Poli Case Digests

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE
STO. TOMAS V. SALAC

deployment abroad of OFWs and performing artists. A TRO was issued
G.R. No. 152642, 152710, 167590, 182978-79, 184298-99
enjoining RTC-QC from enforcing its decision.
November 13, 2012
CRUZ
Later, Sec. 29 and 30 of R.A 8042 was expressly repealed by R.A 9422.
This law was signed by Pres. Gloria Arroyo. Respondents Salac, et al. told
DOCTRINE:
the Court that they agree with the Republic's view that the repeal of
Sections 29 and 30 of R.A. 8042 renders the issues they raised by their
The rule is settled that every statute has in its favor the presumption of
action moot and academic.
constitutionality. The Court cannot inquire into the wisdom or expediency
II. G.R. 167590 on Constitutionality of Sections 6, 7, and 9 of R.A.
of the laws enacted by the Legislative Department. Hence, in the absence
8042 --- respondent Philippine Association of Service Exporters, Inc.
of a clear and unmistakable case that the statute is unconstitutional, the
(PASEI) filed a petition for declaratory relief and prohibition with prayer for
Court must uphold its validity.
issuance of TRO and writ of preliminary injunction before the RTC of
Manila, seeking to annul Sections 6, 7, and 9 of R.A. 8042 for being
FACTS:
unconstitutional. Section 6 defines the crime of "illegal recruitment" and
enumerates the acts constituting the same. Section 7 provides the
These consolidated cases pertain to the constitutionality of certain
penalties for prohibited acts. Section 9 of R.A. 8042 allowed the filing of
provisions of Republic Act 8042, otherwise known as the Migrant Workers
criminal actions arising from "illegal recruitment" before the RTC of the
and Overseas Filipinos Act of 1995.
province or city where the offense was committed or where the offended
party actually resides at the time of the commission of the offense.
On June 7, 1995 Congress enacted R.A 8042 or the Migrant Workers and
Overseas Filipinos Act of 1995 that, for among other purposes, sets the
The RTC of Manila declared Section 6 unconstitutional after hearing on the
Government's policies on overseas employment and establishes a higher
ground that its definition of "illegal recruitment" is vague as it fails to
standard of protection and promotion of the welfare of migrant workers,
distinguish between licensed and non-licensed recruiters and for that
their families, and overseas Filipinos in distress.
reason gives undue advantage to the non-licensed recruiters in violation of
the right to equal protection of those that operate with government
I. G.R. 152642 and G.R. 152710 (Constitutionality of Sections 29
licenses or authorities. (Take note: Actually, "illegal recruitment" as
and 30, R.A. 8042) --- Respondents Rey Salac filed a petition
defined in Section 6 is clear and unambiguous and, contrary to the RTC's
for certiorari, prohibition and mandamus with TRO and preliminary
finding, actually makes a distinction between licensed and non-licensed
injunction against petitioners, the DOLE Secretary, the POEA
recruiters. By its terms, persons who engage in "canvassing, enlisting,
Administrator, and the TESDA Secretary-General before the RTC of Quezon
contracting, transporting, utilizing, hiring, or procuring workers" without
City. Salac, et al. sought to: 1) nullify DOLE Department Order 10 (DOLE
the appropriate government license or authority are guilty of illegal
DO 10) and POEA Memorandum Circular 15 (POEA MC 15); 2) prohibit the
recruitment whether or not they commit the wrongful acts enumerated in
DOLE, POEA, and TESDA from implementing the same and from further
that section. On the other hand, recruiters who engage in the canvassing,
issuing rules and regulations that would regulate the recruitment and
enlisting, etc. of OFWs, although with the appropriate government license
placement of overseas Filipino workers (OFWs); and 3) also enjoin them
or authority, are guilty of illegal recruitment only if they commit any of the
to comply with the policy of deregulation mandated under Sections 29 and
wrongful acts enumerated in Section 6.
30 of Republic Act 8042. RTC granted Salac, et al.'s petition and ordered
the government agencies mentioned to deregulate the recruitment and
Section 7 was also declared unconstitutional on the ground that its
placement of OFWs. The RTC also annulled DOLE DO 10, POEA MC 15,
sweeping application of the penalties failed to make any distinction as to
and all other orders, circulars and issuances that are inconsistent with the
the seriousness of the act committed for the application of the penalty
policy of deregulation under R.A. 8042. The government officials
imposed on such violation.
concerned filed the present petition in G.R. 152642 and G. R
152710 seeking to annul the RTC's decision and have the same enjoined
Section 9 of R.A. 8042 was also invalidated on the ground that allowing
pending action on the petition. The Philippine Association of Service
the offended parties to file the criminal case in their place of residence
Exporters, Inc. and CALEA (The Confederated Association of Licensed
would negate the general rule on venue of criminal cases which is the
Entertainment Agencies, Incorporated) intervened claiming that the RTC
place where the crime or any of its essential elements were committed.
March 20, 2002 Decision gravely affected them since it paralyzed the
Venue, said the RTC, is jurisdictional in penal laws and, allowing the filing
1 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO
of criminal actions at the place of residence of the offended parties violates
workers but their rights as human beings. It also provides that deployment
their right to due process. (Take Note: there is nothing arbitrary or
of migrant workers shall only be available to countries where the
unconstitutional in Congress fixing an alternative venue for violations of
Philippines has concluded bilateral agreements or arrangements.
Section 6 of R.A. 8042 that differs from the venue established by the Rules
II. As to Sec 6, 7, and 9, all are rendered constitutional. (those take note
on Criminal Procedure. Indeed, Section 15 (a), Rule 110 of the latter Rules
in parenthesis on the facts above explains why it is constitutional)
allows exceptions provided by laws.)||
III. G.R. 167590, G.R. 182978-79, and G.R. 184298-99
(Constitutionality of Section 10, last sentence of 2nd paragraph)--Respondent spouses Simplicio and Mila Cuaresma (the Cuaresmas) filed a
claim for death and insurance benefits and damages against petitioners
Becmen Service Exporter and Promotion, Inc. (Becmen) and White Falcon
Services, Inc. (White Falcon) for the death of their daughter Jasmin
Cuaresma while working as staff nurse in Riyadh, Saudi Arabia. LA
dismissed the claim but NLRC found petitioners Becmen and Falcon jointly
and severally liable for the death, ordering them to pay $113,000.00 as
actual damages. Jasmine died of criminal violence and rape. Becmen and
White Falcon appealed the NLRC Decision to the CA. CA held Becmen and
White Falcon jointly and severally liable with their Saudi Arabian employer
for actual damages, with Becmen having a right of reimbursement from
White Falcon. Becmen and White Falcon appealed the CA Decision to this
Court.
The Court found Jasmin's death not work-related or work-connected since
her rape and death did not occur while she was on duty at the hospital or
doing acts incidental to her employment. The Court deleted the award of
actual damages but ruled that Becmen's corporate directors and officers
are solidarily liable with their company for its failure to investigate the true
nature of her death. Becmen and White Falcon abandoned their legal,
moral, and social duty to assist the Cuaresmas in obtaining justice for their
daughter.
Now,the corporate directors and officers of Becmen, namely, Gumabay, et
al.. questioned the constitutionality of the last sentence of the second
paragraph of Section 10, R.A. 8042 which holds the corporate directors,
officers and partners jointly and solidarily liable with their company for
money claims filed by OFWs against their employers and the recruitment
firms.
ISSUE:
WON R.A 8042 is constitutional.
HELD:
I. As to the constitutionality of Sec. 29 and Sec 30. It was rendered moot
and academic. R.A 9422 adopted the policy of close government regulation
of the recruitment and deployment of OFWs. It states among others that
POEA, in addition to its powers, to inform migrant not only their rights as
The court said, in fixing uniform penalties for each of the enumerated acts
under Section 6, Congress was within its prerogative to determine what
individual acts are equally reprehensible, consistent with the State policy
of according full protection to labor, and deserving of the same penalties.
It is not within the power of the Court to question the wisdom of this kind
of choice. Notably, this legislative policy has been further stressed in July
2010 with the enactment of R.A. 10022 which increased even more the
duration of the penalties of imprisonment and the amounts of fine for the
commission of the acts listed under Section 7.
What is the spirit behind the law? Obviously, in fixing such tough
penalties, the law considered the unsettling fact that OFWs must work
outside the country's borders and beyond its immediate protection. The
law must, therefore, make an effort to somehow protect them from
conscienceless individuals within its jurisdiction who, fueled by greed, are
willing to ship them out without clear assurance that their contracted
principals would treat such OFWs fairly and humanely.
III. The Court HOLDS the last sentence of the second paragraph of
Section 10 of Republic Act 8042 valid and constitutional.
The Court has already held, pending adjudication of this case, that the
liability of corporate directors and officers is not automatic. To make them
jointly and solidarily liable with their company, there must be a finding
that they were remiss in directing the affairs of that company, such as
sponsoring or tolerating the conduct of illegal activities. In the case of
Becmen and White Falcon, while there is evidence that these companies
were at fault in not investigating the cause of Jasmin's death, there is no
mention of any evidence in the case against them that intervenors
Gumabay, et al., Becmen's corporate officers and directors, were
personally involved in their company's particular actions or omissions in
Jasmin's case.
As a final note, R.A. 8042 is a police power measure intended to regulate
the recruitment and deployment of OFWs. It aims to curb, if not eliminate,
the injustices and abuses suffered by numerous OFWs seeking to work
abroad. The rule is settled that every statute has in its favor the
presumption of constitutionality. The Court cannot inquire into the wisdom
or expediency of the laws enacted by the Legislative Department. Hence,
in the absence of a clear and unmistakable case that the statute is
unconstitutional, the Court must uphold its validity.
New York Times vs US

403 U.S. 713 (1971)
government sought a similar injunction against the Post in the District of
Columbia.
DOCTRINE:
Any system of prior restraint comes to this court bears a heavy
presumption AGAINST its constitutional validity. The government thus
carry a heavy burden of showing a justification for the imposition of such a
restraint.
FACTS:
Over the years the Supreme Court has disagreed on the limits that can be
placed on the 1st Amendment guarantees of freedom of speech and press.
In 1971, the Court faced these issues again in a case brought by the New
York Times. The newspaper had obtained a copy of documents known as
The Pentagon Papersan internal Defense Department report that
detailed government deception with regard to the Vietnam War. The
Pentagon Papers surfaced at a time when the American people were
deeply divided on the question of United States involvement in the war.
The New York Times fought for the right to publish the papers under the
umbrella of the 1st Amendment.
The Pentagon Papers, officially known as History of U.S. Decision-Making
Process on Vietnam Policy, were illegally copied and then leaked to the
press. The New York Times and the Washington Post had obtained the
documents. Acting at the Government's request, the United States district
court in New York issued a temporary injunctiona court orderthat
directed the New York Times not to publish the documents. The
Government claimed that the publication of the papers would endanger
the security of the United States. The New York Times appealed the order
to the United States Supreme Court, arguing that prior restraint
preventing publicationviolated the 1st Amendment.
From June 12 to 14, 1971, the New York Times published a series of
articles about the origins of the Vietnam War. The articles were based on a
forty-seven-volume Defense Department study covering the years 1945 to
1968, which had been leaked to the Times by Daniel Ellsberg, a former
Defense Department analyst. Although the study contained only
information regarding events that occurred before 1968, the government
contended that the study contained "secret" and "top secret" information.
