PRELIMINARY CONSIDERATIONS
179 was a valid exercise of
Illustrative Case:
MMDA v Viron Transportation Co. Inc
FACTS:
To solve the worsening traffic congestions problem
in Metro Manila the President issued Executive
Order (E.O.) 179, ―Providing for the
Establishment of Greater Manila Mass
Transportation System. As determined in E.O. 179,
the primary cause of traffic congestion in Metro
Manila has been the numerous buses plying the
streets that impede the flow of vehicles and
commuters and the inefficient connectivity of the
different transport modes. To decongest traffic,
petitioner Metropolitan Manila Development
Authority (MMDA) came up with a
recommendation, proposing the elimination of bus
terminals located along major Metro Manila
thoroughfares, and the construction of mass
transport terminal facilties to provide a more
convenient access to mass transport system to the
commuting public. The project provided for under
this E.O. was called ―Greater Manila Transport
System‖ (Project) wherein the MMDA was
designated as the implementing agency.
Accordingly, the Metro Manila Council the
governing board of the MMDA issued a resolution,
expressing full support of the project. The
respondents, which are engaged in the business of
public transportation with a provincial bus
operation, Viron Transport Co., Inc. and Mencorp
Transportation System, Inc., assailed the
constitutionality of E.O. 179 before the Regional
Trial Court of Manila. They alleged that the E.O.,
insofar as it permitted the closure of existing bus
terminal, constituted a deprivation of property
without due process; that it contravened the Public
Service Act which mandates public utilities to
provide and maintain their own terminals as a
requisite for the privilege of operating as
common carriers; and that Republic Act 7924,
which created MMDA, did not authorize the latter
to order the closure of bus terminals. The trial court
declared the E.O. unconstitutional. The MMDA
argued before the Court that there was no justiciable
controversy in the case for declaratory relief filed
by the respondents; that E.O. 179 was only an
administrative directive to government agencies to
coordinate with the MMDA, and as such did not
bind third persons; that the President has the
authority to implement the Project pursuant to E.O.
125; and that E.O.
police power.
ISSUE:
Whether or not E.O, 179 is constitutional?
HELD:
By designating the MMDA as
implementing agency of the “Greater Manila
Transport System,” the President clearly
overstepped the limits of the authority conferred by
law, rendering E.O. 179 ultra vires. Executive Order
125, invoked by the MMDA, was issued by former
President Aquino in her exercise of legislative
powers. This executive order reorganized the
Ministry (now Department) of Transportation
and Communications (DOTC), and defined its
powers and functions. It mandated the DOTC to be
the primary policy, planning, programming,
coordinating, implementing, regulating and
administrative entity to promote, develop and
regulate networks of transportation
and communications. The grant of authority to the
DOTC includes the power to establish and
administer comprehensive and integrated programs
for transportation and communications.
Accordingly, it is the DOTC Secretary who is
authorized to issue such orders, rules, regulations
and other issuances as may be necessary to ensure
the effective implementation of the law. The
President may also exercise the same power and
authority to order the implementation of the mass
transport system project, which admittedly is one
for transportation. Such authority springs from the
President‘s power of control over all
executive departments as well as for the faithful
execution of the laws under the Constitution. Thus,
the President, although authorized to establish or
cause the implementation of the Project, must
exercise the authority through the instrumentality of
the DOTC, which, by law, is the primary
implementing and administrative entity in the
promotion, development and regulation of networks
of transportation. It is the DOTC, and not the
MMDA, which is authorized to establish and
implement a project such as the mass transport
system. By designating the MMDA as
implementing agency of the Project, the President
clearly overstepped the limits of the authority
conferred by law, rendering E.O. 179 ultra vires. In
the absence of a specific grant of authority to it
under R.A. 7924, MMDA cannot issue order for
the closure of existing bus terminals Republic Act
(R.A.) 7924 authorizes the MMDA to perform the elimination of respondents‘ bus terminals brings
planning, monitoring and coordinative functions, forth the distinct possibility and the equally
and in the process exercises regulatory and harrowing reality of traffic congestion in the
supervisory authority over the delivery of metro- common parking areas, a case of transference from
wide services, including transport and traffic one site to another. Moreover, an order for
management. While traffic decongestion has been the closure of bus terminals is not in line with the
recognized as a valid ground in the exercise of provisions of the Public Service Act. The
police power, MMDA is not granted police power, establishment, as well as the maintenance of vehicle
let alone legislative power. Unlike the legislative parking areas or passenger terminals, is generally
bodies of the local government units, there is no considered a necessary service by provincial bus
provision in R.A. 7924 that empowers the MMDA operators, hence, the investments they have poured
or the Metro Manila Council to enact ordinances, into the acquisition or lease of suitable terminal
approve resolutions and appropriate funds for the sites.
general welfare of the inhabitants of Metro Manila.
In light of the administrative nature of its powers
and functions, the MMDA is devoid of authority to
implement the Greater Manila Transport System as
envisioned by E.O. 179; hence, it could not have
been validly designated by the President to
undertake the project. It follows that the MMDA
cannot validly order the elimination of respondents‘
terminals. Even assuming arguendo that police
power was delegated to the MMDA, its exercise of
such power does not satisfy the two sets of a valid
police power measure: (1) the interest of the public
generally, as distinguished from that of a particular
class, requires its exercise; and (2) the means
employed are reasonably necessary for the
accomplishment of the purpose and not unduly
oppressive upon individuals. In various cases, the
Court has recognized that traffic congestion is a
public, not merely a private concern. Indeed, the
E.O. was issued due to the felt need to address the
worsening traffic congestion in Metro Manila
which, the MMDA so determined, is caused by the
increasing volume of buses plying the major
thoroughfares and the inefficient connectivity of
existing transport system. With the avowed
objective of decongesting traffic in Metro Manila
the E.O. seeks to eliminate the bus terminals now
located along major Metro Manila thoroughfares
and provide more convenient access to the mass
transport system to the commuting public through
the provision of mass transport terminal facilities.
Common carriers with terminals along the major
thoroughfares of Metro Manila would thus be
compelled to close down their existing bus
terminals and use the MMDA-designated common
parking areas. The Court fails to see how the
prohibition against respondents‘ terminals can be
considered a reasonable necessity to ease traffic
congestion in the metropolis. On the contrary,
POLICE POWER
What is Police Power?
Power of promoting the public welfare by
restrainingand regulating the use of both
liberty andproperty of all the people. It is
considered tobe the most all-encompassing
of the threepowers. It may be exercised only
by thegovernment. The property taken in
theexercise of this power is destroyed
becauseit is noxious or intended for a
noxiouspurpose.It lies primarily in the
discretion of
thelegislature. Hence, the President, andadm
inistrative boards as well as thelawmaking
bodies on all municipal levels,including the
barangay may not exercise itwithout a valid
delegation of legislativepower. Municipal
governments exercise thispower by virtue of
the general welfare clauseof the Local
Government Code of 1991. Eventhe courts
cannot compel the exercise of thispower
through mandamus or any judicialprocess.
 
Requisites of a valid police measure:
(a.) Lawful Subject
 the activity or property sought to be
regulated affects the publicwelfare. It
requires the primacy of the welfareof
the many over the interests of the
few.
(b.) Lawful Means
 the means employed must
bereasonable and must conform to
thesafeguards guaranteed by the Bill
of Rights
Illustratve Cases:
Pimentel v LEB
Beltran v Secretary of Health
Facts:
The promotion of public health is a fundamental
obligation of the State. The health of the people is a
primordial governmental concern. The National
Blood Services Act was enacted in the exercise of
the State’s police power in order to promote and
preserve public health and safety.
What may be regarded as a denial of the equal
protection of the laws is a question not always
easily determined. No rule that will cover every
case can be formulated. Class legislation,
discriminating against some and favoring others is
prohibited but classification on a reasonable basis
and not made arbitrarily or capriciously is
permitted.
Republic Act No. 7719 or the National Blood
Services Act of 1994 was enacted into law on April
2, 1994. The Act seeks to provide an adequate
supply of safe blood by promoting voluntary blood
donation and by regulating blood banks in the
country. It was approved by then President Fidel V.
Ramos on May 15, 1994 and was subsequently
published in the Official Gazette on August 18,
1994. The law took effect on August 23, 1994.
On April 28, 1995, Administrative Order No. 9,
Series of 1995, constituting the Implementing Rules
and Regulations of said law was promulgated by
respondent Secretary of the Department of Health
(DOH). Section 7 of R.A. 7719 provides, Phase-out
of Commercial Blood Banks – All commercial
blood banks shall be phased-out over a period of
two (2) years after the effectivity of this Act,
extendable to a maximum period of two (2) years by
the Secretary. ” Section 23. Process of Phasing
Out. — The Department shall effect the phasing-out
of all commercial blood banks over a period of two
(2) years, extendible for a maximum period of two
(2) years after the effectivity of R.A. 7719. The
decision to extend shall be based on the result of a
careful study and review of the blood supply and
demand and public safety.”
Years prior to the passage of the National Blood
Services Act of 1994, petitioners have already been
operating commercial blood banks under Republic
Act No. 1517, entitled “An Act Regulating the
Collection, Processing and Sale of Human Blood,
and the Establishment and Operation of Blood
Banks and Blood Processing Laboratories.”
The law, which was enacted on June 16, 1956,
allowed the establishment and operation by licensed
physicians of blood banks and blood processing
laboratories.
On May 20, 1998, prior to the expiration of the
licenses granted to petitioners, they filed a petition
for certiorari with application for the issuance of a
writ of preliminary injunction or temporary
restraining order under Rule 65 of the Rules of
Court assailing the constitutionality and validity of
the aforementioned Act and its Implementing Rules
and Regulations.
Issue:
Whether or not Section 7 of RA 7719 and its
implementing rules is valid on the ground that it
violates the equal protection clause.
 Decision:
 Petition granted. The assailed law and its
implementing rules are constitutional and valid.  State. The health of the people is a primordial
What may be regarded as a denial of the equal
protection of the laws is a question not always
easily determined. No rule that will cover every
case can be formulated. Class legislation,
discriminating against some and favoring others is
prohibited but classification on a reasonable
basis and not made arbitrarily or capriciously is
permitted.
The classification, however, to be reasonable: (a)
must be based on substantial distinctions which
make real differences; (b) must be germane to the
purpose of the law; (c) must not be limited to
existing conditions only; and, (d) must apply
equally to each member of the class.
