Equitable PCI Bank, Inc. v. South Rich Acres, Inc., G.R. No.

202384, May 04, 2021

Facts:

The Sangguniang Panlungsod of the City of Las Piñas enacted City Ordinance No. 343-97 which declared
Marcos Alvarez Avenue as a public road.

Subsequently, SRA and Top Service filed a Petition for Declaratory Relief and Damages with a Prayer for
Preliminary Injunction seeking to annul City Ordinance No. 343-97.

In the meantime, the Royal South Subdivision makes use of Marcos Alvarez Avenue for ingress and
egress.1Thus, on September 29, 1997, Royal Asia Multi-Properties, Inc. (RAMPI) filed a Motion for Leave
of Court to File Answer in Intervention on the ground that it has legal interest in the upholding of the
validity and constitutionality of City Ordinance No. 343-97 because SRA and Top Service had been
unjustifiably demanding payment from them for the use of Marcos Alvarez Avenue. Specifically, RAMPI
alleged that it was the owner and developer of the Royal South Subdivision Project located
at Sitio Mulawin, Bo. Talon, Pamplona, Las Piñas which uses Marcos Alvarez Avenue. RAMPI further
alleged that it was being accused by SRA and Top Service of violating their rights as it relied on City
Ordinance No. 343-97 instead of paying for the use of Marcos Alvarez Avenue.

On July 24, 2000, SRA and Top Service filed a Motion for Substitution of Parties with Motion to
Annotate Lis Pendens. The RTC granted the motions in its Resolution dated October 5, 2000.
Consequently, EPCIB substituted RAMPI as intervenor-defendant because all the rights and interests
over the Royal South Subdivision had already been transferred, conveyed, and assigned by RAMPI to
EPCIB. Likewise, the Register of Deeds of Las Piñas was directed to annotate a notice of lis pendens in all
the titles of Royal South Subdivision project.

The RTC, first, declared City Ordinance No. 343-97 as invalid and unconstitutional for taking the property
without just compensation;34 and second, denied the claim of SRA and Top Service for damages against
EPCIB for lack of merit.

CA upheld the ruling of the RTC.

Issue:

Whether Ordinance No. 343-97 is unconstitutional for being an invalid exercise of police power.

Ruling:

Yes. The Court finds City Ordinance No. 343-97 as unconstitutional for being an invalid exercise of police
power. A discussion on the distinctions between police power and eminent domain is proper.

Police power is defined as "the inherent power of the State to regulate or to restrain the use of liberty
and property for public welfare." Thus, "[u]nder the police power of the State, 'property rights of
individuals may be subjected to restraints and burdens in order to fulfill the objectives of the
government."' However, "[p]olice power does not involve the taking or confiscation of property, with
the exception of a few cases where there is a necessity to confiscate private property in order to destroy
it for the purpose of protecting peace and order and of promoting the general welfare; for instance, the
confiscation of an illegally possessed article, such as opium and firearms."

On the other hand, eminent domain is defined as "the inherent power of the State to take or
appropriate private property for public use." It must be emphasized however that as provided under
Section 9, Article III of the 1987 Constitution, "[p]rivate property should not be taken for public use
without just compensation." Thus, the exercise of eminent domain requires the payment of just
compensation to the owner.

Thus, in police power, while the regulation affects the right of ownership, none of the bundle of rights
which constitute ownership is appropriated for use by or for the benefit of the public. However, when
there is already a taking or confiscation of private property for public use, the State is no longer
exercising police power, but eminent domain for which just compensation must be paid.

The Court held that the declaration of the entirety of Marcos Alvarez Avenue as a public road despite
the fact that the subject lots are owned by SRA is an act of unlawful taking of SRA's property. As
correctly ruled by the CA in CA-G.R. CV No. 91117, the taking of SRA's property without just
compensation amounts to confiscation which is beyond the ambit of police power. 

Llyods Richfield Industrial Corporation (now Republic Cement Corporation) v. National Power
Corporation, G.R. No. 190207, June 30, 2021

Facts:

Lloyds Richfield is a cement manufacturing corporation. With a plant site in Danao City, it purchased
parcels of land within its vicinity and quarried limestones from these areas, which would then be used to
manufacture cement.

Sometime before June 25, 1996, the National Power Corporation entered into negotiations with Lloyds
Richfield to create an easement of right of way over the parcels of land. Transmission lines would be
constructed over the parcels of land for the 230 KV Leyte-Cebu Interconnection Project.

When negotiations failed, the National Power Corporation filed a Complaint for expropriation before the
Regional Trial Court of Danao City. It also filed an ex parte motion, upon which the trial court issued a
Writ of Possession allowing it to take immediate possession of Lloyds Richfield's properties.

RTC said Lloyds Richfield was entitled to an amount equivalent to the fair market value of the lands to be
expropriated, not just an easement fee.

The Court of Appeals agreed that just compensation must be paid for all 11 parcels of land, not just an
easement fee.

Issues:
Whether or not Lloyds Richfield Industrial Corporation is entitled to just compensation equivalent to the
fair market value of the properties expropriated, not just a 10% easement fee.

Ruling:

Yes. Expropriation, however, is not limited to the taking of property with the corresponding transfer of
title from the landowner to the expropriator.

Easements of right of way fall within the purview of expropriation, allowed when the restrictions on the
landowner's property rights are not perpetual or indefinite. 71 In such a case, a mere easement fee may
suffice.