Further, the government alleged that publication of the information could
prolong the Vietnam War and threaten the safe return of U.S. prisoners of
war. On June 15, 1971, the government sued in New York federal district
court, seeking an injunction prohibiting the Times from continuing to
publish information from the Pentagon Papers. Soon after, the Washington
Post began publishing material from the study; accordingly, the
It was the Nixon Administration that attempted to prevent the New York
Times and Washington Post from publishing materials. The President
argued that prior restraint was necessary to protect national security.
Contentions:
For the New York Times: The 1st Amendment's guarantee of freedom of
the press protects the newspaper in the publication of these documents.
One of the few restraints on executive power in matters of national
defense is a knowledgeable population. The press must be free to inform
the American people. In addition, the Government has failed to show that
publication of the Pentagon Papers would endanger national security.
For the United States: The 1st Amendment does not guarantee an
absolute freedom of the press, especially when the nation's security is
involved. The Court must strike a balance between the fundamentally
important right to a free press and the equally important duty of the
Government to protect the nation. Allowing the publication of these
documents
would
establish
a
dangerous
precedent
for
future cases involving national security.
ISSUE:
WON prior restraint of publication constitutes violation of the first
amendment
HELD:
Yes. Any system of prior restraint comes to this court bearing a heavy
presumption AGAINST its constitutionality. The government, thus carry a
heavy burden of showing a justification for the imposition of such a
restraint. In this case, the government has not MET that burden.
The Supreme Court decided on a 6-3 vote that a prior restraint could not
be imposed on publication of the Pentagon Papers. The whole Court noted
that the government "carries a heavy burden of showing justification for
the imposition of such a restraint" and stated that the government had
failed to meet that burden. The Court could not agree on a precise
standard for determining when the government may impose a prior
restraint on free speech, or even whether the government could ever
impose a prior restraint.
Dissent on Separation of Powers:
The scope of the judicial function in passing upon activities of the
PHILIPPINE PRESS INSTITUTE, INC. V. COMELEC
Executive Branch in the field of foreign affairs is very narrowly restricted.
G.R. No. 119694, May 22, 1995
This view is dictated by the doctrine of Separation of Powers. The doctrine
GATACELO
prohibiting prior restraints does not prevent the courts from maintaining
status quo long enough to act responsibly. The First Amendment is only
DOCTRINE:
part of the Constitution. The cases should be remanded to be developed
expeditiously.
To compel print media companies to donate "Comelec space" amounts to
"taking" of private personal property for public use or purposes. The taking
Concurrence. To find that the President has inherent power to halt the
of private property for public use is, of course, authorized by the
publication of news by resort to the courts would wipe out the First
Constitution, but not without payment of "just compensation" (Article III,
Amendment
of
the United
States
Constitution [Constitution].
Section 9).
The First Amendment of the Constitution leaves no room for governmental
restraint on the press. There is, moreover, no statute barring the
No attempt was made to demonstrate that a real and palpable or urgent
publication by the press of the material that the Times and Post seek to
necessity for the taking of print space confronted the Comelec and that
publish.
Section 2 of Resolution No. 2772 was itself the only reasonable and
calibrated response to such necessity available to the Comelec.
The First Amendment of the Constitution tolerates no prior judicial
restraints of the press predicated upon surmise or conjecture that
FACTS:
untoward
consequences
may
result.
Thus,
only
governmental allegation and proof that publication must inevitably,
Comelec promulgated Resolution No. 2772 which allowed Comelec to
directly and immediately cause the occurrence of an event kindred to
procure free print space of not less than 1/2 page in at least one
imperiling the safety of a transport already at sea can support the issuance
newspaper of general circulation in every province or city for use as
of an interim restraining order.
'Comelec Space' (Section 2). The 'Comelec Space' shall be allocated,
through lottery, by the Commission, free of charge, among all
Unless and until the Government has clearly made its case, the First
candidates within the area in which the newspaper, magazine or periodical
Amendment of the Constitution commands that no injunction be issued.
is circulated to enable the candidates to make known their qualifications,
The responsibility must be where the power is. The Executive must have
their stand on public issues and their platforms and programs of
the large duty to determine and preserve the degree of internal security
government in short, dissemination of vital election information.
necessary to exercise its power effectively. The Executive is correct with
respect to some of the documents here, but disclosure of any of them will
Furthermore, the resolution stated that no newspaper or publication shall
not result in irreparable danger to the public.
allow to be printed or published in the news, opinion, features, or other
sections of the newspaper or publication accounts or comments which
Additional Info: What is this first amendment? When the constitution of US
manifestly favor or oppose any candidate or political party by unduly or
was drafted in 1789, many people opposed this document because of the
repeatedly referring to or including therein said candidate or political
absence of bill of rights to safeguard certain basic freedom. They feared
party. However, unless the facts and circumstances clearly indicate
that this absence would allow the central government to curtail the
otherwise, the Commission will respect the determination by the publisher
freedom of the press, assembly and speech. In response to this clamor,
and/or editors of the newspapers or publication that the accounts or views
James Madison, proposed series of amendment to their constitution to
published are significant, newsworthy and of public interest (Section 8).
satisfy US citizens that these liberties is beyond government abridge. Later
on, this amendment was called the First Amendment. It has three parts.
Comelec directed several newspapers, which previously gave 2 pages
a.) civil rights shall not be abridged on account of religious belief, b.)
during the 1992 elections, to
people shall not be restrained to peaceably assemble, and c.) people shall
provide free print space of not less than 1/2 page for use as 'Comelec
not be deprived of their right to speak, to write, or publish their
Space'.
sentiments, and the freedom of the press, as one of the great bulwarks
shall be inviolable.
Petitioners 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
reasonable relationship between that power and the enforcement and
and of expression.
administration of election laws by Comelec must be shown; it is not
casually to be assumed. The resolution does not constitute a valid exercise
Respondents contention: SolGen claims that Resolution No. 2772
of the power of eminent domain.|||
does not impose upon any obligation as it does not provide any criminal or
administrative sanction for non-compliance with that Resolution. And even
Thus, public funds, not publishers solely, should bear costs for public
if the questioned Resolution and its implementing letter directives are
information of electoral processes. The economic costs of informing the
viewed as mandatory, the same would nevertheless be valid as an
general public about the qualifications and programs of those seeking
exercise of the police power of the State.
elective office are most appropriately distributed as widely as possible
throughout our society by the utilization of public funds, especially funds
ISSUE:
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
WON the Comelec, through the subject resolution, validly exercised its
level of information on and the awareness of the electoral process are
power of eminent domain and police power.
commonly thought to be community-wide; the burdens should be allocated
on the same basis.
HELD:
Re police power: Firstly, there was no effort (and apparently no inclination
No.
on the part of Comelec) to show that the police power essentially a
Re eminent domain: To compel print media companies to donate "Comelec
power of legislation has been constitutionally delegated to respondent
space" amounts to "taking" of private personal property for public use or
Commission. Secondly, while private property may indeed be validly taken
purposes. The resolution failed to specify the intended frequency of such
in the legitimate exercise of the police power of the state, there was no
compulsory "donation": only once during the period from 6 March 1995 (or
attempt to show compliance in the instant case with the requisites of a
21 March 1995) until 12 May 1995? or everyday or once a week? or as
lawful taking under the police power. Section 2 is a blunt and heavy
often as Comelec may direct during the same period? The extent of the
instrument that purports, without a showing of existence of a national
taking or deprivation is not insubstantial; this is not a case of a de
emergency or other imperious public necessity, indiscriminately and
minimis temporary limitation or restraint upon the use of private property.
without regard to the individual business condition of particular
The monetary value of the compulsory "donation," measured by the
newspapers or magazines located in differing parts of the country, to take
advertising rates ordinarily charged by newspaper publishers whether in
private property of newspaper or magazine publishers. No attempt was
cities or in non-urban areas, may be very substantial indeed. The taking of
made to demonstrate that a real and palpable or urgent necessity for the
private property for public use is, of course, authorized by the
taking of print space confronted the Comelec and that Section 2 of
Constitution, but not without payment of "just compensation" (Article III,
Resolution No. 2772 was itself the only reasonable and calibrated response
Section 9). And apparently the necessity of paying compensation for
to such necessity available to the Comelec. Section 2 does not constitute a
"Comelec space" is precisely what is sought to be avoided by respondent
valid exercise of the police power of the State.
Commission, whether the Resolution is read as petitioner PPI reads it, as
an assertion of authority to require newspaper publishers to "donate" free
NB. Re freedom of speech etc.: The distinction between paid political
print space for Comelec purposes, or as an exhortation, or perhaps an
advertisements on the one hand and news reports, commentaries and
appeal, to publishers to donate free print space, as the Resolution
expressions of belief or opinion by reporters, broadcasters, editors, etc. on
attempts to suggest. The threshold requisites for a lawful taking of private
the other hand, can realistically be given operative meaning only in actual
property for public use need to be examined here: one is the necessity for
cases or controversies, on a case-to-case basis, in terms of very specific
the taking; another is the legal authority to effect the taking. The element
sets of facts. At all events, the Court is bound to note that PPI has failed to
of necessity for the taking has not been shown by respondent Comelec. It
allege any specific affirmative action on the part of Comelec designed to
has not been suggested that the members of PPI are unwilling to sell print
enforce or implement Section 8. PPI has not claimed that it or any of its
space at their normal rates to Comelec for election purposes. Indeed, the
members has sustained actual or imminent injury by reason of Comelec
unwillingness or reluctance of Comelec to buy print space lies at the heart
action under Section 8. Put a little differently, the Court considers that the
of the problem. Similarly, it has not been suggested, let alone
precise constitutional issue here sought to be raised whether or not
demonstrated, that Comelec has been granted the power of eminent
Section 8 of Resolution No. 2772 constitutes a permissible exercise of the
domain either by the Constitution or by the legislative authority. A
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
Tio claimed that Section 10 was unconstitutional because the tax imposed
the very lis mota thereof, the constitutionality of Section 8.
is harsh, confiscatory, oppressive and/or in unlawful restraint of trade in
violation of the due process clause of the Constitution, etc.
Tio v. Videogram Regulatory Board
G.R. No. L-75697, June 18, 1987
ISSUE:
DOCTRINE:
WON the power of taxation was validly exercised.
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.
HELD:
FACTS:
PD No. 1994 amended the National Internal Revenue Code providing, inter
alia: SEC. 134. 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.
The rationale relates to: 1) the proliferation and unregulated circulation
of videograms that have greatly prejudiced the operations of moviehouses
and theaters, and have caused a sharp decline in theatrical attendance by
at least 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; 2)
videogram establishments collectively earn around P600 Million per annum
from rentals, sales and disposition of videograms, and such earnings have
not been subjected to tax, thereby depriving the Government of
approximately P180 Million in taxes each year; 3) proper taxation of the
activities of videogram establishments will not only alleviate the dire
financial condition of the movie industry upon which more than 75,000
families and 500,00 workers depend for their livelihood, but also provide
an additional source of revenue for the Government, and at the same time
rationalize the heretofore distribution of videograms; 4) the rampant and
unregulated showing of obscene videogram features constitutes a clear
and present danger to the moral and spiritual well-being of the youth, and
impairs the mandate of the Constitution for the State to support the
rearing of the youth for civic efficiency and the development of moral
character and promote their physical, intellectual, and social being; etc.
