Consti 2 Module 1a To 1c PP em Tax

CONSTITUTIONAL LAW 2 – MOD 1 to 1A CASES
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MODULE 1-A. POLICE POWER

• Definition, Characteristics, Scope & Basis
1) Short Title: PRC vs. De Guzman (G.R. No. 144681, June 21, 2004)
Full Title: PROFESSIONAL REGULATION COMMISSION (PRC), CHAIRMAN HERMOGENES P. POBRE, et.al petitioners, vs.
ARLENE V. DE GUZMAN, VIOLETA V. MENESES, et. al, respondents.
Facts: Respondents are all graduates of the Fatima College of1

Medicine. They passed the Physician Licensure Examination conducted in Feb. of 1993 by the Board of Medicine.
Petitioner PRC then released their names as successful examinees in the medical licensure examination.
Shortly, the Board observed that the grades of the 79 successful examinees from Fatima College in the 2 most difficult
subjects in the medical licensure exam (Bio-chem & OB-Gyne), were unusually and exceptionally high:
 11 Fatima examinees scored 100% in Bio-Chem;
 10 got 100% in OB-Gyne;
 11 got 99% in Bio-Chem; and
 21 scored 99% in OB-Gyne.
The Board also observed that many of those who passed from Fatima got marks of 95% or better in both subjects,
and no one got marks of lower than 90%. This was a record-breaking phenomenon in the history of the Physician
Licensure Examination.
On June 1993, the Board issued Resolution No. 19, withholding the registration as physician of all the examinees from
the Fatima College. The PRC asked the Fr. Beinvenido Nebres, an expert mathematician and authority in statistics and the
NBI to conduct a statistical analysis of the results in the subjects and to investigate whether any anomaly or irregularity
marred the February 1993 examination, respectively.
Fr. Nebres reported that the scores of Fatima College examinees were not only incredibly high but unusually clustered
close to each other. He concluded that there must be some unusual reason creating the clustering of scores in the 2
subjects. On the other hand, the NBI reported “the questionable passing rate of Fatima examinees leads to the conclusion
that they gained early access to the test questions.”
On July 5, 1993, respondents filed a special civil action (SCA) for mandamus, with prayer for Preliminary Mandatory
Injunction (PMI) with the RTC.
Meanwhile, the Board issued Resolution No. 26, charging respondents with “immorality, dishonest conduct, fraud, and
deceit” in connection with the 2 subjects. It recommended that the tests results of respondents be nullified. The case was
docketed as Administrative Case No. 1687 by the PRC.
RTC - granted the PMI. RTC allowed the respondents to take their physician’s oath and to register as duly licensed
physician, and enter their names in the rolls of the PRC. Petitioners then filed a special civic action for certiorari with the
CA.
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CA - The CA affirmed the decision of the RTC and held that the respondents complied with all the statutory requirements
for admission in to the licensure examination for physicians in Feb. 1993. Respondents likewise passed the examination.
Having fulfilled the requirements of Republic Act No. 2382,14 they should be allowed to take their oaths as physicians and
be registered in the rolls of the PRC.
Issue: Whether the respondents are entitled to a writ of mandamus against petitioner’s resolution that IF EVER THERE
IS SOME DOUBT AS TO THE MORAL FITNESS OF EXAMINEES, THE ISSUANCE OF LICENSE TO PRACTICE MEDICINE IS
NOT AUTOMATICALLY GRANTED TO THE SUCCESSFUL EXAMINEES.
Ruling: NO.
NOTE: They point out that for a writ of mandamus to issue, the applicant must have a well-defined, clear and certain
legal right to the thing demanded and it is the duty of the respondent to perform the act required. Thus, mandamus may
be availed of only when the duty sought to be performed is a ministerial and not a discretionary one.
Mandamus is a command issuing from a court of competent jurisdiction, in the name of the state or the
sovereign, directed to some inferior court, tribunal or board, or to some corporation or person requiring the
performance of a particular duty therein specified, which duty results from the official station of the party to
whom the writ is directed, or from operation of law. For mandamus to prosper, there must be a showing that the
officer, board, or official concerned, has a clear legal duty, not involving discretion. Moreover, there must be
statutory authority for the performance of the act, and the performance of the duty has been refused.
The question now is whether the petitioners have the duty to administer the Hipprocratic Oath and
register respondents as physicians? The SC answered YES (on the affirmative).
To determine whether the petitioner had the ministerial obligation to administer the Hippocratic Oath to
respondents and register them as physicians, recourse must be to the entirety of the Medical Act of 1959.
A careful reading of Sec. 20 of the Act discloses that the law uses the word “shall” with respect to the issuance of
certificates of registration. Thus, the petitioners “shall” sign and issue certificates of registration to those who have
satisfactorily complied with the requirements of the Board.” In statutory construction the term “shall” is a word of
command. It is given imperative meaning. Thus, when an examinee satisfies the requirements for the grant of his
physician’s license, the Board is obliged to administer to him his oath and register him as a physician pursuant to such
law.
However, the surrounding circumstances in this case call for serious inquiry concerning the satisfactory
compliance with the Board requirements by the respondents. The unusually high scores in the two most difficult subjects
was phenomenal, according to Fr. Nebres, the... consultant of PRC on the matter, and raised grave doubts about the
integrity, if not validity, of the tests. These doubts have to be appropriately resolved.
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Under the second paragraph of Section 22, the Board is vested with the power to conduct administrative
investigations and "disapprove applications for examination or registration," pursuant to the objectives of Rep. Act No.
2382 as outlined in Section 1[26]... thereof. In this case, after the investigation, the Board filed before the PRC, Adm.
Case No. 1687 against the respondents to ascertain their moral and mental fitness to practice medicine, as required by
Section 9[27] of Rep. Act No. 2382
Until the moral and mental fitness of the respondents could be ascertained, according to
petitioners, the Board has discretion to hold in abeyance the administration of the Hippocratic Oath and
the issuance of the certificates to them. The writ of mandamus does not lie to compel performance of an
act which is not duly authorized.
The function of mandamus is not to establish a right but to enforce one that has been established by law. If no
legal right has been violated, there can be no application of a legal remedy, and the writ of mandamus is a legal remedy
for a legal right. There must be a well-defined, clear and certain legal right to the thing demanded. It so long established
rule that a license to practice medicine is a privilege or franchise granted by the government.
Every citizen has a constitutional right to select a profession or course of study subject to a fair,
reasonable, and equitable admission and academic requirements. However, their exercise of this right may
be regulated pursuant to the police power of the State to safeguard health, morals, peace, education,
order, safety, and general welfare of the people.
This regulation takes particular pertinence in the field of medicine, to protect the public from the potentially
deadly effects of incompetence and ignorance among those who would practice medicine. It must be stressed,
nevertheless, that this power to regulate cannot be exercised in an arbitrary, despotic, or oppressive
manner.
In the present case, the regulations prescribes by the Board can be seen it the guidelines provided for in RA
2382, which prescribes the requirements for admission to the practice of medicine, the qualifications of candidates for the
board examinations, the scope and conduct of the examinations, the ground for denying the issuance of a physician’s
license, or revoking a license that has been issued.
Should doubt taint or mar the compliance as being less than satisfactory, then the privilege will not issue. For
said privilege is... distinguishable from a matter of right, which may be demanded if denied. Thus, without a definite
showing that the aforesaid requirements and conditions have satisfactorily met, the court may not grant the writ of
mandamus to secure said privilege without thwarting the legislative will.
On the Ripeness of the Petition for Mandamus Petitioners argue that the administrative remedies had not been
exhausted; hence, the CA should have dismissed the petition for mandamus for being premature.
As a rule, mandamus will not live when administrative remedies are still available. However, the
doctrine of exhaustion of administrative remedies does not apply where, as in this case, a pure question of
law is raised. WHEREFORE the instant petition is granted. The decisions of the RTC and the CA are reversed and set
aside and the writ of mandamus is nullified and set aside. RULED IN FAVOR OF THE PRC
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2) Short Title: Lorenzo vs. Director of Health (50 Phil 595)

Full Title: G.R. No. 27484 September 1, 1927
ANGEL LORENZO, petitioner-appellant, vs. THE DIRECTOR OF HEALTH, respondent-appelle.
The purpose of this appeal is to induce the court to set aside the judgment of the Court of First Instance of
Manila sustaining the law authorizing the segregation of lepers, and denying the petition for habeas corpus , by
requiring the trial court to receive evidence to determine if leprosy is or is not a contagious disease.
Facts: Angel Lorenzo was a leper. He was confined in San Lazaro Hospital in Manila in conformity with the provisions of
Section 1058 of the Administrative Code, authorizing the segregation of lepers.
The Philippine law pertaining to the segregation of lepers is found in article XV of chapter 37 of the Administrative
Code. Codal section 1058 empowers the Director of Health and his authorized agents "to cause to be apprehended, and
detained, isolated, or confined, all leprous persons in the Philippine Islands. "In amplification of this portion of the law are
found provisions relating to arrest of suspected lepers, medical inspection and diagnostic procedure, confirmation of
diagnosis by bacteriological methods, establishment of hospitals, detention camps, and a leper colony, etc.”
Lorenzo filed petition for a writ of habeas corpus with the Court of First Instance of Manila, alleging that his
confinement in said hospital was in violation of his constitutional rights. He alleged that human beings are not incurable
with leprosy and that the disease may not be communicated by contact. The trial court sustained the law and denied the
petition for habeas corpus. Lorenzo appealed, hence this case.
Issues:
1. Whether the Administrative Code provision on the confinement of lepers is violative of one's constitutional right.
2. May the court resolve the question whether or not leprosy is a contagious disease?
Ruling:
1. No. Section 1058 of the Administrative Code was enacted by the legislative body in the legitimate exercise of the police
power which extends to the preservation of the public health. It was place on the statute books in recognition of leprosy
as a grave health problem. The methods provided for the control of leprosy plainly constitute due process of law.
Judicial notice will be taken of the fact that leprosy is commonly believed to be an infectious disease tending to
cause one afflicted with it to be shunned and excluded from society, and that compulsory segregation of lepers as a
means of preventing the spread of the disease of supported by high scientific authority.
Judicial notice is used by a court when it declares a fact presented as evidence as true without a formal
presentation of evidence.
Upon this view, laws for the segregation of lepers have been provided the world over. Similarly, the local
legislature has regarded leprosy as a contagious disease and has authorized measures to control the dread scourge. To
that forum must the petitioner go to reopen the question.
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2. The assumption must be that if evidence was required to establish the necessity for the law, that it was before the
legislature when the act was passed. In the case of a statute purporting the have been enacted in the interest of the
public health, all questions relating to the determination of matters of fact are for the legislature.
If there is probable basis for sustaining the conclusion reached, its findings are not subject to judicial review.
Debatable questions are for the Legislature to decide. The courts do not sit to resolve the merits of conflicting theories.
(Lorenzo vs Director of Health, No. 27484 September 1, 1927)
3) Short Title: People vs. Chan (65 Phil 64)

Full Title: THE PEOPLE OF THE PHILIPPINES, PLAINTIFF AND APPELLANT, VS. REMIGIO B. CHAN, DEFENDANT AND
APPELLEE. [ G.R. No. 45435, June 17, 1938 ]
The legal question involved in this appeal is whether a municipal ordinance which prohibits the sale by first run
cinematographs of tickets in excess of their seating capacity, is discriminatory and, therefore, unconstitutional.
Facts: Remigio B. Chan, manager of the Capitol Theatre, sold to the public tickets in excess of seating capacity. The MTC
charged and sentenced him to pay a fine for doing such act as it violates ordinance No. 2347.
In Section 1, it provides that all first run theatres or cinematographs should register their seating capacity with
the City Treasurer, and in section 2 it prohibits the sale of tickets in said theatres or cinematographs in excess of their
registered seating capacity.
Before the approval of Ordinance No. 2347, Ordinance No. 2188. Section 1 of which divides cinematographs into
three different classes; first, second and third. The first class includes those located on certain and specified streets like
Rosario, Escolta, etc., which exhibit films for the first time; those belonging to the second class are those which, not
being located on said streets, also exhibit films for the first time, and those which, being located on said streets, regularly
show films for the second time or which have the exclusive right to show second-hand films; and the third class
comprehends all those which are not included in the first and second class
He appealed to the Court of First Instance of Manila wherein the information was dismissed on the ground that
said ordinance is unconstitutional and void for being discriminatory.
The respondent contends that discrimination in the ordinance is very obvious inasmuch as there is no reasonable
or natural basis for the imposition of a burden on first run theatres and the exemption therefrom of those which are not
thus classified.
Thereafter, fiscal appealed.
Issue: Whether Ordinance No. 2347 and 2188 are unconstitutional for being discriminatory.
Ruling: NO. The said ordinances are not discriminatory thus both are CONSTITUTIONAL.
It is to be noted that if it is admitted that the restriction on the sale of tickets is imposed on first run cinematographs only
and that those cinematographs which are not so classified are exempted therefrom, then there can be no discrimination.
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The reason for the ordinances: the films which are shown for the first time attract a large attendance, and the
theatre or cinematograph, whether it is first or second class, presenting shows for the first time, would be suffocatingly
overcrowded if the number of tickets were not limited. This is the reason for the prohibition of the sale of tickets in
excess of the seating capacity. The prohibition applies with equal force wherever the same reason exists, that
is, to first and second class theatres which show films for the first time.
Class legislation discriminating against some and favoring others is prohibited. But classification on a reasonable
basis, and to made arbitrarily or capriciously, is permitted. The trues governing classification are briefly as follows: -The
classification must be based on substantial distinctions which make real differences; -it must be germane to the purposes
of the law; -it must not be limited to existing conditions only, and must apply equally to each member of the class.
To go back to our definition of due process of law and equal protection of the laws, there exists a law; the law
seems to be reasonable; it is enforced according to the regular methods of procedure prescribed; and it applies alike to
all of a class.
The City of Manila exercises police power by delegation and in the exercise of that power, it is authorized to enact
ordinances for the regulation of the operation of theaters and cinematographs.
RULING is Reversed and remanded to CFI for further proceedings.
4) Short Title: Ichong vs. Hernandez (101 Phil 1155)

Full Title: G.R. No. L-7995 May 31, 1957
LAO H. ICHONG, in his own behalf and in behalf of other alien residents, corporations and partnerships adversely
affected. by Republic Act No. 1180, petitioner, vs.
JAIME HERNANDEZ, Secretary of Finance, and MARCELINO SARMIENTO, City Treasurer of Manila,
respondents.
Facts: Petitioner, also in behalf of other alien residents’ corporations and partnerships, brought this action to obtain a
judicial declaration that RA 1180 is unconstitutional.
RA No. 1180 entitled "An Act to Regulate the Retail Business" was enacted with an effect of nationalizing the
retail trade business. The main provisions of the Act are:
(1) a prohibition against persons, not citizens of the Philippines, and against associations, partnerships, or
corporations the capital of which are not wholly owned by citizens of the Philippines, from engaging directly or
indirectly in the retail trade;
(2) an exception from the above prohibition in favor of aliens actually engaged in said business on May
15, 1954, who are allowed to continue to engaged therein, unless their licenses are forfeited in accordance with
the law, until their death or voluntary retirement in case of natural persons, and for ten years after the approval
of the Act or until the expiration of term in case of juridical persons;
3) an exception therefrom in favor of citizens and juridical entities of the United States;
(4) a provision for the forfeiture of licenses (to engage in the retail business) for violation of the laws on
nationalization, control weights and measures and labor and other laws relating to trade, commerce and industry;
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(5) a prohibition against the establishment or opening by aliens actually engaged in the retail business of
additional stores or branches of retail business;
(6) a provision requiring aliens actually engaged in the retail business to present for registration with the
proper authorities a verified statement concerning their businesses, giving, among other matters, the nature of
the business, their assets and liabilities and their offices and principal offices of judicial entities; and
(7) a provision allowing the heirs of aliens now engaged in the retail business who die, to continue such
business for a period of six months for purposes of liquidation.
Petitioner contends, among others, that said act violates the equal protection of laws and that it violates the
treaty of the Philippines with China. Petitioner further claims that the act is unconstitutional on the grounds that:
(1) it denies to alien residents the equal protection of the laws and deprives of their liberty and property without
due process of law ;
(2) the subject of the Act is not expressed or comprehended in the title thereof;
(3) the Act violates international and treaty obligations of the Republic of the Philippines;
(4) the provisions of the Act against the transmission by aliens of their retail business thru hereditary succession,
and those requiring 100% Filipino capitalization for a corporation or entity to entitle it to engage in the retail
business, violate the spirit of Sections 1 and 5, Article XIII and Section 8 of Article XIV of the Constitution.
Solicitor General and Fiscal of the City of Manila contend that the act was a valid exercise of the police power of
the State which exercise is authorized in the Constitution in the interest of national economic survival, that the Act has
only one subject embraced in the title; that not a single treaty was infringed by said act.; and that as regards hereditary
succession, only the form is affected but the value of the property is not impaired.
Issue: Whether RA 1180 is unconstitutional on the grounds that its exercise violates one’s right to due process and equal
protection as guaranteed by the Constitution.
Ruling: NO. The Court finds the enactment of RA 1180 to clearly fall within the scope of police power of the
State. It is clear that the law in question was enacted to remedy a real and actual threat and danger to the
national economy posed by alien dominance and control of retail business and free citizens and country
from the said dominance and control.
It has been said the police power is so far - reaching in scope, that it has become almost impossible to limit its
sweep. As it derives its existence from the very existence of the State itself, it does not need to be
expressed or defined in its scope; it is said to be co-extensive with self-protection and survival, and as such
it is the most positive and active of all governmental processes, the most essential, insistent and illimitable.
Especially is it so under a modern democratic framework where the demands of society and of nations have
multiplied to almost unimaginable proportions; the field and scope of police power has become almost boundless, just as
the fields of public interest and public welfare have become almost all-embracing and have transcended human foresight.
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However, the Constitution has set forth limitations thereof and the most important of these are: the due process clause
and the equal protection clause.
The conflict, therefore, between police power and the guarantees of due process and equal protection of the laws
is more apparent than real. Properly related, the power and the guarantees are supposed to coexist. The balancing is the
essence or, shall it be said, the indispensable means for the attainment of legitimate aspirations of any democratic
society. There can be no absolute power, whoever exercise it, for that would be tyranny. Yet there can neither be
absolute liberty, for that would mean license and anarchy. So the State can deprive persons of life, liberty and property,
provided there is due process of law; and persons may be classified into classes and groups, provided everyone is given
the equal protection of the law. The test or standard, as always, is reason. The police power legislation must be
firmly grounded on public interest and welfare, and a reasonable relation must exist between purposes and
means. And if distinction and classification has been made, there must be a reasonable basis for said distinction.
The best evidence to determine the alien dominance in retail business are the statistics on the retail trade, which
put down the figures in black and white. Between the constitutional convention year (1935), when the fear of alien
domination and control of the retail trade already filled the minds of our leaders with fears and misgivings, and the year
of the enactment of the nationalization of the retail trade act (1954), official statistics unmistakably point out to the ever-
increasing dominance and control by the alien of the retail trade. Statistical figures reveal that in percentage
distribution of assets and gross sales, alien participation has steadily increased during the years. It is true,
of course, that Filipinos have the edge in the number of retailers, but aliens more than make up for the
numerical gap through their assets and gross sales which average between six and seven times those of
the very many Filipino retailers.
The Court finds that law does not also violate the equal protection clause of the Constitution
because sufficient grounds exist for the distinction between alien and citizen in the exercise of the
occupation regulated, nor the due process of law clause, because the law is prospective in operation and
recognizes the privilege of aliens already engaged in the occupation and reasonably protects their
privilege. The wisdom and efficacy of the law to carry out its objectives appear to us to be plainly evident — as a matter
of fact it seems not only appropriate but actually necessary — and that in any case such matter falls within the
prerogative of the Legislature, with whose power and discretion the Judicial department of the Government may not
interfere.
5) Short Title: Gould vs. Gould (61 Atl. 604)

Full Title: 78 Conn. 242 (Conn. 1905) 61 A. 604
Facts: In 1895 a statute was enacted, of which the first section reads as follows: "No man and woman, either of
whom is epileptic, imbecile, or feebleminded, shall intermarry, or live together as husband and wife, when
the woman is under forty-five years of age. Any person violating or attempting to violate any of the
provisions of this section shall be imprisoned in the State prison not less than three years."
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Public Acts of 1895, p. 677, Chap. 325. Cf. General Statutes, § 1354. In 1899 the plaintiff, at the age of twenty-
two, married the defendant, who was an epileptic. In 1903 a child was born, issue of the marriage, and soon afterwards
the plaintiff, then first learning of the statute mentioned, left the defendant, and brought this suit for a divorce or a
decree that the marriage was null and void.
In her complaint she alleged that the defendant, though an epileptic, falsely and fraudulently concealed this fact
from her and represented that he had never had epilepsy, in consequence of which representations she, believing them
to be true, had been induced to enter the contract of marriage.
On the trial in this court, no argument was submitted in behalf of the defendant. The proper disposition of a
cause of this character is however a matter of public concern, in the interest of society, and we feel bound to examine
such considerations in support of the judgment appealed from as he might have urged, had he been represented by
counsel.
That epilepsy is a disease of a peculiarly serious and revolting character, tending to weaken mental force, and
often descending from parent to child, or entailing upon the offspring of the sufferer some other grave form of nervous
malady, is a matter of common knowledge, of which courts will take judicial notice.
One mode of guarding against the perpetuation of epilepsy obviously is to forbid sexual intercourse with those
afflicted by it, and to preclude such opportunities for sexual intercourse as marriage furnishes. To impose such a
restriction upon the right to contract marriage, if not intrinsically unreasonable, is no invasion of the equality of all men
before the law, if it applies equally to all under the same circumstances who belong to a certain class of persons, which
class can reasonably be regarded as one requiring special legislation either for their protection or for the protection from
them of the community at large.
Issue: Whether the statute was a valid act of legislation.
Ruling: Yes. It is within the power of the legislature, in the interest of public health, to prohibit marriages
between persons either of whom is epileptic, when the woman is under forty-five years of age; and to that
extent chapter 325 of the Public Acts of 1895 (§§ 1354-1356 of the General Statutes) is a valid and constitutional Act.
The Constitution of this State (Preamble and Art. I, § 1) guarantees to its people equality under the law in the
rights to "life, liberty, and the pursuit of happiness." *244 State v. Conlon, 65 Conn. 478, 489-491. One of these is the
right to contract marriage, but it is a right that can only be exercised under such reasonable conditions as the
legislature may see fit to impose.
It is not possessed by those below a certain age. It is denied to those who stand within certain degrees of
kinship. The mode of celebrating it is prescribed in strict and exclusive terms. General Statutes, § 4538. 244 The universal
prohibition in all civilized countries of marriages between near kindred proceeds in part from the established fact that the
issue of such marriages are often, though by no means always, of an inferior type of physical or mental development.
A marriage in violation of the Act is not declared by it to be void, nor is it a nullity under the provisions of the
common law as adopted in this State. If, however, such a marriage was induced by the fraudulent concealment or
representations of the epileptic as to his or her physical condition, it is within the power of the Superior Court, upon
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application of the other party, to grant a divorce upon the statutory ground (§ 4551) of "fraudulent contract." The fraud
which makes the contract of marriage "fraudulent," as that word is used in § 4551, is a fraud in law and upon the law.
Such a fraud is accomplished whenever a person enters into that contract knowing that he is incapable of sexual
intercourse, and yet, in order to induce the marriage, designedly and deceitfully concealing that fact from the other party,
who is ignorant of it and has no reason to suppose it to exist; and whether such incapacity proceeds from a
physical or a merely legal cause is immaterial.
The prohibition of the Act of 1895 fastened upon the defendant an incapacity which, if unknown to
the plaintiff and by him fraudulently concealed from her with the purpose thereby to induce a marriage,
made his contract of marriage, in the eye of the law, fraudulent.
6) Short Title: Baseco vs. PCGG (150 SCRA 181)

Full Title: BATAAN SHIPYARD & ENGINEERING CO., INC. (BASECO), petitioner,
vs. PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, CHAIRMAN JOVITO SALONGA, COMMISSIONER
MARY CONCEPCION BAUTISTA, COMMISSIONER RAMON DIAZ, COMMISSIONER RAUL R. DAZA,
COMMISSIONER QUINTIN S. DOROMAL, CAPT. JORGE B. SIACUNCO, et al., respondents. (G.R. No. 75885 | May
27, 1987)
Facts: Challenged in this special civil action of certiorari and prohibition by a private corporation known as the Bataan
Shipyard and Engineering Co., Inc. are: (1) Executive Orders Numbered 1 and 2, promulgated by President Corazon C.
Aquino on February 28, 1986 and March 12, 1986, respectively, and (2) the sequestration, takeover, and other orders
issued, and acts done, in accordance with said executive orders by the Presidential Commission on Good Government
and/or its Commissioners and agents, affecting said corporation.
The sequestration order which, in the view of the petitioner corporation, initiated all its misery was issued on April
14, 1986 by Commissioner Mary Concepcion Bautista. It was addressed to three of the agents of the Commission,
hereafter simply referred to as PCGG.
You are hereby ordered:
1. To implement this sequestration order with a minimum disruption of these companies' business activities.
2. To ensure the continuity of these companies as going concerns, the care and maintenance of these assets until
such time that the Office of the President through the Commission on Good Government should decide otherwise.
3. To report to the Commission on Good Government periodically.
Further, you are authorized to request for Military/Security Support from the Military/Police authorities, and such
other acts essential to the achievement of this sequestration order. 1
On the strength of the above sequestration order, Mr. Jose M. Balde, acting for the PCGG, addressed a letter
dated April 18, 1986 to the President and other officers of petitioner firm, reiterating an earlier request for the production
of certain documents such as Stock Transfer Book and other Legal documents (Articles of Incorporation, By-Laws, etc.)
Orders were also issued in connection with the sequestration and takeover, such as termination of Contract for
Security Services and abortion of contract for Improvement of Wharf at Engineer Island; Change of Mode of Payment of
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Entry Charges; Operation of Sesiman Rock Quarry, Mariveles, Bataa; disposal of scrap, etc.; and the provisional takeover
by the PCGG of BASECO, “the Philippine Dockyard Corporation and all their affiliated companies.”
While BASECO concedes that “sequestration without resorting to judicial action, might be made
within the context of Executive Orders Nos. 1 and 2 before March 25, 1986 when the Freedom Constitution
was promulgated, under the principle that the law promulgated by the ruler under a revolutionary regime
is the law of the land, it ceased to be acceptable when the same ruler opted to promulgate the Freedom
Constitution on March 25, 1986 wherein under Section I of the same,y Article IV (Bill of Rights) of the
1973 Constitution was adopted providing, among others, that “No person shall be deprived of life, liberty
and property without due process of law.” (Const., Art. I V, Sec. 1).”
It declares that its objection to the constitutionality of the Executive Orders “as well as the Sequestration Order *
* and Takeover Order * * issued purportedly under the authority of said Executive Orders, rests on four fundamental
considerations: First, no notice and hearing was accorded * * (it) before its properties and business were taken over;
Second, the PCGG is not a court, but a purely investigative agency and therefore not competent to act as prosecutor and
judge in the same cause; Third, there is nothing in the issuances which envisions any proceeding, process or remedy by
which petitioner may expeditiously challenge the validity of the takeover after the same has been effected; and Fourthly,
being directed against specified persons, and in disregard of the constitutional presumption of innocence and general
rules and procedures, they constitute a Bill of Attainder.”
It argues that the order to produce corporate records from 1973 to 1986, which it has apparently already
complied with, was issued without court authority and infringed its constitutional right against self-incrimination, and
unreasonable search and seizure. 14
BASECO further contends that the PCGG had unduly interfered with its right of dominion and management of its business
affairs.
Bataan Shipyard and Engineering Co., Inc (BASECO) – private corporation
Presidential Commission on Good Government (PCGG) – issued the sequestration order
The corporation known as BASECO was owned or controlled by President Marcos during his administration,
through nominees, by taking undue advantage of his public office and/or using his powers, authority, or influence, and
that it was by and through the same means, that BASECO had taken over the business and/or assets of the National
Shipyard and Engineering Co., Inc., and other government-owned or controlled entities.
As evidence found in Malacanang shortly after the sudden flight of President Marcos were certificates
corresponding to more than ninety-five percent (95%) of all the outstanding shares of stock of BASECO, endorsed in
blank, together with deeds of assignment of practically all the outstanding shares of stock of the three (3) corporations
above mentioned (which hold 95.82% of all BASECO stock), signed by the owners thereof although not notarized.
While the petitioner's counsel was quick to dispute this asserted fact, assuring the Court that the BASECO
stockholders were still in possession of their respective stock certificates and had never endorsed them in blank or to
anyone else, that denial is exposed by his own prior and subsequent recorded statements as a mere gesture of defiance
rather than a verifiable factual declaration.
Page 12 of 306
In accordance with Executive Orders Numbered 1 and 2 promulgated by President Corazon Aquino, PCGG
through its commissioners and agent ordered sequestration, takeover and other provisional orders affecting BASECO.
EOs created the PCGG and established its duty or responsibility to recover the ill-gotten wealth amassed by the
former President Marcos.
Commissioner Diaz invoked the provisions of Section 3 (c) of Executive Order No. 1, empowering the Commission
—To provisionally takeover in the public interest or to prevent its disposal or dissipation, business enterprises and
properties taken over by the government of the Marcos Administration or by entities or persons close to former President
Marcos, until the transactions leading to such acquisition by the latter can be disposed of by the appropriate authorities.
Issue: Whether the sequestration order dated April 14, 1986, and all other orders subsequently issued and acts done on
the basis thereof, inclusive of the takeover order of July 14, 1986 and the termination of the services of the BASECO
executives are valid;
Ruling: Yes. The writs of certiorari and prohibition prayed for will not be issued. Other evidence submitted to the Court
by the Solicitor General proves that President Marcos not only exercised control over BASECO, but also that he actually
owns well-nigh one hundred percent of its outstanding stock.
Executive Orders Not a Bill of Attainder – In the first place, nothing in the executive orders can be
reasonably construed as a determination or declaration of guilt. On the contrary, the executive orders, inclusive of
Executive Order No. 14, make it perfectly clear that any judgment of guilt in the amassing or acquisition of “ill-gotten
wealth” is to be handed down by a judicial tribunal, in this case, the Sandiganbayan, upon complaint filed and prosecuted
by the PCGG. In the second place, no punishment is inflicted by the executive orders, as the merest glance at their
provisions will immediately make apparent. In a sense, therefore, the executive orders may not be regarded as a bill of
attainder.
No Violation of Right against Self-Incrimination and Unreasonable Searches and Seizures – It is
elementary that the right against self-incrimination has no application to juridical persons. While an individual may
lawfully refuse to answer incriminating questions unless protected by an immunity statute, it does not follow that a
corporation, vested with special privileges and franchises, may refuse to show its hand when charged with an abuse of
such privileges * *
Scope and Extent of Powers of the PCGG – PCGG cannot exercise acts of dominion over property
sequestered, frozen or provisionally taken over. As already earlier stressed with no little insistence, the act of
sequestration; freezing or provisional takeover of property does not import or bring about a divestment of title over said
property; does not make the PCGG the owner thereof.
The PCGG may thus exercise only powers of administration over the property or business sequestered or
provisionally taken over, much like a court-appointed receiver, such as to bring and defend actions in its own name;
receive rents; collect debts due; pay outstanding debts; and generally do such other acts and things as may be necessary
to fulfill its mission as conservator and administrator.
Page 13 of 306
Powers over Business Enterprises Taken Over by Marcos or Entities or Persons Close to him;
Limitations Thereon – Now, in the special instance of a business enterprise shown by evidence to have been “taken
over by the government of the Marcos Administration or by entities or persons close to former President Marcos,” the
PCGG is given power and authority, as already adverted to, to “provisionally take (it) over in the public interest or to
prevent * * (its) disposal or dissipation;” and since the term is obviously employed in reference to going concerns, or
business enterprises in operation, something more than mere physical custody is connoted; the PCGG may in this case
exercise some measure of control in the operation, running, or management of the business itself. But even in this special
situation, the intrusion into management should be restricted to the minimum degree necessary to accomplish the
legislative will, which is “to prevent the disposal or dissipation” of the business enterprise.
Voting of Sequestered Stock; Conditions Therefor – So, too, it is within the parameters of these conditions and
circumstances that the PCGG may properly exercise the prerogative to vote sequestered stock of corporations, granted to
it by the President of the Philippines through a Memorandum dated June 26, 1986. In the case at bar, there was
adequate justification to vote the incumbent directors out of office and elect others in their stead because the evidence
showed prima facie that the former were just tools of President Marcos and were no longer owners of any stock in the
firm, if they ever were at all.
No Sufficient Showing of Other Irregularities -As to the other irregularities complained of by BASECO, i.e.,
the cancellation or revision, and the execution of certain contracts, inclusive of the termination of the employment of
some of its executives, this Court cannot, in the present state of the evidence on record, pass upon them. It is not
necessary to do so. The issues arising therefrom may and will be left for initial determination in the appropriate action.
WHEREFORE, the petition is dismissed. The temporary restraining order issued on October 14, 1986
is lifted.
7) Short Title: DECS vs. San Diego (180 SCRA 533)

Long Title: DEPARTMENT OF EDUCATION, CULTURE AND SPORTS (DECS) and DIRECTOR OF CENTER FOR
EDUCATIONAL MEASUREMENT, petitioners, vs.
ROBERTO REY C. SAN DIEGO and JUDGE TERESITA DIZON-CAPULONG, in her capacity as Presiding Judge
of the Regional Trial Court of Valenzuela, Metro Manila, Branch 172, respondents. (G.R. No. 89572 | December
21, 1989)
Facts: The Ramon Guevara (private respondent) is a graduate of the University of the East with a degree of Bachelor of
Science in Zoology. The petitioner claims that Guevara took the NMAT three times and flunked it as many times.1 When
Guevara applied to take it again, the petitioner rejected his application on the basis of the three flunk rule.
The rule in taking the National Medical Admission Test (NMAT) states that --
h) A student shall be allowed only three (3) chances to take the NMAT. After three (3) successive failures, a
student shall not be allowed to take the NMAT for the fourth time.
Guevara then went to the Regional Trial Court of Valenzuela, Metro Manila, to compel his admission to the test.
Page 14 of 306
In his original petition for mandamus, he first invoked his constitutional rights to academic freedom and quality
education. By agreement of the parties, the private respondent was allowed to take the NMAT scheduled on April 16,
1989, subject to the outcome of his petition. 2 In an amended petition filed with leave of court, he squarely challenged
the constitutionality of MECS Order No. 12, Series of 1972, containing the above-cited rule. The additional grounds raised
were due process and equal protection.
After hearing, the respondent judge rendered a decision on July 4, 1989, declaring the challenged order
invalid and granting the petition. Judge Teresita Dizon-Capulong held that the petitioner had been deprived of his
right to pursue a medical education through an arbitrary exercise of the police power.
Issue: Whether the respondent judge’s decision stating that three flunk rule is not a legitimate exercise of police power
correct.
Ruling: NO. We cannot sustain the respondent judge. Her decision must be reversed.
In the case of Tablarin v. Gutierrez, the Court upheld the constitutionality of the NMAT as a measure intended to
limit the admission to medical schools only to those who have initially proved their competence and preparation for a
medical education.
The regulation of the practice of medicine in all its branches has long been recognized as a reasonable method of
protecting the health and safety of the public. That the power to regulate and control the practice of medicine includes
the power to regulate admission to the ranks of those authorized to practice medicine, is also well recognized.
Thus, legislation and administrative regulations requiring those who wish to practice medicine first to take and
pass medical board examinations have long ago been recognized as valid exercises of governmental power.
Similarly, the establishment of minimum medical educational requirements-i.e., the completion of prescribed
courses in a recognized medical school-for admission to the medical profession, has also been sustained as a legitimate
exercise of the regulatory authority of the state. In this regard, the regulation of access to medical schools is similar to
what has been previously stated.
MECS Order No. 52, s. 1985, as noted earlier, articulates the rationale of regulation of this type: the improvement
of the professional and technical quality of the graduates of medical schools, by upgrading the quality of those admitted
to the student body of the medical schools. That upgrading is sought by selectivity in the process of admission, selectivity
consisting, among other things, of limiting admission to those who exhibit in the required degree the aptitude for medical
studies and eventually for medical practice. The need to maintain, and the difficulties of maintaining, high standards in
our professional schools in general, and medical schools in particular, in the current state of our social and economic
development, are widely known.
We believe that the government is entitled to prescribe an admission test like the NMAT as a means
of achieving its stated objective of "upgrading the selection of applicants into [our] medical schools" and
of "improv[ing] the quality of medical education in the country." Given the widespread use today of such
admission tests in, for instance, medical schools in the United States of America (the Medical College Admission Test
[MCAT] and quite probably, in other countries with far more developed educational resources than our own, and taking
Page 15 of 306
into account the failure or inability of the petitioners to even attempt to prove otherwise, we are entitled to hold that the
NMAT is reasonably related to the securing of the ultimate end of legislation and regulation in this area. That end, it is
useful to recall, is the protection of the public from the potentially deadly effects of incompetence and ignorance in those
who would undertake to treat our bodies and minds for disease or trauma.
There is no need to redefine here the police power of the State. Suffice it to repeat that the power is validly
exercised if (a) the interests of the public generally, as distinguished from those of a particular class,
require the interference of the State, and (b) the means employed are reasonably necessary to the
attainment of the object sought to be accomplished and not unduly oppressive upon individuals. 5
In other words, the proper exercise of the police power requires the concurrence of a lawful subject and a lawful
method.
The subject of the challenged regulation is certainly within the ambit of the police power. It is the
right and indeed the responsibility of the State to insure that the medical profession is not infiltrated by incompetents to
whom patients may unwarily entrust their lives and health.
The method employed by the challenged regulation is not irrelevant to the purpose of the law nor is it arbitrary or
oppressive. The three-flunk rule is intended to insulate the medical schools and ultimately the medical profession from the
intrusion of those not qualified to be doctors.
While every person is entitled to aspire to be a doctor, he does not have a constitutional right to be a doctor. This
is true of any other calling in which the public interest is involved; and the closer the link, the longer the bridge to one's
ambition. The State has the responsibility to harness its human resources and to see to it that they are not dissipated or,
no less worse, not used at all. These resources must be applied in a manner that will best promote the common good
while also giving the individual a sense of satisfaction.
8) Short Title: Stone vs. Mississippi (101 US 814)

Facts: The legislature of Mississippi passed an act, approved Feb. 16, 1867, entitled 'An Act incorporating the Mississippi
Agricultural and Manufacturing Aid Society.' Its provisions, so far as they bear upon the questions involved, are as
follows:——
'The corporation shall have power to receive subscriptions, and sell and dispose of certificates of subscriptions
which shall entitle the holders thereof to any articles that may be awarded to them , and the distribution of the awards
shall be fairly made in public, after advertising, by the casting of lots, or by lot, chance, or otherwise , in such manner as
shall be directed by the by-laws of said corporation; . . . and the said corporation shall have power to offer premiums or
prizes in money, for the best essays on agriculture, manufactures, and education, written by a citizen of Mississippi, or to
the most deserving works of art executed by citizens of Mississippi, or the most useful inventions in mechanics, science,
or art, made by citizens of Mississippi.'
The Attorney-General of Mississippi filed, March 17, 1874, in the Circuit Court of Warren County in that State, an
information in the nature of a quo warranto, against John B. Stone and others, alleging that, without authority or warrant
of law, they were then, and for the preceding twelve months had been, carrying on a lottery or gift enterprise
Page 16 of 306
within said county and State under the name of 'The Mississippi Agricultural, Educational, and
Manufacturing Aid Society.'
The information alleges that said society obtained from the legislature a charter, but sets up the aforesaid
constitutional provision and the act of July 16, 1870, and avers that the charter was thereby virtually and in effect
repealed.
By their answer the respondents admit that they were carrying on a lottery enterprise under the name
mentioned. They aver that in so doing they were exercising the rights, privileges, and franchises conferred by their
charter, and that they have in all things complied with its provisions. They further aver that their rights and franchises
were not impaired by the constitutional provision and legislative enactment aforesaid.
The State replied to the answer by admitting that the respondents had in every particular conformed to the
provisions of their charter.
The court, holding that the act of incorporation had been abrogated and annulled by the Constitution of 1868 and
the legislation of July 16, 1870, adjudged that the respondents be ousted of and from all the liberties and privileges,
franchises and emoluments, exercised by them under and by virtue of the said act.
Issue: Whether the State of Mississippi, in its sovereign capacity, did by the charter now under consideration bind itself
irrevocably by a contract to permit ‘the Mississippi Agricultural, Educational, and Manufacturing Aid Society,’ 'to receive
subscriptions, and sell and dispose of certificates of subscription which shall entitle the holders thereof to' 'any lands,
books, paintings, antiques, scientific instruments or apparatus, or any other property or thing that may be ornamental,
valuable, or useful,' 'awarded to them' 'by the casting of lots, or by lot, chance, or otherwise.'
Ruling: There can be no dispute but that under this form of words the legislature of the State chartered a lottery
company, having all the powers incident to such a corporation, for twenty-five years, and that in consideration thereof
the company paid into the State treasury $5,000 for the use of a university, and agreed to pay, and until the
commencement of this suit did pay, an annual tax of $1,000 and 'one-half of one per cent on the amount of receipts
derived from the sale of certificates or tickets.'
The legislature cannot bargain away the police power of a State. 'Irrevocable grants of property and franchises
may be made if they do not impair the supreme authority to make laws for the right government of the State; but no
legislature can curtail the power of its successors to make such laws as they may deem proper in matters of
police.' Metropolitan Board of Excise v. Barrie, 34 N. Y. 657; Boyd v. Alabama, 94 U. S. 645.
Many attempts have been made in this court and elsewhere to define the police power, but never with entire
success. It is always easier to determine whether a particular case comes within the general scope of the power, than to
give an abstract definition of the power itself which will be in all respects accurate. No one denies, however, that it
extends to all matters affecting the public health or the public morals.
Page 17 of 306
9) Short Title: PNB vs. Office of the President (255 SCRA 5)

Full Title: PHILIPPINE NATIONAL BANK, Petitioner, vs. CAYETANO A. TEJANO, JR., Respondent. (G.R. No.
173615 | October 16, 2009)
Facts: Private respondents were buyers on instalment of subdivision lots from Marikina Village, Inc. (represented by
spouses Antonio and Susana Astudillo). Land purchase agreements were executed over said lots, however, the
subdivision developer mortgaged the lots in favor of the petitioner, Philippine National Bank.
Unaware of this mortgage, private respondents duly complied with their obligations as lot buyers and constructed
their houses on the lots in question.
Subsequently, the subdivision developer defaulted and PNB foreclosed on the mortgage. As highest bidder at the
foreclosure sale, the bank became owner of the lots.
Acting on suits brought by private respondents (which were later consolidated), the HLURB Office of Appeals,
Adjudication and Legal Affairs (OAALA) in a decision rendered on October 28, 1988 ruled that PNB—without prejudice to
seeking relief against Marikina Village, Inc.—may collect from private respondents only the “remaining amortizations, in
accordance with the land purchase agreements they had previously entered into with” Marikina Village, Inc., and cannot
compel private respondents to pay all over again for the lots they had already bought from said subdivision developer.
On May 2, 1989, the Housing and Land Use Regulatory Board affirmed this decision. On March 10, 1992, the
Office of the President, invoking P.D. 957, likewise concurred with the HLURB.
Thereafter, Petitioner bank raised the following issues:
1. The Office of the President erred in applying P.D. 957 because said law was enacted only on July 12, 1976,
while the subject mortgage was executed on December 18, 1975; and
2. Petitioner Bank is not subject to the contracts between private respondents and mortgagor-subdivision
developer, hence, the Office of the President erred in ordering petitioner Bank to accept private respondents’ remaining
amortization and issue the corresponding titles after payment thereof.
Issue: Whether P.D. 957 was intended to cover even those real estate mortgages executed prior to its enactment.
Ruling: YES. P.D. 957 was intended to cover even those real estate mortgages executed prior to its
enactment.
Normally, pursuant to Article 4 of the Civil Code, “(l)aws shall have no retroactive effect, unless the contrary is
provided.” However, it is obvious and indubitable that P.D. 957 was intended to cover even those real estate mortgages,
like the one at issue here, executed prior to its enactment, and such intent (as succinctly captured in the preamble
quoted below) must be given effect if the laudable purpose of protecting innocent purchasers is to be achieved.
While P.D. 957 did not expressly provide for retroactivity in its entirety, yet the same can be plainly inferred from
the unmistakable intent of the law to protect innocent lot buyers from scheming subdivision developers. As between
these small lot buyers and the gigantic financial institutions which the developers deal with, it is obvious that the law—as
an instrument of social justice—must favor the weak.
Page 18 of 306
Despite the impairment clause, a contract valid at the time of its execution may be legally modified
or even completely invalidated by a subsequent law.
According to Justice Isagani Cruz: “Despite the impairment clause, a contract valid at the time of its execution
may be legally modified or even completely invalidated by a subsequent law. If the law is a proper exercise of the police
power, it will prevail over the contract. Into each contract are read the provisions of existing law and, always, a
reservation of the police power as long as the agreement deals with a matter affecting the public welfare.
Privity of contracts as a defense does not apply in this case for the law explicitly grants to the buyer the option to
pay the installment payment for his lot or unit directly to the mortgagee (petitioner, which is required to apply such
payments to reduce the corresponding portion of the mortgage indebtedness secured by the particular lot or unit being
paid for. And, as stated earlier, this is without prejudice to petitioner Bank’s seeking relief against the subdivision
developer.
Such a contract, it has been held, suffers a congenital infirmity, and this is its susceptibility to change by the
legislature as a postulate of the legal order.”
WHEREFORE, in view of the foregoing considerations, the petition is hereby DENIED, petitioner having failed to
show any REVERSIBLE ERROR or GRAVE ABUSE OF DISCRETION in the assailed decision. No costs.chanrobles.com :
virtual lawlibrary
• Tests of Police Power: Lawful Subject and Lawful Means
10) Short Title: People vs. Abad Lopez (62 Phil 835)
Full Title: THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee, vs. JOSE ABAD LOPEZ, defendant-
appellant. (G.R. No. L-42199 | January 14, 1936)
FACTS: Appellant was convicted in the municipal court of Manila for a violation of section 2694 of the Administrative
Code and appealed to the Court of First Instance. He was again convicted and brings this appeal.
Section 2694 of the Revised Administrative Code, under which appellant was prosecuted, reads:
SEC. 2694. Failure of persons in charge of child to present same for vaccination. — Any parent, guardian, or other
persons having charge of any same for vaccination, as required by law, or who shall fail to return any such child
to the vaccinating officer for verification of the effect of the operation, or for later vaccination, as the case may
be, shall be fined ten pesos for each offense.
Appellant, is the father of twin baby girls. He is a doctor in good standing, practicing his profession in the City
Manila, and belongs to the homeopathic by administering drugs through can be accomplished by administering drugs
through the mouth.
The prosecution contends that the vaccination required by section 2694 above quoted is by the scarification
method. It is not disputed that the children have not been vaccinated by the scarification method and that the father will
not have it done unless compelled by law.
Page 19 of 306
OTHER CASE
That the accused Dr. Jose Abad Lopez, a physician of good standing who has an open clinic in this city, has twin
baby girls named Carmen and Candelaria; that he has not presented them for vaccination against smallpox as required by
section 2694 of the Administrative Code because he himself took charge of immunizing them according to the method
followed in the homeopathic school to which the accused belongs, as evidenced by the certificate of immunity.
ISSUE: Whether the State has the right to compel compulsory vaccination?
HELD: YES. The right of the State to compel compulsory vaccination is well established (Jacobson vs. Massachusetts,
197 U.S., 11), and not put in question in these proceedings.
The decision of America courts are uniform to the effect that whatever dispute may exist between the various
schools of medicine as to how smallpox is to be prevented, that question is for the legislature, not for the courts, to
determine.
The word "vaccination" standing alone means to the common man, scarification, not drugging, and this is the
definition given by the standard dictionaries and likewise is the interpretation given by American judicial decisions. There
is no reason to believe that the legislature used this term in any other sense, but we are not left in any doubt because in
the same section they speak of a vaccination as an "operation". In the immediate preceding section of the Revised
Administrative Code, section 2693, the legislature says:
Any person liable to vaccination who shall refuse to submit to the operation . . ..
Certainly taking a drug by the mouth is not submitting to an operation.

Appellant also contends that he cannot be convicted as he signed a certificate as a practicing physician that the
two children had been vaccinated and bases his contention upon section 1054 of the Administrative Code, which reads:
SEC. 1054. Persons liable to vaccination.— Every person in the Philippine Islands shall submit to vaccination when
thereunto lawfully required, unless he shall furnish satisfactory evidence either by a certificate from a physician or
vaccinator, or otherwise, to the effect that he is immune from the disease of smallpox. Such vaccination shall be
performed gratis.
As he admits that he had not vaccinated the children as required by law, the certificate which he furnished
himself is of no value.
The judgment appealed from is therefore affirmed, with costs. So ordered.
Page 20 of 306
11) Short Title: Lorenzo vs. Director of Health (50 Phil 595)
Full Title: ANGEL LORENZO, petitioner-appellant, vs. THE DIRECTOR OF HEALTH, respondent-appelle. (G.R. No.
27484 | September 1, 1927)
The purpose of this appeal is to induce the court to set aside the judgment of the Court of First Instance of
Manila sustaining the law authorizing the segregation of lepers, and denying the petition for habeas corpus, by requiring
the trial court to receive evidence to determine if leprosy is or is not a contagious disease.
FACTS: Petitioner Angel Lorenzo, a leper, was confined in the San Lazaro Hospital in the City of Manila in conformity with
the provisions of section 1058 of the Administrative Code that empowers the Director of Health and his authorized agents
"to cause to be apprehended, and detained, isolated, or confined, all leprous persons in the Philippine Islands.”
In amplification of this portion of the law are found provisions relating to arrest of suspected lepers, medical
inspection and diagnostic procedure, confirmation of diagnosis by bacteriological methods, establishment of hospitals,
detention camps, and a leper colony, etc..
Lorenzo, however, alleged that his confinement was in violation of his constitutional rights and advancing as the
basis for that contention the theory to be substantiated by proof that human beings are not incurable with leprosy, and
that the disease may not be communicated by contact.
ISSUE: Whether or not the with the provisions of section 1058 of the Administrative Code pertaining on the confinement
of lepers is violative of one's constitutional right.
HELD: No. Section 1058 of the Administrative Code was enacted by the legislative body in the legitimate exercise of the
police power which extends to the preservation of the public health. It was place on the statute books in recognition of
leprosy as a grave health problem.
The methods provided for the control of leprosy plainly constitute due process of law. Judicial notice will be taken
of the fact that leprosy is commonly believed to be an infectious disease tending to cause one afflicted with it to be
shunned and excluded from society, and that compulsory segregation of lepers as a means of preventing the spread of
the disease of supported by high scientific authority. Upon this view, laws for the segregation of lepers have been
provided the world over.
Similarly, the local legislature has regarded leprosy as a contagious disease and has authorized measures to
control the dread scourge.
Page 21 of 306
12) Short Title: NTC vs. Philippine Veterans Bank (192 SCRA 257)
Full Title: NATIONAL DEVELOPMENT COMPANY AND NEW AGRIX, INC., Petitioners, vs. PHILIPPINE
VETERANS BANK, THE EX-OFFICIO SHERIFF and GODOFREDO QUILING, in his capacity as Deputy Sheriff of
Calamba, Laguna, Respondents ([G.R. Nos. 84132-33 : December 10, 1990.] 192 SCRA 257
FACTS: Pres. Decree No. 1717, which ordered the rehabilitation of the Agrix Group of Companies to be administered
mainly by the National Development Company. It outlined the procedure for filing claims against the Agrix companies and
created a Claims Committee to process these claims.
Especially relevant to this case is Sec. 4(1) thereof providing that "all mortgages and other liens presently
attaching to any of the assets of the dissolved corporations are hereby extinguished."
Before this, the Agrix Marketing had executed in favor of petitioner Philippine Veterans Bank a real estate
mortgage dated July 7, 1978, over three (3) parcels of land situated in Los Baños, Laguna. During the existence of the
mortgage, AGRIX went bankrupt. It was for the expressed purpose of salvaging this and the other Agrix companies that
the aforementioned decree was issued by President Marcos.
Petitioner filed a claim with the AGRIX Claims Committee for the payment of its loan credit. In the meantime, the
New Agrix, Inc. and the National Development Company, invoking Sec. 4 (1) of the decree, filed a petition with the
Regional Trial Court of Calamba, Laguna, for the cancellation of the mortgage lien in favor of Philippine Veterans.
For its part, the Philippine Veterans took steps to extrajudicially foreclose the mortgage, prompting Agrix to file a
second case with the same court to stop the foreclosure.
In the trial court, the judge annulled not only the challenged provision of Sec. 4 (1), but the entire Pres. Decree
No. 1717 on the grounds that: (1) the presidential exercise of legislative power was a violation of the principle of
separation of powers; (2) the law impaired the obligation of contracts; and (3) the decree violated the equal protection
clause.
The motion for reconsideration of this decision having been denied, the present petition was filed in the Supreme
Court.
Petitioners argue that property rights, like all rights, are subject to regulation under the police power for the
promotion of the common welfare. Hence justification of the provision.
The petitioners contend that the private respondent is now estopped from contesting the validity of the decree.
They cited Mendoza v. Agrix Marketing, Inc.,1 where the constitutionality of Pres. Decree No. 1717 was also raised but
not resolved.
Moreover the claims committee dismissed the filing of the petition by Philippine Veterans on the ground of the
aforementioned estoppel.
The petitioners stress that in that the private respondent also invoked the provisions of Pres. Decree No. 1717 by
filing a claim with the AGRIX Claims Committee. Failing to get results, it sought to foreclose the real estate mortgage
executed by AGRIX in its favor, which had been extinguished by the decree.
Page 22 of 306
It was only when the petitioners challenged the foreclosure on the basis of Sec. 4 (1) of the decree, that the
private respondent attacked the validity of the provision. At that stage, however, consistent with Mendoza, the petitioners
alleged that private respondent was already estopped from questioning the constitutionality of the decree.
Issues:
1. Is estoppel applicable?
2. Is PD 1717 constitutional?
Ruling / Ratio:
1. No. To rule now that the private respondent is estopped for having abided with the decree instead of boldly assailing it
is to close our eyes to a cynical fact of life during the Marcos time.
This case must be distinguished from Mendoza, where the petitioners, after filing their claims with the AGRIX
Claims Committee, received in settlement shares of stock valued at P40,000.00 without protest or reservation.
The private respondent has not been paid a single centavo on its claim, which was kept pending for more than
seven years for alleged lack of supporting papers. Significantly, the validity of that claim was not questioned by the
petitioner when it sought to restrain the extrajudicial foreclosure of the mortgage by the private respondent. The
petitioner limited itself to the argument that the private respondent was estopped from questioning the decree because of
its earlier compliance with its provisions.
2. Yes. The Court is especially disturbed by Section 4(1) of the decree, quoted above, extinguishing all mortgages and
other liens attaching to the assets of AGRIX. It also notes, the restriction in Subsection (ii) thereof that all "unsecured
obligations shall not bear interest" and in Subsection (iii) that "all accrued interests, penalties or charges as of date hereof
pertaining to the obligations, whether secured or unsecured, shall not be recognized."
These provisions must be read with the Bill of Rights, where it is clearly provided in Section 1 that "no person
shall be deprived of life, liberty or property without due course of law nor shall any person be denied the equal protection
of the law" and in Section 10 that "no law impairing the obligation of contracts shall be passed.
Court- The police power is not a panacea (solution) for all constitutional maladies / problem. Neither does its mere
invocation conjure an instant and automatic justification for every act of the government depriving a person of his life,
liberty or property.
A legislative act based on the police power requires the concurrence of a lawful subject and a lawful method . In
more familiar words, a) the interests of the public generally, as distinguished from those of a particular class, should
justify the interference of the state; and b) the means employed are reasonably necessary for the accomplishment of the
purpose and not unduly oppressive upon individuals
The case is not applicable to these requirements because the interests of the public are not sufficiently involved
to warrant the interference of the government with the private contracts of AGRIX.
Page 23 of 306
The decree speaks vaguely of the "public, particularly the small investors," who would be prejudiced if the
corporation were not to be assisted. There was no record of these investors. Also, there was no public interest to be
protected. The decree was to the benefit of an exclusive set of investors.
The oppressiveness is patent on the face of the decree to rehabilitate Agrix. No consideration is paid for the
extinction of the mortgage rights. The accrued interests and other charges are simply rejected by the decree.
A mortgage lien is a property right derived from contract and so comes under the protection of the Bill of Rights.
Private property cannot simply be taken by law from one person and given to another without compensation and any
known public purpose. This is plain arbitrariness and is not permitted under the Constitution.
And not only is there arbitrary taking, there is discrimination as well. In extinguishing the mortgage and other
liens, the decree lumps the secured creditors with the unsecured creditors and places them on the same level in the
prosecution of their respective claims.
Under the equal protection clause, all persons or things similarly situated must be treated alike, both in the
privileges conferred and the obligations imposed. Conversely, all persons or things differently situated should be treated
differently. In the case at bar, persons differently situated are similarly treated, in disregard of the principle that there
should be equality only among equals.
One may also well wonder why AGRIX was singled out for government help, among other corporations where the
stockholders or investors were also swindled. It is not clear why other companies entitled to similar concern were not
similarly treated.
On top of all this, New Agrix, Inc. was created by special decree notwithstanding the provision of Article XIV,
Section 4 of the 1973 Constitution, then in force, that:
SEC. 4. The Batasang Pambansa shall not, except by general law, provide for the formation, organization, or
regulation of private corporations, unless such corporations are owned or controlled by the Government or any
subdivision or instrumentality thereof.
The new corporation is neither owned nor controlled by the government.
The Court also feels that the decree impairs the obligation of the contract between AGRIX and the
private respondent without justification. While it is true that the police power is superior to the impairment clause,
the principle will apply only where the contract is so related to the public welfare that it will be considered congenitally
susceptible to change by the legislature in the interest of the greater number.
It can be seen that the contracts of loan and mortgage executed by AGRIX are purely private transactions and have not
been shown to be affected with public interest.
Page 24 of 306
13) Short Title: Drugstores Association of the Philippines vs. National Council on Disability Affairs (G.R. No. 194561,
September 14, 2016)
Full Title: DRUGSTORES ASSOCIATION OF THE PHILIPPINES, INC. AND NORTHERN LUZON DRUG
CORPORATION, Petitioners, v. NATIONAL COUNCIL ON DISABILITY AFFAIRS; DEPARTMENT OF HEALTH; DEPARTMENT
OF FINANCE; BUREAU OF INTERNAL REVENUE; DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT; AND
DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT, Respondent.
Facts: On March 24, 1992, Republic Act (R.A.) No. 7277, entitled "An Act Providing for the Rehabilitation, Self-
Development and Self-Reliance of Disabled Persons and their Integration into the Mainstream of Society and for Other
Purposes," otherwise known as the "Magna Carta for Disabled Persons," was passed into law.
On April 30, 2007, RA 9442 was enacted amending RA 7277 to read as " Magna Carta for Persons with Disability "
and all references on the law to "disabled persons" were amended to read as "persons with disability" (PWD).
R.A. No. 9442 granted the PWDs a twenty (20) percent discount on the purchase of medicine, and a tax
deduction scheme was adopted wherein covered establishments may deduct the discount granted from gross income
based on the net cost of goods sold or services rendered.
On April 23, 2008, the National Council on Disability Affairs (NCDA) issued Administrative Order (A.O.) No. 1,
Series of 2008, prescribing guidelines which should serve as a mechanism for the issuance of a PWD Identification Card
(IDC) which shall be the basis for providing privileges and discounts to bona fide PWDs in accordance with R.A. 9442.
On May 20, 2009, the DOH issued A.O. No. 2009-001118 specifically stating that the grant of 20% discount shall
be provided in the purchase of branded medicines and unbranded generic medicines from all establishments dispensing
medicines for the exclusive use of the PWDs. It also detailed the guidelines for the provision of medical and related
discounts and special privileges to PWDs pursuant to R.A. 9442.
On July 28, 2009, petitioners filed a Petition for Prohibition with application for a Temporary Restraining Order
and/or a Writ of Preliminary Injunction before the Court of Appeals to annul and enjoin the implementation of the
following laws:
1) Section 32 of R.A. No. 7277 as amended by R.A. No. 9442;
2) Section 6, Rule IV of the Implementing Rules and Regulations of R.A. No. 9442;
3) NCDA A.O. No. 1;
4) DOF Revenue Regulation No. 1-2009;
5) DOH A.O. No. 2009-0011.
On July 26, 2010, the CA rendered a Decision upholding the constitutionality of R.A. 7277 as amended, as well as
the assailed administrative issuances. However, the CA suspended the effectivity of NCDA A.O. No. 1 pending proof of
respondent NCDA's compliance with filing of said administrative order with the Office of the National Administrative
Register (ONAR) and its publication in a newspaper of general circulation. The dispositive portion of the Decision states
Page 25 of 306
CA - WHEREFORE, the petition is PARTLY GRANTED. The effectivity of NCDA Administrative Order No. 1 is hereby
SUSPENDED pending Respondent's compliance with the proof of filing of NCDA Administrative Order No. 1 with the Office
of the National Administrative Register and its publication in a newspaper of general circulation.
Respondent NCDA filed a motion for reconsideration before the CA to lift the suspension of the implementation of
NCDA A.O. No. 1 attaching thereto proof of its publication in the Philippine Star and Daily Tribune on August 12, 2010, as
well as a certification from the ONAR showing that the same was filed with the said office on October 22, 2009.22
Likewise, petitioners filed a motion for reconsideration of the CA Decision.
In a Resolution dated November 19, 2010, the CA dismissed petitioners' motion for reconsideration and lifted the
suspension of the effectivity of NCDA A.O. No. 1 considering the filing of the same with ONAR and its publication in a
newspaper of general circulation.
Issue:
1. Whether the mandated PWD discount is a valid exercise of police power.
2. Whether Section 32 of RA 7277 as amended by RA 9442 and the other implementing regulations did violate the
due process clause.
3. Whether the CA erred in ruling that the definitions of disabilities under RA 7277 as amended are not vague,
ambiguous and unconstitutional.
4. Whether the mandated PWD discount violates the Equal Protection Clause.
Ruling:
1. YES. The priority given to the PWDs finds its basis in the Constitution, it is supported by a valid objective or purpose.
The law is a legitimate exercise of police power which, similar to the power of eminent domain, has general welfare for its
objects. It has a valid subject considering that the concept of public use is no longer confined to the traditional notion of
use by the public, but held synonymous with public interest, public benefit, public welfare and public convenience. The
discount privilege to which the PWDs are entitled is actually a benefit enjoyed by the general public to which these
citizens belong.
Police power is the power of the state to promote public welfare by restraining and regulating the use of liberty
and property. In the exercise of police power, property rights of private individuals are subjected to reattains and burdens
in order to secure the general comfort, health, and prosperity of the state.
Eminent Domain is the inherent right of the state to condemn private property to public use upon payment of
the compensation.
2. NO. Petitioners aver that Section 32 of R.A. No. 7277 as amended by R.A. No. 9442 is unconstitutional and void for
violating the due process clause of the Constitution since entitlement to the 20% discount is allegedly merely based on
any of the three documents mentioned in the provision, namely: (i) an identification card issued by the city or municipal
mayor or the barangay captain of the place where the PWD resides; (ii) the passport of the PWD; or (iii) transportation
discount fare identification card issued by NCDA. Petitioners, thus, maintain that none of the said documents has any
Page 26 of 306
relation to a medical finding of disability, and the grant of the discount is allegedly without any process for the
determination of a PWD in accordance with law.
Section 32 of R.A. No. 7277, as amended by R.A. No, 9442, must be read with its IRR which stated that upon its
effectivity, NDA A.O, No, 1 provides the reasonable guidelines in the issuance of Is to PWDs as proof of their entitlement
to the privileges and incentives under the law and fills the details in the implementation of the law.
Any single dispensing of medicine must be in accordance with the prescription issued by the physician and should
not exceed a one (1) month supply. Therefore, as correctly argued by the respondents, Section 32 of R.A. No. 7277 as
amended by R.A. No. 9442 complies with the standards of substantive due process.
3. NO. The terms are not vague and ambiguous. Settled is the rule that courts will not interfere in matters which are
addressed to the sound discretion of the government agency entrusted with the regulation of activities coming under the
special and technical training and knowledge of' such agency.
The language of a statute is vague and ambiguous, an interpretation thereof is resorted to. A law is deemed
ambiguous when it is capable of being understood by reasonably well-informed persons in either of two or more senses.
The fact that a law admits of different interpretations is the best evidence that it is vague and ambiguous.
4.YES. Petitioners contend that R.A. No. 7227, as amended by R.A. No. 9442, violates the equal protection clause of the
Constitution because it fairly singles out drugstores to bear the burden of the discount, and that it can hardly be said to
"rationally" meet a legitimate government objective which is the purpose of the law. The law allegedly targets only
retailers such as petitioners, and that the other enterprises in the drug industry are not imposed with similar burden. This
same argument had been raised in the case of Carlos Superdrug Corp., et al. v. DSWD, et al and We reaffirm and apply
the ruling therein in the case at bar.
Under the equal protection clause, all persons or things similarly situated must be treated alike, both in the
privileges conferred and the obligations imposed. Conversely, all persons or things differently situated should be treated
differently. In the case of ABAKADA Guro Party List, et al. v. Hon. Purisima, et al.
WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated July 26, 2010, and the
Resolution dated November 19, 2010, in CA-G.R. SP No. 109903 are AFFIRMED.
14) Short Title: Southern Luzon Drug Corporation vs. DSWD (G.R. No. 199699, April 25, 2017)
Full Title: SOUTHERN LUZON DRUG CORPORATION, Petitioner, v. THE DEPARTMENT OF SOCIAL WELFARE AND
DEVELOPMENT, THE NATIONAL COUNCIL FOR THE WELFARE OF DISABLED PERSONS, THE DEPARTMENT OF FINANCE,
AND THE BUREAU OF INTERNAL REVENUE, Respondents.
Facts: The case at bar is a Petition for Review on Certiorari assailing the Decision of the Court of Appeals which
dismissed the petition for prohibition filed by Southern Luzon Drug Corporation (petitioner) against the Department of
Social Welfare and Development , the National Council for the Welfare of Disabled Persons (now National Council on
Disability Affairs or NCDA), the Department of Finance and the Bureau of Internal Revenue (collectively, the
Page 27 of 306
respondents), which sought to prohibit the implementation of Section 4(a) of Republic Act (R.A.) No. 9257, otherwise
known as the "Expanded Senior Citizens Act of 2003" and Section 32 of R.A. No. 9442, which amends the "Magna Carta
for Disabled Persons," particularly the granting of 20% discount on the purchase of medicines by senior citizens and
persons with disability (PWD), respectively, and treating them as tax deduction. which dismissed the petition for
prohibition filed by Southern Luzon Drug Corporation (petitioner) against the Department of Social Welfare and
Development , the National Council for the Welfare of Disabled Persons (now National Council on Disability Affairs or
NCDA), the Department of Finance and the Bureau of: Internal Revenue (collectively, the respondents), which sought to
prohibit the implementation of Section 4(a) of Republic Act (R.A.) No. 9257, otherwise known as the "Expanded Senior
Citizens Act of 2003" and Section 32 of R.A. No. 9442, which amends the "Magna Carta for Disabled Persons," particularly
the granting of 20% discount on the purchase of medicines by senior citizens and persons with disability (PWD),:
respectively, and treating them as tax deduction due to the reason that claiming it affects the profitability of their
business.
The petitioner is a domestic corporation engaged in the business of drugstore operation in the Philippines while
the respondents are government' agencies, office and bureau tasked to monitor compliance with R.A. Nos. 9257 and
9442, promulgate implementing rules and regulations for their effective implementation, as well as prosecute and revoke
licenses of erring establishments.
April 23, 1992, R.A. No. 7432, entitled "An Act to Maximize the Contribution of Senior Citizens to Nation-Building,
Grant Benefits and Special Privileges and For Other Purposes," was enacted.
Under the said law, a senior citizen, who must be at least 60 years old and has an annual income of not more
than P60,000.00,[4] may avail of the privileges which is the grant of twenty percent (20%) discount from all
establishments relative to utilization of transportation services, hotels and similar lodging establishment, restaurants and
recreation centers and purchase of medicine anywhere in the country.
R.A. No. 9257 was later enacted amending some provisions of R.A. No. 7432. The new law retained the 20%
discount on the purchase of medicines but removed the annual income ceiling thereby qualifying all senior citizens to the
privileges under the law. Further, R.A. No. 9257 modified the tax treatment of the discount granted to senior citizens,
from tax credit to tax deduction from gross income, computed based on the net cost of goods sold or services rendered.
On May 28, 2004, the DSWD issued the Implementing Rules and Regulations (IRR) of R.A. No. 9257. Article 8 of Rule VI
of the said IRR provides “that the cost of the discount shall be allowed as deduction from gross income for the same
taxable year that the discount is granted.
Meanwhile, R.A. No. 7277 pertaining to the “Magna Carta for Disabled Persons” was enacted, codifying the rights
and privileges of PWDs. Thereafter, R.A. No. 9442 was enacted, amending R.A. No. 7277. One of the salient amendments
in the law is the insertion of Chapter 8 in Title 2 thereof, which enumerates the other privileges and incentives of PWDs,
including the grant of 20% discount on the purchase of medicines.
Similar to R.A. No. 9257, covered establishments shall claim the discounts given to PWDs as tax deductions from
the gross income, based on the net cost of goods sold or services rendered. Pursuant to the foregoing, the IRR of R.A.
No. 9442 was promulgated by the DSWD, Department of Education, DOF, Department of Tourism and the Department of
Transportation and Communications.
Page 28 of 306
Petitioner filed a petition seeking to declare as unconstitutional (a) Section 4(a) of R.A. No. 9257, and (b) Section
32 of R.A. No. 9442 and Section 5.1 of its IRR, insofar as these provisions only allow tax deduction on the gross income
based on the net cost of goods sold or services rendered as compensation to private establishments for the 20% discount
that they are required to grant to senior citizens and PWDs.
Issue: Whether or not the 20% sales discount for Senior Citizens and PWDs is a valid exercise of police power.
Ruling: YES. The duty to care for the elderly and the disabled lies not only upon the State, but also on the
community and even private entities.
NOTE: The law has the intention to regulate the prices of medicines by giving 20% discount to a
particular class of individuals for which the constitution affords preferential concern. The government,
under the principle of parens patriae, stands as the guardian or parent of the people – and the state has a
mandate to protect the people. To reiterate, the duty emanates from its role as parens patriae which holds
it under obligation to provide protection and look after the welfare of its people especially those who
cannot tend to themselves.
It is in the exercise of its police power that the Congress enacted R.A. Nos. 9257 and 9442, the laws
mandating a 20% discount on purchases of medicines made by senior citizens and PWDs. It is also in further
exercise of this power that the legislature opted that the said discount be claimed as tax deduction, rather than tax credit,
by covered establishments.
Unlike in the exercise of the power of eminent domain, just compensation is not required in
wielding police power. This is precisely because there is no taking involved, but only an imposition of
burden.
The Court also entertains no doubt on the legality of the method taken by the legislature to implement the
declared policies of the subject laws, that is, to impose discounts on the medical services and purchases of senior citizens
and PWDs and to treat the said discounts as tax deduction rather than tax credit. The measure is fair and reasonable and
no credible proof was presented to prove the claim that it was confiscatory . The effect of the subject laws in the
financial standing of covered companies depends largely on how they respond and forge a balance
between profitability and their sense of social responsibility. The adaptation is entirely up to them and they
are not powerless to make adjustments to accommodate the subject legislations.
To reiterate, the subject provisions only affect the petitioner’s right to profit, and not earned profits.
Unfortunately for the petitioner, the right to profit is not a vested right or an entitlement that has accrued on
the person or entity such that its invasion or deprivation warrants compensation. Right to profits does not
give the petitioner the cause of action to ask for just compensation, it being only an inchoate right or one that
has not fully developed and therefore cannot be claimed as one’s own. It cannot claim deprivation of profit before
the consummation of a sale and the purchase by a senior citizen or PWD.
Page 29 of 306
Corollary, whether to treat the discount as a tax deduction or tax credit is a matter addressed to the wisdom of
the legislature. After all, it is within its prerogative to enact laws which it deems sufficient to address a specific public
concern.
To recognize all senior citizens as a group, without distinction as to income, is a valid classification.
The Constitution itself considered the elderly as a class of their own and deemed it a priority to address
their needs. When the Constitution declared its intention to prioritize the predicament of the underprivileged sick,
elderly, disabled, women, and children, it did not make any reservation as to income, race, religion or any other personal
circumstances. It was a blanket privilege afforded the group of citizens in the enumeration in view of the vulnerability of
their class.
Tax credits directly reduce the amount of tax you owe. Tax deductions, on the other hand, reduce how much of
your income is subject to taxes.
• Who exercises the power?
15. Short Title: Balacuit vs. CFI (G.R. No. L-38429, June 30, 1988)
Full Title: CARLOS BALACUIT, LAMBERTO TAN and SERGIO YU CARCEL, Petitioners-Appellants, v. COURT OF FIRST
INSTANCE OF AGUSAN DEL NORTE AND BUTUAN CITY, Branch 11, and the CITY OF BUTUAN, Respondents-Appellees.
Facts: The case primarily discussed an issue challenging the validity and constitutionality of a legislative action by a
municipal board:
The Municipal Board of Butuan City passed Ordinance 640 on April 21, 1969 penalizing persons, group of
persons, or business selling admission tickets to any movie or public exhibitions or performances, from requiring
children (age 7 - 12 yo) to full payment.
Petitioners, theater owners, assailed the constitutionality of Ordinance No. 640 passed by the Municipal Board of
the City of Butuan on April 21, 1969. This called for a reduction to ½ of the ticket price given to minors from 7-12 years
old. There was a fine from 200-600 pesos or a 2-6 month imprisonment
The complaint was issued in the trial court. A TRO was then issued to prevent the law from being enforced.
The respondent court entered its decision declaring the law valid.
Petitioners attack the validity and constitutionality of Ordinance No. 640 on the grounds that it is ultra vires and
an invalid exercise of police power. Petitioners contend that Ordinance No. 640 is not within the power of’ the Municipal
Board to enact as provided for in Section 15(n) of Republic Act No. 523 where it states that the Muncipal board can only
fix license fees for theaters and not admission rates.
The respondent attempts to justify the enactment of the ordinance by invoking the general welfare clause
embodied in Section 15 (nn) of the cited law.
Page 30 of 306
Issue: Is the act of the Municipal Board a valid exercise of police power?
Ruling: NO. To invoke the exercise of police power, not only must it appear that the interest of the public
generally requires an interference with private rights, but the means adopted must be reasonably
necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.
The ordinance was created to help parents who complain that paying full price for their children is
too financially burdensome. This is not a public necessity. A police power legislation must be firmly
grounded on public interest and welfare. There is nothing pernicious (harmful) in demanding equal price
for both children and adults. A lawful business or calling may not, under the guise of regulation, be unreasonably
interfered with even by the exercise of police power.
The Supreme Court ruled in favor of the petitioners thereby declaring the said Ordinance unconstitutional, hence
null and void.
The ordinance is not justified by any necessity for the public interest:
 The police power legislation must be firmly grounded on public interest and welfare,and a reasonable relation
must exist between purposes and means.
 The evident purpose of the ordinance is to help ease the burden of cost on the partof parents, however, the
petitioners are the ones made to bear the cost of these savings.
 The Ordinance is not practicable because children above 10 may try to pass off their age as below
10. By the inclusion of a provision to require patrons exhibit certificate of live birth upon entrance
the ordinance becomes clearly unreasonable and oppressive.
 Moreover, there is no discernible relation between the ordinance and the promotion of public health,
safety, morals and the general welfare.
 There is nothing immoral or injurious in charging the same price for both children and adults. In fact,
no person is under compulsion to purchase a ticket. It is a totally voluntary act on the part of the purchaser if he
buys a ticket to such performances.
 The ticket which represents that right is also, necessarily, a species of property. As such, the owner
thereof, in the absence of any condition to the contrary in the contract by which he obtained it, has the clear
right to dispose of it, to sell it to whom he pleases and at such price as he can obtain. 24 So that an act
prohibiting the sale of tickets to theaters or other places of amusement at more than the regular price was held
invalid as conflictingwith the state constitution securing the right of property.
 A police measure for the regulation of the conduct, control and operation of a business should not
encroach upon the legitimate and lawful exercise by the citizens of their property rights.
 The right of the owner to fix a price at which his property shall be sold or used is an inherent attribute of the
property itself and, as such, within the protection of the due process clause."" Hence, the proprietors of a
theater have a right to manage their property in their own way, to fix what prices of admission they
think most for their own advantage, and that any person who did not approve could stay away.
Page 31 of 306
 Ordinance No. 640 clearly invades the personal and property rights of petitioners for even if We could
assume that, on its face, the interference was reasonable, from the foregoing considerations, it has been fully
shown that it is an unwarranted and unlawful curtailment of the property and personal rights of citizens. For
being unreasonable and an undue restraint of trade, it cannot, under the guise of exercising police power, be
upheld as valid.
Principles of Police Power affirmed by the Supreme Court:

 To invoke the exercise of police powe, not only must it appear that the interest of the public generally requires an
interference with private rights, but the means adopted must be reasonably necessary for the accomplishment of
the purpose and not unduly oppressive upon individuals.
 The legislature may not, under the guise of protecting the public interest, arbitrarily interfere with private
business, or impose unusual and unnecessary restrictions upon lawful occupations
 IN OTHER WORDS, THE DETERMINATION AS TO WHAT IS A PROPER EXERCISE OF ITS POLICE POWER IS NOT
FINAL OR CONCLUSIVE, BUT IS SUBJECT TO THE SUPERVISION OF THE COURTS
 In the exercise of police power is necessarily subject to a qualification, limitation or restriction demanded by the
regard, the respect and the obedience due to the prescriptions of the fundamental law, particularly those forming
part of the Constitution of Liberty, otherwiseknown as the Bill of Rights (Homeowners' Association of the
Philippines, Inc. v. Municipal Board of the City of Manila)
 There must be public necessity which demands the adoption of proper measuresto secure the ends sought to be
attained by the enactment of the ordinance, and the large discretion is necessarily vested in the legislative
authority to determine not only what the interests of the public require, but what measures are necessary for the
protection of such interests.
16. Short Title: Lozano vs. Martinez [146 SCRA 323 (1986)]G.R. No. L-63419 December 18, 1986
Full Title: FLORENTINA A. LOZANO, Petitioner, v. THE HONORABLE ANTONIO M. MARTINEZ, in his capacity as Presiding
Judge, Regional Trial Court, National Capital Judicial Region, Branch XX, Manila, and the HONORABLE JOSE B.
FLAMINIANO, in his capacity as City Fiscal of Manila, Respondents.
Facts: The constitutionality of Batas Pambansa Bilang 22 (BP 22 for short), popularly known as the Bouncing Check Law,
which was approved on April 3, 1979, is the sole issue presented by these petitions for decision.
It is aimed at putting a stop to the practice of issuing checks that are worthless which causes injury to the public
interest. Contentions on the law are that:
1) it offends constitutional provision forbidding imprisonment for debt;
2) it impairs freedom of contract;
3) it contravenes the equal protection clause;
4) it unduly delegates legislative and executive powers; and
Page 32 of 306
5) its enactment is flawed because the Interim Batasan violated the prohibition on amendments in the Third
Reading
Among the constitutional objections raised against BP 22, the most serious is the alleged conflict between the
statute and the constitutional provision forbidding imprisonment for debt. It is contended that the statute runs counter to
the inhibition in the Bill of Rights which states, "No person shall be imprisoned for debt or non-payment of a poll tax."
Petitioners insist that, since the offense under BP 22 is consummated only upon the dishonor or non-payment of
the check when it is presented to the drawee bank, the statute is really a "bad debt law" rather than a "bad check law."
What it punishes is the non-payment of the check, not the act of issuing it. The statute, it is claimed, is nothing more
than a veiled device to coerce payment of a debt under the threat of penal sanction.
Issue: Whether enactment of BP 22 repugnant of the constitutional inhibition against imprisonment for debt and
therefore is an invalid exercise of police power.
Ruling: NO. The enactment of the assailed statute is a valid exercise of Police power and is not repugnant
to the constitutional inhibition against imprisonment for debt. It may be constitutionally impermissible for
the legislature to penalize a person for non-payment of debt ex contractu, but certainly it is within the
prerogative of the lawmaking body to prescribe certain acts deemed pernicious and inimical to public
welfare.
Acts mala in se are not only acts which the law can punish. An act may not be considered by society as inherently
wrong, hence, not malum in se, but because of the harm that it inflicts on the community, it can be outlawed and
criminally punished as malum prohibitum. The state can do this in the exercise of its police power.
The enactment of the said statute is a declaration by the legislature that, as a matter of public
policy, the making and issuance of a worthless check is deemed a public nuisance to be abated by the
imposition of penal sanctions.
The gravamen of the offense punished by BP 22 is the act of making and issuing a worthless check or
a check that is dishonored upon its presentation for payment. It is not the non-payment of an obligation which the
law punishes. The law is not intended or designed to coerce a debtor to pay his debt.
The thrust of the law is to prohibit, under pain of penal sanctions, the making of worthless checks and
putting them in circulation. Because of its deleterious effects on the public interest, the practice is
proscribed by the law. The law punishes the act not as an offense against property, but an offense against public
order.
The SC finds that the enactment of BP 22 is a valid exercise of police power and is not repugnant to
the constitutional inhibition against imprisonment for debt.
Page 33 of 306
17) Short Title: Del Rosario vs. Bengzon