Here, expropriation by creating an easement of right of way is impossible. Constructing transmission

lines over the expropriated properties placed an indefinite and perpetual restriction on Lloyds Richfield's
proprietary rights. This is especially true since Lloyds Richfield has been perpetually prohibited from
conducting dynamite blasting and quarrying activities in the properties expropriated, or else the
transmission lines would be damaged or completely destroyed, endangering lives and properties.
Therefore, the National Power Corporation has no choice but to expropriate the properties in the
traditional sense—to take the properties and acquire title, for which it must pay the full market value of
the properties as just compensation.

The National Power Corporation's oft-cited basis for refusing to pay the full market value as just
compensation—Section 3A of Republic Act No.6 395 which provides that "only a right-of-way easement
thereon shall be acquired when the principal purpose for which such land is actually devoted will not be
impaired -has long been rejected by this Court.

Here, constructing transmission lines over Lloyds Richfield's properties impairs the principal purpose for
which the parcels of expropriated land were actually devoted: quarrying activities. Consequently, a
right-of-way easement will not suffice.

In the case at bar, the easement of right-of-way is a taking under the power of eminent domain.
Considering the nature and effect of the installation of the 230 KV Mexico-Limay transmission lines, the
limitation imposed by NPC against the use of the land for an indefinite period deprives private
respondents of its ordinary use.

Municipality of San Mateo, Isabela v. Smart Communications, G.R. No. 219506, June 23, 2021

Facts:

On 27 June 2005, petitioner Municipality of San Mateo, Isabela (petitioner) enacted Ordinance No.
2005-491 (subject Ordinance) entitled, "An Ordinance imposing Regulatory Fee known as Annual
Antenna/Tower Fee for the Operation if All Citizens Ban (CB), Very High Frequency (VHF), Ultra High
Frequency (UHF) and Cellular Sites/Relay Stations Within the Municipality" pursuant to its power under
Section 186 of Republic Act No. (RA) 71605 or the Local Government Code of 1991(LGC) to levy other
taxes, fees or charges within its jurisdiction.
Petitioner conducted public and committee hearings in relation to the subject ordinance on 09 May
2005, for which the Santiago City Branch of respondent Smart Communications, Inc. (SCI) was duly
notified. Upon conclusion of the hearing, the Committee on Rules and Amendments and Ways and
Means recommended the adoption of the subject Ordinance in its Report addressed to the Sangguniang
Bayan of petitioner.

After the subject Ordinance came into effect, Notices of Assessment were sent to SCI and other affected
businesses in the municipality. SCI was required to pay the tower fee of Php200,000.00 per year. Despite
the receipt of said notices, SCI failed to pay the assessed fees. SCI was then sent demand letters dated
14 July 2010, 31 July 2010 and 23 February 2011 for the collection of the unpaid fees.10 The SCI,
however, filed a Petition for Certiorari with application for Temporary Restraining Order (TRO) and/or
Writ of Preliminary Injunction before the RTC.

RTC ruled in SCI’s favor and declared the subject Ordinance as null and void. CA Affirmed.

Issue:

Whether or not the CA erred in ruling that the subject Ordinance is a tax measure and not a regulatory
fee.

Ruling:

Section 5, Article X of the 1987 Constitution provides that "[e]ach local government unit shall have the
power to create its own sources of revenues and to levy taxes, fees, and charges subject to such
guidelines and limitations as the Congress may provide, consistent with the basic policy of local
autonomy. Such taxes, fees, and charges shall accrue exclusively to the local government." Consistent
with this constitutional mandate, the LGC grants the taxing powers to each local government unit.
Specifically, Section 142 of the LGC grants municipalities the power to levy taxes, fees, and charges not
otherwise levied by provinces. Section 143 of the LGC provides for the scale of taxes on business that
may be imposed by municipalities while Section 147 of the same law provides for the fees and charges
that may be imposed by municipalities on business and occupation.

The term "taxes" has been defined by case law as "the enforced proportional contributions from
persons and property levied by the state for the support of government and for all public needs." While,
under the LGC, a "fee" is defined as "any charge fixed by law or ordinance for the regulation or
inspection of a business or activity."

From the foregoing jurisprudential and statutory definitions, it can be gleaned that the purpose of an
imposition will determine its nature as either a tax or a fee. If the purpose is primarily revenue, or if
revenue is at least one of the real and substantial purposes, then the exaction is properly classified as an
exercise of the power to tax. On the other hand, if the purpose is primarily to regulate, then it is deemed
an exercise of police power in the form of a fee, even though revenue is incidentally generated. Simply
stated, if generation of revenue is the primary purpose, the imposition is a tax, but if regulation is the
primary purpose, the imposition is properly categorized as a regulatory fee.
The Court En Banc in Smart Communications, Inc. v. Municipality of Malvar determined the nature of
Ordinance No. 18 assailed therein after a reading of the ordinance's whereas clauses which revealed
that the primary purpose of the ordinance was to regulate cell sites or telecommunications towers.
Since the whereas clauses showed that the ordinance served a regulatory purpose, it was ruled that the
case involved a fee and not a tax. The Court also underlined in said case that while the fees in issue may
contribute to the revenues of therein respondent, this is merely incidental. As such, the assailed fees are
not taxes.