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 videogramoperators. 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.
Ortigas vs. Court of Appeals
G.R. No. 126102. December 4, 2000
GOMEZ
Doctrine:
A law enacted in the exercise of police power to regulate or govern certain
activities or transactions could be given retroactive effect and may
WON CA erred in ruling that a contractual right is automatically discarded
reasonably impair vested rights or contracts. Police power legislation is
once it conflicts with police power (MMC Ordinance No. 81-01)
applicable not only to future contracts, but equally to those already in
existence. Nonimpairment of contracts or vested rights clauses will have to
HELD:
yield to the superior and legitimate exercise by the State of police power
to promote the health, morals, peace, education, good order, safety, and
The SC noted that in issuing the disputed writ of preliminary injunction,
general welfare of the people. Moreover, statutes in exercise of valid police
the trial court observed that the contract of sale was entered into in
power must be read into every contract.
August 1976, while the zoning ordinance was enacted only in March 1981.
The trial court reasoned that since private respondent had failed to show
FACTS:
that MMC Ordinance No. 81-01 had retroactive effect, said ordinance
should be given prospective application only, citing Co vs. Intermediate
On August 25, 1976, petitioner Ortigas & Company sold to Emilia
Appellate Court, 162 SCRA 390 (1988).
Hermoso, a parcel of land with an area of 1,508 square meters, located in
Greenhills Subdivision IV, San Juan, Metro Manila. The contract of sale
In general, we agree that laws are to be construed as having only
provided that the lot be used exclusively for residential purposes only, and
prospective operation. Lex prospicit, non respicit. Equally settled, only
not more than one single-family residential building will be constructed
laws existing at the time of the execution of a contract are applicable
thereon; the BUYER shall not erect any sign or billboard on the roof for
thereto and not later statutes, unless the latter are specifically intended to
advertising purposes; no single-family residential building shall be erected
have retroactive effect.A later law which enlarges, abridges, or in any
until the building plans, specification have been approved by the SELLER;
manner changes the intent of the parties to the contract necessarily
restrictions shall run with the land and shall be construed as real
impairs the contract itself and cannot be given retroactive effect without
covenants until December 31, 2025 when they shall cease and
violating the constitutional prohibition against impairment of contracts.
terminate.These and the other conditions were duly annotated on the
certificate of title issued to Emilia.
But, the foregoing principles do admit of certain exceptions. One involves
police power. A law enacted in the exercise of police power to regulate or
In 1981, the Metropolitan Manila Commission (now Metropolitan Manila
govern certain activities or transactions could be given retroactive effect
Development Authority) enacted MMC Ordinance No. 81-01, also known as
and may reasonably impair vested rights or contracts. Police power
the Comprehensive Zoning Area for the National Capital Region. The
legislation is applicable not only to future contracts, but equally to those
ordinance reclassified as a commercial area a portion of Ortigas Avenue
already in existence. Nonimpairment of contracts or vested rights clauses
from Madison to Roosevelt Streets of Greenhills Subdivision where the lot
will have to yield to the superior and legitimate exercise by the State of
is located. On June 8, 1984, private respondent Ismael Mathay III leased
police power to promote the health, morals, peace, education, good order,
the lot from Emilia Hermoso and J.P. Hermoso Realty Corp.. The lease
safety, and general welfare of the people. Moreover, statutes in exercise of
contract did not specify the purposes of the lease. Thereupon, private
valid police power must be read into every contract.
respondent constructed a single story commercial building for Greenhills
Autohaus, Inc., a car sales company.
Following the SC ruling in Ortigas & Co., Ltd. vs. Feati Bank & Trust Co.,
Thereafter, petitioner filed a complaint against Emilia Hermoso with the
94 SCRA 533 (1979), the contractual stipulations annotated on the
RTC of Pasig. The complaint sought the demolition of the said commercial
Torrens Title, on which Ortigas relies, must yield to the ordinance. When
structure for having violated the terms and conditions of the Deed of Sale.
that stretch of Ortigas Avenue from Roosevelt Street to Madison Street
Petitioner asked for the issuance of a TRO and a writ of preliminary
was reclassified as a commercial zone by the Metropolitan Manila
injunction.
Commission in March 1981, the restrictions in the contract of sale between
Ortigas and Hermoso, limiting all construction on the disputed lot to
RTC- granted the writ of preliminary injunction in favor of Ortigas. CAsingle-family residential buildings, were deemed extinguished by the
ruled in favor of Mathay. It held that MMC Ordinance No. 81-01 effectively
retroactive operation of the zoning ordinance and could no longer be
nullified the restrictions allowing only residential use of the property in
enforced. While our legal system upholds the sanctity of contract so that a
question. CA- denied Ortigas motion for reconsideration.
contract is deemed law between the contracting parties, nonetheless,
stipulations in a contract cannot contravene law, morals, good customs,
ISSUE:
public order, or public policy. Otherwise such stipulations would be
deemed null and void. Respondent court correctly found that the trial
in the state is held subject to its general regulations, necessary to the
court committed in this case a grave abuse of discretion amounting to
common good and general welfare.
want of or excess of jurisdiction in refusing to treat Ordinance No. 81-01
as applicable to Civil Case No. 64931.
In a number of cases, we laid down the test to determine the validity of a
police measure, thus:
Chavez vs. Romulo
(1)
The interests of the public generally, as distinguished from those of
G.R. No. 157036. June 9, 2004
a particular class, require the exercise of the police power; and
(2)
The means employed are reasonably necessary for the
DOCTRINE:
accomplishment of the purpose and not unduly oppressive upon
individuals.
In a number of cases, the SC laid down the test to determine the validity
of a police measure, thus: The interests of the public generally, as
Deeper reflection will reveal that the test merely reiterates the essence of
distinguished from those of a particular class, require the exercise of the
the constitutional guarantees of substantive due process, equal protection,
police power; and the means employed are reasonably necessary for the
and non-impairment of property rights.
accomplishment of the purpose and not unduly oppressive upon
individuals.
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
FACTS:
proliferation of crimes, particularly those committed by the New Peoples
Army (NPA), which tends to disturb the peace of the community, President
In January 2003, President Gloria Macapagal-Arroyo delivered a speech
Arroyo deemed it best to impose a nationwide gun ban. Undeniably, the
before the members of the PNP stressing the need for a nationwide gun
motivating factor in the issuance of the assailed Guidelines is the interest
ban in all public places to avert the rising crime incidents. She directed
of the public in general.
the then PNP Chief, respondent Ebdane, to suspend the issuance of
The only question that can then arise is whether the means employed are
Permits to Carry Firearms Outside of Residence (PTCFOR). This was
appropriate and reasonably necessary for the accomplishment of the
prompted by the latest killing of former NPA leader Rolly Kintanar.
purpose and are not unduly oppressive. In the instant case, the assailed
Guidelines do not entirely prohibit possession of firearms. What they
Acting on President Arroyos directive, respondent Ebdane issued the
proscribe is merely the carrying of firearms outside of residence. However,
assailed Guidelines in the Implementation of the Ban on the Carrying of
those who wish to carry their firearms outside of their residences may reFirearms Outside of Residence. Petitioner Francisco I. Chavez, a licensed
apply for a new PTCFOR. This we believe is a reasonable regulation. If
gun owner to whom a PTCFOR has been issued, requested the Department
the carrying of firearms is regulated, necessarily, crime incidents will be
of Interior and Local Government (DILG) to reconsider the implementation
curtailed. Criminals carry their weapon to hunt for their victims; they do
of the assailed Guidelines. However, his request was denied. Thus, he
not wait in the comfort of their homes. With the revocation of all PTCFOR,
filed the present petition impleading public respondents Ebdane, as Chief
it would be difficult for criminals to roam around with their guns. On the
of PNP; Alberto G. Romulo, as Executive Secretary; and Gerry L. Barias, as
other hand, it would be easier for the PNP to apprehend them.
Chief of the PNP-Firearms and Explosives Division.
Notably, laws regulating the acquisition or possession of guns have
ISSUE:
frequently been upheld as reasonable exercise of the police power. In
State vs. Reams, it was held that the legislature may regulate the right to
WON the issuance of the assailed Guidelines is a valid exercise of police
bear arms in a manner conducive to the public peace. With the promotion
power
of public peace as its objective and the revocation of all PTCFOR as the
means, we are convinced that the issuance of the assailed Guidelines
HELD:
constitutes a reasonable exercise of police power.
At any rate, assuming that petitioners PTCFOR 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
MMDA vs. BEL-AIR VILLAGE ASSOCIATION

GR. NO. 135962; MARCH 27, 2000
LAZARO
commonwealth, and for the subjects of the same. The power is plenary
and its scope is vast and pervasive, reaching and justifying measures for
MMDA is not vested with police power. Its functions are merely
public health, public safety, public morals, and the general welfare. It
administrative in nature.
bears stressing that police power is lodged primarily in the National
Legislature. It cannot be exercised by any group or body of individuals not
FACTS:
possessing legislative power. The National Legislature, however, may
delegate this power to the President and administrative boards as well as
Petitioner MMDA is a government agency tasked with the delivery of basic
the lawmaking bodies of municipal corporations or local government units.
services in Metro Manila. Respondent Bel-Air Village Association, Inc.
Once delegated, the agents can exercise only such legislative powers as
(BAVA) is a non-stock, non-profit corporation whose members are
are conferred on them by the national lawmaking body.
homeowners in Bel-Air Village, a private subdivision in Makati City.
Respondent BAVA is the registered owner of Neptune Street, a road beside
The scope of the MMDA's function is limited to the delivery of seven (7)
Bel-Air Village.||| Respondent received from petitioner, through its
basic services. One of these is transport and traffic management which
Chairman, a notice dated December 22, 1995 requesting respondent to
includes the formulation and monitoring of policies, standards and projects
open Neptune Street to public vehicular traffic starting January 2, 1996.|||
to
rationalize
the
existing
transport
operations,
infrastructure
On the same day, respondent was apprised that the perimeter wall
requirements, the use of thoroughfares and promotion of the safe
separating the subdivision from the adjacent Kalayaan Avenue would be
movement of persons and goods. It also covers the mass transport system
demolished. Respondent instituted against petitioner before the Regional
and the institution of a system of road regulation, the administration of all
Trial Court for injunction. After due hearing, the trial court denied issuance
traffic enforcement operations, traffic engineering services and traffic
of a preliminary injunction. Respondent questioned the denial before the
education programs, including the institution of a single ticketing system in
Court of Appeals. The appellate court conducted an ocular inspection of
Metro Manila for traffic violations. Under this service, the MMDA is
Neptune Street 3 and on February 13, 1996, it issued a writ of preliminary
expressly authorized "to set the policies concerning traffic" and "coordinate
injunction enjoining the implementation of the MMDA's proposed action.
and regulate the implementation of all traffic management programs." In
The appellate court rendered a Decision on the merits of the case finding
addition, the MMDA may "install and administer a single ticketing system,"
that the MMDA has no authority to order the opening of Neptune Street, a
fix, impose and collect fines and penalties for all traffic violations.
private subdivision road and cause the demolition of its perimeter walls. It
held that the authority is lodged in the City Council of Makati by ordinance.
