from real property tax
under the Assessment Law: (c) churches and parsonages or convents appurtenant thereto, and all lands,
buildings, and improvements used exclusively for religious, charitable, scientific or educational purposes.
The test of exemption from taxation is the use of the property for purposes mentioned in the Constitution.
It must be stressed however, that while this Court allows a more liberal and non-restrictive interpretation
of the phrase "exclusively used for educational purposes. Thus, while the use of the second floor of the
main building in the case at bar for residential purposes of the Director and his family, may find justification
under the concept of incidental use, which is complimentary to the main or primary purpose — educational,
the lease of the first floor thereof to the Northern Marketing Corporation cannot by any stretch of the
imagination be considered incidental to the purpose of education. The trial court correctly arrived at the
conclusion that the school building as well as the lot where it is built, should be taxed, not because the
second floor of the same is being used by the Director and his family for residential purposes, but because
the first floor thereof is being used for commercial purposes.

POWER OF TAXATION
FERRER vs. BAUTISTA
(G.R. NO. 210551. June 30, 2015)
PERALTA, J.:

FACTS: On October 17, 2011, respondent Quezon City Council enacted Ordinance No. SP-2095, S-2011,
or the Socialized Housing Tax of Quezon City. The ordinance will be effective for five (5) years, the
Socialized Housing Tax (SHT) shall be utilized by the Quezon City Government for the following projects:
(a) land purchase/land banking; (b) improvement of current/existing socialized housing facilities; (c) land
development; (d) construction of core houses, sanitary cores, medium-rise buildings and other similar
structures; and (e) financing of public-private partnership agreement of the Quezon City Government and
National Housing Authority (NHA) with the private sector. Under certain conditions, a tax credit shall be
enjoyed by taxpayers regularly paying the special assessment.
On the other hand, Ordinance No. SP-2235, S-2013 was enacted on December 16, 2013 and took
effect ten days after when it was approved by respondent City Mayor. The proceeds collected from the
garbage fees on residential properties shall be deposited solely and exclusively in an earmarked special
account under the general fund to be utilized for garbage collections.
Petitioner alleges that he is a registered co-owner of a 371-square-meter residential property in
Quezon City which is covered by Transfer Certificate of Title (TCT) No. 216288, and that, on January 7,
2014, he paid his realty tax which already included the garbage fee in the sum of Php 100.00.

ISSUE/S:
1) Whether or not Specialized Housing Tax is valid
2) Whether or not LGUs may enact tax ordinances

HELD:
1) YES. For an ordinance to be valid though, it must not only be within the corporate powers of
the LGU to enact and must be passed according to the procedure prescribed by law, it should also conform
to the following requirements: (1) not contrary to the Constitution, or any statute; (2) not unfair or
oppressive; (3) not partial or discriminatory; (4) not prohibit but may regulate trade; (5) general and
consistent with public policy; and (6) not unreasonable. As jurisprudence indicates, the tests are divided
into the formal (i.e., whether the ordinance was enacted within the corporate powers of the LGU and
whether it was passed in accordance with the procedure prescribed by law), and the substantive (i.e.,
involving inherent merit, like the conformity of the ordinance with the limitations under the Constitution
and the statutes, as well as with the requirements of fairness and reason, and its consistency with public
policy).
2) YES. The power of taxation is indubitably the most effective instrument to raise needed revenues
in financing and supporting myriad activities of the LGUs for the delivery of basic services essential to the
promotion of the general welfare and the enhancement of peace, progress, and prosperity of the people.
LGUs have no inherent power to tax except to the extent that such power might be delegated to them either
by the basic law or by the statute. "Under the now prevailing Constitution, where there is neither a grant
nor a prohibition by statute, the tax power must be deemed to exist although Congress may provide statutory
limitations and guidelines. The basic rationale for the current rule is to safeguard the viability and self-
sufficiency of local government units by directly granting them general and broad tax powers. Nevertheless,
the fundamental law did not intend the delegation to be absolute and unconditional; the constitutional
objective obviously is to ensure that, while the local government units are being strengthened and made
more autonomous, the legislature must still see to it that (a) the taxpayer will not be overburdened or saddled
with multiple and unreasonable impositions; (b) each local government unit will have its fair share of
available resources; (c) the resources of the national government will not be unduly disturbed; and (d) local
taxation will be fair, uniform, and just."