Full Title: G.R. No. 88265 (December 21, 1989)
SANTIAGO A. DEL ROSARIO, GEORGE G. GACULA, EDGARDO G. SANTOS, ALBANO S. SIBAL, ALBERTO C.
REYES, NONITO P. ARROYO, EMMANUEL F. TERENCIO, DOMINGO S. DE LEON, MODESTO O. LLAMAS,
FARIDA U. ALONTO, ZENAIDA A. FLOIRENDO, ISABEL A. MEJIA, LUZ P. MABANAG, RAMON H. RABAGO, JR.,
SAMUEL D. TROCIO and OSCAR M. BRION, petitioners, vs. HON. ALFREDO R. BENGZON, in his capacity as
Secretary of the Department of Health, respondent.
FACTS: This is a class suit filed by officers of the Philippine Medical Association asking the Court to declare as
unconstitutional some provisions of the Generics Act of 1988 (Rep. Act No. 6675), and of the implementing Administrative
Order No. 62 issued pursuant thereto, specifically:
(a) Section 6, Pars. (a) and (b) of the Generics Act which provide:
a) All government health agencies and their personnel as well as other government agencies
shall use generic terminology or generic names in all transactions related to purchasing,
prescribing, dispensing and administering of drugs and medicines.
b) All medical, dental and veterinary practitioners, including private practitioners, shall write
prescriptions using the generic name. The brand name may be included if so desired.
(b) Section 12, Pars. (b), (c) and (d) of the same law which provide:
b) For the second conviction, the penalty of file in the amount of not less than two thousand pesos
(P2,000.00) but not exceeding five thousand pesos (P5,000.00) at the discretion of the court.
c) For the third conviction, the penalty of fine in the amount of not less than five thousand pesos
(P5,000.00) but not exceeding ten thousand pesos (P10,000.00) and suspension of his license to practice
his profession for thirty (30) days at the discretion of the court.
d) For the fourth and subsequent convictions, the penalty of fine of not less than ten thousand pesos
(P10,000.00) and suspension of his license to practice his profession for one year or longer at the
discretion of the court.
(c) Sections 4 and 7, Phase 3 of Administrative Order No. 62, Series of 1989 dated March 9, 1989, of the
respondent Secretary of Health, which read as follows:
Section 4. Violative Erroneous, and Impossible Prescriptions.
4.1. Violative Prescriptions:
4.1.1 Where the generic name is not written;
4.1.2 Where the generic name is not legible and a brand name which is legible is written;
4.1.3 Where the brand name is indicated and instructions added, such as the phase 'No
Substitution' which tend to obstruct, hinder or prevent proper generic dispensing.
4.2 What to do with Violative Prescriptions.
Page 34 of 306
Violative prescriptions shall not be filled. They shall be kept and reported by the pharmacist of the drug outlet or
any other interested party to the nearest DOH Officer for appropriate action. The pharmacist shall advise the
prescriber of the problem and/or instruct the customer to get the proper prescription.
4.3 Erroneous Prescriptions:
4.3.1 When the brand name precedes the generic name.
4.3.2 Where the generic name is the one in parenthesis.
4.3.3 Where the brand name in (sic) not in parenthesis.
4.3.4 Where more than one drug product is prescribed in one prescription form.
4.4 What to do with erroneous prescriptions.
Erroneous prescriptions shall be filled. Such prescriptions shall also be kept and reported by the pharmacist of the
drug outlet or any other interested party to the nearest DOH Office for appropriate action.
xxx xxx xxx
On March 15, 1989, the full text of Republic Act No. 6675 was published in two newspapers of general circulation
in the Philippines. The law took effect on March 30, 1989.
The petitioner's main argument against paragraphs (a) and (b), Section 6 of the law, is the alleged unequal
treatment of government physicians, dentists, and veterinarians, on one hand, and those in private practice on the other
hand, in the manner of prescribing generic drugs, for, while the government physicians are allegedly required to use only
generic terminology in their prescriptions, and the those in private practice may write the brand name of the drug in
parenthesis below the generic name. The favored treatment of private doctors, dentists and veterinarians under the law is
allegedly a specie of invalid class legislation.
Petitioners concede that the requirement for doctors, dentists, and veterinarians to use the generic terminology in
writing their prescriptions, followed by the brand name in parenthesis, is "well and good". However, under paragraph (d)
of the law which reads:
(d) Drug outlets, including drugstores, hospital and non-hospital pharmacies and non-traditional outlets such as
supermarkets and stores, shall inform any buyer about any and all other drug products having the same generic name,
together with their corresponding prices so that the buyer may adequately exercise his option. Within one (1) year after
approval of this Act, the drug outlets referred to herein, shall post in conspicuous places in their establishments, a list of
drug products with the same generic name and their corresponding prices”
They complain that as per the provision, the salesgirl at the drugstore counter is authorized to "substitute the
prescribed medicine with another medicine belonging to the same generic group." Since doctors are not allowed to
instruct the druggist not to substitute the prescription, or to "Dispense only as Prescribed", the petitioners argue that "the
act of prescribing the correct medicine for the patient becomes the act of the salesgirl at the drugstore counter, no longer
the act of the physician, dentist, or veterinarian".
Meanwhile, the public respondent points out that the institution of generics in the Philippines will compel
physicians to prescribe drugs based on their therapeutic or "active ingredient," instead of their well-known brand names.
Multiple medications which may produce potentially adverse, even lethal, chemical reactions in the patient will thereby be
avoided. Patients with limited means will be able to buy generic drugs that cost less but possess the same active
Page 35 of 306
ingredients, dosage form, and strength as brand names, many of which are priced beyond the reach of the common tao
because the high costs of advertising, packaging, royalties, and other inputs of production determine their pricing for the
market.
ISSUE:
1. Whether Republic Act 6675 (Generics Act of 1988) is constitutional.
2. Whether the Act impairs the obligation of contract between the physician and patient.
RULING:
1. YES. The Court has been unable to find any constitutional infirmity in the Generics Act. It, on the contrary,
implements the constitutional mandate for the State "to protect and promote the right to health of the people"
and "to make essential goods, health and other social services available to all the people at affordable
cost" (Section 15, Art. II and Section 11, Art. XIII, 1987 Constitution).
There is no merit in the petitioner’s argument on the unequal treatment of government physicians,
dentists, and veterinarian and those in private practice for it proceeds from a misreading and misinterpretation of
the letter and intent of paragraphs (a) and (b), Section 6 of the Generics Act. Indeed, as explained by the public
respondent:
... while paragraph (a) enumerates the government transactions ('Purchasing, prescribing, dispensing and
administering of drugs and medicines') where the sole use of generic terminology has been required, the
'prescription' of drugs is further governed by paragraph (b). And the use of the word 'all' in the latter
provision emphasizes the absence of any distinction between government and private physicians . In
other words, in prescribing drugs, physicians, whether in government service or in private practice, are
both governed by exactly the same rules, and thus, are both authorized to include the brand name in
their respective prescriptions. Furthermore, it may be observed that while paragraph (a) refers to "all
government health agencies, and their personnel as well as other government agencies" (not necessarily
physicians, dentists and veterinarians), paragraph (b) refers to "all medical, dental and veterinary
practitioners, including private practitioners."
The petitioners have distorted the clear provisions of the law and the implementing administrative order.
For it is plain to see that neither paragraph (d) of Section 6 of the Generics Act, nor Section 4 of Administrative
Order No. 62, gives the salesgirl and/or druggist the discretion to substitute the doctor's prescription. On the
contrary, Section 4, par. 4.1, of Administrative Order No. 62 directs the pharmacist not to fill "violative
prescriptions" (where the generic name is not written, or illegibly written, and the prescription of a brand name is
accompanied by the doctor's instruction not to substitute it), as well as "impossible prescriptions" (par. 4.5). Even
a doctor's "erroneous" prescriptions "shall be filled," not substituted (par. 4.3, Adm. Order No. 62).
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And, Sections 3 and 5 of Adm. Order No. 63 enjoin the drug outlets not (to) favor or suggest" or
"impose" a particular brand or product on the customer. The salesgirl at the drugstore counter,
merely informs the customer, but does not determine (for she is incompetent to do so) all the other drug
products or brands that have the same generic name, and their corresponding prices.
That information she may obtain from the list of drug products determined by the Bureau of Food and
Drugs to have the same generic name, or which are the chemical, biological, and therapeutic equivalent of the
generic drug. All drugstores or drug outlets are required by the law to post such list in a conspicuous place in
their premises for the information of the customers, for the choice of whether to buy the expensive brand name
drug, or the less expensive generic, should be exercised by the customer alone.
The prohibition against the use by doctors of "no substitution" and/or words of similar
import in their prescription, is a valid regulation to prevent the circumvention of the law. It secures
to the patient the right to choose between the brand name and its generic equivalent since his
doctor is allowed to write both the generic and the brand name in his prescription form . If a doctor is
allowed to prescribe a brand-name drug with "no substitution," the patient's option to buy a lower-priced, but
equally effective, generic equivalent would thereby be curtailed. The law aims to benefit the impoverished
(and often sickly) majority of the population in a still developing country like ours, not the affluent
and generally healthy minority.
2. NO. There is no merit in the petitioners' theory that the Generics Act impairs the obligation of contract between a
physician and his patient, for no contract ever results from a consultation between patient and physician.
A doctor may take in or refuse a patient, just as the patient may take or refuse the doctor's advice or
prescription. As aptly observed by the public respondent, no doctor has ever filed an action for breach of contract
against a patient who refused to take prescribed medication, undergo surgery, or follow a recommended course
treatment by his doctor.
In any event, no private contract between doctor and patient may be allowed to override the
power of the State to enact laws that are reasonably necessary to secure the health, safety, good
order, comfort, or general welfare of the community. This power can neither be abdicated nor
bargained away. All contractual and property rights are held subject to its fair exercise.
We hold that the Generics Act and the implementing administrative orders of the Secretary of Health are
constitutional. In light of its beneficial provisions, we cannot heed the petitioners' plea to kill it aborning, i.e., before it has
had a chance to prove its value to our people as envisioned by its makers. WHEREFORE, the petition is dismissed for lack
of merit.
Page 37 of 306
18) Short Title: Tablarin vs. Judge Gutierrez [152 SCRA 730 (1987)]
Full Title: G.R. No. 78164 (July 31, 1987)
TERESITA TABLARIN, MA, LUZ CIRIACO, MA NIMFA B. ROVIRA, EVANGELINA S. LABAO, in their behalf and
in behalf of applicants for admission into the Medical Colleges during the school year 1987-88 and future
years who have not taken or successfully hurdled tile National Medical Admission Test (NMAT). petitioners,
vs.
THE HONORABLE JUDGE ANGELINA S. GUTIERREZ, Presiding Judge of Branch XXXVII of the Regional Trial
Court of the National Capital Judicial Region with seat at Manila, THE HONORABLE SECRETARY LOURDES
QUISUMBING, in her capacity as Chairman of the BOARD OF MEDICAL EDUCATION, and THE CENTER FOR
EDUCATIONAL MEASUREMENT (CEM), respondents.
Facts: The petitioners sought admission into colleges or schools of medicine for the school year 1987-1988. However,
the petitioners either did not take or did not successfully take the National Medical Admission Test (NMAT) required by
the Board of Medical Education, one of the public respondents, and administered by the private respondent, the Center
for Educational Measurement (CEM).
On March 5, 1987, the petitioners filed with the Regional Trial Court, National Capital Judicial Region, a Petition
for Declaratory Judgment and Prohibition with a prayer for Temporary Restraining Order and Preliminary Injunction.
The petitioners sought to enjoin the Secretary of Education, Culture and Sports, the Board of Medical Education
and the Center for Educational Measurement from enforcing Section 5 (a) and (f) of Republic Act No. 2382, as
amended, and MECS Order No. 52, series of 1985, dated August 23, 1985 and from requiring the taking and
passing of the NMAT as a condition for securing certificates of eligibility for admission, from proceeding
with accepting applications for taking the NMAT and from administering the NMAT as scheduled on April
26, 1987 and in the future. After hearing on the petition for issuance of preliminary injunction, the trial court denied
said petition. Thereafter, NMAT was conducted and administered as previously scheduled.
Petitioners accordingly filed this Special Civil Action for certiorari with this Court to set aside the Order of the
respondent judge denying the petition for issuance of a writ of preliminary injunction.
Republic Act 2382, as amended by Republic Acts Nos. 4224 and 5946, known as the "Medical Act of 1959" defines its
basic objectives in the following manner:
Section 1. Objectives. — This Act provides for and shall govern (a) the standardization and regulation of medical
education (b) the examination for registration of physicians; and (c) the supervision, control and regulation of the
practice of medicine in the Philippines. (Underscoring supplied)
The statute, among other things, created a Board of Medical Education. The functions of the Board of Medical Education
specified in Section 5 of the statute include the following:
(a) To determine and prescribe requirements for admission into a recognized college of medicine;
xxxx
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(f) To accept applications for certification for admission to a medical school and keep a register of those issued
said certificate; and to collect from said applicants the amount of twenty-five pesos each which shall accrue to
the operating fund of the Board of Medical Education;
xxxxx
(h) To promulgate and prescribe and enforce the necessary rules and regulations for the proper implementation
of the foregoing functions.
Section 7 prescribes certain minimum requirements for applicants to medical schools:
Admission requirements. — The medical college may admit any student who has not been convicted by any court
of competent jurisdiction of any offense involving moral turpitude and who presents (a) a record of completion of
a bachelor's degree in science or arts; (b) a certificate of eligibility for entrance to a medical school from the
Board of Medical Education; (c) a certificate of good moral character issued by two former professors in the
college of liberal arts; and (d) birth certificate. Nothing in this act shall be construed to inhibit any college of
medicine from establishing, in addition to the preceding, other entrance requirements that may be deemed
admissible.
MECS Order No. 52, s. 1985, issued by the then Minister of Education, Culture and Sports and dated 23 August
1985, established a uniform admission test called the National Medical Admission Test (NMAT) as an additional
requirement for issuance of a certificate of eligibility for admission into medical schools of the Philippines, beginning with
the school year 1986-1987. No applicant shall be issued the requisite Certificate of Eligibility for Admission (CEA), or
admitted for enrollment as first year student in any medical college, beginning the school year, 1986-87, without the
required NMAT qualification as called for under this Order.
Pursuant to MECS Order No. 52, s. 1985, the private respondent Center conducted NMATs for entrance to
medical colleges during the school year 1986-1987. In December 1986 and in April 1987, respondent Center conducted
the NMATs for admission to medical colleges during the school year 1987.1988.
The petitioners invoke a number of provisions of the 1987 Constitution which are, in their assertion, violated by
the continued implementation of Section 5 (a) and (f) of Republic Act 2381, as amended, and MECS Order No. 52, s.
1985. The petitioners also urge that the NMAT prescribed in MECS Order No. 52, s. 1985, is an "unfair, unreasonable and
inequitable requirement," which results in a denial of due process.
ISSUE: Whether Section 5 (a) and (f) of Republic Act No. 2382, as amended, and MECS Order No. 52, s. 1985 are
constitutional.
RULING: YES. The Supreme Court concludes that prescribing the NMAT and requiring certain minimum scores therein
as a condition for admission to medical schools in the Philippines, do not constitute an unconstitutional imposition.
The police power, it is commonplace learning, is the pervasive and non-waivable power and authority of the
sovereign to secure and promote all the important interests and needs — in a word, the public order — of the general
community. An important component of that public order is the health and physical safety and well being of the
population, the securing of which no one can deny is a legitimate objective of governmental effort and regulation.
Page 39 of 306
Perhaps the only issue that needs some consideration is whether there is some reasonable relation between the
prescribing of passing the NMAT as a condition for admission to medical school on the one hand, and the securing of the
health and safety of the general community, on the other hand. This question is perhaps most usefully approached by
recalling that the regulation of the practice of medicine in all its branches has long been recognized as a reasonable
method of protecting the health and safety of the public.
MECS Order No. 52, s. 1985 articulates the rationale of regulation of this type: the improvement of the
professional and technical quality of the graduates of medical schools, by upgrading the quality of those admitted to the
student body of the medical schools. That upgrading is sought by selectivity in the process of admission, selectivity
consisting, among other things, of limiting admission to those who exhibit in the required degree the aptitude for medical
studies and eventually for medical practice.
The need to maintain, and the difficulties of maintaining, high standards in our professional schools in general,
and medical schools in particular, in the current stage of our social and economic development, are widely known. We
believe that the government is entitled to prescribe an admission test like the NMAT as a means for
achieving its stated objective of "upgrading the selection of applicants into [our] medical schools" and of
"improving the quality of medical education in the country. We are entitled to hold that the NMAT is
reasonably related to the securing of the ultimate end of legislation and regulation in this area. That end , it
is useful to recall, is the protection of the public from the potentially deadly effects of incompetence and
ignorance in those who would undertake to treat our bodies and minds for disease or trauma.
WHEREFORE, the Petition for Certiorari is DISMISSED and the Order of the respondent trial court denying the
petition for a writ of preliminary injunction is AFFIRMED.
• Zoning and Regulatory Ordinances
19) Short Title: Ermita – Malate Hotel & Motel Operators vs. City Mayor [20 SCRA 849 (1967)]
Full Title: G.R. No. L-24693 ( July 31, 1967)
ERMITA-MALATE HOTEL AND MOTEL OPERATORS ASSOCIATION, INC., HOTEL DEL MAR INC. and GO
CHIU, petitioners-appellees, vs. THE HONORABLE CITY MAYOR OF MANILA, respondent-appellant.
VICTOR ALABANZA, intervenor-appellee.
FACTS: Petitioners Ermita-Malate Hotel and Motel Operators Association with one of its members, Hotel del Mar Inc., and
Go Chiu, the president and general manager of the second petitioner, filed a petition for prohibition against Ordinance No.
4760 on July 5, 1963 against the respondent Mayor of the City of Manila who was sued in his capacity as such charged
with the general power and duty to enforce ordinances of the City of Manila and to give the necessary orders for the
execution and enforcement of such ordinances.
Page 40 of 306
It was alleged that the petitioner non-stock corporation is dedicated to the promotion and protection of the
interest of its eighteen (18) members "operating hotels and motels, characterized as legitimate businesses duly licensed
by both national and city authorities, regularly paying taxes, employing and giving livelihood to not less than 2,500 person
and representing an investment of more than P3 million."
It was then alleged that on June 13, 1963, the Municipal Board of the City of Manila enacted Ordinance No. 4760,
approved on June 14, 1963 by the then Vice-Mayor Herminio Astorga, who was at the time acting as Mayor of the City of
Manila.
There was the assertion of its being beyond the powers of the Municipal Board of the City of Manila to enact
insofar as it would regulate motels, on the ground that in the revised charter of the City of Manila or in any other law, no
reference is made to motels; that Section 1 of the challenged ordinance is unconstitutional and void for being
unreasonable and violative of due process insofar as it would impose P6,000.00 fee per annum for first class motels and
P4,500.00 for second class motels; that the provision in the same section which would require 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, it also being provided 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 is unconstitutional and void
again on due process grounds, not only for being arbitrary, unreasonable or oppressive but also for being vague,
indefinite and uncertain, and likewise for the alleged invasion of the right to privacy and the guaranty against self-
incrimination.
Petitioners also asserts that Section 2 of the ordinance classifying motels into two classes and requiring the
maintenance of certain minimum facilities in first class motels such as a telephone in each room, a dining room or,
restaurant and laundry similarly offends against the due process clause for being arbitrary, unreasonable and oppressive,
a conclusion which applies to the portion of the ordinance requiring second class motels to have a dining room ; that the
provision of Section 2 of the challenged ordinance prohibiting 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 making 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, runs counter to the due process guaranty for lack of certainty and for its
unreasonable, arbitrary and oppressive character; and that insofar as the penalty provided for in Section 4 of the
challenged ordinance for a subsequent conviction would, cause the automatic cancellation of the license of the offended
party, in effect causing the destruction of the business and loss of its investments, there is once again a transgression of
the due process clause.
Page 41 of 306
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 July 6, 1963 issued a writ of preliminary injunction
ordering respondent Mayor to refrain from enforcing said Ordinance No. 4760 from and after July 8, 1963. Hence this
appeal.
ISSUE: Whether Ordinance No. 4760 unconstitutional.
RULING: NO. A decent regard for constitutional doctrines of a fundamental character ought to have admonished the
lower court against such a sweeping condemnation of the challenged ordinance. Its decision cannot be allowed to stand,
consistently with what has hitherto been the accepted standard of constitutional adjudication, in both procedural and
substantive aspects.
Primarily what calls for a reversal of such a decision is the absence of any evidence to offset the presumption of
validity that attaches to a challenged statute or ordinance. As was expressed categorically by Justice Malcolm: "The
presumption is all in favor of validity x x x . The action of the elected representatives of the people cannot be
lightly set aside. The councilors must, in the very nature of things, be familiar with the necessities of their
particular municipality and with all the facts and circumstances which surround the subject and
necessitate action. The local legislative body, by enacting the ordinance, has in effect given notice that the
regulations are essential to the well being of the people x x x . The Judiciary should not lightly set aside legislative
action when there is not a clear invasion of personal or property rights under the guise of police regulation. It admits of
no doubt therefore that there being a presumption of validity, the necessity for evidence to rebut it is unavoidable, unless
the statute or ordinance is void on its face which is not the case here.
The principle has been nowhere better expressed than in the leading case of O'Gorman & Young v. Hartford Fire
Insurance Co.,3 where the American Supreme Court through Justice Brandeis tersely and succinctly summed up the
matter thus: The statute here questioned deals with a subject clearly within the scope of the police power.
We are asked to declare it void on the ground that the specific method of regulation prescribed is unreasonable and
hence deprives the plaintiff of due process of law.
As underlying questions of fact may condition the constitutionality of legislation of this character, the resumption
of constitutionality must prevail in the absence of some factual foundation of record for overthrowing the statute." No
such factual foundation being laid in the present case, the lower court deciding the matter on the pleadings and the
stipulation of facts, the presumption of validity must prevail and the judgment against the ordinance set aside.
Nor may petitioners assert with plausibility that on its face the ordinance is fatally defective as being repugnant to
the due process clause of the Constitution. The mantle of protection associated with the due process guaranty does not
cover petitioners. This particular manifestation of a police power measure being specifically aimed to
safeguard public morals is immune from such imputation of nullity resting purely on conjecture
(speculation) and unsupported by anything of substance. To hold otherwise would be to unduly restrict and
narrow the scope of police power which has been properly characterized as the most essential, insistent
and the least limitable of powers, extending as it does "to all the great public needs."
It would be, to paraphrase another leading decision, to destroy the very purpose of the state if it could be
deprived or allowed itself to be deprived of its competence to promote public health, public morals, public
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safety and the genera welfare. Negatively put, police power is "that inherent and plenary power in the State
which enables it to prohibit all that is hurt full to the comfort, safety, and welfare of society.
There is no question but that the challenged ordinance was precisely enacted to minimize certain
practices hurtful to public morals. The explanatory note of the Councilor Herminio Astorga included as
annex to the stipulation of facts, speaks of the 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 challenged ordinance then 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." Moreover, the increase in the licensed fees was intended to discourage "establishments of the
kind from operating for purpose other than legal" and at the same time, to increase "the income of the city
government." It would appear therefore that the stipulation of facts, far from sustaining any attack against the validity
of the ordinance, argues eloquently for it.
It is a fact worth noting that this Court has invariably stamped with the seal of its approval, ordinances
punishing vagrancy and classifying a pimp or procurer as a vagrant; provide a license tax for and regulating the
maintenance or operation of public dance halls; prohibiting gambling; prohibiting jueteng; and monte; prohibiting playing
of panguingui on days other than Sundays or legal holidays; prohibiting the operation of pinball machines; and prohibiting
any person from keeping, conducting or maintaining an opium joint or visiting a place where opium is smoked or
otherwise used, all of which are intended to protect public morals.
On the legislative organs of the government, whether national or local, primarily rest the exercise of the police
power, which, it cannot be too often emphasized, is the power to prescribe regulations to promote the health, morals,
peace, good order, safety and general welfare of the people. In view of the requirements of due process, equal protection
and other applicable constitutional guaranties however, the exercise of such police power insofar as it may affect the life,
liberty or property of any person is subject to judicial inquiry. Where such exercise of police power may be considered as
either capricious, whimsical, unjust or unreasonable, a denial of due process or a violation of any other applicable
constitutional guaranty may call for correction by the courts.
It would be an affront to reason to stigmatize an ordinance enacted precisely to meet what a municipal
lawmaking body considers an evil of rather serious proportion an arbitrary and capricious exercise of authority. It would
seem that what should be deemed unreasonable and what would amount to an abdication of the power to govern is
inaction in the face of an admitted deterioration of the state of public morals. To be more specific, the Municipal
Board of the City of Manila felt the need for a remedial measure. It provided it with the enactment of the
challenged ordinance. A strong case must be found in the records, and, as has been set forth, none is even attempted
here to attach to an ordinance of such character the taint of nullity for an alleged failure to meet the due process
requirement. Nor does it lend any semblance even of deceptive plausibility to petitioners' indictment of Ordinance No.
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4760 on due process grounds to single out such features as the increased fees for motels and hotels, the curtailment of
the area of freedom to contract, and, in certain particulars, its alleged vagueness.
Admittedly there was a decided increase of the annual license fees provided for by the challenged ordinance for
hotels and motels, 150% for the former and over 200% for the latter, first-class motels being required to pay a P6,000
annual fee and second-class motels, P4,500 yearly. It has been the settled law however, as far back as 1922 that
municipal license fees could be classified into those imposed for regulating occupations or regular enterprises, for the
regulation or restriction of non-useful occupations or enterprises and for revenue purposes only. As was explained more
in detail in the above Cu Unjieng case: (2) Licenses for non-useful occupations are also incidental to the police
power and the right to exact a fee may be implied from the power to license and regulate, but in fixing
amount of the license fees the municipal corporations are allowed a much wider discretion in this class of
cases than in the former, and aside from applying the well-known legal principle that municipal ordinances
must not be unreasonable, oppressive, or tyrannical, courts have, as a general rule, declined to interfere
with such discretion. The desirability of imposing restraint upon the number of persons who might otherwise engage in
non-useful enterprises is, of course, generally an important factor in the determination of the amount of this kind of
license fee. Hence license fees clearly in the nature of privilege taxes for revenue have frequently been upheld, especially
in of licenses for the sale of liquors. In fact, in the latter cases the fees have rarely been declared unreasonable.
Moreover in the equally leading case of Lutz v. Araneta this Court affirmed the doctrine earlier announced by the
American Supreme Court that taxation may be made to implement the state's police power. Only the other day, this Court
had occasion to affirm that the broad taxing authority conferred by the Local Autonomy Act of 1959 to cities and
municipalities is sufficiently plenary to cover a wide range of subjects with the only limitation that the tax so levied is for
public purposes, just and uniform. As a matter of fact, even without reference to the wide latitude enjoyed by the City of
Manila in imposing licenses for revenue, it has been explicitly held in one case that "much discretion is given to municipal
corporations in determining the amount," here the license fee of the operator of a massage clinic, even if it were viewed
purely as a police power measure.
Nor does 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 room or portion thereof more than twice every 24 hours, with a proviso that in all cases full payment
shall be charged, call for a different conclusion. Again, such a limitation 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, according to the explanatory note, are being
devoted. How could it then be arbitrary or oppressive when there appears a correspondence between the undeniable
existence of an undesirable situation and the legislative attempt at correction. Moreover, petitioners cannot be unaware
that every regulation of conduct amounts to curtailment of liberty which as pointed out by Justice Malcolm cannot be
absolute. Thus: "One thought which runs through all these different conceptions of liberty is plainly apparent. It is this:
'Liberty' as understood in democracies, is not license; it is 'liberty regulated by law.'
Implied in the term is restraint by law for the good of the individual and for the greater good of the peace and
order of society and the general well-being. No man can do exactly as he pleases. Every man must renounce unbridled
Page 44 of 306
license. The right of the individual is necessarily subject to reasonable restraint by general law for the common good x x x
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."
A similar observation was made by Justice Laurel: "Public welfare, then, lies at the bottom of the enactment of
said law, and the 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 x x x To this fundamental aim of our Government the
rights of the individual are subordinated. Liberty is a blessing without which life is a misery, but liberty should not be
made to prevail over authority because then society will fall into anarchy. Neither should authority be made to prevail
over liberty because then the individual will fall into slavery. The citizen should achieve the required balance of liberty and
authority in his mind through education and personal discipline, so that there may be established the resultant
equilibrium, which means peace and order and happiness for all.
It is noteworthy that the only decision of this Court nullifying legislation because of undue deprivation of freedom
to contract, People v. Pomar, no longer "retains its virtuality as a living principle. The policy of laissez faire has to some
extent given way to the assumption by the government of the right of intervention even in contractual relations affected
with public interest. What may be stressed sufficiently is that if the liberty involved were freedom of the mind or the
person, the standard for the validity of governmental acts is much more rigorous and exacting, but where the liberty
curtailed affects at the most rights of property, the permissible scope of regulatory measure is wider.
Lastly, there is the attempt to impugn the ordinance on another due process ground by invoking the principles of
vagueness or uncertainty. It would appear from a recital in the petition itself that what seems to be the gravamen of the
alleged grievance is that the provisions are too detailed and specific rather than vague or uncertain. Petitioners, however,
point to the requirement that a guest should give the name, relationship, age and sex of the companion or companions
as indefinite and uncertain in view of the necessity for determining whether the companion or companions referred to are
those arriving with the customer or guest at the time of the registry or entering the room With him at about the same
time or coming at any indefinite time later to join him; a proviso in one of its sections which cast doubt as to whether the
maintenance of a restaurant in a motel is dependent upon the discretion of its owners or operators; another proviso
which from their standpoint would require a guess as to whether the "full rate of payment" to be charged for every such
lease thereof means a full day's or merely a half-day's rate.
The attack against the validity of the challenged ordinance cannot be considered a success. Far from it. Respect
for constitutional law principles so uniformly held and so uninterruptedly adhered to by this Court compels a reversal of
the appealed decision. Wherefore, the judgment of the lower court is reversed and the injunction issued lifted
forthwith.
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20) Short Title: Homeowners Association of the Philippines, Inc. vs. Municipal Board of Manila
(G.R. No. L-23979, August 30, 1968)
Full Title: G.R. No. L-23979 (August 30, 1968)
HOMEOWNERS' ASSOCIATION OF THE PHILIPPINES, INC. and VICENTE A. RUFINO, petitioners-appellees,
vs.
THE MUNICIPAL BOARD OF THE CITY OF MANILA, ET AL., respondents,
ANTONIO J. VILLEGAS, Mayor of the City of Manila, respondent-appellant.
Facts: This is an action, against the Municipal Board and the Mayor of the City of Manila, for a declaratory relief . It was
brought by the Homeowners' Association of the Philippines, Inc. and its President, Vicente A. Rufino, to nullify Municipal
Ordinance No. 4841 of the City of Manila. After appropriate proceedings, the Court of First Instance of Manila rendered
judgment declaring said ordinance "ultra vires, unconstitutional, illegal and void ab initio. Hence, this appeal by the Mayor
of Manila.
Said Ordinance reads: AN ORDINANCE REGULATING RENTALS OF LOTS AND BUILDING FOR
RESIDENTIAL PURPOSES.
WHEREAS, in view of the prevailing scarcity of lands and buildings for residential purposes in the City
of Manila and the present high cost of living, a state of emergency in the the matter of providing
housing accommodations especially for poor at reasonable rates is hereby declared to exist:
Now, therefore.
SECTION 1. Lessors or sublessors of lands, or parts thereof, primarily devoted to residential purposes, and
persons claiming title or color of title thereto from such lessors or sublessors, are hereby prohibited from
increasing the rental to an amount in excess of the proportion, percentage wise, in the increase of the assessed
value of the land leased or subleased. If only a portion of the land is leased or subleased, the proportionate value
of the leased premises shall be the basis for determining the maximum rental to which the same may be
increased.
SEC. 2. Lessors or sublessors of buildings, or parts thereof, primarily devoted to residential purposes, and persons
claiming title or color of title thereto from such lessors or sublessors, are hereby prohibited from increasing the
rentals to an amount in excess of ten (10) percentum per annum of the assessed value of the building leased or
subleased and of the land on which the building stands. If only a portion of the building is leased or subleased,
the proportionate assessed value of the building and the land on which the building stands shall be the basis for
determining the maximum rental to which the same may be increased.
SEC. 3. This Ordinance shall not apply to contracts of lease or sublease existing upon its approval and to lands
used by, or to rooms of, boarding house, and lodging houses; PROVIDED, HOWEVER, That renewals or
modifications of such contracts made on or after the approval of this Ordinance shall be governed by the
provisions hereof.
SEC. 4. Any person violating the provisions of this Ordinance shall, upon conviction, be punished by a fine of not
less than one hundred (P100.00) pesos nor more than two hundred (P200.00) pesos and imprisonment for not
Page 46 of 306
less than one (1) month nor more than six (6) months. In the case of juridical persons, the general manager,
director, or any other person in control thereof shall be liable.
The Lower Court struck down the questioned ordinance upon the ground that the power to "declare a state of
emergency ... exclusively pertains to Congress"; that "there is no longer any state of emergency" which may justify the
regulation of house rentals; that said ordinance disconstitutes an unreasonable and unjustified limitation on
the use of private properties and arbitrarily encroaches on the constitutional rights of property owners";
that the power of the City of Manila to "regulate the business of ... letting or subletting of lands and
buildings" does not include the authority to prohibit what is forbidden in said ordinance; and that the same
cannot be deemed sanctioned by the general welfare clause in the City Charter.
Issue: Whether Municipal Ordinance No. 4841 is unconstitutional.
Ruling: YES. The authority of municipal corporations to regulate is essentially police power. Inasmuch as the
same generally entails a curtailment of the liberty, the rights and/or the property of persons, which are protected and
even guaranteed by the Constitution, (however) the exercise of police power is necessarily subject to a
qualification, limitation or restriction demanded by the regard, the respect and the obedience due to the
prescriptions of the fundamental law, particularly those forming part of the Constitution of Liberty,
otherwise known as the Bill of Rights — the police power measure must be "reasonable". In other words,
individual rights may be adversely affected by the exercise of police power to the extent only — and only to
the extent — that may fairly be required by the legitimate demands of public interest or public welfare.
If such demands are brought about by a state of emergency, the interference upon individual rights,
resulting from the regulations adopted to meet the situation, must be, by and large, co-extensive, co-equal or
co-terminous with the existence thereof. And, since an emergency is by nature temporary in character, so
must the regulations promulgated therefor be. In the language of Justice Holmes, "circumstances may so change
in time or differ in space as to clothe with such an interest what at other times or in other places would be a matter of
purely private concern." Or, as the American Jurisprudence puts it, "a limit in time to tide over a passing trouble may
justify a law that could not be upheld as a permanent change."
As a consequence a law or ordinance affecting the rights of individuals, as a means to tide over a critical
condition, to be valid and legal, must be for a " definite" period of time, the length of which must be "reasonable", in
relation to the nature and duration of the crisis it seeks to overcome or surmount. The practical reason for the
requirement that a statute passed to meet a given emergency, should limit the period of its effectivity, is that, otherwise,
a new and different law would be necessary to repeal it, and said period would, accordingly, be "unlimited, indefinite,
negative and uncertain", so that "that which was intended to meet a temporary emergency may become a permanent
law", because "Congress might not enact the repeal, and, even if it would, the repeal might not meet with the approval of
the President, and the Congress might not be able to override the veto".
We are inclined to believe that in providing that the lifetime of the authority given must be "for a limited period",
the framers of our Charter were influenced by the fact that powers were being delegated to the Executive, as much as by
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the circumstance that, since the cause for the grant of power was temporary, so should the grant be, for the effect
cannot remain in existence upon the removal of its cause. In fact, Congress has, in actual practice, accepted this
limitation upon its exercise of police power to meet a condition of emergency. Needless to say, the powers of municipal
corporations delegated thereto by the National Government cannot escape the inherent limitations to which the latter —
as the source of said powers — is subject. Then, again, since our law on municipal corporations is, in principle, patterned
after that of the United States, the rule therein, to the effect that "in a proper case, emergency legislation, limited in time,
may be enacted under the police power" of a municipal corporation, should be considered a part of our legal system.
Moreover, appellant assails the validity of the proceedings in the lower court upon the round that, although
petitioners herein had assailed Municipal Ordinance No. 4841, not merely as ultra vires, but, also, as unconstitutional, the
Solicitor General had been neither heard nor notified in connection therewith, in violation of Section 4 of Rule 64 of the
Rules of Court. It should be noted, however, that appellant did not raise this question or invoke said Section 4, either in
his answer or in a motion to dismiss in the lower court. Upon the other hand, the City Fiscal of Manila was notified
therein. In fact, he filed a memorandum, apart from the memorandum submitted by counsel for appellant herein. Neither
did his motion for reconsideration of the appealed decision touch upon said question, which was raised, for the first time,
in a "supplement" to said motion for reconsideration. Inasmuch as said requirement is not mandatory,
but discretionary, non-compliance therewith and with Section 4 of Rule 64 — the interpretation of which should be
harmonized with said Section 23 of Rule 3 — affected neither the jurisdiction of the trial court nor the validity of the
proceedings therein, in connection with the present case.
WHEREFORE, the decision appealed from should be as it is hereby affirmed, with costs against the appellant. It is
so ordered.
21) Short Title: Cruz vs. Paras

Full Title: G.R. No. L-42571-72 July 25, 1983
VICENTE DE LA CRUZ, RENATO ALIPIO, JOSE TORRES III, LEONCIO CORPUZ, TERESITA CALOT, ROSALIA
FERNANDEZ, ELIZABETH VELASCO, NANETTE VILLANUEVA, HONORATO BUENAVENTURA, RUBEN DE
CASTRO, VICENTE ROXAS, RICARDO DAMIAN, DOMDINO ROMDINA, ANGELINA OBLIGACION, CONRADO
GREGORIO, TEODORO REYES, LYDIA ATRACTIVO, NAPOLEON MENDOZA, PERFECTO GUMATAY, ANDRES
SABANGAN, ROSITA DURAN, SOCORRO BERNARDEZ, and PEDRO GABRIEL, petitioners, vs.
THE HONORABLE EDGARDO L. PARAS, MATIAS RAMIREZ as the Municipal Mayor, MARIO MENDOZA as the
Municipal Vice-Mayor, and THE MUNICIPAL COUNCIL OF BOCAUE, BULACAN, respondents.
Facts:Petitioners Vicente de la Cruz, et al.had been issued licenses to operate clubs by the Municipal Mayor of
Bocaue.The Local Government of Bocaue, Bulacan, a municipal corporation, enacted Ordinance No. 84 which sought to
prohibit the operation of night clubs and cabarets including the employment of hostesses or hospitality girls in such night
clubs. On November 5, 1975, two cases for prohibition with preliminary injunction were filed with the CFI of Bulacan.
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The grounds alleged follow: (1) Ordinance No. 84 is null and void as a municipality has no authority to prohibit a
lawful business, occupation or calling. (2)Ordinance No. 84 is violative of the petitioners' right to due process and the
equal protection of the law, as the license previously given to petitioners was in effect withdrawn without judicial hearing.
(3)That under P.D. 189, as amended by P.D. No.259, the power to license and regulate tourist-oriented businesses
including night clubs, has been transferred to the Department of Tourism."
The cases were assigned to respondent Judge who issued a restraining order on November 7, 1975.
The municipality answered that: (1) That the Municipal Council is authorized by law not only to regulate but to
prohibit the establishment, maintenance and operation of night clubs invoking Section 2243 of the RAC, CA 601, Republic
Acts Nos. 938, 978 and 1224; (2) The Ordinance No. 84 is not violative of petitioners' right to due process and the equal
protection of the law, since property rights are subordinate to public interests. (3) That Presidential Decree No. 189, as
amended, did not deprive Municipal Councils of their jurisdiction to regulate or prohibit night clubs."
The CFI ruled on January 15, 1976 upholding the constitutionality and validity of Ordinance No. 84 and dismissing
the cases. Hence this petition for certiorari by way of appeal.
Issue: Whether or not a municipal corporation can prohibit the exercise of a lawful trade, the operation of night clubs,
and the pursuit of a lawful occupation, such clubs employing hostesses.
Ruling: No, it must be declared null and void. Police power is granted to municipal corporations in general terms as
follows: "General power of council to enact ordinances and make regulations . - The municipal council shall enact such
ordinances and make such regulations, not repugnant to law, as may be necessary to carry into effect and discharge the
powers and duties conferred upon it by law and such as shall seem necessary and proper to provide for the health and
safety, promote the prosperity, improve the morals, peace, good order, comfort, and convenience of the municipality and
the inhabitants thereof, and for the protection of property therein."
It is practically a reproduction of the former Section 39 of Municipal Code. An ordinance enacted by virtue
thereof, according to Justice Moreland, speaking for the Court in the leading case of United States v. Abendan "is valid,
unless it contravenes the fundamental law of the Philippine Islands, or an Act of the Philippine Legislature, or
unless it is against public policy, or is unreasonable, oppressive, partial, discriminating, or in derogation of
common right.
Where the power to legislate upon a given subject, and the mode of its exercise and the details of such
legislation are not prescribed, the ordinance passed pursuant thereto must be a reasonable exercise of the power, or it
will be pronounced invalid."
If night clubs were merely then regulated and not prohibited, certainly the assailed ordinance
would pass the test of validity. This Court had stressed reasonableness, consonant with the general powers and
purposes of municipal corporations, as well as consistency with the laws or policy of the State. It cannot be said that
such a sweeping exercise of a lawmaking power by Bocaue could qualify under the term reasonable.
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The objective of fostering public morals, a worthy and desirable end can be attained by a measure
that does not encompass too wide a field. Certainly, the ordinance on its face is characterized by
overbreadth.
OVERBREADTH DOCTRINE – trenches that a governmental purpose may not be achieved by means
which sweep unnecessarily broadly and thereby invade the area of protected freedoms.
The purpose sought to be achieved could have been attained by reasonable restrictions rather than
by an absolute prohibition. It is clear that in the guise of a police regulation, there was in this instance a
clear invasion of personal or property rights, personal in the case of those individuals desirous of
patronizing those night clubs and property in terms of the investments made and salaries to be earned by
those therein employed.
22) Short Title: Velasco vs. Villegas

Full Title: G.R. No. L-24153 February 14, 1983
TOMAS VELASCO, LOURDES RAMIREZ, SY PIN, EDMUNDO UNSON, APOLONIA RAMIREZ and LOURDES
LOMIBAO, as component members of the STA. CRUZ BARBERSHOP ASSOCIATION, in their own behalf and
in representation of the other owners of barbershops in the City of Manila, petitioners-appellants,
vs.
HON. ANTONIO J. VILLEGAS, City Mayor of Manila, HON. HERMINIO A. ASTORGA, Vice-Mayor and Presiding
Officer of the Municipal Board in relation to Republic Act 4065, THE MUNICIPAL BOARD OF THE CITY OF
MANILA and EDUARDO QUINTOS SR., Chief of Police of the City of Manila, respondents-appellees.
Facts: This is an appeal from an order of the lower court dismissing a suit for declaratory relief challenging the
constitutionality based on Ordinance No. 4964 of the City of Manila, the contention being that it amounts to a deprivation
of property of petitioners-appellants of their means of livelihood without due process of law.
The assailed ordinance is worded thus: "It shall be prohibited for any operator of any barber shop to conduct the
business of massaging customers or other persons in any adjacent room or rooms of said barber shop, or in any room or
rooms within the same building where the barber shop is located as long as the operator of the barber shop and the
room where massaging is conducted is the same person."
As noted in the appealed order, petitioners-appellants admitted that criminal cases for the violation of this
ordinance had been previously filed and decided. The lower court, therefore, held that a petition for declaratory relief did
not lie, its availability being dependent on there being as yet no case involving such issue having been filed.
Issue: Whether said ordinance was unconstitutional, and therefore an improper exercise of police power
Ruling: No, the attack against the validity cannot succeed. As pointed out in the brief of respondents-appellees, it
is a police power measure. The objectives behind its enactment are: "(1) To be able to impose payment of the license fee
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for engaging in the business of massage clinic under Ordinance No. 3659 as amended by Ordinance 4767 , an entirely
different measure than the ordinance regulating the business of barbershops and, (2) in order to forestall possible
immorality which might grow out of the construction of separate rooms for massage of customers."
This Court has been most liberal in sustaining ordinances based on the general welfare clause. As far back as U.S.
v. Salaveria, a 1918 decision, this Court through Justice Malcolm made clear the significance and scope of such a clause,
which "delegates in statutory form the police power to a municipality. As above stated, this clause has been given wide
application by municipal authorities and has in its relation to the particular circumstances of the case been liberally
construed by the courts. Such, it is well to really is the progressive view of Philippine jurisprudence."As it was then, so it
has continued to be.
There is no showing, therefore, of the unconstitutionality of such ordinance.
WHEREFORE, the appealed order of the lower court is affirmed.
23) Short Title: Magtajas vs. Pryce Properties

Full Title: G.R. No. 111097 July 20, 1994
MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners,
vs. PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING
CORPORATION, respondents.
Facts: There was instant opposition when PAGCOR announced the opening of a casino in Cagayan de Oro City. Civic
organizations angrily denounced the project. Demonstrations were led by the mayor and the city legislators. In
1992PAGCOR decided to expand its operations to Cagayan de Oro City, it leased a portion of a building belonging to
Pryce Properties Corporation, Inc., renovated and equipped the same, and prepared to inaugurate its casino there during
the Christmas season.
On December 7, 1992 the Sangguniang Panlungsod of Cagayan de Oro City enacted Ordinance No. 3353- AN
ORDINANCE PROHIBITING THE ISSUANCE OF BUSINESS PERMIT AND CANCELLING EXISTING BUSINESS PERMIT TO
ANY ESTABLISHMENT FOR THE USING AND ALLOWING TO BE USED ITS PREMISES OR PORTION THEREOF FOR THE
OPERATION OF CASINO.On January 4, 1993, it adopted a sterner Ordinance No. 3375-93- AN ORDINANCE
PROHIBITING THE OPERATION OF CASINO AND PROVIDING PENALTY FOR VIOLATION THEREFOR.
Pryce assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as intervenor and
supplemental petitioner. On March 31, 1993, the Court of Appeals declared the ordinances invalid and issued the writ
prayed for to prohibit their enforcement. Reconsideration of this decision was denied on July 13, 1993.
Cagayan de Oro City and its mayor are now before us in this petition for review under Rule 45 of the Rules of
Court. They aver that the respondent Court of Appeals erred in holding that the questioned Ordinances in effect annul
P.D. 1869 and are therefore invalid on that point.
Issue: Whether Ordinance No. 3353 and Ordinance No. 3375-93 are valid.
Page 51 of 306
Ruling: No, the ordinances are invalid. PAGCOR is a corporation created directly by P.D. 1869 to help centralize and
regulate all games of chance, including casinos on land and sea within the territorial jurisdiction of the Philippines.
Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the purposes indicated
in the Local Government Code. It is expressly vested with the police power under what is known as the General Welfare
Clause now embodied in Section 16.
The tests of a valid ordinance are well established. An ordinance must conform to the following substantive
requirements: (1) It must not contravene the constitution or any statute; (2) It must not be unfair or oppressive; (3) It
must not be partial or discriminatory; (4) It must not prohibit but may regulate trade; (5) It must be general and
consistent with public policy; and (6) It must not be unreasonable.
We begin by observing that under Sec. 458 of the Local Government Code, local government units are authorized
to prevent or suppress, among others, "gambling and other prohibited games of chance." Obviously, this provision
excludes games of chance which are not prohibited but are in fact permitted by law. The petitioners are less than
accurate in claiming that the Code could have excluded such games of chance but did not. In fact, it does. The language
of the section is clear and unmistakable. Under the rule of noscitur a sociis, a word or phrase should be interpreted in
relation to, or given the same meaning of, words with which it is associated. Accordingly, we conclude that since the word
"gambling" is associated with "and other prohibited games of chance," the word should be read as referring to only illegal
gambling which, like the other prohibited games of chance, must be prevented or suppressed.
While insisting that the decree has only been "modified pro tanto," they are actually arguing that it is already
dead, repealed and useless for all intents and purposes because the Code has shorn PAGCOR of all power to centralize
and regulate casinos.Under this construction, PAGCOR will have no more games of chance to regulate or centralize as
they must all be prohibited by the local government units pursuant to the mandatory duty imposed upon them by the
Code. In this situation, PAGCOR cannot continue to exist except only as a toothless tiger or a white elephant and will no
longer be able to exercise its powers as a prime source of government revenue through the operation of casinos.
There is no sufficient indication of an implied repeal of P.D. 1869. On the contrary, as the private respondent
points out, PAGCOR is mentioned as the source of funding in two later enactments of Congress. This would show that the
PAGCOR charter has not been repealed by the Local Government Code but has in fact been improved as it were to make
the entity more responsive to the fiscal problems of the government.
The proper resolution of the problem at hand is to hold that under the Local Government Code, local
government units may (and indeed must) prevent and suppress all kinds of gambling within their
territories except only those allowed by statutes like P.D. 1869.
This approach would also affirm that there aretwo kinds of gambling, the illegal and those authorized by law.
Plausibly, following this theory, the City of Manila could, by mere ordinance, prohibit the Philippine Charity Sweepstakes
Office from conducting a lottery as authorized by R.A. 1169 and B.P. 42 or stop the races at the San Lazaro Hippodrome
as authorized by R.A. 309 and R.A. 983.
In light of all the above considerations, we see no way of arriving at the conclusion urged on us by
the petitioners that the ordinances in question are valid. On the contrary, we find that the ordinances
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violate P.D. 1869, which has the character and force of a statute, as well as the public policy expressed in the decree
allowing the playing of certain games of chance despite the prohibition of gambling in general.
The rationale of the requirement that the ordinances should not contravene a statute is obvious. Municipal
governments are only agents of the national government. Local councils exercise only delegated legislative powers
conferred on them by Congress as the national lawmaking body.
We hold that the power of PAGCOR to centralize and regulate all games of chance, including casinos on land and
sea within the territorial jurisdiction of the Philippines, remains unimpaired. P.D. 1869 has not been modified by the Local
Government Code, which empowers the local government units to prevent or suppress only those forms of gambling
prohibited by law.
Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be
amended or nullified by a mere ordinance. Hence, it was not competent for the Sangguniang Panlungsod of
Cagayan de Oro City to enact the said ordinances. For all their praiseworthy motives, these ordinances are
contrary to P.D. 1869 and the public policy announced therein and are therefore ultra vires and void.
ULTRA VIRES means beyond the powers. It describes actions taken by government bodies or corporations that
exceed the scope of power given to them by laws or corporate charters.
24) Short Title: Lim vs. Pacquing

Full Title: G.R. No. 115044 January 27, 1995
HON. ALFREDO S. LIM, in his capacity as Mayor of Manila, and the City of Manila, petitioners,
vs.
HON. FELIPE G. PACQUING, as Judge, branch 40, Regional Trial Court of Manila and ASSOCIATED
Facts: The Charter of the City of Manila was enacted by Congress on 18 June 1949. On 1 January 1951, EO 392 was
issued transferring the authority to regulate jai-alais from local government to the Games and Amusements Board (GAB).
On 07 September 1971, however, the Municipal Board of Manila passed Ordinance No. 7065 entitled "An Ordinance
Authorizing the Mayor To Allow And Permit The Associated Development Corporation To Establish, Maintain And Operate
A Jai-Alai In The City Of Manila, Under Certain Terms And Conditions And For Other Purposes."
On 20 August 1975, Presidential Decree No. 771 was issued by then President Marcos. The decree, entitled
"Revoking All Powers and Authority of Local Government(s) To Grant Franchise, License or Permit And Regulate Wagers
Or Betting By The Public On Horse And Dog Races, Jai-Alai Or Basque Pelota, And Other Forms Of Gambling", in Section 3
thereof, expressly revoked all existing franchises and permits issued by local governments .
The petition in G.R. No. 115044 was dismissed by the First Division of this Court on 01 September 1994 based on
a finding that there was "no abuse of discretion, much less lack of or excess of jurisdiction, on the part of respondent
judge [Pacquing]", in issuing the questioned orders. Judge Pacquing had earlier issued in Civil Case No. 88-45660, RTC of
Page 53 of 306
Manila, Branch 40, the following orders which were assailed by the Mayor of the City of Manila, Hon. Alfredo S. Lim, in
said G.R. No. 115044:
a. order dated 28 March 1994 directing Manila mayor Alfredo S. Lim to issue the permit/license to
operate the jai-alai in favor of Associated Development Corporation (ADC).
b. order dated 11 April 1994 directing mayor Lim to explain why he should not be cited for contempt for
non-compliance with the order dated 28 March 1994.
c. order dated 20 April 1994 reiterating the previous order directing Mayor Lim to immediately issue
the permit/license to Associated Development Corporation (ADC).
On 13 September 1994, petitioner Guingona (as executive secretary) issued a directive to then chairman of the
GAB Francisco R. Sumulong, jr. to hold the grant of authority, or if any had been issued, to withdraw such grant of
authority, to ADC to operate the jai-alai in the City of Manila.
On 15 September 1994, ADC filed a petition for prohibition, mandamus, injunction and damages with prayer for
TRO and/or writ of preliminary injunction in the RTC of Manila against petitioner Guingona and then GAB chairman
Sumulong, seeking to prevent GAB from withdrawing the provisional authority that had earlier been granted to ADC. On
the same day, the RTC of Manila, through presiding Judge Vetino Reyes, issued a TRO enjoining the GAB from
withdrawing ADC's provisional authority.
The Republic of the Philippines, through the Games and Amusements Board, filed a "Motion for Intervention.
Meanwhile, Judge Reyes on 19 October 1994 issued another order, this time, granting ADC a writ of
preliminary mandatory injunction against Guingona and GAB to compel them to issue in favor of ADC the authority to
operate jai-alai.
Guingona, as executive secretary, and Dominador Cepeda, Jr. as the new GAB chairman, then filed the petition in
G.R. No. 117263 assailing the abovementioned orders of respondent Judge Vetino Reyes.
ADC's position is that Ordinance No. 7065 was validly enacted by the City of Manila pursuant to its delegated
powers under it charter, Republic Act No. 409. ADC also squarely assails the constitutionality of PD No. 771 as violative of
the equal protection and non-impairment clauses of the Constitution. In this connection, counsel for ADC contends that
this Court should really rule on the validity of PD No. 771 to be able to determine whether ADC continues to possess a
valid franchise.Such issue has, become the very lis mota in resolving the present controversy, in view of ADC's insistence
that it was granted a valid and legal franchise by Ordinance No. 7065 to operate the jai-alai.
Issue: Whether PD No. 771 is unconstitutional.
Ruling: No. PD No. 771 is valid and constitutional. The time-honored doctrine is that all laws (PD No. 771 included)
are presumed valid and constitutional until or unless otherwise ruled by this Court. Not only this; Article XVIII Section 3 of
the Constitution states:
Sec. 3. All existing laws, decrees, executive orders, proclamations, letters of instructions and other
executive issuances not inconsistent with this Constitution shall remain operative until amended, repealed
or revoked.
Page 54 of 306
There is nothing on record to show or even suggest that PD No. 771 has been repealed, altered or amended by
any subsequent law or presidential issuance (when the executive still exercised legislative powers).
Neither can it be tenably stated that the issue of the continued existence of ADC's franchise by reason of the
unconstitutionality of PD No. 771 was settled in G.R. No. 115044, for the decision of the Court's First Division in said case,
aside from not being final, cannot have the effect of nullifying PD No. 771 as unconstitutional, since only the Court En
Banc has that power under Article VIII, Section 4(2) of the Constitution.
And on the question of whether or not the government is estopped from contesting ADC's possession of a valid
franchise, the well-settled rule is that the State cannot be put in estoppel by the mistakes or errors, if any, of its officials
or agents.
Consequently, in the light of the foregoing expostulation, we conclude that the republic (in contra distinction to
the City of Manila) may be allowed to intervene in G.R. No. 115044. The Republic is intervening in G.R. No. 115044 in the
exercise, not of its business or proprietary functions, but in the exercise of its governmental functions to protect public
morals and promote the general welfare.
25) Short Title: Tano vs. Socrates (G.R. 110249, August 27, 1997)
Facts: On 15 December 1992 the Sanguniang Panglungsod of Puerto Princesa enacted Ordinance No 15-92 to establish a
“closed season” for the species of fish or aquatic animals covered therein for a period of five years ; and on 22 January
1993 acting Mayor Amado Lucero issued Order No 23 to protect the coral in the marine waters of the City of Puerto
Princesa and the Province of Palawan from further destruction due to illegal fishing activities.
It enacted a resolution prohibiting the catching , gathering, possessing, buying, selling, and shipment of a several
species of live marine coral dwelling aquatic organisms for 5 years, in and coming from Palawan waters ; and the cyanide
fishing.
The petitioners, invoked the Court for certiorari contending both ordinances for depriving them of due process of
law, their livelihood, and unduly restricted them from the practice of their trade, in violation of Section 2, Article XII and
Sections 2 and 7 of Article XIII of the 1987 Constitution.
Issue: Whether or not Ordinance 15-92 enacted by Sanguniang Panglungsod and Order No 23 by Acting Mayor Lucero
are within the limits of police power.
Ruling: Petition dismissed and TRO lifted. Ordinance 15-92 and Order No 23 are valid. The relationship then between the
activities barred by Ordinance No. 15-92 of the City of Puerto Princesa and the prohibited acts provided in Ordinance No.
2, Series of 1993 of the Province of Palawan, on one hand, and the use of sodium cyanide, on the other, is painfully
obvious.
In sum, the public purpose and reasonableness of the Ordinances may not then be controverted.
The Supreme Court found the petitioners contentions baseless and held that the challenged ordinances did not suffer
from any infirmity, both under the Constitution and applicable laws. There is absolutely no showing that any of the
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petitioners qualifies as a subsistence or marginal fisherman. Besides, Section 2 of Article XII aims primarily not to bestow
any right to subsistence fishermen, but to lay stress on the duty of the State to protect the nation’s marine wealth. The
so-called “preferential right” of subsistence or marginal fishermen to the use of marine resources is not at all absolute.
In accordance with the Regalian Doctrine, marine resources belong to the state and pursuant to the first paragraph of
Section 2, Article XII of the Constitution, their “exploration, development and utilization...shall be under the full control
and supervision of the State.
In addition, one of the devolved powers of the LCG on devolution is the enforcement of fishery laws in municipal waters
including the conservation of mangroves. This necessarily includes the enactment of ordinances to effectively carry out
such fishery laws within the municipal waters.
In light of the principles of decentralization and devolution enshrined in the LGC and the powers granted therein to LGUs
which unquestionably involve the exercise of police power, the validity of the questioned ordinances cannot be doubted.
26) Short Title: City of Manila vs. Judge Laguio (G. R. No. 118127, April 12, 2005)
Facts: The private respondent, Malate Tourist Development Corporation (MTOC) is a corporation engaged in the business
of operating hotels, motels, hostels, and lodging houses. It built and opened Victoria Court in Malate which was licensed
as a motel although duly accredited with the Department of Tourism as a hotel.
March 30, 1993 - City Mayor Alfredo S. Lim approved an ordinance enacted which prohibited certain forms of
amusement, entertainment, services and facilities where women are used as tools in entertainment and which tend to
disturb the community, annoy the inhabitants, and adversely affect the social and moral welfare of the community. The
Ordinance prohibited the establishment of sauna parlors, massage parlors, karaoke bars, beerhouses, night clubs, day
clubs, cabarets, motels, inns. Owners and operators of the enumerated establishments are given three months to wind up
business operations or transfer to any place outside Ermita-Malate or convert said businesses to other kinds allowable
within the area. The Ordinance also provided that in case of violation and conviction, the premises of the erring
establishment shall be closed and padlocked permanently.
June 28, 1993 - MTOC filed a Petition with the lower court, praying that the Ordinance, insofar as it included
motels and inns as among its prohibited establishments, be declared invalid and unconstitutional for several reasons but
mainly because it is not a valid exercise of police power and it constitutes a denial of equal protection under the law.
Judge Laguio ruled for the petitioners. The case was elevated to the Supreme Court.
Issue: Whether the Ordinance is constitutional.
Ruling: SC held that the ordinance is unconstitutional for several reasons.

First, it did not meet the valid exercise of police power. To successfully invoke the exercise of police power, not
only must it appear that (1)the interest of the public generally, as distinguished from those of a particular class, require
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an interference with private rights, but (2)the means employed must be reasonably necessary for the accomplishment of
the purpose and not unduly oppressive.
The object of the ordinance was the promotion and protection of the social and moral values of the community.
The closing down and transfer of businesses or their conversion into businesses allowed under the ordinance have no
reasonable relation to its purpose. Otherwise stated, the prohibition of the enumerated establishments will not per se
protect and promote social and moral welfare of the community. It will not itself eradicate prostitution, adultery,
fornication nor will it arrest the spread of sexual disease in Manila.
Second. The modality employed constitutes unlawful taking. The ordinance is unreasonable and oppressive as it
substantially divests the respondent of the beneficial use of its property. The ordinance forbids running of the enumerated
businesses in Ermita-Malate area and instructs owners/operators to wind up their business operations or to transfer
outside the area or convert said business into allowed business. An ordinance which permanently restricts the use of
property that it cannot be used for any reasonable purpose goes beyond regulation and must be recognized as a taking of
the property without just compensation. It is intrusive and violative of the private property rights of individuals. There are
two types of taking: A “possessory” taking and a “regulatory” taking. The latter occurs when the government’s regulation
leaves no reasonable economically viable use of the property, as in this case.
Third. The ordinance violates the equal protection clause. Equal protection requires that all persons or things
similarly situated should be treated alike, both as to the rights conferred and responsibilities imposed. Similar subjects, in
other words, should not be treated differently, so as to give undue favor to some. Legislative bodies are allowed to
classify the subjects of legislation provided the classification is reasonable.
To be valid, it must conform to the following requirements:
(1)It must be based on substantial distinction;
(2)It must be germane to the purpose of the law;
(3)It must not be limited to existing conditions only; and
(4)It must apply equally to all members of the class.
In the Court’s view, there are no substantial distinction between motels, inns, pension houses, hotels, lodging
houses or other similar establishments. By definition, all are commercial establishments providing lodging and usually
meals and other services for the public. No reason exists for prohibiting motels and inns but not pension houses, hotels,
lodging houses or other similar establishments. The Court likewise cannot see the logic for prohibiting the business and
operation of motels in the Ermita-Malate area but not outside this area. A noxious establishment does not become any
less noxious if located outside the area.
Fourth. The ordinance is repugnant to general laws, thus it is ultra vires. The ordinance is in contravention of the
Revised Administrative Code as the Code merely empowers the local government units to regulate, and not prohibit, the
establishments enumerated. Not only that, it likewise runs counter to the provisions of P.D. 499. The P.D. Had already
converted the residential Ermita-Malate area into a commercial area. The decree allowed the establishment and operation
of all kinds of commercial establishments.
Wherefore, the petition was DENIED and the decision of the RTC was AFFIRMED.
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27) Short Title: L´Hotel vs. New Orleans (177 US 587) - 1900
Argued March 20, 1900; Decided May 14, 1900; 177 U.S. 587
Facts: The ordinance of the City of New Orleans set forth at length below in the statement of the case, prescribing limits
in that city outside of which no woman of lewd character shall dwell, does not operate to deprive persons owning or
occupying property in or adjacent to the prescribed limits, whether occupied as a residence or for other purposes, of any
rights secured by the Constitution of the United States, and they cannot prevent its enforcement on the ground that by it
their rights under the federal Constitution are invaded.
Until there is some invasion of Congressional power or of private rights ecured by the Constitution of the United
States, the action of a state in such respect is beyond question in the federal courts.
The settled rule of this Court is that the mere fact of pecuniary injury does not warrant the overthrow of
legislation of a police character.
By ordinance No. 13,032, council series, approved January 29th, 1897, it was ordained by the Common Council of
the City of New Orleans:
"That from the first of October, 1897, it shall be unlawful for any public prostitute or woman notoriously
abandoned to lewdness to occupy, inhabit, live, or sleep in any house, room, or closet situated without the following
limits: South side of Custom House Street from Basin to Robertson Street, east side of Robertson Street from Custom
House to St. Louis Street, south side of St. Louis Street from Robertson to Basin Street. Provided, That no lewd woman
shall be permitted to occupy a house, room, or closet on St. Louis Street. Provided further, That nothing herein shall be
so construed as to authorize any lewd woman to occupy a house, room, or closet in any portion of the city."
By ordinance No. 13,485, council series of the City of New Orleans, approved July 7th, 1897, it was ordained:
"That section 1 of ordinance 13,032, C.S., be and the same is hereby amended as follows: from and after the first
of October, 1897, it shall be unlawful for any public prostitute or woman notoriously abandoned to lewdness to occupy,
inhabit, live, or sleep in any house, room, or closet situate without the ordinance limits”
The above ordinance being in force, the plaintiff in error George L'Hote, a resident, citizen, and taxpayer of New
Orleans, brought this action in the Civil District Court for the Parish of Orleans against the City of New Orleans, its mayor
and superintendent of police, on behalf of himself and all other persons similarly situated, who might intervene and bear
their proportion of costs and expenses. The object of the suit was to obtain a decree enjoining and prohibiting the
defendants from in any manner enforcing ordinance No. 13,032 as amended by section 1 of ordinance No. 13,485.
The bill alleged that the plaintiff was the owner of property situated in the square bounded by St. Louis, Franklin,
Treme, and Toulouse Streets in the Second District of the City of New Orleans, and resided with his wife and children in
that square at No. 522 Treme Street; that the chief and principal way of approach to his residence, and for ingress and
egress thereto, was in, through, and from St. Louis Street; that the locality in which he resided was at the
commencement of the action and had always been used for private residences, schools, groceries, and other mercantile
establishments; that the people residing in that locality were then and had always been moral, virtuous, sober, law-
abiding, and peaceful; that the locality referred to was not then and never had been dedicated to immoral purposes or
used for dwelling places and as the refuge of public prostitutes, lewd and abandoned women and the necessary
attendants thereof, drunkards, idle, vicious, and disorderly persons, who gather around them to gratify their depraved
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appetites, andwho were regarded as dangerous to the peace and welfare of the community, their presence at any place
being always a just cause of alarm and apprehension;
That the above ordinances were unconstitutional, illegal, unreasonable, and oppressive, and would, if executed,
work irreparable injury, wrong, and damage to the plaintiff;
That the council, in enacting those ordinances, pretended to have acted under and by virtue of the power
conferred upon them in section 15 of Act No. 45, approved July 7, 1896,"to regulate the police of houses of prostitution
and assignation and to close such houses in certain limits, and shall have the power to exclude the same, and to
authorize the mayor and police to close said places," andThat the enforcement of those ordinances in the manner
provided for violated the provisions both of the Constitution of the United States and of the state, and would deprive the
plaintiff of his property without due process of law, and amount to a taking or damaging of such property for public
purposes without just and adequate compensation's being first paid.
The bill further alleged that"the introduction of public prostitutes, women notoriously abandoned to lewdness, in
said locality, authorizing them to occupy, inhabit, live, and sleep in houses and rooms situated therein, will materially
lessen and depreciate the value of your petitioner's property, render his dwelling and the dwelling of his neighbors
similarly situated unfit for the occupancy of private families, destroy the morals, peace, and good order of the
neighborhood, drive out and turn away the law-abiding, virtuous citizens and their families from said locality, and
dedicate the same to public and private nuisances per se, contrary to law and good morals;"
That"the common council of the City of New Orleans had previously designated the limits within which prostitutes
and women notoriously abandoned to lewdness should inhabit and live, and had thereby exhausted whatever power was
vested in them by legislature of the state and were without legal right to alter, change, or modify the same to the injury,
detriment, and damage of your petitioner and others residing in said locality, which said council have attempted to
include within saidlimits; that, having so exhausted the authority conferred upon them by the legislature, the said council
was without power to capriciously change the limits previously established by them; that the avocations plied by public
prostitutes and women notoriously abandoned to lewdness are contra bonos mores, and the said common council of the
City of New Orleans have no right, power, or authority to legalize the same and to permit such persons to reside in the
said vicinity in which your petitioner and others dwell with their families;"
That "there was no good and sufficient reason for the enactment of said ordinance or the changing of the limits
previously existing and established;"
That"said council, in enacting said ordinance No. 13,485, council series, eliminated and excluded a large area of
the city which had been previously dedicated to the occupancy of lewd and abandoned women, to the detriment and
injury of petitioner, by changing said limits so as to include St. Louis Street in his locality;"
That the execution of the ordinances would render plaintiff's dwelling house and those of his neighbors unfit and
unsuitable for the occupancy of their families, wives, and children, and wholly valueless for the purposes for which they
were constructed and had theretofore been used; and
That the plaintiff and others similarly situated would be compelled, if the ordinances were executed, to abandon
and remove from their dwellings at great trouble, expense, and annoyance, and that the enforcement of the ordinance
would oppress, injure, and seriously damage and incommode the plaintiff and all others similarly situated.
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The plaintiff also averred that the ordinances, if executed, would deprive him and others similarly situated of the
equal protection of the laws and be in violation equally of the Constitution and laws of the United States and of the state;
that, under the laws and ordinances of the city as they existed, he and all others similarly situated in the locality had the
right to cause houses of prostitution and assignation suppressed as nuisances per se and the inmates arrested and forced
to vacate and remove therefrom, and of that right the plaintiff had theretofore availed himself,and that the ordinances, if
executed, would legalize such nuisance and take away the rights of citizens theretofore existing and vested in plaintiff
and others residing in that locality.
After alleging that the enforcement of the ordinance would work irreparable damage and injury to him in the
depreciation in value of his property because it would cease to be a fit and proper place for the dwelling house of himself,
his wife, and children, and necessitate their abandonment of the same and removal from the locality, he prayed that the
ordinances might be declared null and void.
The writ of injunction as prayed was directed to be issued.
The City of New Orleans, its mayor and superintendent of police, pleaded that the court was without jurisdiction
ratione materiae.
Bernardo Gonzales Carbajal intervened by petition, and after alleging that he was the owner of certain improved
property within the limits prescribed by the above ordinances, reiterated all the allegations of the petition of L'Hote so far
as they related to his property, and averred that the enforcement of the ordinances would work great and irreparable
injury to him and depreciate his property by rendering it unfit and unsuitable for dwelling houses. He united in the prayer
that the ordinances be declared null and void.
The Church Extension Society of the Methodist Episcopal Church, a corporation chartered and organized under
the laws of Pennsylvania, also intervened, and alleged that it was the owner of buildings and improvements within the
above district which were used and occupied for church purposes; that a religious congregation known as the Union
Chapel of the Methodist Episcopal Church assembled and worshipped therein on each and every Sabbath and on Tuesday
and Friday evenings, as well as on other stated occasions; that, besides the religious services conducted in that church, a
Sunday school was organized and established which was attended by 170 children, who received religious instruction and
teaching, and that the membership of that congregation consisted of about 300 persons, while those worshiping in the
church numbered about six hundred persons.
The society reiterated all the allegations of the plaintiff's petition and alleged that if the ordinances were
enforced, the value of its property would be destroyed and the same would be unfit for the purposes for which it was
erected and was now being used, enjoyed, and occupied; that the threats to enforce the ordinances had already caused a
portion of the congregation attending the church to cease from attending therein; that, encouraged by the action of the
city council of New Orleans in passing the ordinances, a number of lewd and abandoned women had already taken up
their abode and habitation in the vicinity of the church and were plying their vocation as prostitutes, and that a number of
houses were then in progress of erection and construction which were intended to be used and kept as brothels and
houses of prostitution, and other places had been leased and let for the purpose of carrying on liquor saloons and concert
halls, for the purpose and with the intention of changing the hitherto respectable character of that neighborhood into a
resort for vice and the establishment of nuisances mala in se.
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After averring that the above ordinances were in violation of the Constitution of the United States and the
Constitution and laws of Louisiana, and that the city council had no right to destroy the value of the intervener's property
and render the neighborhood in which the same was located the resort of lewd and abandoned women, it united in the
prayer of the plaintiff's petition that those ordinances be declared null and void.
The exceptions filed by the defendants to the petitions of the plaintiff and the interveners having been overruled,
the City of New Orleans and its chief of police filed an answer averring that the ordinances in question were legal and
that their enforcement would be a lawful exercise of the power conferred upon the city, and especially a valid exercise of
the power conferred upon it by Act No. 45 of 1896.
The civil district court rendered judgment in favor of the plaintiff, but in favor of the city against the interveners.
From that judgment, suspensive appeals were allowed and prosecuted by the city as well as by the Church Extension
Society.
By the final judgment of the Supreme Court of Louisiana, thejudgment of the civil district court in favor of the
plaintiff was reversed, and the injunction obtained by him was dissolved and his suit dismissed, while the judgment
dismissing the intervening petitions and dissolving the injunction granted on behalf of the interveners was affirmed.
Issue:
1.) Whether an ordinance of the City of New Orleans prescribing limits in that city outside of which no woman of lewd
character shall dwell operates to deprive these plaintiffs in error of any right secured by the Constitution of the United
States.
2.) Whether one who may own or occupy property in or adjacent to the prescribed limits, whether occupied as a
residence or for other purposes, can prevent the enforcement of such an ordinance on the ground that by it his rights
under the federal Constitution are invaded.
Ruling:
1.) It is well, in the first place, to look at the negative side and see what is not involved. No woman of that character is
challenging its validity; there is no complaint by her that she is deprived of any personal rights, either as to the control of
her life or the selection of an abiding place. She is not saying that she is denied the right to select a home where she may
desire, or that her personal conduct is in any way interfered with. In brief, the persons named in the ordinance, and
against whom its provisions are directed, do not question its validity.
In the second place, no person owning buildings outside of the prescribed limits is complaining that he is
deprived of a possible tenant by virtue of the ordinance, or saying that the abridgment of her freedom of domicile
operates to cut down the amount of his rents.
In the third place, it will be perceived that the ordinance does not attempt to give to persons of such character
license to carry on their business in any way they see fit, or indeed to carry it on at all, or to conduct themselves in such
a manner as to disturb the public peace within the prescribed limits. Clauses 3and 4 of the first section of the ordinance
are clearly designed to restrain any public manifestation of the vocation which these persons pursue, and to keep so far
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as possible unseen from public gaze the character of their lives, while clauses 6, 7, 8 and 9 provide means for enforcing
order and preventing disturbances of the peace.
2.) In this respect, we premise by saying that one of the difficult social problems of the day is what shall be done in
respect to those vocations which minister to and feed upon human weaknesses, appetites, and passions. The
management of these vocations comes directly within the scope of what is known as the police power. They affect
directly the public health and morals. Their management becomes a matter of growing importance, especially in our
larger cities, where from the very density of population the things which minister to vice tend to increase and multiply. It
has been often said that the police power was not by the federal Constitution transferred to the nation, but was reserved
to the states, and that upon them rests the duty of so exercising it as to protect the public health and morals. While of
course that power cannot be exercised by the states in any way to infringe upon the powers expressly granted to
Congress, yet until there is some invasion of congressional power or of private rights secured by the Constitution of the
Now this ordinance neither prohibits absolutely nor gives entire freedom to the vocation of these women. The
power to prescribe a limitation carries with it the power to discriminate against one citizen and in favor of another.
It is said that this operates to depreciate the pecuniary value of the property belonging to the plaintiffs in error,
but a similar result would follow if other limits were prescribed, and therefore the power to prescribe limits could never be
exercised, because, whatever the limits, it might operate to the pecuniary disadvantage of some property holders.
The truth is that the exercise of the police power often works pecuniary injury, but the settled rule of this Court is
that the mere fact of pecuniary injury does not warrant the overthrow of legislation of a police character.
In 1 Dillon, Mun.Corp., 4th ed., sec. 141, the rule is thus stated:
"Laws and ordinances relating to the comfort, health, convenience, good order, and general welfare of the
inhabitants are comprehensively styled 'police laws or regulations.' It is well settled that laws and regulations of
this character, though they may disturb the enjoyment of individual rights, are not unconstitutional, though no
provision is made for compensation for such disturbances. They do not appropriate private property for public
use, but simply regulate its use and enjoyment by the owner. If he suffers injury, it is either damnum absque
injuria or, in the theory of the law, he is compensated for it by sharing in the general benefits which the
regulations are intended and calculated to secure. The citizen owns his property absolutely, it is true; it cannot be
taken from him for any private use whatever without his consent, nor can it be taken for any public use without
compensation; still he owns it subject to this restriction -- namely, that it must be so used as not unreasonably to
injure others, and that the sovereign authority may, by police regulations, so direct the use of it that it shall not
prove pernicious to his neighbors, or the citizens generally."
Here, the ordinance in no manner touched the property of the plaintiffs. It subjected that property to no burden,
it cast no duty or restraint upon it, and only in an indirect way can it be said that its pecuniary value was affected by this
ordinance. Even if any such establishment should be located in proximity, there is nothing in the ordinance to deny the
ordinary right of the individual to restrain a private nuisance. Under these circumstances, we are of the opinion that the
ordinance in question is not one of which the plaintiffs in error can complain. The judgment of the SC of Louisiana is
therefore AFFIRMED.
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28) Short Title: Ferrer vs. City Mayor Bautista (G.R. No. 210551, June 30, 2015)
Full Title: G.R. No. 210551 June 30, 2015
JOSE J. FERRER, JR., Petitioner,vs.CITY MAYOR HERBERT BAUTISTA, CITY COUNCIL OF QUEZON CITY,
CITY TREASURER OF QUEZON CITY, and CITY ASSESSOR OF QUEZON CITY, Respondents.
Facts: Respondent Quezon City Council enacted two ordinances: Ordinance No. SP-2095, S-2011 or the Socialized
Housing Tax of Quezon City and Ordinance No. SP-2235, S-2013, an ordinance imposing an annual garbage fee on all
domestic households and providing penalty for non-compliance.
Proceeds collected from the garbage fees on residential properties shall be deposited solely and exclusively in an
earmarked special account under the general fund to be utilized for garbage collections.
The collection of the garbage fee shall accrue on the first day of January and shall be paid simultaneously with
the payment of the real property tax, but not later than the first quarter installment.
Petitioner alleges that he is a registered co-owner of a 371- sq.m. residential property in QC which is covered by
TCT No. 216288, and that, on 7 Jan 2014, he paid his realty tax which already included the garbage fee in the sum of
Php100.00.
This petition was filed with prayer for issuance of TRO seeking to declare unconstitutional and illegal both
ordinances.The Court issued a TRO enjoining the enforcement of both ordinances.
Issue: Whether the ordinance imposing an annual garbage fee is valid.
Ruling: SHT is valid tax while the ordinance imposing an annual garbage fee is invalid.
An ordinance, as in every law, is presumed valid. For an ordinance to be valid though, it must not only be within
the corporate powers of the LGU to enact and must be passed according to the procedure prescribed by law, it should
also conform to the following requirements: (1) not contrary to the Constitution or any statute; (2) not unfair or
oppressive; (3) not partial or discriminatory; (4) not prohibit but may regulate trade; (5) general and consistent with
public policy; and (6) not unreasonable. As jurisprudence indicates, the tests are divided into the formal and the
substantive.
LGUs have no inherent power to tax except to the extent that such power might be delegated to them either by
the basic law or by the statute.
On the Socialized Housing Tax (SHT) The 1987 Constitution explicitly espouses the view that the use of property
bears a social function and that all economic agents shall contribute to the common good.
SHT is pursuant to the social justice principle found in Sections 1 and 2, Article XIII5 of the 1987 Constitution and
Sections 2(a) and 43 of RA No. 7279 or the Urban Development and Housing Act of 1992 (UDHA). Under the UDHA,
socialized housing shall be the primary strategy in providing shelter for the underprivileged and homeless.Clearly, the SHT
charged by the Quezon City Government is a tax which is within its power to impose.
Certainly, as opposed to petitioner’s opinion, the garbage fee is not a tax. In Smart Communications, Inc. v.
Municipality of Malvar, Batangas, 716 SCRA 677 (2014), the Court had the occasion to distinguish these two concepts: In
Progressive Development Corporation v. Quezon City, the Court declared that “if the generating of revenue is the primary
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purpose and regulation is merely incidental, the imposition is a tax; but if regulation is the primary purpose, the fact that
incidentally revenue is also obtained does not make the imposition a tax.” In Victorias Milling Co., Inc. v. Municipality of
Victorias, the Court reiterated that the purpose and effect of the imposition determine whether it is a tax or a fee, and
that the lack of any standards for such imposition gives the presumption that the same is a tax. We accordingly say that
the designation given by the municipal authorities does not decide whether the imposition is properly a license tax or a
license fee. The determining factors are the purpose and effect of the imposition as may be apparent from the provisions
of the ordinance.
29) Short Title: Aquino vs. Municipality of Malay, Aklan (G.R. No. 211356, September 29, 2014)
Full Title: G.R. No. 211356 September 29, 2014
CRISOSTOMO B. AQUINO, Petitioner, v. MUNICIPALITY OF MALAY, AKLAN, REPRESENTED BY HON. MAYOR
JOHN P. YAP, SANGGUNIANG BAYAN OF MALAY, AKLAN, REPRESENTED BY HON. EZEL FLORES, DANTE
PASUGUIRON, ROWEN AGUIRRE, WILBEC GELITO, JUPITER GALLENERO, OFFICE OF THE MUNICIPAL
ENGINEER, OFFICE OF THE MUNICIPAL TREASURER, BORACAY PNP CHIEF, BORACAY FOUNDATION, INC.,
REPRESENTED BY NENETTE GRAF, MUNICIPAL AUXILIARY POLICE, AND JOHN AND JANE DOES,
Respondents.
Facts: Petitioner, president and chief executive officer of Boracay Island West Cove Management Philippines, Inc.
(Boracay West Cove), applied for a zoning compliance with the municipal government of Malay, Aklan. While the company
was already operating a resort in the area, the application sought the issuance of a building permit covering the
construction of a three-storey hotel over a parcel of land measuring 998 sq.m. located in Sitio Diniwid, Barangay Balagab,
Boracay Island, Malay, Aklan, which is covered by a Forest Land Use Agreement for Tourism Purposes (FLAgT) issued by
the Department of Environment and Natural Resources (DENR) in favor of Boracay West Cove.
Through a Decision on Zoning dated January 20, 2010, the Municipal Zoning Administrator denied petitioner's
application on the ground that the proposed construction site was within the "no build zone" demarcated in Municipal
Ordinance 2000-131 (Ordinance). On March 28, 2011, a Cease and Desist Order was issued by the municipal
government, enjoining the expansion of the resort, and on June 7, 2011, the Office of the Mayor of Malay, Aklan issued
the assailed EO 10, ordering the closure and demolition of Boracay West Cove's hotel.
Alleging that the order was issued and executed with grave abuse of discretion, petitioner filed a Petition for
Certiorari with prayer for injunctive relief with the CA. He argued that judicial proceedings should first be conducted
before the respondent mayor could order the demolition of the company's establishment. In its assailed Decision dated
August 13, 2013, the CA dismissed the petition solely on procedural ground. Petitioner sought reconsideration but this
was denied by the CA on February 3, 2014 through the challenged Resolution. Hence,the instant petition.
Issue/s:
1. Whether or not respondent mayor committed grave abuse of discretion when he issued EO 10;
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2. Whether or not petitioner’s right to due process was violated when the respondent mayor ordered the closure
and demolition of Boracay West Cove’s hotel without first conducting judicial proceedings;
3. Whether or not the LGU’s refusal to issue petitioner the necessary building permit and clearances was justified.
4. Whether the DENR has jurisdiction over the controversy.
Ruling:
1. NO. Respondent mayor has the power to order the demolition of illegal constructions. Despite the
hotel’s classification as a nuisance per accidens, however, We still find in this case that the LGU may nevertheless
properly order the hotel’s demolition. This is because, in the exercise of police power and the general welfare
clause, property rights of individuals may be subjected to restraints and burdens in order to fulfil the objectives of
the government. Otherwise stated, the government may enact legislation that may interfere with personal liberty,
property, lawful businesses and occupations to promote the general welfare.
One such piece of legislation is the LGC, which authorizes city and municipal governments, acting through their
local chief executives, to issue demolition orders. Under existing laws, the office of the mayor is given powers not
only relative to its function as the executive official of the town; it has also been endowed with authority to hear
issues involving property rights of individuals and to come out with an effective order or resolution thereon.
Pertinent herein is Sec. 444 (b)(3)(vi) of the LGC, which empowered the mayor to order the closure and removal
of illegally constructed establishments for failing to secure the necessary permit.
2. NO. In the case at bench, the due process requirement is deemed to have been sufficiently complied with. First,
basic is the rule that public officers enjoy the presumption of regularity in the performance of their duties. 22 The
burden is on the petitioner herein to prove that Boracay West Cove was deprived of the opportunity to beheard
before EO 10 was issued. Regrettably, copies of the Cease and Desist Order issued by the LGU and of the assailed
EO 10 itself were never attached to the petition before this Court, which documents could have readily shed light
on whether or not petitioner has been accorded the 10-day grace period provided in Section 10 of the Ordinance.
In view of this fact, the presumption of regularity must be sustained. Second, as quoted by petitioner in his
petition before the CA, the assailed EO 10 states that petitioner received notices from the municipality government
on March 7 and 28, 2011, requiring Boracay West Cove to comply with the zoning ordinance and yet it failed to do
so.23 If such was the case, the grace period can be deemed observed and the establishment was already ripe for
closure and demolition by the time EO 10 was issued in June. Third, the observance of the 10-day allowance for
the owner to demolish the hotel was never questioned by petitioner so there is no need to discuss the same.
Verily, the only grounds invoked by petitioner in crying due process violation are (1) the absence of a court order
prior to demolition and (2) the municipal government’s exercise of jurisdiction over the controversy instead of the
DENR. Therefore, it can no longer be belatedly argued that the 10-day grace period was not observed because to
entertain the same would result in the violation of the respondents’ own due process rights. Given the presence of
the requirements under Sec. 444 (b)(3)(vi) of the LGC, whether the building constituted a nuisance per seor a
nuisance per accidensbecomes immaterial. The hotelwas demolished not exactly because it is a nuisance but
because it failed to comply with the legal requirements prior to construction. It justso happened that, in the case
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at bar, the hotel’s incident that qualified it as a nuisance per accidens––its being constructed within the no build
zone––further resulted in the non-issuance of the necessary permits and clearances, which is a ground for
demolition under the LGC. Under the premises, a court order that is required under normal circumstances is
hereby dispensed with.
3. YES. Requirements for the exercise of the power are present. In the case at bar, petitioner admittedly failed to
secure the necessary permits, clearances, and exemptions before the construction, expansion, and operation of
Boracay Wet Cove’s hotel in Malay, Aklan. To recall, petitioner declared that the application for zoning compliance
was still pending with the office of the mayor even though construction and operation were already ongoing at the
same time. As such, it could no longer be denied that petitioner openly violated Municipal Ordinance 2000-131,
which provides:
SECTION 9. – Permits and Clearances.
(a) No building or structure shall beallowed to start construction unless a Building Permit therefore has been duly
issued by the Office of the Municipal Engineer.Once issued, the building owner or any person in charge of the
construction shall display on the lot or on the building undergoing construction a placard containing the Building
Permit Number and the date of its issue. The office of the Municipal Engineer shall not issue any building permit
unless:
1. The proposed construction has been duly issued a Zoning Clearance by the Office of the Municipal
Zoning Officer;
2. The proposed construction has been duly endorsed by the Sangguniang Bayan through a Letter of
Endorsement.
(b) Only buildings/structures which has complied with all the requirements for its construction
asverified to by the Building Inspector and the Sangguniang Bayan shall be issued a Certificate of
Occupancy by the Office of the Municipal Engineer.
(c) No Business or Mayor’s Permit shall be issued to businesses being undertaken on buildings or
structures which were not issued a certificate of Occupancy beginning January 2001 and
thereafter.
Petitioner cannot justify his position by passing the blame onto the respondent mayor and the latter’s failure to
act on his appeal for this does not, in any way, imply that petitioner can proceed with his infrastructure projects.
On the contrary,this only means that the decision of the zoning administrator denying theapplication still stands
and that petitioner acquired no right to construct on the no build zone. The illegality of the construction cannot
be cured by merely tendering payment for the necessary fees and permits since the LGU’s refusal rests on valid
grounds.
Instead of taking the law into his own hands, petitioner could have filed, as an alternative, a petition for
mandamus to compel the respondent mayor to exercise discretion and resolve the controversy pending before his
office. There is indeed an exception to the rule that matters involving judgment and discretion are beyond the
reach of a writ of mandamus, for such writ may be issued to compel action in those matters, when refused.
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Whether or not the decision would be for or against petitioner would be for the respondent mayor to decide, for
while mandamus may be invoked to compel the exercise of discretion, it cannot compel such discretion to be
exercised in a particular way. What would have been important was for the respondent mayor to immediately
resolve the case for petitioner to be able to go through the motions that the zoning clearance application process
entailed.
Alas, petitioner opted to defy the zoning administrator’s ruling. He consciously chose to violate not only the
Ordinance but also Sec. 301 of PD 1096, laying down the requirement of building permits, which provides:
Section 301. Building Permits. No person, firm or corporation, including any agency or instrumentality of the
government shall erect, construct, alter, repair, move, convert or demolish any building or structure or cause the
same to be done without first obtaining a building permit therefor from the Building Official assigned in the place
where the subject building is located or the building work is to be done.
This twin violation of law and ordinance warranted the LGU’s invocation of Sec. 444 (b)(3)(vi) of the LGC, which
power is separate and distinct from the power to summarily abate nuisances per se. Under the law, insofar as
illegal constructions are concerned, the mayor can, after satisfying the requirement of due notice and hearing,
order their closure and demolition.
4. NO. In alleging that the case concerns the development and the proper use of the country’s environment and
natural resources, petitioner is skirting the principal issue, which is Boracay West Cove's non-compliance with the
permit, clearance, and zoning requirements for building constructions under national and municipal laws. He
downplays Boracay West Cove's omission in a bid to justify ousting the LGU of jurisdiction over the case and
transferring the same to the DENR. He attempts to blow the issue out of proportion when it all boils down to
whether or not the construction of the three-storey hotel was supported by the necessary documentary
requirements.
Based on law and jurisprudence, the office of the mayor has quasijudicial powers to order the closing and
demolition of establishments.1âwphi1 This power granted by the LGC, as earlier explained, We believe, is not the
same power devolved in favor of the LGU under Sec. 17 (b )(2)(ii), as abovequoted, which is subject to review by
the DENR. The fact that the building to be demolished is located within a forestland under the administration of
the DENR is of no moment, for what is involved herein, strictly speaking, is not an issue on environmental
protection, conservation of natural resources, and the maintenance of ecological balance, but the legality or
illegality of the structure. Rather than treating this as an environmental issue then, focus should not be diverted
from the root cause of this debacle-compliance.
Ultimately, the purported power of review by a regional office of the DENR over respondents' actions exercised
through an instrumentality of an ex-parte opinion, in this case, finds no sufficient basis. At best, the legal opinion
rendered, though perhaps informative, is not conclusive on the courts and should be taken with a grain of salt.
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• Proclamations, Executive Orders, Administrative Rules and Regulations

30) Short Title: Zabal vs. Duterte (G.R. No. 238467, February 12, 2019)
Full Title: G.R. No. 238467 February 12, 2019
MARK ANTHONY V. ZABAL, THITING ESTOSO JACOSALEM, AND ODON S. BANDIOLA, Petitioners vs.
RODRIGO R. DUTERTE, President of the Republic of the Philippines; SALVADOR C. MEDIALDEA, Executive
Secretary; and EDUARDO M. ANO, [Secretary] of the Department of Interior and Local Government,
Respondents
FACTS: Claiming that Boracay has become a cesspool (septic tank, dirty), President Duterte first made public his plan to
shut it down during a business forum held in Davao sometime February 2018. This was followed by several speeches and
news releases stating that he would place Boracay under a state of calamity.
True to his words, 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. Following this pronouncement, petitioners contend that around 630 police and military personnel were
readily deployed to Boracay including personnel for crowd dispersal management. The DILG had also released guidelines
for the closure.
This caused petitioners Zabal, Jacosalem, and Bandiola to file a Petition for Prohibition and Mandamus against
respondents President Duterte, Executive Secretary Salvador Medialdea, and DILG Secretary Eduardo Año.
Zabal claims to build sandcastles for tourists while Jacosalem drives for tourists and workers in the Boracay
Island. While not a resident, Bandiola claims to occasionally visit Boracay for business and pleasure. The three based their
locus standi on direct injury and also from the transcendental importance doctrine.
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.
The day following the filing of their original petition, 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. On October 26, 2018, Boracay was reopened to tourism.
Petitioners assert that (1) this case presents constitutional issues, i.e., whether President Duterte acted within the
scope of the powers granted him by the Constitution in ordering the closure of Boracay and, whether the measures
implemented infringe upon the constitutional rights to travel and to due process of petitioners as well as of tourists and
non-residents of the island; and, (2) President Duterte exercised a power legislative in nature, thus unlawfully excluding
the legislative department from the assertion of such power.
Respondents contend that there is no real justiciable controversy in this case. They see no clash between the
right of the State to preserve and protect its natural resources and the right of petitioners to earn a living. Proclamation
No. 475 does not prohibit anyone from being gainfully employed.
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Respondents moreover maintain that the petition is in the nature of a Strategic Lawsuit Against Public
Participation (SLAPP) under Rule 6 of A.M. No. 09-6-8-SC or the Rules of Procedure for Environmental Cases, or a legal
action filed to harass, vex, exert undue pressure or stifle any legal recourse that any person, institution or the
government has taken or may take in the enforcement of environmental laws, protection of the environment or assertion
of environmental rights. Respondents thus assert that the petition must be dismissed since it was filed for the said sole
purpose.
With regard to the substantive aspect, respondents contend that the issuance of Proclamation No. 475 is a valid
exercise of delegated legislative power, it being anchored on Section 16 of Republic Act (RA) No. 10121, otherwise known
as the Philippine Disaster Risk Reduction and Management Act of 2010, or the authority given to the President to declare
a state of calamity.
In sum, respondents emphasize that the issuance of Proclamation No. 475 is within the ambit of the powers of
the President, not contrary to the doctrine of separation of powers, and in accordance with the mechanism laid out by the
Constitution. Thus, this petition.
Procedural Issues
1. Whether President Duterte must be dropped as party-respondent in view of Pesidential immunity.

2. Whether a petition for prohibition or mandamus is proper.
3. Whether the essential requisites for judicial review are present.
Substantial Issues:
1. Whether Proclamation No. 475 is unconstitutional for infringing on the constitutional rights to
travel and to due process.
2. Whether President Duterte acted within the scope of the powers granted him by the Constitution in
ordering the closure of Boracay/ Whether the measure is a valid exercise of police power.
3. Whether the means employed are reasonably necessary for the accomplishment of the purpose and
not unduly oppressive upon individuals.
4. Whether the act constitutes an intrusion of the President into the autonomy of the LGUs.
PROCEDURAL
1. YES. Settled is the doctrine that the President, during his tenure of office or actual incumbency, may not be sued
in any civil or criminal case, and there is no need to provide for it in the Constitution or law. It will degrade the
dignity of the high office of the President, the Head of State, if he can be dragged into court litigations while
serving as such. Furthermore, it is important that he be freed from any form of harassment, hindrance or
distraction to enable him to fully attend to the performance of his official duties and functions. Unlike the
legislative and judicial branch, only one constitutes the executive branch and anything which impairs his
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usefulness in the discharge of the many great and important duties imposed upon him by the Constitution
necessarily impairs the operation of the Government. Accordingly, President Duterte is dropped as respondent in
this case.
2. YES. Under Section 2, Rule 65 of the Rules of Court, prohibition is a preventive remedy seeking that a judgment
be rendered directing the defendant to desist from continuing with the commission of an act perceived to be
illegal. As a rule, the proper function of a writ of prohibition is to prevent the performance of an act which is
about to be done. Under Section 3 of Rule 65 of the Rules of Court, mandamus will lie if the tribunal, corporation,
board, officer, or person unlawfully neglects the performance of an act which the law enjoins as a duty. However,
the use of prohibition and mandamus is not merely confined to Rule 65. These extraordinary remedies may be
invoked when constitutional violations or issues are raised. It must be stressed, though, that resort to prohibition
and mandamus on the basis of alleged constitutional violations is not without limitations. It is not enough that
this petition mounts a constitutional challenge against Proclamation No. 475. It is likewise necessary that it meets
the requisites for the exercise of the power of judicial review before the Court sustains the propriety of the
recourse. The petition must be subjected to the four exacting requisites for the exercise of the power
of judicial review, viz.: (a) there must be an actual case or controversy; (b) the petitioners must possess locus
standi; (c) the question of constitutionality must be raised at the earliest opportunity; and (d) the issue of
constitutionality must be the lis mota of the case.
3. Essential requisites for judicial review are satisfied.