Republic Act No. 7719 or The National Blood
Services Act of 1994, was enacted for the
promotion of public health and welfare. Based on
the foregoing, the Legislature never intended for the
law to create a situation in which unjustifiable
discrimination and inequality shall be allowed.
To effectuate its policy, a classification was made
between nonprofit blood banks/centers and
commercial blood banks. We deem the
classification to be valid and reasonable for the
following reasons: First, it was based on substantial
distinctions. The former operates for purely
humanitarian reasons and as a medical service while
the latter is motivated by profit. Also, while the
former wholly encourages voluntary blood
donation, the latter treats blood as a sale of
commodity. Second, the classification, and the
consequent phase out of commercial blood banks is
germane to the purpose of the law, that is, to
provide the nation with an adequate supply of safe
blood by promoting voluntary blood donation and
treating blood transfusion as a humanitarian or
medical service rather than a commodity. This
necessarily involves the phase out of commercial
blood banks based on the fact that they operate as a
business enterprise, and they source their blood
supply from paid blood donors who are considered
unsafe compared to voluntary blood donors as
shown by the USAID-sponsored study on the
Philippine blood banking system. Third, the
Legislature intended for the general application of
the law. Its enactment was not solely to address the
peculiar circumstances of the situation nor was it
intended to apply only to the existing conditions.
Lastly, the law applies equally to all commercial
blood banks without exception.The promotion of
public health is a fundamental obligation of the
governmental concern.
Basically, the National Blood Services Act was
enacted in the exercise of the State’s police power
in order to promote and preserve public health and
safety.  Based on the grounds raised by petitioners
to challenge the constitutionality of the National
Blood Services Act of 1994 and its Implementing
Rules and Regulations, the Court finds that
petitioners have failed to over overcome the
presumption of constitutionality of the law. As to
whether the Act constitutes a wise legislation,
considering the issues being raised by petitioners, is
for Congress to determine.
Mirasol v DPWH
FACTS:
Petitioners filed before the court a petition for
declaratory judgment with application for temporary
restraining order and injunction. It seeks the
declaration of nullification of administrative
issuances for being inconsistent with the provisions
of Republic Act 2000 (Limited Access Highway
Act) which was enacted in1957.
Previously, pursuant to its mandate under RA 2000,
DPWH issued on June 25, 1998 Dept. Order no.
215 declaring the Manila Cavite (Coastal Road)
Toll Expressway as limited access facilities.
Petitioners filed an Amended Petition on February
8, 2001 wherein petitioners sought the declaration
of nullity of the aforesaid administrative issuances.
The petitioners prayed for the issuance of a
temporary restraining order to prevent the
enforcement of the total ban on motorcycles along
NLEX, SLEX, Manila-Cavite (Coastal Road) toll
Expressway under DO 215.
RTC, after due hearing, granted the petitioner’s
application for preliminary injunction conditioned
upon petitioner’s filing of cash bond in the amount
of P100, 000 which petitioners complied.
DPWH issued an order (DO 123) allowing
motorcycles with engine displacement of 400 cubic
centimeters inside limited access facilities (toll
ways).  
Upon assumption of Hon. Presiding Judge Cornejo,
both the petitioners and respondents were required
to file their Memoranda.
The court issued an order dismissing the petition but
declaring invalid DO 123.
The petitioners moved for reconsideration but it was
denied.
RTC ruled that DO 74 is valid but DO 123 is invalid
being violative of the equal protection clause of the
Constitution
ISSUE:
Whether RTC’s decision is barred by res judicata?
Whether DO 74, DO 215 and the TRB regulation
contravene RA 2000.
Whether AO 1 is unconstitutional.
HELD:
1. NO. The petitioners are mistaken because they
rely on the RTC’s Order granting their prayer for a
writ of preliminary injunction. Since petitioners did
not appeal from that order, the petitioners presumed
that the order became a final judgment on the
issues.
The order granting the prayer is not an adjudication
on the merits of the case that would trigger res
judicata.
A preliminary injunction does not serve as a final
determination of the issues, it being a provisional
remedy.
2. YES. The petitioners claimed that DO 74, DO
215 and TRB’s rules and regulation issued under
them unduly expanded the power of the DPWH in
sec. 4 of RA 2000 to regulate toll ways.   tollway, was a subject that could validly be limited
They contend that DPWH’s regulatory authority is
limited to acts like redesigning curbings or central
dividing sections.  
They claim that DPWH is only allowed to redesign
the physical structure of toll ways and not to
determine“who or what can be qualifies as toll ways
user”.
The court ruled that DO 74 and DO 215 are void
because the DPWH has no authority to declare
certain expressways as limited access facilities.
Under the law, it is the DOTC which is authorized
to administer and enforce all laws, rules and
regulations in the field of transportation and to
regulate related activities.
Since the DPWH has no authority to regulate
activities relative to transportation, the  Toll
Regulatory Board (TRB) cannot derive its power
from the DPWH to issue regulations governing
limited access facilities.
The DPWH cannot delegate a power or function
which it does not possess in the first place.
3. NO. The Court emphasized that the secretary of
the then Department of Public Works and
Communications had issued AO 1 in February
1968, as authorized under Section 3 of Republic Act
2000, prior to the splitting of the department and the
eventual devolution of its powers to the DOTC.
Because administrative issuances had the force and
effect of law, AO 1 enjoyed the presumption of
validity and constitutionality. The burden to prove
its unconstitutionality rested on the party assailing
it, more so when police power was at issue and
passed the test of reasonableness. The
Administrative Order was not oppressive, as it did
not impose unreasonable restrictions or deprive
petitioners of their right to use the facilities. It
merely set rules to ensure public safety and the
uninhibited flow of traffic within those limited-
access facilities.
The right to travel did not mean the right to choose
any vehicle in traversing a tollway. Petitioners were
free to access the tollway as much as the rest of the
public. However, the mode in which they wished to
travel, pertaining to their manner of using the
by regulation. There was no absolute right to drive;
on the contrary, this privilege was heavily regulated.
Social Justice Society v Lim
Facts:
On 12 October 2001, a Memorandum of Agreement
was entered into by oil companies
(Chevron, Petron and Shell) and Department of
Energy for the creation of a Master Plan
to address and minimize the potential risks and
hazards posed by the proximity of
communities, business and offices to Pandacan oil
terminals without affecting security
and reliability of supply and distribution of
petroleum products.
On 20 November 2001, the Sangguniang
Panlungsod (SP) enacted Ordinance No. 8027
which reclassifies the land use of Pandacan, Sta.
Ana, and its adjoining areas from
Industrial II to Commercial I.
Owners and operators of the businesses affected by
the reclassification were given six (6)
months from the date of effectivity to stop the
operation of their businesses. It was later
extended until 30 April 2003.
On 4 December 2002, a petition for mandamus was
filed before the Supreme Court (SC)
to enforce Ordinance No. 8027.
Unknown to the SC, the oil companies filed before
the Regional Trial Court of Manila an
action to annul Ordinance No. 8027 with
application for writs of preliminary prohibitory
injunction and preliminary mandatory injunction.
The same was issued in favor of
Chevron and Shell. Petron, on the other hand,
obtained a status quo on 4 August 2004.
On 16 June 2006, Mayor Jose Atienza, Jr. approved
Ordinance No. 8119 entitled “An
Ordinance Adopting the Manila Comprehensive
Land Use Plan and Zoning Regulations
of 2006 and Providing for the Administration,
Enforcement and Amendment thereto”.
This designates Pandacan oil depot area as a
Planned Unit Development/Overlay Zone.
On 7 March 2007, the SC granted the petition for
mandamus and directed Mayor Atienza
to immediately enforce Ordinance No. 8027.
It declared that the objective of the
ordinance is to protect the residents of manila from
the catastrophic devastation that will
surely occur in case of a terrorist attack on the
Pandacan Terminals.
The oil companies filed a Motion for
Reconsideration (MR) on the 7 March 2007
Decision. The SC later resolved that Ordinance No.
8027 is constitutional and that it was
not impliedly repealed by Ordinance No. 8119 as
there is no irreconcilable conflict
between them.
SC later on denied with finality the second MR of
the oil companies.
On 14 May 2009, during the incumbency of Mayor
Alfredo Lim (Mayor Lim), the SP
enacted Ordinance No. 8187. The Industrial Zone
under Ordinance No. 8119 was limited
to Light Industrial Zone, Ordinance No. 8187
appended to the list a Medium and a Heavy
Industrial Zone where petroleum refineries and oil
depots are expressly allowed.
Petitioners Social Justice Society Officers, Mayor
Atienza, et.al. filed a petition for
certiorari under Rule 65 assailing the validity of
Ordinance No. 8187. Their contentions
are as follows:
It is an invalid exercise of police power because it
does not promote the general
welfare of the people
- It is violative of Section 15 and 16, Article II of
the 1987 Constitution as well as
health and environment related municipal laws and
international conventions and
treaties, such as: Clean Air Act; Environment Code;
Toxic and Hazardous Wastes
Law; Civil Code provisions on nuisance and
human relations; Universal
Declaration of Human Rights; and Convention on
the Rights of the Child
- The title of Ordinance No. 8187 purports to amend
or repeal Ordinance No. 8119
when it actually intends to repeal Ordinance No.
8027
 On the other hand, the respondents Mayor Lim,
et.al. and the intervenors oil companies
contend that:
- The petitioners have no legal standing to sue
whether as citizens, taxpayers or
legislators. They further failed to show that they
have suffered any injury or threat
of injury as a result of the act complained of
- The petition should be dismissed outright for
failure to properly apply the related
provisions of the Constitution, the Rules of Court,
and/or the Rules of Procedure
for Environmental Cases relative to the appropriate
remedy available
- The principle of the hierarchy of courts is violated
because the SC only exercises
appellate jurisdiction over cases involving the
constitutionality or validity of an
ordinance under Section 5, Article VIII of the 1987
Constitution
- It is the function of the SP to enact zoning
ordinance without prior referral to the
Manila Zoning Board of Adjustment and Appeals;
thus, it may repeal all or part
of zoning ordinance sought to be modified
- There is a valid exercise of police power
 On 28 August 2012, the SP enacted Ordinance
No. 8283 which essentially amended the
assailed Ordinance to exclude the area where
petroleum refineries and oil depots are
located from the Industrial Zone. The same was
vetoed by Mayor Lim.