In the case at bar, a cursory reading of the whereas clauses makes it apparent that the primary purpose
of Ordinance No. 2005-491 is "to regulate the proliferation of these CB [Citizens Band], VHF/UHF [Very
High Frequency/ Ultra High Frequency], parabolic discs and towers" erected within petitioner's
municipality "to ensure the safety of their operations." The subject ordinance underlines that: (1) "due
to its location, San Mateo is considered as strategic place for the installation and operation of repeater /
transmitter facilities of communication companies"; (2) "communication facilities such as cellular sites,
towers and parabolic discs intended for commercial and private uses start to proliferate" and that (3)
"these facilities, directly or indirectly, affect the populace."32 Evidently, the Ordinance was issued to
address the concerns grounded on the proliferation of the enumerated facilities which affect petitioner's
populace.

Considering the above, the main purpose of the assailed ordinance is clearly to regulate the installation
and maintenance of the enumerated communication facilities erected within the Municipality of San
Mateo, Isabela. Consequently, the fees imposed in Ordinance No. 2005-491 are primarily regulatory in
nature and not primarily revenue-raising. While the fees contribute to the revenues of petitioner, this
effect is merely incidental. Thus, the fees imposed in Ordinance No. 2005-491 are not taxes.

In this regard, Section 187 of the LGC, which outlines the procedure for questioning the constitutionality
of a tax ordinance, is inapplicable, rendering unnecessary the resolution of the issue on non-exhaustion
of administrative remedies. Ordinances that impose regulatory fees do not need to be challenged before
the Secretary of Justice. To stress, the procedure found in Section 187 must be followed when an
ordinance imposes a tax; the institution of an action in court without complying with the requirements
of the provision will lead to the dismissal of the case on the ground of non-exhaustion of administrative
remedies. However, when an ordinance imposes a fee, as in this case, direct recourse to the courts may
be had without prior protest before the Secretary of Justice. At any rate, this Court has previously
relaxed the application of the rules in view of the more substantive matters.

Estoconing v. People, G.R. No. 231298, October 07, 2020

Facts:

Estoconing is a professor at the Silliman University and the general manager of the Silliman University
Cooperative.
On January 9, 2012, an Information7 was filed against Estoconing for violating the Expanded Senior
Citizens Act.
Manuel Utzurrum, a member of the university’s cooperative, claimed that in 2011 he purchased his
favorite soft drink from the university cooperative and demanded a 20 per cent discount since he is
a senior citizen. He said that for eight times for eight purchases of soft drink, his demands were
rejected.
In his defense, Estoconing asserted that the Silliman University Cooperative, being a cooperative
registered under the Cooperative Development Authority (CDA), was exempted by law from the
coverage of the Expanded Senior Citizens Act.

He also insisted that as a member-owner of the cooperative, Utzurrum received the annual
patronage refund, so he was disqualified from demanding the 20 percent senior citizen discount
under the law’s no double discount provision.

Issue:
Whether cooperatives are exempt from taxation.
Ruling:
Yes. The SC said “the scope of the legislative power to tax not only includes the power to
determine the tax rate and its method of collection, but also whom to tax or to exclude from
taxation.”
In this instance, the legislature deliberately opted not to exercise its power to tax when it came to
cooperatives to encourage their formation and development. The Silliman University Cooperative
is a primary multi-purpose cooperative duly registered with the Cooperative Development
Authority on Jan. 11, 2010, and received its Certificate of Tax Exemption from the Bureau of
Internal Revenue on May 15, 2012.
The Certificate of Tax Exemption enumerates the tax exemptions and privileges granted to it under
Section 61 of Republic Act No. 9520. Section 61 provides that cooperatives that transact ‘business
with both members and non-members shall not be subject to tax on their transactions with
members,’ while cooperatives that transact with non-members will only be taxable if their
‘accumulated reserves and undivided net savings’ are more than Pl 0,000,000.
It is true that a business establishment’s availment of a tax benefit is ‘merely permissive, not
imperative.’ A business establishment may even opt to ignore the tax credit or tax deduction
altogether and consider its issuance of senior citizen discounts ‘as an act of beneficence, an
expression of its social conscience.’

“However, the option to avail of a tax benefit must still be available to the business establishment
and not be rendered illusory. Being forced to act benevolently is antithetical to the entire concept
of charitable giving.

“We acquit petitioner on the ground of reasonable doubt that the law applies to him.
“In so doing, we earnestly suggest that the offended senior citizen make a choice: to continue with
his habit of patronizing the cooperative, or to find a private establishment that will certainly sell
him his favorite drink with a certain discount.

“Life is full of choices; this is not the most difficult of them.

“To reiterate, the imposition of the senior citizen discount is a valid exercise of the State’s police
power to address social justice and human rights. The tax deduction scheme emanates from the
State’s exercise of its police power, which empowers it to ‘regulate the acquisition, ownership,
use, and disposition of property and its increments’ and –not its power of eminent domain.

“Given the possible ambiguity in the interpretation of the two laws, we find that the prosecution
was unable to support its claim beyond reasonable doubt that the Silliman University Cooperative,
as a restaurant operator, was obligated to issue a 20 percent senior citizen discount to senior
citizen members and non-members alike.

“We sympathize with the senior citizen who claimed to be the offended party here. We understand
how difficult it may have been for him to be denied the senior citizen discount from his favorite
watering hole for his favorite soft drink.