Actual case or controversy. In La Bugal-B 'laan Tribal Association, Inc. vs. Sec. Ramos , an actual case or
controversy was characterized as a "case or controversy that is appropriate or ripe for determination, not
conjectural or anticipatory, lest the decision of the court would amount to an advisory opinion. The power does
not extend to hypothetical questions since any attempt at abstraction could only lead to dialectics and barren
legal question and to sterile conclusions unrelated to actualities." The existence of an actual controversy in this
case is evident. President Duterte issued Proclamation No. 475 on April 26, 2018 and, pursuant thereto, Boracay
was temporarily closed the same day. Entry of non-residents and tourists to the island was not allowed until
October 25, 2018. Certainly, the implementation of the proclamation has rendered legitimate the concern of
petitioners that constitutional rights may have possibly been breached by this governmental measure. It bears to
state that when coupled with sufficient facts, "reasonable certainty of the occurrence of a perceived threat to any
constitutional interest suffices to provide a basis for mounting a constitutional challenge".
While it may be argued that the reopening of Boracay has seemingly rendered moot and academic questions
relating to the ban of tourists and non-residents into the island, abstention from judicial review is precluded by
such possibility of constitutional violation and also by the exceptional character of the situation, the paramount
public interest involved, and the fact that the case is capable of repetition.
Locus standi (legal standing). Legal standing or locus standi is a party's personal and substantial interest in a
case such that he has sustained or will sustain direct injury as a result of the governmental act being challenged.
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It calls for more than just a generalized grievance. The term 'interest' means a material interest, an interest in
issue affected by the decree, as distinguished from mere interest in the question involved, or a mere incidental
interest. There must be a present substantial interest and not a mere expectancy or a future,
contingent, subordinate, or consequential interest. Zabal is a sandcastle maker and Jacosalem, a
driver. The nature of their livelihood is one wherein earnings are not guaranteed. Therefore, what
Zabal and Jacosalem could lose in this case are mere projected earnings which are in no way
guaranteed, and are sheer expectancies characterized as contingent, subordinate, or consequential
interest. Concomitantly, an assertion of direct injury on the basis of loss of income does not clothe
Zabal and Jacosalem with legal standing.
As to Bandiola, the petition is bereft of any allegation as to his substantial interest in the case and as to how he
sustained direct injury as a result of the issuance of Proclamation No. 475. It has been held that a party who
assails the constitutionality of a statute must have a direct and personal interest. He must show not only that the
law or any governmental act is invalid, but also that he sustained or is in immediate danger of sustaining some
direct injury as a result of its enforcement, and not merely that he suffers thereby in some indefinite way. He
must show that he has been or is about to be denied some right or privilege to which he is lawfully entitled or
that he is about to be subjected to some burdens or penalties by reason of the statute or act complained of.
Indeed, the petition utterly fails to demonstrate that Bandiola possesses the requisite legal standing to sue.
Transcendental importance. Notwithstanding petitioners' lack of locus standi, this Court will allow this petition
to proceed to its ultimate conclusion due to its transcendental importance. After all, the rule on locus standi is a
mere procedural technicality, which the Court, in a long line of cases involving subjects of transcendental
importance, has waived or relaxed, thus allowing non-traditional plaintiffs such as concerned citizens, taxpayers,
voters and legislators to sue in cases of public interest, albeit they may not have been personally injured by a
government act. The matters raised in this case affect public interests and therefore are of transcendental
importance to the people. In addition, the situation calls for review because it is capable of repetition, the Court
taking judicial notice of the many other places in our country that are suffering from similar environmental
degradation.
Lis mota. As to the two other requirements, their existence is indubitable. It will be recalled that even before a
formal issuance on the closure of Boracay was made by the government, petitioners already brought the question
of the constitutionality of the then intended closure to this Court. And, a day after Proclamation No. 475 was
issued, they filed a supplemental petition impugning its constitutionality. Clearly, the filing of the petition and
the supplemental petition signals the earliest opportunity that the constitutionality of the subject government
measure could be raised. There can also be no denying that the very lis mota of this case is the constitutionality
of Proclamation No. 475.
SUBSTANTIAL
1. NO. Proclamation No. 475 does not pose an actual impairment on the right to travel. The activities
proposed to be undertaken to rehabilitate Boracay involved inspection, testing, demolition, relocation, and
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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. Tue 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.
On the other hand, petitioners have no vested rights on their sources of income as to be entitled to due process.
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.
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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.
2. YES. Since Proclamation No. 475 does not actually impose a restriction on the right to travel, its issuance did not
result to any substantial alteration of the relationship between the State and the people. The proclamation is
therefore not a law and conversely, the President did not usurp the law-making power of the legislature.
Even if it is otherwise, Proclamation No. 475 must be upheld for being in the nature of a valid police
power measure. Police power, amongst the three fundamental and inherent powers of the state, is
the most pervasive and comprehensive. "It has been defined as the 'state authority to enact
legislation that may interfere with personal liberty or property in order to promote general
welfare." "As defined, it consists of (1) imposition or restraint upon liberty or property, (2) in order
to foster the common good. It is not capable of exact definition but has be purposely, veiled in
general terms to underscore its all-comprehensive embrace." The police power "finds no specific
Constitutional grant for the plain reason that it does not owe its origin to the Charter" since "it is inborn in the
very fact of statehood and sovereignty." It is said to be the "inherent and plenary power of the State which
enables it to prohibit all things hurtful to the comfort, safety, and welfare of the society." Thus, police power
constitutes an implied limitation on the Bill of Rights. After all, "the Bill of Rights itself does not purport to be an
absolute guaranty of individual rights and liberties. 'Even liberty itself, the greatest of all rights, is not unrestricted
license to act according to one's will.' It is subject to the far more overriding demands and requirements of the
greater number."
"Expansive and extensive as its reach may be, police power is not a force without limits." "It has to be exercised
within bounds - lawful ends through lawful means, i.e., that the interests of the public generally, as distinguished
from that of a particular class, require its exercise, and that the means employed are reasonably necessary for
the accomplishment of the purpose while not being unduly oppressive upon individuals."
That the assailed governmental measure in this case is within the scope of police power cannot be disputed.
Verily, the statutes from which the said measure draws authority and the constitutional provisions which serve as
its framework are primarily concerned with the environment and health, safety, and well-being of the people, the
promotion and securing of which are clearly legitimate objectives of governmental efforts and regulations. The
motivating factor in the issuance of Proclamation No. 475 is without a doubt the interest of the public in general.
3. YES. The pressing need to implement urgent measures to rehabilitate Boracay is beyond cavil from the factual
milieu that precipitated the President's issuance of Proclamation No. 475. This necessity is even made more
critical and insistent by what the Court said in Oposa v. Hon. Factoran, Jr. in regard the rights to a balanced and
healthful ecology and to health, which rights are likewise integral concerns in this case. Oposa warned that unless
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the rights to a balanced and healthful ecology and to health are given continuing importance and the State
assumes its solemn obligation to preserve and protect them, the time will come that nothing will be left not only
for this generation but for the generations to come as well. It further taught that the right to a balanced and
healthful ecology carries with it the correlative duty to refrain from impairing the environment.
As earlier noted, one of the root causes of the problems that beset Boracay was tourist influx. Tourist arrivals in
the island were clearly far more than Boracay could handle. As early as 2007, the DENR had already determined
this as the major cause of the catastrophic depletion of the island's biodiversity. Also part of the equation is the
lack of commitment to effectively enforce pertinent environmental laws. Unfortunately, direct action on these
matters has been so elusive that the situation reached a critical level. Hence, by then, only bold and sweeping
steps were required by the situation. Certainly, the closure of Boracay, albeit temporarily, gave the island its
much needed breather, and likewise afforded the government the necessary leeway in its rehabilitation program.
Note that apart from review, evaluation and amendment of relevant policies, the bulk of the rehabilitation
activities involved inspection, testing, demolition, relocation, and construction. These works could not have easily
been done with tourists present. The rehabilitation works in the first place were not simple, superficial or mere
cosmetic but rather quite complicated, major, and permanent in character as they were intended to serve as
long-term solutions to the problem. Moreover, as part of the rehabilitation efforts, operations of establishments in
Boracay had to be halted in the course thereof since majority, if not all of them, need to comply with
environmental and regulatory requirements in order to align themselves with the government's goal to restore
Boracay into normalcy and develop its sustainability. Allowing tourists into the island while it was undergoing
necessary rehabilitation would therefore be pointless as no establishment would cater to their accommodation
and other needs. Besides, it could not be said that Boracay, at the time of the issuance of the questioned
proclamation, was in such a physical state that would meet its purpose of being a tourist destination. For one, its
beach waters could not be said to be totally safe for swimming. In any case, the closure, to emphasize, was only
for a definite period of six months, i.e., from April 26, 2018 to October 25, 2018. Absent a clear showing of grave
abuse of discretion, unreasonableness, arbitrariness or oppressiveness, the Court will not disturb the executive
determination that the closure of Boracay was necessitated by the foregoing circumstances. As earlier noted,
petitioners totally failed to counter the factual bases of, and justification for the challenged executive action.
Undoubtedly, Proclamation No. 475 is a valid police power measure. To repeat, police power constitutes an
implied limitation to the Bill of Rights, and that even liberty itself, the greatest of all rights, is subject to the far
more overriding demands and requirements of the greater number. For the above reasons, petitioners'
constitutional challenge on Proclamation No. 475 anchored on their perceived impairment of the right to travel
must fail.
4. NO. The alleged intrusion of the President into the autonomy of the LGUs concerned is likewise too trivial to
merit this Court's consideration. Contrary to petitioners' argument, RA 10121 recognizes and even puts a
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premium on the role of the LGUs in disaster risk reduction and management as shown by the fact that a number
of the legislative policies set out in the subject statute recognize and aim to strengthen the powers decentralized
to LGUs. This role is echoed in the questioned proclamation. The fact that other government agencies are
involved in the rehabilitation works does not create the inference that the powers and functions of the LGUs are
being encroached upon. The respective roles of each government agency are particularly defined and
enumerated in Executive Order No. 5365 and all are in accordance with their respective mandates. Also, the
situation in Boracay can in no wise be characterized or labelled as a mere local issue as to leave its rehabilitation
to local actors. Boracay is a prime tourist destination which caters to both local and foreign tourists. Any issue
thereat has corresponding effects, direct or otherwise, at a national level. This, for one, reasonably takes the
issues therein from a level that concerns only the local officials. At any rate, notice must be taken of the fact that
even if the concerned LGUs have long been fully aware of the problems afflicting Boracay, they failed to
effectively remedy it. Yet still, in recognition of their mandated roles and involvement in the rehabilitation of
Boracay, Proclamation No. 475 directed "all departments, agencies and offices, including government-owned or
controlled corporations and affected local government units to implement and execute the closure [of Boracay]
and the appropriate rehabilitation works, in accordance with pertinent operational plans and directives, including
the Boracay Action Plan."
31) Short Title: Mirasol vs. DPWH (G.R. No. 158793, June 8, 2006)
Full Title: G.R. No. 158793 June 8, 2006
JAMES MIRASOL, RICHARD SANTIAGO, and LUZON MOTORCYCLISTS FEDERATION, INC., Petitioners, vs.
DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS and TOLL REGULATORY BOARD, Respondents.
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 in 1957. 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).
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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:
1. Whether RTC’s decision is barred by res judicata?
2. Whether DO 74, DO 215 and the TRB regulation contravene RA 2000.
3. Whether AO 1 is unconstitutional.
Ruling:
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. Page 267 of 376A 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. 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.
Page 76 of 306
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 tollway, was a subject that could validly be limited by regulation. There was no absolute right to
drive; on the contrary, this privilege was heavily regulated.
32) Short Title: Anglo-Fil Trading vs. Lazaro [124 SCRA 494 (1983)]
Full Title: G.R. No. L-54958 September 2, 1983
ANGLO-FIL TRADING CORPORATION, ADUANA STEVEDORING CORPORATION, ANDA STEVEDORING
CORPORATION, BEN PAZ PORT SERVICE, INC., MANILA STEVEDORING CORPORATION, WATERFRONT
STEVEDORING AND ARRASTRE SERVICES, INC., VANGUARD STEVEDORING AND ARRASTRE SERVICES,
INC., and LUVIMIN STEVEDORING/ARRASTRE & DEVELOPMENT CORPORATION, petitioners,
vs.
HON. ALFREDO LAZARO, in his capacity as Presiding Judge of Branch XXV, of the Court of First Instance of
Manila, PHILIPPINE PORTS AUTHORITY, COL. EUSTAQUIO S. BACLIG, JR., CDR. PRIMITIVO SOLIS, JR.,
and OCEAN TERMINAL SERVICES, INC., respondents.
Facts: Involved in these two petitions is the operation of stevedoring work in the South Harbor of the Port of Manila.
Stevedoring, as the term is understood in the port business, consists of the handling of cargo from the hold of the ship to
the dock, in case of pier-side unloading, or to a barge, in case of unloading at sea. The loading on the ship of outgoing
cargo is also part of stevedoring work. Stevedoring charges at rates approved by the Government are assessed and
collected for the services.
The Philippines Ports Authority (PPA), the government agency charged with the management and control of all
ports, was created by Presidential Decree No. 505, promulgated on July 11, 1974, later superseded by Presidential Decree
No. 857 dated December 23, 1975. The PPA’s function is to carry out an integrated program for the planning,
development, financing, and operation of ports and port districts throughout the country. Among other things, the
powers, duties, and jurisdiction of the Bureau of Customs concerning arrastre operations were transferred to and vested
in the PPA.
The Philippine Integrated Port Services, Inc., (PIPSI), petitioner in G.R. No. 54966, is a stevedoring operator at
the Manila South Harbor. Anglo-Fil Trading Corporation, Aduana Stevedoring Corporation, Anda Stevedoring Corporation,
Ben Paz Port Service, Inc., Manila Stevedoring and Arrastre Services, Inc., (Anglo-Fil, et al.,) petitioners in G.R. No.
54958, are stevedoring and arrastre operators and contractors, likewise at Manila South Harbor, Port of Manila. Anglo-Fil,
et al., are members of the Philippine Association of Stevedoring Operators and Contractors, Inc. (PASOC).
Page 77 of 306
Prior to the present controversy which arose as a result of the actions of the PPA, 23 contractors competed at the
South Harbor for the performance of stevedoring work. The licenses of these contractors had long expired when the PPA
took over the control and management of ports but they continued to operate afterwards on the strength of temporary
permits and hold-over authorities issued by PPA.
On May 4, 1976, the Board of Directors of PPA passed Resolution 10, approving and adopting a set of policies on
Port Administration, Management and Operation. The PPA adopted as its own the Bureau of Customs‘ policy of placing on
only one organization the responsibility for the operation of arrastre and stevedoring services in one port.
President Ferdinand E. Marcos issued Letter of Instruction 1005-A which, among other things, directed PPA to
expeditiously evaluate all recognized cargo handling contractors and port-related service operators and to determine the
qualified contractor or operator in order to ensure effective utilization of port facilities, etc. This was followed by the
President‘s memorandum directing submission of a report on the integration of the stevedoring operations in Manila
South Harbor and emphasizing the need for such integration as well as the strengthening of the PPA in order to remedy
the problems therein.
On April 28, 1980, the committee submitted its report recommending the award of an exclusive
contract for stevedoring services in the South Harbor to Ocean Terminal Services, Inc. (OTSI) after finding
it the best qualified among the existing contractors. The PPA submitted the committee report to the President,
who approved the recommendation to award an exclusive management contract to OTSI. On June 27, 1980, PPA and
OTSI entered into a management contract which provided, among others, for a 5-year exclusive operation by OTSI of
stevedoring services in the South Harbor, renewable for another 5 years. The Board of Directors of the PPA gave its
approval.
Thereafter, PIPSI instituted an action before the Court of First Instance (CFI) of Manila against PPA and OTSI for
the nullification of the contract between the two, the annulment of the 10% of gross stevedoring revenue being collected
by PPA, and injunction with preliminary injunction. An ex-parte restraining order was issued. On August 21, 1980. with
leave of court, Anglo-Fil, et al., filed their complaint in intervention. The motion was granted and the CFI issued another
ex-parte restraining order in the case to include Anglo-Fil et. al., under the benefits of such order. On August 30, 1980,
the PPA filed an urgent motion to lift the restraining orders ―in view of the long delay in the resolution of the injunction
incident and the countervailing public interest involved.
On September 1, 1980, the CFI dissolved, lifted and set aside the restraining orders without prejudice to the
Court‘s resolution on the propriety of issuing the writ of preliminary injunction prayed for. PPA then sent a letter to the
General Manager of PIPSI informing him that due to the lifting of the temporary restraining order, it was withdrawing
PIPSI‘s holdover authority to operate or provide stevedoring services at South Harbor. Anglo-Fil, et al., and PIPSI,
therefore, filed the petitions for certiorari with preliminary injunction alleging that the lifting of the restraining orders ex-
parte by the CFI was clearly effected with grave abuse of discretion amounting to lack of jurisdiction.
Issue/s:
1. Whether the PPA have the power and authority to award an exclusive stevedoring contract in favor of respondent
OTSI?
Page 78 of 306
2. Whether the PPA-OTSI Management Contract executed pursuant to P.D. No. 857 and LOI No. 1005-A should be
declared invalid. (In so far as it deprives petitioners due process and that it promotes monopolies as contended
by the petitioners)
Ruling:
1. YES. The petitioners are on extremely shaky grounds when they invoke the non-impairment clause to sustain
their charge of invalidity. According to the petitioners, contracts entered into with local and foreign clients or
customers would be impaired.
Even in the United States during the heyday of the laissez faire philosophy, we are informed that the American
Supreme Court’s interpretations have never allowed the contract clause to be an inflexible barrier to public
regulation. We cite the 1914 decision in Atlantic Coast Line R. Co. v. Goldsboro (232 U.S. 548) where the U.S.
Court ruled "It is settled that neither the contract clause nor the due process clause has the effect of overriding
the power of the State to establish all regulations that are reasonably necessary to secure the health, safety,
good order, comfort, or general welfare of the community; that this power can neither be abdicated nor
bargained away, and is inalienable even by express grant; and that all contract and property rights are held
subject to its fair exercise" and Manigault v. Springs (199 U.S. 473) where the same Court stated that "parties by
entering itno contract may not stop the legislature from enacting laws intended for the public good."
In the Philippines, the subservience of the contract clause to the police power enacting public
regulations intended for the general welfare of the community is even more clearcut. As pointed out
by then Senior Associate, now Chief Justice Enrique M. Fernando, the laissez faire or let alone philosophy has no
place in our scheme of things, not even under the 1935 Constitution. In his concurring opinion in Agricultural
Credit and Cooperative Financing Administration v. Confederation of Unions (30 SCRA 649, 682-683) Chief Justice
Fernando stated: "xxx With the decision reached by us today, the Government is freed from the compulsion
exerted by the Bacani doctrine of the ‘constituent-ministrant’ test as a criterion for the type of activity in which it
may engage. Its constricting effect is consigned to oblivion. No doubts or misgivings need assail us that
governmental efforts to promote the public weal, whether through regulatory legislation of vast scope and
amplitude or through the undertaking of business activities, would have to face a searching and rigorous scrutiny.
It is clear that their legitimacy cannot be challenged on the ground alone of their being offensive to the
implications of the laissez-faire concept. Unless there be a repugnancy then to the limitations expressly set forth
in the Constitution to protect individual rights, the government enjoys a much wider latitude of action as to the
means it chooses to cope with grave social and economic problems that urgently press for solution. xxx"
The Manila South Harbor is public property owned by the State. The operations of this premiere port
of the country, including stevedoring work, are affected with public interest. Stevedoring services
are subject to regulation and control for the public good and in the interest of general welfare Not
only does the PPA, as an agency of the State enjoy the presumption of validity in favor of its official
acts implementing its statutory charter, it has more than adequately proved that the integration of
port services-is far from arbitrary and is related to the stated governmental objective.
Page 79 of 306
A single contractor furnishing the stevedoring requirements of a port has in its favor the economy of scale and
the maximum utilization of equipment and manpower. In turn, effective supervision and control as well as
collection and accounting of the government share of revenues are rendered easier for PPA than where there are
23 contractors for it to oversee. As respondent court found from the evidence, the multiple-contractor system has
bred cut-throat competitions in the port. Understandably, most contractors had been unable to acquire sufficient
modern facilities, observe labor standards for their workers, maintain efficiency in services, and pay PPA dues.
The questioned program would accelerate the rationalization and integration of all cargo-handling activities and
port-related services in major ports and the development of vital port facilities, projects, and services.
2. NO. The contention of petitioners Anglo-Fil, et al., that due process was violated resulting to a confiscatory effect
on private property is likewise without merit. In the first place, the petitioners were operating merely on "hold-
over" permits. Clearly, all hold-over permits were by nature temporary and subject to subsequent policy
guidelines as may be implemented by PPA. Such should have served as sufficient notice to petitioners that, at any
time, their authorities may be terminated.
Petitioners PIPISI would also impress upon this Court that the certification issued to it and its fellow contractors
by PPA, dated August 30, 1979, showed that they were not only kept in the dark as to PPA’s subsequent move to
award OTSI an exclusive contract, but that they were actually lulled into believing that their temporary permits
were being given pending issuance of their PTO or Permit to Operate. The Court believes otherwise. The second
paragraph of the certification states that the hold-over permit was still subject to the memorandum. The
certification provided that: "In accordance with PPA Memo Circular No. I, dated January 9, 1977 …, the said firm is
allowed to continue operating at the South Harbor, Port manila.
Petitioners, therefore, cannot be said to have been deprived of property without due process because, in this
respect, what was given them was not a property right but a mere privilege and they should have taken
cognizance in the South Harbor, their permits can be withdrawn anytime the public welfare deems it best to do
so. The absence of arbitrariness or bad faith is manifest in the selection procedure adopted. The award in favor
of OTSI was the result of an evaluation of performance of existing contractors made by a special committee
created by the PPA. The respondent court found from the evidence that the members of that committee were "in
a vantage position as to provide proper evaluation and determination of the individual performance, qualification,
and compliance of the PPA requirements by each stevedoring operator." The committee rated OTSI with the
highest grade of 95% in its evaluation. And significantly, since no less than the President of the Philippines
approved the award of the management contract to OTSI presumptively after through consideration of all factors
relevant to efficient stevedoring services, it is difficult for this Court to find a violation of due process in the
selection procedure.
Page 80 of 306
In seeking the nullification of the management contract, the petitioners also invoke the constitutional provision on
monopolies and combination. Private monopolies are not necessarily prohibited by the Constitution. They may be
allowed to exist but under State regulation. A determination must first be made whether public interest requires
that the State should regulate or prohibit private monopolies. A distinction prevails as regards combinations in
restraint of trade and unfair competition which are prohibited outright by the Constitution. By their very nature,
certain public services or public utilities such those which supply water, electricity, transportation, telephone,
telegraph, etc. must me given exclusive franchises if public interest is to be served. Such exclusive franchises are
not violative of the law against monopolies.
Neither is the management contract violative of the Anti-Graft Law. It is a contract executed in pursuance to law
and the instructions of the President to carry out government objectives to promote public interest. The act did
not cause "undue injury" to the petitioners who as explained earlier had no vested property rights entitled to
protection. There is no undue injury to the government nor any unwarranted benefit to OTSI consideration for
PPA which is the payment by OTSI of ten percent (10%) of its gross income, something which petitioner PIPSI is
loathe to pay. The rationalization and effective utilization of port facilities is to the advantage of the Government.
Furthermore, the discretion in choosing the stevedoring contractor for the south Harbor, Port Manila, belongs by
law to PPA. As long as standards are set in determining the contractor and such standards are reasonable and
related to the purpose for which they are used, the courts should not inquire into the wisdom of PPA’s choice.
The criterion used by PPA namely, the identification of a contractor with the highest potential for operating an
exclusive service, appears reasonable.
In view of the foregoing, we find the PPA-OTSI Management Contract executed on June 27, 1980, valid and
devoid of any constitutional or legal infirmity. The respondents, however, should maintain the policy of absorption
of bona-fide displaced port workers in the integration scheme as mandated not only by LOI No. 1005-A but by
the policy of the State to assure the rights of workers to security of tenure. (sec. 9, Art. II, Constitution)
We note that both PPA and OTSI have given assurance in their answers that none of the legitimate stevedores
would be displaced from work although they added that their bonafide stevedores should join PWUP. Which union
a worker or various workers should join cannot be ordained by this Court in these petitions where the basic issue
is the validity of the exclusive stevedoring contract given to one operator for one port. This matter will have to be
eventually threshed out by the workers themselves and the Ministry of Labor and Employment before it may be
elevated to us, if ever. However, we reiterate the guidelines earlier issued that no bona fide stevedore or worker
should be deprived of employment he used to enjoy simply because of the execution and implementation of the
disputed Management Contract. This absorption of bona fide workers is an act of social justice. When a person
has no property, his job may possibly be his only possession or means of livelihood. Therefore, he should be
protected against any arbitrary and unjust deprivation of his job.
Page 81 of 306
33) Short Title: PPA vs. Cipres Stevedoring [G.R. No. 145742, July 14, 2005].
Full Title: G.R. No. 145742. July 14, 2005
THE PHILIPPINE PORTS AUTHORITY, represented by its GENERAL MANAGER JUAN O. PENA, Petitioners, vs.
CIPRES STEVEDORING & ARRASTRE, INC., Respondents.
Facts: Petitioner PPA is a govt. entity created by virtue of P.D. no. 857 and is tasked to implement an integrated
program for the planning, development, financing, and operation of ports and port districts in the country.
Respondent CISAI is a domestic corporation primarily engaged in stevedoring, arrastre, and porterage business,
including cargo handling and hauling services in Negros Oriental and Dumaguete and Bais. Since 1976, CISAI had been
granted permits to operate the cargo handling operations in Dumaguete.
In 1991, PPA awarded an 8-year contract to CISAI to pursue its business endeavor. Upon this time, PPA
Administrative Order No. 03-90 took effect providing for the awarding of cargo handling services through public bidding.
Following the expiration of its contract, CISAI was able to continue with its business by virtue of hold-over permits
given by PPA. During this time, another administrative order PPA AO No. 03-2000 took effect which amended PPA AO
no. 03-90 expressly provided that all contract for cargo handling services of more than 3 years shall be awarded
through public bidding.
CISAI initiated an action for specific performance, injunction with application for preliminary mandatory injunction,
contending that PPA‘s action was I derogation of their vested right over the operation of cargo handling enterprise. The
lower court granted CISAI‘s prayer for a temporary restraining order.
PPA filed a motion for reconsideration which was granted by the trial court setting aside the injunctive writ. CISAI
filed a petition for certiorari before the CA, and the CA granted the petition, ordering PPA to desist from conducting the
scheduled public bidding for cargo handling operations in the port of Dumaguete.
Thus, this instant appeal.
Issue: Whether CISAI have acquired a vested right to the cargo handling operations at the Dumaguete Port.
Ruling: NO. The Supreme Court held that CISAI have no vested rights to the cargo handling operations because the
continuance of their business was due to hold over permits given by PPA, and such may be revoked anytime by the
granting authority. As held in the case of Anglo-Fil Trading Corporation vs. Lazaro, hold over permits are merely
temporary subject to the policy and guidelines as may be implemented by the authority granting it. Stevedoring services
are imbued with public interest and subject to the state‘s police power, therefore, whatever proprietary right the CISAI
may have acquired must necessarily give way to valid exercise of police power.
PPA, being created for the purpose of promoting the growth of regional port bodies, it is empowered to make port
regulations. With this mandate, the decision to bid out cargo holding services is properly within the province and
discretion of PPA. As for CISAI‘s claim that PPA AO No. 03-2000 violated the constitutional provision of non-impairment of
contract, suffice it to state that all contracts are subject to the overriding demands, needs, interests of the greater
number as the State may determine in the legitimate exercise of its police power. Wherefore, Petition is granted.
Page 82 of 306
34) Short Title: Chavez vs. Romulo [G.R. No. 157036, June 9, 2004]
Full Title: G.R. NO. 157036. JUNE 9, 2004
FRANCISCO I. CHAVEZ, Petitioner, v. HON. ALBERTO G. ROMULO, IN HIS CAPACITY AS EXECUTIVE
SECRETARY; DIRECTOR-GENERAL HERMOGENES E. EBDANE, JR., IN HIS CAPACITY AS THE CHIEF OF THE
PNP, et al., Respondents.
FACTS: In Jan. 2003, ex-Pres. GMA delivered a speech before the members of the PNP stressing the need for a
nationwide gun ban in all public places to stop the rising crime incidents. Thus, she directed then PNP Chief Ebdane Jr. to
suspend the issuance of Permits to Carry Firearms Outside Residence (PTCFOR). Acting on PGMAs directive, Ebdane
issued the assailed Guidelines.
ISSUE: Whether or not the issuance of the assailed Guidelines is a valid exercise of police power.
RULING: Assuming that PTC FOR constitutes a property right protected by the constitution, the same cannot be
considered as absolute as to be placed beyond the reach of the States police power. All property in the state is held
subject to its general regulations, necessary to the common good and general welfare.
Test to determine the validity of a police measure:(1) The interests of the public generally require the exercise of
police power;(2) The means employed are reasonably necessary for the accomplishment of the purpose and not unduly
oppressive upon individuals.
The test merely reiterates the essence of the constitutional guarantees of substantive due process, equal
protection, and non-impairment of property rights.
It is apparent from the assailed Guidelines that the basis for its issuance was the need for peace and order in the
society. Owing to the proliferation of crimes, particularly those committed by the New Peoples Army (NPA), President
Arroyodeemed it best to impose a nationwide gun ban. The motivating factor in the issuance of the assailed Guidelines is
the interest of the public in general.
The only question that can then arise is whether the means employed are appropriate and reasonably necessary
for the accomplishment of the purpose and are not unduly oppressive. In the instant case, the assailed Guidelines do not
entirely prohibit possession of firearms. What they proscribe is merely the carrying of firearms outside of the residence.
However, those who wish to carry their firearms outside of their residences may re-apply for a new PTCFOR. This we
believe is a reasonable regulation. If the carrying of firearms is regulated, necessarily, crime incidents will be curtailed.
With the revocation of all PTCFOR, it would be difficult for criminals to roam around with their guns. On the other hand, it
would be easier for the PNP to apprehend them.
Laws regulating the acquisition or possession of guns have frequently been upheld as a reasonable exercise of
police power. With the promotion of public peace as its objective and the revocation of all PTCFOR as the means, the
Court is convinced that the issuance of the assailed Guidelines constitutes a reasonable exercise of police power. The
petition is hereby DISMISSED.
Page 83 of 306
35) Short Title: Bautista vs. Junio [127 SCRA 329 (1984)]; G.R. No. L-50908 January 31, 1984
Full Title: MARY CONCEPCION BAUTISTA and ENRIQUE D. BAUTISTA, petitioners, vs. ALFREDO L. JUINIO,
ROMEO F. EDU and FIDEL V. RAMOS, respondents.
FACTS: Letter of Instruction 869 was issued on May 31, 1979, as the validity of energy conservation prohibiting certain
vehicles on certain days or, to apply to this case, The use of private motor vehicles with heavy (H) and extra heavy (EH)
plates on weekends and holidays was banned from"12:00 a.m. Saturday morning to 5:00 a.m. Monday morning, or 1:00
a.m. of the holiday to 5:00 a.m. of the day after the holiday.
This was in pursuant to Memorandum Circular No. 39, issued on June 11, 1979, by respondent Alfredo L. Junio,
then Minister of Public Works, Transportation and communications and respondent Romeo P. Edu, then Commissioner of
Land TransportationCommission, which imposed "the penalties of fines, confiscation of vehicle and cancellation of
registration on owners of the certain vehicles" found violating such Letter of Instruction. As provided, For violation of any
provisions of this Act or regulations promulgated pursuant hereto, not hereinbefore specifically punished, a fine of not
less than ten nor more than fifty pesos shall be imposed.
Petitioners Mary Concepcion Bautista and Enrique D. Bautista who are "the registered owners of an eight-cylinder
1969 Buick, and the vendees of a six-cylinder Willy's kaiser jeep, which are both classified as heavy or H" are being
allegedly violative of the due process and equal protection guarantees of the Constitution. According to Article IV, Sec. 1
of the Constitution: No person shall be deprived of life, liberty, or property without due process of law, nor shall any
person be denied the equal protection of the laws.
It was then alleged by petitioners that "while the purpose for the issuance of the LOI 869 is laudable, to wit,
energy conservation, the provision banning the use of H and EH [vehicles] isunfair, discriminatory, [amounting to an]
arbitrary classification" and thus in contravention of the equal protection clause. Also, such Letter of Instruction is a denial
of due process, more specifically," of their right to use and enjoy their private property and of their freedom to travel and
hold family gatherings, reunions and outings on weekends and holidays," inviting attention to the fact that others not
included in the ban enjoying "unrestricted freedom." For them, there is no rational justification for the ban being imposed
on vehicles classified as heavy (H) and extra-heavy (EH), for precisely those owned by them fall within such category.
Petitioners also contend that Memorandum Circular No. 39 issued by herein respondents imposing penalties of
fines, confiscation of the vehicle, and cancellation of license of owners of the above-specified vehicles found violating
such LOI, is likewise unconstitutional, for being violative of the doctrine of undue delegation of legislative power.
ISSUE: Whether or not Letter of Instruction No. 869 as implemented by Memorandum Circular No.39 is violative of: (1)
equal protection clause? (2) Of due process - non-delegation of legislative power?
RULING: No violation of equal protection clause and of due process

LOI No. 869 is not held offensive to the due process clause as such measures provided are conducive to energy
conservation. A recital of the whereas clauses of the Letter of Instruction makes it clear. Thus: "[Whereas], developments
in the international petroleum supply situation continue to follow a trend of limited production and spiraling prices thereby
precluding the possibility of immediate relief in supplies within the foreseeable future; [Whereas], the uncertainty of fuel
Page 84 of 306
supply availability underscores a compelling need for the adoption of positive measures designed to ensure the viability of
the country's economy and sustain its developmental growth;[Whereas], to cushion the effect of increasing oil prices and
avoid fuel supply disruptions, it is imperative to adopt a program directed towards the judicious use of our energy
resources complemented with intensified conservation efforts and efficient utilization thereof.
On the other hand, administrative interpretation of the law is at best merely advisory, for it is the courts that
finally determine what the law means. It cannot be otherwise as to the Constitution limits the authority of the President,
in whom all executive power resides, to take care that the laws be faithfully executed. No lesser administrative executive
office or agency then can, contrary to the express language of the Constitution, assert for itself a more extensive
prerogative."
Also, Memorandum Circular No. 39 cannot be held to be ultra vires as long as the fine imposed is not less than
ten nor more than fifty pesos. It follows that while the imposition of a fine or the suspension of registration under the
conditions therein set forth is valid under the Land Transportation and Traffic Code, the impounding of a vehicle finds no
statutory justification. To apply that portion of Memorandum Circular No. 39 would be ultra vires. It must likewise be
made clear that a penalty even if warranted can only be imposed in accordance with the procedure required by law.
36) Short Title: Marfe vs. Mutuc [22 SCRA 424]

Full Title: G.R. No. L-20387 JANUARY 31, 1968
JESUS P. MORFE, plaintiff-appellee, vs. AMELITO R. MUTUC, as Executive Secretary, ET AL., defendants-
appellants.
FACTS: One of the specific provisions of the Anti-Graft and Corrupt Practices Act of 1960 is that every public officer,
either within thirty (30) days after its approval or after his assumption of office “and within the month of January of every
other year thereafter”, as well as upon the termination of his position, shall prepare and file with the head of the office to
which he belongs, “a true detailed and sworn statement of assets and liabilities, including a statement of the amounts
and sources of his income, the amounts of his personal and family expenses and the amount of income taxes paid for the
next preceding calendar: . . .”
In relation to Morfe’s alleged accumulation of assets grossly disproportionate to his reported incomes after his
assumption to office, plaintiff Morfe alleged that the periodical submission of such sworn statement of assets is violative
of due process as an oppressive exercise of police power and as an unlawful invasion of the constitutional right to
privacy, implicit in the ban against unreasonable search and seizure construed together with the prohibition against self-
incrimination.
On the other hand, the defendants’ Secretary of Justice and Executive Secretary contended that it was a
legitimate exercise of police power, and that Morfe, having accepted a public position, voluntarily assumed the obligation
to give information about his personal affair, not only at the time of his assumption of office but during the time he
continues to discharge the public trust.
Lower court: Law is unconstitutional.
Page 85 of 306
ISSUE: Whether or not the required periodical submission of the sworn statement of assets and liabilities is
unconstitutional on the grounds of it being an unlawful invasion of the right to privacy, and an insult to the personal
integrity and official dignity of public officials.
RULING: No. SC said that such provision of the Anti-Graft and Corrupt Practices Act is constitutional. It is within the
State’s police power, and is not violative of due process and liberty. It is also not a violation of the guarantee against
unreasonable search and seizure and is not against the non-incrimination clause. Furthermore, it is not an insult to the
personal integrity and official dignity of public officials.
The Anti-Graft Act of 1960 was precisely aimed at curtailing and minimizing the opportunities for official
corruption and maintaining a standard of honesty in the public service. It is intended to further promote morality in public
administration. A public office must indeed be a public trust.
The State’s inherent police power enables it to prohibit all things hurtful to the comfort, safety, and welfare of
society. However, if the police power extends to regulatory action affecting persons in public or private life, then anyone
with an alleged grievance can invoke the protection of due process which permits deprivation of property or liberty as
long as such requirement is observed.
If due process mandate is not disregarded, even a public official, to protect the security of tenure which is
analogous to property, can protect himself from an infringement of his liberty. However, liberty, in the interest of public
health, public order, or safety, of the general welfare, in other words through the proper exercise of the police power,
may be regulated.
In here, the reasonableness of the law makes the prohibition valid and within the ambit of police power.
It would be to dwell in the realm of abstractions and to ignore the harsh and compelling realities of public service
with its ever-present temptation to heed the call of greed and avarice to condemn as arbitrary and oppressive a
requirement as that imposed upon public officials and employees to file such sworn statement of assets and liabilities
every two years after having done so upon assuming office. There was therefore no unconstitutional exercise of police
power.
A periodical submission of a sworn statement of assets and liabilities after assumption of office is within the
power of the government to impose, even if it will affect the public officer’s liberty, for as long as due process is
observed. In subjecting the public officer to such a further compulsory revelation of his assets and liabilities, including the
statement of the amounts and sources of income, the amounts of personal and family expenses, and the amount of
income taxes paid for the next preceding calendar year, there is no unconstitutional intrusion into what otherwise would
be a private sphere.
Other Notes:
Presumption of validity
Plaintiff asserted that the submission of SAL was a reasonable requirement for employment so a public officer can
make of record his assets and liabilities upon assumption of office. Plaintiff did not present evidence to rebut the
presumption of validity.
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“If the liberty involved were freedom of the mind or the person, the standard for the validity of governmental acts
is much more rigorous and exacting, but where the liberty curtailed affects the most rights of property, the permissible
scope of regulatory measure is wider.” (Ermita-Malate Hotel v. Mayor of Manila)
Exercise of Police power and the defense provided by the Due Process Clause
“Inherent and plenary power in the state which enables it to prohibit all things hurtful to the comfort, safety, and
welfare of society” (Justice Malcolm)
The power of sovereignty, the power to govern men and things within the limits of its domain (Justice Taney,
going beyond curtailment of rights)
Anyone with an alleged grievance regarding the extension of police power to regulatory action affecting persons
in public or private life can invoke the protection of due process.
It has been held that due process may be relied upon by public officials to protect the security of tenure which in
a limited sense is analogous to property. Therefore he could also use due process to strike down what he considers as an
infringement of his liberty.
Under the Constitution, the challenged provision is allowable as long as due process is observed.
The standard for due process is REASONABLENESS. Test: Official action must not outrun the bounds of reason
and result in sheer oppression.
“It would be to dwell in the realm of abstractions and to ignore the harsh and compelling realities of public
service with its ever-present temptation to heed the call of greed and avarice to condemn as arbitrary and oppressive a
requirement as that imposed upon public officials and employees to file such sworn statement of assets and liabilities
every two years after having done so upon assuming office. There was, therefore, no unconstitutional exercise of police
power.”
Right to privacy or Right to be left alone

“It cannot be said that the challenged statutory provision calls for disclosure of information which infringes on the
right of a person to privacy. It cannot be denied that the rational relationship such a requirement possesses with the
objective of a valid statute goes very far in precluding assent to an objection of such character. This is not to say that a
public officer, by virtue of the position he holds, is bereft of constitutional protection; it is only to emphasize that in
subjecting him to such a further compulsory revelation of his assets and liabilities, including the statement of the amounts
of personal and family expenses, and the amount of income taxes paid for the next preceding calendar year, there is no
unconstitutional intrusion into what otherwise would be a private sphere.”
Unreasonable Search and Seizure

The constitutional guarantee against unreasonable search and seizure does not give freedom from testimonial
compulsion.
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Right against self-incrimination

We are not aware of any constitutional provision designed to protect a man’s conduct from judicial inquiry or aid
him in fleeing from justice.
Insult to personal integrity and official dignity

Only congressional power or competence, not the wisdom of the action taken, may be the basis for declaring a
statute invalid.
37) Short Title: Taxicab Operators of Metro Manila vs. BOT [119 SCRA 597 (1982)]
Full Title: GR L-59234, SEPTEMBER 30, 1982
TAXICAB OPERATORS OF METRO MANILA vs. THE BOARD OF TRANSPORTATION
FACTS: Petitioners who are taxicab operators assail the constitutionality of Memorandum Circular No. 77-42 issued by
the Board of Transportation (BOT) providing for the phasing out and replacement of old and dilapidated taxicabs; as well
as Implementing Circular No. 52 issued pursuant thereto by the Bureau of Land Transportation (BLT) instructing
personnel of the BLT within the National Capital Region to implement the said BOT Circular, and formulating a schedule of
phase-out of vehicles to be allowed and accepted for registration as public conveyances.
Petitioners allege that the questioned Circulars did not afford them procedural and substantive due process, equal
protection of the law, and protection against arbitrary and unreasonable classification and standard. Among others, they
question the issuance of the Circulars without first calling them to a conference or requiring them to submit position
papers or other documents enforceability thereof only in Metro Manila; and they are being applicable only to taxicabs and
not to other transportation services.
ISSUE: Whether or not the constitutional guarantee of due process was denied to the taxicab operators and/or other
persons affected by the assailed Circular No. 52.
RULING: No. The Supreme Court held that there was no denial of due process since calling the taxicab operators or
persons who may be affected by the questioned Circulars to a conference or requiring them to submit position papers or
other documents is only one of the options open to the BOT which is given wide discretionary authority under P.D. No.
101; and fixing a six-year ceiling for a car to be operated as a taxicab is a reasonable standard adopted to apply to all
vehicles affected uniformly, fairly, and justly.
The Court also ruled that neither has the equal protection clause been violated by initially enforcing the Circulars
only in Metro Manila since it is of common knowledge that taxicabs in this city, compared to those of other places, are
subject to heavier traffic pressure and more constant use, thus making for a substantial distinction; nor by non-
application of the Circulars to other transportation services because the said Circulars satisfy the criteria required under
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the equal protection clause, which is the uniform operation by legal means so that all persons under identical or similar
circumstances would be accorded the same treatment both in privilege conferred and the liabilities imposed.
It is clear from the provision of Section 2 of P.D. 101 afore quoted, that the leeway accorded the Board gives it a
wide range of choice in gathering necessary information or data in the formulation of any policy, plan, or program. It is
not mandatory that it should first call a conference or require the submission of position papers or other documents from
operators or persons who may be affected, this being only one of the options open to the Board, which is given wide
discretionary authority.
Petitioners cannot justifiably claim, therefore, that they were deprived of procedural due process. Neither can
they state with certainty that public respondents had not availed of other sources of inquiry prior to issuing the
challenged Circulars. Operators of public conveyances are not the only primary sources of the data and information that
may be desired by the BOT.
38) Short Title: Agustin vs. Edu [88 SCRA 195 (February 2, 1979)]
Full Title: G.R. NO. L-49112 FEBRUARY 2, 1979
LEOVILLO C. AGUSTIN, petitioner, vs. HON. ROMEO F. EDU, in his capacity as Land Transportation
Commissioner; HON. JUAN PONCE ENRILE, in his capacity as Minister of National Defense; HON. ALFREDO
L. JUINIO, in his capacity as Minister Of Public Works, Transportation, and Communications; and HON:
BALTAZAR AQUINO, in his capacity as Minister of Public Highways, respondents.
FACTS: Petitioner, Agustin assails the validity of the Letter of Instruction No. 229 which requires an early warning device
to be carried by users of motor vehicles as being violative of the constitutional guarantee of due process and transgresses
the fundamental principle of non-delegation of legislative power.
Herein respondent Romeo Edu in his capacity as Land Transportation Commissioner set forth the implementing
rules and regulations of the said instruction.
Petitioner makes known that he "is the owner of a Volkswagen Beetle Car, Model 13035, already properly
equipped when it came out from the assembly lines with blinking lights fore and aft, which could very well serve as an
early warning device in case of the emergencies mentioned in Letter of Instructions No. 229, as amended, as well as the
implementing rules and regulations in Administrative Order No. 1 issued by the land transportation Commission,"
Furthermore, petitioner contends that the law is "one-sided, onerous and patently illegal and immoral because
[they] will make manufacturers and dealers instant millionaires at the expense of car owners who are compelled to buy a
set of the so-called early warning device at the rate of P 56.00 to P72.00 per set." are unlawful and unconstitutional and
contrary to the precepts of a compassionate New Society [as being] compulsory and confiscatory on the part of the
motorists who could very well provide a practical alternative road safety device or a better substitute to the specified set
of Early Warning Device (EWD)."
This instruction, signed by President Marcos, aims to prevent accidents on streets and highways, including
expressways or limited-access roads caused by the presence of disabled, stalled, or parked motor vehicles without
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appropriate early warning devices. The hazards posed by these disabled vehicles are recognized by international bodies
concerned with traffic safety.
The Philippines is a signatory of the 1968 Vienna Convention on Road Signs and Signals and the United Nations
Organizations and the said Vienna Convention was ratified by the Philippine Government under PD 207.
ISSUE: Whether or not the LOI 229 is invalid and violated constitutional guarantees of due process.
RULING: No. The assailed Letter of Instruction was a valid exercise of police power and there was no unlawful
delegation of legislative power on the part of the respondent. As identified, police power is a state authority to enact
legislation that may interfere with personal liberty or property in order to promote the general welfare. In this case, the
particular exercise of police power was clearly intended to promote public safety.
It cannot be disputed that the Declaration of Principle found in the Constitution possesses relevance: “ The
Philippines adopts the generally accepted principles of international law as part of the law of the nation.”
Thus, as impressed in the 1968 Vienna Convention it is not for this country to repudiate a commitment to which it
had pledged its word. Our country’s word resembled in our own act of legislative ratification of the said Hague and Vienna
Conventions thru P.D. No. 207.
The concept of pacta sunt servanda stands in the way of such an attitude which is, moreoever, at war with the
principle of international morality.
Petition dismissed.
MODULE 1B - EMINENT DOMAIN

• Definition and Scope
39) Short Title: Manotok vs. NHA (150 SCRA 89)
Full Title:
G.R. No. L-55166 May 2l, 1987
TIONGSON, married to CAYETANO TIONGSON, PACITA L. GO married to EDUARDO GO, ROBERTO LAPERAL III, MIGUEL
SISON, PHILIP L. MANOTOK, MARIA TERESA L. MANOTOK, JOSE CLEMENTE MANOTOK, RAMON SEVERINO MANOTOK,
JOSE MARIA MANOTOK and JESUS JUDE MANOTOK, JR., assisted by their father and judicial guardian, JESUS MANOTOK,
MILAGROS V. MANOTOK, IGNACIO V. MANOTOK, JR., FELISA V. MANOTOK, MARY-ANN V. MANOTOK, MICHAEL V.
MANOTOK, FAUSTO C. MANOTOK, SEVERINO MANOTOK III, and JESUS MANOTOK, petitioners, vs. NATIONAL HOUSING
AUTHORITY and the REPUBLIC OF THE PHILIPPINES, respondents.
GR No. L-55167 May 21,1987

PATRICIA L. TIONGSON, PATRICIA L. GO, assisted by her husband EDWARD GO, ROBERTO LAPERAL III, ELISA R.
MANOTOK, JESUS R. MANOTOK, MIGUEL A. B. SISON, SEVERINO MANOTOK III, JOSE MARIA MANOTOK and JESUS
MANOTOK, represented herein by their father and judicial guardian JESUS MANOTOK, JR., IGNACIO R. MANOTOK., and
Page 90 of 306
FAUSTO C. MANOTOK, petitioners, vs. NATIONAL HOUSING AUTHORITY and the REPUBLIC OF THE PHILIPPINES,
respondents
Facts: Pursuant to LOI No. 555 instituting nationwide slum improvement and resettlement program (SIR) and LOI No.
557 adopting slum improvement as a national housing policy, the City of Manila and NHA declared the Tambunting Estate
and the Sunog-Apog area in its priority list for a Zonal Improvement Program (ZIP) which they described as blighted
areas.
With this, the President issued the challenged Presidential Decrees Nos. 1669 and 1670 which respectively
declared the Tambunting Estate and the Sunog-Apog area expropriated. The decrees gave the City Assessor the authority
to determine the market value of the lands involved and stated that "no improvement has been undertaken on the land
and that the land is squatted upon by resident families which should considerably depress the expropriation cost".
Petitioners are the owners of two large estates known as the Tambunting Estate and Sunog-Apog in Tondo,
Manila, both of which were declared expropriated in two decrees issued by President Marcos, PD 1669 and PD 1670.
Petitioners maintain that the Presidential Decrees providing for the direct expropriation of the properties in
question violate their constitutional right to due process and equal protection of the law because by the mere passage of
the said decrees their properties were automatically expropriated and they were immediately deprived of the ownership
and possession thereof without being given the chance to oppose such expropriation or to contest the just compensation
to which they are entitled.
The petitioners argue that the government must first have filed a complaint with the proper court under Rule 67
of the Revised Rules of Court in order to fulfill the requirements of due process.
The government on the other hand contends that the power of eminent domain is inherent in the State and when
the legislature or the President through his law-making powers exercises this power, the public use and public necessity
of the expropriation and the fixing of the just compensation become political in nature and the courts must respect the
decision.
Issues:
1) Whether or not the decrees in question deprived the petitioners of their properties without due process.
2) Whether or not the petitioners were denied to their right to just compensation
Whether the said Presidential Decree is an invalid exercise of the power of eminent domain.
Ruling: YES. Petitions are GRANTED. Presidential Decree Numbers 1669 and 1670 which respectively proclaimed the
Tambunting Estate and the Estero de Sunog-Apog area expropriated, are declared unconstitutional and, therefore, null
and void ab initio.
1) FOR DUE PROCESS: The challenged decrees are unfair in the procedures adopted and the powers given to the NHA.
The Tambunting subdivision is summarily proclaimed a blighted area and directly expropriated by decree without the
slightest semblance of a hearing or any proceeding whatsoever.
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The expropriation is instant and automatic to take effect immediately upon the signing of the decree. No deposit
before the taking is required. There is not provision for any interest to be paid upon unpaid installments.
Not only are the owners given absolutely no opportunity to contest the expropriation, plead their side, or question the
amount of payments fixed by decree, but the decisions, rulings, orders, or resolutions of the NHA are expressly declared
as beyond the reach of judicial review.
In City of Manila v. Arellano Law Colleges (85 Phil. 663), we reiterated that a necessity must exist for the
taking of private property for the proposed uses and purposes but accepted the fact that modern decisions do
not call for absolute necessity. ---- In the instant petitions, there is no showing whatsoever as to why the
properties involved were singled out for expropriation through decrees or what necessity impelled the
particular choices or selections
2) JUST COMPENSATION: The fixing of the maximum amounts of compensation and the bases thereof which are the
assessed values of the properties in 1978 deprive the petitioner of the opportunity to prove a higher value because, the
actual or symbolic taking of such properties occurred only in 1980 when the questioned decrees were promulgated. ---
The decision of the government to acquire a property through eminent domain should be made known to
the property owner through a formal notice wherein a hearing or a judicial proceeding is contemplated as
provided for in Rule 67 of the Rules of Court.
This shall be the time of reckoning the value of the property for the purpose of just compensation. For the
compensation to be just, it must approximate the value of the property at the time of its takin g and the
government can be said to have decided to acquire or take the property only after it has, at the least, commenced a
proceeding, judicial or otherwise, for this purpose.
The so-called "conditions" of the properties should not be determined through a decree but must be
shown in an appropriate proceeding in order to arrive at a just valuation of the property.
The market value stated by the city assessor alone cannot substitute for the court's judgment in
expropriation proceedings.
It is violative of the due process and the eminent domain provisions of the Constitution to deny to a
property owner the opportunity to prove that the valuation made by a local assessor is wrong or
prejudiced.
Teehankee, CJ, concurring: The judgment at bar now learly overturns the majority ruling in JM Tuason v. LTA that the
power of Congress to designate the particular property to be taken adn how much may be condemned thereof must be
duly recognized, leaving only as a judicial question whether in the exercise of such competence, the party adversely
affected is the victim of partiality and prejudice. The SC now rules that such singling out of properties does not foreclose
judicial scrutiny as to whether such expropriation by legislative act transgresses the due process and equal protection and
just compensation guarantees of the Constitution.
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40) Short Title: Office of Solicitor General vs. Ayala Land (G.R. No. 177056, September 18, 2009)
Full Title: THE OFFICE OF THE SOLICITOR GENERAL, Petitioner, v. AYALA LAND INCORPORATED, ROBINSON'S LAND
CORPORATION, SHANGRI-LA PLAZA CORPORATION and SM PRIME HOLDINGS, INC., Respondents.
Facts: The Office of Solicitor General filed a case against Ayala Land Incorporated, Robinson’s Land Corporation, Shang-
Ri La Plaza Corporation, SM Prime Holdings, Inc. on the ground of Illegal collection of parking fees.
The following shopping malls provides parking spaces for different motor vehicles. They provide security
personnel to protect the vehicles parked in their parking facilities and maintain order within the area. In turn, they collect
the following parking fees from the persons making use of their parking facilities.
On weekdays Ayala Land Incorporated was collecting parking fees of ₱25.00 for the first four hours and ₱10.00
for every succeeding hour; on weekends, flat rate of ₱25.00 per day.
In Robinson’s Parking fees are in the amount of ₱20.00 for the first three hours and ₱10.00 for every succeeding
hour Flat rate of ₱30.00 per day.
Shangri-La Corporation collects a Flat rate of ₱30.00 per day.
SM Prime collects parking fees of ₱10.00 to ₱20.00 (depending on whether the parking space is outdoors or
indoors) for the first three hours and 59 minutes, and ₱10.00 for every succeeding hour or fraction thereof.
The Senate Committee on Trade and Commerce found that the collection of parking fees by shopping malls is
contrary to National Building Code and figuratively speaking, the Code has “expropriated” the land for parking. Also,
Committee stated that the collection of parking fees would be against Article II of RA 9734 (Consumer Act of the
Philippines) as to the State’s policy of protecting the interest of consumers. Moreover, Section 201 of the National
Building Code gives the responsibility for the administration and enforcement of the provisions of the
Code, including the imposition of penalties for administrative violations thereof to the Secretary of Public
Works. This is not being strictly followed as the LGUs are tasked to discharge the regulatory powers of DPWH instead of
DPWH instead.
As such, Senate Committee recommended that: 1) Office of Solicitor General should institute the action to enjoin
the collction of parking fees and enforce the sanctions for violation of National Building Code; 2) DTI pursuant to RA 7394
should enforce the provisions of Code relative to parking; and 3) Congress should amend and update the National
Building Code to prohibit the collection of parking fees and its waiver of liability.
Respondent SM Prime contended that: 1) Rule XIX of Implementing Rules and Regulations of National Building
Code is unconstitutional and void; 2) respondent has the legal right to lease parking spaces; and 3) National Building
Code IRR is ineffective as it was not published for 3 consecutive weeks in newspaper of general circulation as mandated
by Section 211 of PD 1096.
OSG then filed a Petition for Declaratory Relief and Injunction (with Prayer for Temporary Restraining Order and
Writ of Preliminary Injunction) to the RTC against respondents, prohibiting them from collecting parking fees and
contending that their practice of charging parking fees is violative of National Building Code.
The RTC held that: 1) OSG has the capacity to institute the proceeding it being a controversy of public welfare;
2) a petition for declaratory relief is proper since all the requisites are present; 3) the Building Code with its IRR does not
necessarily impose that parking spaces shall be free of charge and providing parking spaces for free can be considered as
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unlawful taking of property right without just compensation; and 4) there was no sufficient evidence to justify any award
for damages. They deemed that the respondents are not obligated to provide parking spaces free of charge.
OSG appealed the decision to CA, saying that RTC erred in holding that the National Building Code did not intend
the parking spaces to be free of charge. On the other hand, respondent SM filed a separate appeal to the CA, contending
that: 1) RTC erred in failing to declare Rule XIX of IRR as unconstitutional; 2) RTC erred in failing to declare IRR
ineffective for not having been published as required by law; 3) RTC erred in dismissing the OSG’s petition for failure to
exhaust administrative remedies; and 4) RTC erred in failing to declare that OSG has no legal standing as it is not a real
party-in-interest.
CA denied the appeals of both petitioners and respondents on the following grounds: 1) OSG did not fail
to exhaust administrative remedies and that an administrative review is not a condition precedent to judicial relief where
the question in dispute is purely a legal one and nothing of an administrative nature is to be or can be done; 2) the
validity of National Building Code IRR cannot be proceeded as it was not discussed in RTC and the controversy could be
settled on other grounds without touching the issue of validity since the courts should refrain from passing upon the
constitutionality of a law; and 3) Section 803 of National Building Code and Rule XIX of IRR are clear that they are only
intended to control the occupancy of areas and structures, and in the absence of provision of law, respondents could not
be obliged to provide parking spaces free of charge.
As such, OSG presented itself to SC for the instant Petition for Review.
Issue:
1) Whether the CA erred in affirming the ruling of RTC that respondents are not obliged to provide free parking spaces to
their customers or the public.
2) Whether the petition of OSG for prohibiting the collection of parking fees is a valid exercise of the police
power of State.
Ruling:
1) No. The CA was correct in affirming the ruling of RTC, and the respondents are not obliged to provide free parking
spaces. SC found no merit in the OSG’s petition. Respondents, as operators/lessors of neighborhood shopping centers,
should provide parking and loading spaces with the minimum ratio of one slot per 100 square meters of shopping floor
area. There is nothing therein pertaining to the collection (or non-collection) of parking fees by respondents. In fact, the
term “parking fees” cannot even be found at all in the entire National Building Code and its IRR.
The total prohibition against the collection by respondents of parking fees from persons who use the mall parking
facilities has no basis in the National Building Code or its IRR. Hence, the prohibition of collecting parking fees is void as
denied by the court since there is no clear rule or law stating that collection of parking fees is illegal.
The OSG limits its citation to the first part of Section 102 of the National Building Code declaring the policy of the
State “to safeguard life, health, property, and public welfare, consistent with the principles of sound environmental
management and control”; but totally ignores the second part of said provision, which reads, “and to this end, make it
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the purpose of this Code to provide for all buildings and structures, a framework of minimum standards and requirements
to regulate and control their location, site, design, quality of materials, construction, use, occupancy, and maintenance.”
The rule-making power of administrative agencies must be confined to details for regulating the mode or
proceedings to carry into effect the law as it has been enacted, and it cannot be extended to amend or expand the
statutory requirements or to embrace matters not covered by the statute. Administrative regulations must always be in
harmony with the provisions of the law because any resulting discrepancy between the two will always be resolved in
favor of the basic law.
2) NO. No. The petition of OSG to prohibit collection of parking fees is not a valid exercise of the police
power of State.
It is not sufficient for the OSG to claim that “the power to regulate and control the use, occupancy, and
maintenance of buildings and structures carries with it the power to impose fees and, conversely, to control, partially or,
as in this case, absolutely, the imposition of such fees.”
Firstly, the fees within the power of regulatory agencies to impose are regulatory fees. It has been settled law in
this jurisdiction that this broad and all-compassing governmental competence to restrict rights of liberty and property
carries with it the undeniable power to collect a regulatory fee. It looks to the enactment of specific measures that govern
the relations not only as between individuals but also as between private parties and the political society. True, if the
regulatory agencies have the power to impose regulatory fees, then conversely, they also have the power to remove the
same. Even so, it is worthy to note that the present case does not involve the imposition by the DPWH Secretary and
local building officials of regulatory fees upon respondents; but the collection by respondents of parking fees from
persons who use the mall parking facilities.
Secondly, assuming arguendo that the DPWH Secretary and local building officials do have regulatory powers
over the collection of parking fees for the use of privately owned parking facilities, they cannot allow or prohibit such
collection arbitrarily or whimsically. Whether allowing or prohibiting the collection of such parking fees, the action of the
DPWH Secretary and local building officials must pass the test of classic reasonableness and propriety of the measures or
means in the promotion of the ends sought to be accomplished.
Without using the term outright, the OSG is actually invoking police power to justify the regulation by the State,
through the DPWH Secretary and local building officials, of privately owned parking facilities, including the collection by
the owners/operators of such facilities of parking fees from the public for the use thereof. The Court finds, however,
that in totally prohibiting respondents from collecting parking fees, the State would be acting beyond the
bounds of police power.
Police power is 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 the
property of the owner. The power to regulate, however, does not include the power to prohibit. A fortiori, the
power to regulate does not include the power to confiscate. Police 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
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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.
When there is a taking or confiscation of private property for public use, the State is no longer
exercising police power, but another of its inherent powers, namely, eminent domain. Eminent domain
enables the State to forcibly acquire private lands intended for public use upon payment of just
compensation to the owner.
The power of eminent domain results in the taking or appropriation of title to, and possession of,
the expropriated property; but no cogent reason appears why the said power may not be availed of only to
impose a burden upon the owner of condemned property, without loss of title and possession.
It is a settled rule that neither acquisition of title nor total destruction of value is essential to
taking. It is usually in cases where title remains with the private owner that inquiry should be made to determine
whether the impairment of a property is merely regulated or amounts to a compensable taking.
IMPORTANT NOTE: A regulation that deprives any person of the profitable use of his property
constitutes a taking and entitles him to compensation, unless the invasion of rights is so slight as to permit
the regulation to be justified under the police power. Similarly, a police regulation that unreasonably restricts the
right to use business property for business purposes amounts to a taking of private property, and the owner may recover
therefor.
Although in the present case, title to and/or possession of the parking facilities remain/s with respondents, the
prohibition against their collection of parking fees from the public, for the use of said facilities, is already
tantamount to a taking or confiscation of their properties. The State is not only requiring that respondents
devote a portion of the latter’s properties for use as parking spaces, but is also mandating that they give
the public access to said parking spaces for free. Such is already an excessive intrusion into the property
rights of respondents. Not only are they being deprived of the right to use a portion of their properties as they wish,
they are further prohibited from profiting from its use or even just recovering therefrom the expenses for the
maintenance and operation of the required parking facilities.
In conclusion, the total prohibition against the collection by respondents of parking fees from persons
who use the mall parking facilities has no basis in the National Building Code or its IRR. The State also
cannot impose the same prohibition by generally invoking police power, since said prohibition amounts to
a taking of respondents’ property without payment of just compensation.
WHEREFORE, the instant Petition for Review on Certiorari is hereby DENIED.
Page 96 of 306
• Who exercises the power?

41) Short Title: City of Manila vs. Chinese Cemetery of Manila [40 Phil 349 (1919)]
Full Title: G.R. No. L-14355 October 31, 1919
THE CITY OF MANILA, plaintiff-appellant, vs. CHINESE COMMUNITY OF MANILA, ET AL., defendants-appellees.
Facts: On the 11th day of December, 1916, the city of Manila presented a petition in the Court of First Instance of said
city, praying that certain lands, therein particularly described, be expropriated for the purpose of constructing a public
improvement.
The defendant, the Comunidad de Chinos de Manila [Chinese Community of Manila], answering the petition of
the plaintiff, alleged that it was a corporation organized and existing under and by virtue of the laws of the Philippine
Islands, having for its purpose the benefit and general welfare of the Chinese Community of the City of Manila; that it
was the owner of parcels one and two of the land described in paragraph 2 of the complaint; that it denied that it
was either necessary or expedient that the said parcels be expropriated for street purposes; that existing street and
roads furnished ample means of communication for the public in the district covered by such proposed
expropriation; that if the construction of the street or road should be considered a public necessity, other
routes were available; which would fully satisfy the plaintiff's purposes, at much less expense and without disturbing
the resting places of the dead; ; that it had a Torrens title for the lands in question; that the lands in question had been
used by the defendant for cemetery purposes; that a great number of Chinese were buried in said cemetery; that if said
expropriation be carried into effect, it would disturb the resting places of the dead, would require the expenditure of a
large sum of money in the transfer or removal of the bodies to some other place or site and in the purchase of such new
sites, would involve the destruction of existing monuments and the erection of new monuments in their stead, and would
create irreparable loss and injury to the defendant and to all those persons owning and interested in the graves and
monuments which would have to be destroyed; that the plaintiff was without right or authority to expropriate
said cemetery or any part or portion thereof for street purposes; and that the expropriation, in fact, was
not necessary as a public improvement.
The defendant Feliza Concepcion de Delgado, with her husband, Jose Maria Delgado, and each of the other
defendants, answering separately, presented substantially the same defense as that presented by the Comunidad de
Chinos de Manila and Ildefonso Tambunting above referred to.
The plaintiff alleged that the expropriation was necessary. The defendants each alleged ( a) that no
necessity existed for said expropriation and ( b) that the land in question was a cemetery, which had been
used as such for many years, and was covered with sepulchres and monuments, and that the same should
not be converted into a street for public purposes.
Upon the issue thus presented by the petition and the various answers, the Honorable Simplicio del Rosario,
judge, in a very elucidated opinion, with very clear and explicit reasons, supported by ambulance of authorities , It was
then decided that there was no necessity for the expropriation of the particular strip of land in question,
and absolved each and all of the defendants from all liability under the complaint, without any finding as to
costs.
Page 97 of 306
From that judgment the plaintiff appealed.
Issue: In expropriation proceedings by the city of Manila, may the courts inquire into, and hear proof upon, the necessity
of the expropriation?
Whether city of manila has authority to expropriate private lands for public use.
Ruling: That the city of Manila has authority to expropriate private lands for public purposes, is not denied.
Section 2429 of Act No. 2711 (Charter of the city of Manila) provides that "the city (Manila) . . . may
condemn private property for public use."
The Charter of the city of Manila contains no procedure by which the said authority may be carried into effect.
We are driven, therefore, to the procedure marked out by Act No. 190 to ascertain how the said authority may be
exercised. From an examination of Act No. 190, in its section 241, we find how the right of eminent domain
may be exercised. Said section 241 provides that, "The Government of the Philippine Islands, or of any province or
department thereof, or of any municipality, and any person, or public or private corporation having, by law, the right to
condemn private property for public use, shall exercise that right in the manner hereinafter prescribed."
It is contended on the part of the plaintiff that the phrase in said section, "and if the court shall find the right to
expropriate exists," means simply that, if the court finds that there is some law authorizing the plaintiff to expropriate,
then the courts have no other function than to authorize the expropriation and to proceed to ascertain the value of the
land involved; that the necessity for the expropriation is a legislative and not a judicial question.
Volume 15 of the Cyclopedia of Law and Procedure (Cyc.), page 629, is cited as a further conclusive authority upon the
question that the necessity for the exercise of the right of eminent domain is a legislative and not a judicial question.
Cyclopedia, at the page stated, says:
In the absence of some constitutional or statutory provision to the contrary, the necessity and expediency of
exercising the right of eminent domain are questions essentially political and not judicial in their character. The
determination of those questions (the necessity and the expediency) belongs to the sovereign power; the
legislative department is final and conclusive, and the courts have no power to review it (the necessity and the
expediency) . . . . It (the legislature) may designate the particular property to be condemned, and its
determination in this respect cannot be reviewed by the courts.
Whether it was wise, advisable, or necessary to confer upon a municipality the power to exercise the right of
eminent domain, is a question with which the courts are not concerned. But when that right or authority is
exercised for the purpose of depriving citizens of their property, the courts are authorized, in this
jurisdiction, to make inquiry and to hear proof upon the necessity in the particular case, and not the
general authority.
It is true that naby decisions may be found asserting that what is a public use is a legislative question, and
many other decisions declaring with equal emphasis that it is a judicial question. But, as long as there is a constitutional
or statutory provision denying the right to take land for any use other than a public use, it occurs to us that the
question whether any particular use is a public one or not is ultimately, at least, a judicial question. The
Page 98 of 306
legislative may, it is true, in effect declare certain uses to be public, and, under the operation of the well-known rule that
a statute will not be declared to be unconstitutional except in a case free, or comparatively free, from doubt, the courts
will certainly sustain the action of the legislature unless it appears that the particular use is clearly not of a public nature.
The conflict in the authorities upon the question whether the necessity for the exercise of the right of eminent
domain is purely legislative and not judicial, arises generally in the wisdom and propriety of the legislature in authorizing
the exercise of the right of eminent domain instead of in the question of the right to exercise it in a particular case.
The general power to exercise the right of eminent domain must not be confused with the right to exercise it in
a particular case. The power of the legislature to confer, upon municipal corporations and other entities
within the State, general authority to exercise the right of eminent domain cannot be questioned by the
courts, but that general authority of municipalities or entities must not be confused with the right to
exercise it in particular instances. The moment the municipal corporation or entity attempts to exercise the
authority conferred, it must comply with the conditions accompanying the authority. The
necessity for conferring the authority upon a municipal corporation to exercise the right of eminent domain is admittedly
within the power of the legislature. But whether or not the municipal corporation or entity is exercising the right in a
particular case under the conditions imposed by the general authority, is a question which the courts have the right to
inquire into.
While we do not contend that the dead must not give place to the living, and while it is a matter of public
knowledge that in the process of time sepulchres may become the seat of cities and cemeteries traversed by streets and
daily trod by the feet of millions of men, yet, nevertheless such sacrifices and such uses of the places of the dead should
not be made unless and until it is fully established that there exists an eminent necessity therefor. While cemeteries
and sepulchres and the places of the burial of the dead are still within the memory and command of the
active care of the living; while they are still devoted to pious uses and sacred regard, it is difficult to
believe that even the legislature would adopt a law expressly providing that such places, under such
circumstances, should be violated.
In such an appropriation, what, we may ask, would be the measure of damages at law, for the wounded
sensibilities of the living, in having the graves of kindred and loved ones blotted out and desecrated by a common
highway or street for public travel? The impossibility of measuring the damage and inadequacy of a remedy at law is too
apparent to admit of argument. To disturb the mortal remains of those endeared to us in life sometimes becomes the sad
duty of the living; but, except in cases of necessity, or for laudable purposes, the sanctity of the grave, the last resting
place of our friends, should be maintained, and the preventative aid of the courts should be invoked for that object
42) Short Title: Moday vs. Court of Appeals [268 SCRA 368 (1997)]
Full Title: G.R. No. 107916 February 20, 1997
PERCIVAL MODAY, ZOTICO MODAY (deceased) and LEONORA MODAY, petitioners, vs.
COURT OF APPEALS, JUDGE EVANGELINE S. YUIPCO OF BRANCH 6, REGIONAL TRIAL COURT, AGUSAN DEL
SUR AND MUNICIPALITY OF BUNAWAN, respondents.
Page 99 of 306
Facts: Petitioner seeks the reversal of the Court of Appeals decision and resolution, promulgated on July 15, 1992 and
October 22, 1992 respectively, 1 and a declaration that Municipal Resolution No. 43-89 of the Bunawan Sangguniang
Bayan is null and void.
On July 23, 1989, the Sangguniang Bayan of the Municipality of Bunawan in Agusan del Sur passed Resolution
No. 43-89, "Authorizing the Municipal Mayor to Initiate the Petition for Expropriation of a One (1) Hectare Portion of Lot
No. 6138-Pls-4 Along the National Highway Owned by Percival Moday for the Site of Bunawan Farmers Center and Other
Government Sports Facilities." 2
In due time, Resolution No. 43-89 was approved by then Municipal Mayor Anuncio C. Bustillo and transmitted to
the Sangguniang Panlalawigan for its approval. On September 11, 1989, the Sangguniang Panlalawigan disapproved
said Resolution and returned it with the comment that "expropriation is unnecessary considering that there are still
available lots in Bunawan for the establishment of the government center." 3
The Municipality of Bunawan, herein public respondent, subsequently filed a petition for Eminent Domain against
petitioner Percival Moday before the Regional Trial Court at Prosperidad, Agusan del Sur. 4
The complaint was later
amended to include the registered owners, Percival Moday's parents, Zotico and Leonora Moday, as party defendants.
On March 6, 1991, public respondent municipality filed a Motion to Take or Enter Upon the Possession of Subject
Matter of This Case stating that it had already deposited with the municipal treasurer the necessary amount in
accordance with Section 2, Rule 67 of the Revised Rules of Court and that it would be in the government's best interest
for public respondent to be allowed to take possession of the property.
RTC
Despite petitioners' opposition and after a hearing on the merits, the Regional Trial Court granted respondent
municipality's motion to take possession of the land. The lower court held that the Sangguniang Panlalawigan's
failure to declare the resolution invalid leaves it effective. It added that the duty of the Sangguniang Panlalawigan is
merely to review the ordinances and resolutions passed by the Sangguniang Bayan under Section 208 (1) of B.P. Blg.
337, old Local Government Code and that the exercise of eminent domain is not one of the two acts
enumerated in Section 19 thereof requiring the approval of the Sangguniang Panlalawigan. Petitioners'
motion for reconsideration was denied by the trial court on October 31, 1991.
CA
Petitioners elevated the case in a petition for certiorari alleging grave abuse of discretion on the part of the trial court, but
the same was dismissed by respondent appellate court on July 15, 1992. 7
The Court of Appeals held that the public
purpose for the expropriation is clear from Resolution No. 43-89 and that since the Sangguniang
Panlalawigan of Agusan del Sur did not declare Resolution No. 43-89 invalid, expropriation of petitioners'
property could proceed. Respondent appellate court also denied petitioners' motion for reconsideration on October 22,
1992.
The Court of Appeals declared that the Sangguniang Panlalawigan's reason for disapproving the resolution "could be
baseless, because it failed to point out which and where are those available lots.'" Respondent court also concluded that
Page 100 of 306
since the Sangguniang Panlalawigan did not declare the municipal board's resolution as invalid, expropriation of
petitioners' property could proceed.
Issue: Whether a municipality may expropriate private property by virtue of a municipal resolution which was
disapproved by the Sangguniang Panlalawigan.
Ruling: The Court finds no merit in the petition and affirms the decision of the Court of Appeals
Eminent domain, the power which the Municipality of Bunawan exercised in the instant case, is a
fundamental State power that is inseparable from sovereignty. 14
It is government's right to appropriate, in the
nature of a compulsory sale to the State, private property for public use or purpose. 15
Inherently possessed by the
national legislature, the power of eminent domain may be validly delegated to local governments, other
public entities and public utilities. 16
For the taking of private property by the government to be valid, the
taking must be for public use and there must be just compensation. 17
The Municipality of Bunawan's power to exercise the right of eminent domain is not disputed as it is
expressly provided for in Batas Pambansa Blg. 337, the local Government Code 18
in force at the time expropriation
proceedings were initiated. Section 9 of said law states:
Sec. 9. Eminent Domain. — A local government unit may, through its head and acting pursuant to a
resolution of its sanggunian, exercise the right of eminent domain and institute condemnation
proceedings for public use or purpose.
The Sangguniang Panlalawigan's disapproval of Municipal Resolution No. 43-89 is an infirm action
which does not render said resolution null and void. The law, as expressed in Section 153 of B.P. Blg. 337,
grants the Sangguniang Panlalawigan the power to declare a municipal resolution invalid on the sole
ground that it is beyond the power of the Sangguniang Bayan or the Mayor to issue.
The only ground upon which a provincial board may declare any municipal resolution, ordinance, or order invalid
is when such resolution, ordinance, or order is "beyond the powers conferred upon the council or president
making the same." Absolutely no other ground is recognized by the law. A strictly legal question is before the
provincial board in its consideration of a municipal resolution, ordinance, or order. The provincial (board's)
disapproval of any resolution, ordinance, or order must be premised specifically upon the fact that such
resolution, ordinance, or order is outside the scope of the legal powers conferred by law. If a provincial board
passes these limits, it usurps the legislative function of the municipal council or president. Such has been the
consistent course of executive authority.
Thus, the Sangguniang Panlalawigan was without the authority to disapprove Municipal Resolution No. 43-89 for
the Municipality of Bunawan clearly has the power to exercise the right of eminent domain and its Sangguniang Bayan
the capacity to promulgate said resolution, pursuant to the earlier-quoted Section 9 of B.P. Blg. 337. Perforce, it follows
that Resolution No. 43-89 is valid and binding and could be used as lawful authority to petition for the condemnation of
petitioners' property.
Page 101 of 306
The limitations on the power of eminent domain are that the use must be public, compensation must be
made and due process of law must be
observed. 22
The Supreme Court, taking cognizance of such issues as the adequacy of compensation, necessity of the
taking and the public use character or the purpose of the taking, 23
has ruled that the necessity of exercising eminent
domain must be genuine and of a public character. 24
Government may not capriciously choose what private property
should be taken.
43) Short Title: Land Bank of the Philippines vs. Dalauta

Full Title: G.R. No. 190004
LAND BANK OF THE PIDLIPPINES, Petitioner, vs. EUGENIO DALAUTA, Respondent
FACTS: Eugenio Dalauta (Dalauta) was the registered owner of an agricultural land in Florida, Butuan City. The land was
placed by the Department of Agrarian Reform (DAR) under compulsory acquisition of the Comprehensive Agrarian Reform
Program (CARP). Thus, Dalauta received on February 7, 1994 a Notice of Coverage notifying him that his land was
subject of expropriation. Land Bank of the Philippines (LBP) offered ₱192,782.59 as compensation for the land, but
Dalauta rejected such valuation for being too low.
The case was referred to the DAR Adjudication Board (DARAB). A summary administrative proceeding was
conducted to determine the appropriate just compensation for the subject property. In its Resolution, the PARAD affirmed
the valuation made by LBP in the amount of ₱192,782.59.Dalauta filed a petition for determination of just compensation
with the RTC, sitting as Special Agrarian Court (SAC).
Dalauta argued that the valuation of his land should be determined using the formula in DAR A.O. No. 6, series of
1992, which was Land Value (LV) = Capitalized Net Income (CNI) x 0.9 + Market Value (MV) per tax declaration x 0.1, as
he had a net income of ₱350,000.00 in 1993 from the sale of the trees that were grown on the said land to Norberto C.
Fonacier.
On May 30, 2006, the SAC rendered its decision pegging the just compensation in the amount of ₱2,639,557.00,
higher than the value made by LBP. Unsatisfied, LBP filed a motion for reconsideration, but it was denied by the SAC.
Hence, LBP filed a petition for review under Rule 42 of the Rules of Court before the CA, arguing, among others
that the SAC erred in taking cognizance of the case when the DARAB decision sustaining the LBP valuation had long
attained finality and that the SAC violated Republic Act (R.A.) No. 6657 and DAR A.O. No. 6, series of 1992, in fixing the
just compensation.
The CA ruled that the SAC correctly took cognizance of the case. It ruled that the SAC had original and exclusive
jurisdiction over all petitions for the determination of just compensation.
ISSUES:
Page 102 of 306
1. Whether or not the trial court had properly taken jurisdiction over the case despite the finality of the PARAD
Resolution.
2. Whether or not the trial court correctly computed the just compensation of the subject property.
RULING:
1. Yes. The Court agrees with the CA in this regard. Section 9, Article III of the 1987 Constitution provides that "[p]rivate
property shall not be taken for public use without just compensation." In Export Processing Zone Authority v. Dulay,38
the Court ruled that the valuation of property in eminent domain is essentially a judicial function which cannot be vested
in administrative agencies..
It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian Court, has "original and exclusive
jurisdiction over all petitions for the determination of just compensation to landowners." This "original and
exclusive" jurisdiction of the RTC would be undermined if the DAR would vest in administrative officials
original jurisdiction in compensation cases and make the RTC an appellate court for the review of
administrative decisions.
Thus, although the new rules speak of directly appealing the decision of adjudicators to the RTCs sitting as Special
Agrarian Courts, it is clear from Sec. 57 that the original and exclusive jurisdiction to determine such cases is in the
RTCs. Any effort to transfer such jurisdiction to the adjudicators and to convert the original jurisdiction of the RTCs into
appellate jurisdiction would be contrary to Sec. 57 and therefore would be void.
Thus, direct resort to the SAC by private respondent is valid.

Jurisdiction is defined as the power and authority of a court to hear, try and decide a case.23 Jurisdiction over
the subject matter is conferred only by the Constitution or the law.24 The courts, as well as administrative bodies
exercising quasi-judicial functions, have their respective jurisdiction as may be granted by law. In connection with
the courts' jurisdiction vis-a-vis jurisdiction of administrative bodies, the doctrine of primary jurisdiction takes into
play.
The doctrine of primary jurisdiction tells us that courts cannot, and will not, resolve a controversy involving a
question which is within the jurisdiction of an administrative tribunal, especially where the question demands the
exercise of sound administrative discretion requiring the special knowledge, experience and services of the
administrative tribunal to determine technical and intricate matters of fact
2. No. On Just Compensation
Upon an assiduous assessment of the different valuations arrived at by the DAR, the SAC and the CA, the Court agrees
Page 103 of 306
with the position of Justice Francis Jardeleza that just compensation for respondent Dalauta's land should be computed
based on the formula provided under DAR-LBP Joint Memorandum Circular No. 11, series of 2003 (JMC No. 11 (2003).
The case was remanded to the Regional Trial Court, Branch 5, Butuan City, sitting as Special Agrarian Court, for purposes
of computing just compensation in accordance with JMC No.11.
• Constitutional limitation – Art. III. Sec. 9

44) Short Title: REPUBLIC vs. LIM
G.R. No. 161656 June 29, 2005
REPUBLIC OF THE PHILIPPINES, GENERAL ROMEO ZULUETA, COMMODORE EDGARDO GALEOS, ANTONIO
CABALUNA, DOROTEO MANTOS & FLORENCIO BELOTINDOS, petitioners, vs. VICENTE G. LIM, respondent
FACTS: In 1938, the Republic instituted a special civil action for expropriation of a land in Lahug, Cebu City for the
purpose of establishing a military reservation for the Philippine Army. The said lots were registered in the name of
Gervasia and Eulalia Denzon. The Republic deposited P9,500 in the PNB then took possession of the lots. Thereafter, on
May 1940, the CFI rendered its Decision ordering the Republic to pay the Denzons the sum of P4,062.10 as just
compensation. The Denzons appealed to the CA but it was dismissed on March 11, 1948. An entry of judgment was made
on April 5, 1948.
In 1950, one of the heirs of the Denzons, filed with the National Airports Corporation a claim for rentals for the
two lots, but it "denied knowledge of the matter." On September 6, 1961, Lt. Cabal rejected the claim but expressed
willingness to pay the appraised value of the lots within a reasonable time.
For failure of the Republic to pay for the lots, on September 20, 1961, the Denzons· successors-in-
interest,Valdehueza and Panerio, filed with the same CFI an action for recovery of possession with damages against the
Republic and AFP officers in possession of the property.
On November 1961, Titles of the said lots were issued in the names of Valdehueza and Panerio with the
annotation "subject to the priority of the National Airports Corporation to acquire said parcels of land, Lots 932 and939
upon previous payment of a reasonable market value".
On July 1962, the CFI promulgated its Decision in favor of Valdehueza and Panerio, holding that they are the
owners and have retained their right as such over lots because of the Republic·s failure to pay the amount of
P4,062.10,adjudged in the expropriation proceedings. However, in view of the annotation on their land titles, they were
ordered to execute a deed of sale in favor of the Republic.
They appealed the CFI·s decision to the SC. The latter held that Valdehueza and Panerio are still the registered
owners of Lots 932 and 939, there having been no payment of just compensation by the Republic. SC still ruled that they
are not entitled to recover possession of the lots but may only demand the payment of their fair market value.
Meanwhile, in 1964, Valdehueza and Panerio mortgaged Lot 932 to Vicente Lim, herein respondent, as security
for their loans. For their failure to pay Lim despite demand, he had the mortgage foreclosed in 1976. The lot title was
issued in his name.
Page 104 of 306
On 1992, respondent Lim filed a complaint for quieting of title with the RTC against the petitioners herein. On
2001, the RTC rendered a decision in favor of Lim, declaring that he is the absolute and exclusive owner of the lot with all
the rights of an absolute owner including the right to possession. Petitioners elevated the case to the CA. In its Decision
dated September 18, 2003, it sustained the RTC Decision saying: ´... This is contrary to the rules of fair play because the
concept of just compensation embraces not only the correct determination of the amount to be paid to the owners of the
land,but also the payment for the land within a reasonable time from its taking. Without prompt payment, compensation
cannot be considered "just"...”
Petitioner, through the OSG, filed with the SC a petition for review alleging that they remain as the owner of Lot
932.
ISSUE: Whether the Republic has retained ownership of Lot 932 despite its failure to pay respondent’s predecessors-in-
interest the just compensation therefor pursuant to the judgment of the CFI rendered as early as May 14, 1940.
HELD: NO. One of the basic principles enshrined in our Constitution is that no person shall be deprived of his private
property without due process of law; and in expropriation cases, an essential element of due process is that there must
be just compensation whenever private property is taken for public use. Accordingly, Section 9, Article III, of our
Constitution mandates: "Private property shall not be taken for public use without just compensation." The Republic
disregarded the foregoing provision when it failed and refused to pay respondent’s predecessors-in-interest the just
compensation for Lots 932 and 939.
The Court of Appeals is correct in saying that Republic’s delay is contrary to the rules of fair play. In jurisdictions
similar to ours, where an entry to the expropriated property precedes the payment of compensation, it has been held that
if the compensation is not paid in a reasonable time, the party may be treated as a trespasser ab initio.
As early as May 19, 1966, in Valdehueza, this Court mandated the Republic to pay respondent’s predecessors-in-
interest the sum of P16,248.40 as "reasonable market value of the two lots in question." Unfortunately, it did not comply
and allowed several decades to pass without obeying this Court’s mandate. It is tantamount to confiscation of private
property. While it is true that all private properties are subject to the need of government, and the government may take
them whenever the necessity or the exigency of the occasion demands, however from the taking of private
property by the government under the power of eminent domain, there arises an implied promise to
compensate the owner for his loss.
There is a recognized rule that title to the property expropriated shall pass from the owner to the expropriator
only upon full payment of the just compensation. So, how could the Republic acquire ownership over Lot 932 when it has
not paid its owner the just compensation, required by law, for more than 50 years? Clearly, without full payment of
just compensation, there can be no transfer of title from the landowner to the expropriator.
SC ruled in earlier cases that expropriation of lands consists of two stages. First is concerned with the
determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise.
The second is concerned with the determination by the court of "the just compensation for the property sought to be
taken." It is only upon the completion of these two stages that expropriation is said to have been completed In Republic
Page 105 of 306
v. Salem Investment Corporation, we ruled that, "the process is not completed until payment of just compensation."
Thus, here, the failure of the Republic to pay respondent and his predecessors-in-interest for a period of 57 years
rendered the expropriation process incomplete.
Thus, SC ruled that the special circumstances prevailing in this case entitle respondent to recover possession of
the expropriated lot from the Republic.
While the prevailing doctrine is that "the non-payment of just compensation does not entitle the
private landowner to recover possession of the expropriated lots, however, in cases where the government
failed to pay just compensation within five (5) years from the finality of the judgment in the expropriation
proceedings, the owners concerned shall have the right to recover possession of their property. After all, it is
the duty of the government, whenever it takes property from private persons against their will, to facilitate the payment
of just compensation. In Cosculluela v. Court of Appeals, we defined just compensation as not only the correct
determination of the amount to be paid to the property owner but also the payment of the property within a reasonable
time. Without prompt payment, compensation cannot be considered "just."
• Objects of Expropriation
45) Short Title: Republic vs. PLDT
G.R. No. L-18841 January 27, 1969
REPUBLIC OF THE PHILIPPINES, plaintiff-
appellant, vs. PHILIPPINE LONG DISTANCE
TELEPHONE COMPANY, defendant-appellant
Facts: The plaintiff, Republic of the Philippines, is a political entity exercising governmental powers through
its branches and instrumentalities, one of which is the Bureau of Telecommunications. The defendant,
Philippine Long Distance Telephone Company (PLDT for short), is a public service corporation holding a
legislative franchise, to install, operate and maintain a telephone system throughout the Philippines.
BOT soon after its creation set up its own Government Telephone System (GTS) utilizing its own
appropriation and equipment and by renting the trunk lines of the PLDT to enable government offices to call
private parties. The Bureau has extended its services to the general public. Through these trunk lines, a
Government Telephone System (GTS) subscriber could make a call to a PLDT subscriber in the same way
that the latter could make a call to the former.
BOT entered into an agreement with RCA Communications (an American Co. party not in interest
of the case), Inc. for a joint telephone service whereby the BOT would convey radio-telephone overseas
call received by RCA to and from local residents.
PLDT complained that BOT violated conditions since BOT had used the trunk lines not only for
government offices but even to serve private persons or the general public in competition with the business
Page 106 of 306
of PLDT. PLDT sever the telephone connections of BOT resulting to isolation of the Philippines on telephone
services from the rest of the world except the US.
The BOT had proposed that both enter into an interconnecting agreement, with the government
paying (on a call basis) for all calls passing through the interconnecting facilities from the GTS to the PLDT.
18
The PLDT replied that it was willing to enter into an agreement on overseas telephone service to
Europe and Asian countries provided that the BOT would submit to the jurisdiction and regulations of the
Public Service Commission and in consideration sharing of the gross revenues. The proposals were not
accepted by either party.
The plaintiff (Republic) commenced suit against the defendant, praying in its complaint for judgment;
(1) commanding the PLDT to execute a contract with plaintiff, through the BOT, for the use of the facilities
of defendant's telephone system throughout the Philippines under such terms and conditions as the court
might consider reasonable, and; (2) for a writ of preliminary injunction against the defendant company to
restrain the severance of the existing telephone connections and/or restore those severed.
After trial, the lower court rendered judgment that it could not compel the PLDT to enter into an
agreement with the Bureau because the parties were not in agreement;
Both parties appealed.
Issue/s: Whether or not interconnection of Government Telephone System and PLDT can be subject for
expropriation.
Ruling: Yes.
❖ The Republic of the Philippines through Bureau of Telecommunications may in the exercise of the
sovereign power of eminent domain, and require the Telephone Company to permit interconnection of
the Government Telephone System and that of the PLDT, as the needs of the government service may
required, subject to the payment of just compensation to be determined by the court.
❖ The Republic’s cause of action is predicated upon the radio telephonic isolation of the BOT facilities from
the outside world if the severance of interconnection were to be carried out by the PLDT, thereby
preventing the BOT from properly discharging its functions, to the prejudice of the general public. The
case should be for the compulsory rendering of interconnection of services by the telephone company
upon such terms and conditions as the court may determine to be just.
❖ Since the lower court should have proceeded to treat the case as one of condemnation of such services
independently of contract and proceeded to determine the just and reasonable compensation for the
same, instead of dismissing the petition.
Under Section 79 of EO 94 paragraph (b)

To investigate, consolidate, negotiate for, operate and maintain wire-telephone or radio telephone
communication service throughout the Philippines by utilizing such existing facilities in cities, towns, and
Page 107 of 306
provinces as may be found feasible and under such terms and conditions or arrangements with the present
owners or operators thereof as may be agreed upon to the satisfaction of all concerned.
Under Section 6 Article XIII 1935 Constitution “Conservation and Utilization of Natural Resources.”
The State may, in the exercise of national welfare and defense, establish and operate industries and means
of transportation and communication, and upon payment of just compensation, transfer to public ownership,
utilities and other private enterprises to be operated by the government.
Charter of PLDT expressly provides that Section 14.
The rights therein granted shall not be exclusive, and the rights and power to grant to any corporation,
association or person other than the grantee franchise for the telephone or electrical transmission of
message or signals shall not be impaired or affected by the granting of this franchise.
PLDT’s right to just compensation for the services rendered to the GTS and its users is herein recognized
and preserved. To uphold PLDT’s contention is to subordinate the needs of the general public to the right of
the PLDT to deprive profit from the future expansion of its services under its non exclusive franchise.
❖The acceptance by the defendant of the payment of rentals, despite its knowledge that the plaintiff had
extended the use of the trunk lines to commercial purposes, continuously since 1948, implies assent by
the defendant to such extended use. Since this relationship has been maintained for a long time and
the public has patronized both telephone systems, and their
• Where Expropriation Suit is Filed

46) Barangay San Roque vs. Heirs of Pastor (G.R. No. 13896, June 20, 2000)
G.R. No. 138896 June 20, 2000
BARANGAY SAN ROQUE, TALISAY, CEBU, petitioner,
vs. Heirs of FRANCISCO PASTOR
Summary: Barangay San Roque of Talisay, Cebu filed a complaint to expropriate the property of Pator with MTC. The
MTC dismissed the Complaint on the ground of lack of jurisdiction. It reasoned that “The principal cause of action is the
exercise of the power of eminent domain. The fact that the action also involves real property is merely incidental. An
action for eminent domain is therefore within the exclusive original jurisdiction of the Regional Trial Court.”
This was then filed to RTC but was dismissed, holding that an action for eminent domain affected title to real property;
hence, the value of the property to be expropriated would determine whether the case should be filed before the MTC or
the RTC. The property value was less than 20k and should be filed with MTC.
FACTS OF THE CASE: Petitioner filed before the Municipal Trial Court (MTC) of Talisay, Cebu a Complaint to expropriate
a property of the respondents. In an Order dated April 8, 1997, the MTC dismissed the Complaint on the ground of lack of
jurisdiction. It reasoned that an action for eminent domain is within the exclusive original jurisdiction of the RTC and not
with MTC.
The RTC also dismissed the Complaint when filed before it, holding that an action for eminent domain affected
Page 108 of 306
title to real property; hence, the value of the property to be expropriated would determine whether the case should be
filed before the MTC or the RTC. It appears from the current Tax Declaration of the land involved that its assessed value
is only P1,740.00. Pursuant to Section 3, paragraph (3), of Republic Act No. 7691, all civil actions involving title to, or
possession of, real property with an assessed value of less than P20,000.00 are within the exclusive original jurisdiction of
the MTCs. In the case at bar, it is within the exclusive original jurisdiction of the MTC of Talisay, Cebu, where the
property involved is located.
Petitioner appealed directly to this Court, raising a pure question of law.
ISSUE: Whether or not the action for eminent domain is within the jurisdiction of the MTC?
RULING: The Court ruled that the action for eminent domain is within the jurisdiction of the RTC. In the
present case, an expropriation suit does not involve the recovery of a sum of money but it deals with the exercise by the
government of its authority and right to take private property for public use. The subject of an expropriation suit is the
government’s exercise of eminent domain, a matter that is incapable of pecuniary estimation . The value of the property
to be expropriated is estimated in monetary terms, for the court is duty-bound to determine the just compensation for it.
However, this is merely incidental to the expropriation suit. The amount is determined only after the court is satisfied
with the propriety of the expropriation.
In Republic of the Philippines v. Zurbano, the Court held that "condemnation proceedings are within the
jurisdiction of Courts of First Instance," the forerunners of the RTCs. The said case was decided during the effectivity of
the Judiciary Act of 1948 which, like BP 129 in respect to RTCs, provided that courts of first instance had original
jurisdiction over "all civil actions in which the subject of the litigation is not capable of pecuniary estimation." The 1997
amendments to the Rules of Court were not intended to change these jurisprudential precedents.
Also, the Court is not persuaded by respondents’ argument that the present action involves the title to or
possession of a parcel of land. They cite the observation of retired Justice Jose Y. Feria, an eminent authority in remedial
law, that condemnation or expropriation proceedings are examples of real actions that affect the title to or possession of
a parcel of land. Their reliance is misplaced. Justice Feria sought merely to distinguish between real and personal
actions. His discussion on this point pertained to the nature of actions, not to the jurisdiction of courts. In fact, in his pre-
bar lectures, he emphasizes that jurisdiction over eminent domain cases is still within the RTCs under the 1997 Rules.
WHEREFORE, the Petition is hereby GRANTED and the assailed Orders SET ASIDE. The Regional Trial Court is
directed to HEAR the case. No costs.
• Requisites of Taking
47) Short Title: Mactan Cebu International Airport vs. Lozada, Jr. (G.R. No. 176625, February 25, 2010)
Long Title: MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY AND AIR TRANSPORTATION OFFICE, PETITIONERS,
VS. BERNARDO L. LOZADA, SR., AND THE HEIRS OF ROSARIO MERCADO, NAMELY, VICENTE LOZADA, MARIO M.
Page 109 of 306
LOZADA, MARCIA L. GODINEZ, VIRGINIA L. FLORES, BERNARDO LOZADA, JR., DOLORES GACASAN, SOCORRO CAFARO
AND ROSARIO LOZADA, REPRESENTED BY MARCIA LOZADA GODINEZ, RESPONDENTS.
Facts: An area of 1,017 square meters in Lahug, Cebu City was owned by Anastacio Deiparine when the same was
subject to expropriation proceedings, initiated by the Republic of the Philippines (Republic), represented by the then Civil
Aeronautics Administration (CAA) for the expansion and improvement of the Lahug Airport.
During the pendency of the expropriation proceedings, respondent Bernardo L. Lozada, Sr. acquired Lot No. 88
from Deiparine. Consequently, the Transfer Certificate of Title (TCT) No. 9045 was issued in Lozada’s name.
On December 29, 1961, the trial court rendered judgment in favor of the Republic and ordered them to pay
Lozada the fair market value of Lot No. 88, adjudged at P3.00 per square meter, with consequential damages by way of
legal interest computed from November 16, 1947—the time when the lot was first occupied by the airport. Lozada
received the amount of P3,018.00 by way of payment.
The affected landowners appealed. Pending appeal, the Air Transportation Office (ATO), formerly CAA, proposed
a compromise settlement that if owners of the lots who would not appeal or withdraw their respective appeals for their
respective lots, such lots would be resold at the price they were expropriated IN THE EVENT that the ATO would abandon
the Lahug Airport.
Because of this promise, Lozada did not pursue his appeal. Thereafter, Lot No. 88 was transferred and registered
in the name of the Republic under TCT No. 25057.
The projected improvement and expansion plan of the old Lahug Airport, however, was not pursued.
Lozada, with the other landowners, contacted then CAA Director Vicente Rivera, Jr., requesting to repurchase the lots, as
per previous agreement.
The CAA replied that there might still be a need for the Lahug Airport to be used as an emergency DC-3 airport.
It reiterated, however, the assurance that "should this Office dispose and resell the properties which may be found to be
no longer necessary as an airport, then the policy of this Office is to give priority to the former owners subject to the
approval of the President."
On November 29, 1989, then President Corazon C. Aquino issued a Memorandum to the Department of
Transportation, directing the transfer of general aviation operations of the Lahug Airport to the Mactan International
Airport before the end of 1990 and, upon such transfer, the closure of the Lahug Airport. In line with this, the Congress of
the Philippines passed Republic Act (R.A.) No. 6958, entitled "An Act Creating the Mactan-Cebu International Airport
Authority, Transferring Existing Assets of the Mactan International Airport and the Lahug Airport to the Authority, Vesting
the Authority with Power to Administer and Operate the Mactan International Airport and the Lahug Airport, and For
Other Purposes."
Since then, the public purpose of the said expropriation (expansion of the airport) was never actually initiated,
realized, or implemented.
Instead, the old airport was converted into a commercial complex (Ayala I.T. Park). Lot No. 88 became the site of
a jail known as Bagong Buhay Rehabilitation Complex, while a portion thereof was occupied by infromal settlers
Page 110 of 306
RTC RULING: was in favor of the plaintiffs, Bernardo L. Lozada, Sr. et. al., and ordered the repossession and ownership
to them.
CA RULING: affirmed in toto
Issue: Whether the right of the respondent to repurchase may be enforced based on a constructive trust?
Ruling: Yes.– The right of respondents to repurchase Lot No. 88 may be enforced based on a constructive trust
constituted on the property held by the government in favor of the former.
It is well settled by the SC that the taking of private property by the Government’s power of eminent domain is subject to
two mandatory requirements: (1) that it is for a particular purpose; and (2) that just compensation be paid to
property owner.
If the government cannot be compelled by petitioners to reconvey the parcels of land to them, petitioners would
be denied the use of their properties upon a state of affairs that was not conceived nor contemplated when the
expropriation was authorized
No doubt, the return or repurchase of the condemned properties of petitioners could be readily justified as the
manifest legal effect or consequence of the trial courts underlying presumption that Lahug Airport will continue to be in
operation when it granted the complaint for eminent domain and the airport discontinued its activities.
The predicament of petitioners involves a constructive trust, one that is akin to the implied trust referred to in
Art. 1454 of the Civil Code, If an absolute conveyance of property is made in order to secure the performance of an
obligation of the grantor toward the grantee, a trust by virtue of law is established. If the fulfillment of the obligation is
offered by the grantor when it becomes due, he may demand the reconveyance of the property to him. The government
with the latter obliging itself to use the realties for the expansion of Lahug Airport; failing to keep its bargain, the
government can be compelled by petitioners to reconvey the parcels of land to them, otherwise, petitioners would be
denied the use of their properties upon a state of affairs that was not conceived nor contemplated when the expropriation
was authorized.
In constructive trusts, the arrangement is temporary and passive in which the trustees sole duty is to transfer the
title and possession over the property to the plaintiff-beneficiary. Of course, the wronged party seeking the aid of a court
of equity in establishing a constructive trust must himself do equity. Accordingly, the court will exercise its discretion in
deciding what acts are required of the plaintiff-beneficiary as conditions precedent to obtaining such decree and has the
obligation to reimburse the trustee the consideration received from the latter just as the plaintiff-beneficiary would if he
proceeded on the theory of rescission. In the good judgment of the court, the trustee may also be paid the necessary
expenses he may have incurred in sustaining the property, his fixed costs for improvements thereon, and the monetary
value of his services in managing the property to the extent that plaintiff-beneficiary will secure a benefit from his acts.
On the matter of the repurchase price, while petitioners are obliged to reconvey Lot No. 88 to respondents, the
latter must return to the former what they received as just compensation for the expropriation of the property, plus legal
interest to be computed from default, which in this case runs from the time petitioners comply with their obligation to
respondents.
Page 111 of 306
Respondents must likewise pay petitioners the necessary expenses they may have incurred in maintaining Lot No.
88, as well as the monetary value of their services in managing it to the extent that respondents were benefited thereby.
Additional notes:
The right of eminent domain is “the ultimate right of the sovereign power to appropriate, not only the public but
the private property of all citizens within the territorial sovereignty, to public purpose.” But the exercise of such right is
not unlimited, for two mandatory requirements should underlie the Government’s exercise of the power of eminent
domain, namely: (1) that it is for a particular public purpose; and (2) that just compensation be paid to the property
owner. These requirements partake the nature of implied conditions that should be complied with to enable the
condemnor to keep the property expropriated.
 Can the government just take the property is taken under this power?
The payment of just compensation is required before the government can take properties under the power of
eminent domain. Just compensation is defined as the full and fair equivalent of the property taken from its
owner by the expropriator. The measure is not the taker’s gain, but the owner’s loss. The word “just” is used
to intensify the meaning of the word “compensation” and to convey thereby the idea that the equivalent to be rendered
for the property to be taken shall be real, substantial, full, and ample. (National Power Corporation v. Diato-Bernal, 653
Phil. 345, 354 (20 10)).
 What should be considered before a taking under the power of eminent domain can be exercised?
Under Article III, Section 9 of the 1987 Constitution, it is guaranteed that the right of every owner whose land is
being taken for public use to be paid with just compensation. Just compensation to be paid to the owner shall be based
on the fair market value of the property.
The following factors are considered in determining just compensation:
1) the classification and use for which the property is suited;
2) the developmental cost for improving the land;
3) the value declared by the owners;
4) the current selling price of similar lands in the vicinity;
5) the reasonable disturbance compensation for the removal and/or demolition of certain improvement
on the land and for the value of improvements thereon;
6) the size, shape or location, tax declaration and zonal valuation of the land;
7) the price of the land as manifested in the ocular findings, oral as well as documentary evidence
presented; and
8) such facts and events as to enable the affected property owners to have sufficient funds to acquire
similarly-situated lands of approximate areas as those required from them by the government, and thereby
rehabilitate themselves as early as possible (Section 5, RA 8974 or An Act to Facilitate the Acquisition of Right-of-
Way, Site or Location for National Government Infrastructure Projects and For Other Purposes).
Page 112 of 306
48) City Govt. of Quezon City vs. Ericta [122 SCRA 759 (1983)]
Full Title: G.R. No. L-34915 June 24, 1983
CITY GOVERNMENT OF QUEZON CITY and CITY COUNCIL OF QUEZON CITY, petitioners,
vs.
HON. JUDGE VICENTE G. ERICTA as Judge of the Court of First Instance of Rizal, Quezon City, Branch
XVIII; HIMLAYANG PILIPINO, INC., respondents.
Facts: This is a petition for review which seeks the reversal of the decision of the Court of First Instance of Ri zal, Branch
XVIII declaring Section 9 of Ordinance No. 6118, S-64, of the Quezon City Council null and void.
Section 9 of Ordinance No. 6118, S-64, entitled "ORDINANCE REGULATING THE ESTABLISHMENT, MAINTENANCE AND
OPERATION OF PRIVATE MEMORIAL TYPE CEMETERY OR BURIAL GROUND WITHIN THE JURISDICTION OF QUEZON
CITY AND PROVIDING PENALTIES FOR THE VIOLATION THEREOF" provides:
Sec. 9. At least six (6) percent of the total area of the memorial park cemetery shall be set aside for
charity burial of deceased persons who are paupers and have been residents of Quezon City for at least 5
years prior to their death, to be determined by competent City Authorities. The area so designated shall
immediately be developed and should be open for operation not later than six months from the date of
approval of the application.
For several years, the aforequoted section of the Ordinance was not enforced by city authorities but seven years
after the enactment of the ordinance, the Quezon City Council passed the following resolution:
RESOLVED by the council of Quezon assembled , to request, as it does hereby request the City Engineer,
Quezon City, 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.
Pursuant to this petition, the Quezon City Engineer notified respondent Himlayang Pilipino, Inc. in writing that
Section 9 of Ordinance No. 6118, S-64 would be enforced
Respondent Himlayang Pilipino reacted by filing with the Court of First Instance of Rizal Branch XVIII at Quezon
City, a petition for declaratory relief, prohibition and mandamus with preliminary injunction (Sp. Proc. No. Q-16002)
seeking to annul Section 9 of the Ordinance in question The respondent alleged that the same is contrary to the
Constitution, the Quezon City Charter, the Local Autonomy Act, and the Revised Administrative Code.
The respondent court, therefore, rendered the decision declaring Section 9 of Ordinance No. 6118, S-64 null and
void.
A motion for reconsideration having been denied, the City Government and City Council filed the instant petition.
Petitioners argue 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 argue 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
Page 113 of 306
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 other hand, respondent Himlayang Pilipino, Inc. contends that the taking or confiscation of
property is 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.
The respondent also stresses that the general welfare clause is not available as a source of power
for the taking of the property in this case because it refers to "the power of promoting the public welfare
by restraining and regulating the use of liberty and property." The respondent points out that if an owner is
deprived of his property outright under the State's police power, the property is generally not taken for
public use but is urgently and summarily destroyed in order to promote the general welfare. The respondent
cites the case of a nuisance per se or the destruction of a house to prevent the spread of a conflagration.
Issue: Whether Section 9 of the ordinance in question a valid exercise of the police power.
Ruling: No. The power to regulate does not include the power to prohibit (People vs. Esguerra, 81 PhiL 33,
Vega vs. Municipal Board of Iloilo, L-6765, May 12, 1954; 39 N.J. Law, 70, Mich. 396). A fortiori, the power to regulate
does not include the power to confiscate. The ordinance in question not only confiscates but also prohibits the
operation of a memorial park cemetery, because under Section 13 of said ordinance, 'Violation of the
provision thereof is punishable with a fine and/or imprisonment and that upon conviction thereof the permit to
operate and maintain a private cemetery shall be revoked or cancelled.' The confiscatory clause and the penal provision in
effect deter one from operating a memorial park cemetery.
It will be seen from the foregoing authorities that police power is usually exercised in the form of mere
regulation or restriction in the use of liberty or property for the promotion of the general welfare. It 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 the peace and order and of promoting the
general welfare as for instance, the confiscation of an illegally possessed article, such as opium and firearms.
It seems to the court that Section 9 of Ordinance No. 6118, Series of 1964 of Quezon City is not a mere police regulation
but an outright confiscation. It deprives a person of his private property without due process of law, nay, even without
compensation.
There is no reasonable relation between the setting aside of at least six (6) percent of the total area
of a 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.
Page 114 of 306
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.
49. Short Title: Republic vs. Castelvi [58 SCRA 336 (1974)]
Full Title: G.R. No. L-20620 August 15, 1974
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant, vs. CARMEN M. VDA. DE CASTELLVI, ET AL., defendants-
appellees.
Facts: The Republic of the Philippines occupied the land of Carmen M. vda. de Castellvi, the judicial
administratrix of the estate of the late Alfonso de Castellvi, from July 1, 1947, by virtue of a contract of
lease, on a year to year basis (from July 1 of each year to June 30 of the succeeding year). Before the expiration of
the contract of lease on June 30, 1956, the Republic sought to renew the same but Castellvi refused. When the AFP
refused to vacate the leased premises after the termination of the contract, Castellvi wrote to the Chief of Staff of the AFP
on July 11, 1956, informing the latter that the heirs of the property had decided not to continue leasing the property in
question because they had decided to subdivide the land for sale to the general public, demanding that the property be
vacated within 30 days from receipt of the letter, and that the premises be returned in substantially the same condition as
before occupancy.
The Chief of Staff refused, saying that it was difficult for the army to vacate the premises in view of the
permanent installations and other facilities worth almost P500,000.00 that were erected and already established on the
property, and that, there being no other recourse, the acquisition of the property by means of expropriation proceedings
would be recommended to the President. Castellvi then brought suit in the Court of First Instance (CFI) of Pampanga
(Civil Case 1458), to eject the Philippine Air Force from the land. While this ejectment case was pending, the Republic
filed on June 26, 1959 complaints for eminent domain against Castellvi, and Maria Nieves Toledo Gozun over 3 parcels of
land situated in the barrio of San Jose, Floridablanca, Pampanga.
Page 115 of 306
In its complaint, the Republic alleged, among other things, that the fair market value of the abovementioned
lands, according to the Committee on Appraisal for the Province of Pampanga, was not more than P2,000 per hectare, or
a total market value of P259,669.10; and prayed, that the provisional value of the lands be fixed at P259,669.10, that the
court authorizes the Republic to take immediate possession of the lands upon deposit of that amount with the Provincial
Treasurer of Pampanga; that the court appoints 3 commissioners to ascertain and report to the court the just
compensation for the property sought to be expropriated, and that the court issues thereafter a final order of
condemnation. The Republic was placed in possession of the lands on August 10, 1959.
Meanwhile, on November 21, 1959, the CFI of Pampanga, dismissed Civil Case 1458, upon petition of the parties.
After the parties filed their respective memoranda, the trial court, on May 26, 1961, rendered its decision, finding that the
unanimous recommendation of the commissioners of P10.00 per square meter for the 3 lots subject of the action is fair
and just; and required the Republic to pay interests.
On June 21, 1961 the Republic filed a motion for a new trial and/or reconsideration, against which motion
Castellvi and Toledo-Gozun filed their respective oppositions, and which the trial court denied on July 12, 1961. The
Republic’s record on appeal was submitted on December 6, 1961, after filing various ex-parte motions for extension of
time within which to file its record on appeal. On December 27, 1961 the trial court dismissed both appeals for having
been filed out of time, thereby.
On January 11, 1962 the Republic filed a "motion to strike out the order of December 27, 1961 and for
reconsideration", and subsequently an amended record on appeal, against which motion Castellvi and Toledo-Gozun filed
their opposition. On July 26, 1962 the trial court issued an order, stating that "in the interest of expediency, the questions
raised may be properly and finally determined by the Supreme Court," and at the same time it ordered the Solicitor
General to submit a record on appeal containing copies of orders and pleadings specified therein. In an order dated
November 19, 1962, the trial court approved the Republic's record on appeal as amended. Defendant Castellvi did not
insist on her appeal. Defendant Toledo-Gozun did not appeal. The motion to dismiss the Republic's appeal was reiterated
by appellees Castellvi and Toledo-Gozun before the Court, but the motion was denied.
In her motion of August 11, 1964, appellee Castellvi sought to increase the provisional value of her land. The
Republic, in its comment on Castellvi's motion, opposed the same. This Court denied Castellvi's motion. The motion of
appellees, Castellvi and Toledo-Gozun, praying that they be authorized to mortgage the lands subject of expropriation,
was denied on October 14, 1969.
Before this Court, the Republic contends that the lower court erred:
1. In finding the price of P10 per square meter of the lands subject of the instant proceedings as just
compensation;
2. In holding that the "taking" of the properties under expropriation commenced with the filing of this
action;
3. In ordering plaintiff-appellant to pay 6% interest on the adjudged value of the Castellvi property to
start from July of 1956;
4. In denying plaintiff-appellant's motion for new trial based on newly discovered evidence.
Page 116 of 306
In support of the assigned error that the lower court erred in holding that the "taking" of the properties under
expropriation commenced with the filing of the complaint in this case, the Republic argues that the "taking" should be
reckoned from the year 1947 when by virtue of a special lease agreement between the Republic and appellee Castellvi,
the former was granted the "right and privilege" to buy the property should the lessor wish to terminate the lease, and
that in the event of such sale, it was stipulated that the fair market value should be as of the time of occupancy; and that
the permanent improvements amounting to more that half a million pesos constructed during a period of twelve years on
the land, subject of expropriation, were indicative of an agreed pattern of permanency and stability of occupancy by the
Philippine Air Force in the interest of national Security.
Appellee Castellvi, on the other hand, maintains that the "taking" of property under the power of
eminent domain requires two essential elements, to wit: (1) entrance and occupation by condemn or upon
the private property for more than a momentary or limited period, and (2) devoting it to a public use in
such a way as to oust the owner and deprive him of all beneficial enjoyment of the property.
This appellee argues that in the instant case the first element is not present or inadequate, for the contract of
lease relied upon provides for a lease from year to year; that the second element is also wanting, because the Republic
was paying the lessor Castellvi a monthly rental of P445.58; and that the contract of lease does not grant the Republic
the "right and privilege" to buy the premises "at the value at the time of occupancy. Appellee Toledo-Gozun did not
comment on the Republic's argument in support of the second error assigned, because as far as she was concerned the
Republic had not taken possession of her lands prior to August 10, 1959.
Issue: Whether the taking of Castellvi’s property for purposes of eminent domain occurred in 1947 when the Republic
first occupied the subject lands.
Ruling: NO. A number of circumstances must be present in the "taking" of property for purposes of eminent domain.
First, the expropriator must enter a private property. Second, the entrance into private property must be
for more than a momentary period. Third, the entry into the property should be under warrant or color of
legal authority. Fourth, the property must be devoted to a public use or otherwise informally appropriated
or injuriously affected. Fifth, the utilization of the property for public use must be in such a way as to oust
the owner and deprive him of all beneficial enjoyment of the property.
First, the expropriator must enter a private property. By virtue of the lease agreement the Republic,
through the AFP, took possession of the property of Castellvi.
Second, the entrance into private property must be for more than a momentary period. The word
“momentary” when applied to possession or occupancy of (real) property should be construed to mean “a
limited period”—not indefinite or permanent. In the instant case, the lease contract was for a period of one
year, renewable from year to year. The entry on the property, under the lease, is temporary, and
considered transitory.
Page 117 of 306
Third, the entry into the property should be under warrant or color of legal authority. The Republic
entered the Castellvi property as lessee.
Fourth, the property must be devoted to a public use or otherwise informally appropriated or
injuriously affected. It may be conceded that the circumstance of the property being devoted to public use
is present because the property was used by the air force of the AFP.
Fifth, the utilization of the property for public use must be in such a way as to oust the owner and
deprive him of all beneficial enjoyment of the property
The entry of the Republic into the property and its utilization of the same for public use did not oust Castellvi and
deprive her of all beneficial enjoyment of the property. Castellvi remained as owner, and was continuously
recognized as owner by the Republic. Neither was Castellvi deprived of all the beneficial enjoyment of the
property, because the Republic was bound to pay, and had been paying, Castellvi the agreed monthly
rentals.
Thus, the Court has ruled that when the taking of the property sought to be expropriated coincides
with the commencement of the expropriation proceedings, or takes place subsequent to the filing of the
complaint for eminent domain, the just compensation should be determined as of the date of the filing of
the complaint.
The "taking" of Castellvi's property for purposes of eminent domain cannot be considered to have
taken place in 1947 when the Republic commenced to occupy the property as lessee thereof.
Two essential elements in the "taking" of property under the power of eminent domain, namely: 1.)
that the entrance and occupation by the condemnor must be for a permanent, or indefinite period, and;
2.)that in devoting the property to public use the owner was ousted from the property and deprived of its
beneficial use, were not present when the Republic entered and occupied the Castellvi property in 1947.
The "taking' of the Castellvi property should not be reckoned as of the year 1947 when the Republic first
occupied the same pursuant to the contract of lease, and that the just compensation to be paid for the Castellvi property
should not be determined on the basis of the value of the property as of that year. Under Section 4 of Rule 67 of the
Rules of Court, the "just compensation" is to be determined as of the date of the filing of the complaint. This Court has
ruled that when the taking of the property sought to be expropriated coincides with the commencement of the
expropriation proceedings, or takes place subsequent to the filing of the complaint for eminent domain, the just
compensation should be determined as of the date of the filing of the complaint.
50. Short Title: Municipality of Paranaque vs. V.M. Realty Corp. (292 SCRA 676)
Full Title:
G.R. No. 127820 July 20, 1998
MUNICIPALITY OF PARAÑAQUE, Petitioner, v. V.M. REALTY CORPORATION, Respondent.
Page 118 of 306
Facts: Municipality of Paranaque(Petitioner) filed a complaint for expropriation against private respondent V.M. Realty
Corporation. The complaint was filed for the purpose of alleviating the living conditions of the underprivileged by
providing homes for the homeless through a socialized housing project.
However, respondent claimed that the complaint had failed to state the cause of action because it was filed
pursuant to a resolution and not to an ordinance as required by RA 7160, the Local Goverment Code.
etitioner argued that a resolution approved by the municipal council for the purpose of initiating an expropriation
case so this substantially complies with the requirements of the law. Citing Article 36, Rule VI of the Rules of Regulations
Implementing the Local Government Code, which provides: “If the LGU fails to acquire a private property for public use,
purpose, or welfare through purchase, the LGU may expropriate said property through a resolution of the Sanggunian
authorizing its chief executive to initiate expropriation proceedings.”
Issue: Whether the resolution duly approved by the municipal council have the same force and effect of an ordinance
and will not deprive an expropriation case of a valid cause of action
Ruling: No. Resolutions do not have the same force and effect of an ordinance since that it is a rule that the power of
eminent domain is lodged in the legislative branch of government, which may delegate the exercise thereof to LGUs,
other public entities and public utilities.
An LGU may therefore exercise the power to expropriate private property only when authorized by Congress and
subject to the latter’s control and restraints, imposed “through the law conferring the power or in other legislations.”
These are the following essential requisites must concur before an LGU can exercise the power of eminent domain:
1. An ordinance is enacted by the local legislative council authorizing the local chief executive , in behalf of
the LGU, to exercise the power of eminent domain or pursue expropriation proceedings over a particular
private property.
2. The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of the
poor and the landless.
3. There is payment of just compensation, as required under Section 9, Article III of the Constitution, and
other pertinent laws.
4. A valid and definite offer has been previously made to the owner of the property sought to be
expropriated, but said offer was not accepted.
In the case at bar, the local chief executive sought to exercise the power of eminent domain pursuant to a
resolution of the municipal council. Thus, there was no compliance with the first requisite that the mayor be authorized
through an ordinance. Also, RA 7160, the present Local Government Code, which was already in force when the
Complaint for expropriation was filed, explicitly required an ordinance for this purpose.
Moreover, Petitioner relies on Article 36, Rule VI of the Implementing Rules, which requires only a resolution to
authorize an LGU to exercise eminent domain. This is clearly misplaced, because Section 19 of RA 7160, the law
itself, surely prevails over said rule which merely seeks to implement it.
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Therefore, the petitioner, relying on a resolution, has no authority exercising the power of eminent domain.
• Deprivation of Use
51) Hermano Oil Manufacturing and Sugar Corporation vs. Toll Regulatory Board (G.R. No.
167290, November 26, 2014)
Subject: TRB, Dumlao and the DPWH enjoy immunity from suit as they are unincorporated government agencies which
perform essentially governmental or public functions; PNCC, being a private business entity, is not immune from suit; No
court except the Supreme Court could issue an injunction against an infrastructure project of the Government; Scope of
“infrastructure projects”; Establishment of an access fence along the NLEX is considered an infrastructure project which
cannot be restrained by injunction; DOTC, not the DPWH, has authority over the establishment of the access fence;
Putting up of the access fence on the petitioner’s property was a valid exercise of police power; No violation of equal
protection clause; There is no taking which requires the payment of just compensation.
Facts: Hermano Oil Manufacturing & Sugar Corp. (petitioner) owned a parcel of land located at the right side of the Sta.
Rita Exit of the NLEX situated at Barangay Sta. Rita, Guiguinto, Bulacan. The land was bounded by an access fence along
the NLEX. Petitioner wrote a letter to the Toll Regulatory Board (TRB) to request for a grant an easement of right of way,
contending that it had been totally deprived of the enjoyment and possession of its property by the access fence that had
barred its entry into and exit from the NLEX.
The TRB denied the petitioner’s request, stating that the same would be inconsistent with Section 7.0 of Republic
Act No. 2000, also known as the Limited Access Highway Act. Moreover, allowing easement of right-of-way may have an
adverse effect on the scheduled rehabilitation and improvement of the North Luzon Expressway Interchanges.
Petitioner sued the TRB and its Executive Director, Engr. Jaime S. Dumlao, in the RTC demanding specific performance,
the grant of the easement of right of way and damages. In the alternative, petitioner demanded payment of just
compensation of not less that P4,000/ square meter.
The petitioner amended its complaint to implead the Philippine National Construction Corporation (PNCC) and the
Department of Public Works and Highways (DPWH) as indispensable parties
However, the RTC granted the TRB's motion to dismiss observing that (1) the action would be considered as a suit
against the state without its consent as among the reliefs prayed for in thecomplaint is to require the said defendants to
pay, jointly and severally, a just and reasonable compensation of the plaintiff’s property which, if awarded, would
ultimately involve an appropriation by the state of the amount needed to pay the compensation and damages so
awarded; also, (2) the main relief sought by the plaintiff is beyond the jurisdiction of this court to grant as Presidential
Decree No. 1818 and Republic Act No. 8975 essentially prohibit the courts from issuing temporary restraining orders
(TRO) and/or writs of injunction against government infrastructure projects, and which expressly declares any such TRO
or writ of injunction void under Section 3 of R.A. No. 8975.
The Court of Appeals (CA) affirmed the RTC’s dismissal of the complaint. The CA also observed that the NLEX
was already in existence when the petitioner acquired the property. A person cannot demand an easement of right of way
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if the isolation of the property was due to owner’s own act. Moreover, there is a road network in front of the property
which serves as its access. In order to be able to demand a compulsory right of way, the dominant estate must not have
adequate access to a public highway. Lastly, the CA found that PNCC, although not strictly a government agency (like the
TRB and DPWH), its function is a necessary incident to a government function and, hence, it should likewise enjoy
immunity from suit.Hence, this petition.
Held:
TRB, Dumlao and the DPWH enjoy immunity from suit as they are unincorporated governmentagencies
which perform essentially governmental or public functions
The TRB, Dumlao and the DPWH correctly invoked the doctrine of sovereign immunity in their favor. The TRB
and the DPWH performed purely or essentially government or public functions. As such, they were invested with the
inherent power of sovereignty. Being unincorporated agencies or entities of theNational Government, they could not be
sued as such. On his part, Dumlao was acting as the agent ofthe TRB in respect of the matter concerned.
An unincorporated government agency without any separate juridical personality of its own enjoysimmunity from suit
because it is invested with an inherent power of sovereignty. Accordingly, a claim fordamages against the agency cannot
prosper; otherwise, the doctrine of sovereign immunity is violated. However, the need to distinguish between an
unincorporated government agency performing governmental function and one performing proprietary functions has
arisen. The immunity has been upheld in favor of the former because its function is governmental or incidental to such
function; it has not been upheld in favor of the latter whose function was not in pursuit of a necessary function of
government but was essentially a business. (see Air Transportation Office v. Ramos)
PNCC, being a private business entity, is not immune from suit