ISSUES
1. WON there are violations of environmental laws
2. WON the principle of hierarchy of courts is
violated
3. WON the petitioners have legal standing to sue
4. WON Ordinance No. 8187 is unconstitutional in
relation to the Pandacan Terminals
RULING
1. None. The scope of the Rules of Procedure for
Environmental Cases is embodied in
Section 2, Part I, Rule I thereof. It states that the
Rules shall govern the procedure in
civil, criminal and special civil actions before the
MeTCs, MTCCs, MTCs and MCTCs,
and the RTCs involving the enforcement or
violations of environmental and other related
laws, rules and regulations such as but not limited
to: R.A. No. 6969, Toxic Substances
and Hazardous Waste Act; R.A. No. 8749, Clean
Air Act; Provisions in C.A. No. 141;
and other existing laws that relate to the
conservation, development, preservation,
protection and utilization of the environment and
natural resources.
Notably, the aforesaid Rules are limited in
scope. While, indeed, there are
allegations of violations of environmental laws in
the petitions, these only serve as
collateral attacks that would support the other
position of the petitioners – the protection
of the right to life, security and safety.
2. No. The SC held that it is true that the petitions
should have been filed with the RTC, it
having concurrent jurisdiction with the SC over a
special civil action for prohibition, and
original jurisdiction over petitions for declaratory
relief.
However, the petitions at bar are of
transcendental importance warranting a
relaxation of the doctrine of hierarchy of courts.
This is in accordance with the well-
entrenched principle that rules of procedure are not
inflexible tools designed to hinder or
delay, but to facilitate and promote the
administration of justice. Their strict and rigid
application, which would result in technicalities that
tend to frustrate, rather than promote
substantial justice, must always be eschewed.
(Jaworski v. PAGCOR, 464 Phil. 375)
3. Yes. The SC referred to their Decision
dated 7 March 2007 which ruled that the
petitioners in that case have a legal right to seek the
enforcement of Ordinance No. 8027
because the subject of the petition concerns a public
right, and they, as residents of
Manila, have a direct interest in the implementation
of the ordinances of the city.
No different are herein petitioners who seek to
prohibit the enforcement of the
assailed ordinance, and who deal with the same
subject matter that concerns a public
right.
In like manner, the preservation of the life, security
and safety of the people is
indisputably a right of utmost importance to the
public. Certainly, the petitioners, as
residents of Manila, have the required personal
interest to seek relief to protect such right.
4. Yes. In striking down the contrary provisions of
the assailed Ordinance relative to the
continued stay of the oil depots, the SC followed the
same line of reasoning used in its 7
March 2007 decision, to wit:
“Ordinance No. 8027 was enacted for the purpose
of promoting a sound
urban planning, ensuring health, public safety and
general welfare of the residents
of Manila. The Sanggunian was impelled to take
measures to protect the residents
of Manila from catastrophic devastation in case
of a terrorist attack on the
Pandacan Terminals. Towards this objective, the
Sanggunian reclassified the area
defined in the ordinance from industrial to
commercial.
The following facts were found by the
Committee on Housing,
Resettlement and Urban Development of the
City of Manila which
recommended the approval of the ordinance:
(1) The depot facilities contained 313.5 million
liters of highly flammable
and highly volatile products which include
petroleum gas, liquefied
petroleum gas, aviation fuel, diesel, gasoline,
kerosene and fuel oil
among others;
(2) The depot is open to attack through land, water
and air;
(3) It is situated in a densely populated place and
near Malacañang Palace;
and
(4) In case of an explosion or conflagration in the
depot, the fire could
spread to the neighboring communities.
The Ordinance was intended to safeguard the rights
to life, security and
safety of all the inhabitants of Manila and not just of
a particular class. The depot
is perceived, rightly or wrongly, as a representation
of western interests which
means that it is a terrorist target. As long as there is
such a target in their midst,
the residents of Manila are not safe. It therefore
becomes necessary to remove
these terminals to dissipate the threat.”
The same best interest of the public guides the
present decision. The Pandacan oil
depot remains a terrorist target even if the contents
have been lessened. In the absence of
any convincing reason to persuade the Court that
the life, security and safety of the
inhabitants of Manila are no longer put at risk by
the presence of the oil depots, the SC
holds that the Ordinance No. 8187 in relation to the
Pandacan Terminals is invalid and
unconstitutional.
For, given that the threat sought to be prevented
may strike at one point or
another, no matter how remote it is as perceived by
one or some, the SC cannot allow the
right to life be dependent on the unlikelihood of an
event. Statistics and theories of
probability have no place in situations where the
very life of not just an individual but of
residents of big neighbourhoods is at stake.
Carlos Superdrug Corp v DSWD
FACTS:
Petitioners are domestic corporations and
proprietors operating drugstores in the Philippines.
Public respondents, on the other hand, include the
DSWD, DOH, DOF, DOJ, and the DILG,
specifically tasked to monitor the
drugstores’ compliance with the law; promulgate
the implementing rules and regulations for the
effective implementation of the law; and prosecute
and revoke the licenses of erring drugstore
establishments.
President Gloria Macapagal-Arroyo signed into law
R.A. No. 9257 otherwise known as the “Expanded
Senior Citizens Act of 2003.”
Sec. 4(a) of the Act states that The senior citizens
shall be entitled to the following: (a) the grant of
twenty percent (20%) discount from all
establishments relative to the utilization of services
in hotels and similar lodging establishments,
restaurants and recreation centers, and purchase of
medicines in all establishments for the exclusive use
or enjoyment of senior citizens, including funeral
and burial services for the death of senior citizens;
Petitioners assert that Section 4(a) of the law is
unconstitutional because it constitutes deprivation
of private property. Compelling drugstore owners
and establishments to grant the discount will result
in a loss of profit and capital because according to
them drugstores impose a mark-up of only 5% to
10% on branded medicines, and the law failed to
provide a scheme whereby drugstores will be justly
compensated for the discount.
ISSUE:
WON RA 9257 is constitutional.
HELD:
YES. The law is a legitimate exercise of police
power which, similar to the power of eminent
domain, has general welfare for its object. Police
power is not capable of an exact definition, but has
been purposely veiled in general terms to
underscore its comprehensiveness to meet all
exigencies and provide enough room for an efficient
and flexible response to conditions and
circumstances, thus assuring the greatest benefits.
Accordingly, it has been described as the most
essential, insistent and the least limitable of powers,
extending as it does to all the great public needs. It
is [t]he power vested in the legislature by the
constitution to make, ordain, and establish all
manner of wholesome and reasonable laws, statutes,
and ordinances, either with penalties or without, not
repugnant to the constitution, as they shall judge to
be for the good and welfare of the commonwealth,
and of the subjects of the same.
For this reason, when the conditions so demand as
determined by the legislature, property rights must
bow to the primacy of police power because
property rights, though sheltered by due process,
must yield to general welfare.
Police power as an attribute to promote the common
good would be diluted considerably if on the mere
plea of petitioners that they will suffer loss of
earnings and capital, the questioned provision is
invalidated. Moreover, in the absence of evidence
demonstrating the alleged confiscatory effect of the
provision in question, there is no basis for its
nullification in view of the presumption of validity
which every law has in its favor.
Given these, it is incorrect for petitioners to insist
that the grant of the senior citizen discount is unduly
oppressive to their business, because petitioners
have not taken time to calculate correctly and come
up with a financial report, so that they have not been
able to show properly whether or not the tax
deduction scheme really works greatly to their
disadvantage.
In treating the discount as a tax deduction,
petitioners insist that they will incur losses.
However,petitioner’s computation is clearly flawed.
For purposes of reimbursement, the law states that
the cost of the discount shall be deducted from gross
income, the amount of income derived from all
sources before deducting allowable expenses, which
will result in net income. Here, petitioners tried to
show a loss on a per transaction basis, which should
not be the case. An income statement, showing an
accounting of petitioners sales, expenses, and net
profit (or loss) for a given period could have
accurately reflected the effect of the discount on
their income. Absent any financial statement,
petitioners cannot substantiate their claim that they
will be operating at a loss should they give the
discount. In addition, the computation was
erroneously based on the assumption that their
customers consisted wholly of senior citizens.
Lastly, the 32% tax rate is to be imposed on income,
not on the amount of the discount.
While the Constitution protects property rights,
petitioners must accept the realities of business and
the State, in the exercise of police power, can
intervene in the operations of a business which may
result in an impairment of property rights in the
process.
Zabal v Duterte
Proclamation No. 475 does not pose an actual
impairment on the right to travel. In fine, this case
does not actually involve the right to travel in its
essential sense contrary to what petitioners want
to portray. Any bearing that Proclamation No. 475
may have on the right to travel is merely corollary
to the closure of Boracay and the ban of tourists and
non-residents therefrom which were necessary
incidents of the island's rehabilitation.
There is certainly no showing that Proclamation No.
475 deliberately meant to impair the right to travel.
The questioned proclamation is clearly focused on
its purpose of rehabilitating Boracay and any
intention to directly restrict the right cannot, in any
manner, be deduced from its import.
FACTS:
Petitioners Zabal and Jacosalem are both residents
of Boracay who, at the time of the filing of the
petition, were earning a living from the tourist
activities therein. While not a resident, Petitioner
Bandiola, for his part, claims to occasionally visit
Boracay for business and pleasure.
Claiming that Boracay has become a cesspool,
President Duterte first made public his plan to shut
it
down during a business forum held in Davao.
President Duterte ordered the shutting down of the
island in a cabinet meeting held on April 4, 2018.
This was confirmed by then Presidential
Spokesperson Roque, Jr. wherein he formally
announced that the total closure of Boracay would
be
for a maximum period of six months starting April
26, 2018.
Petitioners claim that ever since the news of
Boracay's closure came about, fewer tourists had
been
engaging the services of Zabal and Jacosalem such
that their earnings were barely enough to feed
their families. Hence, despite the fact that the
government was then yet to release a formal
issuance
on the matter, petitioners filed the Petition for
Prohibition and Mandamus with Application for
Temporary Restraining Order, Preliminary
Injunction, and/or Status Quo Ante Order on April
25,
2018.
On May 18, 2018, petitioners filed a Supplemental
Petition stating that the day following the filing of
their original petition or on April 26, 2018,
President Duterte issued Proclamation No. 475
formally
declaring a state of calamity in Boracay and
ordering its closure for six months from April 26,
2018
to October 25, 2018. The closure was implemented
on even date. Thus, in addition to what they
prayed for in their original petition, petitioners
implore the Court to declare as unconstitutional
Proclamation No. 475 insofar as it orders the
closure of Boracay and ban of tourists and
nonresidents
therefrom.