“Yet, we must take a larger view. It does not seem reasonable that cooperatives, favored by the
State for social justice reasons, will be at a disadvantage vis-a-vis private commercial
establishments. The latter are allowed by law to claim the senior citizen discount as a tax
deduction, and the State is not compelling them to reduce the potential benefits they could give to
their owners.

Thunderbird Pilipinas Hotels and Resorts, Inc. v. CIR, G.R. No. 211327, November 11, 2020

Facts:

Thunderbird Pilipinas is a domestic corporation that operates a casino and resort complex within the
Poro Point Special Economic and Freeport Zone in San Fernando City, La Union.

On November 19, 2008, the Bureau of Internal Revenue issued Assessment Notice  for deficiency income
tax and expanded withholding tax, respectively, together with a Formal Letter of Demand against
Thunderbird Pilipinas.

Thunderbird Pilipinas protested the assessments through a letter dated December 23, 2008 and a
supplemental protest dated February 18, 2009. The protest was denied by the Regional Director.

On March 30, 2009, Thunderbird Pilipinas received a collection letter from the Revenue District Officer
of San Fernando City, La Union, directing the payment of the assessed tax within 10 days from receipt.
Thunderbird Pilipinas replied on April 1, 2009 that it would appeal the Regional Director's decision to the
Court of Tax Appeals and requested for deferment of the collection.

On July 18, 2012, the Court of Tax Appeals found Thunderbird Pilipinas liable for deficiency income and
expanded withholding taxes. It held that since PAGCOR was no longer exempt from income tax,
pursuant to the rulings in Abakada Guro Party List v. Ermita and  PAGCOR v. Bureau of Internal
Revenue, Thunderbird Pilipinas-a the licensee/contractee of PAGCOR-is likewise subject to income tax
from its casino operations.

CTA En Banc upheld the decision of the CTA First Division.

Issue:

Whether PAGCOR's income tax exemption  inures to the benefit of PAGCOR's contractees or licensees in
connection with the operation of casinos
Ruling:

No. Section 13(2)(b) of Presidential Decree No. 1869 means that the Philippine Amusement and Gaming
Corporation (PAGCOR)'s income tax exemptions only extend to entities or individuals in a contractual
relationship with PAGCOR in connection with its casino operations. A PAGCOR licensee authorized to
operate its own casino does not fall within the purview of Section 13(2)(b). Its income from its casino
operations, therefore, is not tax-exempt.

Indeed, the presumption is that an exemption from "all taxes" or the exempting "in lieu of all
taxes" clause embraces only those taxes for which the taxpayer is directly liable, unless the exempting
statute specifically includes indirect taxes that are shifted to the taxpayer as part of the purchase
price.78 Section 13(2)(b) of Presidential Decree No. 1869 is one such provision specifically granting
exemption from indirect taxes.

Tax exemptions are strictly construed against the taxpayer.79 For an exemption to be deemed
conferred, it must be clearly and distinctly stated in the language of the law.80 Tax exemptions "are not
to be extended beyond the ordinary and reasonable intendment of the language actually used by the
legislative authority in granting the exemption."81

Nonetheless, while the tax exemption under Section 13(2)(b) of Presidential Decree No. 1869 inures to
the benefit of entities with whom PAGCOR has a contractual relationship, the law adds a qualification:
this contractual relationship must be "in connection with the operations of the casino(s) authorized to
be conducted under this Franchise[.]" Stated differently, the tax exemption is made available only to
those in a contractual relationship with PAGCOR in connection with PAGCOR's casino operations.
In other words, the clause "operations of the casino(s) authorized to be conducted under this Franchise"
under Section 13(2)(b) referred to casinos operated by PAGCOR itself.

The legislature, then, could not have envisioned that the clause would cover casinos operated by
PAGCOR licensees since, at that time, PAGCOR had the sole and exclusive authority to operate casinos.
Had that been its intention, Congress should have unequivocally provided in the amendatory law,
Republic Act No. 9487, that tax exemptions extend to PAGCOR licensees.

As stated earlier, it is a settled rule that tax exemptions are strictly construed and must be couched in
clear language. This Court has held that "if an exemption is found to exist, it must not be enlarged by
construction, since the reasonable presumption is that the state has granted in express terms all it
intended to grant at all[.]"

Thus, following this Court's pronouncement in Acesite, we construe Section 13(2)(b) of Presidential
Decree No. 1869 to mean that the tax exemption of PAGCOR extends only to those individuals or
entities that have contracted with PAGCOR in connection with PAGCOR's casino operations. The
exemption does not include private entities that were licensed to operate their own casinos.

Here, petitioner was authorized and licensed by PAGCOR to construct and operate a casino complex, by
virtue of the April 11, 2006 Memorandum of Agreement91 and the October 31, 2006
License.92 Petitioner does not fall within the purview of Section 13(2)(b). Therefore, revenues derived
by petitioner from its casino operations are not exempt from income tax.

Philippine Blooming Mills Employees Organization v. Philippine Blooming Mills Co., Inc., 51 SCRA 189
(1973)

Facts:

Philippine Blooming Mills Employees Organization (hereinafter referred to as PBMEO) is a legitimate

labor union composed of the employees of the respondent Philippine Blooming Mills Co., Inc.