It will be noted that the powers of the MMDA are limited to the following
acts: formulation, coordination, regulation, implementation, preparation,
Petitioner MMDA claims that it has the authority to open Neptune Street to
management, monitoring, setting of policies, installation of a system and
public traffic because it is an agent of the state endowed with police power
administration. There is no syllable in R.A. No. 7924 that grants the MMDA
in the delivery of basic services in Metro Manila. One of these basic
police power, let alone legislative power. Even the Metro Manila Council
services is traffic management which involves the regulation of the use of
has not been delegated any legislative power. Unlike the legislative bodies
thoroughfares to insure the safety, convenience and welfare of the general
of the local government units, there is no provision in R.A. No. 7924 that
public.
empowers the MMDA or its Council to "enact ordinances, approve
resolutions and appropriate funds for the general welfare" of the
ISSUE:
inhabitants of Metro Manila. The MMDA is, as termed in the charter itself, a
"development authority." It is an agency created for the purpose of laying
WON MMDA has the authority to order the opening of Neptune Street and
down policies and coordinating with the various national government
the demolition of the perimeter wall pursuant to its alleged police power.
agencies, people's organizations, non-governmental organizations and the
private sector for the efficient and expeditious delivery of basic services in
HELD:
the vast metropolitan area. All its functions are administrative in nature
and these are actually summed up in the charter itself.
No. Police power is an inherent attribute of sovereignty. It has been
The MMDA has no power to enact ordinances for the welfare of the
defined as the power vested by the Constitution in the legislature to make,
community. It is the local government units, acting through their
ordain, and establish all manner of wholesome and reasonable laws,
respective legislative councils, that possess legislative power and police
statutes and ordinances, either with penalties or without, not repugnant to
power. In the case at bar, the Sangguniang Panlunsod of Makati City did
the Constitution, as they shall judge to be for the good and welfare of the
not pass any ordinance or resolution ordering the opening of Neptune
DOCTRINE:
Street, hence, its proposed opening by petitioner MMDA is illegal and the
gained early access to the test questions. Respondents then filed a special
respondent Court of Appeals did not err in so ruling.
civil action for mandamus with the RTC of Manila.
Moreover, the MMDA was created to put some order in the metropolitan
transportation system, but unfortunately the powers granted by its charter
are limited. Its good intentions cannot justify the opening for public use of
a private street in a private subdivision without any legal warrant. The
promotion of the general welfare is not antithetical to the preservation of
the rule of law.
PROFESSIONAL REGULATION COMMISSION (PRC) vs. DE GUZMAN
G.R. No. 144681. JUNE 21, 2004
DOCTRINE:
The Professional Regulation Commission, pursuant to the exercise of its
police power, has the authority to regulate the medical profession.
FACTS:
The respondents are all graduates of the Fatima College of Medicine,
Valenzuela City, Metro Manila. They passed the Physician Licensure
Examination conducted in February 1993 by the Board of Medicine
(Board). Petitioner Professional Regulation Commission (PRC) then
released their names as successful examinees in the medical licensure
examination.
Shortly thereafter, the Board observed that the grades of the seventy-nine
successful examinees from Fatima College in the two most difficult
subjects in the medical licensure exam, Biochemistry (Bio-Chem) and
Obstetrics and Gynecology (OB-Gyne), were unusually and exceptionally
high. Eleven Fatima examinees scored 100% in Bio-Chem and ten got
100% in OB-Gyne, another eleven got 99% in Bio-Chem, and twenty-one
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 a mark lower than 90%. A comparison of the performances of the
candidates from other schools was made. The Board observed that
strangely, the unusually high ratings were true only for Fatima College
examinees. It was a record-breaking phenomenon in the history of the
Physician Licensure Examination. The Board issued Resolution No. 19,
withholding the registration as physicians of all the examinees from the
Fatima College of Medicine. The PRC asked the National Bureau of
Investigation (NBI) to investigate whether any anomaly or irregularity
marred the February 1993 Physician Licensure Examination. the NBI found
that "the questionable passing rate of Fatima examinees in the [1993]
Physician Examination leads to the conclusion that the Fatima examinees
ISSUE:
WON the petition for mandamus will lie.
HELD:
No. 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 is long established rule that a
license to practice medicine is a privilege or franchise granted by the
government.
It is true that this Court has upheld the constitutional right of every citizen
to select a profession or course of study subject to a fair, reasonable, and
equitable admission and academic requirements. But like all rights and
freedoms guaranteed by the Charter, their exercise may be so regulated
pursuant to the police power of the State to safeguard health, morals,
peace, education, order, safety, and general welfare of the people. Thus,
persons who desire to engage in the learned professions requiring
scientific or technical knowledge may be required to take an examination
as a prerequisite to engaging in their chosen careers. 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 the power to regulate the exercise
of a profession or pursuit of an occupation cannot be exercised by the
State or its agents in an arbitrary, despotic, or oppressive manner. A
political body that regulates the exercise of a particular privilege has the
authority to both forbid and grant such privilege in accordance with certain
conditions. Such conditions may not, however, require giving up ones
constitutional rights as a condition to acquiring the license. Under the view
that the legislature cannot validly bestow an arbitrary power to grant or
refuse a license on a public agency or officer, courts will generally strike
down license legislation that vests in public officials discretion to grant or
refuse a license to carry on some ordinarily lawful business, profession, or
activity without prescribing definite rules and conditions for the guidance
of said officials in the exercise of their power.
In the present case, the aforementioned guidelines are provided for in
Rep. Act No. 2382, as amended, 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
grounds for denying the issuance of a physician's license, or revoking a
Thereafter,
the
Department of Labor,
following
the
EIAC's
license that has been issued. Verily, to be granted the privilege to practice
recommendation, issued a series of orders fine-tuning and implementing
medicine, the applicant must show that he possesses all the qualifications
the new system which include, among others:
and none of the disqualifications. Furthermore, it must appear that he has
fully complied with all the conditions and requirements imposed by the law
Department Order No. 3-B, pertaining to the Artist Record Book (ARB)
and the licensing authority. Should doubt taint or mar the compliance as
requirement, which could be processed only after the artist could show
being less than satisfactory, then the privilege will not issue. For said
proof of academic and skills training and has passed the required tests.
privilege is distinguishable from a matter of right, which may be demanded
if denied. Thus, without a definite showing that the aforesaid requirements
Federation of Entertainment Talent Managers of the Philippines (FETMOP),
and conditions have been satisfactorily met, the courts may not grant the
on January 27, 1995 filed a class suit assailing these department orders,
writ of mandamus to secure said privilege without thwarting the legislative
principally contending that said orders 1) violated the constitutional right
will.
to travel; 2) abridged existing contracts for employment; and 3) deprived
individual artists of their licenses without due process of law. FETMOP,
JMM PROMOTION AND MANAGEMENT, INC. VS. CA
likewise, averred that the issuance of the Artist Record Book (ARB) was
G.R. No. 120095. August 5, 1996
discriminatory and illegal and "in gross violation of the constitutional right
MUEZ
. . . to life liberty and property." Said Federation consequently prayed for
the issuance of a writ of preliminary injunction against the aforestated
DOCTRINE:
orders.
No right is absolute, and the proper regulation of a profession, calling,
business or trade has always been upheld as a legitimate subject of a valid
exercise of the police power by the State particularly when their conduct
affects either the execution of legitimate governmental functions, the
preservation of the State, the public health and welfare and public morals.
JMM Promotion and Management, Inc. and Kary International, Inc., herein
petitioners, filed a Motion for Intervention in said civil case, which was
granted by the trial court but which later denied petitioners prayer for a
writ of preliminary injunction and dismissed the complaint.
ISSUE:
FACTS:
Following the much-publicized death of Maricris Sioson in 1991, former
President Corazon C. Aquino ordered a total ban against the
deployment of performing artists to Japan and other foreign destinations.
The ban was, however, rescinded after leaders of the overseas
employment industry promised to extend full support for a program aimed
at removing kinks in the system of deployment. In its place, the
government,
through
the
Secretary of Labor
and
Employment,
subsequently issued Department Order No. 28 creating the Entertainment
Industry Advisory Council (EIAC) which was tasked with issuing guidelines
on the training, testing certification and deployment of performing artists
abroad.
Pursuant to the EIAC's recommendations, the Secretary of Labor, on
January 6, 1994, issued Department Order No. 3 establishing various
procedures and requirements for screening performing artists under a new
system of training, testing, certification and deployment of the former.
Performing artists successfully hurdling the test, training and certification
requirement were to be issued an Artist's Record Book (ARB), a necessary
prerequisite to processing of any contract of employment by the POEA.
WON the Artist Record Book requirement and the other Department
Orders were issued by the Secretary of Labor pursuant to a valid exercise
of the police power.
HELD:
YES. The latin maxim salus populi est suprema lex embodies the
character of the entire spectrum of public laws aimed at promoting the
general welfare of the people under the State's police power. As an
inherent attribute of sovereignty which virtually "extends to all public
needs," this "least limitable" of governmental powers grants a wide
panoply of instruments through which the state, as parens patriae gives
effect to a host of its regulatory powers.
Thus, police power concerns government enactments which precisely
interfere with personal liberty or property in order to promote the general
welfare or the common good. As the assailed Department Order enjoys a
presumed
validity,
it
follows
that
the
burden
rests
upon
petitioners to demonstrate that the said order, particularly, its ARB
requirement, does not enhance the public welfare or was exercised
arbitrarily or unreasonably.
Pursuant to the alarming number of reports that a significant
workers. The basic constitutional statement on labor, embodied in Section
number of Filipina performing artists ended up as prostitutes abroad
18 of Article II of the Constitution provides:
(many of whom were beaten, drugged and forced into prostitution), and
following the deaths of a number of these women, the government began
Sec. 18.The State affirms labor as a primary social economic force. It shall
instituting measures aimed at deploying only those individuals who met
protect the rights of workers and promote their welfare.
set standards which would qualify them as legitimate performing artists. In
spite of these measures, however, a number of our countrymen have
Obviously, protection to labor does not indicate promotion of employment
nonetheless fallen victim to unscrupulous recruiters, ending up as virtual
alone. Under the welfare and social justice provisions of the Constitution,
slaves controlled by foreign crime syndicates and forced into jobs other
the promotion of full employment, while desirable, cannot take a
than those indicated in their employment contracts. Worse, some of our
backseat to the government's constitutional duty to provide mechanisms
women have been forced into prostitution.
for the protection of our workforce, local or overseas.
Clearly, the welfare of Filipino performing artists, particularly the women
was paramount in the issuance of Department Order No. 3. Short of a
total
and
absolute
ban
against
the
deployment of performing
artists to "high-risk" destinations, a measure which would only drive
recruitment further underground, the new scheme at the very least
rationalizes the method of screening performing artists by requiring
reasonable educational and artistic skills
from them and limits deployment to only those individuals adequately
prepared for the unpredictable demands of employment as artists abroad.
It cannot be gainsaid that this scheme at least lessens the room for
exploitation by unscrupulous individuals and agencies.
As to the other provisions of Department Order No. 3 questioned by
petitioners, we see nothing wrong with the requirement for document and
booking confirmation (D.O. 3-C), a minimum salary scale (D.O. 3-E), or
the requirement for registration of returning performers. The requirement
for a venue certificate or other documents evidencing the place and
nature of work allows the government closer monitoring of foreign
employers and helps keep our entertainers away from prostitution fronts
and other worksites associated with unsavory, immoral, illegal or
exploitative
practices.