ISSUE:
Whether Proclamation No. 475 constitute an
impairment on the right to travel. (NO)
RULING:
Proclamation No. 475 does not pose an actual
impairment on the right to travel. Petitioners
claim that Proclamation No. 475 impairs the right to
travel based on the following provisions:
NOW, THEREFORE, I, RODRIGO ROA
DUTERTE, President of the Philippines, by virtue
of the
powers vested in me by the Constitution and
existing laws, do hereby declare a State of
Calamity in the barangays of Balabag, Manoc-
Manoc and Yapak (Island of Boracay) in the
Municipality of Malay, Aklan. In this regard, the
temporary closure of the Island as a tourist
destination for six (6) months starting 26 April
2018, or until 25 October 2018, is hereby
ordered subject to applicable laws, rules, regulations
and jurisprudence.
xxx xxx xxx
The Municipality of Malay, Aklan is also hereby
directed to ensure that no tourist will be
allowed entry to the island of Boracay until such
time that the closure has been lifted by
the President.
The activities proposed to be undertaken to
rehabilitate Boracay involved inspection, testing,
demolition, relocation, and construction. These
could not have been implemented freely and
smoothly with tourists coming in and out of the
island not only because of the possible disruption
that they may cause to the works being undertaken,
but primarily because their safety and
convenience might be compromised.
Also, the contaminated waters in the island were not
just confined to a small manageable area. The
excessive water pollutants were all over Bolabog
beach and the numerous illegal drainpipes
connected to and discharging wastewater over it
originate from different parts of the island. Indeed,
the activities occasioned by the necessary digging of
these pipes and the isolation of the contaminated
beach waters to give way to treatment could not be
done in the presence of tourists. Aside from the
dangers that these contaminated waters pose, hotels,
inns, and other accommodations may not be
available as they would all be inspected and
checked to determine their compliance with
environmental laws.
Moreover, it bears to state that a piece-meal closure
of portions of the island would not suffice since
as mentioned, illegal drainpipes extend to the beach
from various parts of Boracay. Also, most areas
in the island needed major structural rectifications
because of numerous resorts and tourism
facilities which lie along easement areas, illegally
reclaimed wetlands, and of forested areas that were
illegally cleared for construction purposes. Hence,
the need to close the island in its entirety and ban
tourists therefrom.
In fine, this case does not actually involve the right
to travel in its essential sense contrary to what
petitioners want to portray. Any bearing that
Proclamation No. 475 may have on the right to
travel
is merely corollary to the closure of Boracay and the
ban of tourists and non-residents therefrom which
were necessary incidents of the island's
rehabilitation.
There is certainly no showing that Proclamation No.
475 deliberately meant to impair the right to
travel. The questioned proclamation is clearly
focused on its purpose of rehabilitating Boracay and
any intention to directly restrict the right cannot, in
any manner, be deduced from its import.
Also significant to note is that the closure of
Boracay was only temporary considering the
categorical pronouncement that it was only for a
definite period of six months. Hence, if at all, the
impact of Proclamation No. 475 on the right to
travel is not direct but merely consequential;
and, the same is only for a reasonably short period
of time or merely temporary.
City of Batangas v Shell Petroleum Corporation
Facts:
Batangas City is a local government unit created by
virtue of its charter, Republic Act No. 5495 (RA
5495). Under RA 5495, Batangas City constitutes a
political body corporate, and is endowed with
powers which pertain to a municipal corporation.[9]
The Sangguniang Panlungsod is the legislative body
of Batangas City.
PSPC owns and operates a refinery situated in
Tabangao, Batangas City (Tabangao Refinery).[11]
In furtherance of the mandate of Presidential Decree
No. 87 (PD 87) to promote the discovery and
production of indigenous petroleum, the
Department of Energy (DOE) executed Service
Contract No. 38 (SC 38) with SPEX under which
SPEX was tasked to explore and develop possible
petroleum sources in North Western Palawa
SPEX's exploration led to the discovery of an
abundant source of natural gas in the Malampaya
field off the shores of Palawan, which thereafter
gave rise to the Malampaya Project.
The Malampaya Project required the construction of
a 504-kilometer offshore pipeline for the transport
of natural gas from Malampaya field to Batangas,
for treatment in PSPC's Tabangao Refinery.[14]
On May 28, 2001, the Sangguniang Panlungsod
enacted the Assailed Ordinance which requires
heavy industries operating along the portions of
Batangas Bay within the territorial jurisdiction of
Batangas City to construct desalination plants to
facilitate the use of seawater as coolant for their
industrial facilities
The Assailed Ordinance was approved by the city
mayor on June 7, 2001
Heavy industries subject of the Assailed Ordinance
had until May 28, 2006 to comply with its
provisions.[17] Among the facilities affected by the
Assailed Ordinance is PSPC's Tabangao Refinery.
On May 23, 2006, PSPC filed against Batangas City
and the Sangguniang Panlungsod a Petition for
Declaration of Nullity (PSPC Petition) before the
RTC praying that the Assailed Ordinance be
declared null and void. The PSPC Petition was
raffled to Branch 84, and docketed as SP Civil Case
No. 7924
For its part, PSPC averred that the Assailed
Ordinance constitutes an invalid exercise of police
power as it failed to meet the substantive
requirements for validity.
Particularly, PSPC argued that the Assailed
Ordinance contravenes the Water Code of the
Philippines (Water Code), and encroaches upon the
power of the National Water Resources Board
(NWRB) to regulate and control the Philippines'
water resources.
In addition, Batangas City and the Sangguniang
Panlungsod failed to sufficiently show the factual or
technical basis for its enactment.
In this connection, PSPC alleged that the Assailed
Ordinance unduly singles out heavy industries, and
holds them solely accountable for the loss of water
and destruction of aquifers without basis, resulting
in the deprivation of their property rights without
due process of law
PSPC contended that the Assailed Ordinance was
not posted or published in a newspaper of general
circulation in the province, nor were public hearings
or consultations involving concerned parties
conducted thereon
Further, there are no records showing that the
Assailed Ordinance, as approved by the
Sangguniang Panlungsod, was forwarded to the
Sangguniang Panlalawigan of the Province of
Batangas after it was approved by the city mayor
SPEX essentially adopted the allegations of PSPC
and prayed for the same relief, asserting that it
possesses material and direct interest in the subject
matter of the PSPC Petition.[28]
In response, Batangas City and the Sangguniang
Panlungsod maintained that they have the power to
enact the Assailed Ordinance pursuant to the
general welfare clause under the LGC.[29]
According to them, the rationale of the Assailed
Ordinance is to stop PSPC and other industries
similarly situated from relying "too much" on gro...
round water as coolants for their machineries, and
alternatively promote the use of seawater for such
purpose, considering that fresh ground water is a
"perishable commodity."... that the "regulation or
prohibition" on the use of ground water is merely
incidental to the main purpose of the Assailed
Ordinance, which is to compel heavy industries
such as PSPC to construct desalination plants.
Hence, provisions having regulatory and prohibitive
effect may be taken out of the Assailed Ordinance
without entirely impairing its validity
Further, Batangas City and the Sangguniang
Panlungsod took exception to PSPC's allegations
and asserted that the Assailed Ordinance had been
published in Dyaryo Veritas, a newspaper of
general circulation in the area. Moreover, Batangas
City and the Sangguniang Panlungsod claimed that
a joint public hearing on the Assailed Ordinance
had in fact been conducted by the Sangguniang
Panlungsod and Sangguniang Panlalawigan, where
PSPC was duly represented
Finally, Batangas City and the Sangguniang
Panlungsod averred that since PSPC and SPEX,
along with other concerned heavy industries,
essentially question the former's authority to
regulate and prohibit the use of fresh ground water,
they should have first referred their grievances to
NWRB by filing a complaint for adjudication on the
threatened revocation of their existing water
permits.[34]
RTC rendered a Decision
The dispositive portion of said Decision reads:
It is evident that from foregoing factual milieu and
parameters, the questioned ordinance is INVALID,
as it is hereby declared INVALID, in its entirety for
want of necessity and for not conducting prior
public hearing, and for violating the due process
clause of the Constitution with respect to its (sic)
Sec. 8, City Ordinance No.3,... The RTC gave
credence to the testimony of PSPC's witness
Engineer Joeffrey Caranto (Engineer Caranto) who
conducted a hydrogeology study on the Tabangao-
Malitam watershed from which PSPC sources fresh
ground water.[38] The RTC summarized the
findings of said study in this wise:A water balance x
x x calculation of the Tabangao-Malitam
groundwater system shows that the natural recharge
(replenishment) rate far exceeds the current demand
for water in the area. Hence, there is no threat of
depletion of the groundwater resource[s] in the
Tabangao-Malitam [w]atershed that purportedly
may result from PSPC's deep well pumping.
Water levels in the PSPC wells have not lowered
significantly over the last three (3) decades,
indicating that there is no substantial diminution of
the supply of groundwater.
The chloride levels in the other nearby PSPC wells
are all within drinking water standards and have not
increased in the last four (4) decades of usage. This
indicates that salt water intrusion is not occurring in
the PSPC wells.
The RTC also noted that the Sangguniang
Panlungsod failed to consult the NWRB before
enacting the Assailed Ordinance, thereby
encroaching upon its authority
Anent Section 8, the RTC concluded that the power
granted to the city mayor to cause the issuance of
cease and desist orders against the use of ground
water without prior notice and hearing constitutes a
violation of the due process clause.
The appeals against JG Summit and First Gas were
raffled to the Fourth Division (CA Fourth Division)
and were docketed as CA-G.R. CV Nos. 90324 (JG
Summit Appeal) and 90365 (First Gas Appeal),
respectively. Meanwhile, the appeal filed against
PSPC and SPEX was raffled to the Tenth Division
(CA Tenth Division), and docketed as CA-G.R. CV
No. 90373 (PSPC Appeal).
These testimonies, according to Batangas City and
the Sangguniang Panlungsod, serve as sufficient
factual bases for the enactment of the Assailed
Ordinance, as "there could be no higher degree of
evidence than the actual experience of the
inhabitants in the area.
On the basis of the submissions of the parties, the
CA Tenth Division issued the Assailed Decision
dismissing the appeal filed against PSPC and SPEX
for lack of merit. The relevant portions of the
Assailed Decision read:City Ordinance No. 3, S.