The PNCC was incorporated in 1966 under the Corporation Code with the original name of Construction
Development Corporation of the Philippines (CDCP). In 1983, the CDCP changed its corporate name to the PNCC to
reflect the extent of the Government’s equity investment in the company. The Government owned 90.3% of the equity of
the PNCC, and only 9.70% of the PNCC’s voting equity remained under private ownership. Although the majority or
controlling shares of the PNCC belonged tothe Government, the PNCC was essentially a private corporation due to its
having been created inaccordance with the Corporation Code, the general corporation statute. More specifically, the PNCC
was an acquired asset corporation under Administrative Order No. 59, and was subject to the regulation and jurisdiction
of the Securities and Exchange Commission. Consequently, the doctrine of sovereign immunity had no application to the
PNCC.
No court except the Supreme Court could issue an injunction against an infrastructure project ofthe
Government
The suability of PNCC notwithstanding, the dismissal of the complaint was proper due to lack of jurisdiction and
due to lack of cause of action.
Page 121 of 306
Petitioner’s complaint principally sought to restrain the respondents from implementing an access fence on its
property, and to direct them to grant it a right of way to the NLEX. Clearly, the reliefs being sought by the petitioner were
beyond the jurisdiction of the RTC because no court except the SupremeCourt could issue an injunction against an
infrastructure project of the Government.
The prohibition is based on Presidential Decree No. 1818, issued on January 16, 1981 which was amended by
Republic Act No. 8975, approved on November 7, 2000, whose pertinent parts provide:
Section 3. Prohibition on the Issuance of Temporary Restraining Orders, Preliminary Injunctions and Preliminary
Mandatory Injunctions.-No court, except the Supreme Court, shall issue any temporary restraining order, preliminary
injunction or preliminary mandatory injunction against the government, or any of its subdivisions, officials or any
person or entity, whether public or private, acting under the government's direction, to restrain, prohibit or compel
the following acts:
Acquisition, clearance and development of the right-of-way and/or site or location of any national government
project;
Bidding or awarding of contract/project of the national government as defined under Section 2 hereof;
Commencement, prosecution, execution, implementation, operation of any such contract or project;
Termination or rescission of any such contract/project; and
The undertaking or authorization of any other lawful activity necessary for such contract/project. This
prohibition shall apply in all cases, disputes or controversies instituted by a private party, including but not
limited to cases filed by bidders or those claiming to have rights through such bidders involving such
contract/project. This prohibition shall not apply when the matter is of extreme urgency involving a
constitutional issue, such that unless a temporary restraining order is issued, grave injustice and irreparable
injury will arise. The applicant shall file a bond, in an amount to be fixed by the court, which bond shall
accrue in favor of the government if the court should finally decide that the applicant was not entitled to the
relief sought.
If after due hearing the court finds that the award of the contract is null and void, the court may, if appropriate
under the circumstances, award the contract to the qualified and winning bidder or order a rebidding of the same,
without prejudice to any liability that the guilty party may incur under existing laws.
Section 4. Nullity of Writs and Orders.-Any temporary restraining order, preliminary injunction or preliminary
mandatory injunction issued in violation of Section 3 hereof is void and of no force and effect.
PD 1818 proscribes the issuance of a writ of preliminary injunction in any case involving an infrastructure project
of the government. The aim of the prohibition, as expressed in its second whereas clause, is to prevent delay in the
implementation or execution of government infrastructure projects (particularly through the use of provisional remedies)
Page 122 of 306
to the detriment of the greater good since it disrupts the pursuit of essential government projects and frustrates the
economic development effort of the nation.
Scope of “infrastructure projects”

The term “infrastructure projects” means “construction, improvement and rehabilitation of roads, and bridges,
railways, airports, seaports, communication facilities, irrigation, flood control and drainage, water supply and sewage
systems, shore protection, power facilities, national buildings, school buildings, hospital buildings, and other related
construction projects that form part of the government capital investment.” (see Republic vs. Silerio)
The definition of infrastructure projects specifically includes the improvement and rehabilitation of roads and not
just its construction. Accordingly, even if the Coastal Road was merely upgraded and not constructed from scratch, it is
still covered by the definition. Moreover, PD 1818 itself states that any person, entity or governmental official cannot be
prohibited from continuing the execution or implementation of such project or pursuing any lawful activity necessary for
such execution or implementation. Undeniably, the collection of toll fees is part of the execution or implementation of the
MCTEP as agreed upon in the TOA. The MCTEP is an infrastructure project of the government forming part of the
government capital investment considering that under the TOA, the government owns the expressways comprising the
project. (see Francisco, Jr. vs. UEM-MARA Philippines Corporation)
Establishment of an access fence along the NLEX is considered an infrastructure project which cannot be
restrained by injunction
The respondents’ maintenance of safety measures, including the establishment of the access fence along the
NLEX, was a component of the continuous improvement and development of the NLEX. Consequently, the lower courts
could not validly restrain the implementation of the access fence by granting the petitioner its right of way without
exceeding its jurisdiction.
DOTC, not the DPWH, has authority over the establishment of the access fence
The access fence was put up pursuant to Republic Act No. 2000 (Limited Access Highway Act), the enforcement
of which was under the authority of the DOTC.
Section 4 of RA 2000 provides that “[t]he Department of Public Works and Communications (DPWC) is authorized
to do so design any limited access facility and to so regulate, restrict, or prohibit access as to best serve the traffic for
which such facility is intended.”
The RTC erroneously assumed that the Department of Public Works and Highways (DPWH) took the place of the
DPWC. However, upon the ratification of the 1987 Constitution in February 1987, the former Ministry of Public Works and
Highways became the Department of Public Works and Highways (DPWH) and the former Ministry of Transportation and
Communications became the Department of Transportation and Communications (DOTC).
Page 123 of 306
Under Section 1 of EO 546, the DPWH assumed the public works functions. on the other hand, it is the DOTC,
not the DPWH, which has authority to regulate, restrict, or prohibit access to limited accessfacilities. Even under
Executive Order No. 125 and Executive Order No. 125-A, which further reorganized the DOTC, the authority to administer
and enforce all laws, rules and regulations relative to transportation is clearly with the DOTC.
Putting up of the access fence on the petitioner’s property was a valid exercise of police power
Moreover, the putting up of the access fence on the petitioner’s property was in the valid exercise of police
power, assailable only upon proof that such putting up unduly violated constitutional limitations like due process and
equal protection of the law
A toll way is not an ordinary road. As a facility designed to promote the fastest access to certain destinations, its
use, operation, and maintenance require close regulation. Public interest and safetyrequire the imposition of certain
restrictions on toll ways that do not apply to ordinary roads. As a special kind of road, it is but reasonable that not all
forms of transport could use it. (see Mirasol v. Department of Public Works and Highways)
No violation of equal protection clause

The access fence was a reasonable restriction on the petitioner’s property given the location thereof at the right
side of Sta. Rita Exit of the NLEX. Although some adjacent properties were accorded unrestricted access to the
expressway, there was a valid and reasonable classification for doing sobecause their owners provided ancillary services
to motorists using the NLEX, like gasoline servicestations and food stores. A classification based on practical convenience
and common knowledge is not unconstitutional simply because it may lack purely theoretical or scientific uniformity.
There is no taking which requires the payment of just compensation

The limited access imposed on the petitioner’s property did not partake of a compensable taking due to the
exercise of the power of eminent domain. There is no question that the property was not taken and devoted for public
use. Instead, the property was subjected to a certain restraint, i.e. the access fence, in order to secure the general safety
and welfare of the motorists using the NLEX. There being a clear and valid exercise of police power, the petitioner was
certainly not entitled to any just compensation.
52) NAPOCOR vs. San Pedro [G.R. No. 170945, September 26, 2006]
NATIONAL POWER CORPORATION, petitioner, vs. MARIA MENDOZA SAN PEDRO, represented by VICENTE,
HERMINIA and FRANCISCO, all surnamed SAN PEDRO, respondents.
FACTS OF THE CASE: For the construction of its San Manuel-San Jose 500 KV Transmission Line and Tower No. SMJ-
389, NPC negotiated with Maria Mendoza San Pedro, then represented by her son, Vicente, for an easement of right of
way over her property, Lot No. 2076. The property, which was partly agricultural and partly residential land, was located
in Barangay Partida, Norzagaray, Bulacan and covered by Tax Declaration No. 00386.
Page 124 of 306
The payment voucher for the residential portion of the lot valued at P6,000,000.00 (at P600.00 per square meter)
was then processed.7 However, the NPC Board of Directors approved Board Resolution No. 97-2468 stating that it would
pay only P230.00 per sq m for the residential portion and P89.00 per sq m for the agricultural portion, on the following
premises:
 The proposed land valuations were evaluated and analyzed using the joint appraisal report on fair market value of
lands by Cuervo Appraisal, Inc., Development Bank of the Philippines, and the Land Bank of the Philippines and the
fair market values established by the respective Provincial Appraisal Committee (PAC) of Zambales, Pangasinan,
Nueva Ecija, Pampanga and Bulacan as well as the City Appraisal Committee (CAC) of San Carlos and Cabanatuan.
 For lot acquisition, adopt PAC or CUERVO Appraisal, whichever is lower; if there is a problem of acceptance, refer
same to the Board;
 For easement over agricultural lands, adopt median or average if there are several amounts involved; and
 Always oppose any proposals for conversion of agricultural lands.
On January 15, 1998, the NPC filed a complaint for eminent domain in the Regional Trial Court (RTC) of Bulacan
against Maria and other landowners.
Maria San Pedro filed her Answer on February 2, 1998, alleging that there had already been an agreement as to the
just compensation for her property. She prayed, among others, that she should be paid the consideration stated in the
Right of Way Grant, P600.00 per sq m for the residential portion of the land as agreed upon by her and NPC , and to base
the values from Resolution No. 97-00512 of the Provincial Appraisal Committee.
During the pre-trial on January 25, 1999, the parties agreed that the only issue for resolution was the just
compensation for the property. The court appointed a committee of commissioners to ascertain and recommend to the
trial court the just compensation for the properties.
On June 6, 2001, the trial court issued an Order granting the motion of the heirs and denied that of NPC. The RTC
declared that the just compensation for the residential portion of the property should be the same as that of the spouses
Lagula's property, which was P499.00 per sq m. On the claim of NPC in its motion for reconsideration that it should be
made to pay only an easement fee, the trial court ruled that Lot No. 2076 should be treated the same way as NPC treated
the properties of the spouses Lagula. It was pointed out that in the compromise agreements executed by plaintiff and
spouses Lagula, plaintiff paid P499.00 per sq m on the basis of a straight sale of their agricultural land, and not merely an
easement fee for a right of way thereon.
NPC appealed to the CA asserting that the lower court erred in its decision and prayed for modification.
ISSUE: Whether or not the petitioner paid just compensation.
RULING: The petition is denied for lack of merit.

The constitutional limitation of "just compensation" is considered to be the sum equivalent to the market value of
the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of legal
action and competition or the fair value of the property as between one who receives, and one who desires to sell it, fixed
Page 125 of 306
at the time of the actual taking by the government.39 To determine the just compensation to be paid to the landowner,
the nature and character of the land at the time of its taking is the principal criterion.
In the July 12, 1999 Majority Report, the commissioners found that the property was located in a highly-
developed area and was accessible through an all-weather road. The fact that the property had potential for full
development as shown by the existence of building projects in the vicinity, and the long-term effect of the expropriation
on the lives, comfort and financial condition of petitioners was likewise considered. The report also took into account the
ocular inspection conducted by the commissioners on May 11, 1999. The tax declaration of the subject property,41 the
NPC sketch plan,42 the location plan,43 the zoning certificates,44 the zonal valuation of the BIR,45 and the opinion
values46 were also considered.
As had been amply explained by this Court in Export Processing Zone Authority v. Dulay:
Various factors can come into play in the valuation of specific properties singled out for expropriation. The values
given by provincial assessors are usually uniform for very wide areas covering several barrios or even an entire town with
the exception of the poblacion. Individual differences are never taken into account. The value of land is based
on such generalities as its possible cultivation for rice, corn, coconuts, or other crops. Very often land
described as "cogonal" has been cultivated for generations. Buildings are described in terms of only two or
three classes of building materials and estimates of areas are more often inaccurate than correct . Tax values
can serve as guides but cannot be absolute substitutes for just compensation.
To say that the owners are estopped to question the valuations made by assessors since they had the
opportunity to protest is illusory. The overwhelming mass of land owners accept unquestioningly what is found in the tax
declarations prepared by local assessors or municipal clerks for them. They do not even look at, much less analyze, the
statements. The idea of expropriation simply never occurs until a demand is made or a case filed by an agency authorized
to do so.
It is violative of due process to deny to the owner the opportunity to prove that the valuation in the tax
documents is unfair or wrong. And it is repulsive to basic concepts of justice and fairness to allow the haphazard work of
a minor bureaucrat or clerk to absolutely prevail over the judgment of a court promulgated only after expert
commissioners have actually viewed the property, after evidence and arguments pro and con have been presented, and
after all factors and considerations essential to a fair and just determination have been judiciously evaluated.
In the case at bar, the easement of right-of-way is definitely 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.
53) PPI vs. COMELEC [244 SCRA 272 (1995)]

PHILIPPINE PRESS INSTITUTE, INC., for and in behalf of 139 members, represented by its President,
Amado P. Macasaet and its Executive Director Ermin F. Garcia, Jr., petitioner,
vs. COMMISSION ON ELECTIONS, respondent.
Page 126 of 306
Facts: Comelec promulgated Resolution No. 2772 which allowed Comelec to procure free print space of not less than
1/2 page in at least one newspaper of general circulation in every province or city for use as ‘Comelec Space’. The
‘Comelec Space’ shall be allocated, through lottery, by the Commission, free of charge, among all candidates within the
area in which the newspaper, magazine or periodical is circulated to enable the candidates to make known their
qualifications, their stand on public issues and their platforms and programs of government – in short, dissemination of
vital election information.
Furthermore, the resolution stated that no newspaper or publication shall allow to be printed or published in
the news, opinion, features, or other sections of the newspaper or publication accounts or comments which manifestly
favor or oppose any candidate or political party by unduly or repeatedly referring to or including therein said candidate
or political party. However, unless the facts and circumstances clearly indicate otherwise, the Commission will respect the
determination by the publisher and/or editors of the newspapers or publication that the accounts or views published are
significant, newsworthy and of public interest.
Comelec directed several newspapers, which previously gave 2 pages during the 1992 elections, to provide
free print spaceof not less than 1/2 pagefor use as ‘Comelec Space’.
Petitioner’s contention: Resolution No. 2772 was unconstitutional and void; they claimed that there was taking
of private property for public use without just compensation. It also constituted impositions of involuntary servitude. And
that the resolution violated freedom of speech, of the press and of expression.
Respondent’s contention: SolGen claims that Resolution No. 2772 does not impose upon any obligation as it
does not provide any criminal or administrative sanction for non-compliance with that Resolution. And even if the
questioned Resolution and its implementing letter directives are viewed as mandatory, the same would nevertheless be
valid as an exercise of the police power of the State.
Issue: Whether or not the Comelec, through the subject resolution, validly exercised its power of eminent domain and
police power.
Ruling: No. To compel print media companies to donate “Comelec space” amounts to “taking” of private personal
property for public use or purposes. The resolution failed to specify the intended frequency of such compulsory
“donation”: only once during the period from 6 March 1995 (or 21 March 1995) until 12 May 1995? or everyday or once
a week? or as often as Comelec may direct during the same period? The extent of the taking or deprivation is not
insubstantial; this is not a case of a de minimis temporary limitation or restraint upon the use of private property.
The monetary value of the compulsory “donation,” measured by the advertising rates ordinarily charged by
newspaper publishers whether in cities or in non-urban areas, may be very substantial indeed. The taking of private
property for public use is, of course, authorized by the Constitution, but not without payment of “just compensation ”
(Article III, Section 9). And apparently the necessity of paying compensation for “Comelec space” is precisely what is
sought to be avoided by respondent Commission, whether the Resolution is read as petitioner PPI reads it, as an
assertion of authority to require newspaper publishers to “donate” free print space for Comelec purposes, or as an
exhortation, or perhaps an appeal, to publishers to donate free print space, as the Resolution attempts to suggest. The
Page 127 of 306
threshold requisites for a lawful taking of private property for public use need to be examined here: one is the necessity
for the taking; another is the legal authority to effect the taking.
The element of necessity for the taking has not been shown by respondent Comelec. It has not been suggested
that the members of PPI are unwilling to sell print space at their normal rates to Comelec for election purposes. Indeed,
the unwillingness or reluctance of Comelec to buy print space lies at the heart of the problem . Similarly, it has not been
suggested, let alone demonstrated, that Comelec has been granted the power of eminent domain either by the
Constitution or by the legislative authority. A reasonable relationship between that power and the enforcement
and administration of election laws by Comelec must be shown; it is not casually to be assumed. The resolution does not
constitute a valid exercise of the power of eminent domain.
Thus, public funds, not publishers solely, should bear costs for public information of electoral processes. The
economic costs of informing the general public about the qualifications and programs of those seeking elective office are
most appropriately distributed as widely as possible throughout our society by the utilization of public funds, especially
funds raised by taxation, rather than cast solely on one small sector of society, i.e., print media enterprises. The benefits
which flow from a heightened level of information on and the awareness of the electoral process are commonly thought
to be community-wide; the burdens should be allocated on the same basis.
Firstly, there was no effort (and apparently no inclination on the part of Comelec) to show that the police power
—essentially a power of legislation —has been constitutionally delegated to respondent Commission. Secondly, while
private property may indeed be validly taken in the legitimate exercise of the police power of the state, there was no
attempt to show compliance in the instant case with the requisites of a lawful taking under the police power. Section 2 is
a blunt and heavy instrument that purports, without a showing of existence of a national emergency or other imperious
public necessity, indiscriminately and without regard to the individual business condition of particular newspapers or
magazines located in differing parts of the country, to take private property of newspaper or magazine publishers. No
attempt was made to demonstrate that a real and palpable or urgent necessity for the taking of print space confronted
the Comelec and that Section 2 of Resolution No. 2772 was itself the only reasonable and calibrated response to such
necessity available to the Comelec. Section 2 does not constitute a valid exercise of the police power of the State.
The distinction between paid political advertisements on the one hand and news reports, commentaries and
expressions of belief or opinion by reporters, broadcasters, editors, etc. on the other hand, can realistically be given
operative meaning only in actual cases or controversies, on a case-to-case basis, in terms of very specific sets of facts.At
all events, the Court is bound to note that PPI has failed to allege any specific affirmative action on the part of Comelec
designed to enforce or implement Section 8. PPI has not claimed that it or any of its members has sustained actual or
imminent injury by reason of Comelec action under Section 8. Put a little differently, the Court considers that the precise
constitutional issue here sought to be raised — whether or not Section 8 of Resolution No. 2772 constitutes a permissible
exercise of the Comelec’s power under Article IX, Section 4 of the Constitution is not ripe for judicial review for lack of an
actual case or controversy involving, as the very lismota thereof, the constitutionality of Section 8.
54) NAPOCOR vs. Gutierrez [193 SCRA 1 (1991)]

Page 128 of 306
NATIONAL POWER CORPORATION, petitioner, vs. SPS. MISERICORDIA GUTIERREZ and RICARDO MALIT and
THE HONORABLE COURT OF APPEALS, respondents.
Facts: This is a petition for review on certiorari filed by the National Power Corporation (NPC) seeking the reversal or
modification of the March 9, 1986 Decision of the Court of Appeals in CA G.R. No. 54291-R entitled "National Power
Corporation v. Sps. Misericordia Gutierrez and Ricardo Malit", affirming the December 4, 1972 Decision of the then Court
of First Instance of Pampanga, Fifth Judicial District, Branch II, in Civil Case No. 2709, entitled National Power
Corporation v. Matias Cruz, et al.
National Power Corporation, a government owned and controlled entity, in accordance with Commonwealth Act
No. 120, is invested with the power of eminent domain for the purpose o f pursuing its objectives, which among others is
the construction, operation, and maintenance of electric transmission lines for distribution throughout the Philippines. For
the construction of its 230 KV Mexico-Limay transmission lines, plaintiff's lines have to pass the lands belonging to
defendants Matias Cruz, Heirs of Natalia Paule and spouses Misericordia Gutierrez and Ricardo Malit covered by tax
declarations Nos. 907, 4281 and 7582, respectively.
Plaintiff initiated negotiations for the acquisition of right of way easementsbut unsuccessful in this regard, said
corporation was constrained to file eminent domain proceedings against the herein defendants.
Upon filing of the corresponding complaint, plaintiff corporation deposited the amount of P973.00 with the
Provincial Treasurer of Pampanga, tendered to cover the provisional value of the land of the defendant spouses Ricardo
Malit and Misericordia Gutierrez. And by virtue of which, the plaintiff corporation was placed in possession of the property
of the defendant spouses so it could immediately proceed with the construction. In this connection, by the trial court's
order of September 30, 1965, the defendant spouses were authorized to withdraw the fixed provisional value of their
land.
Meanwhile, for the purpose of determining the fair and just compensation due the defendants, the court
appointed three commissioners. Hearings were consequently held before said commissioners and during their hearings,
the case of defendant Heirs of Natalia Paule was amicably settled by virtue of a Right of Way Grant executed by
Guadalupe Sangalang for herself and in behalf of her co-heirs in favor of the plaintiff corporation. The case against Matias
Cruz was earlier decided by the court, thereby leaving only the case against the defendant spouses Ricardo Malit and
Misericordia Gutierrez still to be resolved. Accordingly, the commissioners submitted their individual reports.
The lower court rendered a decisionordering plaintiff National Power Corporation to pay defendant spouses
Ricardo Malit and Misericordia Gutierrez the sum of P10.00 per square meter as the fair and reasonable compensation for
the right-of-way easement of the affected area. The plaintiff corporation filed a motion for reconsideration which was
favorably acted upon by the lower court, and in an order dated June 10, 1973, it amended its previous decision, the court
finally classified the land to be partly commercial and partly agricultural, for which reason the amount of P10.00 per sq.
meter awarded is hereby reduced to P5.00 per square meter. Still not satisfied, an appeal was filed by petitioner (NPC)
with the Court of Appeals but respondent Court of Appeals in its March 9, 1982, sustained the trial court.
Issue: Whether the acquisition of a mere right-of-way is an exercise of the power of eminent domain.
Page 129 of 306
Ruling: Yes.The trial court's observation shared by the appellate court show that ". . . While it is true that plaintiff are
only after a right-of-way easement, it nevertheless perpetually deprives defendants of their proprietary rights as
manifested by the imposition by the plaintiff upon defendants that below said transmission lines no plant higher than
three (3) meters is allowed. Furthermore, because of the high-tension current conveyed through said transmission lines,
danger to life and limbs that may be caused beneath said wires cannot altogether be discounted, and to cap it all plaintiff
only pays the fee to defendants once, while the latter shall continually pay the taxes due on said affected portion of their
property."
The foregoing facts considered, the acquisition of the right-of-way easement falls within the purview of the power
of eminent domain. Such conclusion finds support in similar cases of easement of right-of-way where the Supreme Court
sustained the award of just compensation for private property condemned for public use. In the case at bar, the
easement of right-of-way is definitely 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.
For these reasons, the owner of the property expropriated is entitled to a just compensation, which should be
neither more nor less, whenever it is possible to make the assessment, than the money equivalent of said property . Just
compensation has always been understood to be the just and complete equivalent of the loss which the owner of the
thing expropriated has to suffer by reason of the expropriation . The price or value of the land and its character at the
time it was taken by the Government are the criteria for determining just compensation . The above price refers to the
market value of the land which may be the full market value thereof.
Private respondents recognize the inherent power of eminent domain being exercised by NPC when it finally
consented to the expropriation of the said portion of their land, subject however to payment of just compensation. No
matter how laudable NPC's purpose is, for which expropriation was sought, it is just and equitable that they be
compensated the fair and full equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain
would accrue to the expropriating entity.
55) Republic vs. Fajardo [104 Phil. 443 (1958)]

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. JUAN F. FAJARDO, ET AL., defendants-appellants.
Facts: Appeal from the decision of the Court of First Instance of Camarines Sur convicting defendants-appellants Juan F.
Fajardo and Pedro Babilonia of a violation of Ordinance No. 7, Series of 1950, of the Municipality of Baao, Camarines Sur,
for having constructed without a permit from the municipal mayor a building that destroys the view of the public plaza.
Page 130 of 306
On August 15, 1950, during the incumbency of defendant-appellant Juan F. Fajardo as mayor of the municipality of Baao,
Camarines Sur, the municipal council passed the ordinance in question providing as follows:
SECTION 1. Any person or persons who will construct or repair a building should, before constructing or
repairing, obtain a written permit from the Municipal Mayor.
Four years later, after the term of appellant Fajardo as mayor had expired, he and his son in-law, appellant
Babilonia, filed a written request with the incumbent municipal mayor for a permit to construct a building adjacent to their
gasoline station on a parcel of land registered in Fajardo's name, located along the national highway and separated from
the public plaza by a creek. On January 16, 1954, the request was denied, for the reason among others that the proposed
building would destroy the view or beauty of the public plaza. On January 18, 1954, defendants reiterated their request
for a building permit, but again the request was turned down by the mayor. Whereupon, appellants proceeded with the
construction of the building without a permit, because they needed a place of residence very badly, their former house
having been destroyed by a typhoon and hitherto they had been living on leased property.
On February 26, 1954, appellants were charged before and convicted by the justice of the peace court of Baao,
Camarines Sur, for violation of the ordinance in question. Defendants appealed to the Court of First Instance, which
affirmed the conviction, and sentenced appellants to pay a fine of P35 each and the costs, as well as to demolish the
building in question because it destroys the view of the public plaza of Baao, in that "it hinders the view of travelers from
the National Highway to the said public plaza." From this decision, the accused appealed to the Court of Appeals, but the
latter forwarded the records to us because the appeal attacks the constitutionality of the ordinance in question
.
Issue:Whether Ordinance No. 7 is valid.
Ruling: No. The ordinance fails to state any policy, or to set up any standard to guide or limit the mayor's action. No
purpose to be attained by requiring the permit is expressed; no conditions for its grant or refusal are enumerated. It is
not merely a case of deficient standards; standards are entirely lacking. The ordinance thus confers upon the mayor
arbitrary and unrestricted power to grant or deny the issuance of building permits, and it is a settled rule that such an
undefined and unlimited delegation of power to allow or prevent an activity, per se lawful, is invalid
The ordinance in question in no way controls or guides the discretion vested thereby in the respondents. It
prescribes no uniform rule upon which the special permission of the city is to be granted. Thus the city is clothed with the
uncontrolled power to capriciously grant the privilege to some and deny it others; to refuse the application of one
landowner or lessee and to grant that of another, when for all material purposes, the two applying for precisely the same
privileges under the same circumstances. The danger of such an ordinance is that it makes possible arbitrary
discriminations and abuses in its execution, depending upon no conditions or qualifications whatever, other than the
unregulated arbitrary will of the city authorities as the touchstone by which its validity is to be tested. Fundamental rights
under our government do not depend for their existence upon such a slender and uncertain thread. Ordinances which
thus invest a city council with a discretion which is purely arbitrary, and which may be exercised in the interest of a
favored few, are unreasonable and invalid.
Page 131 of 306
An ordinance which permanently so restricts the use of property that it cannot be used for any
reasonable purpose goes, it is plain, beyond regulation and must be recognized as a taking of the property.
The only substantial difference, in such case, between restriction and actual taking, is that the restriction
leaves the owner subject to the burden of payment of taxation, while outright confiscation would relieve
him of that burden. (Arverne Bay Constr. Co. vs. Thatcher (N.Y.) 117 ALR. 1110, 1116).
A regulation which substantially deprives an owner of all beneficial use of his property is confiscation and is a
deprivation within the meaning of the 14th Amendment.
The validity of the ordinance in question was justified by the court below under section 2243, par. (c), of the
Revised Administrative Code, as amended. Under the provisions of the section above quoted, however, the power of the
municipal council to require the issuance of building permits rests upon its first establishing fire limits in populous parts of
the town and prescribing the kinds of buildings that may be constructed or repaired within them. As there is absolutely no
showing in this case that the municipal council had either established fire limits within the municipality or set standards
for the kind or kinds of buildings to be constructed or repaired within them before it passed the ordinance in question, it
is clear that said ordinance was not conceived and promulgated under the express authority of sec. 2243 (c) aforequoted.
We rule that the regulation in question, Municipal Ordinance No. 7, Series of 1950, of the Municipality of Baao, Camarines
Sur, was beyond the authority of said municipality to enact, and is therefore null and void.
56) U.S. vs. Causby [328 U.S. 256 (1946)]

Facts: Respondents own 2.8 acres near an airport outside of Greensboro, North Carolina. It has on it a dwelling house,
and also various outbuildings which were mainly used for raising chickens. The farm was located near an airport used
regularly by the United States military.
According to Causby, noise from the airport regularly frightened the animals on his farm, resulting in the deaths
of several chickens. The noise is startling. And at night the glare from the planes brightly lights up the place. As many as
six to ten of their chickens were killed in one day by flying into the walls from fright. The total chickens lost in that
manner was about 150.
Production also fell off. The problem became so severe that Causby was forced to abandon his business. The
result was the destruction of the use of the property as a commercial chicken farm. Respondents are frequently deprived
of their sleep and the family has become nervous and frightened. Although there have been no airplane accidents on
respondents' property, there have been several accidents near the airport and close to respondents' place.
Under an ancient doctrine of the common law, land ownership extended to the space above and below the earth.
Using this doctrine as a basis, Causby sued the United States, arguing that he owned the airspace above his farm. By
flying planes in this airspace, he argued, the government had confiscated his property without compensation, thus
violating the Takings Clause of the Fifth Amendment. The United States Court of Claims accepted Causby's argument, and
ordered the government to pay compensation.
Page 132 of 306
Issue: Whether the flying of planes by the United States military over Causby's farm constitute a violation of the Takings
Clause of the Fifth Amendment.
Ruling: Yes. The court agreed with the finding that there had been a taking of respondents' property within the meaning
of U.S. Const. amend. V. The court held that a physical invasion of the property was not necessary where there was an
intrusion so immediate and direct as to subtract from respondents' full enjoyment and use of the property. Further, the
damages were not merely consequential; they were the product of a direct invasion of respondents' domain . The United
States Supreme Court reversed and remanded the action, however, on the basis that the record was not clear whether
the easement taken was temporary or permanent. The court remanded the cause for a determination of the necessary
findings regarding the nature of the easement.
In a 5-2 opinion, the Court concluded that the ancient common law doctrine "has no place in the modern world."
Justice Douglas noted that, were the Court to accept the doctrine as valid, "every transcontinental flight would subject
the operator to countless trespass suits. Common sense revolts at the idea." However, while the Court rejected the
unlimited reach above and below the earth described in the common law doctrine, it also ruled that, "if the landowner is
to have full enjoyment of the land, he must have exclusive control of the immediate reaches of the enveloping
atmosphere." Without defining a specific limit, the Court stated that flights over the land could be considered a violation
of the Takings Clause if they led to "a direct and immediate interference with the enjoyment and use of the land."
Given the damage caused by the particularly low, frequent flights over his farm, the Court determined that the
government had violated Causby's rights, and he was entitled to compensation.
• Priority in Expropriation
57) Lagcao vs. Judge Labra (G.R. No. 155746, October 13, 2004)
Full Title: [G.R. NO. 155746 : October 13, 2004]
DIOSDADO LAGCAO, DOROTEO LAGCAO and URSULA LAGCAO, Petitioners, v.JUDGE GENEROSA G. LABRA,
Branch 23, Regional Trial Court, Cebu, and the CITY OF CEBU, Respondent.
Facts: The Province of Cebu donated several lots to the City of Cebu. One of these lots was Lot 1029, situated in Capitol
Hills, Cebu City. In 1965, petitioners purchased Lot 1029 on installment basis. But then, in late 1965, the lots, including
Lot 1029, reverted to the Province of Cebu. Consequently, the province tried to annul the sale of Lot 1029 by the City of
Cebu to the petitioners. This prompted the latter to sue the province for specific performance and damages in the then
Court of First Instance. CFI ruled in favor of petitioners.
After acquiring title, petitioners tried to take possession of the lot only to discover that it was already occupied by
squatters. Thus, petitioners instituted ejectment proceedings against the squatters. The MTCC, Branch 1, Cebu City,
rendered a decision ordering the squatters to vacate the lot. On appeal, the RTC affirmed the MTCC’s decision and issued
a writ of execution and order of demolition.
Page 133 of 306
However, when the demolition order was about to be implemented, Cebu City Mayor Alvin Garcia wrote two
letters to the MTCC, requesting the deferment of the demolition on the ground that the City was still looking for a
relocation site for the squatters.
Acting on the mayor’s request, the MTCC issued two orders suspending the demolition for a period of 120 days.
During the suspension period, the Sangguniang Panlungsod of Cebu City passed a resolution which identified Lot 1029 as
a socialized housing site pursuant to RA 7279. T
hen, the Sangguniang Panlungsod of Cebu City passed Ordinance No. 1772 which included Lot 1029 among the
identified sites for socialized housing. On July, 19, 2000, Ordinance No. 1843 7 was enacted by the SP of Cebu City
authorizing the mayor of Cebu City to initiate expropriation proceedings for the acquisition of Lot 1029 which was
registered in the name of petitioners. The intended acquisition was to be used for the benefit of the homeless after its
subdivision and sale to the actual occupants thereof.
Petitioner’s Claim:
They argue that Ordinance No. 1843 is unconstitutional as it sanctions the expropriation of their property for the
purpose of selling it to the squatters, an endeavor contrary to the concept of “public use” contemplated in the
Constitution.They allege that it will benefit only a handful of people. The ordinance, according to petitioners, was
obviously passed for politicking, the squatters undeniably being a big source of votes.
Respondent’s Claim:
That the ordinance in question is valid under the claim that Local Government Units has the delegated power of
Eminent Domain and that the requirements was satisfied as there is an ordinance authorizing the Executive to expropriate
the land and that just compensation was already deposited in favor of the petitioner.
Issue: Whether or not Ordinance No. 1843 is a valid exercise of eminent domain under RA 7279?
Ruling: NO. The foundation of the right to exercise eminent domain is genuine necessity and that necessity
must be of public character. Government may not capriciously or arbitrarily choose which private property should be
expropriated. In this case, there was no showing at all why petitioners’ property was singled out for expropriation by the
city ordinance or what necessity impelled the particular choice or selection. Ordinance No. 1843 stated no reason for the
choice of petitioners’ property as the site of a socialized housing project.
There are two legal provisions which limit the exercise of this power: (1) no person shall be deprived of life,
liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws; and (2)
private property shall not be taken for public use without just compensation. Thus, the exercise by local government
units of the power of eminent domain is not absolute. In fact, Section 19 of RA 7160 itself explicitly states that
such exercise must comply with the provisions of the Constitution and pertinent laws.
Strict limitations on the exercise of the power of eminent domain by local government units, especially with
respect to (1) the order of priority in acquiring land for socialized housing and (2) the resort to expropriation proceedings
as a means to acquiring it. Private lands rank last in the order of priority for purposes of socialized housing. In
Page 134 of 306
the same vein, expropriation proceedings may be resorted to only after the other modes of acquisition are exhausted.
Compliance with these conditions is mandatory because these are the only safeguards of oftentimes
helpless owners of private property against what may be a tyrannical violation of due process when their
property is forcibly taken from them allegedly for public use. The Local Government Unit failed to follow section 9
and 10 of RA 7279.
58) City of Mandaluyong vs. Francisco [G.R. No. 137152, January 29, 2001]
Full Title:
[G.R. No. 137152. January 29, 2001.]
CITY OF MANDALUYONG, Petitioner, v. ANTONIO N., FRANCISCO N., THELMA N., EUSEBIO N., RODOLFO N.,
all surnamed AGUILAR, Respondents.
Facts: City of Mandaluyong filed with the RTC of Pasig City a complaint for expropriation of three (3) adjoining parcels of
land registered under the names of the respondents Antonio N.Aguilar, et. al. On a portion of the 3 lots, respondents
constructed residential houses which they had since leased out to tenants until the present. On the vacant portion of the
lots, other families constructed residential structures which they likewise occupied.
In 1983, the lots were classified by Resolution No. 125 of the Board of the Housing and Urban Development
Coordinating Council as an Area for Priority Development for urban land reform under Proclamation Nos. 1967 and 2284
of then President Marcos. As a result of this classification, the tenants and occupants of the lots offered to purchase the
land from respondents, but the latter refused to sell. The Sangguniang Panlungsod of petitioner, upon petition of the
Kapitbisig, an association of tenants and occupants of the subject land, adopted a Resolution No. 516, Series of 1996
authorizing the Mayor of the City of Mandaluyong to initiate action for the expropriation of the subject lots and
construction of a medium-rise condominium for qualified occupants of the land. The Mayor sent a letter to respondents
offering to purchase the said property but respondents did not answer the letter.
In their answer, Respondents, denied having received a copy of Mayor Abalos’ offer to purchase their lots. They
alleged that the expropriation of their land is arbitrary and capricious, and is not for a public purpose; the subject lots are
their only real property and are too small for expropriation.
Petitioner filed an Amended Complaint, excluding from expropriation TCT No. 59870 and thereby reduced the
area sought to be expropriated from three (3) parcels of land to two (2) parcels totalling 1,636 square meters.
The trial court issued an order dismissing the Amended Complaint after declaring respondents as "smallproperty
owners" whose land is exempt from expropriation under Republic Act No. 7279. Hence this petition.
Petitioner mainly claims that the size of the lots in litigation does not exempt the same from expropriation in
view of the fact that the said lots have been declared to be within the Area for Priority Development (APD). This
declaration allegedly authorizes petitioner to expropriate the property, ipso facto, regardless of the area of the land.
Page 135 of 306
Issue/s: Whether or not the subject lots are exempt from expropriation.
Ruling: YES. Section 9 exempts from expropriation parcels of land owned by small property owners. Republic Act No.
7279, the "Urban Development and Housing Act of 1992, Section 9 thereof provides:
"SECTION 9. Priorities in the Acquisition of Land. — Lands for socialized housing shall be acquired in the following order:
(a) Those owned by the Government or any of its subdivisions, instrumentalities, or agencies, including
government-owned or controlled corporations and their subsidiaries;
(b) Alienable lands of the public domain;
(c) Unregistered or abandoned and idle lands;
(d) Those within the declared Areas for Priority Development, Zonal Improvement Program sites, and Slum
Improvement and Resettlement Program sites which have not yet been acquired;
(e) Bagong Lipunan Improvement of Sites and Services or BLISS Sites which
have not yet been acquired;
(f) Privately-owned lands.
Section 10 of R.A. 7279 also provides that Lands for socialized housing are to be acquired in several modes.
Among these modes are the following: (1) community mortgage; (2) land swapping, (3) land assembly or consolidation;
(4) land banking; (5) donation to the government; (6) joint venture agreement; (7) negotiated purchase; and (8)
expropriation.
The acquisition of the lands in the priority list must be made subject to the modes and conditions set forth in the
next provision. In other words, land that lies within the APD, such as in the instant case, may be acquired only in the
modes under, and subject to the conditions of, Section 10.
The mode of expropriation shall be resorted to only when (1) other modes of acquisition have been exhausted
and (2) that when expropriation is resorted to, parcels of land owned by small property owners shall be exempted for
purposes of R.A. 7279.
(1) The other modes of acquisition have not been exhausted

Petitioner claims that it had faithfully observed the different modes of land acquisition for socialized housing,
however, did not state with particularity whether it exhausted the other modes of acquisition in Section 9 of the law
before it decided to expropriate the subject lots. Petitioner alleged only one mode of acquisition, i.e., by negotiated
purchase. Petitioner, through the City Mayor, tried to purchase the lots from respondents but the latter refused to sell. As
to the other modes of acquisition, no mention has been made. Not even Resolution No. 516 of the Sangguniang
Panlungsod authorizing the Mayor of Mandaluyong to effect the expropriation of the subject property states whether the
city government tried to acquire the same by community mortgage, land swapping, land assembly or consolidation, land
banking, donation to the government, or joint venture agreement under Section 9 of the law.
Page 136 of 306
(2) the parcels of land owned by small property owners is exempted for purposes of R.A. 7279.
Section 3 (q) of R.A. 7279. Section 3 (q) provides:
"SECTION 3 . . . (q). "Small property owners" refers to those whose only real property consists of residential
lands not exceeding three hundred square meters (300 sq.m.) in highly urbanized cities and eight hundred square
meters (800 sq.m.) in other urban areas."
The case at bar involves two (2) residential lots in Mandaluyong City, a highly urbanized city. The lot under TCT
No. 63766 is 687 square meters in area issued in the names of herein five (5) respondents and the second under TCT No.
63767 is 949 square meters issued in the names of the five (5) respondents plus Virginia Aguilar, both totaling 1,636
square meters in area.
59) Filstream International vs. CA [284 SCRA 716 (1998)]

FILSTREAM INTERNATIONAL INCORPORATED, Petitioner, vs. COURT OF APPEALS, JUDGE FELIPE S.
TONGCO and THE CITY OF MANILA, Respondents.
Facts: Filstream International is the registered owner of parcels of land located in Antonio Rivera St., Tondo II Manila.
On January 7, 1993, it filed an ejectment suit against the occupants (private respondents) of the said parcels of land on
the grounds of termination of the lease contract and non-payment of rentals. The ejectment suit became final and
executory as no further action was taken beyond the CA.
During the pendency of the ejectment proceedings private respondents filed a complaint for Annulment of Deed
of Exchange against Filstream. The City of Manila came into the picture when it approved Ordinance No. 7813 authorizing
Mayor Alfredo Lim to initiate acquisition through legal means of certain parcels of land. Subsequently, the City of Manila
approved Ordinance No. 7855 declaring the expropriation of certain parcels of land which formed part of the properties of
Filstream.
The said properties were sold and distributed to qualified tenants pursuant to the Land Use Development
Program of the City of Manila. The City of Manila then filed a complaint for eminent domain seeking to expropriate lands
in Antonio Rivera St. The RTC issued a Writ of Possession in favor of the City.
Filstream filed a motion to dismiss and a motion to quash the writ of possession. The motion to dismiss was
premised on the following grounds: no valid cause of action; the petition does not satisfy the requirements of public use
and a mere clandestine maneuver to circumvent the writ execution issued by the RTC of Manila in the ejectment suit;
violation of the constitutional guarantee against non-impairment of obligation and contract; price offered was too low
hence violative of the just compensation provision of the constitution.
The RTC denied the two motions. Filstream filed a Petition for Certiorari with the CA which dismissed the petition
for being insufficient in form and substance, aside from the fact that copies of the pleadings attached to the petition are
blurred and unreadable.
Issue/s: WON expropriation of Filstream’s lots were legally and validly undertaken.
Page 137 of 306
Ruling: NO. We take judicial notice of the fact that urban land reform has become a paramount task in view of the acute
shortage of decent housing in urban areas particularly in Metro Manila. Nevertheless, despite the existence of a
serious dilemma, local government units are not given an unbridled/unrestrained authority when exercising their power of
eminent domain in pursuit of solutions to these problems. Constitutional provisions on due process and just
compensation for the expropriation of private property must be complied with. Other laws have also set down
specific rules in the exercise of the power of eminent domain, to wit:
• Sec 19 of LGC provides that such exercise must be pursuant to the provisions of the Constitution and pertinent
laws.
• Sec 9 of the Urban Development and Housing Act of 1992 (UDHA) provides an order of priority in the
acquisition of land for socialized housing, with private lands listed as the last option.
• Sec 10 of UDHA provides that expropriation shall be resorted to only when other modes of acquisition such as
community mortgage, land swapping, donation to the government, etc. have been exhausted, and, where
expropriation is resorted to, parcels of land owned by small property owners shall be exempted.
Compliance with the above legislated conditions are deemed mandatory because these are the only safeguards in
securing the right of owners of private property to DUE PROCESS when their property is expropriated for public use.
There is nothing in the records which would indicate that the City of Manila complied with the above conditions.
Filstream’s properties were expropriated and ordered condemned in favor of the City of Manila sans any showing that
resort to the acquisition of other lands listed under Sec. 9 of RA 7279 have proved futile. Evidently, there was a violation
of petitioner Filstream’s right to due process.
It must be emphasized that the State has a paramount interest in exercising its power of eminent domain for the
general good considering that the right of the State to expropriate private property as long as it is for public use always
takes precedence over the interest of private property owners. However we must not lose sight of the fact that the
individual rights affected by the exercise of such right are also entitled to protection, bearing in mind that the exercise of
this superior right cannot override the guarantee of due process extended by the law to owners of the property to be
expropriated.
60) JIL vs. Mun. of Pasig (G.R. 152230, August 9, 2005)

Full Title: JESUS IS LORD CHRISTIAN SCHOOL FOUNDATION, INC., Petitioners, v. MUNICIPALITY (now
CITY) OF PASIG, METRO MANILA, Respondent.
Facts: The Municipality of Pasig needed an access road from E. R. Santos Street, a municipal road near the Pasig Public
Market, to Barangay Sto. Tomas Bukid, Pasig, where 60 to 70 houses, mostly made of light materials, were located. The
road had to be at least three meters in width, as required by the Fire Code, so that fire trucks could pass through in case
of conflagration. Likewise, the residents in the area needed the road for water and electrical outlets. The municipality
Page 138 of 306
then decided to acquire 51 square meters out of the 1,791-square meter property of Lorenzo Ching Cuanco, Victor Ching
Cuanco and Ernesto Ching Cuanco Kho covered by Transfer Certificate of Title (TCT).
On April 19, 1993, the Sangguniang Bayan of Pasig approved an Ordinance authorizing the municipal mayor to
initiate expropriation proceedings to acquire the said property and appropriate the fund therefor. The ordinance stated
that the property owners were notified of the municipality’s intent to purchase the property for public use as an access
road but they rejected the offer.
On July 21, 1993, the municipality filed a complaint, amended on August 6, 1993, against the Ching Cuancos for
the expropriation of the property under Section 19 ofRepublic Act (R.A.) No. 7160, otherwise known as the Local
Government Code. The plaintiff alleged therein that it notified the defendants, by letter, of its intention to construct an
access road on a portion of the property but they refused to sell the same portion. The plaintiff appended to the
complaint a photocopy of the letter addressed to defendant Lorenzo Ching Cuanco.
The plaintiff deposited with the RTC 15% of the market value of the property based on the latest tax declaration
covering the property. On plaintiff’s motion, the RTC issued a writ of possession over the property sought to be
expropriated. On November 26, 1993, the plaintiff caused the annotation of a notice of lis pendens at the dorsal portion
of TCT No. PT-92579 under the name of the Jesus Is Lord Christian School Foundation, Incorporated (JILCSFI) which had
purchased the property. Thereafter, the plaintiff constructed therein a cemented road with a width of three meters; the
road was called Damayan Street.
In their answer, the defendants claimed that, as early as February 1993, they had sold the said property to
JILCSFI as evidenced by a deed of sale bearing the signature of defendant Ernesto Ching Cuanco Kho and his wife.
When apprised about the complaint, JILCSFI filed a motion for leave to intervene as defendant-in-intervention, which
motion the RTC granted on August 26, 1994.
In its answer-in-intervention, JILCSFI averred, by way of special and affirmative defenses, that the plaintiff’s
exercise of eminent domain was only for a particular class and not for the benefit of the poor and the landless. It alleged
that the property sought to be expropriated is not the best portion for the road and the least burdensome to it.
The intervenor filed a crossclaim against its co-defendants for reimbursement in case the subject property is
expropriated. In its amended answer, JILCSFI also averred that it has been denied the use and enjoyment of its property
because the road was constructed in the middle portion and that the plaintiff was not the real party-in-interest. The
intervenor, likewise, interposed counterclaims against the plaintiff for moral damages and attorney’s fees.
Issues:
1) Whether the letter written by the Engineer inviting the owners to talk about the price of the land was
the ‘valid offer previously made’ contemplated by the law.
2) Whether JILSCFI’s property which is already intended to be used for public purposes may still be
expropriated by the Municipality.
3) Whether the respondent failed to show the necessity for constructing a road particularly in petitioners property and not
elsewhere.
Page 139 of 306
4) Whether the petitioner was deprived of due process when it was not notified of the ocular inspection.
Ruling:
1) NO. The Court first discussed the nature of eminent domain.
First, it is the ultimate right of the sovereign power to appropriate any property within its territorial sovereignty
for a public purpose.
Second, the authority to condemn is to be strictly construed in favor of the owner and against the condemner
because it is a derogation of private rights.
Third, it is the condemner who has the burden of proving all the requisites have been complied with.
Citing the Suguitan case, the court reiterated the 4 requisites. The letter was not a valid and definite offer
because the letter was not addressed to all registered owners and it only manifested intent, instead of a
definite offer to buy, on the part of the Municipality. Notice of lis pendens and declarations in whereas
clauses of an Ordinance do not constitute substantial compliance.
The purpose of the requirement of a valid and definite offer to be first made to the owner is to encourage
settlements and voluntary acquisition of the property to avoid the expense and delay of an action. The law is designed to
give the owner the opportunity to sell his land w/o the expense and inconvenience of a protracted and expensive
litigation. A reasonable offer in good faith, not merely perfunctory or pro forma offer, must be made. A single bona fide
offer will suffice. The offer must be made to the registered owners.
As applied:
a) Letter to Lorenzo— Since the property was co-owned, the Municipality should have made the offer to ALL the
Ching Cuancos, not merely to Lorenzo. Also, the letter contained no definite offer, it merely expressed the
Municipality’s intent to acquire the property.
b) Notice of lis pendens— While it deemed a notice to the whole world of the pendency of an action, there is no
legal basis to claim that this constitutes substantial compliance with the requisite offer. Moreover, it was
annotated long after the complaint has been filed in the RTC. c Whereas clauses in the Ordinance—also not
substantial compliance, there still has be competent evidence that indeed, there was a definite an valid offer to all
co-owners.
2) YES. The court reject the contention of the petitioner that its property can no longer be expropriated by the
respondent because it is intended for the construction of a place for religious worship and a school for its members . As
aptly explained by this Court in Manosca v. Court of Appeals, thus: It has been explained as early as Seña v. Manila
Railroad Co., that: . . .
A historical research discloses the meaning of the term “public use” to be one of constant growth. As society
advances, its demands upon the individual increases and each demand is a new use to which the resources of the
individual may be devoted. . . . for “whatever is beneficially employed for the community is a public use.”
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Chief Justice Enrique M. Fernando states:

The taking to be valid must be for public use. There was a time when it was felt that a literal meaning should be
attached to such a requirement. Whatever project is undertaken must be for the public to enjoy, as in the case of
streets or parks. Otherwise, expropriation is not allowable. It is not so any more. As long as the purpose of the
taking is public, then the power of eminent domain comes into play.
As just noted, the constitution in at least two cases, to remove any doubt, determines what public use is. One is
the expropriation of lands to be subdivided into small lots for resale at cost to individuals.
The other is the transfer, through the exercise of this power, of utilities and other private enterprise
to the government. It is accurate to state then that at present whatever may be beneficially employed for
the general welfare satisfies the requirements of public use.
3) YES. The respondent failed to show the necessity for constructing the road particularly in the petitioner’s property and
not elsewhere. We note that the whereas clause of the ordinance states that the 51-square meter lot is the shortest and
most suitable access road to connect Sto. Tomas Bukid to E.R. Santos Street. The respondent’s complaint also alleged
that the said portion of the petitioner’s lot has been surveyed as the best possible ingress and egress. However, the
respondent failed to adduce a preponderance of evidence to prove its claims.
4) YES. As correctly pointed out by the petitioner, there is no showing in the record that an ocular inspection was
conducted during the trial. If, at all, the trial court conducted an ocular inspection of the subject property during the trial,
the petitioner was not notified thereof. The petitioner was, therefore, deprived of its right to due process. It bears
stressing that an ocular inspection is part of the trial as evidence is thereby received and the parties are entitled to be
present at any stage of the trial. Consequently, where, as in this case, the petitioner was not notified of any ocular
inspection of the property, any factual finding of the court based on the said inspection has no probative weight. The
findings of the trial court based on the conduct of the ocular inspection must, therefore, be rejected.
• Public Use
61) Berman vs. Parker (348 US 25, 99 Ed. 27)
Facts: In 1945, Congress passed the District of Columbia Redevelopment Act, creating the District of Columbia
Redevelopment Land Agency, whose purpose would be to identify and redevelop blighted areas of Washington, D.C.
Congress gave the new agency the power of eminent domain – the ability to seize private property with just
compensation.
Berman and the other appellants owned a department store in one blighted area targeted by the commission and
objected to the seizing of their property solely for beautification of the area.
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The landowners brought a civil suit in federal district court challenging the constitutionality of the Act. Their case
was dismissed. They then appealed directly to the U.S. Supreme Court.
Issue: Whether the seizing of Berman and the other appellants' property for the purpose of beautification and
redevelopment of the community violate the Takings Clause of the Fifth Amendment.
Ruling: NO. In a unanimous opinion authored by Justice William O. Douglas, the Court found that the Fifth
Amendment does not limit Congress' power to seize private property with just compensation to any
specific purpose.
The Court concluded that the power to determine what values to consider in seizing property for public
welfare is Congress' alone. "If those who govern the District of Columbia decide that the Nation's Capital should be
beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in the way."
Taking is valid when a statute which expresses a legislative determination that the taking of land,
even developed land, as part of an economic development project is a “public use” and in the “public
interest.
The court held that such economic development qualified as a valid public use under both the Federal and
State Constitutions. It also upheld that a redevelopment plan targeting a blighted area of Washington, D. C., in
which most of the housing for the area’s 5,000 inhabitants was beyond repair. Under the plan, the area would be
condemned and part of it utilized for the construction of streets, schools, and other public facilities. The
remainder of the land would be leased or sold to private parties for the purpose of redevelopment, including the
construction of low-cost housing.
62) Estate of Jimenez vs. PEZA (G.R. No. 137285, January 16, 2001)
G.R. No. 137285 January 16, 2001
ESTATE SALUD JIMENEZ, petitioner, vs.PHILIPPINES EXPORT PROCESSING ZONE, respondent.
FACTS: In 1981, PEZA, initiate before the RTC of Cavite expropriation proceedings on the parcels of irrigated lands . One
of the lots, Lot 1406 (A and B) is registered in the name of Salud Jimenez. More than ten years later, the trial court
upheld PEZA's right to expropriate, among others, the lot of petitioner. Petitioner sought reconsideration alleging that the
lot would only be transferred to a private corporation, and hence would not be utilized for a public purpose.
The trial court reconsidered the order and released Lot 1406 A from expropriation while the expropriation of Lot
1406 B was maintained. PEZA appealed the order to the CA. Later on, the petitioner and PEZA entered into a compromise
agreement whereby (1) PEZA agrees to withdraw its appeal while Salud agrees to waive, quitclaim and forfeit its claim for
damages and loss of income which it sustained by reason of the possession of said lot by PEZA from 1981-1993; and (2)
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the parties agree to swap Lot 1406B with Lot434 and that instead of being paid the just compensation for Lot 1406B, the
estate of Salud shall be paid with Lot434. The compromise agreement is immediately final and executory. The CA
remanded the case to the trial court for the approval of the said compromise agreement. The trial court approved the
same.
However, PEZA failed to transfer the title of Lot434 inasmuch as it was not the registered owner of the said lot.
Petitioner thereafter filed a motion to partially annul the order. The trial court then annulled the compromise agreement
and ordered the turnover of Lot1406B to petitioner. The CA upheld the rescission of the compromise agreement,
however, set aside the order of the trial court regarding the turnover of the lot and ordered the trial judge to
proceed with the hearing of the expropriation proceedings regarding the determination of just
compensation. This is in accordance with Art 2041 of the Civil Code which states that "if one of the parties fails or
refuses to abide by the compromise, the other party may either enforce the compromise or regard it as rescinded and
insist upon his original demand.
ISSUE: Whether the phrase "original demand" pertains to the return of Lot 1406 B which is sought to be expropriated or
the determination of just compensation for the lot.
RULING: NO. The "original demand" referred to means the fixing of just compensation.
Expropriation proceedings involve two (2) phases.
The first phase ends either with an order of expropriation (where the right of plaintiff to take the land and
the public purpose to which they are to be devoted are upheld) or an order of dismissal. Either order would be a final
one since it finally disposes of the case.
The second phase concerns the determination of just compensation to be ascertained by three (3)
commissioners. It ends with an order fixing the amount to be paid to the defendant . Inasmuch as it leaves
nothing more to be done, this order finally disposes of the second stage. To both orders the remedy there from is an
appeal.
In the case at bar, the first phase was terminated when the July 11, 1991 order of expropriation became final and
the parties subsequently entered into a compromise agreement regarding the mode of payment of just compensation.
When respondent failed to abide by the terms of the compromise agreement, petitioner filed an action to partially rescind
the same. Obviously, the trial court could only validly order the rescission of the compromise agreement anent the
payment of just compensation inasmuch as that was the subject of the compromise.
It is crystal clear from the contents of the agreement that the parties limited the compromise agreement to the
matter of just compensation to petitioner. Said expropriation order is not closely intertwined with the issue of payment
such that failure to pay by respondent will also nullify the right of respondent to expropriate. No statement to this effect
was mentioned in the agreement. The Order was mentioned in the agreement only to clarify what was subject
to payment.
Page 143 of 306
Hence, the "original demand" referred to means the fixing of just compensation. When PEZA failed to fulfill
its obligation to deliver Lot 434, petitioner can again demand for the payment but not the return of the
expropriated Lot 1406-B.
63) Manosca vs. Court of Appeals [252 SCRA 412 (1996)]

ALEJANDRO MANOSCA, ASUNCION MANOSCA and LEONICA MANOSCA, petitioners, vs. HON. COURT OF
APPEALS, HON. BENJAMIN V. PELAYO, Presiding Judge, RTC-Pasig, Metro Manila, Branch 168, HON.
GRADUACION A. REYES CLARAVAL, Presiding Judge, RTC-Pasig, Metro Manila, Branch 71, and REPUBLIC
OF THE PHILIPPINES, respondents.
Facts: Petitioners inherited a piece of land located at P. Burgos Street, Calzada, Taguig. Metro Manila, with an area of
about four hundred ninety-two (492) square meters. When the parcel was ascertained by the NHI to have been the
birthsite of Felix Y. Manalo, the founder of Iglesia Ni Cristo, it passed Resolution No. 1, Series of 1986, pursuant to
Section 4 of Presidential Decree No. 260, declaring the land to be a national historical landmark.
The resolution was approved by the Minister of Education, Culture and Sports At the same time, respondent
Republic filed an urgent motion for the issuance of an order to permit it to take immediate possession of the property .
The motion was opposed by petitioners. After a hearing, the trial court issued an order fixing the provisional market and
assessed values of the property and authorizing the Republic to take over the property once the required sum would have
been deposited with the Municipal Treasurer of Taguig, Metro Manila.
Petitioners moved to dismiss the complaint on the main thesis that the intended expropriation was not for a
public purpose and, incidentally, that the act would constitute an application of public funds, directly or indirectly, for the
use, benefit, or support of Iglesia ni Cristo, a religious entity, contrary to the provision of the Constitution. Petitioners
sought, in the meanwhile, a suspension in the implementation of the 03rd August 1989 order of the trial court.
On 15 February 1990, following the filing by respondent Republic of its reply to petitioners’ motion seeking the
dismissal of the case, the trial court issued its denial of said motion to dismiss.Five (5) days later, or on 20 February 1990,
another order was issued by the trial court, declaring moot and academic the motion for reconsideration and/or
suspension of the order of 03 August 1989 with the rejection of petitioners’ motion to dismiss.
Petitioners’ motion for the reconsideration of the 20th February 1990 order was likewise denied by the trial court
in its 16th April 1991 order. Petitioners then lodged a petition with the Court of Appeals which the appellate court
dismissed for failure to show any grave abuse of discretion or lack of jurisdictional competence on the part of the trial
court. A motion for the reconsideration of the decision was denied subsequently by the appellate court.
Issue: Whether the expropriation was not for a public purpose and, incidentally, that the act would constitute an
application of public funds, directly or indirectly, for the use, benefit, or support of Iglesia ni Cristo, a religious entity,
contrary to the provision of Section 29(2), Article VI, of the 1987 Constitution.
Page 144 of 306
Ruling: No, Public Use. Eminent domain. The constitutional and statutory basis for taking property by eminent domain.
For condemnation purposes, “public use” is one which confers same benefit or advantage to the public; it is
not confined to actual use by the public. It is measured in terms of right of the public to use proposed facilities for
which condemnation is sought and, as long as the public has right of use, whether exercised by one or many members of
the public, a “public advantage” or “public benefit” accrues sufficient to constitute a public use. The idea that “public use”
is strictly limited to clear cases of “use by the public” has long been discarded
64) Guido vs. Rural Progress Administration (84 Phil. 847)

JUSTA G. GUIDO, petitioner, vs. RURAL PROGRESS ADMINISTRATION, c/o FAUSTINO AGUILAR, Manager,
Rural Progress Administration, respondent
Facts: This a petition for prohibition to prevent the Rural Progress Administration and Judge Oscar Castelo of the Court
of First Instance of Rizal from proceeding with the expropriation of the petitioner Justa G. Guido's land, two adjoining lots,
part commercial, with a combined area of 22,655 square meters, situated in Maypajo, Caloocan, Rizal, just outside the
north Manila boundary, on the main street running from this city to the north. Four grounds are adduced in support of the
petition, to wit:
(1) That the respondent RPA (Rural Progress Administration) acted without jurisdiction or corporate power in
filling the expropriation complaint and has no authority to negotiate with the RFC a loan of P100,000 to be used
as part payment of the value of the land.
(2) That the land sought to be expropriated is commercial and therefore excluded within the purview of the
provisions of Act 539.
(3) That majority of the tenants have entered with the petitioner valid contracts for lease, or option to buy at an
agreed price, and expropriation would impair those existing obligation of contract.
(4) That respondent Judge erred in fixing the provisional value of the land at P118,780 only and in ordering its
delivery to the respondent RPA.
Issue: Whether the expropriation of Guido’s land is in conformity to the principle of Social Justice
Ruling: NO. It would be in derogation of individual rights and the time-honored constitutional guarantee that no private
property shall be taken without due process of law. The protection against deprivation of property without due process
for public use without just compensation occupies the forefront positions (paragraph 1 and 2) in the Bill for private use
relieves the owner of his property without due process of law; and the prohibition that "private property should not be
taken for public use without just compensation" (Section 1 [par. 2], Article III, of the Constitution) forbids necessary
implication the appropriation of private property for private uses (29 C.J.S., 819). It has been truly said that the assertion
of the right on the part of the legislature to take the property of and citizen and transfer it to another, even for a full
Page 145 of 306
compensation, when the public interest is not promoted thereby, is claiming a despotic power, and one inconsistent with
very just principle and fundamental maxim of a free government. (29 C.J.S., 820.)
The condemnation of a small property in behalf of 10, 20 or 50 persons and their families does not inure to the
benefit of the public to a degree sufficient to give the use public character. The expropriation proceedings at bar have
been instituted for the economic relief of a few families without any consideration of public health, public peace and
order, or other public advantage. What is proposed to be done is to take plaintiff's property, which for all we
know she acquired by sweat and sacrifice for her and her family's security, and sell it at cost to a few
lessees who refuse to pay the stipulated rent or leave the premises.
No fixed line of demarcation between what taking is for public use and what is not can be made; each case has
to be judge according to its peculiar circumstances. It suffices to say for the purpose of this decision that the
case under consideration is far wanting in those elements which make for public convenience or public use.
It is patterned upon an ideology far removed from that consecrated in our system of government and embraced by the
majority of the citizens of this country. If upheld, this case would open the gates to more oppressive
expropriations.
65) Heirs of Juancho Ardona vs. Reyes [125 SCRA 220 (1983)]
Facts: This is a petition for certiorari with preliminary injunction challenging the constitutionality of Presidential Decree
No. 564, the Revised Charter of the Philippine Tourism Authority, and Proclamation No. 2052 declaring the barangays of
Sibugay, Malubog, Babag and Sirao including the proposed Lusaran Dam in the City of Cebu and in the municipalities of
Argao and Dalaguete in the province of Cebu as tourist zones. The petitioners ask that we restrain respondent Court of
First Instance of Cebu and the Philippine Tourism Authority (PTA) from enforcing and implementing the writs of
possession issued in four (4) expropriation cases filed by PTA against the petitioners: Civil Cases Nos. R-19562, R-19684,
R-20701, and R-21608 of the Court of First Instance of Cebu (Branch 1).
The Philippine Tourism Authority filed four (4) Complaints with the Court of First Instance of Cebu City for the
expropriation of some 282 hectares of rolling land situated in barangays Malubog and Babag, Cebu City, The defendants
filed their respective Opposition with Motion to Dismiss and/or Reconsideration, manifestation adopting the answer.
In their motions to dismiss, the petitioners alleged, in addition to the issue of public use, that there is no specific
constitutional provision authorizing the taking of private property for tourism purposes; that assuming that PTA has such
power, the intended use cannot be paramount to the determination of the land as a land reform area ; that limiting the
amount of compensation by Legislative fiat is constitutionally repugnant; and that since the land is under the land reform
program, it is the Court of Agrarian Relations and not the Court of First Instance that has jurisdiction over the
expropriation cases. The Philippine Tourism Authority having deposited with The Philippine National Bank, Cebu City
Branch, an amount equivalent to 10% of the value of the properties pursuant to Presidential Decree No. 1533. the lower
court issued separate orders authorizing PTA to take immediate possession of the premises and directing the issuance of
writs of possession.
Page 146 of 306
Issue: Whether the actions to expropriate properties are constitutionally infirm (invalid) in the taking of private property
for the promotion of tourism?
Ruling: NO. The petitioners have also failed to overcome the deference that is appropriately accorded to formulations of
national policy expressed in legislation. The petitioners have failed to overcome the burden of anyone trying to strike
down a statute or decree whose avowed purpose is the legislative perception is the public good.
While not directly mentioning the expropriation of private properties upon payment of just compensation, the
provisions on social justice and agrarian reforms which allow the exercise of police power together with the power of
eminent domain in the implementation of constitutional objectives are even more far-reaching insofar as taking of private
property is concerned.
The equitable diffusion of property ownership in the promotion of social justice implies the exercise, whenever
necessary, of the power to expropriate private property. Likewise, there can be no meaningful agrarian reform program
unless the power to expropriate is utilized.
The petitioners ask to adopt a strict construction and declare that "public use" means literally use by the public
and that "public use" is not synonymous with "public interest", "public benefit", or "public welfare" and much less "public
convenience. "
The restrictive view of public use may be appropriate for a nation which circumscribes the scope of government
activities and public concerns and which possesses big and correctly located public lands that obviate the need to take
private property for public purposes. Neither circumstance applies to the Philippines. We have never been a laissez
faire State, And the necessities which impel the exertion of sovereign power are all too often found in areas of scarce
public land or limited government resources.
66) Province of Camarines Sur vs. CA [222 SCRA 170 (1993)]

PROVINCE OF CAMARINES SUR, represented by GOV. LUIS R. VILLAFUERTE and HON. BENJAMIN V. PANGA
as Presiding Judge of RTC Branch 33 at Pili, Camarines Sur, petitioners, vs. THE COURT OF APPEALS (THIRD
DIVISION), ERNESTO SAN JOAQUIN and EFREN SAN JOAQUIN, respondents.
Facts: On December 22, 1988, the Sangguniang Panlalawigan of the Province of Camarines Sur passed Resolution No.
129, Series of 1988, authorizing the Provincial Governor to purchase or expropriate property contiguous to the provincial
capitol site, in order to establish a pilot farm for non-food and non-traditional agricultural crops and a housing project for
provincial government employees.
Pursuant to the Resolution, the Province of Camarines Sur, through its Governor, Hon. Luis R.Villafuerte, filed two
separate cases for expropriation against Ernesto N. San Joaquin and Efren N. San Joaquin, docketed as Special Civil
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Action Nos. P-17-89 and P-19-89 of the Regional Trial Court, Pili, Camarines Sur, presided by the Hon. Benjamin V.
Panga.
Forthwith, the Province of Camarines Sur filed a motion for the issuance of writ of possession. The San Joaquins
failed to appear at the hearing of the motion.
The San Joaquins moved to dismiss the complaints on the ground of inadequacy of the price offered for their property.
RTC
The trial court denied the motion to dismiss and authorized the Province of Camarines Sur to take possession of the
property upon the deposit with the Clerk of Court of the amount of P5,714.00, the amount provisionally fixed by the trial
court to answer for damages that private respondents may suffer in the event that the expropriation cases do not
prosper. The trial court issued a writ of possession in an order dated January18, 1990.
The San Joaquins filed a motion for relief from the order, authorizing the Province of Camarines Sur to take possession of
their property and a motion to admit an amended motion to dismiss. Both motions were denied in the order dated
February 1990.
CA
The Court of Appeals set aside the order of the trial court, allowing the Province of Camarines Sur to take possession of
private respondents' lands and the order denying the admission of the amended motion to dismiss. It also ordered the
trial court to suspend the expropriation proceedings until after the Province of Camarines Sur shall have submitted the
requisite approval of the Department of Agrarian Reform to convert the classification of the property of the private
respondents from agricultural to non-agricultural land.
It must be noted that in the Court of Appeals, the San Joaquins asked for: (i) the dismissal of the complaints for
expropriation on the ground of the inadequacy of the compensation offered for the property and (ii) the nullification of
Resolution No. 129, Series of 1988 of the Sangguniang Panlalawigan of the Province of Camarines Sur.
Issue: Whether the expropriation of agricultural lands by local government units is subject, to the prior approval of the
Secretary of the Agrarian Reform, as the implementator of the agrarian reform program.
Ruling: YES. Decision of the CA affirmed and petition granted.