Parenthetically,
none
of these
issuances
appear to us, by any stretch of the imagination, even remotely
unreasonable or arbitrary. They address a felt need of according greater
protection for an oft-exploited segment of our OCW's. They respond to the
industry's demand for clearer and more practicable rules and guidelines.
Many of these provisions were fleshed out following recommendations by,
and after consultations with, the affected sectors and non-government
organizations. On the whole, they are aimed at enhancing the safety and
security
of entertainers and artists bound for Japan and other destinations, without
stifling the industry's concerns for expansion and growth.
In any event, apart from the State's police power, the Constitution itself
mandates government to extend the fullest protection to our overseas
We now go to petitioners' assertion that the police power cannot,

nevertheless, abridge the right of our performing workers to return to
work abroad after having earlier qualified under the old process, because,
having previously been accredited, their accreditation became a "property
right," protected by the due process clause. We find this contention
untenable.
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.
Nevertheless, no right is absolute, and the proper regulation of a
profession, calling, business or trade has always been upheld as a
legitimate subject of a valid exercise of the police power by the State
particularly when their conduct affects either the execution of legitimate
governmental functions, the preservation of the State, the public health
and welfare and public morals. According to the maxim, sic utere tuo ut
alienum non laedas, it must of course be within the legitimate
range of legislative action to define the mode and manner in which every
one may so use his own property so as not to pose injury to himself or
others.
In any case, where the liberty curtailed affects at most the
rights of property, the permissible scope of regulatory measures is
certainly much wider. To pretend that licensing or accreditation
requirements violates the due process clause is to ignore the settled
practice, under the mantle of the police power, of regulating entry to the
practice of various trades or professions. Professionals leaving for abroad
are required to pass rigid written and practical exams before they are
deemed fit to practice their trade. Seamen are required to take tests
determining their seamanship. Locally, the Professional Regulation
Commission has began to require previously licensed doctors and other
professionals to furnish documentary proof that they had either re-trained
or had undertaken continuing education courses as a requirement for
On January 15, 1976 the decision was rendered upholding the
renewal of their licenses. It is not claimed that these requirements pose an
constitutionality and validity of Ordinance No. 84 and dismissing the cases.
unwarranted deprivation of a property right under the due process clause.
Hence this petition for certiorari by way of appeal.
So long as professionals and other workers meet reasonable regulatory
standards no such deprivation exists.
ISSUE:
Petition is DISMISSED.
WON a municipal corporation, Bocaue, Bulacan, can prohibit the exercise

of a lawful trade, the operation of night clubs, and the pursuit of a lawful
occupation, such clubs employing hostesses.
DELA CRUZ VS. PARAS

G.R. Nos. L-42571-72. July 25, 1983
HELD:
DOCTRINE:
It is a general rule that ordinances passed by virtue of the implied power
found in the general welfare clause must be reasonable, consonant with
the general powers and purposes of the corporation, and not inconsistent
with the laws or policy of the State.
FACTS:
On November 5, 1975, two cases for prohibition with preliminary
injunction were filed with the Court of First Instance of Bulacan.
The Ordinance is known as the Prohibition and Closure Ordinance of
Bocaue, Bulacan. Sec. 3 and 4 provide:
Section 3. Prohibition in the Issuance and Renewal of Licenses, Permits.
Being the principal cause in the decadence of morality and because of
their other adverse effects on this community as explained above, no
operator of night clubs, cabarets or dance halls shall henceforth be issued
permits/licenses to operate within the jurisdiction of the municipality and
no license/permit shall be issued to any professional hostess, hospitality
girls and professional dancer for employment in any of the aforementioned
establishments. The prohibition in the issuance of licenses/permits to said
persons and operators of said establishments shall include prohibition in
the renewal thereof.
Section 4. Revocation of Permits and Licenses. The licenses and
permits issued to operators of night clubs, cabarets or dance halls which
are now in operation including permits issued to professional hostesses,
hospitality girls and professional dancers are hereby revoked upon the
expiration of the thirty-day period given them as provided in Section 8
hereof and thenceforth, the operation of these establishments within the
jurisdiction of the municipality shall be illegal.
NO. This Court holds that reliance on the police power is insufficient to
justify the enactment of the assailed ordinance. 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." An ordinance enacted by virtue
thereof, according to Justice Moreland, speaking for the Court in the
leading case of United States v. Abendan 12 "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."
In another case penned by Justice Malcolm where the present
Administrative Code provision was applied, it was stated by this Court:
"The general welfare clause has two branches: One branch attaches itself
to the main trunk of municipal authority, and relates to such ordinances
and regulations as may be necessary to carry into effect and discharge the
powers and duties conferred upon the municipal council by law. With this
class we are not here directly concerned. The second branch of the clause
is much more independent of the specific functions of the council which are
enumerated by law. It authorizes such ordinances 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 a general rule that ordinances passed by virtue of the implied
judicial correction. That is to comply with the legislative will to allow the
power found in the general welfare clause must be reasonable, consonant
operation and continued existence of night clubs subject to appropriate
with the general powers and purposes of the corporation, and not
regulations. In the meanwhile, to compel petitioners to close their
inconsistent with the laws or policy of the State." If night clubs were
establishments, the necessary result of an affirmance, would amount to no
merely then regulated and not prohibited, certainly the assailed ordinance
more than a temporary termination of their business. During such time,
would pass the test of validity. In the two leading cases above set forth,
their employees would undergo a period of deprivation. Certainly, if such
this Court had stressed reasonableness, consonant with the general
an undesirable outcome can be avoided, it should be. The law should not
powers and purposes of municipal corporations, as well as consistency
be susceptible to the reproach that it displays less than sympathetic
with the laws or policy of the State. It cannot be said that such a sweeping
concern for the plight of those who, under a mistaken appreciation of a
exercise of a lawmaking power by Bocaue could qualify under the term
municipal power, were thus left without employment. Such a deplorable
reasonable. The objective of fostering public morals, a worthy and
consequence is to be avoided. If it were not thus, then the element of
desirable end can be attained by a measure that does not encompass too
arbitrariness enters the picture. That is to pay less, very much less, than
wide a field. Certainly the ordinance on its face is characterized by
full deference to the due process clause with its mandate of fairness and
overbreadth. The purpose sought to be achieved could have been attained
reasonableness.
by reasonable restrictions rather than by an absolute prohibition.
Certiorari is granted and the decision of the lower court is reversed, set
The decision now under review refers to Republic Act No. 938 as
aside, and nullified.
amended. It was originally enacted on June 20, 1953. It is entitled: "AN
ACT GRANTING MUNICIPAL OR CITY BOARDS AND COUNCILS THE POWER
REPUBLIC OF THE PHILIPPINES vs. PHILIPPINE LONG DISTANCE
TO REGULATE THE ESTABLISHMENT, MAINTENANCE AND OPERATION OF
TELEPHONE COMPANY
CERTAIN PLACES OF AMUSEMENT WITHIN THEIR RESPECTIVE
G.R. No. L-18841. January 27, 1969
TERRITORIAL JURISDICTIONS.' The Constitution mandates: "Every bill
MURILLO
shall embrace only one subject which shall be expressed in the title
thereof." Since there is no dispute as the title limits the power to
DOCTRINE:
regulating, not prohibiting, it would result in the statute being invalid if, as
was done by the Municipality of Bocaue, the operation of a night club was
The State may, in the exercise of its power to expropriate, require a public
prohibited. There is a wide gap between the exercise of a regulatory power
utility to render services in the general interest, provided just
"to provide for the health and safety, promote the prosperity, improve the
compensation compensation is paid therefor.
morals, and to interdict any calling, occupation, or enterprise. In
accordance with the well-settled principle of constitutional construction
FACTS:
that between two possible interpretations by one of which it will be free
from constitutional infirmity and by the other tainted by such grave defect,
Sometime in 1933, the defendant PLDT entered into an agreement with
the former is to be preferred. A construction that would save rather than
RCA Communications Inc., an American corporation, whereby telephone
one that would affix the seal of doom certainly commends itself. We have
messages coming from the US and received by RCAs domestic station,
done so before We do so again.
could automatically be transferred to the lines of PLDT, and vice versa.
The petitioner, meanwhile, established the Bureau of Telecommunications.
There is reinforcement to the conclusion reached by virtue of a specific
It set up its own Government Telephone System by utilizing its own
provision of the recently-enacted Local Government Code. The general
appropriation and equipment and by renting trunk lines of the PLDT.
welfare clause, a reiteration of the Administrative Code provision, is set
Thereafter, the State also entered into an agreement with RCA for a joint
forth in the first paragraph of Section 149 defining the powers and duties
overseas telephone service.
of the sangguniang bayan. (hindi ko na cinopy paste sobrang haba) It is
clear that municipal corporations cannot prohibit the operation of night
Alleging that petitioner is in competition with them, PLDT notified the
clubs. They may be regulated, but not prevented from carrying on their
former about the competition. PLDT complained that the Bureau was
business. It would be, therefore, an exercise in futility if the decision under
violating the conditions for using the trunk lines not only for the use of
review were sustained. All that petitioners would have to do is to apply
government offices but even to serve private persons or the general
once more for licenses to operate night clubs. A refusal to grant licenses,
public. PLDT gave a notice that if violations were not stopped, PLDT would
because no such businesses could legally open, would be subject to
sever the connections -which PLDT did. Receiving no reply, PLDT
disconnected the trunk lines being rented by petitioner; thus, prompting
Cuanco and Ernesto Ching Cuanco Kho which is abutting E. R. Santos
the plaintiff to file a case before the CFI praying for judgment commanding
Street. However, it ix claimed that, as early as February 1993, they had
PLDT to execute a contract with the Bureau for the use of the facilities of
sold the said property to petitioner JILCSFI as evidenced by a deed of sale
PLDTs telephone system, and for a writ of preliminary injunction against
9 bearing the signature of defendant Ernesto Ching Cuanco Kho and his
the defendant to restrain the severance of the existing trunk lines and
wife. When apprised about the complaint, JILCSFI filed a motion for leave
restore those severed.
to intervene.
ISSUE:
Whether or not the defendant PLDT can be compelled to enter into a
contract with the plaintiff.
HELD:
Yes. The SC explained that x x x while the Republic may not compel the
PLDT to celebrate a contract with it, the Republic may, in the exercise of
the sovereign power of eminent domain, require the telephone company to
permit interconnection of the government telephone system and that of
the PLDT, as the needs of the government service may require, subject to
the payment of just compensation to be determined by the court.
Considering (1) that the PLDT franchise is non- exclusive, (2) that it is
unable to adequately cope with the current demands for telephone service,
as shown by the number of pending applications therefor; and (3) that the
PLDT's right to just compensation for the services rendered to the
Government telephone system and its users is herein recognized and
preserved, the objections of PLDT are without merit. To uphold the PLDT's
contention is to subordinate the needs of the general public.
JESUS IS LORD CHRISTIAN SCHOOL FOUNDATION, INC. vs.
MUNICIPALITY (now CITY) OF PASIG
G.R. No. 152230. August 9, 2005
DOCTRINE:
One essential requisite for the exercise of the power of eminent domain is
to prove the mandatory requirement of a valid and definite offer to the
owner of the property (and its rejection thereof by the latter) before filing
its complaint.