2001 contravenes Presidential Decree No. 1067,
better known as "The Water Code of the
Philippines" as it is an encroachment into the
authority of the [NWRB]. The use of water
resources is under the regulatory power of the
national government. This is explicit from the
provisions of the Water Code which states that
-"The utilization, explo[i]tation, development,
conservation and protection of water resources shall
be subject to the control and regulation of the
government through the [NWRB]".
Although respondents-appellants insist that the city
ordinance is not an absolute prohibition but merely
a regulation on the use of fresh groundwater for
cooling systems and industrial purposes the
argument cannot justify the attempt to usurp the
NWRB's power to regulate and control water
resources. Moreover, not only does the city
ordinance prohibit or regulate the use of fresh
groundwater in disregard of previously granted
water permits from the NWRB but also directs the
installation of desalination plants for purposes of
utilizing sea water, without the requisite water
permit from the NWRB.
The police power of the Sangguniang Panglungsod
is subordinate to the constitutional limitations that
its exercise must be reasonable and for the public
good. Without the concurrence of these two
requisites, the ordinance will not muster the test of a
valid police measure and should be struck down
There must be a reasonable relation between the
purposes of the police measure and the means
employed for its accomplishment. Arbitrary
invasion of personal rights and those pertaining to
private property will not be allowed even under the
guise of protecting public interest.
WHEREFORE, the appeal is DISMISSED. The
Decision dated 29 June 2007 rendered by the
Regional Trial Court of Batangas City, Branch 84,
in SP Civil Case No. 7924, declaring invalid City
Ordinance No. 3, S. 2001 is hereby AFFIRMED.
Batangas City and the Sangguniang Panlungsod
filed a Motion for Reconsideration
The CA Tenth Division found that the MR merely
reiterated the arguments relied upon in the appeal,
which were already passed upon in the Assailed
Decision
On January 25, 2011, Batangas City filed the
present Petition.[55] Notably, the Petition does not
name the Sangguniang Panlungsod as party
Issues:
The sole issue for this Court's determination is
whether the CA erred in affirming the RTC
Decision which declared the Assailed Ordinance
invalid.
In this Petition, the Court is called upon to
determine whether the control and regulation of the
use of water may be made subject of a city
ordinance under the regime of the Water Code - a
national statute governing the same subject matter.
Ruling:
The Assailed Ordinance is void for being ultra vires,
for being contrary to existing law, and for lack of
evidence showing the existence of factual basis for
its enactment.
The requisites for a valid ordinance are well
established. Time and again, the Court has ruled
that in order for an ordinance to be valid, it must not
only be within the corporate powers of the
concerned LGU to enact, but must also be passed in
accordance with the procedure prescribed by law.
Moreover, substantively, the ordinance (i) must not
contravene the Constitution or any statute; (ii) must
not be unfair or oppressive; (iii) must not be partial
or discriminatory; (iv) must not prohibit, but may
regulate trade; (v) must be general and consistent
with public policy; and (vi) must not be
unreasonable
Batangas City claims that the enactment of the
Assailed Ordinance constitutes a valid exercise of
its police power. This claim is erroneous
Since LGUs exercise delegated police power as
agents of the State, it is incumbent upon them to act
in conformity to the will of their principal, the State.
[75] Necessarily, therefore, ordinances enacted
pursuant to the general welfare clause may not
subvert the State's will by contradicting national
statutes
The Water Code governs the ownership,
appropriation, utilization, exploitation,
development, conservation and protection of water
resources.[... water resources are placed under the
control and regulation of the government through
the National Water Resources Council, now the
NWRB.[79] In turn, the privilege to appropriate and
use water is one which is exclusively granted and
regulated by the State through water permits issued
by the NWRB.[80] Once granted, these water
permits continue to be valid save only for reasons
spelled out under the Water Code itself.[81]
Conversely, the power to modify, suspend, cancel
or revoke water permits already issued also rests
with NWRB.
There is no doubt, therefore, that the Assailed
Ordinance effectively contravenes the provisions of
the Water Code as it arrogates unto Batangas City
the power to control and regulate the use of ground
water which, by virtue of the provisions of the
Water Code, pertains solely to the NWRB.
By enacting the Assailed Ordinance, Batangas City
acted in excess of the powers granted to it as an
LGU, rendering the Assailed Ordinance ultra vires.
In any case, it bears emphasizing that the measure
of the substantive validity of an ordinance is the
underlying factual basis for which it was enacted.
Hence, without factual basis, an ordinance will
necessarily fail the substantive test for validity.
While the Assailed Ordinance has been struck down
as invalid, the pronouncements hereunder should
not be misconstrued by heavy industries to be carte
blanche to abuse their respective water rights at the
expense of the health and safety of the inhabitants
of Batangas City, the environment within which
these inhabitants live, and the resources upon which
these inhabitants rely. The Court recognizes fresh
ground water as an invaluable natural resource, and
deems it necessary to emphasize that Batangas City
is not precluded from exercising its right to protect
its inhabitants from injurious effects which may
result from the misuse of natural water resources
within its territorial jurisdiction, should these effects
later arise, provided that such exercise is done
within the framework of applicable national law,
particularly, the Water Code.
Principles:
The policy of ensuring the autonomy of local
governments was not intended to create an
imperium in imperio and install intra-sovereign
political subdivisions independent of the sovereign
state.[2] As agents of the state, local governments
should bear in mind that the police power devolved
to them by law must be, at all times, exercised in a
manner consistent with the will of their principal.
Police power is the power to prescribe regulations
to promote the health, morals, peace, education,
good order, safety, and general welfare of the
people.[71] As an inherent attribute of sovereignty,
police power primarily rests with the State. In
furtherance of the State's policy to foster genuine
and meaningful local autonomy, the national
legislature delegated the exercise of police power to
local government units (LGUs) as agents of the
State
Such delegation can be found in Section 16[73] of
the LGC, which embodies the general welfare
clause.[74]
"that ordinances passed by virtue of the implied
power found in the general welfare clause must be
reasonable, consonant with the general powers and
purposes of the corporation, and not inconsistent
with the laws or policy of the State."
In this regard, it is appropriate to stress that where
the state legislature has made provision for the
regulation of conduct, it has manifested its intention
that the subject matter shall be fully covered by the
statute, and that a municipality, under its general
powers, cannot regulate the same conduct.
Where the subject is o(statewide concern, and the
legislature has appropriated the field and declared
the rule, its declaration is binding throughout the
State." A reason advanced for this view is that such
ordinances are in excess of the powers granted to
the municipal corporation.
It is a fundamental principle that municipal
ordinances are inferior in status and subordinate to
the laws of the state. An ordinance in conflict with a
state law of general character and statewide
application is universally held to be invalid. The
principle is frequently expressed in the declaration
that municipal authorities, under a general grant of
power, cannot adopt ordinances which infringe the
spirit of a state law or repugnant to the general
policy of the state.
To prohibit an act or to compel something to be
done, there must be a shown reason for the same.
The purpose must also be cogent to the means
adopted by the law to attain it. In this case, as seen
in the "whereas clause," the purpose of the
ordinance is to protect the environment and prevent
ecological imbalance, especially the drying up of
the aquifers of Batangas City
It would have been acceptable had there been a
specific study or findings that the local government
conducted (sic) and not just its reliance on the
complaints of some constituents who merely made
its conclusion that the drying up of wells or its
salination was due to the "heavy industries" use of
groundwater.
Basco v PAGCOR
FACTS:
On July 11, 1983, PAGCOR was created under
Presidential Decree 1869, pursuant to the policy of
the government, “ to regulate and centralize through
an appropriate institution all games of chance
authorized by existing franchise or permitted by
law.” This was subsequently proven to be beneficial
not just to the government but also to the society in
general. It is a reliable source of much needed
revenue for the cash-strapped Government.
Petitioners filed an instant petition seeking to annul
the PAGCOR because it is allegedly contrary to
morals, public policy and public order, among
others.
ISSUES:
Whether PD 1869 is unconstitutional because:
1.) it is contrary to morals, public policy and public
order;
2.) it constitutes a waiver of the right of the City of
Manila to improve taxes and legal fees; and that the
exemption clause in PD 1869 is violative of
constitutional principle of Local Autonomy;
3.) it violates the equal protection clause of the
Constitution in that it legalizes gambling thru
PAGCOR while most other forms are outlawed
together with prostitution, drug trafficking and other
vices; and
4.) it is contrary to the avowed trend of the Cory
Government, away from monopolistic and crony
economy and toward free enterprise and
privatization.
HELD:
1.) Gambling, in all its forms, is generally
prohibited, unless allowed by law. But the
prohibition of gambling does not mean that the
government can not regulate it in the exercise of its
police power, wherein the state has the authority to
enact legislation that may interfere with personal
liberty or property in order to promote the general
welfare.
2.) The City of Manila, being a mere Municipal
Corporation has no inherent right to impose taxes.
Its charter was created by Congress, therefore
subject to its control. Also, local governments have
no power to tax instrumentalities of the National
Government.
3.) Equal protection clause of the Constitution does
not preclude classification of individuals who may
be accorded different treatment under the law,
provided it is not unreasonable or arbitrary. The
clause does not prohibit the legislature from
establishing classes of individuals or objects upon
which different rules shall operate.
4.) The Judiciary does not settle policy issues which
are within the domain of the political branches of
government and the people themselves as the
repository of all state power.
Every law has in its favor the presumption of
constitutionality, thus, to be nullified, it must be
shown that there is a clear and unequivocal breach
of the Constitution. In this case, the grounds raised
by petitioners have failed to overcome the
presumption. Therefore, it is hereby dismissed for
lack of merit.
EMINENT DOMAIN
What is Eminent Domain?
It may be exercised by some private entities.
Theproperty forcibly taken under thispower,
upon payment of just compensation, is
needed for conversion to public use
orpurpose.
The taking of property in law may include:
 trespass without actual eviction of theowner;
 material impairment of the value of
theproperty; or
 prevention of the ordinary uses for whichthe
property was intended.

The property that may be subject
forappropriation shall not be limited to
privateproperty. Public property may be
expropriated provided there is a SPECIFIC
grant of authority to the delegate. Money and a
chose in action are the only things exemptfrom
expropriation. Although it is also lodged
primarily in thenational legislature, the courts
have thepower to inquire the legality of the right
ofeminent domain and to determine whether
ornot there is a genuine necessity therefore
Illustrative Cases:
City Government of Quezon City v Ericta
Facts:
Section 9 of Ordinance No. 6118, S-64 provides
that at least 6% of the total area of the memorial
park cemetery shall be set aside for the charity
burial of deceased persons who are paupers and
have been residents of Quezon City for at least 5
years prior to their death. As such, the Quezon City
engineer required the respondent, Himlayang
Pilipino Inc, to stop any further selling and/or
transaction of memorial park lots in Quezon City
where the owners thereof have failed to donate the
required 6% space intended for paupers burial.