Modernly, there has been a shift from the literal to a broader interpretation of "public purpose" or "public use" for
which the power of eminent domain may be exercised. The old concept was that the condemned property must
actually be used by the general public (e.g. roads, bridges, public plazas, etc.) before the taking thereof could
satisfy the constitutional requirement of "public use". Under the new concept, "public use" means public
advantage, convenience or benefit, which tends to contribute to the general welfare and the prosperity of the whole
community, like a resort complex for tourists or housing project.
The expropriation of the property authorized by the questioned resolution is for a public purpose. The
establishment of a pilot development center would inure to the direct benefit and advantage of the people of the Province
of Camarines Sur. Once operational, the center would make available to the community invaluable information and
technology on agriculture, fishery and the cottage industry. Ultimately, the livelihood of the farmers, fishermen and
Page 148 of 306
craftsmen would be enhanced. The housing project also satisfies the public purpose requirement of the Constitution. As
held in Sumulong v. Guerrero, 154 SCRA 461, "Housing is a basic human need. Shortage in housing is a matter of state
concern since it directly and significantly affects public health, safety, the environment and in sum the general welfare."
It is true that local government units have no inherent power of eminent domain and can exercise it
only when expressly authorized by the legislature (City of Cincinnati v. Vester, 28l US 439, 74 L.ed. 950, 50 SCt.
360). It is also true that in delegating the power to expropriate, the legislature may retain certain control or impose
certain restraints on the exercise thereof by the local governments (Joslin Mfg. Co. v. Providence, 262 US 668 67 L. ed.
1167, 43 S Ct. 684). While such delegated power may be a limited authority, it is complete within its limits. Moreover, the
limitations on the exercise of the delegated power must be clearly expressed, either in the law conferring the
power or in other legislations.
Ordinarily, it is the legislative branch of the local government unit that shall determine whether the use of the
property sought to be expropriated shall be public, the same being an expression of legislative policy. The courts defer to
such legislative determination and will intervene only when a particular undertaking has no real or substantial relation to
the public use
67) Sumulong vs. Guerrero [154 SCRA (1987)]

LORENZO SUMULONG and EMILIA VIDANES-BALAOING, petitioners, vs. HON. BUENAVENTURA GUERRERO
and NATIONAL HOUSING AUTHORITY, respondents.
Facts: On December 5, 1977 the National Housing Authority (NIIA) filed a complaint for expropriation of parcels of land
covering approximately twenty five (25) hectares, (in Antipolo, Rizal) including the lots of petitioners Lorenzo Sumulong
and Emilia Vidanes-Balaoing with an area of 6,667 square meters and 3,333 square meters respectively.
The land sought to be expropriated were valued by the NHA at one peso (P1.00) per square meter adopting the
market value fixed by the provincial assessor in accordance with presidential decrees prescribing the valuation of property
in expropriation proceedings.
Together with the complaint was a motion for immediate possession of the properties. The NHA deposited the
amount of P158,980.00 with the Philippine National Bank, representing the "total market value" of the subject twenty five
hectares of land, pursuant to Presidential Decree No. 1224 which defines "the policy on the expropriation of private
property for socialized housing upon payment of just compensation."
RTC
Respondent Judge issued the following Order:
Plaintiff having deposited with the Philippine National Bank, Heart Center Extension Office, Diliman,
Quezon City, Metro Manila, the amount of P158,980.00 representing the total market value of the subject
parcels of land, let a writ of possession be issued.
Petitioners filed a motion for reconsideration on the ground that they had been deprived of the possession of their
property without due process of law. This was however, denied.Hence, this petition challenging the orders of respondent
Judge and assailing the constitutionality of Pres. Decree No. 1224, as amended. Petitioners contend that "socialized
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housing" as defined in Pres. Decree No. 1224, as amended, for the purpose of condemnation proceedings is not "public
use" since it will benefit only "a handful of people, bereft of public character."
Issue: Whether or not the “public use” requirement in expropriation cases must benefit the public in general.
Ruling: No. This Court holds that "socialized housing" defined in Pres. Decree No. 1224, as amended by Pres. Decree
Nos. 1259 and 1313, constitutes "public use" for purposes of expropriation. However, as previously held by this Court, the
provisions of such decrees on just compensation are unconstitutional; and in the instant case the Court finds that the
Orders issued pursuant to the corollary provisions of those decrees authorizing immediate taking without notice and
hearing are violative of due process.
The "public use" requirement for a and exercise of the power of eminent domain is a flexible and evolving
concept influenced by changing conditions. Housing is a basic human need. Shortage in housing is a matter of state
concern since it directly and significantly affects public health, safety, the environment and in sum, the general welfare.
The public character of housing measures does not change because units in housing projects cannot be occupied by all
but only by those who satisfy prescribed qualifications. A beginning has to be made, for it is not possible to
provide housing for are who need it, all at once.
Population growth, the migration to urban areas and the mushrooming of crowded makeshift dwellings is a
worldwide development particularly in developing countries. So basic and urgent are housing problems that the United
Nations General Assembly proclaimed 1987 as the "International Year of Shelter for the Homeless" "to focus the attention
of the international community on those problems". The General Assembly is Seriously concerned that, despite the efforts
of Governments at the national and local levels and of international organizations, the driving conditions of the majority of
the people in slums and squatter areas and rural settlements, especially in developing countries, continue to deteriorate
in both relative and absolute terms." [G.A. Res. 37/221, Yearbook of the United Nations 1982, Vol. 36, p. 1043-4]
In the light of the foregoing, this Court is satisfied that "socialized housing" fans within the confines of "public
use". It is, particularly important to draw attention to paragraph (d) of Pres. Dec. No. 1224 which opportunities
inextricably linked with low-cost housing, or slum clearance, relocation and resettlement, or slum improvement emphasize
the public purpose of the project.
The acute shortage of housing units in the country is of public knowledge. Official data indicate that more than
one third of the households nationwide do not own their dwelling places. A significant number live in dwellings of
unacceptable standards, such as shanties, natural shelters, and structures intended for commercial, industrial, or
agricultural purposes. Of these unacceptable dwelling units, more than one third is located within the National Capital
Region (NCR) alone which lies proximate to and is expected to be the most benefited by the housing project involved in
the case at bar.
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68) Mactan Cebu International Airport vs. Lozada (G.R. No. 176625, February 25, 2010)
MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY AND AIR TRANSPORTATION OFFICE, PETITIONERS,
VS. BERNARDO L. LOZADA, SR., AND THE HEIRS OF ROSARIO MERCADO, NAMELY, VICENTE LOZADA,
MARIO M. LOZADA, MARCIA L. GODINEZ, VIRGINIA L. FLORES, BERNARDO LOZADA, JR., DOLORES
GACASAN, SOCORRO CAFARO AND ROSARIO LOZADA, REPRESENTED BY MARCIA LOZADA GODINEZ,
RESPONDENTS.
Facts: This is a petition for review on certiorari seeking to reverse, annul, and set aside the decision and resolution of the
CA of the subject lot in Lahug, Cebu. Lot No. 88, with its original owner Anastacio Deiparine, is subject to expropriation
proceedings for expansion and improvement of Lahug Airport as initiated by the Republic of the Philippines (RP), which is
represented by the Civil Aeronautics Administration (CAA).
The lot was previously occupied by the US Army and turned it over to Surplus Property Commission, the Bureau
of Aeronautics, and the National Airport Corporation then to CAA. During the pendency of the expropriation proceedings,
respondent Bernardo Lozada acquired the lot from Deiparine. TCT No. 9045 was issued in Lozada’s name as proof.
On December 29, 1961, the trial court rendered judgment in favor of RP, which ordered the latter to pay Lozada
the fair market value of the lot. RP paid Lozada the amount of P3,018.00 but the affected landowners appealed.
CAA proposed compromise settlements if owners withdraw their appeals. CAA will resell them the lots at expropriated
price in the event that Lahug Airport is abandoned. Lozada did not pursue the appeal and the lot was transferred to the
RP under TCT No. 25057.
Improvement and expansion plan for Lahug Airport did not push through. Hence, Lozada contacted CAA through
Dir. Vicente Rivera and asked to reacquire the lots. CAA declined sayingthey might need the lots for an emergency
airport.
On Nov. 29, 1989, Pres. Aquino signed the memo ordering the Department of Transportation to transfer general
aviation operations of Lahug to Mactan Airport. The creation of Mactan Airport virtually took the assets and operations of
Lahug and closed the previous airport. The public purpose of the land that was bought never materialized since the old
airport became a commercial complex while Lot No. 88 became a jail inhabited by squatters. Lozada initiated complaint
for recovery of Lot No. 88.
 RTC: MCIAA and ATO to return the lot upon payment of expropriation price and complete the transfer of the
TCTs.
 CA: Affirmed RTC.
Issue: Whether the rights of the respondents to repurchase may be enforced based on a constructive trust.
Ruling: YES – The right of respondents to repurchase Lot No. 88 may be enforced based on a constructive trust
constituted on the property held by the government in favor of the former.
RATIO: It is well settled that the taking of private property by the Government’s power of eminent domain is
subject to two mandatory requirements: (1) that it is for a particular purpose; and (2) that just
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compensation be paid to property owner. No doubt, the return or repurchase of the condemned properties of
petitioners could be readily justified as the manifest legal effect or consequence of the trial courts underlying presumption
that Lahug Airport will continue to be in operation when it granted the complaint for eminent domain and the airport
discontinued its activities.
69) Mactan Cebu International Airport vs. Inocian (G.R. No. 168770, February 9, 2011)
MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY (MCIAA), Petitioner,
vs. RICARDO L. INOCIAN, in his personal capacity and as Attorney-in-Fact of OLYMPIA E. ESTEVES, EMILIA
E. BACALLA, RESTITUTA E. MONTANA, and RAUL L. INOCIAN; and ALETHA SUICO MAGAT, in her personal
capacity and as Attorney-in-Fact of PHILIP M. SUICO, DORIS S. DELA CRUZ, JAMES M. SUICO, EDWARD M.
SUICO, ROSELYN SUICO-LAWSIN, REX M. SUICO, KHARLA SUICO-GUTIERREZ, ALBERT CHIONGBIAN, and
JOHNNY CHAN, Respondents.
Facts: On February 8, 1996, Ricardo L. Inocian and four others (all children of Isabel Limbaga who originally owned six
[6] of the lots expropriated); and Aletha Suico Magat and seven others, successors-in-interest of Santiago Suico, the
original owner of two of the condemned lots (collectively, the Inocians), filed before the RTC in Cebu City a complaint for
reconveyance of real properties and damages against MCIAA.
During trial, the Inocians adduced evidence which included the testimony of Ricardo Inocian and Asterio Uy. Uy,
an employee of the CAA, testified that he was a member of the team which negotiated for the acquisition of certain lots
in Lahug for the proposed expansion of the Lahug Airport.
On September 29, 1997, one Albert Chiongbian (Chiongbian), alleging to be the owner of Lot Nos. 761-A and
762-A but which the Inocians were now claiming, moved and was later allowed to intervene.
On October 7, 1998, the RTC ruled in favor of the Inocians and denied Albert Chiongbian’s intervention for utter
lack of factual basis. Therefrom, MCIAA went to the CA on appeal
On January 14, 2005, the CA rendered judgment for the Inocians, declaring them entitled to the reconveyance of
the questioned lots as the successors-in-interest of the late Isabel Limbaga and Santiago Suico, as the case may be, who
were the former registered owners of the said lots.
Issue: Whether the Inocians have the right to repurchase their properties pursuantto the verbal agreement with the
government’s negotiating team assuring them of its reacquisition shouldthe public purpose for which the properties were
used ceases.
Ruling: Yes. The taking of a private land in expropriation proceedings is always conditioned on its continued devotion to
its public purpose. As a necessary corollary, once the purpose is terminated or peremptorily abandoned, then the former
owner, if he so desires, may seek its reversion, subject of course to the return, at the very least, of the just compensation
received.
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Given the foregoing disquisitions, equity and justice demand the reconveyance by MCIAA of the litigated lands in
question to the Inocians. In the same token, justice and fair play also dictate that the Inocian return to MCIAA what they
received as just compensation for the expropriation of their respective properties plus legal interest to be computed from
default, which in this case should run from the time MCIAA complies with the reconveyance obligation.
They must likewise pay MCIAA the necessary expenses it might have incurred in sustaining their respective lots
and the monetary value of its services in managing the lots in question to the extent that they, as private owners, were
benefited thereby.
• Genuine Necessity
70) De la Paz Masikip vs. Judge Legaspi (G.R. No. 136349, January 23, 2006)
Full Title: LOURDES DE LA PAZ MASIKIP, Petitioner,vs.THE CITY OF PASIG, HON. MARIETTA A. LEGASPI, in
her capacity as Presiding Judge of the Regional Trial Court of Pasig City, Branch 165 and THE COURT OF
APPEALS, Respondents.
Where the taking by the State of private property is done for the benefit of a small community which seeks to
have its own sports and recreational facility, notwithstanding that there is such a recreational facility only a short distance
away, such taking cannot be considered to be for public use. Its expropriation is not valid. In this case, the Court defines
what constitutes a genuine necessity for public use.
Facts: Petitioner is the registered owner of a parcel of land located at Pag-Asa, Caniogan, Pasig City, Metro Manila. The
Respondent City of Pasig, notified petitioner of its intention to expropriate a portion of her property to be used for the
“sports development and recreational activities” of the residents of Barangay Caniogan.
This was pursuant to Ordinance enacted by the then Sangguniang Bayan of Pasig. Again respondent wrote
another letter to petitioner, but this time the purpose was allegedly “in line with the program of the Municipal
Government to provide land opportunities to deserving poor sectors of our community.” petitioner sent a reply to
respondent stating that the intended expropriation of her property is unconstitutional, invalid, and oppressive, as
the area of her lot is neither sufficient nor suitable to “provide land opportunities to deserving poor sectors of our
community.”
Respondent reiterated in a letter that the purpose of the expropriation of petitioner’s property is “to provide
sports and recreational facilities to its poor residents.” Subsequently, respondent filed with the trial court a complaint for
expropriation and prayed that the trial court, after due notice and hearing, issue an order for the condemnation of the
property; The petitioner filed a Motion to Dismiss the complaint.
The trial court dismissed the motion on the ground that there is a genuine necessity to expropriate the property .
The motion for reconsideration of the petitioner was denied by the trial court which prompted petitioner to file with the
Court of Appeals a special civil action for certiorari who dismissed the petition for lack of merit. Petitioner’s Motion for
Reconsideration was also denied.
Page 153 of 306
Issue/s: Where the expropriation of private property for the benefit of a small community notwithstanding that there is
such a recreational facility only a short distance away, is considered to be for public use?
Ruling: No. The right to take private property for public purposes necessarily originates from “the necessity” and the
taking must be limited to such necessity. the court held that the very foundation of the right to exercise eminent domain
is a genuine necessity and that necessity must be of a public character.
Moreover, the ascertainment of the necessity must precede or accompany and not follow, the taking of the land.
That “necessity within the rule that the particular property to be expropriated must be necessary, does not mean an
absolute but only a reasonable or practical necessity, such as would combine the greatest benefit to the public with the
least inconvenience and expense to the condemning party and the property owner consistent with such benefit.” That
respondent City of Pasig has failed to establish that there is a genuine necessity to expropriate petitioner’s property.
71) De Knecht vs. Bautista [100 SCRA 660 (1980)]

Full Title: CRISTINA DE KNECHT, petitioner,vsHON. PEDRO JL. BAUTISTA, as Judge presiding over Branch III
of the Court of First Instance (Pasay City) and the REPUBLIC OF THE PHILIPPINES, respondents.
Facts: The petitioner alleges that than ten (10) years ago, the government through the Department of Public Workmen’s
and Communication (now MPH) prepared a to Epifanio de los Santos Avenue (EDSA) to Roxas Blvd; that the proposed
extension, an adjunct of building program, the Manila — Cavite Coastal Read Project, would pass through Cuneta Ave. up
to Roxas Blvd that this route would be a straight one taking into account the direction of EDSA but later decided to make
the proposed extension go through Fernando Rein and Del Pan Streets which petitioner being one of them residents, that
President Marcos referred the matter to the Human Settlements Commission (HSC) for investigation and recommendation
which recommended the original plan; notwithstanding the said recommendation, the MPH insisted on implementing the
revised plan;
In February 1979, the government filed in the Court of First Instance (CFI) of Rizal, presided by the respondent
Judge, a complaint for expropriation against the petitioner.
Respondent judge issued a writ of possession dated June 14, 1979 authorizing the Republic of the Philippines to
take and enter upon the possession of the properties sought be condemned. The petitioner contends that “Respondent
court lacked or exceeded its jurisdiction or gravely abused its discretion in issuing the order to take over and enter upon
the possession of the properties sought to be expropriated-petitioner having raised a constitutional question which
respondent court must resolve before it can issue an order to take or enter upon the possession of properties sought to
be expropriated.
The petitioner assails the choice of the revised Streets route on the following grounds:
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(a) court had no jurisdiction over the subject matter of the action because the complaint failed to allege that the
instant project for expropriation bore the approval of the Ministry of Human Settlements and the Metro Manila
Government nor pursuant to Presidential Decrees Nos. 824, 1396 and 1517;
(b) The choice of properties to be expropriated made by the Ministry of Public Highways was arbitrary and
erroneous;
(c) The complaint was premature as the plaintiff never really had gone through serious negotiations with the
defendant for the purchase of her property; and
(d) The complaint relied on an arbitrary and erroneous valuation of properties and disregarded consequential
damages.
Issue/s: Whether the expropriator can choose any property it wanted.
Ruling: No, The choice of property to be expropriated cannot be without rhyme or reason. The condemnor may not
choose any property it wants. Where the legislature has delegated a power of eminent do-main, the question of the
necessity for taking a particular fine for the intended improvement rests in the discretion of the grantee power subject
however to review by the courts in case of fraud, bad faith or gross abuse of discretion . The choice of property must be
examined for bad faith, arbitrariness or capriciousness and due process determination as to whether or not the proposed
location was proper in terms of the public interests.
The respondent judge committed a grave abuse of discretion in allowing the Republic of the Philippines to take
immediate possession of the properties sought to be expropriated.
WHEREFORE, the petition for certiorari and prohibition is hereby granted. The order of June 14, 1979
authorizing the Republic of the Philippines to take or enter upon the possession of the properties sought to be
condemned is set aside and the respondent Judge is permanently enjoined from taking any further action on Civil Case
No. 7001-P, entitled "Republic of the Philippines vs. Concepcion Cabarrus Vda. de Santos, etc." except to dismiss said
case.
72) Republic vs. De Knecht (G.R. 87351, February 12, 1990)

REPUBLIC OF THE PHILIPPINES, petitioner, vs. CRISTINA DE KNECHT AND THE COURT OF
APPEALS, respondents.
Facts: On February 20, 1979 the Republic of the Philippines filed in the Court of First Instance (CFI) of Rizal in Pasay City
an expropriation proceedings against the owners of the houses standing along Fernando Rein-Del Pan streets among
them Cristina De Knecht (de Knecht for short) together with Concepcion Cabarrus, and some fifteen other defendants,
docketed as Civil Case No. 7001-P.
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On March 19, 1979 de Knecht filed a motion to dismiss alleging lack of jurisdiction, pendency of appeal with the
President of the Philippines, prematureness of complaint and arbitrary and erroneous valuation of the properties. De
Knecht filed an ex parte urgent motion for the issuance by the trial court of a restraining order to restrain the Republic
from proceeding with the taking of immediate possession and control of the property sought to be condemned . Republic
filed a motion for the issuance of a writ of possession of the property to be expropriated on the ground that it had made
the required deposit with the Philippine National Bank (PNB) of 10% of the amount of compensation stated in the
complaint.
The lower court issued a writ of possession authorizing the Republic to enter into and take possession of the
properties sought to be condemned, and created a Committee of three to determine the just compensation for the lands
involved in the proceedings.
De Knecht filed with this Court a petition for certiorari and directed against the order of the lower court praying
that the respondent be commanded to desist from further proceeding in the expropriation action and from implementing
said order. On October 30, 1980 this Court rendered a decision granting the petition for certiorari and prohibition and
setting aside the order authorizing the Republic of the Philippines to take center upon the possession of the properties
sought to be condemned and the respondent Judge is permanently enjoined from taking any further action on Civil Case
No. 7001-P, entitled 'Republic of the Philippines vs. Concepcion Cabarrus Vda. de Santos, et al.' except to dismiss said
case.
Defendants moved to dismiss the expropriation action in compliance with the dispositive portion of the aforesaid
decision of this Court which had become final and in order to avoid further damage to same defendants who were denied
possession of their properties. The Republic filed a manifestation stating, among others, that it had no objection to the
said motion to dismiss as it was in accordance with the aforestated decision.
On September 2, 1983, the Republic filed a motion to dismiss said case due to the enactment of the Batas
Pambansa Blg. 340 expropriating the same properties and for the same purpose. The lower court in an order of
September 2, 1983 dismissed the case by reason of the enactment of the said law. The motion for reconsideration
thereof was denied in the order of the lower court dated December 18, 1986.
De Knecht appealed from said order to the Court of Appeals seeting aside the order appealed from. As prayed for
in the appellant's brief another Order is hereby issued dismissing the expropriation proceedings (Civil Case No. 51078)
before the lower court on the ground that the choice of Fernando Rein-Del Pan Streets as the line through which the
Epifanio de los Santos Avenue should be extended is arbitrary and should not receive judicial approval.
Hence the Republic filed that herein petition for review of the aforestated decision.
Issues: Whether an expropriation proceeding that was determined by a final judgment of the Supreme Court may be the
subject of a subsequent legislation for expropriation.
Ruling: YES. While it is true that said final judgment of this Court on the subject becomes the law of the case between
the parties, it is equally true that the right of the petitioner to take private properties for public use upon the payment of
the just compensation is so provided in the Constitution and our laws. Such expropriation proceedings may be
Page 156 of 306
undertaken by the petitioner not only by voluntary negotiation with the land owners but also by taking appropriate court
action or by legislation.
When on February 17, 1983 the Batasang Pambansa passed B.P. Blg. 340 expropriating the very properties
subject of the present proceedings, and for the same purpose, it appears that it was based on supervening events that
occurred after the decision of this Court was rendered in De Knecht in 1980 justifying the expropriation through the
Fernando Rein-Del Pan Streets.
The social impact factor which persuaded the Court to consider this extension to be arbitrary had disappeared . All
residents in the area have been relocated and duly compensated. Eighty percent of the EDSA outfall and 30% of the
EDSA extension had been completed. Only private respondent remains as the solitary obstacle to this project that will
solve not only the drainage and flood control problem but also minimize the traffic bottleneck in the area.
The Court finds justification in proceeding with the said expropriation proceedings through the Fernando Rein-Del
Pan streets from ESDA to Roxas Boulevard due to the aforestated supervening events after the rendition of the decision
of this Court in De Knecht. B.P. Blg. 340 therefore effectively superseded the aforesaid final and executory decision of this
Court. And the trial court committed no grave abuse of discretion in dismissing the case pending before it on the ground
of the enactment of B.P. Blg. 340. Moreover, the said decision, is no obstacle to the legislative arm of the Government in
thereafter (over two years later in this case) making its own independent assessment of the circumstances then prevailing
as to the propriety of undertaking the expropriation of the properties in question and thereafter by enacting the
corresponding legislation as it did in this case. The Court agrees in the wisdom and necessity of enacting B.P. Blg. 340.
Thus the anterior decision of this Court must yield to this subsequent legislative flat.
WHEREFORE, the petition is hereby GRANTED and the questioned decision of the Court of Appeals dated
December 28, 1988 and its resolution dated March 9, 1989 are hereby REVERSED and SET ASIDE and the order of
Branch III of the then Court of First Instance of Rizal in Pasay City in Civil Case No. 7001-P dated September 2, 1983 is
hereby reinstated without pronouncement as to costs.
73) Mun. of Meycayauan vs. IAC [157 SCRA 640 (1988)]

MUNICIPALITY OF MEYCAUAYAN, BULACAN, HON. ADRIANO D. DAEZ, MUNICIPAL MAYOR, MEYCAUAYAN,
BULACAN, petitioners, vs. INTERMEDIATE APPELLATE COURT and PHILIPPINE PIPES & MERCHANDIZING
Facts: In 1975, respondent Philippine Pipes and Merchandising Corporation filed with the Office of the Municipal Mayor of
Meycauayan, Bulacan, an application for a permit to fence a parcel of land. The fencing of said property was allegedly to
enable the storage of the respondent's heavy equipment and various finished products such as large diameter steel pipes,
pontoon pipes for ports, wharves, and harbors, bridge components, pre-stressed girders and piles, large diameter
concrete pipes, and parts for low cost housing.
In the same year, the Municipal Council of Meycauayan, headed by then Mayor Celso R. Legaspi, passed
Resolution No. 258, Series of 1975, manifesting the intention to expropriate the respondent's parcel of land covered by
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Transfer Certificate of Title No. 37879. An opposition to the resolution was filed by the respondent with the Office of the
Provincial Governor, which, in turn, created a special committee of four members to investigate the matter.
On March 10, 1976, the Special Committee recommended that the Provincial Board of Bulacan disapprove or
annul the resolution in question because there was no genuine necessity for the Municipality of Meycauayan to
expropriate the respondent's property for use as a public road. On the basis of this report, the Provincial Board of Bulacan
passed Resolution No. 238, Series of 1976, disapproving and annulling Resolution No. 258, Series of 1975, of the
Municipal Council of Meycauayan. The respondent, then, reiterated to the Office of the Mayor its petition for the approval
of the permit to fence the aforesaid parcels of land.
On October 21, 1983, however, the Municipal Council of Meycauayan, now headed by Mayor Adriano D. Daez,
passed Resolution No. 21, Series of 1983, for the purpose of expropriating anew the respondent's land. The Provincial
Board of Bulacan approved the aforesaid resolution on January 25, 1984. Thereafter, the petitioner filed with the Regional
Trial Court of Malolos, Bulacan, Branch VI, a special civil action for expropriation.
Upon deposit of the amount of P24,025.00, which is the market value of the land, with the Philippine National
Bank, the trial court issued a writ of possession in favor of the petitioner. On August 27, 1984, the trial court issued an
order declaring the taking of the property as lawful and appointing the Provincial Assessor of Bulacan as court
commissioner who shall hold the hearing to ascertain the just compensation for the property.
The respondent went to the Intermediate Appellate Court on petition for review. On January 10, 1985, the
appellate court affirmed the trial court's decision. However, upon motion for reconsideration by the respondent, the
decision was re-examined and reversed. The appellate court held that there is no genuine necessity to expropriate the
land for use as a public road as there were several other roads for the same purpose and another more appropriate lot
for the proposed public road. The court, taking into consideration the location and size of the land, also opined that the
land is more Ideal for use as storage area for respondent's heavy equipment and finished products.
After its motion for reconsideration was denied, the petitioner went to this Court on petition for review on
certiorari. Petitioners most respectfully submit that respondent Court has decided a question of substance not in accord
with law or with applicable decisions of this Honorable Supreme Court; that the judgment is based on a misapprehension
of facts and the conclusion is a finding grounded entirely on speculation, surmises, and conjectures, because:
a. It concluded, that by dismissing the complaint for expropriation the existence of legal and factual
circumstance of grave abuse of discretion amounting to lack of jurisdiction committed by the respondent
Judge without any shred of evidence at all contrary to the law on evidence;
b. It concluded, in its decision that respondent Philippine Pipes and Merchandising Corporation has no
need of the property sought to be condemned on the use to which it is devoted as a private road but
allegedly for storage contrary to the allegations of respondent Philippine Pipes and Merchandising
Corporation itself;
c. It anchored its decision on factual situations obtaining a long, long time ago without regard to the
relatively present situation now obtaining. (Rollo, pp. 8-9)
In refuting the petitioner's arguments, the private respondent contends that this Court may only resolve
questions of law and not questions of fact such as those which the petitioner puts in issue in this case. The respondent
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further argues that this Court may not also interfere with an action of the Court of Appeals which involves the exercise of
discretion.
Issue: Whether the expropriation of the Respondents Lot is of Public Necessity.
Ruling: NO. SC agrees with the respondent. The Supreme Court opines that the jurisdiction of this Court in cases
brought to us from the Court of Appeals is limited to the review of errors of law, factual issues not being proper in
certiorari proceedings.
This Court reviews and rectifies the findings of fact of the Court of Appeals only under certain established
exceptions such as: (1) when the conclusion is a finding grounded entirely on speculations, surmises and conjectures; (2)
when the inference made is manifestly mistaken, absurd and impossible; (3) when there is grave abuse of discretion; (4)
when the judgment is based on a misapprehension of facts; and (5) when the court, in making its finding, went beyond
the issues of the case and the same is contrary to the admissions of both the appellant and the appellee. None of the
exceptions warranting non-application of the rule is present in this case. On the contrary, the appellate court's decision is
supported by substantial evidence.
The petitioner's purpose in expropriating the respondent's property is to convert the same into a
public road which would provide a connecting link between Malhacan Road and Bulac Road in Valenzuela,
Bulacan and thereby ease the traffic in the area of vehicles coming from MacArthur Highway. The records,
however, reveals that there are other connecting links between the aforementioned roads. The petitioner
itself admits that there are four such cross roads in existence. The respondent court stated that with the
proposed road, there would be seven.
The petitioner objects to the appellate court's findings contending that they were based on facts obtaining long
before the present action to expropriate took place. However, that there is no evidence on record which shows a change
in the factual circumstances of the case. There is no showing that some of the six other available cross roads have been
closed or that the private roads in the subdivision may not be used for municipal purposes. What is more likely is that
these roads have already been turned over to the government. The petitioner alleges that surely the environmental
progress during the span of seven years between the first and second attempts to expropriate has brought about a
change in the facts of the case. This allegation does not merit consideration absent a showing of concrete evidence
attesting to it.
There is no question here as to the right of the State to take private property for public use upon payment of just
compensation. What is questioned is the existence of a genuine necessity therefor. As early as City of Manila v. Chinese
Community of Manila (40 Phil. 349) this Court held that the foundation of the right to exercise the power of eminent
domain is genuine necessity and that necessity must be of a public character. Condemnation of private property is
justified only if it is for the public good and there is a genuine necessity of a public character. Consequently, the courts
have the power to inquire into the legality of the exercise of the right of eminent domain and to determine whether there
is a genuine necessity therefor.
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In the recent case of De Knecht v. Bautista, (100 SCRA 660) this court further ruled that the government may not
capriciously choose what private property should be taken. Citing the case of J.M. Tuason & Co., Inc. v. Land Tenure
Administration (supra), the Court held: ... With due recognition then of the power of Congress to designate the particular
property to be taken and how much thereof may be condemned in the exercise of the power of expropriation, it is still a
judicial question whether in the exercise of such competence, the party adversely affected is the victim of partiality and
prejudice. That the equal protection clause will not allow. (At p. 436)
There is absolutely no showing in the petition why the more appropriate lot for the proposed road which was
offered for sale has not been the subject of the petitioner's attempt to expropriate assuming there is a real need for
another connecting road.
WHEREFORE, the petition is hereby DISMISSED for lack of merit. The questioned resolution of the respondent
court is AFFIRMED.
GOVERNMENTAL WITHDRAWAL
74) NHA vs. HEIRS OF ISIDRO GUIVELONDO G.R. No. 154411 June 19, 2003
NATIONAL HOUSING AUTHORITY, Petitioner, vs.
HEIRS OF ISIDRO GUIVELONDO, court of appeals, HON. ISAIAS DICDICAN, Presiding Judge, Regional Trial
Court, Branch 11, Cebu City, and PASCUAL Y. ABORDO, Sheriff, Regional Trial Court, Branch 11, Cebu City,
Respondents.
NATIONAL HOUSING AUTHORITY, Petitioner,
vs.
HEIRS OF ISIDRO GUIVELONDO, the court of appeals, HON. ISAIAS DICDICAN, Presiding Judge, Regional
Trial Court, Branch 11, Cebu City, and PASCUAL Y. ABORDO, Sheriff, Regional Trial Court, Branch 11, Cebu
City, Respondents.
Facts: On February 23, 1999, the NHA called the alleged claimants of the land they intend to develop as a
socialized housing project, namely the Heirs of Isidro Guivelondo. November 12, 1999, the Heirs of Isidro
Guivelondo(respondents) filed a Manifestation stating that they were waiving their objections to the petitioner's power to
expropriate their properties. The plaintiff has a lawful right to expropriate the properties of the defendants who are heirs
of Isidro Guivelondo and the court-appointed three Commissioners to ascertain the just compensations. Commissioners
submitted their reports amounting to P11,200.00 per square meter. Both parties filed a motion for
reconsideration about the compensation but were denied by the court. A motion for execution was filed by the
respondents and was then granted by the court.
July 16, 2001, The petitioner filed with the trial court a Motion to dismiss Civil Case No. CEB-23386, a
complaint about eminent domain, alleging that the implementation of its socialized housing project was
rendered impossible by the unconscionable value of the land sought to be expropriated, which the
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intended beneficiaries can't afford. The Motion was on the ground that the Partial Judgment had already become
final and executory and there was no just and equitable reason to warrant the dismissal of the case.
Issues:
1) Whether or not the state can be compelled and coerced by the courts to exercise or continue with the exercise of its
inherent power of eminent domain;
2) Whether or not judgment has become final and executory and if estoppel or laches applies to government;
3) Whether or not writs of execution and garnishment may be issued against the state in an expropriation
wherein the exercise of the power of eminent domain will not serve public use or purpose
Ruling:
1) Yes. The right of the plaintiff to dismiss an action with the consent of the court is universally recognized with certain
well-defined exceptions. If the plaintiff discovers that the action which he commenced was brought for the purpose of
enforcing a right or a benefit, the advisability or necessity of which he later discovers no longer exists, or that the result
of the action would be different from what he had intended, then he should be permitted to withdraw his action, subject
to the approval of the court.
2) Yes. Expropriation proceedings consist of two stages: first, condemnation of the property after it is
determined that its acquisition will be for a public purpose or public use and, second, the determination of
just compensation to be paid for the taking of private property to be made by the court with the assistance
of not more than three commissioners. Both of the stages are final yet still appealable. An order of condemnation or
dismissal is final, resolving the question of whether or not the plaintiff has properly and legally exercised its power of
eminent domain. Once the first order becomes final and no appeal thereto is taken, the authority to
expropriate and its public use can no longer be questioned. In the case at bar, the petitioner did not appeal
the Order of the trial court dated December 10, 1999, which declared that it has a lawful right to
expropriate the properties of respondent Heirs of Isidro Guivelondo. Hence, the Order became final and may no
longer be subject to review or reversal in any court. A final and executory decision or order can no longer be
disturbed or reopened no matter how erroneous it may be. Although judicial determinations are not
infallible, the judicial errors should be corrected through appeals, not through repeated suits on the same
claim.
3) Yes. The court is satisfied that "socialized housing" falls with the confines of "public use". The public
purpose of the socialized housing project is not in any way diminished by the amount of just compensation
that the court has fixed. It was also stated that the funds of such government-owned and controlled corporations and
non-corporate agencies, although considered public in character, are not exempt from garnishment. This is so because
when the Government enters into a commercial business, it abandons its sovereign capacity and is to be treated like any
other corporation. EXPRESSED CONSENT: MONEY CLAIMS ARISING FROM CONTRACTS.
WHEREFORE, in view of the foregoing, the instant petition for review is DENIED. The decision of the Court of Appeals in
CA-G.R. SP No. 68670, affirming the trial court's Order denying petitioners Motion to Dismiss the expropriation
Page 161 of 306
proceedings in Civil Case No. CEB-23386 is AFFIRMED. Petitioners prayer for injunctive relief against the levy and
garnishment of its funds and personal properties is DENIED. The Temporary Restraining Order dated January 22, 2003, is
LIFTED.
75) NPC & POBRE vs. CA G.R. No. 106804 August 12, 2004
NATIONAL POWER CORPORATION, petitioner,
vs.
COURT OF APPEALS and ANTONINO POBRE, respondents.
FACTS: Antonio Pobre owns land which he developed into a resort subdivision, beneath which isothermal
mineral water and steam. For one year, Pobre leased to NPC eleven lots from the approved subdivision
plan. To own the land for industrial purposes, NPC filed an expropriation case against Pobre, during the
pendency of which the former dumped waste materials beyond the site agreed upon by the parties. Then
NPC filed its second expropriation case against Pobreto to acquire an additional area of the property. In his motion to
dismiss the complaint, Pobre prayed for just compensation of all the lots affected by NPC’s actions and for
the payment of damages. But NPC itself filed a motion to dismiss the second expropriation case on the ground that
NPC had found an alternative site and that NPChad already abandoned 1981 the project within the Property due to
Pobre’s opposition. The trial court ruled that because of the pollution generated by NPC’s geothermal plants
NPC had rendered Pobre’s entire Property useless as a resort subdivision. The property has become useful
only to NPC. NPC must therefore take Pobre’s entire Property and pay for it. But NPC insists that it has the
right to move for the automatic dismissal of its complaint, relying on Section 1, Rule 17 of the 1964 Rules of
Court (the Rules in effect at the time).
Section 1, Rule 17 of the 1964 Rules of Court, provided that:
SECTION 1. Dismissal by the plaintiff. — An action may be dismissed by the plaintiff without order of court
by filing a notice of dismissal at any time before service of the answer or of a motion for summary
judgment. Unless otherwise stated in the notice, the dismissal is without prejudice, except that a notice operates as an
adjudication upon the merits when filed by a plaintiff who has once dismissed in a competent court an action based on or
including the same claim. A class suit shall not be dismissed or compromised without the approval of the court.
ISSUE: Whether the value of just compensation for the property was to be computed in 1992 when the complaint was
filed instead of in 1978 when the “taking of the property” was done.
RULING: Yes. The general rule in determining just compensation in eminent domain proceedings is found
in Section 4, Rule 67 of the Revised Rules of Court, which states that in an Order of Condemnation, the
plaintiff has a lawful right to take the property “…upon payment of just compensation to be determined as
of the date of the filing of the complaint.” Normally, the time of the taking coincides with the filing of the complaint
about expropriation. The exception to this general rule is where the owner would be given undue incremental
advantages from the use of the expropriated property. Petitioner NPC has not established any proof that the
increase of P1000 was due to increments caused by the petitioner’s use of the land. The present price can be attributed
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to ordinary inflation and increase in land values from 1978to 1992. Therefore, the petitioner can not invoke the exception
to Section 4 of Rule 67. The taking did not take place in 1978, because the petitioner’s entrance in 1978 was
not legal. It was without intent to expropriate nor was it made under a “warrant or color of legal
authority.” Petitioner believed that the property was owned by the City of Marawi, and when a private respondent
claimed ownership of the land in 1979, the petitioner flatly refused the claim and thought that the city had already
conferred upon its rights over the property. After a decade of beneficial use was only when petitioner recognized the
private respondent as the private owner and negotiated for voluntary purchase of the property. The acts of the petitioner
do not constitute the intent of expropriation nor the exercise of eminent domain as contemplated by law. It was only in
1992 when a private respondent filed a civil case against the petitioner that it decided to file its own complaint about
eminent domain.
76) REPUBLIC vs. HEIRS OF BORBON G.R. No. 165354 January 12, 2015
REPUBLIC OF THE PHILIPPINES, represented by the NATIONAL POWER CORPORATION, Petitioner,
vs.
HEIRS OF SATURNINO Q. BORBON, AND COURT OF APPEALS, Respondents.
FACTS: In 1993, NAPOCOR, a GOCC entered a property located in Batangas City in order to construct and
maintain transmission lines. Respondents heirs of Saturnino Q. Borbon owned the property. On 1995,
NAPOCOR filed a complaint for expropriation in the RTC in Batangas City seeking the acquisition of an
easement of right of way over a portion of the property, alleging that it had negotiated with the
respondents for the acquisition of the easement but they had failed to reach any agreement.
The respondents maintained that NAPOCOR had not negotiated with them before entering the property
and that the entry was done without their consent. They tendered no objection to NAPOCOR’s entry
provided it would pay just compensation not only for the portion sought to be expropriated but for the
entire property whose potential was greatly diminished, if not totally lost, due to the project; and that their
property was classified as industrial land.
The RTC ordered NAPOCOR to pay the respondent just compensation for the whole area, NAPOCOR
appealed to CA, wherein the CA affirmed the order and decision of the RTC with modification that plaintiff-
appellant shall pay only for the occupied portion. Hence, this appeal.
On 2012, during the pendency of the appeal, NAPOCOR filed a Manifestation and Motion to Discontinue
Expropriation Proceedings, informing that the parties failed to reach an amicable agreement; that the
property sought to be expropriated was no longer necessary for public purpose because of the intervening
retirement of the transmission lines installed on the respondents’ property;that because the public purpose
Page 163 of 306
for which such property would be used thereby ceased to exist, the proceedings for expropriation should
no longer continue, and the State was now duty bound to return the property to its owners; and that the
dismissal or discontinuance of the expropriation proceedings was in accordance with Section 4, Rule 67 of the Rules of
Court.
ISSUE: Whether or not the expropriation proceedings should be discontinued or dismissed pending appeal.
RULING: Yes. The dismissal of the proceedings for expropriation at the instance of NAPOCOR is proper, but,
conformably with Section 4,36 Rule 67 of the Rules of Court, the dismissal or discontinuance of the proceedings must be
upon such terms as the court deems just and equitable. The SC remind the parties about the nature of the power of
eminent domain that the public use is fundamental basis for the action of expropriation, hence, NAPOCOR motion should
be granted.
The SC held that the very moment that it appears at any stage of the proceedings that the expropriation is
not for a public use, the action must necessarily fail and should be dismissed, for the reason that the action
cannot be maintained at all except when the expropriation is for some public use. That must be true even
during the pendency of the appeal or at any other stage of the proceedings.
With regards to the NAPOCOR entered the property without the owners’ consent and without paying just compensation to
the respondents. Neither did it deposit any amount as required by law prior to its entry. The Constitution is explicit in
obliging the Government and its entities to pay just compensation before depriving any person of his or her property for
public use. Considering that in the process of installing transmission lines, NAPOCOR destroyed some fruit
trees and plants without payment, and the installation of the transmission lines went through the middle
of the land as to divide the property into three lots, thereby effectively rendering the entire property inutile
for any future use, it would be unfair for NAPOCOR not to be made liable to the respondents for the
disturbance of their property rights from the time of entry until the time of restoration of the possession of
the property.
In light of these premises, the SC expressly hold that the taking of private property, consequent to the Government’s
exercise of its power of eminent domain, is always subject to the condition that the property be devoted to the specific
public purpose for which it was taken. Corollarily, if this particular purpose or intent is not initiated or not at all pursued,
and is peremptorily abandoned, then the former owners, if they so desire, may seek the reversion of the property,
subject to the return of the amount of just compensation received. In such a case, the exercise of the power of eminent
domain has become improper for lack of the required factual justification.
This should mean that the compensation must be based on what they actually lost as a result and by
reason of their dispossession of the property and of its use, including the value of the fruit trees, plants
and crops destroyed by NAPOCOR’s construction of the transmission lines. Considering that the dismissal of the
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expropriation proceedings is a development occurring during the appeal, the Court now treats the dismissal of the
expropriation proceedings as producing the effect of converting the case into an action for damages.
For that purpose, the Court remands the case to the court of origin for further proceedings, with
instruction to the court of origin to enable the parties to fully litigate the action for damages by giving
them the opportunity to re-define the factual and legal issues by the submission of the proper pleadings on
the extent of the taking, the value of the compensation to be paid to the respondents by NAPOCOR, and
other relevant matters as they deem fit. Trial shall be limited to matters the evidence upon which had not been
heretofore heard or adduced. The assessment and payment of the correct amount of filing fees due from the respondents
shall be made in the judgment, and such amount shall constitute a first lien on the recovery. Subject to these conditions,
the court of origin shall treat the case as if originally filed as an action for damages.
WHEREFORE, the Supreme Court DISMISSED the expropriation proceedings due to the intervening cessation of the need
for public use.
Page 165 of 306
RECOVERY OF EXPROPRIATED LAND

77) ATO vs. GOPUCO G.R. No. 158563 June 30, 2005
AIR TRANSPORTATION OFFICE (ATO) and MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY (mciaa),
petitioners,
vs.
APOLONIO GOPUCO, JR., respondent.
SUMMARY: Respondent owned a lot which the government wanted to expropriate in order to expand the
Lahug Airport where the lot was located. Respondent disagreed, so the government filed a case for
expropriation which was ruled in favor of the government, and which case became final and executory. Later
however, the Lahug Airport was shut down. So respondent wanted his lot back, alleging that the purpose
for which the expropriation was made did not get fulfilled. The government refused to return the lot,
saying that they now have the absolute title over it. SC held that the land in this case became the absolute
title of the government because it was acquired not for a particular purpose but for a fee simple.
DOCTRINE: When land has been acquired for public use in “fee simple,” unconditionally, either by the exercise of
eminent domain or by purchase, the former owner retains no rights in the land.
FACTS: Respondent Apolonio Gopuco Jr. was the owner of Cadastral Lot No. 72 located in the vicinity of
the Lahug Airport in Cebu City. The Lahug Airport had been turned over by the US Army to the Republic of the Phil
through the Surplus Property Commission. In 1947, the Surplus Property Commission was succeeded by the Bureau of
Aeronautics, which office was supplanted by the National Airport Corporation (NAC). The NAC was in turn dissolved and
replaced with the Civil Aeronautics Administration (CAA).
In 1949, the NAC informed the owners of the various lots surrounding the Lahug Airport, including the
herein Respondent, that the government was acquiring their lands for purposes of expansion. Some
landowners were convinced to sell their properties on the assurance that they would be able to repurchase the same
when these would no longer be used by the airport. Others, including Gopuco, refused to do so.
In 1952, the CAA filed a complaint with the CFI of Cebu for the expropriation of Lot No. 72 and its
neighboring realties, docketed as Civil Case No. R-1881. CFI ruled that the expropriation of the lot was
justified. No appeal was taken from the decision and the judgment of condemnation became final and
executory. Thereafter, absolute title to Lot No. 72 was transferred to the government.
Subsequently, when the Mactan International Airport commenced operations, the Lahug Airport was
ordered closed by then President Corazon C. Aquino via a Memorandum. Thus, Lot No. 72 was virtually
abandoned.
In 1990, Gopuco wrote the Bureau of Air Transportation seeking the return of his lot and offering to return
the money previously received by him as payment for the expropriation. This letter was ignored. In the
same year, Congress passed Republic Act No. 6958 creating the Mactan-Cebu International Airport Authority (MCIAA) and
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in part providing for the transfer of the assets of the Lahug Airport thereto. Consequently, ownership of Lot No. 72 was
transferred to MCIAA.
Apolonio Gopuco, Jr. filed an amended complaint for recovery of ownership of Lot No. 72 against the Air
Transportation Office (ATO) and the Province of Cebu with the Regional Trial Court (RTC) of Cebu, Branch X,
docketed as Civil Case No. CEB-11914. He maintained that by virtue of the closure of the Lahug Airport, the
original purpose for which the property was expropriated had ceased or otherwise been abandoned, and
title to the property had therefore reverted to him.
Gopuco further alleged that when the original judgment of expropriation had been handed down, and before they could
file an appeal thereto, the CAA offered them a compromise settlement whereby they were assured that the expropriated
lots would be resold to them for the same price as when it was expropriated in the event that the Lahug Airport would be
abandoned. Gopuco claims to have accepted this offer. However, he failed to present any proof on this matter, and later
admitted that insofar as the said lot was concerned, no compromise agreement was entered into by the government and
the previous owners.
RTC dismissed the complaint. CA reversed. Gopuco is now before the SC.
Petitioner MCIAA’s contention: the Republic of the Philippines validly expropriated Lot No. 72 through the
proceedings in Civil Case No. R-1881, the judgment of which had long become final and executory. Further, said
judgment vested absolute and unconditional title in the government, there having been no condition whatsoever that the
property should revert to its owners in case the Lahug Airport should be abandoned.
Respondent’s contention: the expropriation was subject to the condition that the Lahug Airport will
continue to be in operation, relying on the case of Fery v. Municipality of Cabanatuan (discussed in the Ratio). Also,
there exists between the government and the owners of expropriated realty an “implied contract” that the properties
involved will be used only for the public purpose for which they were acquired in the first place.
ISSUE: Whether a private land that is expropriated for a particular public use, and that particular public use is abandoned,
does its former owner acquire a cause of action for recovery of the property?
Whether the former owner acquire a cause of action for recovery if the particular public use of the
expropriated land is abandoned.
RULING: NO. Eminent domain is generally described as “the highest and most exact idea of property
remaining in the government” that may be acquired for some public purpose through a method in the nature of a
forced purchase by the State. Also often referred to as “expropriation” and, with less frequency, as “condemnation,” it is,
like police power and taxation, an inherent power of sovereignty and need not be clothed with any constitutional gear to
exist; instead, provisions in our Constitution on the subject are meant more to regulate, rather than to grant, the exercise
of the power. It is a right to take or reassert dominion over property within the state for public use or to
meet a public exigency and is said to be an essential part of governance even in its most primitive form and
thus inseparable from sovereignty. In fact, all separate interests of individuals in property are held of the
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government under this tacit agreement or implied reservation. Notwithstanding the grant to individuals, the eminent
domain remains in the government, or in the aggregate body of people in their sovereign capacity; and they have the
right to resume the possession of the property whenever the public interest so requires it.
The ubiquitous character of eminent domain is manifest in the nature of the expropriation proceedings. Expropriation
proceedings are not adversarial in the conventional sense, for the condemning authority is not required to
assert any conflicting interest in the property. Thus, by filing the action, the condemnor in effect merely serves
notice that it is taking title and possession of the property, and the defendant asserts title or interest in the property, not
to prove a right to possession, but to prove a right to compensation for the taking.
The only direct constitutional qualification is that “private property shall not be taken for public use without just
compensation.” This prescription is intended to provide a safeguard against possible abuse and so to protect as well the
individual against whose property the power is sought to be enforced.
As applied In this case, the judgment on the propriety of the taking and the adequacy of the compensation
received have long become final. The SC also held that the terms of that judgment granted “title in fee simple” to the
Republic of the Philippines. An excerpt from the case of Fery makes an important distinction between particular purpose
vs. fee simple title, which basically answers the main issue in this case. In Fery, the SC asked and answered the same
question: When private land is expropriated for a particular public use, and that particular public use is
abandoned, does the land so expropriated return to its former owner?
The answer to that question depends upon the character of the title acquired by the expropriator (whether it
be the State, a province, a municipality, or a corporation which has the right to acquire property under the power of
eminent domain). If, for example, land is expropriated for a particular purpose, with the condition that when
that purpose is ended or abandoned the property shall return to its former owner, then, of course, when
the purpose is terminated or abandoned the former owner reacquires the property so expropriated.
On the contrary, however, if the decree of expropriation gives to the entity a fee simple title, then
of course, the land becomes the absolute property of the expropriator, whether it be the State, a province,
or municipality, and in that case the nonuser does not have the effect of defeating the title acquired by the
expropriation proceedings. Therefore, pursuant to the SC’s ruling in Fery, no rights to Lot No. 72, either
express or implied, have been retained by the herein respondent.
Page 168 of 306
78. Republic vs Lim (G.R. No. 161656, June 29, 2005)

G.R. No. 161656 June 29, 2005
REPUBLIC OF THE PHILIPPINES, GENERAL ROMEO ZULUETA, COMMODORE EDGARDO GALEOS, ANTONIO
CABALUNA, DOROTEO MANTOS & FLORENCIO BELOTINDOS, petitioners, vs. VICENTE G. LIM,
respondent.
FACTS: In 1938, the Republic instituted a special civil action for expropriation of Lots 932 and 939 for the
purpose of establishing a military reservation for the Philippine Army. Lots were registered in the names of
Gervasia and Eulalia Denzon. CFI ordered the Republic to pay the Denzons the sum of P4,062.10 as just
compensation. The Denzons appealed to the CA but it was dismissed.
In 1950, one of the heirs of the Denzons, filed with the National Airports Corporation a claim for
rentals for the two lots, but it "denied knowledge of the matter." In 1961, Lt. Cabal rejected the claim but
expressed willingness to pay the appraised value of the lots within a reasonable time. For failure of the
Republic to pay for the lots, the Denzons’ successors-in-interest (Francisca Galeos-Valdehueza and Josefina
Galeos-Panerio) filed with the same CFI an action for recovery of possession with damages against the
Republic and AFP officers in possession of the property. CFI ruled in favor of Valdehueza and Panerio but
titles of the said lots came with the annotation "subject to the priority of the National Airports Corporation
to acquire said parcels of land… ". On appeal, SC held that Valdehueza and Panerio are still the registered
owners of Lots 932 and 939, there having been no payment of just compensation by the Republic, but they
are not entitled to recover possession of the lots but may only demand the payment of their fair market
value. Valdehueza and Panerio were ordered to execute a deed of sale in favor of the Republic. In 1964,
Valdehueza and Panerio mortgaged Lot 932 to respondent Lim as security for their loans. For their failure
to pay Lim despite demand, the latter had the mortgage foreclosed and the lot was issued in his name. On
1992, Lim filed a complaint for quieting of title with the RTC against Republic. RTC rendered a decision in
favor of Lim, declaring that Lim is the absolute and exclusive owner of the lot with all the rights of an
absolute owner. CA affirmed. OSG then filed petition for review with the Court.
ISSUE: Whether the Republic has retained ownership of Lot 932 despite its failure to pay respondent’s predecessors-in-
interest the just compensation pursuant to the judgment of the CFI rendered as early as May 14, 1940.
HELD: No. Under Section 9, Article III of the Constitution: “Private property shall not be taken for public
use without just compensation.” The Republic disregarded the foregoing provision when it failed and
refused to pay respondents predecessors-in-interest the just compensation for Lots 932 and 939. Obviously,
defendant-appellant Republic evaded its duty of paying what was due to the landowners. The expropriation
proceedings had already become final in the late 1940s and yet, up to now, or more than 50 years after,
the Republic had not yet paid the compensation fixed by the court while continuously reaping benefits
from the expropriated property to the prejudice of the landowner.
Page 169 of 306
The recognized rule is that title to the property expropriated shall pass from the owner to the expropriator
only upon full payment of the just compensation. Clearly, without full payment of just compensation, there
can be no transfer of title from the landowner to the expropriator. Otherwise stated, the Republic’s
acquisition of ownership is conditioned upon the full payment of just compensation within a reasonable
time. The expropriation of lands consists of two stages, to wit: The first is concerned with the determination
of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in
the context of the facts involved in the suit. It ends with an order, if not of dismissal of the action, of condemnation
declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose
described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the
complaint. The second phase of the eminent domain action is concerned with the determination by the court
of the just compensation for the property sought to be taken. This is done by the court with the assistance of not
more than three commissioners. When Valdehueza and Panerio mortgaged Lot 932 to respondent in 1964, they
were still the owners and their title had not yet passed to the petitioner Republic. In fact, it never did.
JUST COMPENSATION
79. Ansaldo vs Tantuico (188 SCRA 300)
G.R. No. L-50147 August 3, 1990
JOSE MA. ANSALDO, for himself and as attorney-in-fact of Maria Angela Ansaldo, petitioners vs.
FRANCISCO S. TANTUICO, JR., Acting Chairman, Commission on Audit, and BALTAZAR AQUINO, Minister of
Public Highways, respondents.
FACTS:
The lots belong to the petitioners are covered by title in their names. These lots were taken from the
Ansaldos sometime in 1947 by the Department of Public Work Transportation and Communication and
made part of what used to be Sta. Mesa Street and is now Ramon Magsaysay Avenue at San Juan, Metro
Manila. Said owners made no move whatever until twenty-six years later. They wrote to ask for
compensation for their land on January 22, 1973. Their claim was referred to the Secretary of Justice who in
due course rendered an opinion dated February 22, 1973, that just compensation should be paid in
accordance with Presidential Decree No. 76. The Decree provided that the basis for the payment of just
compensation of property taken for public use should be the current and fair market value thereof as
declared by the owner or administrator, or such market value as determined by the assessor, whichever
was lower. The Secretary of Justice thus advised that the corresponding expropriation suit be forthwith instituted to fix
the just compensation to be paid to the Ansaldos.
Pursuant to this opinion, the Commissioner of Public Highways requested the Provincial Assessor of Rizal to
make a redetermination of the market value of the Ansaldos’ property in accordance with PD 76. The new
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valuation was made, after which the Auditor of the Bureau of Public Highways forwarded the Ansaldos’
claim to the Auditor General with the recommendation that payment be made on the basis of the “current
and fair market value, . . . and not on the fair market value at the time of taking.
The Commission on Audit, however, declined to adopt the recommendation. In a decision handed down on
September 26, 1973, the Acting Chairman ruled that “the amount of compensation to be paid to the
claimants is to be determined as of the time of the taking of the subject lots, i.e. 1947. The ruling was
reiterated by the Commission on September 8, 1978, and again on January 25, 1979 when it denied the Ansaldos’
motion for reconsideration. It is these rulings of the Commission on Audit that the Ansaldos have appealed to
this Court.
ISSUE: Whether the amount of compensation to be paid to the claimants is to be determined as of the time of the taking
of the subject land?
HELD: Yes, which is in 1947. There is a “taking” when the owner is actually deprived or dispossessed of his
property; when there is a practical destruction or a material impairment of the value of his property or
when he is deprived of the ordinary use thereof. There is a “taking” in this sense when the expropriator
enters private property not only for a momentary period but for a more permanent duration, for the
purpose of devoting the property to a public use in such a manner as to oust the owner and deprive him of
all beneficial enjoyment thereof. For ownership, after all, is nothing without the inherent rights of possession, control
and enjoyment. Where the owner is deprived of the ordinary and beneficial use of his property or of its value by its being
diverted to public use, there is taking within the Constitutional sense. Under these norms, there was undoubtedly a
taking of the Ansaldo's’ property when the Government obtained possession thereof and converted it into a
part of a thoroughfare for public use.
Clearly, then, the value of the Ansaldo's’ property must be ascertained as of the year 1947, when it was
actually taken, and not at the time of the filing of the expropriation suit, which, by the way, still has to be done.
It is as of that time that the real measure of their loss may fairly be adjudged. The value, once fixed, shall
earn interest at the legal rate until full payment is affected, conformably with other principles laid down by case
law
80. Manila Railway Co. Vs Velasquez (32 Phil 286)

G.R. No. L-10278 November 23, 1915
THE MANILA RAILROAD COMPANY, plaintiff-appellant,
vs. ROMANA VELASQUEZ, MELECIO ALLAREY and DEOGRACIAS MALIGALIG, defendants-appellants.
Page 171 of 306
FACTS: Manila Railroad Company filed expropriation proceedings for 12 small parcels of land for a railroad
station site at Lucena, Province of Tayabas. The commissioners fixed the value of the twelve parcels at P81,
412.75 and awarded P600 to Simeon Perez (one of the respondents) as damages for the removal of an
uncompleted camarin. Upon hearing, the commissioner’s report was approved and the plaitiff directed to
pay to the Tayabas Land Company the total amount awarded, with interests and costs.
Basis for appraisement: 1) the construction of the provincial building and the high school had increased the
price of land in their vicinity; 2) the neighborhood of these buildings had become a choice residential
district; 3) the population on the vicinity had increased.
The petitioner company alleges that the amount is grossly excessive, pointing out that the land has never
been used except for rice culture. The lower court affirmed the commissioner’s report. Hence, this appeal
by the petitioner was filed asking the court to review the evidence and to reduce the value of the
condemned land in accordance with its findings.
ISSUE: Whether or not the CFI has power over the reports of the commission
RULING: Yes. There is ample authority in the statute to authorize the courts to change or modify the report
of the commissioners by increasing or decreasing the amount of the award, if the facts of the case will
justify such change or modification. The report of the commissioners on the condemned land is not final.
The judgement of the court is necessary to give effect to their estimated valuation.
The judgement of the court on question of the value of land sought to be condemned is rendered after a consideration of
the evidence submitted to the commissioners, their report and the exceptions thereto submitted upon the hearing of the
report. Based on Sec. 246 of the Code of Civil Procedure, it is obvious that the court may, in its discretion correct the
commissioner’s report in any manner deemed suitable to the occasion so that final judgement may be rendered and thus
end the litigation. The “final order and judgement” are reviewable by the court by means of a bill of exceptions in the
same was as any other “action.” Based on Section 496 and 497, this court, in those cases where the right of
eminent domain has been exercised and where the provisions of the above section have been complied
with, may examine the testimony and decide the case by a preponderance of evidence, or in other words,
retry the case upon the merits and renders such order or judgement as justice and equity may require.
Notwithstanding the respect due to the report of the commissioners, their valuation of the property must
be supported by competent evidence of record, and in those cases where the evidence as to the value and
damages is conflicting, they should always set forth in full their reasons for accepting certain evidence,
especially in those cases where a review of premises had been made.
For the foregoing reasons, the judgment of the court is modified by reducing the award for the parcel containing 16,094
square meters to the sum of P6,500. The damages for the remaining parcels will be fixed at the same proportionate
amount
Page 172 of 306
Definition
81) Short Title: Eslaban vs. De Onorio
Long Title: [G.R. No. 146062. June 28, 2001.]

SANTIAGO ESLABAN, JR., in his capacity as Project Manager of the National Irrigation Administration,
Petitioner, v. CLARITA VDA. DE ONORIO, Respondent.
Facts: Respondent Clarita Vda. de Enorio is the owner of a lot in Barangay M. Roxas, Sto. Niño, South
Cotabato. On October 6, 1981, Santiago Eslaban, Jr., Project Manager of the NIA, approved the construction of
the main irrigation canal of the NIA on the said lot, affecting a 24,660 square meter portion thereof.
Respondent’s husband agreed to the construction of the NIA canal provided that they be paid by the
government for the area taken after the processing of documents by the Commission on Audit.
Sometime in 1983, a Right-of-Way agreement was executed between respondent and the NIA. The NIA
then paid respondent the amount of P4,180.00 as Right-of-Way damages. Respondent subsequently
executed an Affidavit of Waiver of Rights and Fees whereby she waived any compensation for damages to
crops and improvements which she suffered as a result of the construction of a right-of-way on her
property. The same year, petitioner offered respondent the sum of P35,000.00 by way of amicable settlement pursuant
to Executive Order No. 1035, §18, which provides in part that:
Financial assistance may also be given to owners of lands acquired under C.A. 141, as amended, for the area or
portion subject to the reservation under Section 12 thereof in such amounts as may be determined by the
implementing agency/instrumentality concerned in consultation with the Commission on Audit and the assessor’s
office concerned.
Respondent demanded payment for the taking of her property, but petitioner refused to pay. Accordingly,
respondent filed a complaint against petitioner before the Regional Trial Court, praying that petitioner be
ordered to pay the sum of P111,299.55 as compensation for the portion of her property used in the
construction of the canal constructed by the NIA, litigation expenses, and the costs.
Petitioner, through the Office of the Solicitor-General, filed an Answer, in which he admitted that NIA constructed an
irrigation canal over the property of the plaintiff and that NIA paid a certain landowner whose property had been taken
for irrigation purposes, but petitioner interposed the defense that: (1) the government had not consented to
be sued; (2) the total area used by the NIA for its irrigation canal was only 2.27 hectares, not 24,600
square meters; and (3) respondent was not entitled to compensation for the taking of her property
considering that she secured title over the property by virtue of a homestead patent under C.A. No. 141.
At the pre-trial conference, the following facts were stipulated upon: (1) that the area taken was 24,660
square meters; (2) that it was a portion of the land covered by TCT No. T-22121 in the name of respondent
and her late husband; and (3) that this area had been taken by the NIA for the construction of an irrigation
canal.
Page 173 of 306
On October 18, 1993, the trial court rendered a decision, in favor of plaintiff and against the defendant ordering the
defendant, National Irrigation Administration, to pay to plaintiff the sum of (P107,517.60) as just compensation for the
questioned area of 24,660 square meters of land owned by plaintiff and taken by said defendant NIA which used it for its
main canal plus costs.
Petitioner appealed to the Court of Appeals which, on October 31, 2000, affirmed the decision of the Regional Trial Court.
Hence this petition.
Issue/s:
1. Whether the land granted by virtue of a homestead patent and subsequently registered under Presidential
Decree 1529 ceases to be part of the public domain.
2. Whether the value of just compensation shall be determined from the time of the taking or from
the time of the finality of the decision.
3. Whether the affidavit of waiver of rights and fees executed by respondent exempts petitioner from making
payment to the former.
Ruling:
1. YES. §39 of the Land Registration Act (now P.D. No. 1529, §44) provides:
Every person receiving a certificate of title in pursuance of a decree of registration, and every subsequent purchaser
of registered land who takes a certificate of title for value in good faith shall hold the same free from all
encumbrances except those noted on said certificate, and any of the following encumbrances which may be
subsisting, namely:
Any public highway, way, private way established by law, or any government irrigation canal or lateral thereof,
where the certificate of title does not state that the boundaries of such highway, way, irrigation canal or lateral
thereof, have been determined.
As this provision says, the only servitude which a private property owner is required to recognize in
favor of the government is the easement of a "public highway, way, private way established by law, or
any government canal or lateral thereof where the certificate of title does not state that the
boundaries thereof have been pre-determined." This implies that the same should have been pre-
existing at the time of the registration of the land in order that the registered owner may be compelled
to respect it. Conversely, where the easement is not pre-existing and is sought to be imposed only
after the land has been registered under the Land Registration Act, proper expropriation proceedings
should be had, and just compensation paid to the registered owner thereof.
In this case, the irrigation canal constructed by the NIA on the contested property was built only on October 6, 1981,
several years after the property had been registered on May 13, 1976. Accordingly, prior expropriation
proceedings should have been filed and just compensation paid to the owner thereof before it could be
taken for public use.
Indeed, the rule is that where private property is needed for conversion to some public use, the first
thing obviously that the government should do is to offer to buy it. If the owner is willing to sell and
the parties can agree on the price and the other conditions of the sale, a voluntary transaction can
Page 174 of 306
then be concluded and the transfer effected without the necessity of a judicial action. Otherwise, the
government will use its power of eminent domain, subject to the payment of just compensation, to
acquire private property in order to devote it to public use.
2. The Court held that the value of just compensation shall be determined from the time of its taking.
With respect to the compensation which the owner of the condemned property is entitled to receive, it is settled that
it is the market value which should be paid or "that sum of money which a person, desirous but not
compelled to buy, and an owner, willing but not compelled to sell, would agree on as a price to be given
and received therefor." Further, just compensation means not only the correct amount to be paid to the
owner of the land but also the payment of the land within a reasonable time from its taking. Without
prompt payment, compensation cannot be considered "just" for then the property owner is made to
suffer the consequence of being immediately deprived of his land while being made to wait for a
decade or more before actually receiving the amount necessary to cope with his loss. Nevertheless, as
noted in Ansaldo v. Tantuico, Jr., there are instances where the expropriating agency takes over the property prior to
the expropriation suit, in which case just compensation shall be determined as of the time of taking, not as of the
time of filing of the action of eminent domain.
Before its amendment in 1997, Rule 67, §4 provided: Order of condemnation. When such a motion is overruled or
when any party fails to defend as required by this rule, the court may enter an order of condemnation declaring that
the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose described
in the complaint upon the payment of just compensation to be determined as of the date of the filing of the
complaint. . . .
It is now provided that ― SEC. 4. Order of expropriation. ― If the objections to and the defense against
the right of the plaintiff to expropriate the property are overruled, or when no party appears to defend
as required by this Rule, the court may issue an order of expropriation declaring that the plaintiff has a
lawful right to take the property sought to be expropriated, for the public use or purpose described in
the complaint, upon the payment of just compensation to be determined as of the date of the taking of
the property or the filing of the complaint, whichever came first.
A final order sustaining the right to expropriate the property may be appealed by any party aggrieved thereby. Such
appeal, however, shall not prevent the court from determining the just compensation to be paid. After the rendition
of such an order, the plaintiff shall not be permitted to dismiss or discontinue the proceeding except on such terms as
the court deems just and equitable. Thus, the value of the property must be determined either as of the date of the
taking of the property or the filing of the complaint, "whichever came first." Even before the new rule, however, it
was already held in Commissioner of Public Highways v. Burgos that the price of the land at the time of taking, not its
value after the passage of time, represents the true value to be paid as just compensation. It was, therefore, error for
the Court of Appeals to rule that the just compensation to be paid to respondent should be determined as of the filing
of the complaint in 1990, and not the time of its taking by the NIA in 1981, because petitioner was allegedly remiss in
its obligation to pay respondent, and it was respondent who filed the complaint.
Page 175 of 306
Indeed, the value of the land may be affected by many factors. It may be enhanced on account of its
taking for public use, just as it may depreciate. In this case, the proper valuation for the property in question is
P16,047.61 per hectare, the price level for 1982, based on the appraisal report submitted by the commission
(composed of the provincial treasurer, assessor, and auditor of South Cotabato) constituted by the trial court to make
an assessment of the expropriated land and fix the price thereof on a per hectare basis.
3. NO. The Court of Appeals correctly held that If NIA intended to bind the appellee to said affidavit, it would not
even have bothered to give her any amount for damages caused on the improvements/crops within the
appellee’s property. This, apparently was not the case, as can be gleaned from the disbursement voucher in the
amount of P4,180.00 issued on September 17, 1983 in favor of the appellee, and the letter from the Office of the
Solicitor General recommending the giving of "financial assistance in the amount of P35,000.00" to the appellee.
Thus, the SC is inclined to give more credence to the appellee’s explanation that the waiver of rights
and fees "pertains only to improvements and crops and not to the value of the land utilized by NIA
for its main canal."
WHEREFORE, premises considered, the assailed decision of the Court of Appeals is hereby AFFIRMED with
MODIFICATION to the extent that the just compensation for the contested property be paid to respondent in the
amount of P16,047.61 per hectare, with interest at the legal rate of six percent (6%) per annum from the time of
taking until full payment is made. Costs against petitioner
82) Short Title: Republic vs. IAC, et al.

Long Title: [G.R. No. 71176. May 21, 1990.]
REPUBLIC OF THE PHILIPPINES (Ministry of Education and Culture), Petitioner, v. INTERMEDIATE
APPELLATE COURT and AMEREX ELECTRONICS, PHILS. CORPORATION, Respondents.
Facts: The property involved consists of four (4) parcels of land with a total area of 9,650 square meters located
at No. 2090 Dr. Manuel L. Carreon Street, Manila, a short walking distance from Herran (now Pedro Gil) Street. Its
previous owner, Avegon Inc., offered it for sale to the City School Board of Manila on July 21, 1973 at
P2,300,000. The school board was willing to buy at P1,800,000 but the then Mayor of Manila intervened and
volunteered to negotiate with Avegon Inc. for a better price.
The alleged negotiation did not materialize. Avegon Inc. sold the property and its improvements to Amerex Electronics,
Phils. Corporation (Amerex for brevity) for P1,800,000. Thereafter, Transfer Certificates of Title were issued in favor of
Amerex.
On August 29, 1975, the Solicitor General filed for the Department of Education and Culture (DEC) a
complaint against Amerex for the expropriation of said property before the Court of First Instance of
Manila (Civil Case No. 99190). The complaint stated that the property was needed by the government as a
permanent site for the Manuel de la Fuente High School (later renamed Don Mariano Marcos Memorial High
Page 176 of 306
School); that the fair market value of the property had been declared by Amerex as P2,435,000, and that the assessor
had determined its market value as P2,432,042 and assessed it for taxation purposes in the amount of P1,303,470.
In a motion praying that the plaintiff be authorized to take immediate possession of the property, the then
Acting Solicitor General Hugo E. Gutierrez, Jr., invoking Presidential Decree No. 42, informed the court that
said assessed value of the property for taxation purposes had been deposited with the Philippine National
Bank (PNB) in Escolta, Manila on September 30, 1975. Consequently, the court issued an order directing
the sheriff to place the plaintiff in possession of the property. The plaintiff took actual possession thereof
on October 13, 1975.
Amerex filed a motion to dismiss the complaint stating that while it was not contesting the merits of the
complaint, the same failed to categorically state the amount of just compensation for the property. It
therefore prayed that in consonance with P.D. No. 794, the just compensation be fixed at P2,432,042, the market value
of the property determined by the assessor which was lower than Amerex's own declaration. The motion to dismiss was
opposed by the plaintiff reasoning that while indeed the market value as determined by the assessor was lower than that
declared by Amerex, the plaintiff intended to present evidence of a much lower market value.
Alleging that its motion to dismiss merely sought a clarification on the just compensation for the property, Amerex filed a
motion to withdraw the plaintiffs deposit of P1,303,470 with the PNB without prejudice to its entitlement to the amount of
P1,128,572, the balance of the just compensation of P2,432,042 insisted upon. The plaintiff interposed no objection to
the motion provided that an order of condemnation be issued by the court and that the plaintiff be allowed to present its
evidence on the matter of just compensation.
On December 3, 1975, the lower court issued an order vesting the plaintiff with the lawful light to take the property upon
payment of just compensation as provided by law. On December 19, 1975, after the parties had submitted the names of
their respective recommendees to the appraisal committee, the lower court appointed commissioners. Thereafter, the
lower court ordered Amerex to submit an audited financial statement on the acquisition cost of the property including
expenses for its improvement. Amerex was also allowed by the court, after it had filed a second motion therefor, to
withdraw the P1,303,470 deposit with the PNB.
On March 12, 1976, the plaintiff filed a motion for leave of court to amend its complaint stating that after it had filed the
same, P.D. No. 464 was amended by P.D. No. 794; that Section 92 of said Code, as amended, provided that when
private property is acquired for public use, its just compensation "shall not exceed the market value declared by the
owner or administrator or anyone having legal interest in the property, or such market value as determined by the
assessor, whichever is lower"; and that the amended complaint would state that the fair market value of the property
could not be in excess of P1,800,000, the amount for which defendant's predecessor-in-interest had offered to sell said
properties to the Division of Public Schools of Manila and which amount was also the purchase price paid by Amerex to
Avegon Inc. In due course, plaintiff filed an amended complaint. Amerex, however, opposed the motion for leave to
amend the complaint contending that the plaintiff was insisting on a valuation given by neither the owner nor the
assessor as mandated by P.D. No. 794 but by another person in August 1973 when the peso value was much higher.
The lower court denied the motion to amend the complaint; but after the plaintiff had filed a motion for reconsideration,
the lower court admitted the amended complaint on April 27, 1976. In the meantime, Amerex submitted to the court
Page 177 of 306
"audited financial statements' consisting of an account stating that the cost of its land and buildings was P2,107,479.48,
and another account stating that it incurred total expenses of P150,539 for their maintenance. These statements yielded
the amount of P2,258,018.48 as the total value of the property.
The commissioners conducted an ocular inspection and hearing on the value of the property. On January 24, 1977, the
commissioners submitted their appraisal report finding that the fair market value of the property was P2,763,400. Both
parties objected to the report of the commissioners. The plaintiff contended that the commissioners' conclusion that the
fair market value of the property was unsupported by evidence and that their recommended just compensation of
P2,258,018.57 was excessive. It reiterated its stand that the just compensation should only be P1,800,000 it being the
price had the sale between the city school board and Avegon Inc. materialized and also the actual price of the sale
between Avegon Inc. and Amerex. On the other hand, Amerex averred that the recommended just compensation was
unjustified in view of the commissioners' finding that the fair market value of the property was P2,763,400.
The lower court believes that the findings of the commissioners are supported by the evidence adduced during the
hearings and that their recommendation is reasonable. The lower court rendered a decision funding the amount of
P2,258.018.57 as just compensation for the property of the defendant and declaring the plaintiff entitled to possess and
approximate it to the public use alleged in the complaint and to retain it upon payment of the said amount, after
deducting the amount of P1,303,470.00, with legal interest from October 13, 1975 when the plaintiff was placed in
possession of the real property, and upon payment to each of the commissioners of the sum of P35.00 for their
attendance during the hearings held on January 23, February 16, May 11, July 23, September 17, October 12 and
December 10, 1976, plus P500.00 each for the preparation of the report, and the costs.
The plaintiff elevated the case to the then Intermediate Appellate Court (IAC) for review. On October 29, 1984, it
affirmed the appealed decision with the modification that the plaintiff Republic of the Philippines be exempted from the
payment of the commissioners' fees, the P500.00 granted each of them for the preparation of the report and the costs.
Its motion for the reconsideration of said decision having been denied, petitioner filed the instant petition.
Issue/s: Whether respondent Court erred in determining the petitioner’s just compensation.
Ruling: YES. The Supreme Court holds that the courts below made an erroneous determination of just
compensation in this case. In the first place, the just compensation prescribed herein is based on the commissioners'
recommendation which in turn is founded on the "audited" statements of Amerex that the property is worth
P2,258,018.57. As earlier pointed out, while the court may accept the commissioners' report and render judgment in
accordance therewith, it may not do so without considering whether the report is supported by evidence . The court is
also duty-bound to determine whether the commissioners had discharged the trust reposed in them according to well-
established rules and formed their judgment upon correct legal principles for they are not supposed to act ad libitum .
Amerex's "audited" statement on the acquisition cost, cost of painting and major repairs, taxes, and insurance premiums
which totals P2,107,479.48. Amerex's other "audited" statement on the maintenance expenses of the property
wherein it allegedly incurred the amount of P150,539.09 contains a similar certification by the same accounting firm
specifically states that the auditor did not make an audit of the books of accounts of Amerex. It is clear
Page 178 of 306
from these certifications that the accounting firm which issued them merely compared the figures in the schedules or
"audited" statements with those of the records and books of accounts of Amerex. As no investigation was made as to the
veracity of the figures in the account, there was no audit in the real sense of the term. To audit is to examine an account,
compare it with the vouchers, adjust the same, and to state the balance, by persons legally authorized for the purpose.
While the word "audit" is sometimes restricted to a mere mathematical process, it generally includes investigation, the
weighing of evidence, and deciding whether items should or should not be included in the account. Audit involves the
exercise of discretion; it is a quasi-judicial function. The accuracy of the "audited" statements herein is therefore
suspect. Besides the fact that the petitioner was not furnished a copy of the audited statements which were also not
introduced in evidence, Enrique P. Esteban, vice-president and treasurer of Amerex, and even a representative of the
accounting firm, were likewise not presented during the trial thereby depriving petitioner herein of the opportunity to
cross-examine them. It would therefore be unfair to the petitioner to hold it bound by the "audited" statements of
Amerex which may have been premised on false or mistaken data.
This Court having declared as unconstitutional the mode of fixing just compensation under P.D. No. 794
just compensation should be determined either at the time of the actual taking of the government or at the
time of the judgment of the court, whichever comes first.
In this case, the issuance of the condemnation order and the actual taking of the property both occurred in
October, 1975. Accordingly, the appraisal made by Ampil Realty and Appraisal Co., Inc. on June 5, 1975,
which date is nearest to that of the actual taking of the property, should be the basis for the determination
of just compensation the record being bereft of any indications of anomaly appertaining thereto . It should
be added that the president of said appraisal firm, testified at the trial and therefore petitioner had the opportunity to
confront him and to question his report. The reasonableness of the June 5,1975 appraisal fixing at P2,400,000 the fair
market value of the property, is bolstered by the fact that on June 4, 1975, Traders Commodities Corporation, through its
lawyer, Sedfrey A. Ordoñez offered to buy the property at P2,750,000. It must be emphasized, however, that legal
interest on the balance of the just compensation of P2,400,000 after deducting the amount of P1,303,470 which had
been delivered to Amerex, should be paid by petitioner from the time the government actually took over the property.
Much as we realize the need of the government, under these trying times, to get the best possible price for
the expropriated property considering the ceaseless and continuing necessity for schools, we cannot agree
with the petitioner that the just compensation for the property should be the price it commanded when it
was first offered for sale to the City School Board of Manila. Petitioner failed to substantiate its claim that the
property is worth the lower amount of P1,800,000. In contrast, Amerex submitted evidence consisting of the aforesaid
June 5, 1975 appraisal report which fixed the fair market value of the property at P2,400,000.
WHEREFORE, the just compensation of the property expropriated for the use of the Manuel de la Fuente High School Don
Mariano Marcos Memorial High School) is hereby fixed at Two Million Four Hundred Thousand Pesos (P2,400,000.00).
Page 179 of 306
After deducting the amount of P1,303,470.00 therefrom, the petitioner shall pay the balance with legal interest from
October 13, 1975.
83) Short Title: Sec. of DPWH vs. Spouses Tecson (G.R. No. 179334, July 1, 2013 and April 21, 2015)
Long Title: G.R. No. 179334 July 1, 2013
SECRETARY OF THE DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS and DISTRICT ENGINEER CELESTINO R.
CONTRERAS, Petitioners, vs. SPOUSES HERACLEO and RAMONA TECSON, Respondents.
Facts: Respondent spouses Heracleo and Ramona Tecson (respondents) are co-owners of a parcel of land
in San Pablo, Malolos, Bulacan. Said parcel of land was among the properties taken by the government
sometime in 1940 without the owners consent and without the necessary expropriation proceedings and
used for the construction of the MacArthur Highway.
In a letter dated December 15, 1994, respondents demanded the payment of the fair market value of the
subject parcel of land. Petitioner Celestino R. Contreras (petitioner Contreras), then District Engineer of the
First Bulacan Engineering District of petitioner Department of Public Works and Highways (DPWH), offered to pay the
subject land at the rate ofP0.70 per square meter per Resolution of the Provincial Appraisal Committee (PAC)
of Bulacan. Unsatisfied with the offer, respondents demanded for the return of their property or the
payment of compensation at the current fair market value.
As their demand remained unheeded, respondents filed a Complaint for recovery of possession with
damages against petitioners, praying that they be restored to the possession of the subject parcel of land
and that they be paid attorneys fees. Respondents claimed that the subject parcel of land was assessed at
P2,543,800.00.
Instead of filing their Answer, petitioners moved for the dismissal of the complaint on the following grounds: (1) that the
suit is against the State which may not be sued without its consent; (2) that the case has already prescribed; (3) that
respondents have no cause of action for failure to exhaust administrative remedies; and (4) if respondents are entitled to
compensation, they should be paid only the value of the property in 1940 or 1941.
On June 28, 1995, the RTC issued an Ordergranting respondents motion to dismiss based on the doctrine of state
immunity from suit. As respondents claim includes the recovery of damages, there is no doubt that the suit is against the
State for which prior waiver of immunity is required. When elevated to the CA,the appellate court did not agree with the
RTC and found instead that the doctrine of state immunity from suit is not applicable, because the recovery of
compensation is the only relief available to the landowner. To deny such relief would undeniably cause injustice to the
landowner. Besides, petitioner Contreras, in fact, had earlier offered the payment of compensation although at a lower
rate.Thus, the CA reversed and set aside the dismissal of the complaint and, consequently, remanded the case to the trial
court for the purpose of determining the just compensation to which respondents are entitled to recover from the
government.With the finality of the aforesaid decision, trial proceeded in the RTC.
The Branch Clerk of Court was initially appointed as the Commissioner and designated as the Chairman of the Committee
that would determine just compensation,but the case was later referred to the PAC for the submission of a
Page 180 of 306
recommendation report on the value of the subject property.In PAC Resolution No. 99-007, the PAC recommended the
amount ofP1,500.00 per square meter as the just compensation for the subject property. On March 22, 2002, the RTC
ordered the state to pay the complainants P1,500.00 per square meter for the lot subject matter of this case. On appeal,
the CA affirmed the above decision with the modification that the just compensation stated above should earn interest of
six percent (6%) per annum computed from the filing of the action on March 17, 1995 until full payment.
In its appeal before the CA, petitioners raised the issues of prescription and laches, which the CA brushed aside on two
grounds: first, that the issue had already been raised by petitioners when the case was elevated before the CA in CA-G.R.
CV No. 51454. Although it was not squarely ruled upon by the appellate court as it did not find any reason to delve
further on such issues, petitioners did not assail said decision barring them now from raising exactly the same issues; and
second, the issues proper for resolution had been laid down in the pre-trial order which did not include the issues of
prescription and laches. Thus, the same can no longer be further considered. As to the propriety of the property’s
valuation as determined by the PAC and adopted by the RTC, while recognizing the rule that the just compensation
should be the reasonable value at the time of taking which is 1940, the CA found it necessary to deviate from the general
rule. It opined that it would be obviously unjust and inequitable if respondents would be compensated based on the value
of the property in 1940 which isP0.70 per sq m, but the compensation would be paid only today. Thus, the appellate
court found it just to award compensation based on the value of the property at the time of payment. It, therefore,
adopted the RTCs determination of just compensation ofP1,500.00 per sq m as recommended by the PAC. The CA further
ordered the payment of interest at the rate of six percent (6%) per annum reckoned from the time of taking, which is the
filing of the complaint on March 17, 1995.
Aggrieved, petitioners come before the Court assailing the CA decision.
Issue: Whether the just compensation should be based on the value of the property at the time of taking in 1940 and
not at the time of payment.
Ruling: Just compensation is the value of the property at the time of taking that is controlling for purposes
of compensation. When a property is taken by the government for public use, jurisprudence clearly provides for the
remedies available to a landowner. The owner may recover his property if its return is feasible or, if it is not, the
aggrieved owner may demand payment of just compensation for the land taken. For failure of respondents to question
the lack of expropriation proceedings for a long period of time, they are deemed to have waived and are estopped from
assailing the power of the government to expropriate or the public use for which the power was exercised. What is left to
respondents is the right of compensation. The trial and appellate courts found that respondents are entitled to
compensation. The only issue left for determination is the propriety of the amount awarded to respondents.
Just compensation is "the fair value of the property as between one who receives, and one who desires to
sell, fixed at the time of the actual taking by the government." This rule holds true when the property is
taken before the filing of an expropriation suit, and even if it is the property owner who brings the action
for compensation.
Page 181 of 306
The Court in previous cases was confronted with common factual circumstances where the government took control and
possession of the subject properties for public use without initiating expropriation proceedings and without payment of
just compensation, while the landowners failed for a long period of time to question such government act and later
instituted actions for recovery of possession with damages. The Court thus determined the landowner’s right to
the payment of just compensation and, more importantly, the amount of just compensation. The Court has
uniformly ruled that just compensation is the value of the property at the time of taking that is controlling
for purposes of compensation. Just compensation due respondents in this case should, therefore, be fixed
not as of the time of payment but at the time of taking, that is, in 1940.
The reason for the rule has been clearly explained in Republic v. Lara, et al.,and repeatedly held by the Court in recent
cases, thus: "The value of the property should be fixed as of the date when it was taken and not the date of the filing of
the proceedings." For where property is taken ahead of the filing of the condemnation proceedings, the value
thereof may be enhanced by the public purpose for which it is taken; the entry by the plaintiff upon the
property may have depreciated its value thereby; or, there may have been a natural increase in the value
of the property from the time it is taken to the time the complaint is filed, due to general economic
conditions. The owner of private property should be compensated only for what he actually loses; it is not
intended that his compensation shall extend beyond his loss or injury. And what he loses is only the actual
value of his property at the time it is taken.
Both the RTC and the CA recognized that the fair market value of the subject property in 1940 was P0.70/sq m. Hence, it
should, therefore, be used in determining the amount due respondents instead of the higher value which isP1,500.00.
While disparity in the above amounts is obvious and may appear inequitable to respondents as they would be receiving
such outdated valuation after a very long period, it is equally true that they too are remiss in guarding against the cruel
effects of belated claim. The concept of just compensation does not imply fairness to the property owner alone.
Compensation must be just not only to the property owner, but also to the public which ultimately bears the cost of
expropriation.
Clearly, petitioners had been occupying the subject property for more than fifty years without the benefit
of expropriation proceedings. In taking respondents property without the benefit of expropriation
proceedings and without payment of just compensation, petitioners clearly acted in utter disregard of
respondents proprietary rights which cannot be countenanced by the Court. For said illegal taking,
respondents are entitled to adequate compensation in the form of actual or compensatory damages which
in this case should be the legal interest of six percent (6%) per annum on the value of the land at the time of taking in
1940 until full payment. This is based on the principle that interest runs as a matter of law and follows from
the right of the landowner to be placed in as good position as money can accomplish, as of the date of
taking.
Page 182 of 306
Determination of Just Compensation

84) Short Title: EPZA vs. Dulay [149 SCRA 305 (1987)]
Long Title: G.R. No. L-59603 April 29, 1987

EXPORT PROCESSING ZONE AUTHORITY, petitioner, vs. HON. CEFERINO E. DULAY, in his capacity as the
Presiding Judge, Court of First Instance of Cebu, Branch XVI, Lapu-Lapu City, and SAN ANTONIO
DEVELOPMENT CORPORATION, respondents.
Facts: On January 15, 1979, the President of the Philippines, issued Proclamation No. 1811, reserving a certain
parcel of land of the public domain situated in the City of Lapu-Lapu, Island of Mactan, Cebu and covering a
total area of 1,193,669 square meters, more or less, for the establishment of an export processing zone by petitioner
Export Processing Zone Authority (EPZA). Not all the reserved area, however, was public land. The proclamation
included, among others, four (4) parcels of land owned and registered in the name of the private
respondent. The petitioner, therefore, offered to purchase the parcels of land from the respondent in
accordance with the valuation set forth in Section 92, Presidential Decree (P.D.) No. 464, as amended. The
parties failed to reach an agreement regarding the sale of the property.
The petitioner filed with the then Court of First Instance of Cebu, Branch XVI, Lapu-Lapu City, a complaint
for expropriation with a prayer for the issuance of a writ of possession against the private respondent, to
expropriate the aforesaid parcels of land pursuant to P.D. No. 66, as amended, which empowers the
petitioner to acquire by condemnation proceedings any property for the establishment of export
processing zones, in relation to Proclamation No. 1811, for the purpose of establishing the Mactan Export
Processing Zone.
On October 21, 1980, the respondent judge issued a writ of possession authorizing the petitioner to take immediate
possession of the premises. On December 23, 1980, the private respondent filed its answer.
At the pre-trial conference on February 13, 1981, the respondent judge issued an order stating that the parties have
agreed that the only issue to be resolved is the just compensation for the properties and that the pre-trial is thereby
terminated and the hearing on the merits is set on April 2, 1981. On February 17, 1981, the respondent judge issued the
order of condemnation declaring the petitioner as having the lawful right to take the properties sought to be condemned,
upon the payment of just compensation to be determined as of the filing of the complaint. The respondent judge also
issued a second order, subject of this petition, appointing certain persons as commissioners to ascertain and report to the
court the just compensation for the properties sought to be expropriated. The three commissioners submitted their
consolidated report recommending the amount of P15.00 per square meter as the fair and reasonable value of just
compensation for the properties.
On July 29, 1981, the petitioner made a Motion for Reconsideration of the order of February 19, 1981 and
Objection to Commissioner's Report on the grounds that P.D. No. 1533 has superseded Sections 5 to 8 of
Rule 67 of the Rules of Court on the ascertainment of just compensation through commissioners; and that
the compensation must not exceed the maximum amount set by P.D. No. 1533.
Page 183 of 306
On November 14, 1981, the trial court denied the petitioner's motion for reconsideration and gave the latter ten (10) days
within which to file its objection to the Commissioner's Report. On February 9, 1982, the petitioner filed this present
petition for certiorari and mandamus with preliminary restraining order, enjoining the trial court from enforcing the order
dated February 17, 1981 and from further proceeding with the hearing of the expropriation case.
Issue: Whether or not Sections 5 to 8, Rule 67 of the Revised Rules of Court had been repealed or deemed amended by
P.D. No. 1533 insofar as the appointment of commissioners to determine the just compensation is concerned. Stated in
another way,
Whether the exclusive and mandatory mode of determining just compensation in P.D. No. 1533 valid and
constitutional?
RULING: NO. Prior to the promulgation of P.D. Nos. 76, 464, 794 and 1533, this Court has interpreted the eminent
domain provisions of the Constitution and established the meaning, under the fundametal law, of just
compensation and who has the power to determine it. However, the promulgation of the aforementioned decrees
practically set aside many other precedents hammered out in the course of evidence-laden, well argued, fully heard,
studiously deliberated, and judiciously considered court proceedings. The decrees categorically and peremptorily limited
the definition of just compensation thus:
P.D. No. 76: "For purposes of just compensation in cases of private property acquired by the
government for public use, the basis shall be the current and fair market value declared by the
owner or administrator, or such market value as determined by the Assessor, whichever is lower."
P.D. No. 464: "Section 92. Basis for payment of just compensation in expropriation proceedings. — In
determining just compensation which private property is acquired by the government for public
use, the basis shall be the market value declared by the owner or administrator or anyone having
legal interest in the property, or such market value as determined by the assessor, whichever is
lower."
P.D. No. 794: "Section 92. Basis for payment of just compensation in expropriation proceedings. — In
determining just compensation when private property is acquired by the government for public use,
the same shall not exceed the market value declared by the owner or administrator or anyone
having legal interest in the property, or such market value as determined by the assessor,
whichever is lower."
P.D. No. 1533: "Section 1. In determining just compensation for private property acquired through
eminent domain proceedings, the compensation to be paid shall not exceed the value declared by
the owner or administrator or anyone having legal interest in the property or determined by the
assessor, pursuant to the Real Property Tax Code, whichever value is lower, prior to the
recommendation or decision of the appropriate Government office to acquire the property."
The Court is constrained to declare the provisions of the Decrees on just compensation unconstitutional
and void and accordingly dismiss the instant petition for lack of merit. The method of ascertaining just
Page 184 of 306
compensation under the aforecited decrees constitutes impermissible encroachment on judicial

prerogatives. It tends to render this Court inutile in a matter which under the Constitution is reserved to it
for final determination.
Thus, although in an expropriation proceeding the court technically would still have the power to determine the just
compensation for the property, following the applicable decrees, its task would be relegated to simply stating the lower
value of the property as declared either by the owner or the assessor. As a necessary consequence, it would be useless
for the court to appoint commissioners under Rule 67 of the Rules of Court. Moreover, the need to satisfy the due process
clause in the taking of private property is seemingly fulfilled since it cannot be said that a judicial proceeding was not had
before the actual taking. However, the strict application of the decrees during the proceedings would be nothing short of
a mere formality or charade as the court has only to choose between the valuation of the owner and that of the assessor,
and its choice is always limited to the lower of the two. The court cannot exercise its discretion or independence in
determining what is just or fair. Even a grade school pupil could substitute for the judge insofar as the determination of
constitutional just compensation is concerned.
We are convinced and so rule that the trial court correctly stated that the valuation in the decree may only
serve as a guiding principle or one of the factors in determining just compensation but it may not
substitute the court's own judgment as to what amount should be awarded and how to arrive at such
amount. A return to the earlier well-established doctrine, to our mind, is more in keeping with the principle that the
judiciary should live up to its mission "by vitalizing and not denigrating constitutional rights." The basic unfairness of the
decrees is readily apparent.
Just compensation means the value of the property at the time of the taking. It means a fair and full
equivalent for the loss sustained. All the facts as to the condition of the property and its surroundings, its
improvements and capabilities, should be considered. In this particular case, the tax declarations presented by the
petitioner as basis for just compensation were made by the Lapu-Lapu municipal, later city assessor long before martial
law, when land was not only much cheaper but when assessed values of properties were stated in figures constituting
only a fraction of their true market value. The private respondent was not even the owner of the properties at the time. It
purchased the lots for development purposes. To peg the value of the lots on the basis of documents which are out of
date and at prices below the acquisition cost of present owners would be arbitrary and confiscatory. Various factors can
come into play in the valuation of specific properties singled out for expropriation. The values given by provincial
assessors are usually uniform for very wide areas covering several barrios or even an entire town with the exception of
the poblacion. Individual differences are never taken into account. The value of land is based on such generalities as its
possible cultivation for rice, corn, coconuts, or other crops. Very often land described as "cogonal" has been cultivated for
generations. Buildings are described in terms of only two or three classes of building materials and estimates of areas are
more often inaccurate than correct. Tax values can serve as guides but cannot be absolute substitutes for just
compensation.
Page 185 of 306
To say that the owners are estopped to question the valuations made by assessors since they had the opportunity to
protest is illusory. The overwhelming mass of land owners accept unquestioningly what is found in the tax declarations
prepared by local assessors or municipal clerks for them. They do not even look at, much less analyze, the statements.
The Idea of expropriation simply never occurs until a demand is made or a case filed by an agency authorized to do so. It
is violative of due process to deny to the owner the opportunity to prove that the valuation in the tax documents is unfair
or wrong. And it is repulsive to basic concepts of justice and fairness to allow the haphazard work of a minor bureaucrat
or clerk to absolutely prevail over the judgment of a court promulgated only after expert commissioners have actually
viewed the property, after evidence and arguments pro and con have been presented, and after all factors and
considerations essential to a fair and just determination have been judiciously evaluated.
The determination of "just compensation" in eminent domain cases is a judicial function. The executive
department or the legislature may make the initial determinations but when a party claims a violation of
the guarantee in the Bill of Rights that private property may not be taken for public use without just
compensation, no statute, decree, or executive order can mandate that its own determination shall prevail
over the court's findings. Much less can the courts be precluded from looking into the "just-ness" of the
decreed compensation.
We, therefore, hold that P.D. No. 1533, which eliminates the court's discretion to appoint commissioners
pursuant to Rule 67 of the Rules of Court, is unconstitutional and void. To hold otherwise would be to
undermine the very purpose why this Court exists in the first place.
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby DISMISSED. The temporary restraining order issued
on February 16, 1982 is LIFTED and SET ASIDE.
85) Short Title: Benguet Consolidated, Inc. vs. Republic (143 SCRA 466)
Full Title:
REPUBLIC OF THE PHILIPPINES (DIRECTOR OF FOREST DEVELOPMENT), petitioner, vs. HON. COURT OF
APPEALS (THIRD DIVISION) and JOSE Y. DE LA ROSA, respondents.
G.R. No. L-44081 April 15, 1988
BENGUET CONSOLIDATED, INC., petitioner, vs.
HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORIA, BENJAMIN and EDUARDO, all surnamed DE LA
ROSA, represented by their father JOSE Y. DE LA ROSA, respondents.
G.R. No. L-44092 April 15, 1988
ATOK-BIG WEDGE MINING COMPANY, petitioner, vs.
HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORlA, BENJAMIN and EDUARDO, all surnamed DE LA
ROSA, represented by their father, JOSE Y. DE LA ROSA, respondents.
Page 186 of 306
Facts:
These cases arose from the application for registration of a parcel of land filed on February 11, 1965, by Jose de la Rosa
on his own behalf and on behalf of his three children, Victoria, Benjamin and Eduardo. The land, situated in Tuding,
Itogon, Benguet Province, was divided into 9 lots and covered by plan Psu-225009. According to the application, Lots 1-5
were sold to Jose de la Rosa and Lots 6-9 to his children by Mamaya Balbalio and Jaime Alberto, respectively, in 1964.
The application was separately opposed by Benguet Consolidated, Inc. as to Lots 1-5, Atok Big Wedge Corporation, as to
Portions of Lots 1-5 and all of Lots 6-9, and by the Republic of the Philippines, through the Bureau of Forestry
Development, as to lots 1-9.
In support of the application, both Balbalio and Alberto testified that they had acquired the subject land by
virtue of prescription Balbalio claimed to have received Lots 1-5 from her father shortly after the
Liberation. She testified she was born in the land, which was possessed by her parents under claim of
ownership. Alberto said he received Lots 6-9 in 1961 from his mother, Bella Alberto, who declared that the land was
planted by Jaime and his predecessors-in-interest to bananas, avocado, nangka and camote, and was enclosed with a
barbed-wire fence. She was corroborated by Felix Marcos, 67 years old at the time, who recalled the earlier possession of
the land by Alberto's father. Balbalio presented her tax declaration in 1956 and the realty tax receipts from that year to
1964, Alberto his tax declaration in 1961 and the realty tax receipts from that year to 1964.
Benguet opposed on the ground that the June Bug mineral claim covering Lots 1-5 was sold to it on September 22, 1934,
by the successors-in-interest of James Kelly, who located the claim in September 1909 and recorded it on October 14,
1909.
Atok alleged that a portion of Lots 1-5 and all of Lots 6-9 were covered by the Emma and Fredia mineral claims located
by Harrison and Reynolds on December 25, 1930, and recorded on January 2, 1931, in the office of the mining recorder
of Baguio.
Both Benguet and Atok have appealed to this Court, invoking their superior right of ownership. The Republic has filed its
own petition for review and reiterates its argument that neither the private respondents nor the two mining companies
have any valid claim to the land because it is not alienable and registerable.
Issue: Whether or not Benguet and Atok have exclusive rights to the property in question by virtue of their respective
mining claims which they validly acquired before the Constitution of 1935
Ruling:
YES. "The legal effect of a valid location of a mining claim is not only to segregate the area from the public
domain, but to grant to the locator the beneficial ownership of the claim and the right to a patent therefor upon
Page 187 of 306
compliance with the terms and conditions prescribed by law. Where there is a valid location of a mining claim, the area
becomes segregated from the public domain and the property of the locator."
"When a location of a mining claim is perfected it has the effect of a grant by the United States of the right
of present and exclusive possession, with the right to the exclusive enjoyment of all the surface ground as well as of
all the minerals within the lines of the claim , except as limited by the extralateral right of adjoining locators; and this is
the locator's right before as well as after the issuance of the patent. While a lode locator acquires a vested property right
by virtue of his location made in compliance with the mining laws, the fee remains in the government until patent issues."
It is of no importance whether Benguet and Atok had secured a patent for as held in the Gold Creek Mining
Corp. Case, for all physical purposes of ownership, the owner is not required to secure a patent as long as
he complies with the provisions of the mining laws; his possessory right, for all practical purposes of
ownership, is as good as though secured by patent.
The perfection of the mining claim converted the property to mineral land and under the laws then in force removed it
from the public domain. By such act, the locators acquired exclusive rights over the land, against even the government,
without need of any further act such as the purchase of the land or the obtention of a patent over it. As the land had
become the private property of the locators, they had the right to transfer the same, as they did, to Benguet and Atok.
It is true, as the Court of Appeals observed, that such private property was subject to the "vicissitudes of
ownership," or even to forfeiture by non-user or abandonment or, as the private respondents aver, by
acquisitive prescription. However, the method invoked by the de la Rosas is not available in the case at
bar, for two reasons.
First, the trial court found that the evidence of open, continuous, adverse and exclusive possession submitted by the
applicants was insufficient to support their claim of ownership. They themselves had acquired the land only in 1964 and
applied for its registration in 1965, relying on the earlier alleged possession of their predecessors-in-interest. 16
The trial
judge, who had the opportunity to consider the evidence first-hand and observe the demeanor of the witnesses and test
their credibility was not convinced. We defer to his judgment in the absence of a showing that it was reached with grave
abuse of discretion or without sufficient basis. 17
Second, even if it be assumed that the predecessors-in-interest of the de la Rosas had really been in possession of the
subject property, their possession was not in the concept of owner of the mining claim but of the property as agricultural
land, which it was not. The property was mineral land, and they were claiming it as agricultural land. They were not
disputing the lights of the mining locators nor were they seeking to oust them as such and to replace them in the mining
of the land. In fact, Balbalio testified that she was aware of the diggings being undertaken "down below" 18
but she did
not mind, much less protest, the same although she claimed to be the owner of the said land.
We agree likewise with the oppositors that having complied with all the requirements of the mining laws,
the claims were removed from the public domain, and not even the government of the Philippines can take away
this right from them. The reason is obvious. Having become the private properties of the oppositors, they cannot be
deprived thereof without due process of law.
This is an application of the Regalian doctrine which, as its name implies, is intended for the benefit of the State, not
of private persons. The rule simply reserves to the State all minerals that may be found in public and even private land
Page 188 of 306
devoted to "agricultural, industrial, commercial, residential or (for) any purpose other than mining." Thus, if a person is
the owner of agricultural land in which minerals are discovered, his ownership of such land does not give him the right to
extract or utilize the said minerals without the permission of the State to which such minerals belong.
Our holding is that Benguet and Atok have exclusive rights to the property in question by virtue of their
respective mining claims which they validly acquired before the Constitution of 1935 prohibited the
alienation of all lands of the public domain except agricultural lands, subject to vested rights existing at
the time of its adoption. The land was not and could not have been transferred to the private respondents
by virtue of acquisitive prescription, nor could its use be shared simultaneously by them and the mining
companies for agricultural and mineral purposes.
86) Short Title: Hacienda Luisita, Inc. vs. Presidential Agrarian Reform Council (G.R. No. 171101, April 24,
2012)
Full Title:
HACIENDA LUISITA, INCORPORATED, Petitioner,
LUISITA INDUSTRIAL PARK CORPORATION and RIZAL COMMERCIAL BANKING CORPORATION, Petitioners-
in-Intervention,
vs.
PRESIDENTIAL AGRARIAN REFORM COUNCIL; SECRETARY NASSER PANGANDAMAN OF THE DEPARTMENT
OF AGRARIAN REFORM; ALYANSA NG MGA MANGGAGAWANG BUKID NG HACIENDA LUISITA, RENE
GALANG, NOEL MALLARI, and JULIO SUNIGA1 and his SUPERVISORY GROUP OF THE HACIENDA LUISITA,
INC. and WINDSOR ANDAYA, Respondents.
Facts:
Before the Court are the Motion to Clarify and Reconsider Resolution of November 22, 2011 dated December 16, 2011
filed by petitioner Hacienda Luisita, Inc. (HLI) and the Motion for Reconsideration/Clarification dated December 9, 2011
filed by private respondents Noel Mallari, Julio Suniga, Supervisory Group of Hacienda Luisita, Inc. and Windsor Andaya
(collectively referred to as "Mallari, et al.").
On July 5, 2011, the Supreme Court en banc voted unanimously (11-0) to DISMISS/DENY the petition filed by HLI and
AFFIRM with MODIFICATIONS the resolutions of the PARC revoking HLI’s Stock Distribution Plan (SDP) and placing the
subject lands in Hacienda Luisita under compulsory coverage of the Comprehensive Agrarian Reform Program (CARP) of
the government.
HLI contends that since the SDP is a modality which the agrarian reform law gives the landowner as
alternative to compulsory coverage, then the FWBs cannot be considered as owners and possessors of the
agricultural lands of Hacienda Luisita at the time the SDP was approved by PARC. It further claims that the
approval of the SDP is not akin to a Notice of Coverage in compulsory coverage situations because stock distribution
Page 189 of 306
option and compulsory acquisition are two (2) different modalities with independent and separate rules and mechanisms.
Concomitantly, HLI maintains that the Notice of Coverage issued on January 2, 2006 may, at the very least, be
considered as the date of "taking" as this was the only time that the agricultural lands of Hacienda Luisita were placed
under compulsory acquisition in view of its failure to perform certain obligations under the SDP.
AMBALA further contends that if HLI or Tadeco is, at all, entitled to just compensation, the "taking" should
be reckoned as of November 21, 1989, the date when the SDP was approved, and the amount of
compensation should be PhP 40,000 per hectare as this was the same value declared in 1989 by Tadeco to
ensure that the FWBs will not control the majority stockholdings in HLI.
AMBALA alleges that HLI should no longer be paid just compensation for the agricultural land that will be
distributed to the FWBs, since the Manila Regional Trial Court (RTC) already rendered a decision ordering
the Cojuangcos to transfer the control of Hacienda Luisita to the Ministry of Agrarian Reform, which will
distribute the land to small farmers after compensating the landowners P3.988 million. In the event,
however, that this Court will rule that HLI is indeed entitled to compensation, AMBALA contends that it should be pegged
at forty thousand pesos (PhP 40,000) per hectare, since this was the same value that Tadeco declared in 1989 to make
sure that the farmers will not own the majority of its stocks.
The Court however did not order outright land distribution. Voting 6-5, the Court noted that there are operative
facts that occurred in the interim and which the Court cannot validly ignore. Thus, the Court declared that the revocation
of the SDP must, by application of the operative fact principle, give way to the right of the original 6,296 qualified
farmworkers-beneficiaries (FWBs) to choose whether they want to remain as HLI stockholders or [choose actual land
distribution]. It thus ordered the Department of Agrarian Reform (DAR) to “immediately schedule meetings with the said
6,296 FWBs and explain to them the effects, consequences and legal or practical implications of their choice, after which
the FWBs will be asked to manifest, in secret voting, their choices in the ballot, signing their signatures or placing their
thumbmarks, as the case may be, over their printed names.”
Issue: Whether or not in determining the just compensation, the date of "taking" is November 21, 1989, when PARC
approved HLI’s SDP [stock distribution plan] "in view of the fact that this is the time that the FWBS were considered to
own and possess the agricultural lands in Hacienda Luisita"
Ruling:
We maintain that the date of "taking" is November 21, 1989, the date when PARC approved HLI’s SDP per
PARC Resolution No. 89-12-2, in view of the fact that this is the time that the FWBs were considered to
own and possess the agricultural lands in Hacienda Luisita. To be precise, these lands became subject of the
agrarian reform coverage through the stock distribution scheme only upon the approval of the SDP, that is, November 21,
1989.
It is an established social and economic fact that the escalation of poverty is the driving force behind the
political disturbances that have in the past compromised the peace and security of the people as well as
the continuity of the national order. To subdue these acute disturbances, the legislature over the course of the
history of the nation passed a series of laws calculated to accelerate agrarian reform, ultimately to raise the material
Page 190 of 306
standards of living and eliminate discontent. Agrarian reform is a perceived solution to social instability. The edicts of
social justice found in the Constitution and the public policies that underwrite them, the extraordinary national
experience, and the prevailing national consciousness, all command the great departments of government to tilt the
balance in favor of the poor and underprivileged whenever reasonable doubt arises in the interpretation of the law. But
annexed to the great and sacred charge of protecting the weak is the diametric function to put every effort to arrive at an
equitable solution for all parties concerned: the jural postulates of social justice cannot shield illegal acts, nor do they
sanction false sympathy towards a certain class, nor yet should they deny justice to the landowner whenever truth and
justice happen to be on her side. In the occupation of the legal questions in all agrarian disputes whose outcomes can
significantly affect societal harmony, the considerations of social advantage must be weighed, an inquiry into the
prevailing social interests is necessary in the adjustment of conflicting demands and expectations of the people, and the
social interdependence of these interests, recognized.
Just compensation has been defined as "the full and fair equivalent of the property taken from its owner by the
expropriator." The measure is not the taker’s gain, but the owner’s loss. In determining just compensation, the price or
value of the property at the time it was taken from the owner and appropriated by the government shall be the basis. If
the government takes possession of the land before the institution of expropriation proceedings, the value should be fixed
as of the time of the taking of said possession, not of the filing of the complaint.
In Land Bank of the Philippines v. Livioco, the Court held that "the ‘time of taking’ is the time when the landowner
was deprived of the use and benefit of his property, such as when title is transferred to the Republic." 15 It
should be noted, however, that "taking" does not only take place upon the issuance of title either in the
name of the Republic or the beneficiaries of the Comprehensive Agrarian Reform Program (CARP).
"Taking" also occurs when agricultural lands are voluntarily offered by a landowner and approved by PARC
for CARP coverage through the stock distribution scheme, as in the instant case. Thus, HLI’s submitting its
SDP for approval is an acknowledgment on its part that the agricultural lands of Hacienda Luisita are
covered by CARP. However, it was the PARC approval which should be considered as the effective date of
"taking" as it was only during this time that the government officially confirmed the CARP coverage of
these lands.
Indeed, stock distribution option and compulsory land acquisition are two (2) different modalities under the
agrarian reform program. Nonetheless, both share the same end goal, that is, to have "a more equitable
distribution and ownership of land, with due regard to the rights of landowners to just compensation.
The Court agrees that the option given to the qualified FWBs whether to remain as stockholders of HLI or opt for land
distribution is neither iniquitous nor prejudicial to the FWBs. Nonetheless, the Court is not unmindful of the policy on
agrarian reform that control over the agricultural land must always be in the hands of the farmers. Contrary to the stance
of HLI, both the Constitution and RA 6657 intended the farmers, individually or collectively, to have control over the
agricultural lands of HLI; otherwise, all these rhetoric about agrarian reform will be rendered for naught.
87) Short Title: NPC vs. Ibrahim et. al. (G.R. No. 168732, June 29, 2007)
Full title:
Page 191 of 306
NATIONAL POWER CORPORATION, petitioner, vs.