RTC allowed the expropriation proceedings. Court of Appeals affirmed the

lower courts decision for the construction of an access road. Petitioner
argues that there was no valid and definite offer made before a complaint
for eminent domain was filed as the law requires (Art. 35, Rules and
Regulations Implementing the Local Government Code). Respondent
contends that a letter to purchase was offered to the previous owners and
the same was not accepted.
ISSUE:
Whether or not a letter to purchase is sufficient enough as a definite and
valid offer to expropriate.
HELD:
No. Failure to prove compliance with the mandatory requirement of a valid
and definite offer will result in the dismissal of the complaint. The purpose
of the mandatory requirement to be first made to the owner is to
encourage settlements and voluntary acquisition of property needed for
public purposes in order to avoid the expense and delay of a court of
action. In the present case, the respondent failed to prove that before it
filed its complaint, it made a written definite and valid offer to acquire the
property for public use as an access road. The only evidence adduced by
the respondent to prove its compliance with Section 19 of the Local
Government Code is the photocopy of the letter purportedly bearing the
signature of Engr. Jose Reyes, to only one of the co-owners, Lorenzo Ching
Cuanco. It bears stressing, however, that the respondent offered the letter
only to prove its desire or intent to acquire the property for a right-of-way.
The document was not offered to prove that the respondent made a
definite and valid offer to acquire the property. Hence, the decision of the
lower court and CA are set aside.
REPUBLIC VS LEGASPI
670 SCRA 110, G.R. No. 177611. April 18, 2012
GLORIA
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 municipality then decided to acquire 51 square meters out of
the 1,791-square meter property of Lorenzo Ching Cuanco, Victor Ching
DOCTRINE:
The power of eminent domain is the ultimate right of the sovereign power
to appropriate any property within its territorial sovereignty for a public
purpose thru a method that partakes the nature of a compulsory sale. The
ISSUE:
fact that property is being utilized by respondents for their own private
purposes is, consequently, not a valid reason to deny exercise of the right
Whether or not the Republic has the right to expropriate the remaining lot
of expropriation, for as long as the taking is for a public purpose and just
in question.
compensation is paid.
HELD:
FACTS:
YES. The RTC compounded its error when, acting on the motions for
The case involves the alienation of a property in Miag-ao, Iloilo. UP Visayas
reconsideration filed by the parties, it issued the assailed Order, denying
(UPV) acquired Lot No. 1, consisting of ten lots, through a contract of sale
petitioners right of expropriation over Lot Nos. 21609-A, 21609-D, 21609with respondent Rosalina Libo-on. UPV immediately took possession of the
F, 21609-G, 21609-H, 21609-I and 21609-J, on the ground that the same
property, and started building thereon road networks, infrastructure and
were already used by respondents for their businesses and/or
school facilities as part of its educational development plan. However, 2
residences. Subject to the direct constitutional qualification that private
years from such sale, Rosalina wrote a letter, informing UPV that she was
property shall not be taken for public use without just compensation, the
rescinding the sale of the subject parcel on the ground that she was no
power of eminent domain is, after all, the ultimate right of the sovereign
longer the owner of the property in view of her 5 September 1978
power to appropriate any property within its territorial sovereignty for a
conveyance thereof by way of barter in favor of respondents Legaspi et al.
public purpose through a method that partakes the nature of a compulsory
Republic, thru UPV, then filed against respondents the complaint for
sale. The fact that said lots are being utilized by respondents Legaspis for
eminent domain, alleging, among other matters, that the subject parcel is
their own private purposes is, consequently, not a valid reason to deny
within the approved and delineated campus of the UPV which had wellexercise of the right of expropriation, for as long as the taking is for a
established its presence in the area by building its laboratories,
public purpose and just compensation is paid. Our review of the
classrooms, faculty and student centers, among other facilities; and, that
documents attached to the pleadings filed in connection with the petition
it had been constrained to resort to expropriation in view of the failure of
before the CA and this Court failed to yield any basis for the RTCs
its efforts to negotiate with respondents for the retention of the property
pronouncement that UPV excluded the area occupied by the Villa Marina
on which it constructed considerable improvements already being used for
Resort from its exercise of the right of expropriation. This is belied by
academic purposes. Maintaining that the fair market value of the property
Republics motion for continuation of the condemnation proceedings for the
at the time of its entry was P49,298.00, UPV sought confirmation of its
seven remaining lots into which Lot No. 1 had been subdivided, UPVs
right of condemnation as well as the fixing of the just compensation for
letter-protest against respondent Rodolfo Legaspi, Sr.s occupation of the
the property.
property, its motion for the grant of a writ of possession of the entire lot
and the motions for reconsideration of petitioner and UPV filed from the
The RTC issued an order granting petitioners motion to allow UPV to
condemnation order. Considering that the site of the Villa Marina Resort
continue its possession of the subject parcel upon deposit with the Iloilo
appears to have already been earmarked for UPVs proposed National
Provincial Treasurer of the sum of P50,070.00, representing the
Institute of Marine Biotechnology, the RTC clearly abused its discretion
provisional valuation of the property. Consequently, the RTC issued a
when it ruled that the exclusion of 31,617 square meters from the original
condemnation order. Such order initially included only three lots of the
40,133 sought to be expropriated would not adversely affect UPVs
ten lots in Lot No. 1, so Republic moved for the continuation of the
operations. Granted that no part of the ground of a public cemetery can be
condemnation proceedings insofar as the remaining seven lots were
taken for other public uses under a general authority, there is, likewise, no
concerned. The RTC issued a condemnation order for the remaining lots,
showing in the record of the location and area of the public cemetery of
with the exclusion of the Villa Marina Beach Resort. Seeking the inclusion
Miag-ao in relation to the subject property. The CAs Decision is therefore
of such lot in the expropriation, Republic filed a motion for reconsideration,
REVERSED and SET ASIDE.
which was denied by the RTC. Republic then filed the Rule 65 petition for
certiorari and mandamus, assailing the RTCs order dated 31 May 2004 on
NPC VS ILETO
the ground that grave abuse of discretion attended the denial of the
678 SCRA 107, G.R. No. 169957, July 11, 2012.
expropriation of the subject lots after the right to expropriate the same
was earlier upheld in the likewise assailed order dated 17 November 2003.
DOCTRINE:
The petition was denied.
Expropriation cases which do not involve mere liens on the property in the
form of aerial easements, such as installment of transmission lines, require
HELD:
payment of just compensation because of the imposition of additional
limitations to the landowners interfering with the owners right to possess
YES. Republic Act No. 6395 grants the NPC the power to acquire property
and enjoy their properties.
incident to, or necessary, convenient or proper to carry out the purposes
The determination of just compensation in expropriation cases is a
for which [it] was created, namely: the construction of generation and
function addressed to the discretion of the courts, and may not be usurped
transmission facilities to provide electricity for the entire country. xxx At
by any other department of the government.
the heart of this argument is the mistaken assumption that what are
involved are mere liens on the property in the form of aerial easements.
FACTS:
While it may be true that the transmission lines merely pass over the
affected properties, the easement imposes the additional limitation that
To materialize its Northwestern Luzon Transmission Project, the National
the landowners are prohibited from constructing any improvements or
Power Corporation (NPC) filed a complaint, which was subsequently
planting any trees that exceed three (3) meters within the aerial right of
amended, seeking to expropriate certain parcels of land in Bulacan owned
way area. This prohibition clearly interferes with the landowners right to
by Ileto et al. After depositing with the Land Bank the amount of
possess and enjoy their properties. xxx Apart from interfering with the
Php204,566.60, the NPC received actual possession of the properties. To
attributes of ownership, we have articulated in our observation in National
determine the value of the just compensation, the RTC constituted a team
Power Corp. v. Sps. Gutierrez that these transmission lines, because of the
of commissioners. However, owners Heirs of Sofia Mangahas of one
high-tension current that passes through them, pose a danger to the lives
property and the NPC filed with the RTC a jointly executed compromise
and limbs of those in the surrounding areas, and, thus, serve to limit the
agreement on NPCs acquisition of 13,855 sq m. of the 95,445 sq m.
activities that can be done on these lands. We also declared in National
property owned by the former for payment with an assessed value of
Power Corporation v. Purefoods Corporation that Section 3A of Republic
Php250.00/sqm. Such compromise agreement was found by the RTC to
Act No. 6395, as amended (which provides a fixed formula in the
be valid. Bugayong, the commissioner for NPC, opposed such agreement,
computation of just compensation in cases of acquisition of easements of
and recommended that NPC pay an easement fee of 10% of
right of way) is not binding upon this Court. This is in keeping with the
Php85.00/sqm. for the agricultural land that would merely be traversed by
established rule that the determination of just compensation in eminent
the transmission lines. But the RTC approved Commissioners Tanyag and
domain cases is a judicial function. It was established by the Supreme
Villacortas recommendation of payment of just compensation for all
Court that it is necessary for NPC to pay to the landowners just
affected lands pegged at Php250.00/sqm. The NPC filed a motion for
compensation for the affected properties instead of mere easement fees,
reconsideration, which was denied by the RTC. The OSG, representing
because of the nature of the public use for which the expropriation was
NPC, filed an appeal with the CA, assailing the approval of the compromise
intended. NPCs reliance on the provision in R.A. No. 6395, requiring the
agreement, and the propriety of paying just compensation instead of
payment of mere easement fee, was misplaced.
merely the 10% easement fee pursuant to Section 3A of R.A. No. 6395, as
amended.
YES. Such determination of just compensation in expropriation cases is a
function addressed to the discretion of the courts, and may not be usurped
The CA (1) affirmed the validity of the compromise agreement, (2) upheld
by any other department of the government. Any valuation for just
the Php250.00 valuation of just compensation in the compromise
compensation provided in statutes may only serve as guiding principle, but
agreement for being congruent with the amount of just compensation for
not substitute the courts own decision. In this regard, both the RTC and
residential lands as listed by the NPC in its Board Res. No. 97-246, and (3)
the CA erred in using the statutes in determining just compensation.
recognized the error of RTC in fixing valuation of other expropriated lands
Although the determination of just compensation lies within the trial
at Php250.00 although they are not residential.
courts discretion, it should not be done arbitrarily or capriciously. The
decision of the trial court must be based on all established rules, correct
ISSUE:
legal principles, and competent evidence. The courts are proscribed from
basing their judgments on speculations and surmises. In light of the
(1) Whether or not the NPC must pay just compensation to landowners
foregoing, we find that the trial court arbitrarily fixed the amount of just
instead of a mere aerial easement fee.
compensation due the landowners at Php250.00 per square meter. Thus,
(2) Whether or not the CA and the RTC erred in the determination of the
the Court has no alternative but to remand the case to the court of origin
just compensation.
for the proper determination of just compensation.
predecessor-in-interest. The said properties were to be sold and
FILSTREAM INTERNATIONAL
INCORPORATED
distributed to qualified tenants of the area pursuant to the Land Use
vs. COURT OF APPEALS
Development Program of the City of Manila.
G.R. No. 125218. January 23, 1998
CRUZ, CHANINE
On May 23, 1994, City of Manila filed a complaint for eminent domain
before the RTC of Manila, seeking to expropriate the aforecited
DOCTRINE:
parcels of land owned by Filstream which are situated at Antonio Rivera
Local government units are not given an unbridled authority when
Street, Tondo II, Manila.
exercising their power of eminent domain in pursuit of solutions to these
Pursuant to the complaint filed by City of Manila, the trial court issued a
problems, thus, the exercise by local government units of the
Writ of Possession in
favor of the
former
which
ordered
the
power of eminent domain is not without limitations.
transfer of possession over the disputed premises to the City of Manila.