The then Court of First Instance and its judge, Hon.
Ericta, declared Section 9 of Ordinance No. 6118,
S-64 null and void.
Petitioners argued that the taking of the
respondent’s property is a valid and reasonable
exercise of police power and that the land is taken
for a public use as it is intended for the burial
ground of paupers. They further argued that the
Quezon City Council is authorized under its charter,
in the exercise of local police power, ” to make such
further ordinances and resolutions not repugnant to
law as may be necessary to carry into effect and
discharge the powers and duties conferred by this
Act and such as it shall deem necessary and proper
to provide for the health and safety, promote the
prosperity, improve the morals, peace, good order,
comfort and convenience of the city and the
inhabitants thereof, and for the protection of
property therein.”
On the otherhand, respondent Himlayang Pilipino,
Inc. contended that the taking or confiscation of
property was obvious because the questioned
ordinance permanently restricts the use of the
property such that it cannot be used for any
reasonable purpose and deprives the owner of all
beneficial use of his property.
Issue:
Is Section 9 of the ordinance in question a valid
exercise of the police power?
Held:
No. The Sec. 9 of the ordinance is not a valid
exercise of the police power.
Occupying the forefront in the bill of rights is the
provision which states that ‘no person shall be
deprived of life, liberty or property without due
process of law’ (Art. Ill, Section 1 subparagraph 1,
Constitution). On the other hand, there are three
inherent powers of government by which the state
interferes with the property rights, namely-. (1)
police power, (2) eminent domain, (3) taxation.
These are said to exist independently of the
Constitution as necessary attributes of sovereignty.
An examination of the Charter of Quezon City
(Rep. Act No. 537), does not reveal any provision
that would justify the ordinance in question except
the provision granting police power to the City.
Section 9 cannot be justified under the power
granted to Quezon City to tax, fix the license fee,
and regulate such other business, trades, and
occupation as may be established or practised in the
City. The power to regulate does not include the
power to prohibit or confiscate. The ordinance in
question not only confiscates but also prohibits the
operation of a memorial park cemetery.
Police power is defined by Freund as ‘the power of
promoting the public welfare by restraining and
regulating the use of liberty and property’. It is
usually exerted in order to merely regulate the use
and enjoyment of property of the owner. If he is
deprived of his property outright, it is not taken for
public use but rather to destroy in order to promote
the general welfare. In police power, the owner does
not recover from the government for injury
sustained in consequence thereof.
Under the provisions of municipal charters which
are known as the general welfare clauses, a city, by
virtue of its police power, may adopt ordinances to
the peace, safety, health, morals and the best and
highest interests of the municipality. It is a well-
settled principle, growing out of the nature of well-
ordered and society, that every holder of property,
however absolute and may be his title, holds it
under the implied liability that his use of it shall not
be injurious to the equal enjoyment of others having
an equal right to the enjoyment of their property,
nor injurious to the rights of the community. A
property in the state is held subject to its general
regulations, which are necessary to the common
good and general welfare. Rights of property, like
all other social and conventional rights, are subject
to such reasonable limitations in their enjoyment as
shall prevent them from being injurious, and to such
reasonable restraints and regulations, established by
law, as the legislature, under the governing and
controlling power vested in them by the
constitution, may think necessary and expedient.
The state, under the police power, is possessed with
plenary power to deal with all matters relating to the
general health, morals, and safety of the people, so
long as it does not contravene any positive
inhibition of the organic law and providing that
such power is not exercised in such a manner as to
justify the interference of the courts to prevent
positive wrong and oppression.
However, in the case at hand, there is no reasonable
relation between the setting aside of at least six (6)
percent of the total area of an private cemeteries for
charity burial grounds of deceased paupers and the
promotion of health, morals, good order, safety, or
the general welfare of the people. The ordinance is
actually a taking without compensation of a certain
area from a private cemetery to benefit paupers who
are charges of the municipal corporation. Instead of
building or maintaining a public cemetery for this
purpose, the city passes the burden to private
cemeteries.
The expropriation without compensation of a
portion of private cemeteries is not covered by
Section 12(t) of Republic Act 537, the Revised
Charter of Quezon City which empowers the city
council to prohibit the burial of the dead within the
center of population of the city and to provide for
their burial in a proper place subject to the
provisions of general law regulating burial grounds
and cemeteries. When the Local Government Code,
Batas Pambansa Blg. 337 provides in Section 177
(q) that a Sangguniang panlungsod may “provide
for the burial of the dead in such place and in such
manner as prescribed by law or ordinance” it simply
authorizes the city to provide its own city owned
land or to buy or expropriate private properties to
construct public cemeteries. This has been the law
and practise in the past. It continues to the present.
Expropriation, however, requires payment of just
compensation. The questioned ordinance is different
from laws and regulations requiring owners of
subdivisions to set aside certain areas for streets,
parks, playgrounds, and other public facilities from
the land they sell to buyers of subdivision lots. The
necessities of public safety, health, and convenience
are very clear from said requirements which are
intended to insure the development of communities
with salubrious and wholesome environments. The
beneficiaries of the regulation, in turn, are made to
pay by the subdivision developer when individual
lots are sold to home-owners.
WHEREFORE, the petition for review is hereby
DISMISSED. The decision of the respondent court
is affirmed.
DOTC v Abecina
DEPARTMENT OF TRANSPORTATION AND
COMMUNICATIONS (DOTC), Petitioner, v.
SPOUSES VICENTE ABECINA AND MARIA
CLEOFE ABECINA, Respondents. G.R. No.
206484, SECOND DIVISION, June 29, 2016,
BRION, J.: When the DOTC constructed the
encroaching structures and subsequently entered
into the FLA with Digitel for their maintenance, it
was carrying out a sovereign function. These are
acts jure imperii that fall within the cloak of state
immunity. However, as the respondents repeatedly
pointed out, this Court has long established that the
doctrine of state immunity cannot serve as an
instrument for perpetrating an injustice to a citizen.
the Department's entry into and taking of possession
of the respondents' property amounted to an implied
waiver of its governmental immunity from suit.
FACTS:
Respondent spouses Vicente and Maria Cleofe
Abecina are the registered owners of five parcels of
land in Sitio Paltik, Barrio Sta. Rosa, Jose
Panganiban, Camarines Norte. In February 1993,
the DOTC awarded Digitel Telecommunications
Philippines, Inc. a contract for the management,
operation, maintenance, and development of a
Regional Telecommunications Development Project
under the National Telephone Program, Phase I,
Tranche 1. The DOTC and Digitel subsequently
entered into several Facilities Management
Agreements for Digitel to manage, operate,
maintain, and develop the RTDP and NTPI-1
facilities comprising local telephone exchange lines
in various municipalities in Luzon. The FMAs were
later converted into Financial Lease Agreements in
1995. Later on, the municipality of Jose
Panganiban, Camarines Norte, donated a one
thousand two hundred square-meter parcel of land
to the DOTC for the implementation of the RDTP in
the municipality. However, the municipality
erroneously included portions of the respondents'
property in the donation. Pursuant to the FLAs,
Digitel constructed a telephone exchange on the
property which encroached on the properties of the
respondent spouses. Subsequently, the spouses
Abecina discovered Digitel's occupation over
portions of their properties. They required Digitel to
vacate their properties and pay damages, but the
latter refused, insisting that it was occupying the
property of the DOTC pursuant to their FLA. The
respondent spouses sent a final demand letter to
both the DOTC and Digitel to vacate the premises
and to pay unpaid rent/damages in the amount of
one million two hundred thousand pesos
(P1,200,000.00). Neither the DOTC nor Digitel
complied with the demand. The respondent spouses
filed an accion publiciana complaint against the
DOTC and Digitel for recovery of possession and
damages. The complaint was docketed as Civil Case
No. 7355. In its answer, the DOTC claimed
immunity from suit and ownership over the subject
properties. Nevertheless, during the pre-trial
conference, the DOTC admitted that the Abecinas
were the rightful owners of the properties and opted
to rely instead on state immunity from suit. The
respondent spouses and Digitel executed a
Compromise Agreement and entered into a Contract
of Lease. The RTC rendered a partial decision and
approved the Compromise Agreement. The RTC
rendered its decision against the DOTC. It held that
government immunity from suit could not be used
as an instrument to perpetuate an injustice on a
citizen. The RTC ordered the Department - as a
builder in bad faith -to forfeit the improvements and
vacate the properties; and awarded the spouses with
P1,200,000.00 as actual damages, P200,000.00 as
moral damages, and P200,000.00 as exemplary
damages plus attorney's fees and costs of suit. The
DOTC elevated the case to the CA, which affirmed
the RTC's decision but deleted the award of
exemplary damages. The DOTC filed the present
petition for review on certiorari.
ISSUE:
Whether or not DOTC may invoke state immunity
RULING:
No. The State may not be sued without its consent.
This fundamental doctrine stems from the
principle that there can be no legal right against the
authority which makes the law on which the
right depends. This generally accepted principle of
law has been explicitly expressed in both the 1973
and the present Constitutions. But as the principle
itself implies, the doctrine of state immunity is not
absolute. The State may waive its cloak of
immunity and the waiver may be made expressly or
by
implication.
Over the years, the State's participation in economic
and commercial activities gradually expanded
beyond its sovereign function as regulator and
governor. The evolution of the State's activities and
degree of participation in commerce demanded a
parallel evolution in the traditional rule of state
immunity. Thus, it became necessary to distinguish
between the State's sovereign and governmental
acts (jure imperii) and its private, commercial, and
proprietary acts (jure gestionis). Presently, state
immunity restrictively extends only to acts jure
imperii while acts jure gestionis are considered as a
waiver of immunity.
The Philippines recognizes the vital role of
information and communication in nation building.
As a
consequence, we have adopted a policy
environment that aspires for the full development of
communications infrastructure to facilitate the flow
of information into, out of, and across the
country. To this end, the DOTC has been mandated
with the promotion, development, and regulation
of dependable and coordinated networks of
communication.
The DOTC encroached on the respondents'
properties when it constructed the local telephone
exchange in Daet, Camarines Norte. The exchange
was part of the RTDP pursuant to the National
Telephone Program. We have no doubt that when
the DOTC constructed the encroaching structures
and subsequently entered into the FLA with Digitel
for their maintenance, it was carrying out a
sovereign function. Therefore, we agree with the
DOTC's contention that these are acts jure imperii
that fall within the cloak of state immunity.