LUCMAN G. IBRAHIM, OMAR G. MARUHOM, ELIAS G.MARUHOM, BUCAY G. MARUHOM, FAROUK G.
MARUHOM, HIDJARA G. MARUHOM, ROCANIA G. MARUHOM, POTRISAM G. MARUHOM, LUMBA G.
MARUHOM, SINAB G. MARUHOM, ACMAD G. MARUHOM, SOLAYMAN G. MARUHOM, MOHAMAD M.
IBRAHIM, and CAIRONESA M. IBRAHIM, respondents.
Facts:
Respondent Lucman G. Ibrahim, in his personal capacity and in behalf of his co-heirs instituted an action against
petitioner National Power Corporation (NAPOCOR) for recovery of possession of land and damages before the Regional
Trial Court (RTC) of Lanao del Sur. In their complaint, Ibrahim and his co-heirs claimed that they were owners of several
parcels of land. Sometime in 1978, NAPOCOR, through alleged stealth and without respondents’ knowledge and prior
consent, took possession of the sub-terrain area of their lands and constructed therein underground tunnels. The
existence of the tunnels was only discovered sometime in July 1992 by respondents and then later confirmed on
November 13, 1992 by NAPOCOR itself through a memorandum issued by the latter’s Acting Assistant Project Manager.
The tunnels were apparently being used by NAPOCOR in siphoning the water of Lake Lanao and in the operation of
NAPOCOR.
Respondent Omar G. Maruhom requested the Marawi City Water District for a permit to construct and/or install a
motorized deep well in Lot 3 located in Saduc, Marawi City but his request was turned down because the construction of
the deep well would cause danger to lives and property. On October 7, 1992, respondents demanded that NAPOCOR pay
damages and vacate the sub-terrain portion of their lands but the latter refused to vacate much less pay damages.
Respondents further averred that the construction of the underground tunnels has endangered their lives and properties
as Marawi City lies in an area of local volcanic and tectonic activity. Further, these illegally constructed tunnels caused
them sleepless nights, serious anxiety and shock thereby entitling them to recover moral damages and that by way of
example for the public good, NAPOCOR must be held liable for exemplary damages.
Disputing respondents’ claim, NAPOCOR filed an answer with counterclaim denying the material allegations of the
complaint and interposing affirmative and special defenses, namely that (1) there is a failure to state a cause of action
since respondents seek possession of the subterrain portion when they were never in possession of the same , (2)
respondents have no cause of action because they failed to show proof that they were the owners of the property , and
(3) the tunnels are a government project for the benefit of all and all private lands are subject to such easement as may
be necessary for the same. Ibrahim, joined by his co-heirs, filed an Urgent Motion for Execution of Judgment Pending
Appeal. On the other hand, NAPOCOR filed a Notice of Appeal. Thereafter, NAPOCOR filed a vigorous opposition to the
motion for execution of judgment pending appeal with a motion for reconsideration of the Decision. NAPOCOR filed a
Manifestation and Motion withdrawing its Notice of Appeal purposely to give way to the hearing of its motion for
reconsideration. The RTC issued an Order granting execution pending appeal and denying NAPOCOR’s motion for
reconsideration.
Page 192 of 306
NAPOCOR filed its Notice of Appeal by registered mail which was denied by the RTC on the ground of having been filed
out of time. Meanwhile, the Decision of the RTC was executed pending appeal and funds of NAPOCOR were garnished by
respondents Ibrahim and his co-heirs.
The RTC granted the petition and rendered a modified judgment. Subsequently, both respondent Ibrahim and NAPOCOR
appealed to the CA. The CA set aside the modified judgment and reinstated the original decision amending it further by
deleting the award of moral damages and reducing the amount of rentals and attorney’s fees
Issue: Whether respondents are entitled to just compensation hinges upon who owns the sub-terrain area occupied by
petitioner.
Ruling:
The general rule in determining "just compensation" in eminent domain is the value of the property as of
the date of the filing of the complaint, as follows:
"Sec. 4. Order of Condemnation. When such a motion is overruled or when any party fails to defend as required by this
rule, the court may enter an order of condemnation declaring that the plaintiff has a lawful right to take the property
sought to be condemned, for the public use or purpose described in the complaint, upon the payment of just
compensation to be determined as of the date of the filing of the complaint
Normally, the time of the taking coincides with the filing of the complaint for expropriation. Hence, many
ruling of this Court have equated just compensation with the value of the property as of the time of filing
of the complaint consistent with the above provision of the Rules. So too, where the institution of the
action precedes entry to the property, the just compensation is to be ascertained as of the time of filing of
the complaint.
The general rule, however, admits of an exception: where this Court fixed the value of the property as of
the date it was taken and not the date of the commencement of the expropriation proceedings.
In the old case of Provincial Government of Rizal vs. Caro de Araullo, the Court ruled that "x x x the owners of the land
have no right to recover damages for this unearned increment resulting from the construction of the public improvement
(lengthening of Taft Avenue from Manila to Pasay) from which the land was taken. To permit them to do so would be to
allow them to recover more than the value of the land at the time it was taken, which is the true measure of the
damages, or just compensation, and would discourage the construction of important public improvements."
But there is yet another cogent reason why this petition should be denied and why the respondent Court should be
sustained. An examination of the undisputed factual environment would show that the "taking" was not really made in
1978.
Page 193 of 306
This Court has defined the elements of "taking" as the main ingredient in the exercise of power of eminent domain, in
the following words:
"A number of circumstances must be present in "taking" of property for purposes of eminent domain: (1)
the expropriator must enter a private property; (2) the entrance into private property must be for more
than a momentary period; (3) the entry into the property should be under warrant or color of legal
authority; (4) the property must be devoted to a public use or otherwise informally appropriated or
injuriously affected; and (5) the utilization of the property for public use must be in such a way to oust the
owner and deprive him of all beneficial enjoyment of the property."(Italics supplied)
In this case, the petitioner’s entrance in 1978 was without intent to expropriate or was not made under warrant or color
of legal authority, for it believed the property was public land covered by Proclamation No. 1354. When the private
respondent raised his claim of ownership sometime in 1979, the petitioner flatly refused the claim for compensation,
nakedly insisted that the property was public land and wrongly justified its possession by alleging it had already paid
"financial assistance" to Marawi City in exchange for the rights over the property. Only in 1990, after more than a decade
of beneficial use, did the petitioner recognize private respondent’s ownership and negotiate for the voluntary purchase of
the property. A Deed of Sale with provisional payment and subject to negotiations for the correct price was then
executed. Clearly, this is not the intent nor the expropriation contemplated by law.
This is a simple attempt at a voluntary purchase and sale. Obviously, the petitioner neglected and/or refused to exercise
the power of eminent domain.
88) NPC vs Spouses Zabala

Long title: G.R. No. 173520 January 30, 2013
NATIONAL POWER CORPORATION, Petitioner, vs.
SPOUSES RODOLFO ZABALA and LILIA BAYLON, Respondents.
FACTS:
On October 27, 1994, plaintiff-appellant National Power Corporation (Napocor) filed a complaint for Eminent
Domain against defendants-appellees Sps. R. Zabala & L. Baylon, before the RTC, Balanga City, Bataan alleging
that Spouses Zabala and Baylon own parcels of land located in Balanga City, Bataan and that it urgently
needed an easement of right of way over the affected areas for its 230 KV Limay-Hermosa Transmission
Lines.
The Commissioners submitted their Report/ Recommendation fixing the just compensation at P150.00 per
square meter. Napocor prayed that the report be recommitted to the commissioners for the modification of
the report and the substantiation of the same with reliable and competent documentary evidence based on
the value of the property at the time of its taking. The Commissioners submitted their Final Report fixing the just
compensation at P500.00 per square meter.
Page 194 of 306
On June 28, 2004, the RTC rendered its Partial Decision and ordered Napocor to pay Php150.00 per square
meter for the 6,820 square meters determined as of the date of the taking of the property.
Napocor appealed to the CA arguing that the Commissioners reports are not supported by documentary
evidence. Napocor argued that the RTC did not apply Section 3A of R.A. No. 6395 which limits its liability to easement
fee of not more than 10% of the market value of the property traversed by its transmission lines. CA affirmed the RTCs
Partial Decision.
ISSUE: Whether or not the RTC erred in fixing the amount of Php150.00 per square meter as the fair
market value of the property subject of the easement right of way of Napocor?
HELD: YES.
REMEDIAL LAW: commissioners report

The just compensation of P150.00 per square meter as fixed by the RTC is not supported by evidence. Just
compensation cannot be arrived at arbitrarily. Several factors must be considered, such as, but not limited
to, acquisition cost, current market value of like properties, tax value of the condemned property, its size,
shape, and location. But before these factors can be considered and given weight, the same must be supported by
documentary evidence.
Under Section 8, Rule 67 of the Rules of Court, the trial court may accept or reject, whether in whole or in part, the
commissioners report which is merely advisory and recommendatory in character. It may also recommit the report or set
aside the same and appoint new commissioners. In this case, however, in spite of the insufficient and flawed reports of
the Commissioners and Napocors objections thereto, the RTC eventually adopted the same. It shrugged off Napocors
protestations and limited itself to the reports submitted by the Commissioners.
Lastly, it should be borne in mind that just compensation should be computed based on the fair value of the
subject property at the time of its taking or the filing of the complaint, whichever came first. Since in this
case the filing of the eminent domain case came ahead of the taking, just compensation should be based
on the fair market value of spouses Zabalas property at the time of the filing of Napocors Complaint on
October 27, 1994 or thereabouts.
CONSTITUTIONAL LAW: just compensation

Sec. 3A of RA No. 6395 cannot restrict the constitutional power of the courts to determine just
compensation. The payment of just compensation for private property taken for public use is guaranteed
no less by our Constitution and is included in the Bill of Rights. As such, no legislative enactments or
Page 195 of 306
executive issuances can prevent the courts from determining whether the right of the property owners to
just compensation has been violated. It is a judicial function that cannot be usurped by any other branch
or official of the government. Statutes and executive issuances fixing or providing for the method of
computing just compensation are not binding on courts and, at best, are treated as mere guidelines in
ascertaining the amount thereof.
The Supreme Court has held in a long line of cases that since the high- tension electric current passing
through the transmission lines will perpetually deprive the property owners of the normal use of their land,
it is only just and proper to require Napocor to recompense them for the full market value of their
property.
Petition is PARTIALLY GRANTED. Case is REMANDED to the RTC for the proper determination of just
compensation.
89) NPC vs Marasigan

Long title: G.R. No. 220367
NATIONAL POWER CORPORATION, Petitioner vs.
APOLONIO V. MARASIGAN, FRANCISCO V. MARASIGAN, LILIA V. MARASIGAN, BENITO V. MARASIGAN, JR.,
and ALICIA V. MARASIGAN, Respondents
NPC expropriated properties belonging to Marasigan et al. NPC offered to pay 299,550.50 which Marasigan
opposed as they allege that they should be paid Php 47,064,400.
NPC alleges that the reckoning point for the market value should be the time of the taking of the
properties which they claim they did in the 1970s and this preceded their filing of the expropriation
complaint on Jan 23, 2006.
The general rule is that it should be reckoned at the time of actual taking when it preceded the filing of the complaint.
Under Rule 67, Sec 4; the value of just compensation is to be determined as of the date of the taking of the property or
the filing of the complaint, whichever came first. Since there was no proof that they took the properties in the 1970s, the
time of the taking should be taken to mean as coinciding with the commencement of the expropriation proceedings on
January 23, 2006 (the time of the filing of the complaint)
Since there was no proof that they took the properties in the 1970s, the time of the taking should be taken
to mean as coinciding with the commencement of the expropriation proceedings on January 23, 2006 (the
time of the filing of the complaint)
Page 196 of 306
FACTS:
NPC filed an expropriation committee against Marasigan in order to construct Steel Transmission Lines and Wooden
electric poles.
NPC sought an easement of right of way over the subject properties. Based on the tax declaration which classified the
properties as agricultural and based on the BIR zoning valuations, NPC offered to pay Php 299,550.50
Marasigan did not object to the expropriation but opposed the classification since they allege that it is classified as
industrial, commercial, and residential since 1993. They then claim Php 47,064,400 for the affected properties. As
counterclaim, they also seek payment of consequential damages for the areas in between the transmission lines (dangling
portions).
RTC issued an Expropriation order and fixed the value of the properties at Php 47,064,400 which was deposited by NPC
with Landbank. RTC then issued a writ of possession in favor of NPC.
An appraisal committee was formed by the RTC for purposes of determining just compensation. A reverse trial thereafter
ensued.
Marasigan presented the Chairman of the appraisal committee who testified that the appraisal committee recommended
the total valuation of PhP 49,064,400 based on the assessor's data and the BIR zonal valuations as indicated on the 1997
tax declarations. Also presented was the succeeding Chairman of the appraisal committee who testified that the
properties suffered consequential damages which the appraisal committee recommended to be computed at 50% of the
BIR zonal value per square meter or for a total amount of PhP 22,227,800.
On ocular inspection, the appraisal committee found that the existence of the transmission lines hampered the properties'
potential use such that while the areas before and after the transmission lines could still be used, the areas in between
could no longer be utilized. The appraisal committee also noted that the transmission lines produced considerable noise
making the area unsuitable for residential purposes.
NPC presented its right-of-way officers whose testimonies sought to establish that the lots being claimed by Marasigan as
dangling areas were classified as agricultural under the tax declarations and that NPC negotiated with Marasigan, and
that NPC took the properties between 1996 and 1998.
NPC’s officers alleged that the dangling areas could still be used for agricultural purposes but agreed that the lines may
endanger people and animals
On cross-examination, the right of way officer admitted that the properties were classified as agro industrial as stated in
the 1998 tax declarations. He admitted that the classification of the properties as agricultural which was used as basis for
computing its value was erroneous.
RTC affirmed the recommendation of the appraisal committee for payment of the Just compensation in the amount of
47,064,400 based on the BIR zonal valuation as of the time of the filing of the complaint on Jan 23, 2006. It also affirmed
tha payment of the consequential damages for the properties that were rendered useless.
RTC rejected NPC’s claim that it took the properties in 1972 when NPC was allegedly allowed by Marasigan
to construct the lines.
NPC’s Motion for Reconsideration was denied by RTC but the court made modifications by including
interest (6%, 12%)
Page 197 of 306
On their appeal to the CA, they alleged that the award was based on the premise that it sought to acquire ownership
when it merely sought to acquire right-of-way; the payment of which is only 10% of the market-value of the properties.
The CA held that payment of the full value was Just Compensation. It was also held that NPC failed to
allege the issue of taking in its complaint nor was it raised during pre-trial or even proved during trial. The
CA denied their appeal and affirmed the RTC in toto.
ISSUE: WON the just compensation for the subject land areas is be computed on time of the alleged
taking? PhP 47,064,400?
a. The valuation used in arriving at the fair market value of the property.
b. When just compensation was computed.
c. How just compensation was computed.
HELD:
A. The affected land areas were classified as industrial, commercial and residential since the year 1993 as shown by
(1) Sangguniang Bayan Resolution No. 17; (2) Municipal Ordinance No. 7 dated February 1, 1993; (3) annotations on
the memorandum of encumbrances of the titles; (4) DARCO Conversion Order No. 050301016014-(300)-00, Series of
2000 issued by the Department of Agrarian Reform; and (5) Certification issued by the Municipal Assessor of Pili,
Camarines Sur. Moreover, an appraisal committee formed by the RTC for purposes of determining just compensation,
recommended the total valuation of PhP 49,064,400 based on the assessor's data and the BIR zonal valuations as
indicated on the 1997 tax declarations.
B. NPC's expropriation complaint filed on January 23, 2006 clearly sought "to acquire an easement of right-of-way
over portions of the subject properties to enable it "to construct and maintain its steel transmission lines and wooden
electric poles. NPC's action relative to the acquisition of an easement of right-of-way made prior to the filing of its
expropriation complaint was limited only to the conduct of negotiations with respondents. This, as much, was alleged
by NPC itself in its expropriation complaint and was testified to by NPC's right-of-way officer who conducted the
negotiations in 1996.
There being no sufficient proof that NPC actually took the subject properties at a date preceding the filing
of the expropriation complaint, the time of the taking should be taken to mean as coinciding with the
commencement of the expropriation proceedings on January 23, 2006. Hence, the value at the time of the
filing of the complaint should be the basis for the determination of the value when the taking of the
property involved coincides with or is subsequent to the commencement of the proceedings.
C. The subject properties in this case had been reclassified as residential, commercial and industrial
several years before the expropriation complaint was filed as provided by several pertinent documents like
the Sangguniang Bayan Resolution. In any case, reliance on the tax declarations attached to NPC's
Page 198 of 306
expropriation complaint to classify the properties as purely agricultural is inaccurate as these very
same tax declarations reveal that portions of the expropriated Lot No. 4237 and Lot No. 2870 are in
fact classified as residential and commercial. Thus, the payment of P47,064,400.00 for the 49,173 square
meters area directly affected by the transmission lines is the payment for the just compensation.
DECISION:
WHEREFORE, the Petition is DENIED. The Decision dated September 1, 2015 of the Court of Appeals, which affirmed
the Decision dated December 20, 2010 of the Regional Trial Court of Pili, Camarines Sur, isAFFIRMED with
MODIFICATION such that the interest imposed on the amount of PhP 47,064,409 is DELETED and that the
award of consequential damages in the amount of PhP 22,227,800 shall earn interest at the rate of 12% per
annum from January 23, 2006 until June 30, 2013 and the interest rate of 6% per annum is imposed from July 1, 2013
until fully paid.
WHEN DETERMINED
90) NAPOCOR vs Tiangco
G.R. No. 170846 February 6, 2007
NATIONAL POWER CORPORATION, Petitioner, vs.
AURELLANO S. TIANGCO, LOURDES S. TIANGCO and NESTOR S. TIANGCO, Respondents.
FACTS:
Tiangcos, are the owners of a parcel of land with an area of 152,187 square meters at Barangay Sampaloc, Tanay,
Rizal. NAPOCOR, a GOCC, created for the purpose of undertaking the development and generation of power
from whatever source. NPC’s charter authorizes the corporation to acquire private property and exercise
the right of eminent domain.
NPC requires 19,423 square meters of the respondents’ aforementioned property, across which its 500Kv
Kalayaan-San Jose Transmission Line Project will traverse. NPC’s Segregation Plan for the purpose shows that the desired
right-of-way will cut through the respondents’ land.
After repeated unsuccessful negotiations with the respondents, NPC filed with the RTC a complaint for
expropriation against them which the RTC issued Condemnation Order, granting NPC the right to take
possession of the area sought to be expropriated. Which RTC subsequently ordered directing NPC to pay
and deposit with the Rizal Provincial Treasurer an amount representing the temporary provisional value of
the area subject of the expropriation prior to the possession. The RTC rendered judgment expropriating in favor
of NAPOCOR a parcel of land covering a total area and ordered the amount of P40,594.07 as just compensation and the
amount of P324,750.00 as reasonable compensation for the improvements on the land expropriated.
Page 199 of 306
The respondents moved for reconsideration, contending that for the year 1985, 1992, 1994 that the lands valued at
₱30.00, ₱80.00, ₱100.00 per square meter respectively supported by the BIR Circular Appraisal document.
NAPOCOR made it clear that it is interested only in acquiring an easement of right-of-way over the
respondents’ property and that ownership of the area over which the right-of-way will be established shall
remain with the respondents. For this reason, NPC claims that it should pay, in addition to the agreed or
adjudged value of the improvements on the area, only an easement fee in an amount equivalent to 10% of
the market value of the property as declared by the respondents or by the Municipal Assessor, whichever is lower, as
provided for under Section 3-A of Republic Act No. 6395, as amended by Presidential Decree 938.
The trial court made a determination that the market value of the property is ₱2.09 per square meter and
not the ₱30.00 per square meter claimed by the respondents. Neither did the trial court consider NPC’s reliance
on Section 3-A of Republic Act No. 6395, as amended by Presidential Decree 938 , the court placing more weight on
the respondents’ argument that expropriation would result in the substantial impairment of the use of the
area needed, even though what is sought is a mere aerial right-of-way.
From the aforesaid decision of the trial court, both NAPOCOR and the respondents went on appeal to the
CA. The appellate court found merit in the respondents’ appeal, and disregarded the ₱2.09 per square
meter valuation of the trial court, which was based on a 1984 tax declaration. Instead, the CA placed reliance
upon a 1993 tax declaration, "being only two years removed from the time of taking." The appellate court
determined the time of taking to be in 1991.
ISSUE:
1. Is the just compensation to be based on the 1984 or the 1993 valuation?
2. Should NAPOCOR pay for the value of the land being taken, or should it be limited to what is provided for under P.D.
938, that is, ten per cent (10%) of its market value as declared by the owner or the assessor (whichever is lower),
considering that the purpose for which the property is being taken is merely for the establishment of a safe and free
passage for its overhead transmission lines?
HELD:
1. In eminent domain cases, the time of taking is the filing of the complaint, if there was no actual taking
prior thereto. Hence, in this case, the value of the property at the time of the filing of the complaint on
November 20, 1990 should be considered in determining the just compensation due the respondents.
Normally, the time of the taking coincides with the filing of the complaint for expropriation. The trial court
fixed the value of the property at its 1984 value, while the CA, at its 1993 worth. Neither of the two
determinations is correct. For purposes of just compensation, the respondents should be paid the value of
the property as of the time of the filing of the complaint which is deemed to be the time of taking the
property. The expropriation proceedings in this case having been initiated by NAPOCOR on November 20, 1990,
property values on such month and year should lay the basis for the proper determination of just compensation. The
equivalent to be rendered for the property to be taken shall be substantial, full, ample and, as must apply to this case,
real. This must be taken to mean, among others, that the value as of the time of taking should be the price to be paid the
property owner. In this case, this simply means the property’s fair market value at the time of the filing of the complaint.
Page 200 of 306
In the determination of such value, the court is not limited to the assessed value of the property or to the
schedule of market values determined by the provincial or city appraisal committee; these values consist
but one factor in the judicial valuation of the property. The nature and character of the land at the time of its
taking is the principal criterion for determining how much just compensation should be given to the landowner. All the
facts as to the condition of the property and its surroundings, as well as its improvements and capabilities, should be
considered. Neither of the two determinations made by the courts below is therefore correct. A new one must be arrived
at, taking into consideration the foregoing pronouncements.
2. True, an easement of a right-of-way transmits no rights except the easement itself, and the respondents would retain
full ownership of the property taken. Nonetheless, the acquisition of such easement is not gratis. The limitations on the
use of the property taken for an indefinite period would deprive its owner of the normal use thereof. For this reason, the
latter is entitled to payment of a just compensation, which must be neither more nor less than the monetary equivalent of
the land taken. If the easement is intended to perpetually or indefinitely deprive the owner of his proprietary rights
through the imposition of conditions that affect the ordinary use, free enjoyment and disposal of the property or through
restrictions and limitations that are inconsistent with the exercise of the attributes of ownership, or when the introduction
of structures or objects which, by their nature, create or increase the probability of injury, death upon or destruction of
life and property found on the land is necessary, then the owner should be compensated for the monetary equivalent of
the land. As correctly observed by the CA, considering the nature and the effect of the installation power lines, the
limitations on the use of the land for an indefinite period would deprive respondent of normal use of the property. For this
reason, the latter is entitled to payment of a just compensation, which must be neither more nor less than the monetary
equivalent of the land.
91) Short Title: City of Cebu vs. Spouses Dedamo (G.R. No. 142971, May 7, 2002)
Full Title: [G.R. No. 142971. May 7, 2002.]
THE CITY OF CEBU, Petitioner, v. SPOUSES APOLONIO and BLASA DEDAMO, Respondents.
Facts:
The City of Cebu filed a complaint for eminent domain against the spouses Apolonio and Blasa Dedamo,
alleging that it needed their two parcels of land for a public purpose, i.e. for the construction of a public
road.
The total area sought to be expropriated is 1,624 square meters with an assessed value of P1,786,400.
The City of Cebu deposited with the Philippine National Bank the amount representing 15% of the fair market
value of the property to enable the petitioner to take immediate possession of the property pursuant to
Section 19 of R.A. No. 7160.
Dedamo filed a motion to dismiss the complaint because of the following reasons:
(a) That the purpose for which their property was to be expropriated was not for public use, but for
benefit of a single private entity;
Page 201 of 306
(b) That the price offered was very low; and

(c) That they have no other land in Cebu City.
A pre-trial ensued, but the parties executed and submitted to the trial court an Agreement to partially settle the case.
Thereafter, the trial court directed the City of Cebu to pay the Dedamo the just compensation of
P24,865,930.00 based on the recommendation of the appointed commissioners. But the said compensation was
amended to P20,826,339.50, excluding an area which was not subject to expropriation.
The City of Cebu elevated the case to the CA, asserting that the value of just compensation should be
based on the date of the filing of the complaint. But the CA affirmed in toto the decision of the trial court.
Issue:
WoN just compensation should be determined as of the date of the filing of the complaint pursuant to
Section 4, Rule 67 of the Rules of Court.
Ruling:
No, the Court holds that just compensation shall be determined by the proper court, based on the
fair market value at the time of the taking of the property in accordance with Section 19 of R.A. No. 7160,
a substantive law that must prevail over procedural law.
Under Art. 1315 also, contracts are perfected by mere consent, and from that moment the parties
are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences
which, according to their nature, may be in keeping with good faith, usage and law.
In the case at bar, the parties agreed to be bound by the report of the commission and approved by the trial
court. The agreement is a contract between the parties. It has the force of law between them and should be complied
with in good faith. Since the petitioner did not interpose a serious objection during the hearing, it is therefore too late for
petitioner to question the valuation.
Thus, the petition is DENIED.
92) Short Title: Ansaldo vs. Tantuico (G.R. 50147, August 3, 1990)
Full Title: [G.R. No. 50147. August 3, 1990.]
JOSE MA. ANSALDO, for himself and as attorney-in-fact of Maria Angela Ansaldo, Petitioners, v.
FRANCISCO S. TANTUICO, JR., Acting Chairman, Commission on Audit, and BALTAZAR AQUINO, Minister of
Public Highways, Respondents.
Facts: The lots belong to the petitioners are covered by title in their names. These lots were taken from the
Ansaldos sometime in 1947 by the Department of Public Work Transportation and Communication and made
part of what used to be Sta. Mesa Street and is now Ramon Magsaysay Avenue at San Juan, Metro Manila. This, to
repeat, without demur on the part of the owners. Said owners made no move whatever until twenty-six years later. They
wrote to ask for compensation for their land on January 22, 1973. Their claim was referred to the Secretary
of Justice who in due course rendered an opinion dated February 22, 1973, that just compensation should be
Page 202 of 306
paid in accordance with Presidential Decree No. 76. The Decree provided that the basis for the payment of
just compensation of property taken for public use should be the current and fair market value thereof as
declared by the owner or administrator, or such market value as determined by the assessor, whichever
was lower. The Secretary of Justice thus advised that the corresponding expropriation suit be forthwith instituted to fix
the just compensation to be paid to the Ansaldos.
Pursuant to this opinion, the Commissioner of Public Highways requested the Provincial Assessor of Rizal to
make a redetermination of the market value of the Ansaldos’ property in accordance with PD 76. The new
valuation was made, after which the Auditor of the Bureau of Public Highways forwarded the Ansaldos’ claim to the
Auditor General with the recommendation that payment be made on the basis of the “current and fair market
value, . . . and not on the fair market value at the time of taking.
The Commission on Audit, however, declined to adopt the recommendation. In a decision handed down on September
26, 1973, the Acting Chairman ruled that “the amount of compensation to be paid to the claimants is to be
determined as of the time of the taking of the subject lots, 8 i.e. 1947. The ruling was reiterated by the
Commission on September 8, 1978, and again on January 25, 1979 when it denied the Ansaldos’ motion for
reconsideration. It is these rulings of the Commission on Audit that the Ansaldos have appealed to this Court.
Issue: Whether the amount of compensation to be paid to the claimants is to be determined as of the time
of the taking of the subject land?
Held: Yes which is in 1947. there is a “taking” when the owner is actually deprived or dispossessed of his
property; when there is a practical destruction or a material impairment of the value of his property or
when he is deprived of the ordinary use thereof. There is a “taking” in this sense when the expropriator
enters private property not only for a momentary period but for a more permanent duration, for the
purpose of devoting the property to a public use in such a manner as to oust the owner and deprive him of
all beneficial enjoyment thereof. For ownership, after all, “is nothing without the inherent rights of
possession, control and enjoyment. Where the owner is deprived of the ordinary and beneficial use of his
property or of its value by its being diverted to public use, there is taking within the Constitutional sense.
Under these norms, there was undoubtedly a taking of the Ansaldos’ property when the Government
obtained possession thereof and converted it into a part of a thoroughfare for public use. Clearly, then, the
value of the Ansaldos’ property must be ascertained as of the year 1947, when it was actually taken, and not at the time
of the filing of the expropriation suit, which, by the way, still has to be done. It is as of that time that the real measure of
their loss may fairly be adjudged. The value, once fixed, shall earn interest at the legal rate until full payment is effected,
conformably with other principles laid down by case law.
93) Short Title: Tiongson et. al. vs. NHA (G.R. No. 140377, July 14, 2008)
Full Title: [G.R. No. 140377, July 14, 2008]
Page 203 of 306
PETITIONER: PATRICIA L. TIONGSON, SPS. EDUARDO GO and PACITA GO, ROBERTO LAPERAL III, ELISA
MANOTOK, MIGUEL A.B. SISON, ET AL. RESPONDENTS: NATIONAL HOUSING AUTHORITY,
Facts:
In a situation where a government agency, in this case the National Housing Authority, took possession of properties
belonging to private individuals for purposes of expropriation and the laws by virtue of which such government agency
expropriated the subject properties were subsequently declared to be unconstitutional by the Supreme Court, the
determination of just compensation should be reckoned from the date of filing the complaint for expropriation and not
from the time of actual taking of the properties.
Respondent National Housing Authority (NHA) took possession in 1978, for purposes of expropriation, of
properties belonging to petitioners Patricia L. Tiongson, et al. pursuant to P.D. Nos. 1669 and 1670. The
two P.D.’s were thereafter declared unconstitutional by the Supreme Court. On September 14, 1987, the
NHA filed before the Regional Trial Court (RTC) a complaint against Tiongson, et al. for expropriation of
parcels of land which were covered by P.D. Nos. 1669 and 1670.
The RTC held that the determination of just compensation of the properties should be reckoned from the
date of filing of NHA’s petition or on September 14, 1987. However, on appeal, the Court of Appeals reversed
and set aside the trial court’s orders and held that the just compensation should be based on the actual
taking of the property in 1978. Hence, this petition.
Issue:
Whether or not just compensation should be reckoned from the time of the taking of the property or on the filing of the
complaint
Held:
DOCTRINE: Just compensation of properties must be reckoned from the date of the filing of the complaint
for expropriation.
YES. In declaring, in its challenged Decision, that the determination of just compensation should be reckoned
from NHA’s taking of the properties in 1978, the appellate court simply relied on Annex ―C of NHA’s petition before
it, the Order dated June 15, 1988 of the then Presiding Judge of the trial court, and thus concluded that ―the parties
admitted that [NHA] took possession of the subject properties as early as 1978 . If the filing occurs AFTER
the actual taking, just compensation is determined as of the date of taking. The appellate court reached that
conclusion, despite its recital of the antecedents of the case including Tiongson, sustained moves, even before the trial
court, in maintaining that the reckoning of just compensation should be from the date of filing of the petition for
expropriation on September 14, 1987.
The earlier-quoted allegations of the body and prayer in NHA’s Petition for Expropriation filed before the RTC constitute
judicial admissions of NHA—that it possessed the subject properties until this Court’s declaration, in its above-stated
Decision in G.R. No. L-55166 promulgated on May 21, 1987, that P.D. No. 1669 pursuant to which NHA took possession
Page 204 of 306
of the properties of petitioners in 1978 was unconstitutional and, therefore, null and void. These admissions, the
appellate court either unwittingly failed to consider or escaped its notice.
Tiongson, et al., even brought to the appellate court’s attention, in their Motion for Reconsideration of its Decision of June
16, 1999, the fact that they had called the trial court’s attention to NHA’s allegation-admissions in the body and prayer of
its petition. But the appellate court, by resolution of October 7, 1999, denied petitioners’ motion upon the ground that it
raised substantially the same issues that were already considered and passed upon in arriving at its decision. The
appellate court’s June 16, 1999 decision glaringly shows, however, that the matter of judicial admissions of NHA in the
body and prayer in its petition were not considered by it.
Vis-a-vis the factual backdrop of the case, the just compensation of Tiongson, et al.’s properties must be determined ―as
of the date of . . . the filing of [NHA’s] complaint‖ on September 14, 1987.
• When Determined
94) Republic vs. CA (G.R. No. 160379, August 14, 2009)
FACTS: Private respondent Rosario Rodriguez Reyes is the absolute owner of a parcel of land. He received a letter
from petitioner Republic of the Philippines, through the Department of Public Works and Highways
(DPWH), requesting permission to enter into a portion of private respondent’s lot consisting of 663 square
meters, and to begin construction of the Osmeña Street extension road.
Petitioner took possession of private respondent’s property without initiating expropriation
proceedings. Consequently, on 4 and 7 January 1991, private respondent sent letters to the DPWH stating her
objection to the taking of her property.
In the same letter, private respondent requested the City Assessor for a reappraisal of her property,
but said request was denied. Private respondent filed with the Regional Trial Court (RTC) of Cagayan de Oro City a
complaint claiming just compensation and damages against petitioner.
The RTC appointed three commissioners to determine the subject property’s fair market value, as
well as the consequential benefits and damages of its expropriation. The scheduled hearing was reset to 19 May 1994,
to give private respondent (plaintiff) time to consider the offer of petitioner (defendant) to amicably settle
the case and to accept the just compensation of ₱3,200 per square meter, or a total of ₱2,212,600, for the 663-
square meter portion of private respondent’s lot.
Private respondent filed with the RTC an "Urgent Motion to Deposit The Amount of ₱2,121,600 in Court," alleging
that petitioner’s counsel previously manifested in open court that the amount of ₱2,121,600 was ready for release should
the amount be acceptable to private respondent, and praying that said amount of ₱2,121,600 be deposited by petitioner
with the trial court.
RTC granted the motion, however it was only two months after that the petitioner deposited the Landbank check
as just compensation with the RTC Clerk of Court. RTC ordered the commissioners to submit their report but they failed
to do so. Upon the motion of the private respondent, the RTC reappointed new set of commissioners.
Page 205 of 306
The new commissioners submitted a report and rendered a decision regarding the just
compensation of the lots. The CA however, found that the commissioners’ recommendations on just
compensation were not supported by valid documents. Also, it was unclear in the RTC decision whether the
trial court merely adopted the commissioners’ recommendations or the court made its own independent
valuation of the subject property.
Thus, the Court of Appeals held that a reconvening of the commissioners or an appointment of new
commissioners to determine just compensation was necessary. The appellate court further held that the trial
court’s order for petitioner’s return of the 293-square meter lot had no legal basis and was no longer
feasible since the lot was already part of the completed Sergio Osmeña extension road. Moreover,
consequential damages should be awarded in lieu of actual damages for private respondent’s alleged loss of income from
the remaining 297-square meter lot. Hence, the CA ordered to remand the case to the trial court.
ISSUE: Whether the Court of Appeals erred in ordering the remand of the case to the trial court, to order the
reconvening of the commissioners or appointment of new commissioners to determine the consequential
damages for the remaining 297- square meter lot.
RULING: NO. Eminent domain is the authority and right of the State, as sovereign, to take private property
for public use upon observance of due process of law and payment of just compensation. The Constitution
provides that, "private property shall not be taken for public use without just compensation.”
Just compensation is the full and fair equivalent of the property sought to be expropriated. Among the factors to
be considered in arriving at the fair market value of the property are the cost of acquisition, the current value of like
properties, its actual or potential uses, and in the particular case of lands, their size, shape, location, and the tax
declarations thereon. The measure is not the taker’s gain but the owner’s loss. To be just, the compensation must be fair
not only to the owner but also to the taker.
The procedure for determining just compensation is set forth in Rule 67 of the 1997 Rules of Civil
Procedure. Section 5 of Rule 67 partly states that "upon the rendition of the order of expropriation, the court
shall appoint not more than three (3) competent and disinterested persons as commissioners to ascertain
and report to the court the just compensation for the property sought to be taken."
However, we held in Republic v. Court of Appeals that Rule 67 presupposes a prior filing of complaint for
eminent domain with the appropriate court by the expropriator. If no such complaint is filed, the
expropriator is considered to have violated procedural requirements, and hence, waived the usual
procedure prescribed in Rule 67, including the appointment of commissioners to ascertain just
compensation.
WHEN AND HOW TO DETERMINE JUST COMPENSATION: To determine just compensation, the trial
court should first ascertain the market value of the property, to which should be added the consequential
damages after deducting therefrom the consequential benefits which may arise from the expropriation. If
Page 206 of 306
the consequential benefits exceed the consequential damages, these items should be disregarded
altogether as the basic value of the property should be paid in every case.
Section 6 of Rule 67 of the Rules of Civil Procedure provides:

x x x The commissioners shall assess the consequential damages to the property not taken and deduct from such
consequential damages the consequential benefits to be derived by the owner from the public use or purpose of
the property taken, the operation of its franchise by the corporation or the carrying on of the business of the
corporation or person taking the property. But in no case shall the consequential benefits assessed exceed the
consequential damages assessed, or the owner be deprived of the actual value of his property so taken.
An award of consequential damages for property not taken is not tantamount to unjust enrichment
of the property owner. There is unjust enrichment "when a person unjustly retains a benefit to the loss of another, or
when a person retains money or property of another against the fundamental principles of justice, equity and good
conscience." Article 22 of the Civil Code provides that "[e]very person who through an act of performance by another, or
any other means, acquires or comes into possession of something at the expense of the latter without just or legal
ground, shall return the same to him." The principle of unjust enrichment under Article 22 requires two conditions: (1)
that a person is benefited without a valid basis or justification, and (2) that such benefit is derived at another’s expense
or damage. There is no unjust enrichment when the person who will benefit has a valid claim to such
benefit.
As stated, consequential damages are awarded if as a result of the expropriation, the remaining
property of the owner suffers from an impairment or decrease in value. Thus, there is a valid basis for the
grant of consequential damages to the property owner, and no unjust enrichment can result therefrom.
In National Power Corporation v. Court of Appeals, we clarified that when there is no action for expropriation and
the case involves only a complaint for damages or just compensation, the provisions of the Rules of Court on
ascertainment of just compensation (i.e., provisions of Rule 67) are no longer applicable, and a trial before commissioners
is dispensable, thus:
In this case, NPC appropriated Pobre’s Property without resort to expropriation proceedings. NPC
dismissed its own complaint for the second expropriation. At no point did NPC institute expropriation
proceedings for the lots outside the 5,554 square-meter portion subject of the second expropriation . The only
issues that the trial court had to settle were the amount of just compensation and damages that
NPC had to pay Pobre.
In this case, petitioner took possession of the subject property without initiating expropriation
proceedings. Consequently, private respondent filed the instant case for just compensation and
damages. To determine just compensation, the trial court appointed three commissioners pursuant
to Section 5 of Rule 67 of the 1997 Rules of Civil Procedure.
Page 207 of 306
The trial court simply gave the total amount of just compensation due to the property owner
without laying down its basis. Thus, there is no way to determine whether the adjudged just compensation
is based on competent evidence. For this reason alone, a remand of the case to the trial court for proper
determination of just compensation is in order. The decision of the trial court must be based on all established
rules, correct legal principles, and competent evidence. The court is proscribed from basing its judgment on
speculations and surmises.
Page 208 of 306
Manner of Payment
95) Association of Small Landowners vs. DAR [175 SCRA 343 (1988)]
FACTS: These are four consolidated cases questioning the constitutionality of the Comprehensive Agrarian
Reform Act (R.A. No. 6657 and related laws i.e., Agrarian Land Reform Code or R.A. No. 3844).
Brief background: Article XIII of the Constitution on Social Justice and Human Rights includes a call
for the adoption by the State of an agrarian reform program. The State shall, by law, undertake an agrarian
reform program founded on the right of farmers and regular farm workers, who are landless, to own directly or
collectively the lands they till or, in the case of other farm workers, to receive a just share of the fruits thereof.
RA 3844 was enacted in 1963. P.D. No. 27 was promulgated in 1972 to provide for the compulsory
acquisition of private lands for distribution among tenant-farmers and to specify maximum retention limits
for landowners.
In 1987, President Corazon Aquino issued E.O. No. 228, declaring full land ownership in favor of the
beneficiaries of PD 27 and providing for the valuation of still unvalued lands covered by the decree as well
as the manner of their payment. In 1987, P.P. No. 131, instituting a comprehensive agrarian reform program (CARP)
was enacted; later, E.O. No. 229, providing the mechanics for its (PP131’s) implementation, was also enacted.
After which is the enactment of R.A. No. 6657, Comprehensive Agrarian Reform Law in 1988. This
law, while considerably changing the earlier mentioned enactments, nevertheless gives them suppletory effect insofar as
they are not inconsistent with its provisions.
In G.R. No. 7977

The petitioners in the said case are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on the grounds of
separation of powers, equal protection, due process and the constitutional limitation that no private
property shall be taken for public use without just compensation.
In G.R. No. 79310

The petitioners in this case claim that the power to provide for Comprehensive Agrarian Reform Program as
provided in the Constitution is lodged in the Congress and not to the President . The petitioners also seek to
prohibit the implementation of Proclamation No. 131 and E.O. No. 229. The petitioners contend that the taking of
the property must be simultaneous with the payment of just compensation which Sec. 5 of E.O. No. 229
does not provide.
In G.R. No. 79744

The petitioner alleges that E.O. Nos. 228 and 229 were invalidly issued by the President and that the said E.O.s
violate the constitutional provision that no private property shall be taken without due process or just
compensation which was denied to the petitioner.
Page 209 of 306
In G.R. No. 78742

Petitioner claims that they are unable to enjoy their right of retention because they cannot eject their
tenants due to the fact that the Department of Agrarian Reform (DAR) has not issued the implementing
rules required under the said decree. The petitioners are therefore asking the Honorable Court for a writ of mandamus to
compel the DAR to issue the said rules.
ISSUE: Whether the laws questioned are valid exercise of power of eminent domain; and whether the just
compensation must be in terms of cash.
RULING: YES. There are traditional distinctions between the power of eminent domain and police power which logically
preclude the application of both powers at the same time involving the same subject. The property condemned under
police power is harmful or intended for harmful purposes, like a building on the verge of collapse, which
needs to be demolished for public safety, or obscene materials, which should be destroyed in the interest
of public morals. Under police power, the confiscation of such property is not compensable, unlike the taking
done in the exercise of power of eminent domain, which requires the payment of just compensation to the
owner.
The petitions before the Court present no knotty complication insofar as the question of compensable taking is
concerned. There is an exercise of police power for the regulation of private property in accordance with the Constitution
with regards to the extent that the laws in question merely prescribe the retention limits for the landowners. However,
there is definitely a taking under power of eminent domain which payment of just compensation is
imperative when in order to carry out the regulation, it is necessary to deprive such land now.
For the second issue: NO. Money as [sole] payment for just compensation is merely a concept in
traditional exercise of eminent domain. The agrarian reform program is a revolutionary exercise of eminent
domain. The program will require billions of pesos in funds if all compensation have to be made in cash – if everything
is in cash, then the government will not have sufficient money hence, bonds, and other securities, i.e.,
shares of stocks, may be used for just compensation.
The just compensation contemplated by the Bill of Rights is payable in money or in cash and not in
the form of bonds or other things of value.
Accepting the theory that payment of the just compensation is not always required to be made fully in money,
the Court find further that the proportion of cash payment to the other things of value constituting the total payment, as
determined on the basis of the areas of the lands expropriated, is not unduly oppressive upon the landowner . It is noted
that the smaller the land, the bigger the payment in money, primarily because the small landowner will be
needing it more than the big landowners, who can afford a bigger balance in bonds and other things of
value. No less importantly, the government financial instruments making up the balance of the payment are "negotiable
at any time." The other modes, which are likewise available to the landowner at his option, are also not
unreasonable because payment is made in shares of stock, LBP bonds, other properties or assets, tax
credits, and other things of value equivalent to the amount of just compensation.
Page 210 of 306
Addition: It is true that the determination of just compensation is a power lodged in the courts. However, there is
no law which prohibits administrative bodies like the DAR from determining just compensation. In fact, just compensation
can be that amount agreed upon by the landowner and the government – even without judicial intervention so long as
both parties agree. The DAR can determine just compensation through appraisers and if the landowner agrees, then
judicial intervention is not needed. What is contemplated by law however that, the just compensation
determined by an administrative body is is merely preliminary. If the landowner does not agree with the
finding of just compensation by an administrative body, then it can go to court and the determination of
the latter shall be the final determination. This is even so provided by RA 6657:
96) Madumba vs. GSIS (G.R. No. 61293, February 15, 1990
FACTS: This petition for mandamus seeks to compel respondent Government Service Insurance System
(GSIS) to accept Land Bank bonds at their face value as installments payments for a pre-existing
obligation. Respondent GSIS conducted a public bidding of several foreclosed properties, including a house
and lot. The petitioner participated and submitted his bid.
Its bid was subject to a down payment of 35% of the amount thereof, the 10% constituting the proposal bond
with the remaining 25% to be paid after the receipt of the notice of award or acceptance of the bid.
Accordingly, petitioner enclosed with his sealed bid a manager's and cash to complete the proposal
bond. Upon the receipt of the notice of award, petitioner offered to pay the additional 25% in Land Bank bonds at their
face value. These bonds were issued to petitioner as payment for his riceland acquired by the Government
from him.
However, the GSIS rejected the offer, hence it was withdrawn by petitioner. Petitioner then offered
to pay in cash the balance of the required down payment. When the second monthly installment became
due, petitioner sent a letter to the GSIS Board of Trustees requesting that he be allowed to pay with his
Land Bank bonds.
Petitioner invoked the provisions of Section 85 of Republic Act No. 3844, as amended by Presidential Decree No.
251. The GSIS Board of Trustees denied petitioner's offer and "resolved to reiterate the policy that Land Bank
bonds shall be accepted as payment only at a discounted rate to yield the System 18% at maturity."
The petitioner asked the Board to reconsider and then submitted an opinion of the Ministry of
Agrarian Reform, wherein it was stated that "if the GSIS accepts the Land Bank bonds as payment thereof,
it must accept the same at par or face value.
ISSUE: Whether GSIS may be compelled to accept Land Bank bonds in payment for a residential house and lot
purchased by the bondholder from the GSIS.
Page 211 of 306
RULING: YES. Respondent Government Service Insurance System is ordered to accept the bonds issued by
the Land Bank of the Philippines at their par or face value. A government-owned or controlled corporation ,
like the GSIS, is compelled to accept Land Bank bonds as payment for the purchase of its assets.
As a matter of fact, the bidder who offers to pay in bonds of the Land Bank is entitled to preference.
Respondent, in support of its stance that it can discount the bonds, avers that "(a) PD 251 has amended Section 85 of RA
3844 by deleting and eliminating the original provision that Land Bank bonds shall be accepted 'in the amount of their
face value'; and (b) to accept the said bonds at their face value will impair the actuarial solvency of the GSIS and
thoroughly prejudice its capacity to pay death, retirement, insurance, dividends and other benefits and claims to its more
than a million members, the majority of whom are low salaried government employees and workers."
Respondent's arguments disregard the fact that the provisions of Section 85 are primarily designed to cushion the
impact of dispossession. Not only would there be inconvenience resulting from dispossession itself, but also from the
modes of payment in financing the acquisition of farm lots. Acceptance of Land Bank bonds, instead of money,
undoubtedly involves a certain degree of sacrifice for the landowner.
This, of course, is in addition to the fact that, in case of expropriation of land covered by land reform, the
landowner will seldom get the compensation he desires. Thus, discounting the Land Banks bonds, and thereby reducing
their effective value, entails and imposes an additional burden on his part.
It is, in fact, in consideration of this sacrifice that we extended the rule on liberality in the interpretation of the
provisions of Republic Act No. 3844, then known as the Agricultural Land Reform Code, in favor not only of the actual
tillers but the landowners as well.
As explained in an earlier case, “the value of these bonds cannot be diminished by any direct or indirect
act, particularly, since said bonds are fully guaranteed by the Government of the Philippines.”
Respondent cannot rely on the deletion by Presidential Decree No. 251 of the provision in Section 85 that the
bonds shall be accepted in the amount of their face value, and wrest therefrom an interpretation in support of its thesis.
97) Short Title: DAR vs. CA [249 SCRA 149 (1995)]

Long Title: G.R. No. 118745 October 6, 1995
DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform, petitioner,
vs.
COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT &
DEVELOPMENT CORP., ET AL., respondents.
Facts: Separate petitions for review were filed by petitioners Department of Agrarian Reform (DAR) (G.R. No. 118745)
and Land Bank of the Philippines (G.R. No. 118712) following the adverse ruling by the Court of Appeals in CA-G.R. SP
No. 33465. However, upon motion filed by private respondents, the petitions were ordered consolidated. 3
Page 212 of 306
Private respondents are landowners whose landholdings were acquired by the DAR and subjected to
transfer schemes to qualified beneficiaries under the Comprehensive Agrarian Reform Law (CARL, Republic
Act No. 6657).
Aggrieved by the alleged lapses of the DAR and the Landbank with respect to the valuation and payment of
compensation for their land pursuant to the provisions of RA 6657, private respondents filed with this Court a
Petition for Certiorari and Mandamus with prayer for preliminary mandatory injunction. Private respondents
questioned the validity of DAR Administrative Order No. 6, Series of 1992 6 and DAR Administrative
Order No. 9, Series of 1990, 7 and sought to compel the DAR to expedite the pending summary
administrative proceedings to finally determine the just compensation of their properties, and the
Landbank to deposit in cash and bonds the amounts respectively "earmarked", "reserved" and "deposited in trust
accounts" for private respondents, and to allow them to withdraw the same.
Private respondents argued that Administrative Order No. 9, Series of 1990 was issued without jurisdiction and with grave
abuse of discretion because it permits the opening of trust accounts by the Landbank, in lieu of depositing in cash or
bonds in an accessible bank designated by the DAR, the compensation for the land before it is taken and the
titles are cancelled as provided under Section 16(e) of RA 6657.9 Private respondents also assail the fact that the
DAR and the Landbank merely "earmarked", "deposited in trust" or "reserved" the compensation in their
names as landowners despite the clear mandate that before taking possession of the property, the
compensation must be deposited in cash or in bonds. 10
Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid exercise of its rule-making
power pursuant to Section 49 of RA 6657. 11 Moreover, the DAR maintained that the issuance of the "Certificate of
Deposit" by the Landbank was a substantial compliance with Section 16(e) of RA 6657 and the ruling in the case of
Association of Small Landowners in the Philippines , Inc., et al. vs. Hon. Secretary of Agrarian Reform, G.R. No. 78742,
July 14, 1989 (175 SCRA 343).12
For its part, petitioner Landbank declared that the issuance of the Certificates of Deposits was in consonance with Circular
Nos. 29, 29-A and 54 of the Land Registration Authority where the words "reserved/deposited" were also used. 13
On October 20, 1994, the respondent court rendered the assailed decision in favor of private respondents. 14 Petitioners
filed a motion for reconsideration but respondent court denied the same. 15
Issue:
1. Whether the court erred in declaring as null and void DAR Administrative Order No. 9, Series of
1990, insofar as it provides for the opening of trust accounts in lieu of deposit in cash or in bonds
2. Whether or not private respondents are entitled to withdraw the amounts deposited in trust in their behalf
pending the final resolution of the cases involving the final valuation of their properties, petitioners assert the
negative.
Ruling:
1. YES. Section 16(e) of RA 6657 provides as follows:
Sec. 16. Procedure for Acquisition of Private Lands —
Page 213 of 306
(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response
from the landowner, upon the deposit with an accessible bank designated by the DAR of the
compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take immediate
possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines. . . . (emphasis supplied)
It is very explicit therefrom that the deposit must be made only in "cash" or in "LBP bonds". Nowhere does
it appear nor can it be inferred that the deposit can be made in any other form. If it were the intention to
include a "trust account" among the valid modes of deposit, that should have been made express, or at
least, qualifying words ought to have appeared from which it can be fairly deduced that a "trust account" is
allowed. In sum, there is no ambiguity in Section 16(e) of RA 6657 to warrant an expanded construction of
the term "deposit".
In the present suit, the DAR clearly overstepped the limits of its power to enact rules and regulations when it
issued Administrative Circular No. 9. There is no basis in allowing the opening of a trust account in behalf of the
landowner as compensation for his property because, as heretofore discussed, Section 16(e) of RA 6657 is very specific
that the deposit must be made only in "cash" or in "LBP bonds". In the same vein, petitioners cannot invoke LRA
Circular Nos. 29, 29-A and 54 because these implementing regulations cannot outweigh the clear provision
of the law. Respondent court therefore did not commit any error in striking down Administrative Circular No. 9 for being
null and void.
2. The contention is premised on the alleged distinction between the deposit of compensation under Section 16(e)
of RA 6657 and payment of final compensation as provided under Section 18 21 of the same law. According to
petitioners, the right of the landowner to withdraw the amount deposited in his behalf pertains only to
the final valuation as agreed upon by the landowner, the DAR and the LBP or that adjudged by the
court. It has no reference to amount deposited in the trust account pursuant to Section 16(e) in case of rejection by
the landowner because the latter amount is only provisional and intended merely to secure possession of the property
pending final valuation. To further bolster the contention petitioners cite the following pronouncements in
the case of "Association of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian Reform". 2
Notably, however, the aforecited case was used by respondent court in discarding petitioners' assertion as it
found that:
. . . despite the "revolutionary" character of the expropriation envisioned under RA 6657 which led the
Supreme Court, in the case of Association of Small Landowners in the Phil. Inc. vs. Secretary of Agrarian
Reform (175 SCRA 343), to conclude that "payments of the just compensation is not always required to
be made fully in money" — even as the Supreme Court admits in the same case "that the traditional
medium for the payment of just compensation is money and no other" — the Supreme Court in said
case did not abandon the "recognized rule . . . that title to the property expropriated shall
pass from the owner to the expropriator only upon full payment of the just compensation .
We agree with the observations of respondent court. The ruling in the "Association" case merely recognized the
extraordinary nature of the expropriation to be undertaken under RA 6657 thereby allowing a deviation from the
Page 214 of 306
traditional mode of payment of compensation and recognized payment other than in cash. It did not, however,
dispense with the settled rule that there must be full payment of just compensation before the title to the
expropriated property is transferred.
The attempt to make a distinction between the deposit of compensation under Section 16(e) of RA 6657 and
determination of just compensation under Section 18 is unacceptable. To withhold the right of the landowners to
appropriate the amounts already deposited in their behalf as compensation for their properties simply
because they rejected the DAR's valuation, and notwithstanding that they have already been deprived of
the possession and use of such properties, is an oppressive exercise of eminent domain. The irresistible
expropriation of private respondents' properties was painful enough for them. But petitioner DAR rubbed it in all the more
by withholding that which rightfully belongs to private respondents in exchange for the taking, under an authority (the
"Association" case) that is, however, misplaced. This is misery twice bestowed on private respondents, which the Court
must rectify.
Hence, we find it unnecessary to distinguish between provisional compensation under Section 16(e) and final
compensation under Section 18 for purposes of exercising the landowners' right to appropriate the same. The immediate
effect in both situations is the same, the landowner is deprived of the use and possession of his property for which he
should be fairly and immediately compensated. Fittingly, we reiterate the cardinal rule that:
. . . within the context of the State's inherent power of eminent domain, just compensation
means not only the correct determination of the amount to be paid to the owner of
the land but also the payment of the land within a reasonable time from its taking.
Without prompt payment, compensation cannot be considered "just" for the property
owner is made to suffer the consequence of being immediately deprived of his land
while being made to wait for a decade or more before actually receiving the amount
necessary to cope with his loss.
98) Short Title: NAPOCOR vs. Sps. De la Cruz (G.R. No. 156093, February 2, 2007)
Long Title: G.R. No. 156093 February 2, 2007
NATIONAL POWER CORP., Petitioner,
vs.
SPOUSES NORBERTO AND JOSEFINA DELA CRUZ, METROBANK, Dasmariñas, Cavite Branch, REYNALDO
FERRER, and S.K. DYNAMICS MANUFACTURER CORP., Respondents.
Page 215 of 306
Facts: Petitioner NAPOCOR is a government-owned and controlled corporation created under Republic Act No.
6395, as amended, with the mandate of developing hydroelectric power, producing transmission lines, and
developing hydroelectric power throughout the Philippines. NAPOCOR decided to acquire an easement of
right-of-way over portions of land within the areas of Dasmariñas and Imus, Cavite for the construction
and maintenance of the proposed Dasmariñas-Zapote 230 kV Transmission Line Project.3
On November 27, 1998, petitioner filed a Complaint 4 for eminent domain and expropriation of an easement of right-of-
way against respondents as registered owners of the parcels of land sought to be expropriated, which were covered by
Transfer Certificates of Title (TCT) Nos. T-313327, T-671864, and T-454278. The affected areas were 51.55, 18.25, and
14.625 square meters, respectively, or a total of 84.425 square meters.
After respondents filed their respective answers to petitioner’s Complaint, petitioner deposited PhP 5,788.50 to
cover the provisional value of the land in accordance with Section 2, Rule 67 of the Rules of Court .5 Then, on
February 25, 1999, petitioner filed an Urgent Ex-Parte Motion for the Issuance of a Writ of Possession, which the trial
court granted in its March 9, 1999 Order. The trial court issued a Writ of Possession over the lots owned by respondents
spouses de la Cruz and respondent Ferrer on March 10, 1999 and April 12, 1999, respectively.
However, the trial court dropped the Dela Cruz spouses and their mortgagee, Metrobank, as parties-defendants
in its May 11, 1999 Order,6 in view of the Motion to Intervene filed by respondent/intervenor Virgilio M.
Saulog, who claimed ownership of the land sought to be expropriated from respondents spouses Dela Cruz.
On June 24, 1999, the trial court terminated the pre-trial in so far as respondent Ferrer was concerned, considering
that the sole issue was the amount of just compensation, and issued an Order directing the constitution of
a Board of Commissioners with respect to the property of respondent S.K. Dynamics.
As to the just compensation for the property of Saulog, successor-in-interest of the Dela Cruz spouses , the
trial court ordered the latter and petitioner to submit their compromise agreement.
The commissioners conducted an ocular inspection of S.K. Dynamics’ property, and on October 8, 1999,
they submitted a report to the trial court.
Based on the analysis of data gathered and making the proper adjustments with respect to the location, area, shape,
accessibility, and the highest and best use of the subject properties, it is the opinion of the herein commissioners that the
fair market value of the subject real properties is P10,000.00 per square meter, as of this date, October 05, 1999. 7
Thus, both commissioners recommended that the property of S.K. Dynamics to be expropriated by
petitioner be valued at PhP 10,000.00 per square meter. The records show that the commissioners did not
afford the parties the opportunity to introduce evidence in their favor, nor did they conduct hearings
before them. In fact, the commissioners did not issue notices to the parties to attend hearings nor provide the
concerned parties the opportunity to argue their respective causes.
Upon the submission of the commissioners’ report, petitioner was not notified of the completion or filing of
it nor given any opportunity to file its objections to it.
RTC
Page 216 of 306
The trial court fixed the just compensation to be paid by petitioner at PhP 10,000.00 per square meter. On
January 20, 2000, petitioner filed a Motion for Reconsideration of the abovementioned Order, but said motion
was denied in the trial court’s March 23, 2000 Order.
We find for the defendant.
The PAR Resolution alluded to by [petitioner] was passed in 1995 or four (4) years [before] the lot in question was taken
over by the government. This explains why the price or cost of the land has considerably increased. Besides, the
valuation of P10,000.00 per sq.m. was the one recommended by the commissioner designated by [petitioner] itself and
concurred in by the Provincial Assessor of Cavite.
CA
We find nothing on record which would warrant the reversal of the Order dated December 28, 1999 of the court
a quo.
Issue: Whether the legal basis or bases of the Trial Court’s Order on the matter of just compensation is
sufficient.
Ruling: We find this petition meritorious. In this case, it is not disputed that the commissioners
recommended that the just compensation be pegged at PhP 10,000.00 per square meter. The
commissioners arrived at the figure in question after their ocular inspection of the property, wherein they
considered the surrounding structures, the property’s location and, allegedly, the prices of the other,
contiguous real properties in the area . Furthermore, based on the commissioners’ report, the recommended just
compensation was determined as of the time of the preparation of said report on October 5, 1999.
It is settled that just compensation is to be ascertained as of the time of the taking, which usually
coincides with the commencement of the expropriation proceedings. Where the institution of the action
precedes entry into the property, the just compensation is to be ascertained as of the time of the filing of
the complaint.18
We note that in this case, the filing of the complaint for expropriation preceded the petitioner’s entry into
the property.
It is clear that in this case, the sole basis for the determination of just compensation was the commissioners’ ocular
inspection of the properties in question, as gleaned from the commissioners’ October 5, 1999 report. The trial court’s
reliance on the said report is a serious error considering that the recommended compensation was highly
speculative and had no strong factual moorings. For one, the report did not indicate the fair market value of
the lots occupied by the Orchard Golf and Country Club, Golden City Subdivision, Arcontica Sports Complex, and other
business establishments cited. Also, the report did not show how convenience facilities, public
transportation, and the residential and commercial zoning could have added value to the lots being
expropriated.
Page 217 of 306
Just compensation is defined as the full and fair equivalent of the property sought to be expropriated. The
measure is not the taker’s gain but the owner’s loss. The compensation, to be just, must be fair not only to
the owner but also to the taker. Even as undervaluation would deprive the owner of his property without
due process, so too would its overvaluation unduly favor him to the prejudice of the public.
To determine just compensation, the trial court should first ascertain the market value of the property, to
which should be added the consequential damages after deducting therefrom the consequential benefits
which may arise from the expropriation. If the consequential benefits exceed the consequential damages,
these items should be disregarded altogether as the basic value of the property should be paid in every
case.
Clearly, the legal basis for the determination of just compensation in this case is insufficient as earlier
enunciated. This being so, the trial court’s ruling in this respect should be set aside.
99) Short Title: Leca Realty vs. Republic (G.R. No. 155605, September 27, 2006)
Long Title: G.R. No. 155605 September 27, 2006
LECA REALTY CORPORATION, petitioner,
vs.
REPUBLIC OF THE PHILIPPINES, Represented by the Department of Public Works and Highways,
respondent.
Facts: On 18 March 1996, the Republic of the Philippines, represented by the Department of Public Works and Highways
(DPWH), filed a complaint for eminent domain for the taking of some portions of the properties of Leca
Realty Corp. (Leca), Leeleng Realty Inc. (Leeleng), Metropolitan Bank and Trust Co. (Metrobank), Bank of the Philippine
Islands (BPI), and Cityland Inc. (Cityland). The said properties would be affected by the construction of the
EDSA-Shaw Boulevard Overpass Project in Shaw Boulevard, Mandaluyong City, a public purpose to be
undertaken by the DPWH.
The complaint was filed with the Regional Trial Court of Pasig City and was raffled to Branch 159 of the said court.
Attached to the complaint is, among other things, Resolution No. 94-1 of the City Appraisal Committee of Mandaluyong,
which was created to appraise the properties that would be affected by the construction of the project in question. In the
said resolution, the City Appraisal Committee fixed the fair market values of defendants' properties, as follows:
'1. All lots situated along Shaw Boulevard from Edsa going westward towards Manila up to Samat Street, that
City, at THIRTY FIVE THOUSAND PESOS (P35,000) per square meter[.]
Page 218 of 306
'2. All lots situated along Shaw Boulevard from Edsa going eastward towards Pasig up to San Miguel Avenue,
Pasig, Metro Manila at FORTY FIVE THOUSAND PESOS (P45,000) per square meter[.]
"On October 7, 1997, the court a quo appointed three (3) competent and disinterested persons; namely, Atty.
Benjamin C. Angeles, Mr. Joselito E. Gunio and Mr. Melchor Savillo as commissioners to ascertain and report the
just compensation of the properties sought to be taken.
"On January 9, 1998, the commissioners submitted their report dated January 8, 1998, and recommended the
fair market value of the subject properties as follows:
'1. Properties of Leca Realty Corporation and Leeleng Realty Inc.: P50,000 per sq.m.
'2. Metropolitian Bank and Trust Co., Bank of the Philippine Islands: P125,000 per sq.m.
'3. Cityland, Inc.: P137,500 per sq.m. plus 10% corner influence, for a total of P137,500 per sq.m. (sic)'
"In arriving at the said Report, the Commissioners took into consideration the following factors: property
location, identification[,] neighborhood data, community facilities and utilities, highest and best use,
valuation and reasonable indication of land values within the vicinity. "On March 30, 1998, the court
rendered the decision whereby the Commissioners' Report was adopted."
CA
The CA affirmed the lower court's judgment for the following reasons. First, the RTC's appointment of the
commissioners was fair and impartial. Second, the fair market values of the affected properties were
unanimously arrived at by the appointed commissioners after a thorough and objective investigation and
analysis of the properties, with due consideration of the various factors affecting those values: location,
existing facilities, desirability, neighborhood, and size. 8
Issue: Whether the determination of just compensation was supported with sufficient evidence.
Ruling: NO. The Republic avers that the values arrived at in the Commissioners' Report were not supported by sufficient
evidence. Moreover, they were allegedly based on newspaper listings of advertisements,29 which the
commissioners deemed to be reasonable indices of the fair market value.
The Revised Zonal Values of Real Properties in the City of Mandaluyong were implemented on April 29, 1996, by the
Department of Finance under DO No. 71-96. The Republic further argues that, according to this listing,
properties classified as residential condominiums in the vicinity of Shaw Boulevard had a zonal value of
P55,000 per square meter. On the other hand, those properties classified as commercial condominiums had
a zonal value of P60,000 per square meter.
Hence, the fair market value of the subject properties of BPI and Cityland should not be higher than P60,000 per square
meter.31 Given these prescribed values, the Republic contends that the compensation was rendered unfair,
unjust and unconscionable by the gross discrepancies between the values determined for the properties of
Leca and Leeleng Realty and for those of BPI and Cityland.
Page 219 of 306
Just compensation, then, is the full and fair equivalent of a property taken from its owner by the expropriator. The
measure is not the taker's gain, but the owner's loss. Note must be taken that the word "just" is used to stress the
meaning of the word "compensation," in order to convey the idea that the equivalent to be rendered for the property to
be taken shall be real, substantial, full and ample.38
Necessarily, just compensation must not be arrived at arbitrarily, but determined after an evaluation of different factors .
In the present case, the Commissioners' Report made use of the so-called market-data approach in arriving
at the valuation of the properties. In this method, the value of the land is based on sales and listings of
comparable property registered within the vicinity.
As both the Republic and Leca correctly pointed out, however, the Commissioners' Report relied heavily on
newspaper advertisements of offers of sale of properties in the vicinity. Clearly, these offers were merely
asking prices. By their very nature, they are subject to negotiations in which a buyer may ask for a lower
price; understandably, it is customary for the owner to raise the price offer.
Well-settled is the rule that in expropriation proceedings, the value of a property must be determined
either as of the date of the taking of the property or the filing of the complaint, whichever comes first.39
In this case, the Complaint was filed on March 18, 1996, and the trial court issued the Writ of Possession
on June 19, 1997.40 The offers cited in the Commissioners' Report, though, were made between May 1996
to February 1997, a period after the filing of the Complaint on March 18, 1996. Thus, there is no evidence
on record of the fair market value of the property as of March 1996.
100) Short Title: NPC vs. Henson (G.R. No. 129998, December 29, 1998)
Long Title: G.R. No. 129998 December 29, 1998
NATIONAL POWER CORPORATION, petitioner,
vs.
LOURDES HENSON, married to Eugenio Galvez; JOSEFINA HENSON, married to Petronio Katigbak, JESUSA
HENSON; CORAZON HENSON, married to Jose Ricafort; ALFREDO TANCHIATCO; BIENVENIDO DAVID;
MARIA BONDOC CAPILI, married to Romeo Capili; and MIGUEL MANOLOTO, respondents.
Facts: On March 21, 1990, the National Power Corporation (NPC) originally instituted with the Regional Trial Court, Third
Judicial District, Branch 46, San Fernando, Pampanga, a complaint1 for eminent domain, later amended on October 11,
1990, for the taking for public use of five (5) parcels of land, owned or claimed by responde nts, with a total aggregate
area of 58,311 square meters, for the expansion of the NPC Mexico Sub-Station.2
Page 220 of 306
Respondents are the registered owners/claimants of the five (5) parcels of land sought to be expropriated, situated in San
Jose Matulid, Mexico, Pampanga. Petitioner needed the entire area of the five (5) parcels of land, comprising an
aggregate area of 58,311 square meters, for the expansion of its Mexico Subdivision. 4
On March 28, 1990, petitioner filed an urgent motion to fix the provisional value of the subject parcels of land. 3
On April 20, 1990, respondents filed a motion to dismiss. 4

They did not challenge petitioner's right to condemn their
property, but declared that the fair market value of their property was from P180.00 to P250.00 per square meter.5
RTC
The trial court denied respondents' motion to dismiss. The court did not declare that petitioner had a lawful right
to take the property sought to be expropriated. 6 However, the court fixed the provisional value of the land at
P100.00 per square meter, for a total area of 63,2207 square meters of respondents' property, to be deposited with
the Provincial Treasurer of Pampanga. Petitioner deposited the amount on August 29, 1990.8
On September 5, 1990, the trial court issued a writ of possession in favor of petitioner, and, on September 11,
1990, the court's deputy sheriff placed petitioner in possession of the subject land. 9
On November 22, 1990, and December 20, 1990, the trial court granted the motions of respondents to withdraw
the deposit made by petitioner of the provisional value of their property a mounting to P5,831,100.00, with
a balance of P690,900.00, remaining with the Provincial Treasurer of Pampanga. 10
On April 5, 1991, the trial court issued an order appointing three (3) commissioners to aid the court in the reception of
evidence to determine just compensation for the taking of the subject property. After receiving the evidence and
conducting an ocular inspection, the commissioners submitted to the court their individual reports.
Commisioner Mariano C. Tiglao, in his report dated September 10, 1992, recommended that the fair market value of the
entire 63,220 square meters property be fixed at P350.00 per square meter. Commissioner Arnold P. Atienza, in his report
dated February 24, 1993, recommended that the fair market value be fixed at P375.00 per square meter . Commissioner
Victorino Orocio, in his report dated April 28, 1993, recommended that the fair market value be fixed at P170.00 per
square meter. 11
However, the trial court did not conduct a hearing on any of the reports.
On May 19, 1993, the trial court rendered judgment fixing the amount of just compensation to be paid by petitioner for
the taking of the entire area of 63,220 square meters at P400.00 per square meter, with legal interest thereon computed
from September 11, 1990, when petitioner was placed in possession of the land, plus attorney's fees of P20,000.00, and
costs of the proceedings.
CA
The Court of Appeals rendered decision affirming that of the Regional Trial Court.
Issue: Whether the just compensation for the taking of respondents' property for the expansion of the NPC's Mexico Sub-
station is correct.
Ruling: NO. The SC modified the appealed decision. In this case, the trial court and the Court of Appeals fixed the
value of the land at P400.00 per square meter, which was the selling price of lots in the adjacent fully developed
subdivision, the Santo Domingo Village Subdivision. The land in question, however, was an undeveloped, idle
Page 221 of 306
land, principally agricultural in character, though re-classified as residential. Unfortunately, the trial court, after
creating a board of commissioners to help it determine the market value of the land did not conduct a hearing on the
report of the commissioners. The trial court fixed the fair market value of subject land in an amount equal to
the value of lots in the adjacent fully developed subdivision. This finds no support in the evidence. The
valuation was even higher than the recommendation of anyone of the commissioners.
Considering that the subject parcels of land are undeveloped raw land, the price of P375.00 per square
meter would appear to the Court as the just compensation for the taking of such raw land. Consequently,
we agree with Commissioner Atienza's report that the fair market value of subject parcels of land be fixed
at P375.00 per square-meter.
We also agree with petitioner that the area of the communal irrigation canal consisting of 4,809 square meters must be
excluded from the land to be expropriated. To begin with, it is excluded in the amended complaint. Hence, the trial court
and the Court of Appeals erred in including the same in the area to be taken.
The trial court erroneously ordered double payment for 3,611 square meters of lot 5 (portion) in the dispositive part of its
decision, and, hence, this must be deleted.
The trial court and the Court of Appeals correctly required petitioner to pay legal interest 21
on the compensation awarded
from September 11, 1990, the date petitioner was placed in possession of the subject land, less the amount respondents
had withdrawn from the deposit that petitioner made with the Provincial Treasurer's Office.
We, however, rule that petitioner is under its charter exempt from payment of costs of the proceedings.
WHEREFORE, the decision of the Court of Appeals and that of the trial court subject of the appeal are hereby MODIFIED.
101) Meralco vs. Pineda

Short Title: Meralco vs. Pineda [206 SCRA 196 (1992)]
MANILA ELECTRIC COMPANY, petitioner, vs. THE HONORABLE GREGORIO G. PINEDA, Presiding Judge, Court
of First Instance of Rizal, Branch XXI, Pasig, Metro Manila, TEOFILO ARAYON, SR., GIL DE GUZMAN,
LUCITO SANTIAGO and TERESA BAUTISTA, respondents.
Facts:
Petitioner, Manila Electric Company (MERALCO) is a domestic corporation duly organized and existing under the
laws of Philippines. A complaint for eminent domain was filed by the petitioner against forty-two defendants
with the court of first instance (RTC) of Rizal, Branch XXII, Pasig, Metro Manila which alleges that for the
purpose of constructing a 230 KV Transmission line from Barrio Malaya to Tower no. 220 at Pililla, Rizal, the
petitioners would need portions of the land of the private respondents consisting of an aggregate area of
237,321 sqm. The petitioners offered to pay compensation and attempted to negotiate but the parties
failed to reach an agreement. The Court authorized the petitioners to take and enter the property sought to be
expropriated. The respondents filed for motion for withdrawal of deposit claiming that they be allowed to
withdraw the sum of P71,771.50 from petitioner’s deposit account and that they are entitled to be paid at
Page 222 of 306
forty (40) pesos per square meter or an approximate sum of P272,000 however, the motion was
subsequently denied in an order dated September 3, 1976.
Petitioners then sold the power plants and transmission lines including the lines traversing private
respondent’s property on October 30, 1979 to NAPOCOR. Respondent court issued an order appointing the
members of the board of commissioners to make an appraisal of the properties but the petitioner filed a
motion to dismiss the complaint on the ground that it has lost all its interests over the transmission lines
because of their sale to NAPOCOR. Another motion for payment was filed by the respondents on June 9, 1981 where
the court granted it. The petitioners are ordered to pay the movants the amount of P20,200 for the expropriated area of
6800 sqm at P3.00 per sqm. On December 15, 1981, an omnibus motion was filed by the private respondents praying
that they be allowed to withdraw an additional sum of P90,125.50. The court granted it which left a balance of P161,475
payable to the respondents.
The petitioners filed an opposition alleging the private respondents are not entitled to payment of just
compensation because there is still no appraisal and valuation of the property. The court denied the
petitioner’s motion for reconsideration and motion for contempt filed against the respondents.
The respondent court stressed in said order that “ at this stage, the court starts to appoint commissioners to determine
just compensation or dispenses with them and adopts the testimony of a credible real estate broker, or the judge himself
would exercise his right to formulate an opinion of his own as the value of the and in question.
The petitioner strongly maintains that the respondent court’s act of determining and ordering the payment
of just compensation to private respondents without formal presentation of evidence by the parties on the
reasonable value of property constitutes a flagrant violation of petitioner’s constitutional right due
process. A petition for certiorari was filed by the petitioner.
Furthermore, petitioner argues that the respondent judge gravely abused his discretion in granting the
motion for execution pending appeal and consequently denying the petitioner's motion to dismiss.
Respondent judge should have ordered that Napocor be impleaded in substitution of petitioner or could have at least
impleaded both the Napocor and the petitioner as party plaintiffs.
Issue:
Whether the respondent court can dispense with the assistance of a Board of Commissioners in an expropriation
proceeding and determine for itself the just compensation.
Ruling:
NO. The court ruled that the Sections 5 and 8 of the Revised Rules of Court is applicable in the case at bar.
The respondent judge arrived at the amount of just compensation on its own, without the proper reception
of evidence before the Board of Commissioners. The private respondents as landowners have not proved by
competent evidence the value of their respective properties at a proper hearing. Likewise, the petitioner has not been
given the opportunity to rebut any evidence that would have been presented by private respondents.
Page 223 of 306
In an expropriation case the determination of just compensation, a trial before the Commissioners is
indispensable to allow the parties to present evidence on the issue of just compensation.
Rule 67 of the Revised Rules of Court provides that: The appointment of at least three (3) competent
persons as commissioners to ascertain just compensation for the property sought to be taken is a
mandatory requirement in expropriation cases.
The trial with the aid of the commissioners is a substantial right that may not be done away with
capriciously or for no reason at all.
In such instances, where the report of the commissioners may be disregarded, the trial court may make its
own estimate of value from competent evidence that may be gathered from the record. The aforesaid joint
venture agreement relied upon by the respondent judge, in the absence of any other proof of valuation of said
properties, is incompetent to determine just compensation. Hence, the Petition is GRANTED
Trial with Commisioners

101) Short Title: Meralco vs. Pineda [206 SCRA 196 (1992)]
MANILA ELECTRIC COMPANY, petitioner, vs. THE HONORABLE GREGORIO G. PINEDA, Presiding Judge, Court
of First Instance of Rizal, Branch XXI, Pasig, Metro Manila, TEOFILO ARAYON, SR., GIL DE GUZMAN,
LUCITO SANTIAGO and TERESA BAUTISTA, respondents.
Facts:
Petitioner, Manila Electric Company (MERALCO) is a domestic corporation duly organized and existing
under the laws of Philippines. A complaint for eminent domain was filed by the petitioner against forty-two
defendants with the court of first instance (RTC) of Rizal, Branch XXII, Pasig, Metro Manila which alleges
that for the purpose of constructing a 230 KV Transmission line from Barrio Malaya to Tower no. 220 at Pililla,
Rizal, the petitioners would need portions of the land of the private respondents consisting of an aggregate
area of 237,321 sqm. The petitioners offered to pay compensation and attempted to negotiate but the parties failed
to reach an agreement. The Court authorized the petitioners to take and enter the property sought to be expropriated.
The respondents filed for motion for withdrawal of deposit claiming that they be allowed to
withdraw the sum of P71,771.50 from petitioner’s deposit account and that they are entitled to be paid at
forty (40) pesos per square meter or an approximate sum of P272,000 however, the motion was
subsequently denied in an order dated September 3, 1976.
Petitioners then sold the power plants and transmission lines including the lines traversing private
respondent’s property on October 30, 1979 to NAPOCOR. Respondent court issued an order appointing the
members of the board of commissioners to make an appraisal of the properties but the petitioner filed a
motion to dismiss the complaint on the ground that it has lost all its interests over the transmission lines
because of their sale to NAPOCOR. Another motion for payment was filed by the respondents on June 9, 1981 where
Page 224 of 306
the court granted it. The petitioners are ordered to pay the movants the amount of P20,200 for the expropriated area of
6800 sqm at P3.00 per sqm. On December 15, 1981, an omnibus motion was filed by the private respondents praying
that they be allowed to withdraw an additional sum of P90,125.50. The court granted it which left a balance of P161,475
payable to the respondents.
The petitioners filed an opposition alleging the private respondents are not entitled to payment of
just compensation because there is still no appraisal and valuation of the property. The court denied the
petitioner’s motion for reconsideration and motion for contempt filed against the respondents.
The respondent court stressed in said order that “ at this stage, the court starts to appoint commissioners to determine
just compensation or dispenses with them and adopts the testimony of a credible real estate broker, or the judge himself
would exercise his right to formulate an opinion of his own as the value of the and in question.
The petitioner strongly maintains that the respondent court’s act of determining and ordering the
payment of just compensation to private respondents without formal presentation of evidence by the
parties on the reasonable value of property constitutes a flagrant violation of petitioner’s constitutional
right due process. A petition for certiorari was filed by the petitioner.
Furthermore, petitioner argues that the respondent judge gravely abused his discretion in granting
the motion for execution pending appeal and consequently denying the petitioner's motion to dismiss.
Respondent judge should have ordered that Napocor be impleaded in substitution of petitioner or could have at least
impleaded both the Napocor and the petitioner as party plaintiffs.
Issue:
Whether the respondent court can dispense with the assistance of a Board of Commissioners in an expropriation
proceeding and determine for itself the just compensation.
Ruling:
NO. The court ruled that the Sections 5 and 8 of the Revised Rules of Court is applicable in the case at bar.
The respondent judge arrived at the amount of just compensation on its own, without the proper reception
of evidence before the Board of Commissioners. The private respondents as landowners have not proved by
competent evidence the value of their respective properties at a proper hearing. Likewise, the petitioner has not been
given the opportunity to rebut any evidence that would have been presented by private respondents.
In an expropriation case the determination of just compensation, a trial before the Commissioners is
indispensable to allow the parties to present evidence on the issue of just compensation.
Rule 67 of the Revised Rules of Court provides that: The appointment of at least three (3) competent
persons as commissioners to ascertain just compensation for the property sought to be taken is a
mandatory requirement in expropriation cases.
Page 225 of 306
The trial with the aid of the commissioners is a substantial right that may not be done away with
capriciously or for no reason at all.
In such instances, where the report of the commissioners may be disregarded, the trial court may make its own estimate
of value from competent evidence that may be gathered from the record. The aforesaid joint venture agreement relied
upon by the respondent judge, in the absence of any other proof of valuation of said properties, is
incompetent to determine just compensation. Hence, the Petition is GRANTED
102) Short Title: Makati vs. CA (190 SCRA 206)

MUNICIPALITY OF MAKATI, petitioner,vs. THE HONORABLE COURT OF APPEALS, HON. SALVADOR P. DE
GUZMAN, JR., as Judge RTC of Makati, Branch CXLII ADMIRAL FINANCE CREDITORS CONSORTIUM, INC.,
and SHERIFF SILVINO R. PASTRANA, respondents.
Facts:
An expropriation proceeding was initiated by petitioner Municipality of Makati against private
respondent Admiral Finance Creditors Consortium Inc., Home Building System and Reality Corp., and Arceli P. Jo
involving a parcel of land and improvements thereon located at San Antonio Village, Makati.
An action for eminent domain was filed. Attached to the petitioner‘s complaint was a certification that a bank
account had been opened with the PNB. After the decision has become final and executory, a writ of execution
was issued and a notice of garnishment was served upon the manager of PNB where the petitioner had
bank accounts. However, the sheriff was informed that a hold code was placed on the account of the petitioner.
The petitioner contended that its funds at the PNB cocked neither be garnished nor levied upon execution
for to do so would result in the disbursement of public funds without the proper appropriation required
under the law.
In a petition with the Court of Appeals, petitioner alleges for the first time that it has actually two accounts
with the PNB, one exclusively for the expropriation of the subject property with the outstanding balance of
P99, 743. 94. The other account was for the obligations and other purposes of the municipal government
with a balance of P170,098,421.72.
Issue:
Whether the bank account of a municipality may be levied on execution to satisfy a money judgment against it
absent showing that the municipal council has passed an ordinance appropriating from its public funds an amount
corresponding to the balance due to the RTC decision?
Page 226 of 306
Whether the bank account may be levied on execution to satisfy a money judgment even there is no
ordinance by the municipal council appropriating public funds to the balance due to the RTC decision?
Held:
YES. Since the first PNB account was specifically opened for expropriation proceedings it has initiated over
the subject property, there is no objection to the garnishment or levy under execution of funds therein
amounting to P4,965,506.40, the funds garnished in excess of P99,743.94, which are public funds earmarked for
the municipal government. Other statutory obligations are exempted from execution without the proper
appropriation required under the law.
The funds deposited in the 2nd PNB account are public funds of the municipal government. The rule is well-
settled that public funds are not subject to levy and execution, unless otherwise provided by the statute.
More particularly, the properties of a municipality, whether real or personal, which are necessary for public
use cannot be attached and sold on execution sale to satisfy a money judgment against the municipality.
Municipal revenues derived from taxes, licenses and market fees, and which are intended primarily and exclusively for
financing governmental activities and functions of the municipality are exempt from execution. The foregoing rule finds
application in the case at bar.
This is not to say that private respondents are left with no legal recourse. When a municipality fails or
refuses without justifiable reason to effect payment of a final money judgment rendered against it, the
claimant may avail of the remedy of mandamus in order to compel the enactment and approval of the
necessary appropriation ordinance and the corresponding disbursement of municipal funds.
The court will not condone petitioner‘s blatant refusal to settle its obligation arising from an expropriation proceeding it
has in fact initiated. Within the context of the state‘s inherent power of eminent domain, just compensation
means not only the correct determination of the amount to be paid to the owner of the land but also the
payment of the land within a reasonable time from its taking. The state‘s power of eminent domain should be
exercised within the bounds of fair play and justice. In the case at bar, considering that valuable property has
been taken, the compensation to be paid is fixed, and the municipal has had more than reasonable time to
pay full compensation.
Legal Interest for Expropriation Cases
103) Short Title: Wycoco vs. Judge Caspillo (G.R. No. 146733, January 13, 2004)
Page 227 of 306
FELICIANO F. WYCOCO, petitioner, vs. THE HONORABLE RODRIGO S. CASPILLO, Pairing Judge of the
Regional Trial Court, Third Judicial Region, Branch 23, Cabanatuan City and the DEPARTMENT OF
AGRARIAN REFORM, respondents.
Facts:
Feliciano F. Wycoco, petitioner, is the registered owner of a 94.1690 unirrigated and untenanted
rice land situated at the Sitios of Ablang, Saguingan, and Pinamunghilan, Barrio of San Juan, Licab, Nueva
Ecija. In line with the Comprehensive Agrarian Reform Program (CARP) of the Government, Wycoco
(petitioner) voluntarily offered to sell the land to the Department of Agrarian Reform (DAR) for 14.9
million. In November 1991, after the DAR’s Evaluation of the application and the determination of the just compensation
by the Land Bank of the Philippines, a notice of intention to acquire 84.5690 hectares of property for
P1,342,667.466 was sent to Wycoco. The amount was later raised to P2,594,045.39 and upon review, was modifies
to P2,280,159.82.
Wycoco rejected the offer prompting the DAR to indorse the case to the Department of Agrarian Reform
Adjudication Board (DARAB) for the purpose of fixing the just compensation in a summary administrative
proceeding. Thereafter, the DARAB requested Land Bank of the Philippines to open a trust account in the name of
Wycoco and deposited the compensation offered by DAR. In the meantime, the property was distributed to farmer-
beneficiaries.
On November 14,1995, the trial court rendered a decision in favor of Wycoco. It ruled that there is no need
to present evidence in support of the land valuation inasmuch as it is of public knowledge that the
prevailing market value of agricultural lands sold in Licab, Nueva Ecija is from P135,000 to P150,000
hectare. The court thus took judicial notice thereof and fixed the compensation for the entire 94.1690
hectare land at P142,500 per hectare or a total of P13,428,082. It also awarded Wycoco actual damages for
unrealized profits plus legal interest.
The DAR and LBP filed separate petitions before the the court of appeals but both petitions were
dismissed. However, the Court of appeals modified its decision by deducting from the compensation due to
Wycoco the amount corresponding to the 3.3671 hectare portion of the 94.1690 hectare land which was
found to have been previously sold by Wycoco to the Republic.
Issues:
1.) Whether the Regional Trial Court, acting as a Special Agrarian Court, validly acquire jurisdiction over the instant
case for determination of just compensation?
2.) Assuming that it acquired jurisdiction, was the compensation arrived at supported by evidence?
3.) Were the Awards of Interest and damages for unrealized profits valid?
Ruling:
Page 228 of 306
1. YES, It is clear that from Section 57of RA no. 6657 (Comprehensive Agrarian Reform Law of 1988), the RTC,
sitting as a Special Agrarian Court, has “original and exclusive jurisdiction over all petitions for the determination of
just compensation to landowners.” This, notwithstanding, the Court held that the trial court properly acquired
jurisdiction because of its exclusive and original jurisdiction over determination of just compensation.
2. NO, The trial court should have allowed the parties to present evidence thereon instead of practically assuming a
valuation without basis. While Market value may be one of the bases determining just compensation, the same
cannot be arbitrarily arrived at without considering the factors to be appreciated in arriving at the fair market value of
the property. Since these factors were not considered, a remand of the case for determination of just compensation is
necessary.
3. NO, The award of actual damages for unrealized profits should be deleted. The amount of loss must not only be
capable of proof, but must be proven with a reasonable degree of certainty. The claim must be premised upon
competent proof or upon the best evidence obtainable, such receipts or other documentary proof. Because none have
been presented in the instant case, the claim for unrealized profits cannot be granted.
104) Short Title: NPC vs. Angas [208 SCRA 196 (1992)]
Full Title: NATIONAL POWER CORPORATION, petitioner, vs. HONORABLE ZAIN B. ANGAS, District Judge of
the Court of First Instance of Lanao del Sur, HADJI DALUMA KINIDAR, EBRA ALI and/or GASNARA ALI
(intervenors), MANGORSI CASAN, et al., respondents.
Facts:
Petitioner, National Power Corporation, a government-owned and controlled corporation and the agency through
which the government undertakes the on-going infrastructure and development projects throughout the country, filed
two complaints for eminent domain against private respondents with the Court of First Instance of Lanao
del Sur. The complaint which sought to expropriate certain specified lots situated at Limogao, Saguiaran,
Lanao del Sur was for the purpose of the development of hydro-electric power and production of electricity
as well as the erection of such subsidiary works and constructions as may be necessarily connected
therewith.
Subsequently, a consolidated decision was rendered by the lower court, declaring and confirming that the lots
mentioned and described in the complaints have entirely been lawfully condemned and expropriated by
the petitioner, and ordering the latter to pay the private respondents certain sums of money as just
compensation for their lands expropriated “with legal interest thereon until fully paid.”
Page 229 of 306
Two consecutive motions for reconsideration of the said consolidated decision were filed by the petitioner. The
same were denied by the respondent court. Petitioner did not appeal the aforesaid consolidated decision, which
became final and executor.
Subsequently, one of the private respondents Sittie Sohra Batara filed an motion for the execution of the
decision, praying that petitioner be directed to pay her the unpaid balance of P14,300.00 for the lands
expropriated from her, including legal interest which she computed at 6% per annum. The said motion was
granted by the lower court. Likewise, one of the private respondents, Pangonatan Cosna Tagol, through counsel,
filed with the trial court a motion praying, for the first time, that the legal interest on the just compensation
awarded to her by the court be computed at 12% per annum as allegedly “authorized under and by virtue
of Circular No. 416 of the Central Bank to the effect that legal interest allowed in the judgment of the
courts, in the absence of express contract, shall be computed at 12% per annum.”
The lower court granted the said motion allowing 12% interest per annum. Subsequently, the other private
respondents filed motions also praying that the legal interest on the just compensation awarded to them
be computed at 12% per annum.
Petitioner moved for a reconsideration of the lower court’s last order, alleging that the main decision had
already become final and executory with its compliance of depositing the sums of money as just
compensation for the lands condemned, with legal interest at 6% per annum; that the said main decision can
no longer be modified or changed by the lower court; and that Presidential Decree No. 116 is not applicable to this case
because it is Art. 2209 of the Civil Code which applies.
Issue:
Whether or not the interest that should be applied in the transaction is the interest provided in Central Bank Circular 416.
Ruling: No.
The Central Bank circular applies only to loan or forbearance of money, goods or credits. Moreover, The term
“judgments” as used in Section 1 of the Usury Law, as well as in Central Bank Circular No. 416, should be interpreted to
mean only judgments involving loan or forbearance of money, goods or credits, following the principle of ejusdem
generis. The Central Bank circular applies only to loan or forbearance of money, goods or credits and to
judgments involving such loan or forbearance of money, goods or credits. This is evident not only from said
circular but also from Presidential Decree No. 116, which amended Act No. 2655, otherwise known as the Usury Law. On
the other hand, Art. 2209 of the Civil Code applies to transactions requiring the payment of indemnities as
damages, in connection with any delay in the performance of the obligation arising therefrom other than
those covering loan or forbearance of money, goods or credits.
Page 230 of 306
In the case at bar, the transaction involved is clearly not a loan or forbearance of money, goods or credits
but expropriation of certain parcels of land for a public purpose, the payment of which is without
stipulation regarding interest, and the interest adjudged by the trial court is in the nature of indemnity for
damages. The legal interest required to be paid on the amount of just compensation for the properties expropriated is
manifestly in the form of indemnity for damages for the delay in the payment thereof. Therefore, since the kind of
interest involved in the joint judgment of the lower court sought to be enforced in this case is interest by
way of damages, and not by way of earnings from loans, etc. Art. 2209 of the Civil Code shall apply. It is
6% per annum and not 12% per annum.
As for private respondents’ argument that Central Bank Circular No. 416 impliedly repealed or modified Art. 2209 of the
Civil Code, suffice it to state that repeals or even amendments by implication are not favored if two laws can be fairly
reconciled. The Courts are slow to hold that one statute has repealed another by implication, and they will not make such
an adjudication if they can refrain from doing so, or if they can arrive at another result by any construction which is just
and reasonable.
105) Short Title: NPC vs. Marasigan (G.R. No. 220367, November 20, 2017)
Full Title: NATIONAL POWER CORPORATION, Petitioner, v. APOLONIO V. MARASIGAN, FRANCISCO V.
MARASIGAN, LILIA V. MARASIGAN, BENITO V. MARASIGAN, JR., AND ALICIA V. MARASIGAN, Respondents.
Facts:
For purposes of constructing and maintaining its steel transmission lines and wooden electric poles for its
Naga-Tiwi 230 KV (Single Bundle), Naga-Tiwi 230 KV (Double Bundle) and 69 KV Naga-Daraga
Transmission Lines, NPC filed, on January 23, 2006, an expropriation complaint against respondents as
registered owners of the following four parcels of land located in Barangays Sagurong, San Agustin and
San Jose, Pili, Camarines Sur:
The total area over which NPC sought an easement of right of way covers 49,173 square meters of the
subject properties. Based on the tax declarations allegedly classifying the properties as agricultural and
based on the corresponding Bureau of Internal Revenue's (BIR) zoning valuation therefor, NPC offered to
pay PhP 299,550.50.
While interposing no objection to the expropriation, respondents nevertheless opposed the classification of
the properties as agricultural on the ground that the same were classified as industrial, commercial and
residential since the year 1993 as shown by (1) Sangguniang Bayan Resolution No. 17; (2) Municipal Ordinance No. 7
dated February 1, 1993; (3) annotations on the memorandum of encumbrances of the titles; (4) DARCO Conversion
Page 231 of 306
Order No. 050301016014-(300)-00, Series of 2000 issued by the Department of Agrarian Reform; and (5) Certification
issued by the Municipal Assessor of Pili, Camarines Sur.
Respondents thus claimed PhP 47,064,400 for the affected 49,173 square meters. By way of counterclaim,
respondents sought payment of consequential damages for the areas left in between each transmission
line, like the spaces underneath the infrastructure, commonly known as "dangling" portions in the total
area of 41,869 square meters.
After the pre-trial, the RTC issued an Order of Expropriation and further fixed the provisional value of the
properties at PhP 47,064,400, which amount was eventually deposited by NPC with Landbank of the
Philippines. Accordingly, in an Omnibus Order dated May 23, 2006, the RTC issued a writ of possession in
favor of NPC and ordered the LBP to release to respondents the amount deposited. Meanwhile, an appraisal
committee was formed by the RTC for purposes of determining just compensation, which thereafter submitted a
Consolidated Report dated August 10, 2006. A reversed trial thereafter ensued.
Respondents presented the Chairman of the appraisal committee who testified that the appraisal committee
recommended the total valuation of PhP 49,064,400 based on the assessor's data and the BIR zonal valuations as
indicated on the 1997 tax declarations. Also presented was the succeeding Chairman of the appraisal committee who
testified that the properties suffered consequential damages which the appraisal committee recommended
to be computed at 50% of the BIR zonal value per square meter or for a total amount of PhP 22,227,800.
On ocular inspection, the appraisal committee found that the existence of the transmission lines hampered the properties'
potential use such that while the areas before and after the transmission lines could still be used, the areas in between
could no longer be utilized. The appraisal committee also noted that the transmission lines produced considerable noise
making the area unsuitable for residential purposes.
NPC, on the other hand, presented its right-of-way officers whose testimonies sought to establish that the
lots being claimed by respondents as "dangling" areas were classified as agricultural under the tax
declarations and that NPC negotiated with respondents for purposes of installing the transmission lines in
1996 and that NPC took the subject properties in between the years 1996 to 1998.
The right-of-way officer further testified that the "dangling" areas could still be used for agricultural
purposes but nevertheless agreed that the presence of the transmission lines may endanger the people
and animals therein if in case they fell. On cross-examination, the right of way officer admitted that the properties
were classified as agro industrial as stated in the 1998 tax declarations. He admitted that the classification of the
properties as agricultural which was used as basis for computing its value was erroneous.
The RTC rendered its Decision dated December 20, 2010 affirming the recommendation of the appraisal
committee for the payment of just compensation and fixed the amount of PhP 47,064,400 for the 49,173
Page 232 of 306
square meters based on the BIR zonal valuation of the properties classified as residential, commercial and
industrial as of the time of the filing of the complaint on January 23, 2006. The RTC rejected NPC's claim that it
took possession of the property in 1972 and 1974 when respondents allegedly allowed NPC to construct the transmission
lines for lack of proof. In addition, the RTC held that had the properties been taken on said years, such taking was
without color of legal authority. The RTC likewise adopted the recommendation of the appraisal committee for
the payment of PhP 22,227,800 as consequential damages for the 41,867 square meters portion of the
properties which were rendered useless or no longer fit for its intended use due to the construction of the
transmission lines.
In disposal, the RTC held:

Wherefore, judgment is hereby rendered:
1. Approving and adopting the Commissioner's Report dated August 9, 2006 and
November 24, 2008;
2. The payment of the provisional value (on May 19, 2006 when plaintiff made the
deposit) of P47,064,400.00 as just compensation for the 49,173 square meters area directly
affected by the transmission lines is the payment for the just compensation with 12% interest
per annum (Marina Z. Reyes, et al. vs. National Housing Authority, G.R. No. 147511, January 20,
2003), from the date of filing of this case until paid;
3. Condemning plaintiff to pay defendants the amount of P22,227,800.00 as
consequential damages with interest at 12% per annum from January 23, 2006 until fully
paid;
4. To pay P20,000.00 attorney's fees.
SO ORDERED.
NPC's motion for reconsideration was denied by the RTC in its Order dated May 2, 2011. However, the RTC
modified the imposition of interest as follows:
Wherefore, judgment is hereby rendered:

1. Approving and adopting the Commissioner's Report dated August 9, 2006 and November 24, 2008;
2. The payment of the provisional value (on May 19, 2006 when plaintiff made the deposit) of
P47,064,400.00 as just compensation for the 49,173 square meters area directly affected by the transmission
Page 233 of 306
lines is the payment for the just compensation with interest at 6% per annum from the date of filing
of the case until full payment less the interest collected by the defendants from the bank deposit;
3. Condemning plaintiff to pay defendants the amount of P22,227,800.00 as consequential damages

with interest at 6% per annum from January 23, 2006 and at 12% per annum from the
date of finality of this decision until fully paid;
5. To pay P20,000.00 attorney's fees.
SO ORDERED.
Consequently, NPC interposed its appeal before the CA raising as issues the alleged erroneous award of
just compensation and consequential damages. Specifically, NPC argued that the award was based on the premise
that it sought to acquire ownership over the properties when it merely seeks to acquire a right-of-way thus necessitating
the payment of a mere easement fee equivalent to 10% of the market value of the properties. Further, it argued that the
award is contrary to the zonal valuation of the property classified as agricultural and erroneously reckoned as of the time
of the filing of the complaint instead as of the time of taking.
On the other hand, respondents moved for the execution of the award pending appeal which the RTC granted. A writ of
execution and a notice of garnishment were thereafter issued.
On September 1, 2015, the CA rendered its Decision denying NPC's appeal. Contrary to NPC's claim, the CA held that the
just compensation to be paid for an easement of a right-of-way over lands that would be traversed by high-powered
transmission lines should be the full value of the subject property.
The CA likewise found no merit in NPC's argument that the fair market value of the properties should have been based on
the BIR zonal valuation at the time of its supposed taking of the property in the 1970s and on the basis of its
classification as agricultural land as stated in the tax declarations. The CA reasoned that NPC failed to allege the issue of
taking. in its complaint nor was such raised during pre-trial or proven during trial. The CA also held that to base the fair
market value of the property during the alleged actual taking in the 1970s is to compound the injustice caused to
respondents as the expropriation complaint was filed more than 30 years after NPC allegedly took respondents'
properties.38As regards to the proper classification of the properties, the CA noted that these were already reclassified as
residential, commercial and industrial by the municipality of Pili, Camarines Sur even prior to the filing of the expropriation
complaint.
Finally, the CA found no reason to disturb the RTC's award of consequential damages as testimony to that
effect was presented by respondents while NPC, on the other hand, failed to prove the alleged
consequential benefits.
Page 234 of 306
The CA thus disposed:

WHEREFORE, the foregoing considered, the appeal is hereby DENIED and the decision of the trial court [dated]
December 20,2010, as modified by its Order dated May 2, 2011, is AFFIRMED in toto.
Issues:
Reiterating its arguments before the lower courts, NPC interposes the following issues for resolution:
(1. ) should the value of the property be reckoned at the time of the taking in the 1970s;
(2. ) should the amount of just compensation be based on the properties' BIR zonal valuation corresponding to its
classification as agricultural in the tax declarations; and
(3. ) is the award of consequential damages for the "dangling" area proper.
Ruling: We deny the petition.
(1) Reckoning point of the market value of the properties
The circumstances surrounding the "taking" of property in the context of the State's exercise of the power of
eminent domain has been jurisprudentially listed in the seminal case of Republic v. Vda. De Castellvi, thus:
First, the expropriator must enter a private property. x x x
Second, the entrance into private property must be for more than a momentary period. x x x x x
xx
Fourth, the property must be devoted to a public use or otherwise informally appropriated
or injuriously affected. x x x
Fifth, the utilization of the property for public use must be in such a way as to oust the
owner and deprive him of all beneficial enjoyment of the property. x xx
That there was taking of the subject properties for purposes of expropriation is beyond contest. What plagues the court
and the parties is the date when such taking is to be reckoned because this will, in turn, be determinative of the value of
the subject properties from which the amount of just compensation will be based.
Page 235 of 306
Sec. 4, Rule 67 lays down the basic rule that the value of the just compensation is to be
determined as of the date of the taking of the property or the filing of the complaint, whichever
came first.
The case of National Transmission Corporation v. Oroville Development Corporation, settles that just
compensation should be reckoned from the date of actual taking when such preceded the filing of the
complaint for expropriation. In Oroville, the Court explains that the State is only obliged to make good the loss
sustained by the landowner and considering the circumstances availing at the time the property was taken. Deviation
from this general rule was permitted in the cases of National Power Corporation v. Heirs of Macabangkit Sangkay and
National Power Corporation v. Spouses Saludares47 due to special circumstances therein obtaining which necessitated a
valuation of just compensation at the time the landowners initiated inverse condemnation proceedings notwithstanding
that taking of the properties occurred first.
The peculiarity of the instant case is that NPC insists that it took the subject properties in the 1970s despite having
initiated the expropriation complaint only on January 23, 2006. Following the general rule, NPC thus reasons that the
value of the properties should be reckoned in the 1970s. However, NPC's expropriation complaint and the very testimonial
evidence it offered strongly militate against such proposition.
NPC's expropriation complaint filed on January 23, 2006 clearly sought "to acquire an easement of right-of-way over
portions of the [subject properties]" to enable it "to construct and maintain its steel transmission lines and wooden
electric poles for its Naga-Tiwi 230 KV (Single Bundle), Naga-Tiwi 230 KV (Double Bundle) and 69 KV Naga-Daraga
Transmission Lines". NPC's action relative to the acquisition of an easement of right-of-way made prior to the
filing of its expropriation complaint was limited only to the conduct of negotiations with respondents. Even
then, such negotiations pertained to the construction of HVDC 350 KV transmission lines which was not
among the transmission lines subject of the expropriation complaint. This, as much, was alleged by NPC itself in
its expropriation complaint and was testified to by NPC's right-of-way officer who conducted the negotiations in 1996. The
lower courts were thus correct in disregarding NPC's claim of actual taking in the 1970s as such was not alleged in the
expropriation complaint nor was it successfully proven during the trial.
There being no sufficient proof that NPC actually took the subject properties at a date preceding the filing
of the expropriation complaint, the time of the taking should be taken to mean as coinciding with the
commencement of the expropriation proceedings on January 23, 2006. Hence, the value at the time of the
filing of the complaint should be the basis for the determination of the value when the taking of the
property involved coincides with or is subsequent to the commencement of the proceedings.
(2) Amount of just compensation

Page 236 of 306
To begin with, factual issues pertaining to the value of an expropriated property is beyond the scope of judicial review
under a petition filed via Rule 45. As such, factual findings of the trial and appellate courts will not be disturbed by this
Court unless any of the recognized exceptions is present. No such exception obtains in the instant case.
The various provisions of the Constitution uniformly treat the payment of just compensation as a limitation to the State's
exercise of eminent domain. Just compensation likewise bears the consistent and settled meaning as the full
and fair equivalent of the property taken from its owner by the expropriator, the measure is not the taker's
gain, but the owner's loss. The word "just" is used to qualify the meaning of the word "compensation" and
to convey thereby the idea that the amount to be tendered for the property to be taken shall be real,
substantial, full and ample.
Further, the determination of just compensation in expropriation cases is a function addressed to the discretion of the
courts owing to the constitutional mandate that no private property shall be taken for public use without payment of just
compensation. As such, legislative enactments, as well as executive issuances, fixing or providing for the method of
computing just compensation are tantamount to impermissible encroachment on judicial prerogatives. As such, they are
not binding on courts and are treated as mere guidelines in ascertaining the amount of just compensation. Even the
enumeration of the standards for the assessment of the value of the land for purposes of expropriation under Section 5 of
Republic Act No. 8974 reflects the non-exclusive, permissive and discretionary character thereof.
Here, NPC assails the valuation assigned to the subject properties for being contrary to its alleged classification as
agricultural as appearing on the tax declarations attached to its expropriation complaint.
However, the insistence of NPC to base the value of the properties solely on the tax declarations is misplaced considering
that such is only one of the several factors which the court may consider to facilitate the determination of just
compensation. Indeed, courts enjoy sufficient judicial discretion to determine the classification of lands, because such
classification is one of the relevant standards for the assessment of the value of lands subject of expropriation
proceedings. It bears to emphasize, however, that the court's discretion in classifying the expropriated land is only for the
purpose of determining just compensation and is not meant to substitute that of the local government's power to
reclassify and convert lands through local ordinance.
The subject properties in this case had been reclassified as residential, commercial and industrial several years before the
expropriation complaint was filed. If NPC contests the reclassification of the subject properties, the expropriation case is
not the proper venue to do so.
As such, the RTC and the CA did not err in abiding by the classification of the subject properties as residential,
commercial and industrial as reclassified under Sangguniang Bayan Resolution No. 17 and Municipal Ordinance No. 7
dated February 1, 1993 and as certified to by the Municipal Assessor of Pili, Camarines Sur.
Page 237 of 306
In any case, reliance on the tax declarations attached to NPC's expropriation complaint to classify the properties as purely
agricultural is inaccurate as these very same tax declarations reveal that portions of the expropriated Lot No. 4237 and
Lot No. 2870 are in fact classified as residential and commercial.
(3) Award of consequential damages
As a rule, just compensation, to which the owner of the property to be expropriated is entitled, is equivalent to the
market value. The rule is modified where only a part of a certain property is expropriated. In such a case, the owner is
not restricted to compensation for the portion actually taken, he is also entitled to recover the consequential damages, if
any, to the remaining part of the property.
Consequential damages is specifically enunciated under Section 6 of Rule 67 as follows:
Section 6. Proceedings by Commissioners. — Before entering upon the performance of their duties, the
commissioners shall take and subscribe an oath that they will faithfully perform their duties as commissioners,
which oath shall be filed in court with the other proceedings in the case. Evidence may be introduced by either
party before the commissioners who are authorized to administer oaths on hearings before them, and the
commissioners shall, unless the parties consent to the contrary, after due notice to the parties, to attend, view
and examine the property sought to be expropriated and its surroundings, and may measure the same, after
which either party may, by himself or counsel, argue the case. The commissioners shall assess the consequential
damages to the property not taken and deduct from such consequential damages the consequential benefits to
be derived by the owner from the public use or purpose of the property taken, the operation of its franchise by
the corporation or the carrying on of the business of the corporation or person taking the property. But in no case
shall the consequential benefits assessed exceed the consequential damages assessed, or the owner be deprived
of the actual value of his property so taken. (Emphasis supplied)
Thus, if as a result of expropriation, the remaining portion of the property suffers from impairment or decrease in value,
the award of consequential damages is proper.
Respondents in this case claim consequential damages for the areas in between the transmission lines which were
rendered unfit for use. "Dangling" areas, as defined under National Power Board Resolution No. 94-313, refer to those
remaining small portions of the land not traversed by the transmission line project but which are nevertheless rendered
useless in view of the presence of the transmission lines. The appraisal committee determined the total dangling area to
be 41,867 square meters and consequently recommended the payment of consequential damages equivalent to 50% of
the BIR zonal value per square meter or for a total amount of PhP 22,227,800.
Page 238 of 306
In arriving at its recommendation to pay consequential damages, the appraisal committee conducted an
ocular inspection of the properties and observed that the areas before and behind the transmission lines
could no longer be used either for commercial or residential purposes. Despite this determination, NPC insists
that the affected areas cannot be considered "dangling" as these may still be used for agricultural purposes. In so
arguing, NPC loses sight of the undisputed fact that the transmission lines conveying high-tension current posed danger
to the lives and limbs of respondents and to potential farm workers, making the affected areas no longer
suitable even for agricultural production. Thus, the Court finds no reason to depart from the assessment of the
appraisal committee, as affirmed and adopted by the RTC.
NPC's contention that the consequential benefits should have canceled the consequential damages likewise deserve no
merit. It is true that if the expropriation resulted in benefits to the remaining lot, such consequential
benefits may be deducted from the consequential damages or from the value of the expropriated property.
However, such consequential benefits refer to the actual benefits derived by the landowner which are the
direct and proximate results of the improvements as a consequence of the expropriation and not to the
general benefits which the landowner may receive in common with the community. Here, it was not shown by
NPC how the alleged "tremendous increase" in the value of the remaining portions of the properties could have been
directly caused by the construction of the transmission lines. If at all, any appreciation in the value of the properties is
caused by the consequent increase in land value over time and not by the mere presence of the transmission lines.
(4) Imposition of interest
Notwithstanding the foregoing, We find the need to modify the imposition of interest.
The award of interest is imposed in the nature of damages for delay in payment which, in effect, makes the
obligation on the part of the government one of forbearance to ensure prompt payment of the value of the land
and limit the opportunity loss of the owner. Thus, the imposition of interest is justified only in cases where delay
has been sufficiently established.
In this case, NPC deposited the provisional value of the subject properties in the amount of PhP 47,064,400 on May 19,
2006 which was days before the issuance of a writ of possession. Considering NPC's prompt payment, the imposition of
interest thereon is unjustified and should therefore be deleted.
However, interest should be imposed on the award of consequential damages as it is a component of just
compensation. To emphasize, in order to determine just compensation, the trial court should first ascertain
the market value of the property, to which should be added the consequential damages after deducting
therefrom the consequential benefits which may arise from the expropriation. If the consequential benefits
exceed the consequential damages, these items should be disregarded altogether as the basic value of the
property should be paid in every case.
Page 239 of 306
Here, when the RTC pegged the amount of PhP 47,064,400 for the expropriated 49,173 square meters, the consequential
damages was not yet included. The total just compensation should therefore be the total of PhP 47,064,400 and
PhP22,227,800. Considering that the amount of PhP 22,227,800 as consequential damages was not yet paid, such
amount should earn interest at the rate of 12% per annum from January 23, 2006 until June 30, 201374 and the interest
rate of 6% per annum is imposed from July 1, 2013 until fully paid.
WHEREFORE, the Petition is DENIED. The Decision dated September 1, 2015 of the Court of Appeals, which affirmed the
Decision dated December 20, 2010 of the Regional Trial Court of Pili, Camarines Sur, is AFFIRMED with MODIFICATION
such that the interest imposed on the amount of PhP 47,064,409 is DELETED and that the award of consequential
damages in the amount of PhP 22,227,800 shall earn interest at the rate of 12% per annum from January 23, 2006 until
June 30, 2013 and the interest rate of 6% per annum is imposed from July 1, 2013 until fully paid.
SO ORDERED.
Writ of Possession
106) Short Title: Republic vs. Gingoyon (G.R. No. 166429, December 19, 2005)
Full Title: REPUBLIC OF THE PHILIPPINES, Represented by Executive Secretary Eduardo R. Ermita, the
DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS (DOTC), and the MANILA INTERNATIONAL
AIRPORT AUTHORITY (MIAA), Petitioners, vs. HON. HENRICK F. GINGOYON, In his capacity as Presiding
Judge of the Regional Trial Court, Branch 117, Pasay City and PHILIPPINE INTERNATIONAL AIR
TERMINALS CO., INC., Respondents.
Facts:
The Ninoy Aquino International Airport Passenger Terminal III (NAIA 3) was conceived, designed and
constructed to serve as the country’s show window to the world. Regrettably, it has spawned
controversies. Regrettably too, despite the apparent completion of the terminal complex way back it has not yet been
operated. This has caused immeasurable economic damage to the country, not to mention its deplorable discredit in the
international community.
In the first case that reached this Court, Agan v. PIATCO, the contracts which the Government had with the contractor
were voided for being contrary to law and public policy. The second case now before the Court involves the matter of just
compensation due the contractor for the terminal complex it built. We decide the case on the basis of fairness, the same
norm that pervades both the Court’s 2004 Resolution in the first case and the latest expropriation law. The present
controversy has its roots with the promulgation of the Court’s decision in Agan v. PIATCO, promulgated in
2003 (2003 Decision). This decision nullified the “Concession Agreement for the Build-Operate-and-
Transfer Arrangement of the Ninoy Aquino International Airport Passenger Terminal III” entered into
Page 240 of 306
between the Philippine Government (Government) and the Philippine International Air Terminals Co., Inc.
(PIATCO), as well as the amendments and supplements thereto.
The agreement had authorized PIATCO to build a new international airport terminal (NAIA 3), as well as a franchise to
operate and maintain the said terminal during the concession period of 25 years. The contracts were nullified, among
others, that Paircargo Consortium, predecessor of PIATCO, did not possess the requisite financial capacity when it was
awarded the NAIA 3 contract and that the agreement was contrary to public policy.
At the time of the promulgation of the 2003 Decision, the NAIA 3 facilities had already been built by
PIATCO and were nearing completion. However, the ponencia was silent as to the legal status of the NAIA
3 facilities following the nullification of the contracts, as well as whatever rights of PIATCO for
reimbursement for its expenses in the construction of the facilities.
PIATCO and several respondents-intervenors filed their respective motions for the reconsideration of the
2003 Decision. These motions were denied by the Court in its Resolution dated 21 January 2004 (2004
Resolution). However, the Court this time squarely addressed the issue of the rights of PIATCO to refund,
compensation or reimbursement for its expenses in the construction of the NAIA 3 facilities.
After the promulgation of the rulings in Agan, the NAIA 3 facilities have remained in the possession of
PIATCO, despite the avowed intent of the Government to put the airport terminal into immediate
operation. The Government and PIATCO conducted several rounds of negotiation regarding the NAIA 3 facilities. It also
appears that arbitral proceedings were commenced before the International Chamber of Commerce International Court of
Arbitration and the International Centre for the Settlement of Investment Disputes, although the Government has raised
jurisdictional questions before those two bodies.
Then, on 21 December 2004, the Government filed a Complaint for expropriation with the Pasay City
Regional Trial Court (RTC), together with an Application for Special Raffle seeking the immediate holding
of a special raffle. The Government sought upon the filing of the complaint the issuance of a writ of
possession authorizing it to take immediate possession and control over the NAIA 3 facilities.
The Government also declared that it had deposited the amount of P3,002,125,000.0012 (3 Billion) in Cash with the Land
Bank of the Philippines, representing the NAIA 3 terminal’s assessed value for taxation purposes. The case was raffled to
Branch 117 of the Pasay City RTC, presided by respondent judge Hon. Henrick F. Gingoyon (Hon. Gingoyon).
On the same day that the Complaint was filed, the RTC issued an Order directing the issuance of a writ of
possession to the Government, authorizing it to “take or enter upon the possession” of the NAIA 3
facilities.
Citing the case of City of Manila v. Serrano, the RTC noted that it had the ministerial duty to issue the writ of
possession upon the filing of a complaint for expropriation sufficient in form and substance, and upon
deposit made by the government of the amount equivalent to the assessed value of the property subject to
expropriation. The RTC found these requisites present, particularly noting that “[t]he case record shows that [the
Government has] deposited the assessed value of the [NAIA 3 facilities] in the Land Bank of the Philippines, an
authorized depositary, as shown by the certification attached to their complaint.” Also on the same day, the RTC issued a
Writ of Possession.
Page 241 of 306
According to PIATCO, the Government was able to take possession over the NAIA 3 facilities immediately after the Writ of
Possession was issued. However, on 4 January 2005, the RTC issued another Order designed to supplement its 21
December 2004 Order and the Writ of Possession. In the 4 January 2005 Order, now assailed in the present petition, the
RTC noted that its earlier issuance of its writ of possession was pursuant to Section 2, Rule 67 of the 1997
Rules of Civil Procedure. However, it was observed that Republic Act No. 8974 (Rep. Act No. 8974),
otherwise known as “An Act to Facilitate the Acquisition of Right-of-Way, Site or Location for National
Government Infrastructure Projects and For Other Purposes” and its Implementing Rules and Regulations
(Implementing Rules) had amended Rule 67 in many respects.
Issue:
Whether or not RA 8794 should be applied in the instant expropriation case and not Rule 67.
Ruling: Yes.
At the very least, Rule 67 cannot apply in this case without violating the 2004 Resolution. Even assuming that
Rep. Act No. 8974 does not govern in this case, it does not necessarily follow that Rule 67 should then apply. After all,
adherence to the letter of Section 2, Rule 67 would in turn violate the Court’s requirement in the 2004 Resolution that
there must first be payment of just compensation to PIATCO before the Government may take over the property.
It is the plain intent of Rep. Act No. 8974 to supersede the system of deposit under Rule 67 with the scheme of
“immediate payment” in cases involving national government infrastructure projects.
As acknowledged in the 2003 Decision, the development of NAIA 3 was made pursuant to a build-operate-
and-transfer arrangement pursuant to Republic Act No. 6957, as amended,which pertains to infrastructure or
development projects normally financed by the public sector but which are now wholly or partly implemented by the
private sector. Under the build-operate-and-transfer scheme, it is the project proponent which undertakes the
construction, including the financing, of a given infrastructure facility.
There can be no doubt that PIATCO has ownership rights over the facilities which it had financed and
constructed. The 2004 Resolution squarely recognized that right when it mandated the payment of just compensation
to PIATCO prior to the takeover by the Government of NAIA 3. The fact that the Government resorted to eminent domain
proceedings in the first place is a concession on its part of PIATCO’s ownership. Indeed, if no such right is recognized,
then there should be no impediment for the Government to seize control of NAIA 3 through ordinary ejectment
proceedings.
Since the rights of PIATCO over the NAIA 3 facilities are established, the nature of these facilities should now be
determined.
The law classifies the NAIA 3 facilities as real properties just like the soil to which they are adhered. Any sub-
classifications of real property and divergent treatment based thereupon for purposes of expropriation must be based on
substantial distinctions, otherwise the equal protection clause of the Constitution is violated. There may be perhaps a
molecular distinction between soil and the inorganic improvements adhered thereto, yet there are no purposive
distinctions that would justify a variant treatment for purposes of expropriation. Both the land itself and the
improvements thereupon are susceptible to private ownership independent of each other, capable of pecuniary
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estimation, and if taken from the owner, considered as a deprivation of property. The owner of improvements seized
through expropriation suffers the same degree of loss as the owner of land seized through similar means. Equal
protection demands that all persons or things similarly situated should be treated alike, both as to rights conferred and
responsibilities imposed. For purposes of expropriation, parcels of land are similarly situated as the buildings or
improvements constructed thereon, and a disparate treatment between those two classes of real property infringes the
equal protection clause.
Even as the provisions of Rep. Act No. 8974 call for that law’s application in this case, the threshold test must still be met
whether its implementation would conform to the dictates of the Court in the 2004 Resolution. Unlike in the case of Rule
67, the application of Rep. Act No. 8974 will not contravene the 2004 Resolution, which requires the payment of just
compensation before any takeover of the NAIA 3 facilities by the Government. The 2004 Resolution does not particularize
the extent such payment must be effected before the takeover, but it unquestionably requires at least some degree of
payment to the private property owner before a writ of possession may issue. The utilization of Rep. Act No. 8974
guarantees compliance with this bare minimum requirement, as it assures the private property owner the
payment of, at the very least, the proffered value of the property to be seized. Such payment of the
proffered value to the owner, followed by the issuance of the writ of possession in favor of the
Government, is precisely the schematic under Rep. Act No. 8974, one which facially complies with the prescription laid
down in the 2004 Resolution.
Clearly then, we see no error on the part of the RTC when it ruled that Rep. Act No. 8974 governs the instant
expropriation proceedings.
107) Short Title: City of Manila vs. Oscar Serrano

Complete Title: G.R. No. 142304 June 20, 2001
CITY OF MANILA, petitioner, vs. OSCAR, FELICITAS, JOSE, BENJAMIN, ESTELITA, LEONORA AND ADELAIDA,
ALL SURNAMED SERRANO, respondents.
FACTS:
On December 21, 1993, the City Council of Manila enacted the Ordinance No. 7833, authorizing the
expropriation of certain properties in Manila 's First District in Tondo, covered by TCT Nos. 70869, 105201,
105202, and 138273 of the Register of Deeds of Manila, which are to be sold and distributed to qualified occupants
pursuant to the Land Use Development Program of the City of Manila.
One of the properties sought to be expropriated is issued in the name of Feliza De Guia. After her death,
the estate of Feliza De Guia was settled among her heirs by virtue of a compromise agreement, which was duly
approved by the Regional Trial Court. In 1989, Alberto De Guia, one of the heirs of Feliza De Guia, died, as a result of
which his estate was partitioned among his heirs. Lot 1-C was assigned to Edgardo De Guia, one of the heirs of Alberto
De Guia. On July 29, 1994, the said property was transferred to Lee Kuan Hui. The property was subsequently sold
on January 24,1996 to Demetria De Guia.
Page 243 of 306
On September 26, 1997, petitioner City of Manila filed an amended complaint for expropriation with the
Regional Trial Court, Branch 16, Manila, against the supposed owners of the lots which included herein
respondents. On November 12, 1997, respondents filed a consolidated answer, in which they alleged that the
expropriation of Lot l-C would result in their disclosure, it being the only residential land left to them by their
deceased mother; and that the said lot was exempt from expropriation because dividing the said parcel of land
among them would entitle each of them to only about 50 square meters of land. Respondents, therefore, prayed
that judgment be rendered declaring Lot l-C exempt from expropriation and ordering the cancellation of
the notice regarding the pendency of Civil Case No. 94-72282. for eminent domain filed by petitioner.
The trial court issued an order directing petitioner to deposit the amount of Pl,825,241.00 equivalent to the
assessed value of the properties. After petitioner had made the deposit, the trial court issued another order
directing the issuance of a writ of possession in favor of petitioner.
Respondents filed a petition for certiorari with the Court of Appeals, alleging that the expropriation of Lot l-C
would render respondents, who are actual occupants thereof, landless; that Lot l-C is exempt from expropriation because
R.A. No. 7279 provides that properties consisting of residential lands not exceeding 300 square meters in highly urbanized
cities are exempt from expropriations; and that R.A. No. 7279 was not meant to deprive an owner of the entire residential
land but only that in excess of 300 square meters.
The Court of Appeals rendered a decision holding that Lot l-C is not exempt from expropriation because it
undeniably exceeds 300 square meters which is no longer considered a small property within the framework of R.A. No.
7279. However, it held that in accordance with the ruling in Filstream International Inc. v. Court of Appeals, the other
modes of acquisition of lands enumerated in §§9-10 of the law must first be tried by the city government before it can
resort to expropriation.
In its resolution the Court of Appeals likewise denied two motions for reconsideration filed by petitioner.
Hence this petition.
ISSUE: Whether the Court of Appeals erred in giving due course to the petition of the Serranos under Rule 65
notwithstanding its own declaration of the impropriety of the resort to the writ and filing thereof with the
wrong appellate court.
RULING: NO. Petitioner contends that the respondents' remedy against the order of the trial court granting a writ of
possession was not to file a petition for certiorari under Rule 65 but a petition for review under Rule 45 which should have
been filed in the Supreme Court. This contention has no merit.
A petition for review under Rule 45 is a mode of appeal. Accordingly, it could not have been resorted to by
the respondents inasmuch as the order of the trial court granting a writ of possession was merely
interlocutory from which no appeal could be taken. Rule 45, §1 of the 1997 Rules for Civil Procedure
applies only to final judgments or orders of the Court of Appeals, the Sandiganbayan, and the Regional
Trial Court. On the other hand, a petition for certiorari is the suitable remedy in view of Rule 65, §1 which
provides:
When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of
its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no
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appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby
may file a verified petition in the proper court, alleging the facts with certainly and praying that judgment be
rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental
reliefs as laws and justice may require.
Respondents' petition before the Court of Appeals alleged that the trial court had acted without or in excess of its
jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in issuing the order, dated December 15,
1998, resolving that Lot 1-C is not exempt from expropriation and ordering the issuance of the writ of possession in favor
of petitioner.
Art. XII, Sec. 18

108) Short Title: City of Baguio vs. NAWASA
Complete Title: G.R. No. L-12032 August 31, 1959
CITY OF BAGUIO, plaintiff-appelle, vs. THE NATIONAL WATERWORKS AND SEWERAGE AUTHORITY, defendant-
appellant.
FACTS:
Plaintiff is a municipal corporation organized under its Charter with principal place of business in the City
of Baguio, while defendant is in the public corporation created by Republic Act No. 1383 with provincial
place of business in the City of manila. Under section 2553 of its Charter, plaintiffs is maintaining the
Baguio Waterworks System under a certificates of public convenience, the same being financed by its own
funds, the Baguio general fund, and funds advanced by the national Government.
Plaintiff filed on April 25, 1956, in the Court of First Instance of Baguio, a complaint for declaratory relief against
defendant, a public corporation created by Republic Act No. 1383, contending that said Act does not include within its
preview the Baguio Workshop System; that assuming that it does, said Act is unconstitutional because it has the effect of
depriving plaintiff of the ownership, control and operation of said waterworks system without compensation and without
due process of law, and that it is oppressive, unreasonable and unjust to plaintiff and other cities, municipalities and
municipal districts similarly situated.
Defendant filed a motion to dismiss on the ground that Republic Act No. 1383 is a proper exercise of the
police power of the State; that assuming that said Act contemplates an act of expropriation, it is still a
constitutional exercise of the power of eminent domain; that at any rate the Baguio Waterworks System is not a
private property but "public works of public service" over which the Legislature has control; and that the provision of the
said Act being clear and unambiguous, there is no necessity for construction.
The Court denied the motion and ordered defendant to file its answer to the complaint. On July 6, 1956,
defendant filed its answer reiterating and amplifying the ground already advanced in this motion to dismiss, adding
thereto that the action for the declaratory relief is improper for the reason that the Baguio waterworks System has
already been transferred to defendant pursuant to Republic Act No. 1383 or, if such has not been done, there has already
been a breach of said Act.
Page 245 of 306
The Court rendered decision the dispositive part of which reads: "This Court, . . . holds that the workshop system
of the City of Baguio falls filed within the category of 'private property', as contemplated by our
constitution and may not expropriated without just compensation — and that section 8 of republic act No.
1383 provides for the exchange of the NAWASA assets for the value of workshop system of Baguio is
unconstitutional as this is not 'just compensation,'" Defendant filed a motion for reconsideration, and upon its
denial. It took the present appeal.
ISSUE:
1.Whether Republic Act No. 1383 does not contemplates the exercise of the power of eminent domain but the exertion of
the police power of the State.
2. Whether said law comply with the requirements of section 6, Article XIII, in relation to section 1(2), Article III, of our
Constitution?
RULING:
1.Yes. It involves the exercise of power of eminent domain. The contention that the Republic Act No. 1383
constitutes a valid exercise of police power rather than a directive to expropriate the waterworks of the appellee by the
exercise of the power of eminent domain cannot also be entertained. This is far from the intent and purpose of the
law. The act does not confiscate, nor destroy, nor appropriate property belonging to the appellee. It merely
directs that all waterworks belonging to cities, municipalities, and municipal districts in the Philippines be
transferred to the NAWASA for the purpose of placing them under the control and supervision of one
agency with a view to promoting their efficient management, but in so doing it does not confiscate them
because it directs that they be paid with an equal value of the assets of the NAWASA. This is clearly inferred
from the context of the law (section 8, Rep. Act No. 1383).
But it is insisted that the waterworks system of Baguio City does not have the character of patrimonial property but
comes under the phrase "public works for public service" mentioned in Article 424 of the New Civil Code and as such is
subjected to the control of Congress. This contention is also untenable. The Baguio Waterworks System is not like any
public road, park, street or any other public property held in trust by a municipal corporation held for the benefit of the
public but it is rather a property owned by appellee in its proprietary character. While the cases may differ as to the
public or private character of waterworks, the weight of authority as far as the legislature is concerned classes them as
private affairs. (sec. 239, Vol. I, Revised, McQuillin Municipal Corporation, p. 239; Shrik vs. City of Lancaster, 313 Pa. 158,
169 Atl. 557). And in this jurisdiction, this court has already expressed the view that the waterworks system is patrimonial
property of the city that has established it.(Mendoza vs. De Leon, 33 Phil. 509). And being owned by the municipal
corporation in a proprietary character, waterworks cannot be taken away without observing the
safeguards set by our Constitution for the protection of private property.
2. NO. It is clear that the State may, in the interest of National welfare, transfer to public ownership any
private enterprise upon payment of just compensation. At the same time, one has to bear in mind that no
person can be deprived of his property except for public use and upon payment of just compensation.
There is an attempt to observe this requirement in Republic Act No. 1383 when in providing for the transfer of
appellee's waterworks system to a national agency it was directed that the transfer be made upon payment of an
Page 246 of 306
equivalent value of the property. Has this been implemented? Has appellant actually transferred to appellee
any asset of the NAWASA that may be considered just compensation for the property expropriated? There
is nothing in the record to show that such was done. Neither is there anything to this effect in Office Memorandum
No. 7 issued by the NAWASA in implementation of the provision of the Republic Act No. 1383. The law speaks of assets of
the NAWASA by they are not specified. While the Act empowers the NAWASA to contract indebtedness and issue bonds
subject to the approval of the Secretary of Finance when necessary for the transaction of its business (sec. 2, par. (L),
sec. 5, Act No. 1383), no such action has been taken to comply with appellant's commitment in so far as payment of
compensation of appellee is concerned. As to when such action should be taken no one knows. And unless this aspect
of the law is clarified and appellee is given its due compensation, appellee cannot be deprived of its
property even if appellant desires to take over its administration in line with the spirit of the law . We are
therefore persuaded to conclude that the law, insofar as it expropriates the waterworks in question
without providing for an effective payment of just compensation, violates our Constitution. In this respect,
the decision of the trial court is correct.
Art. XIII, Sec.4

109) Short Title: Archbishop vs. Secretary
Complete Title: G.R. No. 139285 December 21, 2007
ROMAN CATHOLIC ARCHBISHOP OF CACERES, Petitioner, vs. SECRETARY OF AGRARIAN REFORM and DAR
REGIONAL DIRECTOR (Region V), Respondents.
FACTS:
The Comprehensive Agrarian Reform Law (CARL) has truly noble goals, and these noble goals should not be stymied by
the creation of exemptions or exceptions not contemplated by the law.
Archbishop is the registered owner of several properties in Camarines Sur, with a total area of 268.5668
hectares. Of that land, 249.0236 hectares are planted with rice and corn, while the remaining 19.5432 hectares are
planted with coconut trees.
In 1985, Archbishop filed with the Municipal Agrarian Reform District Office No. 19, Naga City, Camarines
Sur several petitions for exemption of certain properties located in various towns of Camarines Sur from the
coverage of Operation Land Transfer (OLT) under Presidential Decree No. (PD) 27. Two of these petitions were
denied in an Order dated November 6, 1986, issued by the Regional Director of DAR, Region V, Juanito L. Lorena.
Archbishop appealed from the order of the Regional Director, and sought exemption from OLT coverage of all
lands planted with rice and corn which were registered in the name of the Roman Catholic Archdiocese of Caceres. In his
appeal, Archbishop cited the following grounds: a) That said properties are all covered by conditional donations
subject to the prohibitions of the donors to SELL, EXCHANGE, LEASE, TRANSFER, ENCUMBER OR
MORTGAGE the properties; b) That they are used for charitable and religious purposes; c) That the parishes located in
Page 247 of 306
depressed areas badly need them for the furtherance of their mission work…; d) For the preservation of good relationship
between church and state thru non-infringement of the right to exercise religious profession and worship;
This appeal was denied by then DAR Secretary Ernesto D. Garilao. A subsequent motion for reconsideration was
denied.
The matter was then raised to the CA via Petition for Review on Certiorari. Archbishop argued that even if the lands
in question are registered in his name, he holds the lands in trust for the benefit of his followers as cestui que trust.
Archbishop further argued that the deeds of donation by which the lands were transferred to him imposed
numerous fiduciary obligations, such that he cannot sell, exchange, lease, transfer, encumber, or mortgage
the subject lands. By this reasoning, Archbishop concluded that he is not the "landowner" contemplated by PD 27 and
Republic Act No. (RA) 6657, the CARL of 1988. He then prayed that the assailed orders of the DAR be reversed, or in the
alternative, that the alleged beneficiaries of the trust be each allowed to exercise rights of retention over the
landholdings.
The petition was dismissed by the CA. Archbishop filed a motion for reconsideration, but was denied in the
June 18, 1999 CA Resolution. Archbishop now brings the matter before us through this petition.
ISSUE: Whether the CA erred in holding that he is only entitled to assert one right of retention as the subject properties
are registered in his name.
RULING: NO. The petition has no merit. Archbishop’s arguments, while novel, must fail in the face of the
law and the dictates of the 1987 Constitution.
The laws simply speak of the "landowner" without qualification as to under what title the land is held or
what rights to the land the landowner may exercise. There is no distinction made whether the landowner holds
"naked title" only or can exercise all the rights of ownership. Archbishop would have us read deeper into the law, to
create exceptions that are not stated in PD 27 and RA 6657, and to do so would be to frustrate the revolutionary intent of
the law, which is the redistribution of agricultural land for the benefit of landless farmers and farmworkers.
To adopt his reasoning would create means of sidestepping the law, wherein the mere act of donation
places lands beyond the reach of agrarian reform. There can be no claim of more than one right of
retention per landowner. Neither PD 27 nor RA 6657 has a provision for a landowner to exercise more than one right
of retention. The law is simple and clear as to the retention limits per landowner. PD 27 states, "In all cases, the
landowner may retain an area of not more than seven (7) hectares if such landowner is cultivating such area or will now
cultivate it.”
There is simply no basis in the law or jurisprudence for his argument that it is the "beneficial ownership"
that should be used to determine which party would have the right of retention.
Archbishop makes much of the conditional donation, that he does not have the power to sell, exchange, lease, transfer,
encumber or mortgage the transferred properties. He claims that these conditions do not make him the landowner as
contemplated by the law. This matter has already been answered in Hospicio de San Jose de Barili, Cebu City (Hospicio)
v. Department of Agrarian Reform. In that case, wherein Act No. 3239 prohibited the sale under any consideration of
lands donated to the Hospicio, a charitable organization, the Court found that the lands of the Hospicio were not exempt
from the coverage of agrarian reform. In characterizing the sale of land under agrarian reform.
Page 248 of 306
Archbishop’s claim that he does not have jus disponendi over the subject properties is unavailing. The very
nature of the compulsory sale under PD 27 and RA 6657 defeats such a claim. Other less scrupulous parties may even
attempt creating trusts to prevent their lands from coming under agrarian reform, and say that the trustee has no power
to dispose of the properties. The disposition under PD 27 and RA 6657 is of a different character than what is
contemplated by jus disponendi, wherein under these laws, voluntariness is not an issue, and the disposition is necessary
for the laws to be effective.
Archbishop’s contention that he is merely an administrator of the donated properties will not serve to
remove these lands from the coverage of agrarian reform. Under PD 27, the coverage is lands devoted to
rice and corn. Section 4 of RA 6657 states, "The Comprehensive Agrarian Reform Law of 1988 shall cover, regardless of
tenurial arrangement and commodity produced, all public and private agricultural lands as provided in Proclamation No.
131 and Executive Order No. 229, including other lands of the public domain suitable for agriculture." The lands in
Archbishop’s name are agricultural lands that fall within the scope of the law, and do not fall under the exemptions. The
exemptions under RA 6657 form an exclusive list.
Archbishop would claim exemption from the coverage of agrarian reform by stating that he is a mere administrator, but
his position does not appear under the list of exemptions under RA 6657. His claimed status as administrator does
not create another class of lands exempt from the coverage of PD 27 or RA 6657, and The Roman Catholic
Apostolic Administrator of Davao, Inc. does not create another definition for the term "landowner."
110) Short Title: Danan et. al. vs. CA

Complete Title: G.R. No. 132759 October 25, 2005
ALEJANDRO DANAN, ET. AL. vs. THE HONORABLE COURT OF APPEALS and ESTRELLA ARRASTIA,
Respondents.
FACTS: Petitioners ("private petitioners") in are all residents of Lubao, Pampanga, claiming to be
cultivating a vast landholding owned by the heirs of Teodorica Reinares Arrastia, Leticia Arrastia Montenegro and
Juanita Arrastia ("Arrastia heirs"). The records of the case show that the landholding had been subdivided and distributed
among the Arrastia heirs and the corresponding certificates of titles issued accordingly.
Sometime in 1976, a certain Rustico Coronel leased the subject property for a period of twelve (12) years or until the
crop year 1987 to 1988. On September 27, 1986, persons claiming to be farmers and residents of Barangay
Lourdes and Barangay San Rafael signed a joint resolution as members of the Aniban ng mga Manggagawa
sa Agrikultura ("AMA") to enter and lease the subject property from the Arrastia heirs. Then Pampanga
Governor Brien Guiao favorably endorsed the resolution to then Minister of Environment and Natural
Resources Heherson Alvarez. On the basis of said resolution but without the consent of the landowners,
the AMA members, who are herein petitioners, entered the disputed land, cleared portions thereof and
planted various crops thereon. This culminated in a violent confrontation on May 21, 1988 that led to the filing of
criminal charges against AMA members.
Page 249 of 306
On June 2, 1988, the AMA filed a complaint with petitioner DARAB praying that respondent Arrastia be
prevented from destroying standing crops on the disputed property and from fencing said property and that
petitioners be allowed to continue with their farming thereon.
On October 5, 1988, the DARAB issued an order denying AMA’s motion for authority to cultivate. The order
became final and executory on July 29, 1989, after the DARAB denied AMA’s motion for reconsideration.
On behalf of her co-heirs and co-owners, Arrastia instituted an action against private petitioners for violation of
Section 73(b) of Republic Act (R.A.) No. 6657 on October 9, 1989. The trial court, sitting as a special agrarian court
("SAC"), issued a temporary restraining order, and subsequently a preliminary injunction, both enjoining
private petitioners from entering and cultivating the disputed property.
On November 29, 1989, private petitioners filed a complaint for injunction and damages before the Provincial
Agrarian Reform Adjudication Board ("PARAD") against Arrastia, alleging that they were actual tillers of the
disputed property who were forcibly evicted by Arrastia from their tenanted lots through the use of armed men. In their
complaint, they prayed that Arrastia be restrained from preventing them from reoccupying the property in question. The
hearing officer issued on December 9, 1990 an order granting a preliminary injunction to restrain Arrastia
from disturbing private petitioners in the tilling of the disputed property. The PARAD hearing officer also
directed the MARO to act on the petition for the coverage of the disputed property under the CARP.
Arrastia filed an answer interposing the defense that the disputed land was not devoted to agriculture and that private
petitioners were not tenants thereof.
After due hearing, the PARAD rendered a decision declaring that the subject property is covered by the CARP
and that private petitioners are qualified beneficiaries of the program. The adjudicator also issued an injunction
prohibiting Arrastia from disturbing private petitioners’ occupation of the property.
Arrastia appealed the decision to petitioner DARAB. The DARAB rendered its decision modifying the
appealed judgment. The DARAB declared petitioners to be agricultural lessees on their respective tillages, and ordering
their reinstatement on the land and ordered the rest of the Plaintiffs-Appellees to be reinstated on the land and to
possess and occupy their respective areas of cultivation.
Aggrieved, Arrastia elevated the controversy to the Court of Appeals, which reversed and set aside the decision of the
DARAB.
ISSUE: Whether the Court of Appeals’ finding that private petitioners are ineligible to become CARP beneficiaries is
without factual or evidentiary basis.
RULING: NO. The Court affirms factual findings and conclusions of the Court of Appeals. The Court of Appeals found
private petitioners as not qualified to become CARP beneficiaries on account of certain violations they
committed and considered it unnecessary to ascertain their status as agricultural lessees or tillers.
The appellate court’s conclusion that private petitioners committed particular violations warranting their
disqualification from the CARP is based on the MARO report which has not been disputed by all the private
petitioners. The MARO who prepared the report enjoys the presumption of regularity in the performance of
her functions. Absent any showing that the Court of Appeals committed grave abuse of discretion in giving
Page 250 of 306
evidentiary weight to said report, said factual findings are generally deemed conclusive on this Court,
which is not a trier of facts.
Anent DARAB’s contention that the MARO report was made unilaterally and without giving private petitioners the
opportunity to be heard, the circumstances not nullify said report for lack of due process. The essence of due process is
simply an opportunity to be heard or, as applied to administrative proceedings, an opportunity to explain one's side or an
opportunity to seek reconsideration of the action or ruling complained of. 14 Private petitioners cannot claim denial of due
process simply because they had ample opportunity to rebut the MARO’s findings and present contrary evidence in the
proceedings before the PARAD, the DARAB, or the Court of Appeals.
Private petitioners insist that they are bona fide agricultural tenants of the disputed property. It is unnecessary to pass
upon this issue in the light of the categorical finding of the appellate court that private petitioners are no longer entitled
to avail of the benefits under the CARP. In any event, however, the claim is not well-founded.
Mere occupation or cultivation of an agricultural land does not automatically convert a tiller or farmworker
into an agricultural tenant recognized under agrarian laws. The essential requisites of a tenancy relationship are:
(1) the parties are the landowner and the tenant; (2) the subject is agricultural land; (3) there is consent among the
parties; (4) the purpose is agricultural production; (5) there is personal cultivation; and (6) there is sharing of harvests.
All these requisites must concur in order to create a tenancy relationship between the parties. In the case at bar, it has
not been sufficiently established that private petitioners’ occupation and cultivation of the disputed
property was with the consent of the landowners.
111) Title: Remman Enterprises vs. CA (G.R. No. 164846, June 18, 2008)
Complete title: G.R. No. 132073 July 25, 2012
REMMAN ENTERPRISES, INC., Petitioner, vs. HON. ERNESTO GARILAO, in his capacity as Secretary of the Department of
Agrarian Reform and EDUARDO ADRIANO, PABLITO ADRIANO, ET. AL., Respondents.
x-----------------------x
G.R. No. 132361
EDUARDO ADRIANO, ET. AL., Petitioners, vs. HON. COURT OF APPEALS, REMMAN ENTERPRISES, INC. and HON.
ERNESTO D. GARILAO, in his capacity as Secretary of Agrarian Reform, Respondents.
Facts: A parcel of land situated in Dasmarinas, Cavite with an area of 46.9180 hectares is owned by Nieves
Saulog, Marietta Saulog, Maura Saulog, et.al. The land was later distributed to farmer-beneficiaries covered by an
Operation Land Transfer (OLT) and Emancipation Patent. The beneficiaries are Eduardo and Pablito Adriano, Ignacio
Villena, Domingo Sayoto, et. al.
In February 1993, the Saulogs filed a Petition for Annulment of Resolution of DAR, Certificates of Land
Transfer, Emancipation Patents and CLOAs as issued by the DAR Regional Director of Region IV, Wilfredo B. Leano. The
disputed area covers 27.8530 hectares of the land which was sold by the Saulogs to Remman Enterprises, a domestic
corporation engaged in developing housing and subdivision projects.
Page 251 of 306
The Provincial Agrarian Reform Adjudicator (PARAD) rendered a decision in favor of the Saulogs. On appeal,
the Department of Agrarian Reform Adjudication Board (DARAB) vacated the decision and remanded the case back to
PARAD for non-joinder of indispensable parties and further reception of evidence.
In 1995, while the case was pending, the Saulogs proceeded to sell the land to Remman. The latter
intervened as the new owner of the lot. Remman filed an application of exemption to the DAR and
provided evidence that the subject land is residential. This application was rejected by the DAR, stating
that the land is covered under CARP.
The DAR also noted that even though Remman showed a notarized Deed of Sale, it was not registered with
the Register of Deeds. Hence, the Saulogs are still considered owners of the subject lot and Remman has no
personality to file the application of exemption.
Upon Motion for Reconsideration, the DAR reduced the CARP coverage of the land to 15.31915 hectares (share of Nieves
Saulog), citing that the tenants planted rice and corn therein under the OLT. The order also explained that Nieves Saulog
is allowed to exercise the right to retention over the land.
Unsatisfied, Remman appealed the case to the Court of Appeals which affirmed the decision.
Issue: Whether the CA erred by failing to conclude that the lands involved were already effectively converted into
residential lands by virtue of the re-zoning of the Sangguniang Bayan of Dasmariñas, Cavite and approved by the Housing
and Land Use Regulatory Board (HLURB).
Ruling: This Court deferred the final adjudication of the cases because of the pendency of DARAB case on
the validity of the emancipation patents covering the same parcels of land which are also the objects of the
application for exemption from the coverage of CARP by Remman. The Court reasoned that a complete
resolution of the application for exemption requires a prior final finding that the emancipation patents issued to Eduardo
Adriano, et. al. are null and void.
112) Title: Landbank vs. Spouses Orilla (G.R. No. 157206, June 27, 2008)
Complete title: G.R. No. 157206 June 27, 2008
LAND BANK OF THE PHILIPPINES, petitioner, vs. SPOUSES PLACIDO ORILLA and CLARA DY ORILLA,
respondents.
Facts: Respondents spouses Placido and Clara Orilla were owners of a parcel of land in Bohol containing an
area of 23.3416 hectares. On November 1996, spouses received a notice of land valuation and acquisition
informing them of the compulsory acquisition of the 21.1289 hectares of their landholdings pursuant to the
Comprehensive Agrarian Reform Law. The notice also informed the respondents that they shall be paid an amount
of Php 371, 154.99 as just compensation. However, respondents rejected the offer and asked the Provincial
Department of Agrarian Reform Adjudication Board (Provincial DARAB) to re-assess and determine the
amount of just compensation. Unfortunately, PDARAB affirmed the initial valuation. Respondents then filed an action
for the determination of just compensation before the Special Agrarian Court in Tagbilaran City.
On November 20, court rendered a decision fixing the just compensation for the subject property at Php 1,479, 023.00. A
notice of appeal was filed by the petitioner, which was countered by the respondents by filing a motion for execution
Page 252 of 306
pending appeal. Court granted the latter, which ordered the petitioner to deposit the aforementioned amount with any
accessible bank immediately. In light of this court order, the petitioner filed another special civil action for certioriari and
prohibition with prayer for issuance of a temporary restraining order and/or preliminary injunction. Nevertheless, on July
29, 2002 a decision assailed that the granting of execution was consistent with justice, fairness, and equity as
respondents had been deprived of the used and possession of such property. On the same year, the decision of SAC with
regard to the amount fixing the just compensation was set aside on the ground that there was no insufficient basis to
support the land valuation. Yet, it reaffirmed the decision of immediate payment of the respondents regardless if the case
was still pending.
Issue: Whether or not the Spouses Orilla were entitled to the execution pending appeal of the compensation fixed by
SAC based on the principle of prompt payment of just compensation.
Ruling: Yes, the court ruled that without prompt payment, compensation cannot be considered as “just” as
the property owner was made to suffer the consequence of being immediately deprived of his land while
being made to wait for a decision that can last for many years. Therefore, petitioner LBP was ordered to release
the amount of Php 371, 154.99 to the respondents—the initial amount of valuation. Whatever amount that may be in
deficient shall be delivered upon finality of decision.
The concept of just compensation embraces not only the correct determination of the amount to be paid to
the owners of the land, but also payment within a reasonable time from its taking. Without prompt payment,
compensation cannot be considered "just" inasmuch as the property owner is made to suffer the consequences of being
immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount
necessary to cope with his loss.
Art. XIII, Sec. 9

113) Title: Zamboanga del Norte vs. City of Zamboanga [22 SCRA 1334 (1968)]
Complete title: G.R. No. L-24440 March 28, 1968
THE PROVINCE OF ZAMBOANGA DEL NORTE, plaintiff-appellee, vs. CITY OF ZAMBOANGA, SECRETARY OF FINANCE and
COMMISSIONER OF INTERNAL REVENUE, defendants-appellants.
Facts: Prior to its incorporation as a chartered city, the Municipality of Zamboanga used to be the provincial capital of the
then Zamboanga Province. On October 12, 1936, Commonwealth Act 39 was approved converting the
Municipality of Zamboanga into Zamboanga City. Sec. 50 of the Act also provided that “Buildings and
properties which the province shall abandon upon the transfer of the capital to another place will be
acquired and paid for by the City of Zamboanga at a price to be fixed by the Auditor General.”
Such properties include lots of capitol site, schools, hospitals, leprosarium, high school playgrounds, burleighs, and hydro-
electric sites.
On June 6, 1952, Republic Act 711 was approved dividing the province of Zamboanga into two (2):
Zamboanga del Norte and Zamboanga del Sur. As to how the assets and obligations of the old province were to be
divided between the two new ones, Sec. 6 of that law provided “Upon the approval of this Act, the funds, assets and
Page 253 of 306
other properties and the obligations of the province of Zamboanga shall be divided equitably between the Province of
Zamboanga del Norte and the Province of Zamboanga del Sur by the President of the Philippines, upon the
recommendation of the Auditor General.”
However, on June 17, 1961, Republic Act 3039 was approved amending Sec. 50 of Commonwealth Act 39
by providing that, “All buildings, properties and assets belonging to the former province of Zamboanga and
located within the City of Zamboanga are hereby transferred, free of charge, in favor of the said City of
Zamboanga.”
This constrained Zamboanga del Norte to file on March 5, 1962, a complaint against defendants-appellants Zamboanga
City; that, among others, Republic Act 3039 be declared unconstitutional for depriving Zamboanga del Norte of property
without due process and just compensation.
Lower court declared RA 3039 unconstitutional as it deprives Zamboanga del Norte of its private properties. Hence the
appeal.
Issue: Whether RA 3039 is unconstitutional on the grounds that it deprives Zamboanga del Norte of its private
properties.
Ruling: No. RA 3039 is valid. The properties petitioned by Zamboanga del Norte is a public property.
The validity of the law ultimately depends on the nature of the 50 lots and buildings thereon in question. For,
the matter involved here is the extent of legislative control over the properties of a municipal corporation, of which a
province is one. The principle itself is simple: If the property is owned by the municipality (meaning municipal
corporation) in its public and governmental capacity, the property is public and Congress has absolute control over it. But
if the property is owned in its private or proprietary capacity, then it is patrimonial and Congress has no absolute control.
The municipality cannot be deprived of it without due process and payment of just compensation.
114) Title: City of Baguio vs. Nawasa [106 Phil. 144 (1959)]
Complete title: G.R. No. L-12032 August 31, 1959
CITY OF BAGUIO, plaintiff-appelle, vs. THE NATIONAL WATERWORKS AND SEWERAGE AUTHORITY, defendant-
appellant.
Facts: On April 25, 1956 Plaintiff City of Baguio, a municipal corporation filed a complaint for declaratory relief against
defendant NAWASA, a public corporation created by Republic Act No. 1383. It contend that said Act does not include
within its purview the Baguio Waterworks System; that assuming that it does, said Act is unconstitutional because it has
the effect of depriving plaintiff of the ownership, control and operation of said waterworks system without compensation
and without due process of law, and that it is oppressive, unreasonable and unjust to plaintiff and other cities,
municipalities and municipal districts similarly situated.
On May 22, 1956, defendant filed a motion to dismiss on the ground that Republic Act No. 1383 is a proper exercise of
the police power of the State; that assuming that said Act contemplates an act of expropriation, it is still a constitutional
exercise of the power of eminent domain; that at any rate the Baguio Waterworks System is not a private property but
"public works for public service" over which the Legislature has control; and that the provisions of said Act being clear
and unambiguous, there is no necessity for construction.
Page 254 of 306
On November 5, 1956 the court held that the waterworks system of the City of Baguio falls within the category of ‘private
property’, as contemplated by our Constitution and may not be expropriated without just compensation; and that section
8 of Republic Act No. 1383 provides for the exchange of the NAWASA assets for the value of the waterworks system of
Baguio is unconstitutional as this is not ‘just compensation.
Issue: Whether Republic Act No. 1383 is a valid exercise of police power or power of eminent domain.
Ruling: Republic Act No. 1383 is NOT a valid exercise of police power, since the Act does not confiscate, nor
destroy, nor appropriate property belonging to appellee. It merely directs that all waterworks belonging to cities,
municipalities and municipal districts in the Philippines be transferred to the NAWASA for the purpose of
placing them under the control and supervision of one agency with a view to promoting their efficient
management, but in so doing it does not confiscate them because it directs that they be paid with an equal value
of the assets of the NAWASA.
Furthermore, Baguio water works system is not like a public road, the park, street other public property held in trust by a
municipal corporation for the benefit of the public but is rather a property owned by the appellee. Waterworks system
is patrimonial property of the city, and being owned by a municipal corporation; it cannot be taken away.
The law speaks of assets of the NAWASA but they are not specified. While the Act empowers the NAWASA to
contract indebtedness and issue bonds subject to the approval of the Secretary of Finance when necessary
for the transaction of its business (sec. 2, par. (L), sec. 5, Act No. 1383), no such action has been taken to
comply with appellant's commitment in so far as payment of compensation of appellee is concerned. As to
when such action should be taken no one knows. And unless this aspect of the law is clarified and appellee is
given its due compensation, appellee cannot be deprived of its property even if appellant desires to take
over its administration in line with the spirit of the law. We are therefore persuaded to conclude that the
law, insofar as it expropriates the waterworks in question without providing for an effective payment of
just compensation, violates our Constitution. In this respect, the decision of the trial court is correct.
MODULE 1-C. TAXATION

• Definition, Nature and Scope
115) Philippine Guaranty Co., Inc. vs. CIR (13 SCRA 775)
FACTS: The Philippine Guaranty Co., Inc., a domestic insurance company, entered into reinsurance
contracts, on various dates, with foreign insurance companies not doing business in the Philippines.
Petitioner thereby agreed to cede to the foreign reinsurers a portion of the premiums on insurance it
has originally underwritten in the Philippines, in consideration for the assumption by the latter of liability on an
equivalent portion of the risks insured.
Page 255 of 306
Said reinsurance contracts were signed by Philippine Guaranty Co., Inc. in Manila and by the foreign
reinsurers outside the Philippines. Said premiums were excluded by Philippine Guaranty Co., Inc. from its
gross incomewhen it filed its income tax returns for 1953 and 1954. It did not withhold or pay tax on them.
Consequently, the CIR assessed against PETITIONER withholding tax on the ceded reinsurance premiums.
Petitioner protested the assessment on the ground that the premiums did not constitute income from
sources within the Philippines because the foreign reinsurers did not engage in business in the Philippines,
and CIR's previous rulings did not require insurance companies to withhold income tax due from foreign
companies.
CTA: IN FAVOR OF RESPONDENT
ISSUE: Whether insurance companies not required to withhold tax on reinsurance premiums ceded to
foreign insurance companies, which deprives the government from collecting the tax due from them.
RULING: NO. The power to tax is an attribute of sovereignty. It is a power emanating from necessity. It is
a necessary burden to preserve the State's sovereignty and a means to give the citizenry an army to resist
an aggression, a navy to defend its shores from invasion, a corps of civil servants to serve, public
improvement designed for the enjoyment of the citizenry and those which come within the State's
territory, and facilities and protection which a government is supposed to provide.Considering that the
reinsurance premiums in question were afforded protection by the government and the recipient foreign reinsurers
exercised rights and privileges guaranteed by our laws, such reinsurance premiums and reinsurers should share
the burden of maintaining the state.
The reinsurance premiums are subject to tax. The reinsurance contracts show that the transactions or
activities that constituted the undertaking to reinsure Philippine Guaranty Co., Inc. against lose arising from
the original insurances in the Philippines was performed in the Philippines.
Section 24 of the Tax Code subjects foreign corporations to tax on their income from sources within
the Philippine. “Sources” means the activity, property, or service giving rise to the income.
The petitioner’s claim that the tax due on the reinsurance premium in question has deduction pursuant to certain
provisions of the National Internal Revenue Code is not tenable.
The original insurance undertakings took place in the Philippines. It is not required that the foreign
corporation be engaged in business in the Philippines. What is controlling is not the place of business, but
the place of activity that created the income.Thus, the income is subject to income tax.
It has not been shown that it withheld the amount of tax due before it inquired form the BIR,
contrary to the requirements of Section 200. Strict observance of said steps is required of a withholding agent
before he could be released from liability. Foreign corporations are taxable on their income from sources within
the Philippines. The foreign insurer’s place of business should not be confused with their place of activity.
It suffices that the activity creating the income is performed or done in the Philippines.
Page 256 of 306
The petitioner's defense of reliance of good faith on rulings of the CIR requiring no withholding of tax due on
reinsurance premiums may free the taxpayer from the payment of surcharges or penalties imposed for failure to pay the
corresponding withholding tax, but it certainly would not exculpate it from liability to pay such withholding tax. The
Government is not estopped from collecting taxes by the mistakes or errors of its agents.
NOTE: The foreign insurers' place of business should not be confused with their place of activity. Business
should not be continuity and progression of transactions while activity may consist of only a single transaction. An activity
may occur outside the place of business.
WHEREFORE, in affirming the decision appealed from, the Philippine Guaranty Co., Inc. is hereby ordered to pay
to the Commissioner of Internal Revenue the sums of P202,192.00 and P173,153.00, or a total amount of P375,345.00,
as withholding tax for the years 1953 and 1954, respectively. If the amount of P375,345.00 is not paid within 30 days
from the date this judgement becomes final, there shall be collected a surcharged of 5% on the amount unpaid, plus
interest at the rate of 1% a month from the date of delinquency to the date of payment, provided that the maximum
amount that may be collected as interest shall not exceed the amount corresponding to a period of three (3) years. With
costs againsts petitioner.
116) Manila Gas vs. Collector of Internal Revenue (62 Phil 420)
FACTS: MANILA GAS operates a gas plant in the Manila and furnishes gas service to the people of the
Manila and its surrounding municipalitiesby virtue of a franchise granted by the PH Government.Associated
with MANILA GAS are: ISLAND GAS domiciled in New York, USA, and GENERAL FINANCE COMPANY domiciled
in Zurich, Switzerland. Neither of these corporations is resident in the Philippines.
For 1930, 1931, and 1932, dividends worth P1.3M were paid by MANILA GAS to ISLAND GAS as their
stockholders. TheCIR collected withholding income taxes worth P40K.
For the same years, interest on bonds worth P400K was paid by MANILA GAS to ISLAND GAS. The CIR collected
withholding income taxes worth P12K. Also for the same years, interest on other indebtedness worth P130K was paid by
MANILA GAS to the ISLAND GAS and GENERAL FINANCE. Moreover, the CIR collected withholding income taxes worth
P4K. Overall, the CIR collected P56K from MANILA GAS.
Thus, MANILA GAS filed an action against the CIR for the recovery of P56K. The CFI dismissed the
case.
The petitioner raised the following arguments:
 The CFI erred in holding that the dividends paid by MANILA GAS were subject to income tax in the
hands of its stockholders. Because to impose the tax thereon would be to impose a tax on the MANILA
GAS, in violation of the terms of its franchise, and would, moreover, be oppressive and inequitable.
 The particular portion of the franchise which is invoked provides:The grantee shall annually on the fifth
day of January of each year pay to the City of Manila and the municipalities in the Province of Rizal in which gas
is sold, two and one half per centum of the gross receipts within said city and municipalities, respectively, during
Page 257 of 306
the preceding year. Said payment shall be in lieu of all taxes, Insular, provincial and municipal, except taxes
on the real estate, buildings, plant, machinery, and other personal property belonging to the grantee.
 The interest on bonds and other indebtedness of MANILA GAS, paid by it outside of the Philippines
to corporations not residing therein, were not, on the part of the recipients thereof, income from
Philippine sources, and hence not subject to Philippine income tax.
ISSUE: Whether petitioner is liable for paying income tax and the corporation not domiciled in PH is subject to Philippine
taxation.
RULING: NO. Manila Gas is not liable for paying income tax but its stockholders are liable . A corporation
has a personality distinct from that of its stockholders. This enables the taxing power to reach the latter when
they receive dividends from the corporation. Dividends of a domestic corporation, which are paid and delivered
in cash to foreign corporations as stockholders, are subject to the payment of income tax despite the
exemption clause in the charter of the corporation.
The approved doctrine is that no state may tax anything not within its jurisdiction without violating
the due process clause of the constitution. The taxing power of a state does not extend beyond its
territorial limits, but within such it may tax persons, property, income, or business.
If an interest in property is taxed, the situs of either the property or interest must be found within the state. If an
income is taxed, the recipient thereof must have a domicile within the state or the property or business out of which the
income issues must be situated within the state so that the income may be said to have a situs therein.
MANILA GAS operates its business entirely within the Philippines. Its earnings therefore come from
local sources. The place of material delivery of the interest to the foreign corporations paid out of the revenue of the
domestic corporation is of no particular moment.
The place of payment even if conceded to be outside of the country cannot alter the fact that the
income was derived from the Philippines (The SC said it was not clear as to where the payments were made, some
records show US some show Switzerland).
The word "source" conveys only one idea, that of origin, and the origin of the income was the
Philippines.
Personal property may be separated from its owner, and he may be taxed on its account at the
place where the property is although it is not the place of his own domicile and even though he is not a
citizen or resident of the state which imposes the tax. But debts owing by corporations are obligations of the
debtors, and only possess value in the hands of the creditors.
The Collector of Internal Revenue was justified in withholding income taxes on interest on bonds
and other indebtedness paid to non-resident corporations because this income was received from sources
within the Philippine Islands as authorized by the Income Tax Law.
Page 258 of 306
117) Tiu vs. Videogram Regulatory Board (151 SCRA 703)

G.R. No. L-75697
VALENTIN TIO doing business under the name and style of OMI ENTERPRISES, petitioner,vs.
VIDEOGRAM REGULATORY BOARD, MINISTER OF FINANCE, METRO MANILA COMMISSION, CITY MAYOR
and CITY TREASURER OF MANILA, respondents.
FACTS: The case is a petition filed by petitioner on behalf of videogram operators adversely affected by Presidential
Decree No. 1987, “An Act Creating the Videogram Regulatory Board" with broad powers to regulate and
supervise the videogram industry.
A month after the promulgation of the said Presidential Decree, the amended the National Internal Revenue Code
provided that:
"SEC. 134. Video Tapes. — There shall be collected on each processed video-tape cassette, ready for playback,
regardless of length, an annual tax of five pesos; Provided, That locally manufactured or imported blank video tapes
shall be subject to sales tax."
"Section 10. Tax on Sale, Lease or Disposition of Videograms. — Notwithstanding any provision of law to the
contrary, the province shall collect a tax of thirty percent (30%) of the purchase price or rental rate, as the
case may be, for every sale, lease or disposition of a videogram containing a reproduction of any motion
picture or audiovisual program.”
“Fifty percent (50%) of the proceeds of the tax collected shall accrue to the province, and the other fifty
percent (50%) shall accrue to the municipality where the tax is collected; PROVIDED, That in Metropolitan
Manila, the tax shall be shared equally by the City/Municipality and the Metropolitan Manila Commission.”
The rationale behind the tax provision is to curb the proliferation and unregulated circulation of
videograms including, among others, videotapes, discs, cassettes or any technical improvement or
variation thereof, have greatly prejudiced the operations of movie houses and theaters. Such unregulated
circulation have caused a sharp decline in theatrical attendance by at least forty percent (40%) and a tremendous drop in
the collection of sales, contractor's specific, amusement and other taxes, thereby resulting in substantial losses estimated
at P450 Million annually in government revenues.
Videogram(s) establishments collectively earn around P600 Million per annum from rentals, sales and
disposition of videograms, and these earnings have not been subjected to tax, thereby depriving the
Government of approximately P180 Million in taxes each year.
The unregulated activities of videogram establishments have also affected the viability of the movie industry.
Tio claimed that Section 10 was unconstitutional because the tax imposed is harsh, confiscatory,
oppressive and/or in unlawful restraint of trade in violation of the due process clause of the Constitution,
etc.
ISSUE: Whether the power of taxation was validly exercised

Page 259 of 306
RULING: YES. It is beyond serious question that a tax does not cease to be valid merely because it regulates,
discourages, or even definitely deters the activities taxed. The power to impose taxes is one so unlimited in force and so
searching in extent, that the courts scarcely venture to declare that it is subject to any restrictions whatever, except such
as rest in the discretion of the authority which exercises it.
The tax imposed by the DECREE is not only a regulatory but also a revenue measure prompted by the
realization that earnings of videogram establishments of around P600 million per annum have not been
subjected to tax, thereby depriving the Government of an additional source of revenue. It is an end-user tax,
imposed on retailers for every videogram they make available for public viewing. It is similar to the 30% amusement tax
imposed or borne by the movie industry which the theater-owners pay to the government, but which is passed on to the
entire cost of the admission ticket, thus shifting the tax burden on the buying or the viewing public. It is a tax that is
imposed uniformly on all videogram operators.
The levy of the 30% tax is for a public purpose. It was imposed primarily to answer the need for
regulating the video industry, particularly because of the rampant film piracy, the flagrant violation of
intellectual property rights, and the proliferation of pornographic video tapes.
And while it was also an objective of the DECREE to protect the movie industry, the tax remains a valid
imposition. The public purpose of a tax may legally exist even if the motive which impelled the legislature
to impose the tax was to favor one industry over another.
”It is inherent in the power to tax that a state be free to select the subjects of taxation, and it has been repeatedly held
that “inequities which result from a singling out of one particular class for taxation or exemption infringe no constitutional
limitation’.” Taxation has been made the implement of the state’s police power. At bottom, the rate of tax is a matter
better addressed to the taxing legislature.
IMPORTANT NOTES:
The tax imposed is not harsh and oppressive, confiscatory, and in restraint of trade.
The levy of the 30% tax is for a public purpose. It was imposed primarily to answer the need for regulating the
video industry, particularly because of the rampant film piracy, the flagrant violation of intellectual property rights,
and the proliferation of pornographic video tapes. And while it was also an objective of the Decree to protect the
movie industry, the tax remains a valid imposition. That being said, the rate of tax is a matter better addressed to
the taxing legislature.
The video industry is not being over-regulated.
The video industry being a relatively new industry, the need for its regulation was apparent . While the underlying
objective of the DECREE is to protect the moribund movie industry, there is no question that public welfare is at
bottom of its enactment, considering "the unfair competition posed by rampant film piracy; the erosion of the
moral fiber of the viewing public brought about by the availability of unclassified and unreviewed video tapes
containing pornographic films and films with brutally violent sequences; and losses in government revenues due to
Page 260 of 306
the drop in theatrical attendance, not to mention the fact that the activities of video establishments are virtually
untaxed since mere payment of Mayor's permit and municipal license fees are required to engage in business
Due Process, Equal Protection, Uniformity and Taxation

118) Philippine Health Care Providers vs. CIR (G.R. No. 167330, September 18, 2009)
G.R. No. 167330 September 18, 2009
PHILIPPINE HEALTH CARE PROVIDERS, INC., Petitioner,
vs.
COMMISSIONER OF INTERNAL REVENUE, Respondent.
FACTS: Petitioner is a domestic corporation whose primary purpose is “[t]o establish, maintain, conduct
and operate a prepaid group practice health care delivery system or a health maintenance organization to
take care of the sick and disabled persons enrolled in the health care plan and to provide for the
administrative, legal, and financial responsibilities of the organization”. Individuals enrolled in its health care
programs pay an annual membership fee and are entitled to various preventive, diagnostic and curative medical services
provided by its duly licensed physicians, specialists and other professional technical staff participating in the group
practice health delivery system at a hospital or clinic owned, operated or accredited by it.
On January 27, 2000, the respondent CIR sent petitioner assessment of deficiency taxes, both Value-Added
Tax (VAT) and documentary stamp tax (DST) in the total amount of P224,702,641.18 for taxable years
1996 and 1997.
Petitioner protested such assessment in a letter, but the respondent did not act on the protest which led the petitioner to
file a petition in the Court of Tax Appeals (CTA) seeking the cancellation of said assessments . CTA partially granted the
petition wherein the petitioner is ordered to pay the deficiency VAT and set aside the DST deficiency tax.
Respondent appealed in Court of Appeals (CA) with regard to the cancellation of DST assessment. C A granted the
petition. The Court affirmed CA’s decision. Hence, petitioner filed a motion for reconsideration.
ISSUE: Whether or not the petitioner is liable to pay the DST on its health care agreement pursuant to
Sec.185 of the National Internal Revenue Code of 1997
HELD: NO. Petitioner is not contemplated to be included in “or other branch insurance” covered by Section
185 of NIRC because it is a Health Maintenance Organization (HMO) and not an insurance company.
Page 261 of 306
HMOs primary purpose is rendering service to its member by lowering prices and reducing the cost rather
than the risk of medical health. On the other hand, insurance businesses undertakes for a consideration to
indemnify its clients against loss, damage or liability arising from unknown or contingent event.
The term “indemnify” therein presuppose that a liability or claim has already been incurred. In HMOs, there is no
indemnity precisely because the member merely avails of medical services to be paid or already paid in advance at a pre-
agreed price under the agreements.
Moreover, HMOs play an important role in society as partners of the State in achieving its constitutional
mandate of providing citizens with affordable health services. Also, the DST assessment of the petitioner for the
years 1996 and 1997 became moot and academic since it availed tax amnesty under RA 9480 on December 10, 2007.
Thus, petitioner is entitled to immunity from payment of taxes for taxable year 2005 and prior years.
IMPORTANT NOTES:
The mere presence of risk would be insufficient to override the primary purpose of the business to provide
medical services as needed, with payment made directly to the provider of these services. In short, even if
petitioner assumes the risk of paying the cost of these services even if significantly more than what the
member has prepaid, it nevertheless cannot be considered as being engaged in the insurance business.
In fact, a substantial portion of petitioner’s services covers preventive and diagnostic medical services intended to keep
members from developing medical conditions or diseases. As an HMO, it is its obligation to maintain the good health of its
members. Accordingly, its health care programs are designed to prevent or to minimize the possibility of any
assumption of risk on its part. Thus, its undertaking under its agreements is not to indemnify its members
against any loss or damage arising from a medical condition but, on the contrary, to provide the health and
medical services needed to prevent such loss or damage.
Overall, petitioner appears to provide insurance-type benefits to its members (with respect to its curative
medical services), but these are incidental to the principal activity of providing them medical care . The
“insurance-like” aspect of petitioner’s business is miniscule compared to its non-insurance activities. Therefore, since it
substantially provides health care services rather than insurance services, it cannot be considered as being
in the insurance business.
Lastly, it is significant that petitioner, as an HMO, is not part of the insurance industry. This is evident from
the fact that it is not supervised by the Insurance Commission but by the Department of Health. In fact, in a
letter dated September 3, 2000, the Insurance Commissioner confirmed that petitioner is not engaged in the insurance
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business. This determination of the commissioner must be accorded great weight. It is well-settled that the interpretation
of an administrative agency which is tasked to implement a statute is accorded great respect and ordinarily controls the
interpretation of laws by the courts.
119) NPC vs CITY OF CABANATUAN

G.R. No. 177332, October 01, 2014
NATIONAL POWER CORPORATION, Petitioner, v. CITY OF CABANATUAN, REPRESENTED BY ITS CITY
MAYOR, HON. HONORATO PEREZ, Respondents.
FACTS:
NAPOCOR, the petitioner, is a GOCC created under Commonwealth Act 120. It is tasked to undertake the
“development of hydroelectric generations of power and the production of electricity from nuclear,
geothermal, and other sources, as well as the transmission of electric power on a nationwide basis.”
For many years now, NAPOCOR sells electric power to the resident Cabanatuan City, posting a gross income of
P107,814,187.96 in 1992. Pursuant to Section 37 of Ordinance No. 165-92, the respondent assessed the
petitioner a franchise tax amounting to P808,606.41, representing 75% of 1% of the former’s gross receipts for the
preceding year.
Petitioner, whose capital stock was subscribed and wholly paid by the Philippine Government, refused to
pay the tax assessment. It argued that the respondent has no authority to impose tax on government
entities. Petitioner also contend that as a non-profit organization, it is exempted from the payment of all
forms of taxes, charges, duties or fees in accordance with Sec. 13 of RA 6395, as amended.
The respondent filed a collection suit in the RTC of Cabanatuan City, demanding that petitioner pay the
assessed tax, plus surcharge equivalent to 25% of the amount of tax and 2% monthly interest. Respondent alleged
that petitioner’s exemption from local taxes has been repealed by Sec. 193 of RA 7160 (LGC), which reads
as follows:
“Sec. 193. Withdrawal of Tax Exemption Privileges.- Unless otherwise provided in this Code, tax exemptions or
incentives granted to, or presently enjoyed by all persons, whether natural or juridical, including government
owned or controlled corporations, except local water districts, cooperatives duly registered under R.A. No.
6938, non-stock and non-profit hospitals and educational institutions, are hereby withdrawn upon the
effectivity of this Code.”
The RTC upheld NPC’s tax exemption and dismissed the case. On appeal the CA reversed the trial court’s
Order on the ground that section 193, in relation to sections 137 and 151 of the LGC, expressly withdrew the
exemptions granted to the petitioner.
Page 263 of 306
ISSUE: Whether respondent city government has the authority to issue Ordinance No. 165-92 and impose
an annual tax on “businesses enjoying a franchise”?
HELD: YES. Taxes are the lifeblood of the government, for without taxes, the government can neither exist
nor endure. A principal attribute of sovereignty, the exercise of taxing power derives its source from the
very existence of the state whose social contract with its citizens obliges it to promote public interest and
common good. The theory behind the exercise of the power to tax emanates from necessity; without taxes,
government cannot fulfill its mandate of promoting the general welfare and well-being of the people.
Section 137 of the LGC clearly states that the LGUs can impose franchise tax “notwithstanding any
exemption granted by any law or other special law.” This particular provision of the LGC does not admit
any exception. In City Government of San Pablo, Laguna v. Reyes,74 MERALCO’s exemption from the payment of
franchise taxes was brought as an issue before this Court. The same issue was involved in the subsequent case of Manila
Electric Company v. Province of Laguna.75 Ruling in favor of the local government in both instances, we ruled that the
franchise tax in question is imposable despite any exemption enjoyed by MERALCO under special laws, viz:
“It is our view that petitioners correctly rely on provisions of Sections 137 and 193 of the LGC to support their position
that MERALCO’s tax exemption has been withdrawn. The explicit language of section 137 which authorizes the province
to impose franchise tax ‘notwithstanding any exemption granted by any law or other special law’ is all-encompassing and
clear. The franchise tax is imposable despite any exemption enjoyed under special laws.
Section 193 buttresses the withdrawal of extant tax exemption privileges. By stating that unless otherwise
provided in this Code, tax exemptions or incentives granted to or presently enjoyed by all persons, whether natural or
juridical, including government-owned or controlled corporations except (1) local water districts, (2) cooperatives duly
registered under R.A. 6938, (3) non-stock and non-profit hospitals and educational institutions, are withdrawn upon the
effectivity of this code, the obvious import is to limit the exemptions to the three enumerated entities. It is a basic
precept of statutory construction that the express mention of one person, thing, act, or consequence excludes all others
as expressed in the familiar maxim expressiouniusestexclusioalterius. In the absence of any provision of the Code to
the contrary, and we find no other provision in point, any existing tax exemption or incentive enjoyed by
MERALCO under existing law was clearly intended to be withdrawn.
Reading together sections 137 and 193 of the LGC, we conclude that under the LGC the local government unit may
now impose a local tax at a rate not exceeding 50% of 1% of the gross annual receipts for the preceding calendar
based on the incoming receipts realized within its territorial jurisdiction. The legislative purpose to withdraw
tax privileges enjoyed under existing law or charter is clearly manifested by the language used on (sic)
Sections 137 and 193 categorically withdrawing such exemption subject only to the exceptions
enumerated. Since it would be not only tedious and impractical to attempt to enumerate all the existing statutes
providing for special tax exemptions or privileges, the LGC provided for an express, albeit general, withdrawal of such
exemptions or privileges. No more unequivocal language could have been used.”
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Doubtless, the power to tax is the most effective instrument to raise needed revenues to finance and
support myriad activities of the local government units for the delivery of basic services essential to the
promotion of the general welfare and the enhancement of peace, progress, and prosperity of the people. As
this Court observed in the Mactan case, “the original reasons for the withdrawal of tax exemption privileges granted to
government-owned or controlled corporations and all other units of government were that such privilege resulted in
serious tax base erosion and distortions in the tax treatment of similarly situated enterprises.” With the added burden
of devolution, it is even more imperative for government entities to share in the requirements of
development, fiscal or otherwise, by paying taxes or other charges due from them.
120) EASTERN THEATRICAL CO. VS ALFONSO

G.R. No. L-1104 May 31, 1949
EASTERN THEATRICAL CO., INC., ET AL., plaintiffs-appellants,
vs.
VICTOR, ALFONSO as City Treasurer of Manila, THE MUNICIPAL BOARD OF THE CITY OF MANILA, and JUAN
NOLASCO, as Mayor of the City of Manila, defendants-appellees.
FACTS:
Twelve corporations engaged in the motion picture business filed a complaint to impugn the validity of Ord
No.2958 of the City of Manila entitiled “"AN ORDINANCE IMPOSING A FEE ON THE PRICE OF EVERY
ADMISSION TICKET SOLD BY CINEMATOGRAPHS THEATERS, VAUDEVILLE COMPANIES, THEATRICAL
SHOWS AND BOXING EXHIBITIONS; AND PROVIDING FOR OTHER PURPOSES.”
Plaintiffs, impugn as null and void, Sections 1, 2, and 4 upon the following grounds;
(a) For violating the Constitution, more particularly the provisions regarding the uniformity and equality
of taxation and the equal protection of the laws;
(b) because the Municipal Board of Manila exceeded and overstepped the powers granted it by the
Charter of the City of Manila ;
(c) because it contravenes, violates, and is inconsistent with, existing national legislation, more
particularly revenue and tax laws; and,
(d) because it is unfair, unjust, arbitrary, capricious, unreasonable, oppressive, and is contrary to
and violates our basic and recognized principles of taxation and licensing laws.
Defendants allege as affirmative defenses that; (a) the ordinance was passed by the Municipal Board by virtue
of its express legislative power to tax, fix license fee and regulate the business of theatres , (b) that the
graduated tax required by said ordinance being applied to all as a class without distinction or exception
and does not violate the constitutional prohibition against uniformity and equality of taxation, (c) that the tax imposed
by NIRC is collected for the National Government whereas Ord No. 2958 is for the City of Manila and that
Page 265 of 306
there is no case of double taxation, (d) that said ordinance having been enacted under the express power of
the Municipal Board to tax for revenue, as distinguished from its power to license for purely police
purposes, the fact that the amounts collected there under are higher than what are needed for police regulation and
supervision does not render said ordinance unfair, unjust, capricious, unreasonable and oppressive; (e) that,
considering the nature of the business of the plaintiffs and the enormous volume of business they handle,
the graduated tax fixed by the ordinance is not unreasonable.
Defendants also allege that since the ordinance in question took effect, plaintiffs have been charging the
theatre-going public increased rates of prices of admissions equal and corresponding to the graduated tax
imposed by the ordinance, and as a result while refusing to pay said tax but at the same time collecting the said tax,
plaintiffs have taken undue advantage of said ordinance to realize more profits.
September 5, 1946, CFI upheld the validity of Ord. No 2958.
ISSUE: Whether Ordinance No. 2958 is valid? YES
HELD:
PROVISIONS OF SECTION 2444 (M) OF THE REVISED ADMINISTRATIVE CODE, CONSTRUED.—The whole argument
of plaintiffs hinges on the assumption that the power granted to the City of Manila by section 2444 (ra) of
the Revised Administrative Code is limited to the authority to impose a tax on business, with exclusion of
the power to impose a tax on amusement; but, the assumption is based on an arbitrary labelling of the kind of tax
authorized by said section 2444 (m). The distinction as to the power to tax business and the power to tax amusement
has no ground under the provisions of section 2444 (m) of the Revised Administrative Code. The tax therein authorized
cannot be defined as tax on business and cannot be restricted within a smaller scope than what is authorized by the
words used, to the extent of excluding what plaintiffs describe as tax on amusement.
The very fact that section 2444(m) of the Revised Administrative Code includes theatres, cinematographs,
public billiard tables, public pool tables, bowling alleys, dance halls, public dancing halls, cabarets, circuses and other
similar places, race tracks, horse races, theatrical performances, public exhibition, circus and other performances and
places of amusements, will show conclusively that the power to tax amusement is expressly included within
the power granted by section 2444 (m) of the Revised Administrative Code.
In support of the contention that section 2444 (m) of the Revised Administrative Code was repealed, plaintiffs aver that
the Charter of the City of Manila, containing section 2444 (m) of the Revised Administrative Code, was enacted on.
December 8, 1929. On April 25, 1940, the National Assembly enacted Commonwealth Act No. 466, including provisions
on amusement tax, covering the whole field on taxation and provided for more than what the ordinance in question has
provided. As a result, there are two taxing powers seeking to occupy exactly the same field of legislation, and so the
apparent conflict must be resolved with the conclusion that, with the enactment of Commonwealth Act No. 466, as later
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amended by Republic Act No. 39, section 2444 (m) of the Revised Administrative Code has been impliedly repealed and
the power therein delegated to the City of Manila withdrawn.
That the conflict pointed out is imaginary. Both provisions of law may stand together and be enforced at
the same time without any incompatibility.
EQUALITY AND UNIFORMITY OF TAXATION; VALIDITY OF ORDINANCE NO. 2958.—Appellants point out to the
fact that the ordinance in question does not tax "many more kinds of amusements" than those therein specified, such as
"race tracks, cockpits, cabarets, concert halls, circuses, and other places of amusement." The argument has absolutely no
merit. The fact that some places of amusement are not taxed while others, such as cinematographs, theaters, vaudeville
companies, theatrical shows, and boxing exhibitions and other kinds of amusements or places of amusement are taxed, is
no argument at all against the equality and uniformity of the tax imposition. Equality and uniformity in taxation
means that all taxable articles or kinds of property of the same class shall be taxed at the same rate. The
taxing power has the authority to make reason able and natural classifications for purposes of taxation;
and the appellants cannot point out what places of amusement taxed by the ordinance do not constitute a
class by themselves and which can be confused with those not included in the ordinance.
121) Short Title: Philippine Trust Co. vs. Yatco

Complete Title: G.R. Nos. L-46255, 46256, 46259 and 46277 January 23, 1940
PHILIPPINE TRUST COMPANY, PEOPLES BANK AND TRUST COMPANY,
THE YOKOHAMA SPECIE BANK, LTD., and THE CHARTERED BANK OF INDIA, AUSTRALIA AND
CHINA, plaintiffs-appellants, vs. A.L. YATCO, as Collector of Internal Revenue, defendant-appellee.
FACTS:
The original plaintiffs in the Court of First Instance of Manila were the Philippine Trust Company, the
Peoples Bank and Trust Company, the Yokohama Specie Bank, Ltd., the Chartered Bank of India, Australia
& China, the Bank of the Philippine Islands, the Hongkong & Shanghai Banking Corporation, and the China
Banking corporation. As the last three named Banks did not appeal from the decision of the lower court, we are here
concerned with the appeal taken by the plaintiffs named in the four above-titled cases.
The records disclosed that prior to the filing of these suits, and for a number of years, that the plaintiffs-
appellants had been paying capital and deposit taxes without protest, formerly under section 111 of Act No.
1189, and later under section 1499 of the Revised Administrative Code of 1917, as amended. After trial, the Court of
First Instance of Manila dismissed the actions and upheld the validity of section 1499 of the Revised
Administrative Code, as amended by Act No. 3199.
Page 267 of 306
Appellants challenge the constitutionality of the aforesaid section of the Revised Administrative Code,
principally on the grounds that it violates the rule regarding uniformity of taxation, and that it is
discriminatory, and therefore violative of the equal protection clause of the Constitution.
Appellants stoutly maintain that although the provision is of general application and operates on all banks
of the same kind doing business in the Philippines, the exemption of the National City Bank of New York
from the impositions therein specifically provided (National City Bank of New York v. Posadas [296 U.S.
497, 80 Law ed. 351], makes the law discriminatory and violates the rule of uniformity in taxation. The
exemption, however, of an instrumentality of the Federal Government does not deprive the
Commonwealth of the Philippines of the power to tax competitors of such instrumentality. And the lack of
uniformity in the result furnishes no ground of complaint.
ISSUE: Whether the law is discriminatory and violates the rule of uniformity in taxation.
RULING: No. A tax is considered uniform when it operates with the same force and effect in every place
where the subject may be found. (State v. Railroad Tax Cases, 92 U.S. 575, 595, 612, 23 Law. ed. 363, 373.)
Section 1499 of the Revised Administrative Code, as amended, applies uniformly to, and operates on, all
banks in the Philippines without distinction and discrimination, and if the National City Bank of New York is
exempted from its operation because it is a federal instrumentality subject only to the authority of
Congress, that alone could have the effect of rendering it violative of the rule of uniformity . In every well-
regulated and enlightened state or government, certain descriptions of property and also certain
institutions are exempt from taxation, but these exemptions have never been regarded as disturbing the
rules of taxation, even where the fundamental law had ordained that it should be uniform. (Des Moines Bank
v. Fairweather, 263 U.S. 103,118). The rule of uniformity does not call for perfect uniformity or perfect
equality, because this is hardly attainable.
It is vaguely argued that section 1499 of the Revised Administrative Code was declared unconstitutional by the Supreme
Court of the United States insofar as the National City Bank of New York was concerned. This is an error. In Posadas v.
National City Bank, it was held that the National City Bank of New York in the Philippines was established by
virtue of section 25 of the Federal Reserve Act of 1913, which authorized the establishment of branches of
national banking associations in foreign countries or dependencies of the United States," and that the
Philippines being a possession and dependency of the United States, the rule laid down in Domenech v. National City
Bank that "a dependency may not tax its sovereign," must be considered controlling. There was no
declaration, either express or implied, that section 1499 is unconstitutional and void.
The method of assessment prescribed in section 1502, in relation to section 1499, of the Revised Administrative Code, for
domestic banks while different from that prescribed for foreign banks is permissible. This conclusion flows from the
legal proposition that "a state may impose a different rate of taxation upon a foreign corporation for the
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privilege of doing business within the state than it applies to its own corporations upon the franchise
which the state grants in creating them."
122) Short Title: Tan vs. Del Rosario

Complete Title: G.R. No. 109289 October 3, 1994
RUFINO R. TAN, petitioner,
vs. RAMON R. DEL ROSARIO, JR., as SECRETARY OF FINANCE & JOSE U. ONG, as COMMISSIONER OF
INTERNAL REVENUE, respondents.
FACTS:
Two consolidated special civil actions for prohibition challenge, in G.R. No. 109289, the constitutionality of
Republic Act No. 7496, also commonly known as the Simplified Net Income Taxation Scheme ("SNIT"), amending
certain provisions of the National Internal Revenue Code and, in
G.R. No. 109446, the validity of Section 6, Revenue Regulations No. 2-93, promulgated by public respondents pursuant to
said law.
Petitioners claim to be taxpayers adversely affected by the continued implementation of the amendatory
legislation. It is asserted that the enactment of Republic Act
No. 7496 violates the following provisions of the Constitution: (1) Article VI, Section 26 (2) Article VI, Section
28(1) — The rule of taxation shall be uniform and equitable. (3) Article III, Section 1- due process.
The Solicitor General espouses the position taken by public respondents.
It was challenged on the following grounds:

(a) it adopts a gross income taxation scheme;
(b) it attempts to tax single proprietorships and professionals differently from corporations and
partnerships; and
(c) it violates the due process and protection clauses.
The validity of Sec. 6 of the Revenue Regulation No. 2-93, which makes SNIT applicable to partners in
general professional partnerships, was also challenged for unlawfully creating a distinction between a
person who practices his profession individually and one who does it through partnership with others.
ISSUE: Whether RA 7496 violates the rule of uniformity in taxation.
RULING: NO. The SNIT retained the net income taxation scheme. The allowance for deductible items may
have significantly been reduced by the questioned law in comparison with that which has prevailed prior to the
Page 269 of 306
amendment; but limiting allowable deductions from gross income is neither discordant with, nor opposed to,
the net income tax concept.
The SC also held that there is no distinction in income tax liability between a person who practices his
profession individually and one who does it through partnership with others. Uniformity of taxation, like
the concept of equal protection, merely requires that all subjects or objects of taxation, similarly situated,
are to be treated alike both in privileges and liabilities.
The SC added that with the legislature primarily lies the discretion to determine the nature (kind), object
(purpose), extent (rate), coverage (subjects), and situs (place) of taxation.
Uniformity does not violate classification as long as: (1) the standards that are used therefor are
substantial and not arbitrary, (2) the categorization is germane to achieve the legislative purpose, (3) the
law applies, all things being equal, to both present and future conditions, and (4) the classification applies
equally well to all those belonging to the same class (Pepsi Cola vs. City of Butuan , 24 SCRA 3; Basco vs. PAGCOR,
197 SCRA 52).
What is apparent from the amendatory law is the legislative intent to increasingly shift the income tax
system towards the schedular approach in the income taxation of individual taxpayers and to maintain, by
and large, the present global treatment on taxable corporations. The Court does not view this classification
to be arbitrary and inappropriate.
There is no evident intention of the law, either before or after the amendatory legislation, to place in an unequal
footing or in significant variance the income tax treatment of professionals who practice their respective
professions individually and of those who do it through a general professional partnership.
We certainly do not view this classification to be arbitrary and inappropriate.
ON DUE PROCESS: There is violation of due process.