Petitioners claim that on March 1, 1969, they decided to stage a mass demonstration at Malacañang on
March 4, 1969, and that they informed the respondent Company of their proposed demonstration.

The Management informed PBMEO that the demonstration is an inalienable right of the union
guaranteed by the Constitution but emphasized, however, that any demonstration for that matter
should not unduly prejudice the normal operation of the Company and warned the PBMEO
representatives that workers who belong to the first and regular shifts, who without previous leave of
absence approved by the Company, particularly , the officers present who are the organizers of the
demonstration, who shall fail to report for work the following morning (March 4, 1969) shall be
dismissed, because such failure is a violation of the existing CBA and, therefore, would be amounting to
an illegal strike.
Because the petitioners and their members numbering about 400 proceeded with the demonstration
despite the pleas of the respondent Company that the first shift workers should not be required to
participate in the demonstration, a charge against petitioners and other employees who composed the
first shift, charging them with a "violation of Section 4(a)-6 in relation to Sections 13 and 14, as well as
Section 15, all of Republic Act No. 875, and of the CBA providing for 'No Strike and No Lockout.'

In their answer, dated May 9, 1969, herein petitioners claim that they did not violate the existing CBA
because they gave the respondent Company prior notice of the mass demonstration on March 4, 1969;
that the said mass demonstration was a valid exercise of their constitutional freedom of speech against
the alleged abuses of some Pasig policemen; and that their mass demonstration was not a declaration of
strike because it was not directed against the respondent firm.

CIR found them guilty of bargaining in bad faith. CIR en banc dismissed reconsideration.

Issue:

Whether the demonstration staged by the petitioners are valid exercise of their rigts.

Ruling:

Yes. The Court held that in the hierarchy of civil liberties, the rights of free expression and of assembly
occupy a preferred position as they are essential to the preservation and vitality of our civil and political
institutions;  and such priority "gives these liberties the sanctity and the sanction not permitting dubious
intrusions."

The superiority of these freedoms over property rights is underscored by the fact that a mere
reasonable or rational relation between the means employed by the law and its object or purpose —
that the law is neither arbitrary nor discriminatory nor oppressive — would suffice to validate a law
which restricts or impairs property rights.  On the other hand, a constitutional or valid infringement of
human rights requires a more stringent criterion, namely existence of a grave and immediate danger of
a substantive evil which the State has the right to prevent. So it has been stressed in the main opinion of
Mr. Justice Fernando in Gonzales vs. Comelec and reiterated by the writer of the opinion in Imbong vs.
Ferrer.  It should be added that Mr. Justice Barredo in Gonzales vs. Comelec, supra, like Justices Douglas,
Black and Goldberg in N.Y. Times Co. vs. Sullivan, believes that the freedoms of speech and of the press
as well as of peaceful assembly and of petition for redress of grievances are absolute when directed
against public officials or "when exercised in relation to our right to choose the men and women by
whom we shall be governed,"  even as Mr. Justice Castro relies on the balancing-of-interests test.  Chief
Justice Vinson is partial to the improbable danger rule formulated by Chief Judge Learned Hand, viz. —
whether the gravity of the evil, discounted by its improbability, justifies such invasion of free expression
as is necessary to avoid the danger.

The respondent firm claims that there was no need for all its employees to participate in the
demonstration and that they suggested to the Union that only the first and regular shift from 6 A.M. to 2
P.M. should report for work in order that loss or damage to the firm will be averted. This stand failed
appreciate the sine qua non of an effective demonstration especially by a labor union, namely the
complete unity of the Union members as well as their total presence at the demonstration site in order
to generate the maximum sympathy for the validity of their cause but also immediately action on the
part of the corresponding government agencies with jurisdiction over the issues they raised against the
local police.

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

People v. Sapla, G.R. No. 244045. June 16, 2020

Facts:

In an Information dated 14 January 2014, the appellant was charged with violation of Section 5, Article II
of R.A. No. 9165 or Comprehensive Dangerous Drugs Act of 2002.

At around 1:00 in the afternoon, the RPSB hotline received a text message which stated that the subject
male person who [would] transport marijuana [was] wearing a collared white shirt with green stripes,
red ball cap, and [was] carrying a blue sack on board a passenger jeepney, with plate number AYA 270
bound for Roxas, Isabela. Subsequently, a joint checkpoint was strategically organized at the Talaca
command post.

The passenger jeepney then arrived at around 1:20 in the afternoon, wherein the police officers at the
Talaca checkpoint flagged down the said vehicle and told its driver to park on the side of the road.
Officers Labbutan and Mabiasan approached the jeepney and saw [accused-appellant Sapla] seated at
the rear side of the vehicle. The police officers asked [accused-appellant Sapla] if he [was] the owner of
the blue sack in front of him, which the latter answered in the affirmative. The said officers then
requested [accused-appellant Sapla] to open the blue sack. After [accused-appellant Sapla] opened the
sack, officers Labbutan and Mabiasan saw four (4) bricks of suspected dried marijuana leaves, wrapped
in newspaper and an old calendar. PO3 Labbutan subsequently arrested [accused-appellant Sapla],
informed him of the cause of his arrest and his constitutional rights in [the] Ilocano dialect. PO2
Mabiasan further searched [accused-appellant Sapla] and found one (I) LG cellular phone unit.
Thereafter, PO2 Mabiasan seized the four (4) bricks of suspected dried marijuana leaves and brought
[them] to their office at the Talaca detachment for proper markings.