However, as the respondents repeatedly pointed out,
this Court has long established in Ministerio v
CFI, Amigable v. Cuenca, the 2010 case Heirs of
Pidacan v. ATO, and more recently in Vigilar v.
Aquino
that the doctrine of state immunity cannot serve as
an instrument for perpetrating an injustice to a
citizen.
The Constitution identifies the limitations to the
awesome and near-limitless powers of the State.
Chief among these limitations are the principles that
no person shall be deprived of life, liberty, or
property without due process of law and that private
property shall not be taken for public use
without just compensation. These limitations are
enshrined in no less than the Bill of Rights that
guarantees the citizen protection from abuse by the
State.
Consequently, our laws require that the State's
power of eminent domain shall be exercised through
expropriation proceedings in court. Whenever
private property is taken for public use, it becomes
the ministerial duty of the concerned office or
agency to initiate expropriation proceedings. By
necessary implication, the filing of a complaint for
expropriation is a waiver of State immunity.
If the DOTC had correctly followed the regular
procedure upon discovering that it had encroached
on the respondents' property, it would have initiated
expropriation proceedings instead of insisting
on its immunity from suit. The petitioners would
not have had to resort to filing its complaint for
reconveyance.
We hold, therefore, that the Department's entry into
and taking of possession of the respondents'
property amounted to an implied waiver of its
governmental immunity from suit. We also find no
merit in the DOTC's contention that the RTC should
not have ordered the reconveyance of the
respondent spouses' property because the property is
being used for a vital governmental function, that is,
the operation and maintenance of a safe and
efficient communication system. The exercise of
eminent domain requires a genuine necessity to take
the property for public use and the consequent
payment of just compensation. The property is
evidently being used for a public purpose. However,
we also note that the respondent spouses willingly
entered into a lease agreement with Digitel for the
use of the subject properties. If in the future the
factual circumstances should change and the
respondents refuse to continue the lease, then the
DOTC may initiate expropriation proceedings. But
as matters now stand, the respondents are clearly
willing to lease the property. Therefore, we find no
genuine necessity for the DOTC to actually take the
property at this point.
Manila Memorial Park Inc. V Secretary of DSWD
Facts:
Petitioners assail the constitutionality of Section 4
of Republic Act (RA) No. 7432,[3] as amended by
RA 9257,[4] and the implementing rules and
regulations issued by the DSWD and DOF insofar
as these allow business establishments to... claim
the 20% discount given to senior citizens as a tax
deduction.
tax credit as the 20 percent discount deductible from
gross income for income tax purposes,... Petitioners
emphasize that they are not questioning the 20%
discount granted to senior citizens but are only
assailing the constitutionality of the tax deduction
scheme prescribed under RA 9257 and the
implementing rules and regulations issued by the
DSWD and the DOF
Petitioners posit that the tax deduction scheme
contravenes Article III, Section 9 of the
Constitution, which provides that: "[p]rivate
property shall not be taken for public use without
just compensation."... petitioners cite
Central Luzon Drug Corporation,[12] where it was
ruled that the 20% discount privilege constitutes
taking of private property for public use which
requires the payment of just compensation
Issues:
WHETHER SECTION 4 OF REPUBLIC ACT NO.
9257 AND X X X ITS IMPLEMENTING RULES
AND REGULATIONS, INSOFAR AS THEY
PROVIDE THAT THE TWENTY PERCENT
(20%) DISCOUNT TO SENIOR CITIZENS MAY
BE CLAIMED AS A TAX DEDUCTION BY THE
PRIVATE ESTABLISHMENTS, ARE INVALID
AND
UNCONSTITUTIONAL.
Ruling:
The Petition lacks merit.
The validity of the 20% senior citizen discount and
tax deduction scheme under RA 9257, as an
exercise of police power of the State, has already
been settled in Carlos Superdrug Corporation.
The permanent reduction in their total revenues is a
forced subsidy corresponding to the taking of
private property for public use or benefit. This
constitutes compensable taking for which
petitioners would ordinarily become entitled to a
just compensation.
A tax deduction does not offer full reimbursement
of the senior citizen discount. As such, it would not
meet the definition of just compensation.
Having said that, this raises the question of whether
the State, in promoting the health and welfare of a
special group of citizens, can impose upon private
establishments the burden of partly subsidizing a
government program.
The Court believes so.
As a form of reimbursement, the... law provides that
business establishments extending the twenty
percent discount to senior citizens may claim the
discount as a tax deduction.
The law is a legitimate exercise of police power
which, similar to the power of eminent domain, has
general welfare for its object.
For this reason, when the conditions so demand as
determined by the legislature, property rights must
bow to the primacy of police power because
property rights, though sheltered by due process,
must yield to general welfare.
Police power as an attribute to promote the common
good would be diluted considerably if on the mere
plea of petitioners that they will suffer loss of
earnings and capital, the questioned provision is
invalidated.
Given these, it is incorrect for petitioners to insist
that the grant of the senior citizen discount is unduly
oppressive to their business, because petitioners
have not taken time to calculate correctly and come
up with a financial report, so that they have not been
able to... show properly whether or not the tax
deduction scheme really works greatly to their
disadvantage.
We, thus, found that the 20% discount as well as the
tax deduction scheme is a valid exercise of the
police power of the State.
The 20% discount is intended to improve the
welfare of senior citizens who, at their age, are less
likely to be gainfully employed, more prone to
illnesses and other disabilities, and, thus, in need of
subsidy in purchasing basic commodities.
the 20% discount is a regulation affecting the ability
of private establishments to price their products and
services relative to a special class of individuals, "property rights of individuals may be subjected to
senior citizens, for which the Constitution affords restraints and burdens in... order to fulfill the
preferential concern... it does... not purport to objectives of the government.
appropriate or burden specific properties, used in The State "may interfere with personal liberty,
the operation or conduct of the business of private property, lawful businesses and occupations to
establishments, for the use or benefit of the public, promote the general welfare [as long as] the
or senior citizens for that matter interference [is] reasonable and not arbitrary.
The subject regulation may be said to be similar to, Eminent domain, on the other hand, is the inherent
but with substantial distinctions from, price control power of the State to take or appropriate private
or rate of return on investment control laws which property for public use.
are traditionally regarded as police power measures. private property shall not be taken without due
[77] These laws generally regulate public... utilities process of law and the... payment of just
or industries/enterprises imbued with public interest compensation
in order to protect consumers from exorbitant or In the exercise of police power, a property right is
unreasonable pricing as well as temper corporate impaired by regulation,[65] or the use of property is
greed by controlling the rate of return on investment merely prohibited, regulated or restricted[66] to
of these corporations... considering that they have a promote public welfare.
monopoly... over the goods or services that they payment of just compensation is not required.
provide to the general public. in the exercise of the power of eminent domain,
On its face, therefore, the subject regulation is a property interests are appropriated and applied to
police power measure. some public purpose which necessitates the
The obiter in Central Luzon Drug Corporation,[78] payment of just compensation therefor.
however, describes the 20% discount as an exercise Normally, the title to and possession of the property
of the power of eminent domain and the tax credit, are transferred to the... expropriating authority.
under the previous law, equivalent to the amount of
discount given as the just compensation... therefor.
It presupposes that the subject regulation, which
impacts the pricing and, hence, the profitability of a
private establishment, automatically amounts to a
deprivation of property without due process of law.
If this were so,... then all price and rate of return on
investment control laws would have to be
invalidated because they impact, at some level, the
regulated establishment's profits or income/gross
sales, yet there is no provision for payment of just
compensation
The obiter is, thus, at odds with the settled
doctrine... that the State can employ police power
measures to regulate the pricing of goods and
services, and, hence, the profitability of business
establishments in order to pursue legitimate State
objectives for the common good, provided that the
regulation does not go too far as to... amount to
"taking."
Principles:
Police power versus eminent domain.
Police power is the inherent power of the State to
regulate or to restrain the use of liberty and property
for public welfare.[58] The only limitation is that
the restriction imposed should be reasonable, not
oppressive.
TAXATION
What is taxation?
It affects onlyproperty rights and may be
exercised only bythe government. The
property taken underthis power shall
likewise be intended for apublic use or
purpose. It is used solely forthe purpose of
raising revenues, to protectthe people and
extend them benefits in theform of public
projects and services (I hopeso). Hence, it
cannot be allowed to beconfiscatory, except
if it is intended fordestruction as an
instrument of the policepower.It must
conform to the requirementsof due process.
Therefore, taxpayers areentitled to be
notified of the assessmentproceedings and to
be heard therein on thecorrect valuation to
be given the property. Itis also subject to the
general requirements ofthe equal protection
clause that the rule oftaxation shall be
uniform and equitable.
Illustrative Cases:
Reyes V. Almanzor
FACTS:
J.B.L Reyes, et al., petitioners, owners of parcels of
land in Tondo and Sta. CruzDistricts, City of
Manila which are leased by tenants for a monthly
rentals not exceeding threehundred pesos (P300.00)
in July 1971. Around that time, a law was passed
prohibiting theincrease of rentals of properties
leased for rentals not exceeding P300.00 monthly
and ejectinglessees after the expiration of the usual
legal period of lease. In 1973, respondent City
Assessorof Manila re-classified and reassessed the
value of the subject properties based on theschedule
of market values which entailed an increase in the
acorresponding tax rates promptingpetitioners to file
a Memorandum of Disagreement with the Board of
Tax Assessment Appeals.They averred that the
reassessments made were "excessive, unwarranted,
inequitable,confiscatory and unconstitutional"
considering that the taxes imposed upon them
greatlyexceeded the annual income derived from
their properties. They argued that the
incomeapproach should have been used in
determining the land values instead of the
comparablesales approach which the City Assessor
adopted
ISSUE:
Is the approach adopted by the City Assessor
appropriate in assessing the property?
HELD:
No. The taxing power is an attribute of sovereignty.
However, the power to tax is notunconfined as there
are restrictions. The due process and equal
protection clauses of theConstitution limit this
power. The laws should operate equally and
uniformly on all personsunder similar circumstances
or that all persons must be treated in the same
manner, theconditions not being different both in
the privileges conferred and the liabilities imposed.
Themarket value of properties covered by P.D. No.