FACTS:
ISSUE:
Filstream International, Inc., is the registered owner of the properties

subject of this dispute consisting of adjacent parcels of land situated in
Antonio Rivera Street, Tondo II, Manila. On January 7, 1993, petitioner
filed an ejectment suit before the Metropolitan Trial Court of Manila against
the occupants of the above mentioned parcels of land (herein private
respondents in G. R. No. 128077) on the grounds of termination of the
lease contract and non-payment of rentals. Judgment was rendered by the
MTC ordering private respondents to vacate the premises and pay back
rentals to petitioner.
Whether or not the City of Manila has the power to expropriate private
property despite a final judgment in favor of Filstream?
Not satisfied, private respondents appealed the decision to the Regional

Trial Court of Manila, which in turn affirmed the decision of the MTC in its
decision. Still not content, private respondents proceeded to
the Court of Appeals via a petition for review. The result however
remained the same as the CA affirmed the decision of the RTC. Thereafter,
no further action was taken by the private respondents, as a
result of which the decision in the ejectment suit became final and
executory.
However, it appeared that during the pendency of the ejectment
proceedings,
private
respondents
filed
a
complaint
for
Annulment of Deed of Exchange against Filstream. It was at this stage that
respondent City of Manila came into the picture when the city government
approved Ordinance No. 7813 on November 5, 1993, authorizing Mayor
Alfredo S. Lim to initiate the acquisition by negotiation, expropriation,
purchase, or other legal means certain parcels of land registered under
T.C.T. Nos. 169193, 169198, 169190, 169200, 169202 and 169192 of the
Registry of Deeds
of Manila which formed part of the properties of Filstream then occupied
by private respondents. Subsequently, the City of Manila approved
Ordinance No. 7855 declaring the expropriation of certain parcels of land
situated along Antonio Rivera and Fernando Ma. Guerrero streets in Tondo,
Manila which were owned by Mr. Enrique Quijano Gutierrez, petitioner's
RULING:
Yes. There is no dispute as to the existence of a final and executory
judgment in favor of petitioner Filstream ordering the ejectment of private
respondents from the properties subject of the dispute. However, it must
also be conceded that the City of Manila has an undeniable right to
exercise its power of eminent domain within its jurisdiction. More
specifically, the City of Manila has the power to expropriate private
property in the pursuit of its urban land reform and housing program as
explicitly laid out in the Revised Charter of the City of Manila.
In fact, the City of Manila's right to exercise these prerogatives
notwithstanding the existence of a final and executory judgment over the
property to be expropriated has been upheld by this Court in the
case of Philippine Columbian Association vs. Panis.
Nevertheless, despite the existence of a serious dilemma, local
government units are not given an unbridled authority when exercising
their power of eminent domain in pursuit of solutions to these problems.
The basic rules shall have to be followed. The exercise by local
government units of the power of eminent domain is not without
limitations.
Private lands rank last in the order of priority for purposes of socialized
housing. In the same vein, expropriation proceedings are to be resorted to
only when the other modes of acquisition have been exhausted.
Compliance with these conditions must be 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.
Filstream's properties were expropriated and ordered condemned in
favor of the City of Manila sans any showing that resort to the
Whether or not Ordinance No. 1843 is violative of the Constitution?
acquisition of other lands listed under Sec. 9 of RA 7279 have proved
futile. Evidently, there was a violation of Filstream's right to due process
RULING:
which must accordingly be rectified. ED
Yes. Under Section 48 of RA 7160, otherwise known as the Local
LAGCAO vs. LABRA
Government Code of 1991, local legislative power shall be exercised
G.R. No. 155746, October 13, 2004
by the Sangguniang Panlungsod of the city. The legislative acts of the
Sangguniang Panlungsod in the exercise of its lawmaking authority are
DOCTRINE:
denominated ordinances. Local government units have no inherent power
of eminent domain and can exercise it only when expressly authorized
While we recognize that housing is one of the most serious
by the legislature. By virtue of RA 7160, Congress confer red
social problems of the country, local government units do not
upon local government units the power to expropriate. Ordinance No.
possess unbridled authority to exercise their power of eminent
1843 which authorized the expropriation of petitioners lot was enacted by
domain in seeking solutions to this problem. Thus, the exercise by local
the Sangguniang Panlungsod of Cebu City to provide socialized
government units of the power of eminent domain is not absolute.
housing for the homeless and low -income residents of the City.
However, while we recognize that housing is one of the most
FACTS:
serious social problems of the country, local government units
do not possess unbridled authority to exercise their power
The Province of Cebu donated 210 lots to the City of Cebu. But then, in
of eminent domain in seeking solutions to this problem. There are two
late 1965, the 210 lots, including Lot 1029, reverted to the Province of
legal provisions which limit the exercise of this power: (1) no
Cebu. Consequently, the province tried to annul the sale of Lot 1029
person shall be deprived of life, liberty, or property without due process
by the City of Cebu to the petitioners. This prompted the latter
of law, nor shall any person be denied the equal protection of the
to sue the province for specific performance and damages in the then
laws; and (2) private property shall not be taken for public use
Court of First Instance. The court a quo ruled in favor of petitioners and
without just compensation. Thus, the exercise by local government units
ordered the Province of Cebu to execute the final deed of sale in favor of
of the power of eminent domain is not absolute. In fact, Section 19
petitioners. The Court of Appeals affirmed the decision of the trial court.
of RA 7160 itself explicitly states that such exercise must comply
with the provisions of the Constitution and pertinent laws.
After acquiring title, petitioners tried to take possession of the
lot
only
to
discover
that
it
was
ESLABAN, JR. vs. DE ONORIO
already occupied by squatters. Thus
G.R. No. 146062. June 28, 2001
petitioners instituted ejectment proceedings against the
AREVALO
squatters. The Municipal Trial Court in Cities (MTCC) ordering the
squatters to vacate the lot. On appeal, the RTC affirmed the MTCCs
DOCTRINE:
decision and issued a writ of execution and order of demolition. However,
when the demolition order was about to be implemented, Cebu
The value of the property must be determined either as of the date of the
City Mayor Alvin Garcia wrote two letters to the MTCC, requesting the
taking of the property or the filing of the complaint, whichever came
deferment of the demolition on the ground that t he City was still
first.
looking for a relocation site for the squatters. Acting on the
mayors request, the MTCC issued two orders suspending the demolition.
FACTS:
Unfortunately for petitioners, during the suspension period, the
Sangguniang Panlungsod of Cebu City passed a resolution which identified
Respondent Clarita Vda. de Enorio is the owner of a lot in Barangay M.
Lot 1029 as a socialized housing site pursuant to RA 7279. Petitioners
Roxas, Sto. Nio, South Cotabato. On October 6, 1981, Santiago Eslaban,
filed with the RTC an action for declaration of nullity of
Jr., Project Manager of the National Irrigation Administration (NIA),
Ordinance No. 1843 for being unconstitutional.
approved the construction of the main irrigation canal of the NIA on the
said lot, affecting a 24,660 square meter portion thereof. Respondents
ISSUE:
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
Comprehensive Agrarian Reform Law (R.A. No. 6657). Private
documents by the Commission on Audit.
respondent's certificates of title were cancelled and new ones were issued
and distributed to farmer-beneficiaries.
Sometime in 1983, a Right-of-Way agreement was executed between
respondent and the NIA. The NIA then paid respondent the amount
The lands were valued by the Land Bank of the Philippines at P19,312.24
of P4,180.00 as Right-of-Way damages. Respondent subsequently
per hectare for the riceland and P4,267.68 per hectare for brushland. It
executed an Affidavit of Waiver of Rights and Fees whereby she waived
appears, however, that in the Statement of Agricultural Landholdings
any compensation for damages to crops and improvements which she
("LISTASAKA") which private respondent had earlier filed with the
suffered as a result of the construction of a right-of-way on her property.
Department of Agrarian Reform (DAR), a lower "Fair Value Acceptable to
On December 10, 1990, Respondent demanded payment for taking of
Landowner" was stated and that based on this statement, the Land Bank
property but petitioner refused to pay. RTC ordered NIA to pay
of the Philippines valued private respondent's lands uniformly at
P107,517.60 as just compensation. CA affirmed.
P15,311.79 per hectare and fixed the amount of P390,557.84 as the total
compensation to be paid for the lands.
ISSUE:
Private respondent rejected the government's offer. On December 12,
Whether or not the value of just compensation shall be determined from
1992, private respondent filed a Petition for Just Compensation in the
the time of the taking or from the time of the finality of the decision.
Regional Trial Court of Tagum, Davao del Norte, sitting as a Special
Agrarian Court. Private respondent prayed that DAR be ordered to pay
HELD:
P24,717.40 per hectare.
Payment should be made from the time of the taking. With respect to the
compensation which the owner of the condemned property is entitled to
receive, it is likewise 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.
REPUBLIC (DAR) VS CA and ACIL CORPORATION
GR NO. 122256
DOCTRINE:
Thus Special Agrarian Courts, which are Regional Trial Courts, are given
original and exclusive jurisdiction over two categories of cases, to wit: (1)
"all petitions for the determination of just compensation to landowners"
and (2) "the prosecution of all criminal offenses under [R.A. No. 6657]."
FACTS:
Acil Corporation owned several hectares of land in Linoan, Montevista,
Davao del Norte, which the government took pursuant to the
However, the RTC dismissed its petition on the ground that private
respondent should have appealed to the Department of Agrarian Reform
Adjudication Board (DARAB), pursuant to the latter's Revised Rules of
Procedure, before recourse to it (the RTC) could be had. In addition the
RTC found that, in violation of the DARAB's rules of procedure the petition
had been filed more than fifteen (15) days after notice of the decision of
the PARAD.
ISSUE:
Whether in cases involving claims for just compensation under R.A. No.
6657 an appeal from the decision of the provincial adjudicator to the
DARAB must first be made before a landowner can resort to the RTC under
57
HELD:
No. Under the law, the Land Bank of the Philippines is charged with the
initial responsibility of determining the value of lands placed under land
reform and the compensation to be paid for their taking. Through notice
sent to the landowner pursuant to 16(a) of R.A. No. 6657, the DAR
makes an offer. In case the landowner rejects the offer, a summary
administrative proceeding is held and afterward the provincial (PARAD),
the regional (RARAD) or the central (DARAB) adjudicator as the case may
be, depending on the value of the land, fixes the price to be paid for the
land. If the landowner does not agree to the price fixed, he may bring the
matter to the RTC acting as Special Agrarian Court. 8 This in essence is the
procedure for the determination of compensation cases under R.A. No.
6657. In accordance with it, the private respondent's case was properly
Administrative Order No. 9, Series of 1990 and sought to compel the DAR
brought by it in the RTC, and it was error for the latter court to have
to expedite the pending summary administrative proceedings to finally
dismissed the case. In the terminology of 57, the RTC, sitting as a
determine the just compensation of their properties, and the Landbank to
Special Agrarian Court, has "original and exclusive jurisdiction over all
deposit in cash and bonds the amounts respectively "earmarked",
petitions for the determination of just compensation to landowners."