On January 9, 2017, the RTC rendered its Decision convicting accused-appellant Sapla for violating
Section 5 of R.A. 9165. The RTC found that the prosecution was able to sufficiently establish the corpus
delicti of the crime. 

CA affirmed the decision of RTC. The CA found that although the search and seizure conducted on
accused-appellant Sapla was without a search warrant, the same was lawful as it was a valid warrantless
search of a moving vehicle. The CA held that the essential requisite of probable cause was present,
justifying the warrantless search and seizure.

Issue:

Whether there was a valid search and seizure conducted by the police officers. 

Ruling:

No. The Court finds for accused-appellant Sapla and immediately orders his release from incarceration.

As eloquently explained by the Court in People v. Tudtud (Tudtud),10 "the Bill of Rights is the bedrock of
constitutional government. If people are stripped naked of their rights as human beings, democracy
cannot survive and government becomes meaningless. This explains why the Bill of Rights, contained as
it is in Article III of the Constitution, occupies a position of primacy in the fundamental law way above
the articles on governmental power."

The right of the people against unreasonable searches and seizures is found in Article III, Section 2 of the
1987 Constitution. Hence, as a rule, a search and seizure operation conducted by the authorities is
reasonable only when a court issues a search warrant after it has determined the existence of probable
cause through the personal examination under oath or affirmation of the complainant and the witnesses
presented before the court, with the place to be searched and the persons or things to be seized
particularly described.

However, there are instances when a warrantless search and seizure is valid, to wit:

(1) warrantless search incidental to a lawful arrest;

(2) seizure of evidence in plain view;

(3) search of a moving vehicle;

(4) consented warrantless search;

(5) customs search;

(6) stop and frisk; and

(7) exigent and emergency circumstances.

Applying the foregoing to the instant case, it cannot be seriously disputed that the target of the search
conducted was not the passenger jeepney boarded by accused-appellant Sapla nor the cargo or
contents of the said vehicle. The target of the search was the person who matched the description given
by the person who called the RPSB Hotline, i.e., the person wearing a collared white shirt with green
stripes, red ball cap, and carrying a blue sack.

As explained in Comprado, "to extend to such breadth the scope of searches on moving vehicles would
open the floodgates to unbridled warrantless searches which can be conducted by the mere expedient
of waiting for the target person to ride a motor vehicle, setting up a checkpoint along the route of that
vehicle, and then stopping such vehicle when it arrives at the checkpoint in order to search the target
person."

Therefore, the search conducted in the instant case cannot be characterized as a search of a moving
vehicle.

Zabal v. Duterte, G.R. No. 238467, February 12, 2019

Facts:

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 Harry L. Roque, Jr. in a press briefing the
following day 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. They fear that if the closure pushes through, they would suffer grave and irreparable damage.
Hence, despite the fact that the government was then yet to release a formal issuance on the
matter, petitioners filed the petition praying that a TEMPORARY RESTRAINING ORDER (TRO) and/or a
WRIT OF PRELIMINARY PROHIBITORY INJUNCTION be immediately issued.

Issue: Whether Proclamation No. 475 impinges on their constitutional right to due process since they
were deprived of the corollary right to work and earn a living by reason of the issuance thereof.

Ruling:

Concededly, "[a] profession, trade or calling is a property right within the meaning of our constitutional
guarantees. One cannot be deprived of the right to work and the right to make a living because these
rights are property rights, the arbitrary and unwarranted deprivation of which normally constitutes an
actionable wrong." Under this premise, petitioners claim that they were deprived of due process when
their right to work and earn a living was taken away from them when Boracay was ordered closed as a
tourist destination. It must be stressed, though, that "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." Otherwise, 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, government measures implemented pursuant to the
said state power would be stymied or invalidated. 

In any case, petitioners, particularly Zabal and Jacosalem, cannot be said to have already acquired
vested rights to their sources of income in Boracay. As heretofore mentioned, they are part of the
informal sector of the economy where earnings are not guaranteed.

Here, Zabal and J acosalem 's asserted right to whatever they may earn from tourist arrivals in Boracay is
merely an inchoate right or one that has not fully developed and therefore cannot be claimed as one's
own. An inchoate right is a mere expectation, which may or may not come into fruition. "It is contingent
as it only comes 'into existence on an event or condition which may not happen or be performed until
some other event may prevent their vesting.’’

Besides, Proclamation No. 475 does not strip Zabal and Jacosalem of their right to work and earn a
living. They are free to work and practice their trade elsewhere. That they were not able to do so in
Boracay, at least for the duration of its closure, is a necessary consequence of the police power measure
to close and rehabilitate the island.

NTC v. Brancomm Cable and Television Network Co., G.R. No. 204487, December 5, 2019

Facts:
On November 4, 2008, Cable Link filed four applications for the issuance of certificates of authority to
install, operate and maintain CATV systems in the Municipalities of Sta. Ana , Candaba,  Mexico, and
Arayat ,all in the Province of Pampanga.