20 cannot be equated with the market value
ofproperties not covered. The former has naturally a
much lesser market value in view of therental
restrictions. Consequently, the use of the
Comparable Sales Approach in the assessmentof the
properties on the ground of uniformity is
unreasonable.
Philippine Healthcare Providers, Inc. v
Commissioner of Internal Revenue
Facts:
The petitioner, a prepaid health-care organization
offering benefits to its members. The CIR found
that the organization had a deficiency in the
payment of the DST under Section 185 of the 1997
Tax Code which stipulated its implementation:
“On all policies of insurance or bonds or obligations
of the nature of indemnity for loss, damage, or
liability made or renewed by any person,
association or company or corporation transacting
the business of accident, fidelity, employer's
liability, plate, glass, steam boiler, burglar, elevator,
automatic sprinkler, or other branch of insurance
(except life, marine, inland, and fire insurance)”
The CIR sent a demand for the payment
of deficiency taxes, including surcharges and
interest, for 1996-1997 in the total amount of
P224,702,641.18.
The petitioner protested to the CIR, but it didn’t act
on the appeal. Hence, the company had to go to the
CTA. The latter declared judgment against them
and reduced the taxes. It ordered them to pay 22
million pesos for deficiency VAT for 1997 and 31
million deficiency VAT for 1996.
CA denied the company’s appeal an d increased
taxes to 55 and 68 million for 1996 to 1997.
Issues: WON a health care agreement in the nature
of an insurance contract and therefore subject to the
documentary stamp tax (DST) imposed under
Section 185 of Republic Act 8424 (Tax Code of
1997)
Held: Yes. Petition dismissed.
Ratio:
The DST is levied on the exercise by persons of
certain privileges conferred by law for the creation,
revision, or termination of specific legal
relationships through the execution of specific
instruments.
The DST is an excise upon the privilege,
opportunity, or facility offered at exchanges for the
transaction of the business. In particular, the DST
under Section 185 of the 1997 Tax Code is imposed
on the privilege of making or renewing any policy
of insurance (except life, marine, inland and fire
insurance), bond or obligation in the nature of
indemnity for loss, damage, or liability.
Petitioner's health care agreement is primarily
a contract of indemnity. And in the recent case
of Blue Cross Healthcare, Inc. v. Olivares, this
Court ruled that a health care agreement is in the
nature of a non-life insurance policy.
Its health care agreement is not a contract for the
provision of medical services. Petitioner does not
actually provide medical or hospital services but
merely arranges for the same
It is also incorrect to say that the
health care agreement is not based on loss or
damage because, under the said agreement,
petitioner assumes the liability and indemnifies its
member for hospital, medical and related expenses
(such as professional fees of physicians). The term
"loss or damage" is broad enough to cover the
monetary expense or liability a member will incur
in case of illness or injury.
Philamcare Health Systems, Inc. v. CA.- The
health care agreement was in the nature of non-life
insurance, which is primarily a contract of
indemnity.
Similarly, the insurable interest of every member of
petitioner's health care program in obtaining the
health care agreement is his own health. Under the
agreement, petitioner is bound to indemnify any
member who incurs hospital, medical or any other
expense arising from sickness, injury or other
stipulated contingency to the extent agreed upon
under the contract.
PARTNERSHIP AMONG THE POWERS
Illustrative Cases:
Ermita-Malate Hotel and Motel Operators
Association, Inc. v City Mayor of Manila
Facts: On 13 June 1963, Ordinance 4760 was
issued by the municipal board of the City of Manila
and approved by Vice Mayor Herminio Astorga,
who was at the time acting Mayor of the City of
Manila. The ordinance (1) imposes a P6,000.00 fee
per annum for first class motels and P4,500.00 for
second class motels; (2) requires the owner,
manager, keeper or duly authorized representative
of a hotel, motel, or lodging house to refrain from
entertaining or accepting any guest or customer or
letting any room or other quarter to any person or
persons without his filling up the prescribed form in
a lobby open to public view at all times and in his
presence, wherein the surname, given name and
middle name, the date of birth, the address, the
occupation, the sex, the nationality, the length of
stay and the number of companions in the room, if
any, with the name, relationship, age and sex would
be specified, with data furnished as to his residence
certificate as well as his passport number, if any,
coupled with a certification that a person signing
such form has personally filled it up and affixed his
signature in the presence of such owner, manager,
keeper or duly authorized representative, with such
registration forms and records kept and bound
together; (3) provides that the premises and
facilities of such hotels, motels and lodging houses
would be open for inspection either by the City
Mayor, or the Chief of Police, or their duly
authorized representatives. The ordinance also
classified motels into two classes and required the
maintenance of certain minimum facilities in first
class motels such as a telephone in each room, a
dining room or restaurant and laundry; while second
class motels are required to have a dining room. It
prohibited a person less than 18 years old from
being accepted in such hotels, motels, lodging
houses, tavern or common inn unless accompanied
by parents or a lawful guardian and made it
unlawful for the owner, manager, keeper or duly
authorized representative of such establishments to
lease any room or portion thereof more than twice
every 24 hours. It provided a penalty of automatic
cancellation of the license of the offended party in
case of conviction. On 5 July 1963, the Ermita-
Malate Hotel and Motel Operators Association
(EMHMOA), its member Hotel del Mar, and a
certain Go Chiu filed a petition for prohibition
against the mayor of the City of Manila in his
capacity as he is charged with the general power
and duty to enforce ordinances of the City of Manila
and to give the necessary orders for the faithful
execution and enforcement of such ordinances.
There was a plea for the issuance of preliminary
injunction and for a final judgment declaring the
above ordinance null and void and unenforceable.
The lower court on 6 July 1963 issued a writ of
preliminary injunction ordering the Mayor to refrain
from enforcing said Ordinance 4760 from and after
8 July 1963. After the submission of the
memoranda, ruled that the City of Manila lack
authority to regulate motels and rendering
Ordinance 4760 unconstitutional and therefore null
and void. It made permanent the preliminary
injunction issued by the Mayor and his agents to
restrain him from enforcing the ordinance. The
Mayor of Manila appealed to the Supreme Court.
Issue: Whether the regulations imposed on motels
and hotels (increasing license fees, partially
restricting the freedom to contract, and restraining
the liberty of individuals) is valid and/or
constitutional.
Held: Yes. The ordinance was enacted to minimize
certain practices hurtful to public morals. It was
made as there is observed an alarming increase in
the rate of prostitution, adultery and fornication in
Manila traceable in great part to the existence of
motels, which provide a necessary atmosphere for
clandestine entry, presence and exit and thus
become the ideal haven for prostitutes and thrill
seekers. The ordinance proposes to check the
clandestine harboring of transients and guests of
these establishments by requiring these transients
and guests to fill up a registration form, prepared for
the purpose, in a lobby open to public view at all
times, and by introducing several other amendatory
provisions calculated to shatter the privacy that
characterizes the registration of transients and
guests. The increase in the license fees was intended
to discourage establishments of the kind from
operating for purpose other than legal and to
increase the income of the city government. Further,
the restriction on the freedom to contract, insofar as
the challenged ordinance makes it unlawful for the
owner, manager, keeper or duly authorized
representative of any hotel, motel, lodging house,
tavern, common inn or the like, to lease or rent any
room or portion thereof more than twice every 24
hours, with a proviso that in all cases full payment
shall be charged, cannot be viewed as a
transgression against the command of due process.
It is neither unreasonable nor arbitrary. Precisely it
was intended to curb the opportunity for the
immoral or illegitimate use to which such premises
could be, and, are being devoted. Furthermore, the
right of the individual is necessarily subject to
reasonable restraint by general law for the common
good. The liberty of the citizen may be restrained in
the interest of the public health, or of the public
order and safety, or otherwise within the proper
scope of the police power. State in order to promote
the general welfare may interfere with personal
liberty, with property, and with business and
occupations. Persons and property may be subjected
to all kinds of restraints and burdens, in order to
secure the general comfort, health, and prosperity of
the state. 
Commissioner of Internal Revenue v Central Luzon
Drug Corporation
BILL OF RIGHTS AND PRIVATE PERSONS
Illustrative Cases:
People V. Marti
he Bill of Rights embodied in the Constitution is not
meant to be invoked against acts of private
individuals.
It’s a restraint directed only against the government
and its agencies tasked with the enforcement of the
law.
It could only be invoked against the State to whom
the restraint is imposed.
 Andre Marti and his wife Shirley wanted to
send packages to their friend in Switzerland
and contracted the services of Manila
Packing and Export Forwarders.
 When asked by the forwarder if they could
examine and inspect the packages, Marti
refused, assuring that the packages simply
contained books and cigars.
 However, the proprietor opened the boxes
for final inspection as part of their SOP.
Upon opening, they suspected that the
contents were illegal drugs.
 The proprietor reported the incident to NBI
which confirmed that the suspected content
were marijuana.
  In the presence of the NBI agents, the boxes  The Court answered that the Constitution, in
were opened and found dried marijuana laying down the principles of the
leaves inside. government and fundamental liberties of the
 After Marti was traced by NBI, he was people, does not govern relationships
charged with violation of the Dangerous between individuals.
Drugs Act.
 Marti assailed the admissibility of the drugs
as evidence against him, which, according to
him, is obtained in violation of his AMERICAN BILL OF RIGHTS
constitutional rights against unreasonable
search and seizure and privacy of
communication.
May an act of a private individual, allegedly in
violation of appellant's constitutional rights, be
invoked against the State? NO.
 The Court ruled that in the absence of
governmental interference, the liberties
granted by the Constitution cannot be
invoked against the State. The constitutional
right against unreasonable search and
seizure refers to the immunity of one's
person, whether citizen or alien, from
interference by government. Its protection is
directed only to governmental action.
 This right do not require exclusion of
evidence obtained through a search by a
private citizen.
 In this case, the evidence was primarily
discovered and obtained by a private person,
acting in a private capacity and without the
intervention of State authorities. Therefore,
there is no reason why it should not be
admitted to prosecute him.
 Marti, however, alleged that the NBI agents
made an illegal search and seizure of the
evidence.
 The Court pointed out that: a) It was the
proprietor who made a reasonable search of
the packages in compliance with SOP AND
b) the mere presence of the NBI agents did
not convert the reasonable search effected
into a warrantless search and seizure. Merely
to observe and look at that which is in plain
sight is not a search.
 Marti further argued that since the
Constitution expressly declares as
inadmissible any evidence obtained in
violation of the constitutional prohibition
against illegal search and seizure, it matters
not whether the evidence was procured by
police authorities or private individuals.