The due process clause may correctly be invoked only when there is a clear contravention of inherent or
constitutional limitations in the exercise of the tax power. No such transgression is so evident in herein case.
Uniformity of taxation, like the concept of equal protection, merely requires that all subjects or objects of
taxation, similarly situated, are to be treated alike both in privileges and liabilities. Uniformity does not violate
classification as long as: (1) the standards that are used therefor are substantial and not arbitrary, (2) the categorization
is germane to achieve the legislative purpose, (3) the law applies, all things being equal, to both present and future
conditions, and (4) the classification applies equally well to all those belonging to the same class.
Page 270 of 306
What is apparent from the amendatory law is the legislative intent to increasingly shift the income tax system
towards the schedular approach in the income taxation of individual taxpayers and to maintain, by and large, the present
global treatment on taxable corporations. The Court does not view this classification to be arbitrary and inappropriate.
Purpose
Short Title: 123) Commissioner of Customs vs. Makasiar [177 SCRA 27 (1989)]
Full Title: G.R. No. 79307 August 29, 1989
COMMISSIONER OF CUSTOMS, petitioner, vs. THE HON. RAMON P. MAKASIAR, RTC Judge, Branch 35, Manila
and THE DISTILLERS CO. LTD. OF ENGLAND, respondents.
Facts: On 7 December 1978, the then Court of First Instance (CFI) of Manila issued Search and Seizure Warrants in
Criminal Cases 8602 and 8603 (People v. Sosis) for violation of Section 11 (a) and/or 11(e) of Republic Act 3720, and
violation of Article 188 of the Revised Penal Code (Substituting and altering trademarks, tradenames, or service marks; in
this case, Johnnie Walker Scotch Whisky), respectively.
On 8 December 1978, a composite team from the Ministry of Finance Bureau of Investigation and Intelligence
(BII), the Bureau of Customs and the Integrated National Police (INP) enforced the search and seizure warrants, and
seized and confiscated 6 tanks of scotch whisky, 417 cartons of 1doz. Johnny Walker black, 109 empty bottles, among
others, found in the premises of the Hercules Bottling at Paco, Manila. The articles seized remained in the premises of
Hercules guarded and secured by BII personnel.
On 2 January 1979, the Collector of Customs for the Port of Manila issued a warrant of seizure and detention and
ordered the immediate seizure and turnover of the seized items to its Auction and Cargo Disposal Division at the Port of
Manila. Seizure and forfeiture proceedings were then initiated against the articles for alleged violation of Section 2530 (f)
of the Tariff and Customs Code, in relation to RA 3720. On 29 January 1979, the CFI issued an order authorizing the
transfer and delivery of the seized articles to the customs warehouse located at South Harbor, Port of Manila.
The City Fiscal of Manila proceeded with the preliminary investigation of the criminal cases and the Bureau of
Customs also resumed hearing the seizure and forfeiture proceedings over the said articles. On 11 June 1982, the Distiller
Co. Ltd. of England objected to the continuation by the Collector of Customs of the seizure proceedings claiming that
these proceedings would hamper or even jeopardize the preliminary investigation being conducted by the fiscal. The
Collector of Customs ignored the objections.
On 24 September 1982, the company filed a petition for prohibition with preliminary injunction and/or TRO (Civil
Case 82-12721) to enjoin the Hearing Officer of the Bureau of Customs from taking further action in the seizure
proceedings of the subject goods. The petition was heard not before the CFIMANILA which originally issued
the search warrants, but before another sala, that of Judge Ramon P. Makasiar of the Regional Trial Court,
Branch 35, Manila.
Page 271 of 306
The judge issued a TRO on 29 September 1982. Subsequently, a writ for preliminary injunction was issued as
well. On 20 July 1987, the judge rendered a decision holding that the Collector of Customs acted in excess of
its jurisdiction in issuing the warrant of seizure and detention considering that the subject goods had
already come under the legal custody of the CFI.
Hence, the Commissioner of Internal Revenue, represented by the Solicitor General, filed the instant petition on
11 August 1987. In the meantime, Howard Sosis and company were charged for violation of Chapter VI, Sec. 11(a) & (e)
of RA 3720 (Criminal Case 88-63157) and for violation of Article 188 of the Revised Penal Code (Criminal Case 88-63156)
before the RTC and the MTC Manila.
Petitioner contends that the authority of the Bureau of Customs over seizure and forfeiture cases is beyond
the judicial interference of the Regional Trial Court, even in the form of certiorari, prohibition or
mandamus which are really attempts to review the Commissioner's actions [Rollo, p. 98]. Petitioner argues
that judicial recourse from the decision of the Bureau of Customs on seizure and forfeiture cases can only
be sought in the Court of Tax Appeals and eventually in this Court.
Private respondent however contends that while the law may have vested exclusive jurisdiction in the
Bureau of Customs over forfeiture and seizure cases, in this case respondent judge had jurisdiction to
enjoin the Bureau of Customs from continuing with its seizure and forfeiture proceedings since the articles
here were already in custodia legis, by virtue of the search warrants issued by the CFI-MANILA. Private
respondent contends that respondent judge may properly take cognizance of the instant case since unlike
the cases cited by petitioner, the action for prohibition was brought not to claim ownership or possession
over the goods but only to preserve the same and to prevent the Bureau of Customs from doing anything
prejudicial to the successful prosecution of the criminal cases.
Issue: Whether the RTC has the power to review the acts of the Collector of customs.
Ruling: NO. Tariff and customs duties are taxes constituting a significant portion of the public revenue
which are the lifeblood that enables the government to carry out functions it has been instituted to
perform. The Regional Trial Courts (RTCs) are devoid of any competence to pass upon the validity or
regularity of seizure and forfeiture proceedings conducted in the Bureau of Customs, and to enjoin, or
otherwise interfere with, these proceedings.
The Collector of Customs sitting in seizure and forfeiture proceedings has exclusive jurisdiction to hear and
determine all questions touching on the seizure and forfeiture of dutiable goods. The RTCs are precluded
(prohibited) from assuming cognizance over such matters even through petitions of certiorari, prohibition
or mandamus.
Page 272 of 306
The provisions of the Tariff and Customs Code and that of RA 1125 specify the proper fora for the ventilation of any legal
objections or issues raised concerning these proceedings. Actions of the Collector of Customs are appealable to
the Commissioner of Customs, whose decisions, in turn, are subject to the exclusive appellate jurisdiction
of the CTA. Thereafter, an appeal lies to the Supreme Court through the appropriate petition for review by
writ of certiorari. Undeniably, RTCs do not share these review powers.
The above rule is anchored upon the policy of placing no unnecessary hindrance on the government's drive
not only to prevent smuggling and other frauds upon customs, but also, and more importantly, to render
effective and efficient the collection of import and export duties due the state.
For tariff and customs duties are taxes constituting a significant portion of the public revenue which are
the lifeblood that enables the government to carry out functions it has been instituted to perform.
This Court finds that respondent-judge has failed to adhere to the prevailing rule which denies him
jurisdiction to enjoin the Bureau of Customs from taking further action in the seizure and forfeiture
proceedings over the subject goods.
To reiterate: Jurisprudence is replete with cases which have held that regional trial courts are devoid of any
competence to pass upon the validity or regularity of seizure and forfeiture proceedings conducted in the
Bureau of Customs, and to enjoin, or otherwise interfere with, these proceedings. The Collector of Customs
sitting in seizure and forfeiture proceedings has exclusive jurisdiction to hear and determine all questions
touching on the seizure and forfeiture of dutiable goods. The regional trial courts are precluded
(prohibited) from assuming cognizance over such matters even through petitions of certiorari, prohibition
or mandamus.
Notwithstanding these considerations, respondent judge entertained private respondent's petition

for prohibition holding that the seizure and forfeiture proceedings instituted in the Bureau of Customs was
null and void because the subject goods were earlier seized by virtue of the warrants issued by the CFI-
MANILA in Criminal Cases Nos. 8602 and 8603. This holding is erroneous.
The Court must emphasize at this point that the instant case does not involve a conflict of jurisdictions.
Proceedings before the regular courts for criminal prosecutions against Howard Sosis, et al., and seizure
and forfeiture proceedings for the subject goods conducted by the Bureau of Customs may be maintained
simultaneously and independently of each other.
Page 273 of 306
For the nature of the two proceedings are entirely different such that a resolution in one is not
decisive of the issue in the other. The latter, which is administrative and civil in nature, is directed agains t
the res or articles imported and entails a determination of the legality of its importation.
The former is directed against those persons who may be held liable for violating the penal laws in
connection with the importation.
Even if it be assumed that a taint of irregularity may be imputed to the exercise by the Collector of Customs of his
jurisdiction to institute seizure and forfeiture proceedings over the subject goods because he had accepted custody of the
same under conditions specified in the CFI-Manila order dated January 29, 1979, it would not mean that respondent
judge was correspondingly vested with the jurisdiction to interfere with such proceedings (See Ponce Enrile v.
Vinuya supra]. It bears repeating that law and settled jurisprudence clearly deprive the regional trial courts of jurisdiction
to enjoin the Collector of Customs from exercising his exclusive authority to order seizure and forfeiture proceedings over
imported goods. Moreover, there is no legal basis for respondent judge's conclusion that the Collector of Customs is
deprived of his jurisdiction to issue the assailed warrant of seizure and detention, and to institute seizure and forfeiture
proceedings for the subject goods simply because the same were first taken in custodia legis. Undeniably, the subject
goods have been brought under the legal control of the CFI-MANILA by virtue of its search and seizure warrants and are,
therefore, in custodia legis. But this fact merely serves to deprive any other court or tribunal, except one having
supervisory control or superior jurisdiction in the premises, of the right to divest the CFI-MANILA of its custody and
control of the said property.
In the instant case, the CFI-Manila was not divested of its jurisdiction over the subject goods, nor were its
processes interfered with by the Collector of Customs. It, in fact, authorized the transfer and delivery of the subject goods
from the premises of HERCULES to the Bureau of Customs warehouse/bodega at the South Harbor, Port of Manila
thereby entrusting the Bureau of Customs with the actual possession and control of the same. On the other hand, since
the Collector of Customs herein had actual possession and control over the subject goods, his jurisdiction over the goods
was secured for the purpose of instituting seizure and forfeiture proceedings to determine whether or not the same were
imported into the country contrary to law.
This is consistent with the principle that the basic operative fact for the institution and perfection of
proceedings in rem like the seizure and forfeiture proceedings pursuant to the Tariff and Customs Code, is
the actual or constructive possession of the res by the tribunal empowered by law to conduct the
proceedings. Therefore, contrary to the import of respondent judge's decision, the Collector of Customs
was not precluded by law or legal principle from assuming jurisdiction over the subject goods. No legal
infirmity attended the seizure and forfeiture proceedings over the subject goods.
Private respondent, however, argues that conflict may arise regarding the disposition of the subject goods if the
proceedings before the Collector of Customs and the regular courts were allowed to proceed simultaneously. Private
respondent contends that in view of the nature of the seizure and forfeiture proceedings, a judgment in favor of
Page 274 of 306
HERCULES will result in the release of the subject goods to the claimants thereof, while an unfavorable decision will entail
their destruction or sale. It is asserted that either of the two outcomes will hamper or even jeopardize the ongoing
criminal prosecutions, said goods comprising the substantial part of the evidence for the People of the Philippines. Proper
adherence by both tribunals to the rules of comity as defined in the leading case of The Government of the Philippines v.
Gale [24 Phil. 95 (1931)] will forestall the conflict feared. In that case the Court had established the rule that where the
preservation and safekeeping of the subject matter of an action is demanded, as it is made to appear that these articles
may prove to be of vital importance as exhibits in the prosecution of other charges in another proceeding, the rules for
the orderly course of proceedings in courts and tribunals forbid the disposition or destruction thereof in one action which
would prejudice the other, and vice versa [Id. at pp. 98-99].
The State in the instant case must be given reasonable opportunity to present its cases for the proper
enforcement of the applicable provisions of the Revised Penal Code, Republic Act No. 3720, and the Tariff and Customs
Code, and the prosecution of the violators thereof. It follows then that the execution of any final decision in the seizure
and forfeiture case before the Bureau of Customs, whether it requires the destruction, sale or the release of the subject
goods, should not frustrate the prosecution's task of duly presenting and offering its evidence in Criminal Cases Nos. 88-
63156 and 88-63157.
It is apropos to note that for evidentiary purposes, it would not be necessary to present each and
every item of the goods in question before the courts trying the criminal cases. Thus, a representative
quantity of the goods, as may be agreed upon by the authorized customs officials and fiscals prosecuting
the criminal cases, shall be set aside as evidence to be presented in the above criminal cases and retained
in custodia legis until final judgment is secured in these cases. The rest of the goods may be disposed of in
accordance with the final decision rendered in the seizure and forfeiture proceedings pursuant to the Tariff
and Customs Code.
WHEREFORE, in view of the foregoing, the respondent judge's decision dated 20 July 1987 is REVERSED. The
seizure and forfeiture proceedings involving the goods in question before the Bureau of Customs may proceed subject to
the above pronouncements relative to the setting aside of so much of the goods as may be required for evidentiary
purposes.
Short Title: 124) CIR vs. Algue, Inc. [158 SCRA 9 (1988)]
Full Title: G.R. No. L-28896 February 17, 1988
COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. ALGUE, INC., and THE COURT OF TAX
APPEALS, respondents.
Facts: The Philippine Sugar Estate Development Company had earlier appointed Algue as its agent, authorizing it to sell
its land, factories and oil manufacturing process. Pursuant to such authority, Alberto Guevara, Jr., Eduardo Guevara,
Isabel Guevara, Edith, O'Farell, and Pablo Sanchez, worked for the formation of the Vegetable Oil Investment
Corporation, inducing other persons to invest in it. Ultimately, after its incorporation largely through the promotion of the
Page 275 of 306
said persons, this new corporation purchased the PSEDC properties. For this sale, Algue received as agent a commission
of P126,000.00, and it was from this commission that the P75,000.00 promotional fees were paid to the aforenamed
individuals.
Algue, Inc was assessed by the Bureau of Internal Revenue (BIR) the amount of P83,183.85 as
delinquency income taxes for the years 1958 and 1959. Petitioner CIR contends that the claimed deduction
of P75,000.00 was properly disallowed because it was not an ordinary reasonable or necessary business
expense.
Algue filed a protest, claiming that the P75,000.00 had been legitimately paid for actual services rendered
and that the payment was in the form of promotional fees. Algue was informed that the BIR was not taking any
action on the protest and it was only then that it accepted the warrant of distraint and levy earlier sought to be served.
Algue filed a petition for review with the Court of Tax Appeals which ruled in favor of Algue.
Agreeing with Algue, the Court of Tax Appeals held that the said amount had been legitimately paid by the
private respondent for actual services rendered. The payment was in the form of promotional fees. These
were collected by the Payees for their work in the creation of the Vegetable Oil Investment Corporation of the Philippines
and its subsequent purchase of the properties of the Philippine Sugar Estate Development Company . Parenthetically, the
petitioner had originally claimed these promotional fees to be personal holding company income but later
conformed to the decision of the respondent court rejecting this assertion. In fact, as the said court found,
the amount was earned through the joint efforts of the persons among whom it was distributed.
The Court of Tax Appeals found that the payees duly reported their respective shares of the fees in their
income tax returns and paid the corresponding taxes thereon. Also, after examining the evidence, the CTA found
that no distribution of dividends was involved. The petitioner claims that these payments are fictitious because
most of the payees are members of the same family in control of Algue. It is argued that no indication was
made as to how such payments were made, whether by check or in cash, and there is not enough substantiation of such
payments. In short, the petitioner suggests a tax dodge, an attempt to evade a legitimate assessment by
involving an imaginary deduction.
Issue/s: Whether or not the Collector of Internal Revenue correctly disallowed the P75,000.00 deduction
claimed by private respondent Algue as legitimate business expenses in its income tax returns.
Ruling: NO. The Supreme Court agrees with the respondent court (CTA) that the amount of the
promotional fees was not excessive. The total commission paid by the Philippine Sugar Estate
Development Co. to the private respondent was P125,000.00. After deducting the said fees, Algue still had
a balance of P50,000.00 as clear profit from the transaction. The amount of P75,000.00 was 60% of the total
commission. This was a reasonable proportion, considering that it was the payees who did practically
Page 276 of 306
everything, from the formation of the Vegetable Oil Investment Corporation to the actual purchase by it of
the Sugar Estate properties. This finding of the respondent court is in accord with the following provision of the Tax
Code:
SEC. 30. Deductions from gross income.--In computing net income there shall be allowed as deductions — (a) Expenses:
(1) In general.--All the ordinary and necessary expenses paid or incurred during the taxable year in
carrying on any trade or business, including a reasonable allowance for salaries or other compensation
for personal services actually rendered; ...
and Revenue Regulations No. 2, Section 70 (1), reading as follows:
SEC. 70. Compensation for personal services.--Among the ordinary and necessary expenses paid or
incurred in carrying on any trade or business may be included a reasonable allowance for salaries or
other compensation for personal services actually rendered. The test of deductibility in the case of
compensation payments is whether they are reasonable and are, in fact, payments purely for service.
This test and deductibility in the case of compensation payments is whether they are reasonable and are,
in fact, payments purely for service. This test and its practical application may be further stated and
illustrated as follows:
Any amount paid in the form of compensation, but not in fact as the purchase price of services, is not
deductible. (a) An ostensible salary paid by a corporation may be a distribution of a dividend on stock.
This is likely to occur in the case of a corporation having few stockholders, Practically all of whom draw
salaries. If in such a case the salaries are in excess of those ordinarily paid for similar services, and the
excessive payment correspond or bear a close relationship to the stockholdings of the officers of
employees, it would seem likely that the salaries are not paid wholly for services rendered, but the
excessive payments are a distribution of earnings upon the stock.
It is worth noting at this point that most of the payees were not in the regular employ of Algue nor were
they its controlling stockholders. The Solicitor General is correct when he says that the burden is on the taxpayer
to prove the validity of the claimed deduction. In the present case, however, we find that the onus (the
burden) has been discharged satisfactorily. The private respondent has proved that the payment of the
fees was necessary and reasonable in the light of the efforts exerted by the payees in inducing investors
and prominent businessmen to venture in an experimental enterprise and involve themselves in a new
business requiring millions of pesos. This was no mean feat and should be, as it was, sufficiently
recompensed.
It is said that taxes are what we pay for civilization society. Without taxes, the government would be
paralyzed for lack of the motive power to activate and operate it.
Hence, despite the natural reluctance to surrender part of one's hard earned income to the taxing
authorities, every person who is able to must contribute his share in the running of the government.
Page 277 of 306
The government for its part, is expected to respond in the form of tangible and intangible benefits
intended to improve the lives of the people and enhance their moral and material values. This
symbiotic relationship is the rationale of taxation and should dispel the erroneous notion that it is
an arbitrary method of exaction by those in the seat of power.
But even as we concede the inevitability and indispensability of taxation, it is a requirement in all
democratic regimes that it be exercised reasonably and in accordance with the prescribed procedure. If it
is not, then the taxpayer has a right to complain and the courts will then come to his succor. For all the
awesome power of the tax collector, he may still be stopped in his tracks if the taxpayer can demonstrate,
as it has here, that the law has not been observed.
The Supreme Court finds that the claimed deduction by the private respondent was permitted under the
Internal Revenue Code and should therefore not have been disallowed by the petitioner. ACCORDINGLY, the
appealed decision of the Court of Tax Appeals is AFFIRMED in toto, without costs.
ART VI, SEC. 28

125) Southern Cross vs. Philippine Cement (G.R. No. 158540, July 8, 2004)
Full Title: G.R. No. 158540 July 8, 2004
SOUTHERN CROSS CEMENT CORPORATION, petitioner,
vs.
THE PHILIPPINE CEMENT MANUFACTURERS CORP., THE SECRETARY OF THE DEPARTMENT OF TRADE &
INDUSTRY, THE SECRETARY OF THE DEPARTMENT OF FINANCE, and THE COMMISSIONER OF THE BUREAU
OF CUSTOMS, respondents.
Facts:
Petitioner Southern Cross Cement Corporation (Southern Cross) is a domestic corporation engaged in the
business of cement manufacturing, production, importation and exportation. Private respondent Philippine
Cement Manufacturers Corporation (Philcemcor) is an association of domestic cement manufacturers. DTI
accepted an application from Philcemcor, alleging that the importation of gray Portland cement in
increased quantities has caused declines in domestic production, capacity utilization, market share, sales and
employment; as well as caused depressed local prices. Accordingly, Philcemcor sought the imposition a
definitive safeguard measures on the import of cement pursuant to the Safeguard Measures Act.
The Tariff Commission received a request from the DTI for a formal investigation to determine whether or
not to impose a definitive safeguard measure on imports of gray Portland cement
Page 278 of 306
Tariff Commission’s report: The elements of serious injury and imminent threat of serious injury not having
been established, it is hereby recommended that no definitive general safeguard measure be imposed on
the importation of gray Portland cement
After reviewing the report, then DTI Secretary Manuel Roxas II (DTI Secretary) disagreed with the
conclusion of the Tariff Commission that there was no serious injury to the local cement industry caused by the
surge of imports. In view of this disagreement, the DTI requested an opinion from the Department of Justice
(DOJ) on the DTI Secretarys scope of options in acting on the Commissions recommendations.
Subsequently, then DOJ Secretary Hernando Perez rendered an opinion stating that Section 13 of the SMA precluded
a review by the DTI Secretary of the Tariff Commissions negative finding, or finding that a definitive safeguard
measure should not be imposed.
DTI then denied application for safeguard measures against the importation of gray Portland cement
Philcemcor received a copy of the DTI Decision on 12 April 2002. Ten days later, it filed with the Court of
Appeals a Petition for Certiorari, Prohibition and Mandamus seeking to set aside the DTI Decision, as well
as the Tariff Commissions Report. On the other hand, Southern Cross filed its Comment arguing that the
Court of Appeals had no jurisdiction over Philcemcors Petition, for it is on the Court of Tax Appeals (CTA)
that the Safeguard Measures Act conferred jurisdiction to review rulings of the Secretary in connection
with the imposition of a safeguard measure.
Issue:
Whether or not the decision of DTI Secretary, to impose safeguard measures is valid.
Ruling:
NO. The CTA has the jurisdiction over the case which is concerned with the imposition of safeguard
measures.
Under Section 29 of the SMA, there are three requisites to enable the CTA to acquire jurisdiction over the
petition for review contemplated therein: (i) there must be a ruling by the DTI Secretary; (ii) the petition
must be filed by an interested party adversely affected by the ruling; and (iii) such ruling must be in
connection with the imposition of a safeguard measure. The first two requisites are clearly present. The
third requisite deserves closer scrutiny.
Page 279 of 306
Contrary to the stance of the public respondents and Philcemcor, in this case where the DTI Secretary
decides not to impose a safeguard measure, it is the CTA which has jurisdiction to review his decision . The
reasons are as follows:
First. Split jurisdiction is abhorred (detested). The law expressly confers on the CTA, the tribunal with the
specialized competence over tax and tariff matters, the role of judicial review without mention of any other court
that may exercise corollary or ancillary jurisdiction in relation to the SMA.
Second. The interpretation of the provisions of the SMA favors vesting untrammeled appellate jurisdiction
on the CTA.
A plain reading of Section 29 of the SMA reveals that Congress did not expressly bar the CTA from
reviewing a negative determination by the DTI Secretary nor conferred on the Court of Appeals such
review authority. Respondents note, on the other hand, that neither did the law expressly grant to the CTA the power
to review a negative determination. However, under the clear text of the law, the CTA is vested with jurisdiction
to review the ruling of the DTI Secretary in connection with the imposition of a safeguard measure. Had the
law been couched instead to incorporate the phrase the ruling imposing a safeguard measure, then respondents claim
would have indisputable merit. Undoubtedly, the phrase in connection with not only qualifies but clarifies the succeeding
phrase imposition of a safeguard measure. As expounded later, the phrase also encompasses the opposite or
converse ruling which is the non-imposition of a safeguard measure.
Third. Interpretatio Talis In Ambiguis Semper Fienda Est, Ut Evitur Inconveniens Et Absurdum.
Even assuming arguendo that Section 29 has not expressly granted the CTA jurisdiction to review a
negative ruling of the DTI Secretary, the Court is precluded from favoring an interpretation that would
cause inconvenience and absurdity. Adopting the respondents position favoring the CTAs minimal jurisdiction would
unnecessarily lead to illogical and onerous results.
126) Loan Association vs. Topeka (20 Wall. 655, 664 (US 1975)
Citizens' Savings and Loan Association of Cleveland brought their action in the court ,against the city of Topeka,
on coupons for interest attached to bonds of the city of Topeka.
The bonds purported to be payable to the King Wrought- Iron Bridge Manufacturing and Iron-Works Company, of
Topeka, to aid and encourage that company in establishing and operating bridge shops in said city of
Topeka, under and in pursuance of section twenty-six of an act of the legislature of the State of Kansas (Sec 26) ,
entitled 'An act to incorporate cities of the second class,' approved February 29th, 1872; and also of another 'Act
to authorize cities and counties to issue bonds for the purpose of building bridges, aiding railroads, water-
power, or other works of internal improvement,' approved March 2, 1872
Page 280 of 306
The declaration also alleged that the interest coupons first due were paid out of a fund raised by taxation
for that purpose, and that after this payment the plaintiff became the purchaser of the bonds and the coupons on which
suit was brought, for value. A demurrer was interposed by the city of Topeka to this declaration.
The argument here was that the section of the act of February 29th, 1872, conferring the power to issue bonds
contained no restriction as to the amount which the city might issue to aid manufacturing enterprises, and
that the failure of the legislature to limit and restrict the power so as to prevent abuse, violated the fifth
section of Article XII of the constitution above referred to.
The section of the act of February 29th, on which the main reliance was placed for the authority to issue these bonds,
reads as follows:
'SECTION 76. The council shall have power to encourage the establishment of manufactories and such other
enterprises as may tend to develop and improve such city, either by direct appropriation from the general fund or
by the issuance of bonds of such city in such amounts as the council may determine; Provided, That no greater
amount than one thousand dollars shall be granted for any one purpose, unless a majority of the votes cast at an
election called for that purpose shall authorize the same. The bonds thus issued shall be made payable at any
time within twenty years, and bear interest not exceeding ten per cent. per annum.'
It was conceded that the steps required by this act prerequisite as to issuing the bonds were regular, as were also the
other details, and that the language of the statute was sufficient to justify the action of the city authorities, if the statute
was within the constitutional competency of the legislature.
The court denied the authority, placing the denial on two grounds:
That this part of the statute violated the fifth section of Article XII of the constitution of the State of Kansas; a
section in these words:
'SECTION 5. Provision shall be made by general law for the organization of cities, towns, and villages;
and their power of taxation, assessment, borrowing money, contracting debts, and loaning their credit,
shall be so restricted as to prevent the abuse of such power.'
The act authorized the towns and other municipalities to which it applied, by issuing bonds or lending its
credit, to take the property of the citizen under the guise of taxation to pay these bonds, and use it in aid
of the enterprises of others which were not of a public character; that this was a perversion of the right of
taxation, which could only be exercised for a public use, to the aid of individual interests and personal purposes of profit
and gain.
The court below accordingly, sustaining the demurrer, gave judgment in favor of the defendant, the city of
Topeka; and to its judgment this writ of error was taken.
Loan Association v. Topeka (1874) marked the Supreme Court's endorsement of the public purpose doctrine as a
means of restricting grants of public revenue to private enterprise. As authorized by state law, the city of
Topeka donated municipal bonds to an ironworks company to encourage that business to establish shops
in the city. The city soon ceased making interest payments. When a bondholder in Ohio sued to collect
Page 281 of 306
interest on these bonds, the Supreme Court was called upon to consider the validity of such subsidy
arrangements.
Stressing that there were limits on governmental power that "grow out of the essential nature of all free governments,"
the Supreme Court, in an opinion by Justice Samuel F. Miller, warned: "Of all the powers conferred upon government that
of taxation is most liable to abuse." Miller ruled that "there can be no lawful tax which is not laid for a public
purpose." He then concluded that taxation to aid manufacturing was not for a public purpose and that the municipal
bonds were therefore invalid. In reaching this result, Miller was clearly influenced by the perceived excesses of public aid
to railroads and seemed determined to draw the line against grants of public revenue to other types of private business.
Dissenting alone, Justice Nathan Clifford maintained that courts could only strike down state laws that violated specific
constitutional provisions and that it was inappropriate for courts to rely on vague theories of government to curb state
legislative taxing authority.
Following Loan Association the public purpose doctrine was sometimes invoked to curb use of the tax power to
subsidize business enterprise. Moreover, the ruling made clear that the Supreme Court distrusted the judgment
of state authorities concerning disbursement of tax revenue and was prepared to render an independent
assessment about which projects were for a public purpose. The decision is also significant because the
Supreme Court accepted the premise that legitimate government was restrained by certain fundamental if
unwritten principles.
Thus Loan Association paved the way for the Supreme Court to adopt a substantive reading of the due process clauses in
the late nineteenth century. Lastly, the case demonstrated that the Court in the late nineteenth century was not following
a monolithic course of assisting business enterprise.
Issue:
Whether the act section of the statute of February 29th, 1872, was unconstitutional.
Ruling:
Yes. The act is unconstitutional, a Kansas statute that authorized the city of Topeka to issue public bonds,
payable by taxes, for the benefit of a private company that built iron bridges . In the absence of some usable
clause of the Constitution, Miller relied on judicially implied limitations on government power "which grow out of the
essential nature of all free governments" and protect individual rights "without which the social compact could not exist."
Topeka and the state legislature had believed that attracting a bridge company promoted public prosperity
as did a railroad or a public utility, but because the Court saw only an improper exercise of the tax power
"to aid private enterprise and build up private fortunes," it called the statute "a robbery" of the
public.Taxation can be exercised only for a public use or public purpose. Justice nathanclifford, the sole
dissenter, believed that judicial review should be exercised only when the Constitution imposed a prohibition either
express or necessarily implied, but not when the Court believed that a legislature had violated "natural justice" or "a
general latent spirit" supposedly underlying the Constitution.
Page 282 of 306
The court, in an able and exhaustive opinion, decided that the law was unconstitutional, as giving a right to
tax for other than a public purpose.
By section five of article twelve of the constitution of that State it is declared that provision shall be made by general law
for the organization of cities, towns, and villages; and their power of taxation, assessment, borrowing money, contracting
debts, and loaning their credit, shall be so restricted as to prevent the abuse of such power.
Page 283 of 306
ART X - SEC 5
127) Short Title: Icard vs. City of Baguio (83 Phil 870 (1940))
Long Title: JOSEPH E. ICARD, petitioner-appellee,
vs.
THE CITY COUNCIL OF BAGUIO and the city of baguio, respondent-appellants.
Facts: The City of Baguio has enacted the following ordinances:
1. No. 6-v, providing among other things for an amusement tax of P0.20 for every person entering a
night club licensed to do business in the city;
2. No. 11-V, providing for a property tax on motor vehicles kept and operated in the city; and
3. No. 12-V, imposing a graduated license fee on every admission ticket sold by enterprises
enumerated in said ordinance among them, cinematographs.
Petitioner, a resident of the City of Baguio is holder of a municipal license for the operation of a night club called
"El Club Monaco. " As owner and operator of said night club, he has to pay to the National Government an
amusement tax on its total gross receipts under section 260 of the Internal Revenue Code, and to the City
of Baguio the annual license fee provided for in said Ordinance No. 6-V. But in addition to said amusement tax
and license fee, he has also been required to pay the amusement tax imposed in that same ordinance, which,
on the basis of P0.20 per person entering the night club, amounted to the total sum of P254,80 for the first quarter of
1946. This sum he paid under protest.
There is no showing that petitioner has any business subject to the payment of the graduated license fee
on admission tickets imposed by Ordinance No. 12-V of the City of Baguio.
Contending that the ordinance above mentioned are unjust and ultra vires (beyond powers) , petitioner
brought the present action for declaratory relief to have the said ordinance declared void and also for the
refund of the sum of P254,80 which he has paid to the city under protest.
RTC
In an able and well-considered decision the lower court presided over by Judge Conrado Sanchez to ordinance No. 12-
V on the ground that petitioner had not been shown to be the owner or operator of any of the enterprises
therein enumerated but declared null and void Ordinance No. 11-V and also that portion of Ordinance No. 6-V
which provides for an amusement tax of P0.20 on every person entering a night club, without pronouncement
as to the legality or illegality of the remainder of the said ordinance. And in consequence the city of Baguio was
ordered to refund to petitioner the sum of P254. 80 paid as amusement tax under Ordinance No. 6-V, without special
pronouncement as to costs.
Issue: Whether the City of Baguio is empowered to levy a property tax on motor and an amusement tax on night clubs
Ruling: The City of Baguio may impose taxes only in those cases specifically provided by law . It is settled
that a municipal corporation unlike a sovereign state is clothed with no inherent power of taxation . The
charter or statute must plainly show an intent to confer that power or the municipality, cannot assume it.
Page 284 of 306
And the power when granted is to be construed in strictissimi juris. Any doubt or ambiguity that power must be
resolved against the municipality. Inferences, implications, deductions all these have no place in the
interpretation of the taxing power of a municipal corporation.
With the above principle in mind let us now inquire into the authority of the City of Baguio to levy taxes. That part of
the charter of this city which deal with the subject of taxation is found in section 2553 (b) of the Revised
Administrative Code which empowers its city council. To provide for the levy and collection of taxes and
other city revenues, as provided by law and apply the same to the payment of the municipal expenses in
accordance with appropriations."
As the lower court has correctly interpreted it this provision simply means that the city of Baguio may
impose taxes only in those cases specifically provided in any law. In other words for authority to levy a tax
on specific subjects one must look elsewhere in the statute book. For had the provision been meant as a blanket
authority to levy taxes, their would have been no need for the phrase "as provided by law." The insertion of that
phrase be speaks the legislative intent to have the city exercise the law may provide.
There is of course no question as to the authority of the City of Baguio to collect a license fee on dance
halls and night clubs such authority being specifically given by section 260 of the Internal Revenue Code .
As a matter of fact petitioner has been paying such license fee without objection or protest. But what is objected to is
the tax of P0.20 for every person entering those amusement places as provided for in Ordinance No. 6-V
and this tax is apart and distinct from the license fee, for the ordinance itself says that it shall be in
addition to the latter. This tax is not authorized by any Act of the Legislature. It is therefore beyond the
power of the City of Baguio to levy.
To the plea that the power of taxation is essential to the continued existence of a city government, the answer
is that the City of Baguio is amply provided for by its Charter. It is authorized to levy and collect license fees on a
long list of occupations (section 2253, id.). In addition, the city derives income from the sale of public lands
within its limits and from the operation of its water system and electric plant. The city is thus provided
with ample means with which to carry on the functions of government.
Having come to the conclusion that the City of Baguio may not levy taxes as it pleases but only as the
Legislature may specifically provide, we have looked in the charter of that city for specific provision
empowering it to levy an amusement tax on night clubs and have found none. On the other hand, as the lower
court points out, that power is expressly granted to the City of Manila by section 2444 ( m) of the Revised Administrative
Code. When it is recollected that, as already explained, both cities may, under a general provision of their
charters, levy taxes only as the law authorizes, the absence of a similar express grant in the case of the
city of Baguio is proof that the power to levy this particular tax has been intentionally withheld from it.
Page 285 of 306
128) Manila Electric Co. vs. Province of Laguna (G.R. no. 131359, May 5, 1999)
Long Title: G.R. No. 131359 May 5, 1999
MANILA ELECTRIC COMPANY, petitioner,
vs.
PROVINCE OF LAGUNA and BENITO R. BALAZO, in his capacity as Provincial Treasurer of
Laguna, respondents.
Facts: On various dates, certain municipalities of the Province of Laguna, including, Biñan, Sta. Rosa, San Pedro,
Luisiana, Calauan and Cabuyao, by virtue of existing laws then in effect, issued resolutions through their
respective municipal councils granting franchise in favor of petitioner Manila Electric Company ("MERALCO")
for the supply of electric light, heat and power within their concerned areas. On 19 January 1983, MERALCO
was likewise granted a franchise by the National Electrification Administration to operate an electric light
and power service in the Municipality of Calamba, Laguna.
On 12 September 1991, Republic Act No. 7160, otherwise known as the "Local Government Code of 1991," was
enacted to take effect on 01 January 1992 enjoining local government units to create their own sources of
revenue and to levy taxes, fees and charges, subject to the limitations expressed therein, consistent with the basic
policy of local autonomy. Pursuant to the provisions of the Code, respondent province enacted Laguna
Provincial Ordinance No. 01-92, effective 01 January 1993, providing, in part, as follows:
Sec. 2.09. Franchise Tax. — There is hereby imposed a tax on businesses enjoying a franchise,
at a rate of fifty percent (50%) of one percent (1%) of the gross annual receipts, which shall include
both cash sales and sales on account realized during the preceding calendar year within this province,
including the territorial limits on any city located in the province.
On the basis of the above ordinance, respondent Provincial Treasurer sent a demand letter to MERALCO for the
corresponding tax payment. Petitioner MERALCO paid the tax, which then amounted to P19,520.628.42, under
protest. A formal claim for refund was thereafter sent by MERALCO to the Provincial Treasurer of Laguna
claiming that the franchise tax it had paid and continued to pay to the National Government pursuant to
P.D. 551 already included the franchise tax imposed by the Provincial Tax Ordinance.
On 28 August 1995, the claim for refund of petitioner was denied in a letter signed by Governo r Jose D. Lina
relied on a more recent law, i.e. Republic Act No. 7160 or the Local Government Code of 1991, than the old
decree invoked by petitioner.
RTC
Dismissed the complaint.
Page 286 of 306
Issue: Whether the imposition of a franchise tax under Section 2.09 of Laguna Provincial Ordinance No. 01-92,
insofar as petitioner is concerned, is violative of the non-impairment clause of the Constitution and Section
1 of Presidential Decree No. 551.
Ruling: NO. Prefatorily, it might be well to recall that local governments do not have the inherent power to
tax 4 except to the extent that such power might be delegated to them either by the basic law or by
statute.
Under the now prevailing Constitution, where there is neither a grant nor a prohibition by statute, the tax
power must be deemed to exist although Congress may provide statutory limitations and guidelines. The
basic rationale for the current rule is to safeguard the viability and self-sufficiency of local government
units by directly granting them general and broad tax powers . Nevertheless, the fundamental law did not
intend the delegation to be absolute and unconditional; the constitutional objective obviously is to ensure that,
while the local government units are being strengthened and made more autonomous, 6
the legislature
must still see to it that
a) the taxpayer will not be over-burdened or saddled with multiple and unreasonable impositions;
(b) each local government unit will have its fair share of available resources;
(c) the resources of the national government will not be unduly disturbed; and
(d) local taxation will be fair, uniform, and just.
To exemplify, in Mactan Cebu International Airport Authority vs . Marcos, 9 the Court upheld the withdrawal of the real
estate tax exemption previously enjoyed by Mactan Cebu International Airport Authority. The Court ratiocinated:
. . . These policy considerations are consistent with the State policy to ensure autonomy to local
governments and the objective of the LGC that they enjoy genuine and meaningful local autonomy to
enable them to attain their fullest development as self-reliant communities and make them effective
partners in the attainment of national goals. The power to tax is the most effective instrument to
raise needed revenues to finance and support myriad activities if local government units for
the delivery of basic services essential to the promotion of the general welfare and the
enhancement of peace, progress, and prosperity of the people. It may also be relevant to recall
that the original reasons for the withdrawal of tax exemption privileges granted to government-owned
and controlled corporations and all other units of government were that such privilege resulted in serious
tax base erosion and distortions in the tax treatment of similarity situated enterprises, and there was a
need for these entities to share in the requirements of development, fiscal or otherwise, by paying the
taxes and other charges due from them. 10
In the recent case of the City Government of San Pablo, etc., et al. vs. Hon. Bienvenido V. Reyes, et al., 13
the Court has
held that the phrase in lieu of all taxes "have to give way to the peremptory language of the Local Government Code
specifically providing for the withdrawal of such exemptions, privileges," and that "upon the effectivity of the Local
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Government Code all exemptions except only as provided therein can no longer be invoked by MERALCO to
disclaim liability for the local tax." In fine, the Court has viewed its previous rulings as laying stress more on
the legislative intent of the amendatory law — whether the tax exemption privilege is to be withdrawn or
not — rather than on whether the law can withdraw, without violating the Constitution, the tax exemption
or not.
While the Court has, not too infrequently, referred to tax exemptions contained in special franchises as being in
the nature of contracts and a part of the inducement for carrying on the franchise, these exemptions,
nevertheless, are far from being strictly contractual in nature. Contractual tax exemptions, in the real sense of
the term and where the non-impairment clause of the Constitution can rightly be invoked, are those agreed to by the
taxing authority in contracts, such as those contained in government bonds or debentures, lawfully entered into by them
under enabling laws in which the government, acting in its private capacity, sheds its cloak of authority and waives its
governmental immunity. Truly, tax exemptions of this kind may not be revoked without impairing the
obligations of contracts.
These contractual tax exemptions, however, are not to be confused with tax exemptions granted under franchises . A
franchise partakes the nature of a grant which is beyond the purview of the non-impairment clause of the
Constitution.15 Indeed, Article XII, Section 11, of the 1987 Constitution, like its precursor provisions in the 1935 and the
1973 Constitutions, is explicit that no franchise for the operation of a public utility shall be granted except
under the condition that such privilege shall be subject to amendment, alteration or repeal by Congress as
and when the common good so requires.
129) Title: Smart Communications vs. City of Davao (G.R. No. 155491, September 16, 2008)
Complete title: G.R. No. 155491 July 21, 2009
SMART COMMUNICATIONS, INC., Petitioner, vs. THE CITY OF DAVAO, represented herein by its Mayor Hon. RODRIGO
DUTERTE, and the SANGGUNIANG PANLUNSOD OF DAVAO CITY, Respondents.
Facts: On February 18, 2002, Smart filed a special civil action for declaratory relief under Rule 63 of the Rules
of Court, for the ascertainment of its rights and obligations under the Tax Code of the City of Davao,
particularly Section 1, Article 10 thereof, the pertinent portion of which reads:
Notwithstanding any exemption granted by any law or other special law, there is hereby imposed a tax on businesses
enjoying a franchise, at a rate of seventy-five percent (75%) of one percent (1%) of the gross annual
receipts for the preceding calendar year based on the income or receipts realized within the territorial
jurisdiction of Davao City.
Smart contends that its telecenter in Davao City is exempt from payment of franchise tax to the City, on
the following grounds: (a) the issuance of its franchise under Republic Act (R.A.) No. 7294 subsequent to R.A. No. 7160
shows the clear legislative intent to exempt it from the provisions of R.A. 7160; (b) Section 137 of R.A. No. 7160 can only
apply to exemptions already existing at the time of its effectivity and not to future exemptions; (c) the power of the City
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of Davao to impose a franchise tax is subject to statutory limitations such as the “in lieu of all taxes” clause found in
Section 9 of R.A. No. 7294; and (d) the imposition of franchise tax by the City of Davao would amount to a violation of
the constitutional provision against impairment of contracts.
On March 2, 2002, respondents filed their Answer in which they contested the tax exemption claimed by Smart.
They invoked the power granted by the Constitution to local government units to create their own sources
of revenue.
Issue: Whether the phrase “in lieu of all taxes” covers local tax.
Ruling: NO. We pay heed that R.A. No. 7294 is not definite in granting exemption to Smart from local
taxation. Section 9 of R.A. No. 7294 imposes on Smart a franchise tax equivalent to three percent (3%) of all gross
receipts of the business transacted under the franchise and the said percentage shall be in lieu of all taxes on the
franchise or earnings thereof.
R.A. No 7294 does not expressly provide what kind of taxes Smart is exempted from. It is not clear whether
the “in lieu of all taxes” provision in the franchise of Smart would include exemption from local or national taxation . What
is clear is that Smart shall pay franchise tax equivalent to three percent (3%) of all gross receipts of the
business transacted under its franchise. But whether the franchise tax exemption would include exemption from
exactions by both the local and the national government is not unequivocal.
The uncertainty in the “in lieu of all taxes” clause in R.A. No. 7294 on whether Smart is exempted from both local
and national franchise tax is construed strictly against Smart who is claiming the exemption. This is because
as a rule, those who claim tax exemption have the burden of proving the same. Smart has the burden of
proving that, aside from the imposed 3% franchise tax, Congress intended it to be exempt from all kinds of franchise
taxes — whether local or national. However, Smart failed in this regard.
Tax exemptions are never presumed and are strictly construed against the taxpayer and liberally in favor
of the taxing authority. They can only be given force when the grant is clear and categorical. The surrender
of the power to tax, when claimed, must be clearly shown by a language that will admit of no reasonable construction
consistent with the reservation of the power. If the intention of the legislature is open to doubt, then the
intention of the legislature must be resolved in favor of the State.
In this case, the doubt must be resolved in favor of the City of Davao. The “in lieu of all taxes” clause
applies only to national internal revenue taxes and not to local taxes.
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130) Title: Petron vs. Mayor (G.R. No. 158881, April 16, 2008)
Complete title: G.R. No. 158881 April 16, 2008
PETRON CORPORATION, petitioner, vs. MAYOR TOBIAS M. TIANGCO, and MUNICIPAL TREASURER MANUEL T.
ENRIQUEZ of the MUNICIPALITY OF NAVOTAS, METRO MANILA, respondents.
Facts: Petron maintains a depot or bulk plant at the Navotas Fishport Complex in Navotas. Through that depot,
it has engaged in the selling of diesel fuels to vessels used in commercial fishing in and around Manila Bay.
On 1 March 2002, Petron received a letter from the office of Navotas Mayor, respondent Toby Tiangco,
wherein the corporation was assessed taxes “relative to the figures covering sale of diesel declared by your
Navotas Terminal from 1997 to 2001.” The stated total amount due was P6,259,087.62, a figure derived from
the gross sales of the depot during the years in question. The computation sheets that were attached to the letter
made reference to Ordinance 92-03, or the New Navotas Revenue Code (Navotas Revenue Code), though such
enactment was not cited in the letter itself.
Petron duly filed with Navotas a letter-protest to the notice of assessment pursuant to Section 195 of the Code. It
argued that it was exempt from local business taxes in view of Art. 232 (h) of the Implementing Rules
(IRR) of the LGC, as well as a ruling of the Bureau of Local Government Finance of the Department of
Finance dated 31 July 1995, the latter stating that sales of petroleum fuels are not subject to local
taxation. The letter-protest was denied by the Navotas Municipal Treasurer, respondent Manuel T. Enriquez, in
a letter dated 8 May 2002. This was followed by a letter from the Mayor dated 15 May 2002, captioned “Final
Demand to Pay”, requiring that Petron pay the assessed amount within five (5) days from receipt thereof, with a
threat of closure of Petron’s operations within Navotas should there be no payment. Petron, through counsel,
replied to the Mayor by another letter posing objections to the threat of closure.
Issue: Whether petroleum products may be subjected to business tax
Ruling: NO. The language of Section 133 (h) makes plain that the prohibition with respect to petroleum
products extends not only to excise taxes thereon, but all “taxes, fees and charges.” The earlier reference in
paragraph (h) to excise taxes comprehends a wider range of subjects of taxation: all articles already covered by excise
taxation under the NIRC, such as alcohol products, tobacco products, mineral products, automobiles, and such non-
essential goods as jewelry, goods made of precious metals, perfumes, and yachts and other vessels intended for pleasure
or sports. In contrast, the later reference to “taxes, fees and charges” pertains only to one class of articles of the many
subjects of excise taxes, specifically, “petroleum products”.
While local government units are authorized to burden all such other class of goods with “taxes, fees and
charges,” excepting excise taxes, a specific prohibition is imposed barring the levying of any other type of
taxes with respect to petroleum products. While Section 133 (h) does not generally bar the imposition of
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business taxes on articles burdened by excise taxes under the NIRC, it specifically prohibits local
government units from extending the levy of any kind of “taxes, fees or charges on petroleum products.”
National Internal Revenue Code – NIRC

Accordingly, the subject tax assessment is ultra vires and void.
TAX EXEMPTIONS
131)Short Title: Abra Valley College vs. Aquino [162 SCRA 106 (1988)]
Full Title: G.R. No. L-39086 June 15, 1988
ABRA VALLEY COLLEGE, INC., represented by PEDRO V. BORGONIA, petitioner,
vs.
HON. JUAN P. AQUINO, Judge, Court of First Instance, Abra; ARMIN M. CARIAGA, Provincial Treasurer,
Abra; GASPAR V. BOSQUE, Municipal Treasurer, Bangued, Abra; HEIRS OF PATERNO MILLARE,
respondents.
Facts: Petitioner, filed a complaint in the court a quo to annul and declare void the “Notice of Seizure’ and
the “Notice of Sale” of its lot and building located at Bangued, Abra, for non-payment of real estate taxes
and penalties. The “Notice of Sale” was caused to be served upon the petitioner by the respondent
treasurers for the sale at public auction of said college lot and building , which sale was held on the same date.
Dr. Paterno Millare, then Municipal Mayor of Bangued, Abra, offered the highest bid which was duly
accepted. the respondent filed through counstel a motion to dismiss the complaint. Nonetheless, the trial
court disagreed because of the use of the second floor by the Director of petitioner school for residential
purposes.
He thus ruled for the government and rendered the assailed decision. Hence petitioner instead availed of
the instant petition for review on certiorari with prayer for preliminary injunction before the Supreme
Court.
Issue: Whether the Educational Institution Properties which is not exclusively used for educational
purposes is not eligible for tax exemption.
Held: Yes, Under the 1935 Constitution, the trial court correctly arrived at the conclusion that the school
building as well as the lot where it is built, should be taxed, not because the second floor of the same is
being used by the Director and his family for residential purposes, but because the first floor thereof is
being used for commercial purposes. However, since only a portion is used for purposes of commerce, it is
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only fair that half of the assessed tax be returned to the school involved . Moreover, the exemption in favor
of property used exclusively for charitable or educational purposes is ‘not limited to property actually
indispensable’ therefor but extends to facilities which are incidental to and reasonably necessary for the
accomplishment of said purposes.
But it must be stressed however, that while the court allows a more liberal and non-restrictive
interpretation of the phrase “exclusively used for educational purposes”, reasonable emphasis has always
been made that exemption extends to facilities which are incidental to and reasonably necessary for the
accomplishment of the main purposes.
Otherwise stated, the use of the school building or lot for commercial purposes is neither contemplated by
law, nor by jurisprudence, The lease of the first floor thereof to the Northern Marketing Corporation cannot
by any stretch of the imagination be considered incidental to the purpose of education.
132)Central Mindanao University vs. DAR (G.R. No. 100091, October 22, 1993)
Full Title: G.R. No. 100091. October 22, 1992.
CENTRAL MINDANAO UNIVERSITY REPRESENTED BY ITS PRESIDENT DR. LEONARDO A. CHUA, Petitioner,
v. THE DEPARTMENT OF AGRARIAN REFORM ADJUDICATION BOARD, THE COURT OF APPEALS AND ALVIN
OBRIQUE, REPRESENTING BUKIDNON FREE FARMERS AGRICULTURAL LABORERS ORGANIZATION
(BUFFALO), Respondents.
Facts:
Central Mindanao University(CMU) is an agricultural university. From its beginning, CMU was the answer to
the crying need for training people in order to develop the agricultural potential of the island of Mindanao.
Those who planned and established the school had a vision as to the future development of that part of the
Philippines.
Then Pres. Carlos Garcia issued Proclamation No. 476, withdrawing from sale or settlement and reserving
for the Mindanao Agricultural College, a site which would be the future campus of what is now the CMU.
In the course of the cadastral hearing of the school's petition for registration of the aforementioned grant of
agricultural land, several tribes belonging to cultural communities, opposed the petition claiming
ownership of certain ancestral lands forming part of the tribal reservations. Some of the claims were
granted so that what was titled to the present petitioner school was reduced from 3,401 hectares to 3,080
hectares.
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It was 1984, the CMU approved Resolution No. 160, adopting a livelihood program called"KilusangSarilingSikap
Program" under which the land resources of the school were leased to its faculty and employees. Under this
program the faculty and staff combine themselves to groups of five members each, and the CMU provided
technical know-how, practical training and all kinds of assistance, to enable each group to cultivate 4 to 5
hectares of land for the lowland rice project. Each group pays the University a service fee and also a land use
participant's fee. The contract prohibits participants and their hired workers to establish houses or live in the project area
and to use the cultivated land as a collateral for any kind of loan. It was expressly stipulated that no landlord-
tenant relationship existed between the CMU and the faculty and/or employees. This particular program was
conceived as a multi-disciplinary applied research extension and productivity program to utilize available land, train people
in modern agricultural technology and at the same time give the faculty and staff opportunities within the confines of the
CMU reservation to earn additional income to augment their salaries.
When Dr. Leonardo Chua became President of the Univertisy in July 1986, he discontinued the Agri-
Business Management and Training Project, due to losses incurred while carrying on the said project. Some
CMU personnel, among whom were the complainants, were laid-off when this project was discontinued.
Another project was launched o develop unutilized land resources, mobilize and promote the spirit of self-reliance,
provide socio-economic and technical training in actual field project implementation and augment the income of the
faculty and the staff. This has the same nature as of the KilusangSarilingSikap Program with an express provision that
there would be no tenant-landlord relationship.
The contract expired. Some were renewed, some were not. The non-renewal of the contracts, the discontinuance
of the rice, corn and sugar cane project, the loss of jobs due to termination or separation from the service and the
alleged harassment by school authorities, all contributed to, and precipitated the filing of the complaint.
DARAB found that the private respondents were not tenants and cannot therefore be beneficiaries under
the Comprehensive Agrarian Reform Program (CARP). At the same time, the DARAB ordered the
segregation of 400 hectares of suitable, compact and contiguous portions of the CMU land and their
inclusion in the CARP for distribution to qualified beneficiaries.
Complainants Obrique, et al. claimed that they are tenants of the CMU and/or landless peasants
claiming/occupying a part or portion of the CMU.
Issue:
Whether or not subject land is covered by CARP.
Held:
NO. The 400 hectares ordered segregated by the DARAB and affirmed by the Court of Appeals (CA) in its Decision
dated August 20, 1990, is not covered by the CARP because: It is not alienable and disposable land of the
public domain.
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The CMU land reservation is not in excess of specific limits as determined by Congress; It is private land
registered and titled in the name of its lawful owner, the Central Mindanao University; and,
It is exempt from coverage under Section 10 of R.A. 6657 because the lands are actually, directly and
exclusively used and found to be necessary for school site and campus, including experimental farm
stations for educational purposes, and for establishing seed and seedling research and pilot production
centers
133)Province of Abra vs. Hernando [107 SCRA 104 (1981)]

Full Title: G.R. No. L-49336 August 31, 1981
THE PROVINCE OF ABRA, represented by LADISLAO ANCHETA, Provincial Assessor, petitioner, vs.
HONORABLE HAROLD M. HERNANDO, in his capacity as Presiding Judge of Branch I, Court of First Instance
Abra; THE ROMAN CATHOLIC BISHOP OF BANGUED, INC., represented by Bishop Odilo etspueler and
Reverend Felipe Flores, respondents.
Facts: First, there was a denial of a motion to dismiss an action for declaratory relief by private respondent
Roman Catholic Bishop of Bangued desirous of being exempted from a real estate tax. It was followed by a
summary judgment granting such exemption, without even hearing the side of petitioner, wantonly violated
the rights of petitioner to due process, by giving due course to the petition of private respondent for declaratory
relief, and thereafter without allowing petitioner to answer and without any hearing, adjudged the case; all in total
disregard of basic laws of procedure and basic provisions of due process in the constitution, thereby indicating a failure to
grasp and understand the law, which goes into the competence of the Honorable Presiding Judge.” It was the submission
of counsel that an action for declaratory relief would be proper only before a breach or violation of any statute, executive
order or regulation. Moreover, there being a tax assessment made by the Provincial Assessor on the
properties of respondent Roman Catholic Bishop, petitioner failed to exhaust the administrative remedies
available under Presidential Decree No. 464 before filing such court action. Further, it was pointed out to
respondent Judge that he failed to abide by the pertinent provision of such Presidential Decree.
Issue: Whether Tax exemption is presumed in favor of the claimant?
Held: No, Respondent Judge would not have erred so grievously had he merely compared the provisions of
the present Constitution with that appearing in the 1935 Charter on the tax exemption of “lands, buildings,
and improvements.”
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There is a marked difference. Under the 1935 Constitution: “Cemeteries, churches, and parsonages or
convents appurtenant thereto, and all lands, buildings, and improvements used exclusively for religious,
charitable, or educational purposes shall be exempt from taxation.”
The present Constitution added “charitable institutions, mosques, and non-profit cemeteries” and required
that for the exemption of “:lands, buildings, and improvements,” they should not only be “exclusively” but
also “actually and “directly” used for religious or charitable purposes.
The Constitution is worded differently. The change should not be ignored. It must be duly taken into
consideration. Reliance on past decisions would have sufficed were the words “actually” as well as
“directly” not added. There must be proof therefore of the actual and direct use of the lands, buildings, and
improvements for religious or charitable purposes to be exempt from taxation.
According to Commissioner of Internal Revenue v. Guerrero: “From 1906, in Catholic Church v. Hastings to 1966, in Esso
Standard Eastern, Inc. v. Acting Commissioner of Customs, it has been the constant and uniform holding that exemption
from taxation is not favored and is never presumed, so that if granted it must be strictly construed against the taxpayer.
Affirmatively put, the law frowns on exemption from taxation, hence, an exempting provision should be
construed strictissimi juris (according to the strictest interpretation of the law).In Manila Electric Company v.
Vera, a 1975 decision, such principle was reiterated, reference being made to Republic Flour Mills, Inc. v. Commissioner
of Internal Revenue; Commissioner of Customs v. Philippine Acetylene Co. & CTA; and Davao Light and Power Co., Inc. v.
Commissioner of Customs.
134) Short Title: Bishop of Nueva Segovia vs. Provincial Board [51 Phil. 352 (1927)]
Full Title:
THE ROMAN CATHOLIC BISHOP OF NUEVA SEGOVIA, as representative of the Roman Catholic Apostolic
Church, plaintiff-appellant,vs.
THE PROVINCIAL BOARD OF ILOCOS NORTE, ET AL., defendants-appellants.
Vicente Llanes and Proceso Coloma for plaintiff-appellant
Provincial Fiscal Santos for defendant-appellants.
Facts:
The plaintiff, the Roman Catholic Apostolic Church, represented by the Bishop of Nueva Segovia, possesses
and is the owner of a parcel of land in the municipality of San Nicolas, Ilocos Norte, all four sides of which
face on public streets. On the south side is a part of the churchyard, the convent and an adjacent lot used for
a vegetable garden, containing an area off 1,624 square meters, in which there is a stable and a well for the use
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of the convent. In the center is the remainder of the churchyard and the church. On the north is an old
cemetery with two of its walls still standing, and a portion where formerly stood a tower, the base of which still be
seen, containing a total area of 8,955 square meters. As required by the defendants, on July 3, 1925 the plaintiff
paid, under protest, the land tax on the lot adjoining the convent and the lot which formerly was the
cemetery with the portion where the tower stood.
The plaintiff filed this action for the recovery of the sum paid by to the defendants by way of land tax,
alleging that the collection of this tax is illegal. The lower court absolved the defendants from the
complaint in regard to the lot adjoining convent and declared that the tax collected on the lot, which
formerly was the cemetery and, on the portion, where the lower stood, was illegal.
Both parties appealed from this judgment.
Issue: Whether a lot which constitutes an incidental use in religious functions is exempted from taxation?
Ruling: YES
The exemption in favor of the convent in the payment of the land tax (sec. 344 [c] Administrative Code)
refers to the home of the parties who presides over the church and who has to take care of himself in order
to discharge his duties. In therefore must, in the sense, include not only the land actually occupied by the
church, but also the adjacent ground destined to the ordinary incidental uses of man
. Except in large cities where the density of the population and the development of commerce require the use of larger
tracts of land for buildings, a vegetable garden belongs to a house and, in the case of a convent, it use is limited to the
necessities of the priest, which comes under the exemption. lawphi1.net
In regard to the lot which formerly was the cemetery, while it is no longer used as such, neither is it used
for commercial purposes and, according to the evidence, is now being used as a lodging house by the
people who participate in religious festivities, which constitutes an incidental use in religious functions,
which also comes within the exemption.
Page 296 of 306
135)Short Title: CIR vs. Bishop of the Missionary District of the Philippine Islands (14 SCRA 991)
COMMISSIONER OF INTERNAL REVENUE, petitioner,vs.
BISHOP OF THE MISSIONARY DISTRICT OF THE PHILIPPINE ISLANDS OF THE PROTESTANT EPISCOPAL
CHURCH IN THE U.S.A. and THE COURT OF TAX APPEALS, respondents.
Facts:
This is an appeal taken from the Commissioner of Internal Revenue from a decision of the Court of Tax Appeals ordering
him to refund to the Bishop of the Missionary District of the Philippines Islands of the Protestant Episcopal in the U.S.A.
the sum of P118,847 which the latter had paid by way of compensating tax.
Respondent Bishop of the Missionary District of the Philippines Islands of the Protestant, Episcopal Church
in the U.S.A. is a corporation sole duly registered with the Securities and Exchange Commission. He is in
charge of the administration of the temporalities and the management of the estates and properties in the
Philippines of the Domestic and Foreign Missionary Society of the Protestant Episcopal Church in the
United States (hereinafter referred to as Missionary Society). On the other hand, the Missionary District of the
Philippine Islands of the Protestant Episcopal Church the U.S.A. (hereinafter referred to as Missionary District) is a duly
incorporated and established religious society. It owns and operates the St. Luke's Hospital in Quezon City, the
Brent Hospital in Zamboanga City and the St. Stephen's High School in Manila.
On different dates in 1957, 1958 and 1959, the Missionary District in the Philippines received from the
Missionary Society in the United States various shipments of materials, supplies, equipment and other
articles intended for use in the construction and operation of the new St. Luke's Hospital in Quezon City
and the Brent Hospital and St. Stephen's High School. The Missionary District also received from a certain William
Minnis of Canada a stove for the use of the Brent Hospital.
The Bishop of the Missionary District filed claims for refund of the amount he had paid on the ground that under Republic
Act No. 1916, the materials and articles received by him were exempt from the payment of compensating tax. As the
two-year period for recovery of tax was about to expire, the Bishop of the Missionary District filed a petition for review in
the Court of Tax Appeals, without awaiting action on his claim for refund.
The petitioner, the Commissioner of Internal Revenue denied respondent's claim for refund on the ground
that St. Luke's Hospital was not a charitable institution and, therefore, was not exempt under the law. This
is also the position he maintained in his answer to the first supplemental petition for review in the Tax Court.
Issue: Whether or not St Luke Hospital is exempt from tax
Ruling:
This Court has already held that the following requisites must concur in order that a taxpayer may claim
exemption under the law (1) the imported articles must have been donated; (2) the donee must be a duly
incorporated or established international civic organization, religious or charitable society, or institution
for civic religious or charitable purposes; and (3) the articles so imported must have been donated for the
use of the organization, society or institution or for free distribution and not for barter, sale or hire
The Tax Court's finding that the materials and supplies were purchased by the Missionary Society with money obtained
from contributions from other people who should be considered the real donors is also assailed as being based on the
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uncorroborated testimony of Robert Meyer, Treasurer of the Missionary District, who it is said, did not have
personal knowledge of the matter testified to by him. This is not so. As respondent points out, the various deeds
of donation state in paragraph 3 that the "Missionary Society is a non-profit organization and derives its support from
voluntary contributions."
Petitioner's other point is that St. Luke's Hospital is not a charitable institution considering that it admits
paying patients. Indeed, it was on this ground that petitioner denied respondent's claim for refund. It is argued that
pursuant to the last proviso of Republic Act No. 1916, the Secretary of Finance issued Department Order No. 18 on
October 20, 1958, stating that —
Hospitals that admit pay patients and charity patients ... are not charitable institutions for purposes
of Republic Act No 1916.
Again, it should be enough to point out that the admission of pay patients does not detract from the charitable character
of a hospital, if, as in the case of St. Luke's Hospital, its funds are devoted exclusively to the Maintenance of the
institution (Cf., e.g., Herrera v. Quezon City Board of Assessment Appeals, G.R. No. 15270, September 30, 1961). The
Secretary of Finance cannot limit or otherwise qualify the enjoyment of this exemption granted under Republic Act No.
1916 in implementing the law.
136)Short Title: Lladoc vs. CIR [14 SCRA 292 (1965)]

REV. FR. CASIMIRO LLADOC, petitioner,
vs.
The COMMISSIONER OF INTERNAL REVENUE and The COURT of TAX APPEALS, respondents.
Facts:
Sometime in 1957, the M.B. Estate, Inc., of Bacolod City, donated P10,000.00 in cash to Rev. Fr. Crispin
Ruiz, then parish priest of Victorias, Negros Occidental, and predecessor of herein petitioner, for the
construction of a new Catholic Church in the locality. The total amount was actually spent for the purpose
intended. On March 3, 1958, the donor M.B. Estate, Inc., filed the donor’s gift tax return. Under date of April 29, 1960,
the respondent Commissioner of Internal Revenue issued an assessment for donee’s gift tax against the Catholic Parish of
Victorias, Negros Occidental, of which petitioner was the priest.
The tax amounted to P1,370.00 including surcharges, interests of 1% monthly from May 15, 1958 to June
15, 1960, and the compromise for the late filing of the return. Petitioner lodged a protest to the
assessment and requested the withdrawal thereof. The protest and the motion for reconsideration
presented to the Commissioner of Internal Revenue were denied.
The petitioner appealed to the Court of Tax Appeals on November 2, 1960. In the petition for review, the Rev. Fr.
Casimiro Lladoc claimed, among others, that at the time of the donation, he was not the parish priest in Victorias; that
there is no legal entity or juridical person known as the “Catholic Parish Priest of Victorias,” and, therefore,
he should not be liable for the donee’s gift tax. It was also asserted that the assessment of the gift tax, even
against the Roman Catholic Church, would not be valid, for such would be a clear violation of the provisions of the
Constitution.
Page 298 of 306
Issue: Whether the petitioner is liable for the assessed donee’s gift tax on the donated for the construction of the
Victorias Parish Church.
Ruling: Yes
Section 22 (3), Art. VI of the Constitution of the Philippines, exempts from taxation
cemeteries, churches and parsonages or convents, appurtenant thereto, and all lands, buildings, and
improvements used exclusively for religious purposes. The exemption is only from the payment of taxes
assessed on such properties enumerated, as property taxes, as contra distinguished from excise taxes.
In the present case, what the Collector assessed was a donee's gift tax; the assessment was not on the
properties themselves. It did not rest upon general ownership; it was an excise upon the use made of the
properties, upon the exercise of the privilege of receiving the properties (Phipps vs. Com. of Int. Rec. 91 F
2d 627).
Manifestly, gift tax is not within the exempting provisions of the section just mentioned. A gift tax is not a
property tax, but an excise tax imposed on the transfer of property by way of gift inter vivos, the imposition
of which on property used exclusively for religious purposes, does not constitute an impairment of the
Constitution. As well observed by the learned respondent Court, the phrase "exempt from taxation," as employed
in the Constitution (supra) should not be interpreted to mean exemption from all kinds of taxes. And there
being no clear, positive or express grant of such privilege by law, in favor of petitioner, the exemption
herein must be denied
The decision appealed from should be, as it is hereby affirmed insofar as tax liability is concerned; it is modified, in the
sense that petitioner herein is not personally liable for the said gift tax, and that the Head of the Diocese, herein
substitute petitioner, should pay, as he is presently ordered to pay, the said gift tax, without special, pronouncement as
to costs.
137) American Bible Society vs. City of Manila 101 Phil. 386
G.R. No. L-9637 April 30, 1957
AMERICAN BIBLE SOCIETY, plaintiff-appellant,
vs. CITY OF MANILA, defendant-appellee.
FACTS:
In the course of its ministry, Petitioner’s Philippine agency has been distributing and selling bibles and/or gospel
portions thereof (except during the Japanese occupation) throughout the Philippines and translating the
same into several Philippine dialects. Respondent informed Petitioner that it was conducting the business
Page 299 of 306
of general merchandise since November, 1945, without providing itself with the necessary Mayor’s permit
and municipal license, in violation of the City Ordinances, and required plaintiff to secure, within three
days, the corresponding permit and license fees. Plaintiff protested against this requirement, but the City
Treasurer demanded that plaintiff deposit and pay under protest. To avoid the closing of its operations,
plaintiff paid the defendant under protest the said permit and license fees.In its complaint, plaintiff prays
that judgment be rendered declaring the said Municipal Ordinances illegal and unconstitutional, and that
the defendant be ordered to refund to the plaintiff paid under protest, together with legal interest thereon,
and the costs, plaintiff further praying for such other relief and remedy as the court may deem just
equitable. CFI Dismissed the Petition for lack of merit, which the petitioner raised the issue to the CA
which certified the case to SCfor the reason that the errors assigned to the lower Court involved only questions of
law. A
ISSUE: Whether the Selling activity of the Petitioner is exempted from Taxation?
RULING:Yes. Under Sec. 27(e) of Commonwealth Act No. 466 or the National Internal Revenue Code,
Corporations or associations organized and operated exclusively for religious, charitable, . . . or educational
purposes, . . .: Provided, however, That the income of whatever kind and character from any of its
properties, real or personal, or from any activity conducted for profit, regardless of the disposition made of
such income, shall be liable to the tax imposed under this Code shall not be taxed
It may be true that in this said case, the price asked for the bibles and other religious pamphlets was in some
instances a little bit higher than the actual cost of the same but this cannot mean that appellant was
engaged in the business or occupation of selling said “merchandise” for profit.For the reason that the
provisions of City of Manila Ordinance No. 2529, as amended, cannot be applied to appellant, for in doing so it
would impair its free exercise and enjoyment of its religious profession and worship as well as its rights of
dissemination of religious beliefs.
138) CIR vs CA (G.R. No. 124043, October 14, 1998)

COMMISSIONER OF INTERNAL REVENUE vs. COURT OF APPEALS, COURT OF TAX APPEALS and YOUNG
MENS CHRISTIAN ASSOCIATION OF THE PHILIPPINES, INC. G.R. No. 124043. October 14, 1998
FACTS:
Young Men’s Christian Association of the Philippines (YMCA) is a non-stock, non-profit institution, which
conducts various programs and activities that are beneficial to the public, especially the young people,
pursuant to its religious, educational and charitable objectives. In 1980, YMCA earned, among others, an
income from leasing out a portion of its premises to small shop owners, like restaurants and canteen
Page 300 of 306
operators, and from parking fees collected from non-members.
In July 1984, the CIR issued an assessment to YMCA, in the total amount of P415,615.01 including
surcharge and interest, for deficiency income tax, deficiency expanded withholding taxes on rentals and
professional fees and deficiency withholding tax on wages. Both CTA and CA ruled that it is reasonably
necessary for YMCA to make the most out of its existing facilities to earn some income; further stating that
the rental from small shops and parking fees do not result in the loss of the exemption under Sec. 27 of the
NIRC.
ISSUE: Whether the rental income of YMCA is taxable
RULING:
Yes. The exemption claimed by YMCA is expressly disallowed by the very wording of then Section 27 of the
NIRC which mandates that the income of exempt organizations (such as the YMCA) from any of their
properties, real or personal, be subject to the tax imposed by the same Code.
The Court also reiterates that YMCA is exempt from the payment of property tax, but not income tax on the
rentals from its property. The bare allegation alone that it is a non-stock, non-profit educational institution is
insufficient to justify its exemption from the payment of income tax. Laws allowing tax exemption are construed
strictissimi juris. Hence, for the YMCA to be granted the exemption it claims under the aforecited provision, it
must prove with substantial evidence that: 1. it falls under the classification non-stock, non-profit
educational institution; and 2. the income it seeks to be exempted from taxation is used actually, directly
and exclusively for educational purposes. However, the Court notes that not a scintilla of evidence was
submitted by YMCA to prove that it met the said requisites.
YMCA is not an educational institution within the purview of Art. XIV, Sec. 4(3) of the Constitution. The
term “educational institution,” when used in laws granting tax exemptions, refers to a school, seminary, college or
educational establishment. Therefore, YMCA cannot be deemed one of the educational institutions covered by
the said constitutional provision. Moreover, the Court notes that YMCA did not submit proof of the
proportionate amount of the subject income that was actually, directly and exclusively used for
educational purposes.
Page 301 of 306
Double Taxation
139) Punzalan vs. Municipal Borad of Manila (95 Phil. 46, 1954)
G.R. No. L-4817 May 26, 1954
SILVESTER M. PUNSALAN, ET AL., plaintiffs-appellants,
vs. THE MUNICIPAL BOARD OF THE CITY OF MANILA, ET AL., defendants-appellants.
FACTS:
(This suit was commenced in the Court of First Instance of Manila by two lawyers, a medical practitioner, a public
accountant, a dental surgeon and a pharmacist)
The municipal board of the City of Manila on July 25, 1950, enacted Ordinance No. 3398 which imposes a
municipal occupation tax on persons exercising various professions in the city and penalizes non-payment
of the tax “by a fine of not more than two hundred pesos or by imprisonment of not more than six months, or by both
such fine and imprisonment in the discretion of the court.” Among the professions taxed were those to which
plaintiffs belong. The ordinance was enacted pursuant to paragraph (1) of section 18 of the Revised Charter of
the City of Manila (as amended by Republic Act No. 409), which empowers the Municipal Board of said city to
impose a municipal occupation tax, not to exceed P50 per annum, on persons engaged in the various
professions above referred to.
Having already paid their occupation tax under section 201 of the National Internal Revenue Code,
plaintiffs, upon being required to pay the additional tax prescribed in the ordinance, paid the same under
protest and then brought the present suit for the purpose already stated. The lower court upheld the
validity of the provision of law authorizing the enactment of the ordinance but declared the ordinance
itself illegal and void on the ground that the penalty therein provided for non-payment of the tax was not
legally authorized. From this decision both parties appealed to the Supreme Court.
ISSUE: Whether Ordinance No. 3398 constitutes what amounts to double taxation.
RULING: No. The Legislature may, in its discretion, select what occupations shall be taxed, and in the
exercise of that discretion it may tax all, or it may select for taxation certain classes and leave the others
untaxed. Plaintiff’s complaint is that while the law has authorized the City of Manila to impose the said tax,
it has withheld that authority from other chartered cities, not to mention municipalities. It is not for the courts
to judge what particular cities or municipalities should be empowered to impose occupation taxes in
addition to those imposed by the National Government. That matter is peculiarly within the domain of the
political departments and the courts would do well not to encroach upon it. Moreover, as the seat of the National
Government and with a population and volume of trade many times that of any other Philippine city or municipality,
Manila, no doubt, offers a more lucrative field for the practice of the professions, so that it is but fair that the
professionals in Manila be made to pay a higher occupation tax than their brethren in the provinces. The ordinance
imposes the tax upon every person “exercising” or “pursuing” – in the City of Manila naturally – any one of
Page 302 of 306
the occupations named, but does not say that such person must have his office in Manila . The argument
against double taxation may not be invoked where one tax is imposed by the state and the other is imposed
by the city.
140) Short Title: Victorias Milling Co., Inc. vs. Mun. of Victorias, Negros Occidental (25 SCRA 192)
Full Title: VICTORIAS MILLING CO., INC., plaintiff-appellant, vs. THE MUNICIPALITY OF VICTORIAS, PROVINCE
OF NEGROS OCCIDENTAL, defendant-appellant.
Facts:
The disputed ordinance was approved by the municipal council of Victorias on September 22, 1956 by way
of an amendment to two municipal ordinances separately imposing license taxes on operators of sugar
centrals and sugar refineries. The changes were: with respect to sugar centrals, by increasing the rates of license
taxes; and as to sugar refineries, by increasing the rates of license taxes as well as the range of graduated schedule of
annual output capacity.
Ordinance No. 1 is labeled “An Ordinance Amending Ordinance No. 25, Series of 1953 and Ordinance No. 18, Series of
1947 on Sugar Central by Increasing the Rates on Sugar Refinery Mill by Increasing the Range of Graduated Schedule on
Capacity Annual Output Respectively”. It was, as the ordinance itself states, enacted pursuant to the taxing power
conferred by Commonwealth Act 472. By Section 1 of the Ordinance: “Any person corporation or other
forms of companies, operating sugar central or engage[d] in the manufacture of centrifugal sugar shall be
required to pay the following annual municipal license tax, payable quarterly, to wit: . . .” Section 1 referred to
prescribes a wide range of schedule. It starts with a sugar central with mill having an annual output capacity of not less
than 50,000 piculs of centrifugal sugar, in which case an annual municipal license tax of P1,000.00 is provided.
Depending upon the annual output capacity the schedule of taxes continues with P2,000.00 progressively upward in
twelve other grades until an output capacity of 1,500,001 piculs or more shall have been reached. For this, the annual tax
is P40,000.00. The tax on sugar refineries is likewise calibrated with similar rates. It also starts with P1,000.00 for a
refinery with mill having an annual output capacity of not less than 25,000 bags of 100 lbs. of refined sugar. Then, it
continues with the second bracket of from 25,001 bags to 75,000 bags of 100 lbs. Here, the municipal license tax is
P1,500.00. Then follow the other rates in the graduated scale with the ceiling placed at a capacity of 1,750.001 bags or
more. The annual municipal license tax for the last mentioned output capacity is P40,000.00.
Of importance are the provisions of Section 1(m) relating to sugar centrals and Section 2(m) covering sugar refineries
with specific reference to the maximum annual license tax, viz:
“SECTION No. 1 — Any person, corporation or other forms of Companies, operating Sugar Central or
engage[d] in the manufacture of centrifugal sugar shall be required to pay the following annual municipal license
tax, payable quarterly, to wit:
xxx xxxxxx
Page 303 of 306
(m) Sugar Central with mill having a capacity of producing an annual output of from 1,500,001
piculs or more shall be required to pay an annual municipal license tax of — P40,000.00.
“SECTION No. 2 — Any person, corporation or other forms of Companies shall be required to pay an
annual municipal license tax for the operation of Sugar Refinery Mill at the following rates:
xxx xxxxxx
(m) Sugar Refinery with mill having a capacity of producing an annual output of from 1,750,001
bags of 100 lbs. or more shall be required to pay an annual municipal license tax of — P40,000.00″.
For, the production of plaintiff Victorias Milling Co., Inc. in both its sugar central and its sugar refinery
located in the Municipality of Victorias comes within these items in the schedule.
Plaintiff filed suit below to ask for judgment declaring Ordinance No. 1, series of 1956, null and void;
ordering the refund of all license taxes paid and to be paid under protest; directing the officials of Victorias and
the Province of Negros Occidental to observe, during the pendency of the action, the provisions of section 357 of the
Revised Manual of Instructions to Treasurers of Provinces, Cities and Municipalities, 1954 edition, regarding the treatment
of licenses taxes paid under protest by virtue of disputed ordinance; and other reliefs.
The reasons put forth by plaintiff are that: (a) the ordinance exceeds the amounts fixed in Provincial
Circular 12-A issued by the Finance Department on February 27, 1940; (b) it is discriminatory since it
singles out plaintiff which is the only operator of a sugar central and a sugar refinery within the
jurisdiction of defendant municipality; (c) it constitutes double taxation; and (d) the national government
has pre-empted the field of taxation with respect to sugar centrals or refineries.
Issue:
Whether or not the ordinance is a tax revenue.
Ruling: YES
1. TAXATION; LOCAL TAXATION; KINDS OF LICENSES A MUNICIPALITY MAY IMPOSE.

A municipality is authorized to impose three kinds of licenses:
1) license for regulation of useful occupations or enterprises;
2) license for restriction or regulation of non-useful occupations or enterprises; and
3) license for revenue.
The first two easily fall within the broad police power granted under the general welfare clause. The third
class, however, is for revenue purposes. It is not a license fee, properly speaking, and yet it is generally so termed.
Page 304 of 306
It rests on the taxing power. That taxing power must be expressly conferred by statute upon the
municipality. The tax in question is granted upon the municipality under Commonwealth Act 472.
2. IMPOSITION IN INSTANT CASE IS A LEVY FOR REVENUE PURPOSES.

Considering the purpose and effect of the ordinance in question the imposition must be treated as a levy for revenue
purposes. A quick glance at the big amount of maximum annual tax set forth in the ordinance, P40,000.00 for sugar
centrals, and P40,000.00 for sugar refineries, will readily convince one that the tax is really a revenue tax. There is
nothing in the ordinance which would indicate that the tax imposed is merely for police inspection, supervision or
regulation. We, accordingly, rule that Ordinance No. 1, series of 1956, of the Municipality of Victorias, was promulgated
not in the exercise of the municipality’s regulatory power but as a revenue measure — a tax on occupation or business.
The authority to impose such tax is backed by the express grant of power in Section 1 of Commonwealth
Act 72.
3. MUNICIPALITY HAS POWER TO TAX SUGAR CENTRALS AND SUGAR REFINERIES.

Section 4 (1) of CA 472 clearly and specifically allows municipal councils to tax persons engaged in “the same business or
occupation” on which “fixed internal revenue privilege taxes” are “regularly imposed by the National Government,” with
certain exceptions specified in Section 3 of the same statute. The instant case does not fall within the exceptions. Clearly,
Congress has not reserved to the national government the right to impose the disputed taxes.
4. PRESUMPTION OF VALIDITY OF ORDINANCE IMPOSING TAX.

An ordinance carries with it the presumption of validity. The question of reasonableness though is open to
judicial inquiry. Much should be left thus to the discretion of municipal authorities. Courts will go slow in writing
off an ordinance as unreasonable unless the amount is so excessive as to be prohibitive, arbitrary,
unreasonable, oppressive, or confiscatory. A rule which has gained acceptance is that factors relevant to such an
inquiry are the municipality conditions as a whole and the nature of the business made subject to imposition.
5. COST OF REGULATION IS NOT A GAUGE.

The cost of regulation cannot be taken as a gauge, if the municipality really intended to enact a revenue ordinance. For,
“if the charge exceeds the expense of issuance of a license and costs of regulation, it is a tax”. And if it is, and it is validly
imposed as in this case, “the rule that license fees for regulation must bear a reasonable relation to the expense of the
regulation has no application”. A cash surplus alone cannot stop a municipality from enacting a revenue ordinance
increasing license taxes in anticipation of municipal needs. Discretion to determine the amount of revenue required for
the needs of the municipality is lodged with the municipal authorities. Again, judicial intervention steps in only when there
is a flagrant, oppressive and excessive abuse of power by said municipal authorities.
6. ORDINANCE IN QUESTION IS NOT DISCRIMINATORY.

Page 305 of 306
The ordinance in question does not single out Victorias as the only object of the ordinance. Said ordinance is made to
apply to any sugar central or sugar refinery which may happen to operate in the municipality. So it is, that the fact that
plaintiff is actually the sole operator of a sugar refinery does not make the ordinance discriminatory.
7. ORDINANCE IN QUESTION DOES NOT CONSTITUTE DOUBLE TAXATION.

Plaintiff’s argument on double taxation must not be upheld:
First. The two taxes cover two different objects. Section 1 of the ordinance taxes a person operating sugar
centrals or engaged in the manufacture of centrifugal sugar (MGA MUSCOVADO). While under Section 2,
those taxed are the operators of sugar refinery mills (SUGAR WE COMONLY USE). One occupation or
business is different from the other.
Second. The disputed taxes are imposed on occupation or business. Both taxes are not on sugar. The
amount thereof depends on the annual output capacity of the mills concerned, regardless of the actual
sugar milled. Plaintiff’s argument perhaps could make out a point if the object of taxation here were the
sugar it produces, not the business of promoting it.
8. TERM “LICENSE TAX” HAS NOT ACQUIRED A FIXED MEANING.

The term “license tax has not acquired a fixed meaning.” It is often “used indiscriminately to designate impositions
exacted for the exercise of various privileges”. It does not refer solely to a license for regulation, In many instances, it
refers to “revenue raising exactions on privileges or activities”. On the other hand, license fees are commonly called taxes
but, in contrast to the former which are imposed “in the exercise of police power for purposes of regulation”. Accordingly,
the designation given by the municipal authorities does not decide whether the imposition is properly a license tax or a
license fee. The determining factors are the purpose and effect of the imposition as may be apparent from the provisions
of the ordinance.
License Fees
141 & 142) Short Title: Physical Therapy Org. vs. Municipal Board [G.R. 10448, August 30, 1957]
Full Title: IN THE MATTER OF A PETITION FOR DECLARATORY JUDGMENT REGARDING THE VALIDITY OF
MUNICIPAL ORDINANCE NO. 3659 OF THE CITY OF MANILA. PHYSICAL THERAPY ORGANIZATION OF THE
PHILIPPINES, INC., petitioner-appellant, vs. THE MUNICIPAL BOARD OF THE CITY OF MANILA and ARSENIO
H. LACSON, as Mayor of the City of Manila, respondents-appellees.
Facts:
Page 306 of 306
The petitioner-appellant, an association of registered massagists and licensed operators of massage clinics
in the City of Manila and other parts of the country, filed an action in the Court of First Instance of Manila
for declaratory judgment regarding the validity of Municipal Ordinance No. 3659, promulgated by the Municipal
Board and approved by the City Mayor. To stop the City from enforcing said ordinance, the petitioner secured an
injunction upon filing of a bond in the sum of P1,000.00. A hearing was held, but the parties without introducing any
evidence submitted the case for decision on the pleadings, although they submitted written memoranda.
Thereafter, the trial court dismissed the petition and later dissolved the writ of injunction previously
issued. The petitioner appealed said order of dismissal directly to this Court. In support of its appeal, petitioner-
appellant contends among other things that the trial court erred in holding that the Ordinance in question has
not restricted the practice of massotherapy in massage clinics to hygienic and aesthetic massage, that the
Ordinance is valid as it does not regulate the practice of massage, that the Municipal Board of Manila has the
power to enact the Ordinance in question by virtue of Section 18, Subsection (kk), Republic Act 409, and that permit
fee of P100.00 is moderate and not unreasonable. Inasmuch as the appellant assails and discuss certain provisions
regarding the ordinance in question, and it is necessary to pass upon the same, for purposes of ready reference, we are
reproducing said ordinance in toto.
Issue:
Whether the license fee of P100.00 for operator of the Ordinance is unreasonable, nay, unconscionable (too much).
Ruling:
No, The amount of the fee or charge is properly considered in determining whether it is a tax or an exercise of the police
power. The amount may be so large as to itself show that the purpose was to raise revenue and not to
regulate, but in regard to this matter there is a marked distinction between license fees imposed upon
useful and beneficial occupations which the sovereign wishes to regulate but not restrict, and those which
are inimical and dangerous to public health, morals or safety. In the latter case the fee may be very large without
necessarily being a tax. (Cooley on Taxation, Vol. IV, pp. 3516-17; underlining supplied.) Evidently, the Manila Municipal
Board considered the practice of hygienic and aesthetic massage not as a useful and beneficial occupation which will
promote and is conducive to public morals, and consequently, imposed the said permit fee for its regulation.

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CONSTITUTIONAL LAW 2 – MOD 1 to 1A CASES

MODULE 1-A. POLICE POWER

Facts: Respondents are all graduates of the Fatima College of1

2) Short Title: Lorenzo vs. Director of Health (50 Phil 595)

3) Short Title: People vs. Chan (65 Phil 64)

4) Short Title: Ichong vs. Hernandez (101 Phil 1155)

5) Short Title: Gould vs. Gould (61 Atl. 604)

Issue: Whether the statute was a valid act of legislation.

6) Short Title: Baseco vs. PCGG (150 SCRA 181)

7) Short Title: DECS vs. San Diego (180 SCRA 533)

8) Short Title: Stone vs. Mississippi (101 US 814)

9) Short Title: PNB vs. Office of the President (255 SCRA 5)

• Tests of Police Power: Lawful Subject and Lawful Means

Certainly taking a drug by the mouth is not submitting to an operation.

• Who exercises the power?

Principles of Police Power affirmed by the Supreme Court:

17) Short Title: Del Rosario vs. Bengzon

• Zoning and Regulatory Ordinances

Issue: Whether Municipal Ordinance No. 4841 is unconstitutional.

21) Short Title: Cruz vs. Paras

22) Short Title: Velasco vs. Villegas

23) Short Title: Magtajas vs. Pryce Properties

24) Short Title: Lim vs. Pacquing

Issue: Whether PD No. 771 is unconstitutional.

Issue: Whether the Ordinance is constitutional.

Ruling: SC held that the ordinance is unconstitutional for several reasons.

Issue: Whether the ordinance imposing an annual garbage fee is valid.

• Proclamations, Executive Orders, Administrative Rules and Regulations

1. Whether President Duterte must be dropped as party-respondent in view of Pesidential immunity.

3. Essential requisites for judicial review are satisfied.

RULING: No violation of equal protection clause and of due process

36) Short Title: Marfe vs. Mutuc [22 SCRA 424]

Right to privacy or Right to be left alone

Unreasonable Search and Seizure

Right against self-incrimination

Insult to personal integrity and official dignity

MODULE 1B - EMINENT DOMAIN

GR No. L-55167 May 21,1987

• Who exercises the power?

From that judgment the plaintiff appealed.

43) Short Title: Land Bank of the Philippines vs. Dalauta

Thus, direct resort to the SAC by private respondent is valid.

2. No. On Just Compensation

• Constitutional limitation – Art. III. Sec. 9

Under Section 79 of EO 94 paragraph (b)

• Where Expropriation Suit is Filed

The expropriation without compensation of a portion of private cemeteries is not covered by

PNCC, being a private business entity, is not immune from suit

Scope of “infrastructure projects”

No violation of equal protection clause

There is no taking which requires the payment of just compensation

ISSUE: Whether or not the petitioner paid just compensation.

RULING: The petition is denied for lack of merit.

53) PPI vs. COMELEC [244 SCRA 272 (1995)]

54) NAPOCOR vs. Gutierrez [193 SCRA 1 (1991)]

55) Republic vs. Fajardo [104 Phil. 443 (1958)]

56) U.S. vs. Causby [328 U.S. 256 (1946)]

(1) The other modes of acquisition have not been exhausted

59) Filstream International vs. CA [284 SCRA 716 (1998)]

60) JIL vs. Mun. of Pasig (G.R. 152230, August 9, 2005)

Chief Justice Enrique M. Fernando states:

63) Manosca vs. Court of Appeals [252 SCRA 412 (1996)]

64) Guido vs. Rural Progress Administration (84 Phil. 847)