During the scheduled hearing on November 25 and 26, 2008 for the presentation of Cable Link's
evidence on compliance with the jurisdictional requirements of its applications in NTC BMC Case Nos.
2008-150, 2008-152 and 2008-153, Brancomm opposed the same and manifested that it was not
furnished with copies of Cable Link's applications as well as the annexes attached thereto in violation of
Section 2, Rule 8 of the 2006 Revised Rules of Practice and Procedure of the National
Telecommunications Commission (NTC Rules) . Despite Brancomm's opposition, Nilo L. Lozada, NTC's
hearing officer, proceeded with the hearing on the jurisdictional requirements of the applications
instead of resetting the same.

On December 5, 2008, Brancomm filed its Opposition and Omnibus Motion15 which sought for the
following: (a) dismissal of the applications docketed as NTC BMC Case Nos. 2008-150, 2008-152 and
2008-153 on the ground that the one who signed the verification and certification' of non forum
shopping of the same was not shown to have been expressly authorized to do so; the jurat that appears
on the verification pages of the applications bore no competent evidence of identity of the person
representing the applicant and did not indicate if the notary public personally knows the applicant or the
person representing the latter; and the applications failed to comply with NTC Office Order No. 106-10-
2007 which prescribed the minimum requirements for the acceptance of applications for CATV system;
and (b) annulment of the proceedings that transpired on November 25, 2008 for failure of Cable Link to
furnish Brancomm with copies of the affidavits of its witnesses three days before the scheduled hearing
in violation of its right to due process as well as Section 5, Rule 11 of the NTC Rules 

In denying Brancomm's Opposition and Omnibus Motion, NTC ratiocinated that the Minutes of the
Special Meeting of the Board of Directors18 dated October 31, 2008, that Cable Link submitted ratified
whatever action Atty. Bolante has undertaken in its behalf such as the filing of the said applications.
Also, the purported lack of verification of the applications is a matter of form which cannot be a ground
for their outright dismissal. The defective jurat had already been cured by Cable Link's submission of
amended ones that are compliant with the 2004 Rules on Notarial Practice.19 The NTC likewise held
that the alleged failure of Cable Link to attach in its applications evidence of its technical and financial
capabilities does not merit their outright dismissal under NTC Office Order No. 106-10-2007 as the
requirement to submit the documents specified in the office order was meant only to expedite the
evaluation of the applications. Contrary to the assertion of Brancomm, it was not denied of due process
despite the fact that it was not given copies of the testimonies of Cable Link's witnesses three days
before the scheduled hearing considering that it will be given ample time to scrutinize and review said
testimonies before Brancomm conducts its cross examination.

An MR was filed with the NTC but was denied. CA reversed the decision of the NTC and ruled that
respondent was denied due process. Hence this petition for certiorari.

Issue:

Whether respondent was denied due process.

Ruling:

No. The court explained that an important concept to remember in procedural due process is that the
Due Process Clause is set in motion only when there is actual or a risk of an impending deprivation of
life, liberty or property . Accordingly, "life," "liberty," and "property" are broad terms and are purposely
left to gather meaning from experience . In the case of "property" to which this case involves, it has
been commonly understood to include interests therein which pertain to some form of benefit enjoyed
by owners. Thus, to have a "property interest" in a benefit, a person or entity must clearly have
a legitimate claim of entitlement to it which is more than an abstract need, desire or unilateral
expectation .
In this case, Brancomm's right to due process was never violated by the NTC as the former had not
established or demonstrated any vested right worthy of legal protection. A license does not vest
absolute rights to the holder.66 It is not a contract, property or a property right protected by the due
process clause of the Constitution. Relatedly, there certainly is no such thing as a vested right to
expectation of future profits which can be gained from possession of a franchise. 

Agabon v. NLRC, G.R. No. 158693, November 17, 2004

Facts: Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and
installing ornamental and construction materials. It employed petitioners Virgilio Agabon and Jenny
Agabon as gypsum board and cornice installers on January 2, 1992 until February 23, 1999 when they
were dismissed for abandonment of work. Petitioners then filed a complaint for illegal dismissal and
payment of money claims and on December 28, 1999, the Labor Arbiter rendered a decision declaring
the dismissals illegal and ordered private respondent to pay the monetary claims. It was found out from
the investigations that the abandonment from work by the petitioners was because they subcontracted
with another company to which they have been remanded before when they  committed the same
initially. The petitioners alleged that due process has not been observed.

Issues: Whether or not petitioners dismissal are illegal.

Held: No. Accordingly, petitioners’ dismissal was for a just cause. They had abandoned their
employment and were already working for another employer.
To dismiss an employee, the law requires not only the existence of a just and valid cause but also enjoins
the employer to give the employee the opportunity to be heard and to defend himself.
Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. It is a
form of neglect of duty, hence, a just cause for termination of employment by the employer. 
After establishing that the terminations were for a just and valid cause, we now determine if the
procedures for dismissal were observed.
The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of the Omnibus
Rules Implementing the Labor Code:
Standards of due process: requirements of notice. – In all cases of termination of employment, the
following standards of due process shall be substantially observed:
For termination of employment based on just causes as defined in Article 282 of the Code:
1. A written notice served on the employee specifying the ground or grounds for termination,
and giving to said employee reasonable opportunity within which to explain his side;
1. A hearing or conference during which the employee concerned, with the assistance of
counsel if the employee so desires, is given opportunity to respond to the charge, present
his evidence or rebut the evidence presented against him; and
(c) A written notice of termination served on the employee indicating that upon due consideration of all
the circumstances, grounds have been established to justify his termination.
In case of termination, the foregoing notices shall be served on the employee’s last known address.

Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the
employee two written notices and a hearing or opportunity to be heard if requested by the employee
before terminating the employment: a notice specifying the grounds for which dismissal is sought a
hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of the
decision to dismiss; and (2) if the dismissal is based on authorized causes under Articles 283 and 284, the
employer must give the employee and the Department of Labor and Employment written notices 30
days prior to the effectivity of his separation.

From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause
under Article 282 of the Labor Code, for an authorized cause under Article 283, or for health reasons
under Article 284, and due process was observed; (2) the dismissal is without just or authorized cause
but due process was observed; (3) the dismissal is without just or authorized cause and there was no
due process; and (4) the dismissal is for just or authorized cause but due process was not observed.

The present case squarely falls under the fourth situation. The dismissal should be upheld because it was
established that the petitioners abandoned their jobs to work for another company. Private respondent,
however, did not follow the notice requirements and instead argued that sending notices to the last
known addresses would have been useless because they did not reside there anymore. Unfortunately
for the private respondent, this is not a valid excuse because the law mandates the twin notice
requirements to the employee’s last known address. Thus, it should be held liable for non-compliance
with the procedural requirements of due process.

Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should
not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the
employee for the violation of his statutory rights, as ruled in Reta v. National Labor Relations
Commission.36 The indemnity to be imposed should be stiffer to discourage the abhorrent practice of
"dismiss now, pay later," which we sought to deter in the Serrano ruling. The sanction should be in the
nature of indemnification or penalty and should depend on the facts of each case, taking into special
consideration the gravity of the due process violation of the employer.

Garcia v. Executive Secretary, GR No. 198554, July 30, 2012

FACTS: Garcia, tried by the Special General Court Martial NR 2, was charged with and convicted of
violation of the 96th Article of War (Conduct Unbecoming an Officer and Gentleman) and violation of
the 97th Article of War (Conduct Prejudicial to Good Order and Military Discipline) for failing to disclose
all his assets in his Sworn Statement of Assets and Liabilities and Net worth for the year 2003 as required
by RA 3019, as amended in relation to RA 6713.

Garcia, among others, argued that the confirmation issued by the OP directing his two-year detention in
a penitentiary had already been fully served following his preventive confinement subject to Article 29
of the RPC (Revised Penal Code). He was released on December 16, 2010 after a preventive confinement
for six years and two months. He was initially confined at his quarters at Camp General Emilio Aguinaldo
before he was transferred to the Intelligence Service of the Armed Forces of the Philippines (ISAFP)
Detention Center, and latter to the Camp Crame Custodial Detention Center.

Hence, on September 16, 2011, or a week after the OP confirmed the sentence of the court martial
against him, Garcia was arrested and detained and continues to be detained, for 2 years, at the
maximum security compound of the National Penitentiary in Muntinlupa. The OP stated that Art 29 of
the RPC is not applicable in Military Courts for it is separate and distinct from ordinary courts.

Hence, this petition.

ISSUE: (1) Whether or not Article 29 of the RPC is applicable in Military Courts; and (2) Whether or not
the application of Article 29 of the RPC in the Articles of War is in accordance with the Equal Protection
Clause of the 1987 Constitution

RULING: (1) The Court ruled that applying the provisions of Article 29 of the Revised Penal Code (RPC)
(Period of preventive imprisonment deducted from time of imprisonment), the time within which the
petitioner was under preventive confinement should be credited to the sentence confirmed by the
Office of the President, subject to the conditions set forth by the same law.

The Court held that “the General Court Martial is a court within the strictest sense of the word and acts
as a criminal court.” As such, certain provisions of the RPC, insofar as those that are not provided in the
Articles of War and the Manual for Courts-Martial, can be supplementary. “[A]bsent any provision as to
the application of a criminal concept in the implementation and execution of the General Court Martial’s
decision, the provisions of the Revised Penal Code, specifically Article 29 should be applied. In fact, the
deduction of petitioner’s (Garcia) period of confinement to his sentence has been recommended in the
Staff Judge Advocate Review.”

(2) The Court further held that the application of Article 29 of the RPC in the Articles of War is in
accordance with the Equal Protection Clause of the 1987 Constitution. “The concept of equal justice
under the law requires the state to govern impartially, and it may not draw distinctions between
individuals solely on differences that are irrelevant to a legitimate governmental objective.

It, however, does not require the universal application of the laws to all persons or things without
distinction. What it simply requires is equality among equals as determined according to a valid
classification. Indeed, the equal protection clause permits classification.

Such classification, however, to be valid must pass the test of reasonableness. The test has four
requisites: (1) the classification rests on substantial distinctions; (2) it is germane to the purpose of the
law; (3) it is not limited to existing conditions only; and (4) it applies equally to all members of the same
class. "Superficial differences do not make for a valid classification." 42 In the present case, petitioner
belongs to the class of those who have been convicted by any court, thus, he is entitled to the rights
accorded to them. Clearly, there is no substantial distinction between those who are convicted of
offenses which are criminal in nature under military courts and the civil courts. Furthermore, following
the same reasoning, petitioner is also entitled to the basic and time-honored principle that penal
statutes are construed strictly against the State and liberally in favor of the accused. 43 It must be
remembered that the provisions of the Articles of War which the petitioner violated are penal in nature.