"reserved" and "deposited in trust accounts" for private respondents, and
to allow them to withdraw the same. Through a Resolution of the Second
LAND BANK OF THE PHILIPPINES VS. CA
Division this Court referred the petition to respondent Court of Appeals for
G.R. NO. 118712, OCTOBER 6, 1995
proper determination and disposition. Private respondents argued that
MATILLANO
Administrative Order No. 9, Series of 1990 was issued without jurisdiction
and with grave abuse of discretion because it permits the opening of trust
DOCTRINE:
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
There is no basis in allowing the opening of a trust account in behalf of the
before it is taken and the titles are cancelled as provided under Section
landowner as compensation for his property because, as heretofore
16(e) of RA 6657. 9 Private respondents also assail the fact that the DAR
discussed, Section 16(e) of RA 6657 is very specific that the deposit must
and the Landbank merely "earmarked", "deposited in trust" or "reserved"
be made only in "cash" or in "LBP bonds".
the compensation in their names as landowners despite the clear mandate
that before taking possession of the property, the compensation must be
FACTS:
deposited in cash or in bonds. Petitioner DAR, however, maintained that
Administrative Order No. 9 is a valid exercise of its rule-making power
Separate petitions for review were filed by petitioners Department of
pursuant to Section 49 of RA 6657. Moreover, the DAR maintained that
Agrarian Reform (DAR) and LBP) following the adverse ruling by the CA in.
the issuance of the "Certificate of Deposit" by the Landbank was a
However, upon motion filed by private respondents, the petitions were
substantial compliance with Section 16(e) of RA 6657 and the ruling in the
ordered consolidated. Petitioners assail the decision of the CA which
case of Association of Small Landowners in the Philippines, Inc., et al. vs.
granted private respondents' Petition for Certiorari and Mandamus.
Hon. Secretary of Agrarian Reform. For its part, petitioner Landbank
a)
DAR Administrative Order No. 9, Series of 1990 is declared null
declared that the issuance of the Certificates of Deposits was in
and void insofar as it provides for the opening of trust accounts in lieu of
consonance with Circular Nos. 29, 29-A and 54 of the Land Registration
deposits in cash or bonds;
Authority where the words "reserved/deposited" were also used.
b)
Respondent Landbank is ordered to immediately deposit not
merely "earmark", "reserve" or "deposit in trust" with an accessible
On October 20, 1994, the respondent court rendered the assailed decision
bank designated by respondent DAR in the names of the petitioners within
in favor of private respondents.
Petitioners filed a motion for
the parameters of Sec. 18 (1) of RA 6657
reconsideration but respondent court denied the same.
c)
The DAR-designated bank is ordered to allow the petitioners to
withdraw the above-deposited amounts without prejudice to the final
ISSUE:
determination of just compensation by the proper authorities; and
Whether or not the opening of trust accounts by the Landbank, in lieu of
d)
Respondent DAR is ordered to 1) immediately conduct summary
depositing in cash or bonds in an accessible bank designated by the DAR is
administrative proceedings to determine the just compensation for the
tantamount to Just Compensastion?
lands of the petitioners giving the petitioners 15 days from notice within
which to submit evidence and to 2) decide the cases within 30 days after
HELD:
they are submitted for decision. Private respondents are landowners
whose landholdings were acquired by the DAR and subjected to transfer
No.The contention is untenable. Section 16(e) of RA 6657 provides as
schemes to qualified beneficiaries under the CARL Law. (CARL, Republic
follows:
Act No. 6657).Aggrieved by the alleged lapses of the DAR and the
(e)
Upon receipt by the landowner of the corresponding payment or,
Landbank with respect to the valuation and payment of compensation for
in case of rejection or no response from the landowner, upon the deposit
their land pursuant to the provisions of RA 6657, private respondents filed
with an accessible bank designated by the DAR of the compensation in
with this Court a Petition for Certiorari and Mandamus with prayer for
cash or in LBP bonds in accordance with this Act, the DAR shall take
preliminary mandatory injunction. Private respondents questioned the
immediate possession of the land and shall request the proper Register of
validity of DAR Administrative Order No. 6, Series of 1992 6and DAR
Deeds to issue a Transfer Certificate of Title (TCT) in the name of the
Reform (DAR) for P 10,480,000.00 or P 21,165.00. The Landbank of the
Republic of the Philippines. .
Philippines (LBP) used the guidelines set forth in DAR Administrative Order
It is very explicit therefrom that the deposit must be made only in "cash"
(AO) No. 17 series of 1989 as amended by DAR AO No. 3 series of 1991 to
or in "LBP bonds". Nowhere does it appear nor can it be inferred that the
fix the value of these lands. HFC rejected the valuation. The voluntary
deposit can be made in any other form. If it were the intention to include a
offer to sell was referred to the DAR adjudication Board. The Regional
"trust account" among the valid modes of deposit, that should have been
adjudicator fixed the value of landholdings at P 5,324,529.00. HFC filed a
made express, or at least, qualifying words ought to have appeared from
case with the Regional Trial Court (RTC)of Masbate acting as Special
which it can be fairly deduced that a "trust account" is allowed. In sum,
Agrarian Court against the DAR Secretary and LBP, praying to compensate
there is no ambiguity in Section 16(e) of RA 6657 to warrant an expanded
HFC for its landholdings amounting to P 12,440,000.00. In its amended
construction of the term "deposit". The conclusive effect of administrative
complaint, HFC increased the valuation P 20,000,000.00. LBP, on the other
construction is not absolute. Action of an administrative agency may be
hand, revalued the land under TCT No. T-2872 at P 1,373,244.78, which
disturbed or set aside by the judicial department if there is an error of law,
was formerly fixed at P 2,527,749.60; and TCT No. T-2549 at P
a grave abuse of power or lack of jurisdiction or grave abuse of discretion
1,513,097.57, which was previously fixed at P 2,796,800.00. The RTC
clearly conflicting with either the letter or the spirit of a legislative
made its own valuation when the Board of Commissioners could not agree
enactment. In this regard, it must be stressed that the function of
on the common valuation. The RTC took judicial notice of the fact that a
promulgating rules and regulations may be legitimately exercised only for
portion of 10 hectares of that land is a commercial land because it is near
the purpose of carrying the provisions of the law into effect. The power of
the commercial district of Cataingan, Masbate. Both parties appealed to
administrative agencies is thus confined to implementing the law or
the Court of Appeals (CA). HFC argued that the government illegally failed
putting it into effect. Corollary to this is that administrative regulations
to pay just compensation pursuant when LBP opened trust account in its
cannot extend the law and amend a legislative enactment, for settled is
behalf which is contrary to existing jurisprudence. LBP on the other hand
the rule that administrative regulations must be in harmony with the
argued that the RTC erred when it disregarded the formula set forth in
provisions of the law. And in case there is a discrepancy between the basic
DAR AO No. 6 series of 1992 as amended by DAR AO No. 11 series of
law and an implementing rule or regulation, it is the former that prevails.
1994 and in declaring the 10 hectares of that land as a commercial land.
In the present suit, the DAR clearly overstepped the limits of its power to
The CA decided in favor of HFC. CA held that the lower courts are not
enact rules and regulations when it issued Administrative Circular No. 9.
bound by the factors enumerated in Section 17 of RA 6657 which are mere
There is no basis in allowing the opening of a trust account in behalf of the
guide in determining just compensation. Also, the valuation by LBP based
landowner as compensation for his property because, as heretofore
on the formula was too low and, therefore, confiscatory. LBP argued that
discussed, Section 16(e) of RA 6657 is very specific that the deposit must
the CA erred in not applying the formula based on law and that the land
be made only in "cash" or in "LBP bonds". In the same vein, petitioners
taken pursuant to the States agrarian reform program involves both the
cannot invoke LRA Circular Nos. 29, 29-A and 54 because these
exercise of the States power of eminent domain and the police power of
implementing regulations cannot outweigh the clear provision of the law.
the State. Consequently, the just compensation for land taken for agrarian
Respondent court therefore did not commit any error in striking down
reform should be less than the just compensation given in the ordinary
Administrative Circular No. 9 for being null and void.
exercise of eminent domain. Hence, this petition.
LBP v. HONEYCOMB FARMS CORPORATION
G.R. No. 169903, February 29, 2012
DOCTRINE:
The compensation to be paid should not be less than the market value of
the property although the taking was not done in LBPs traditional exercise
of the power of eminent domain
ISSUES:
Whether the RTC erred when it made its own valuation and disregarded
the DAR formula/ Whether application of DARs formula is mandatory in
determining Just Compensation, hence the RTC and CA erred when both
disregarded the same; Whether the compensation to be paid should be
less than the market value of the property because the taking was not
done in LBPs traditional exercise of the power of eminent domain.
HELD:
FACTS:
Honeycomb Farms Corp. (HFC) voluntarily offered their two parcels of land
to the Department of Agrarian
Petition GRANTED Mandatory application of the DAR formula To guide the

RTC in its function as Special Agrarian Court, Section 17 of RA 6657
enumerates the factors that have to be taken into consideration to
accurately determine just compensation. This provision states: Section 17.
Determination of Just Compensation. In determining just compensation,
The Supreme Court brushed aside the LBPs attempt to differentiate just
the cost of acquisition of the land, the current value of like properties, its
compensation paid in what it terms as traditional exercise of eminent
nature, actual use and income, the sworn valuation by the owner, the tax
domain and eminent domain in the context of agrarian reform in Apo
declarations, and the assessment made by government assessors, shall be
Fruits Corporation and Hijo Plantation, Inc. v. Land Bank of the Philippines,
considered. The social and economic benefits contributed by the farmers
thus: To our mind, nothing is inherently contradictory in the public
and the farmworkers and by the Government to the property, as well as
purpose of land reform and the right of landowners to receive just
the non-payment of taxes or loans secured from any government financing
compensation for the expropriation by the State of their properties. That
institution on the said land, shall be considered as additional factors to
the petitioners are corporations that used to own large tracts of land
determine its valuation. This ruling plainly impose on the RTC the duty to
should not be taken against them. As Mr. Justice Isagani Cruz eloquently
apply the formula laid down in the pertinent DAR administrative
put it: [S]ocial justice or any justice for that matter is for the
regulations to determine just compensation.
deserving, whether he be a millionaire in his mansion or a pauper in his
hovel. It is true that, in case of reasonable doubt, we are called upon to tilt
Clearly, the CA and the RTC acted with grievous error when they
the balance in favor of the poor, to whom the Constitution fittingly extends
disregarded the formula laid down by the DAR, and chose instead to come
its sympathy and compassion. But never is it justified to prefer the poor
up with their own basis for the valuation of the subject land. The
simply because they are poor, or to reject the rich simply because they are
compensation to be paid should not be less than the market value of the
rich, for justice must always be served, for poor and rich alike, according
property although the taking was not done in LBPs traditional exercise of
to the mandate of the law.
the power of eminent domain.The Supreme Court discredit the argument
of LBP that since the taking done by the government for purposes of
LBP VS. SANTIAGO
agrarian reform is not a traditional exercise of the power of eminent
G.R. NO. 182209, OCTOBER 3, 2012
domain but one which is done in pursuance of social justice and which
involves the States police power, the just compensation to be paid to the
DOCTRINE:
landowners for these parcels of agricultural land should be less than the
market value of the property. When the State exercises its inherent power
It should also be pointed out, however, that in the more recent case of
of eminent domain, the Constitution imposes the corresponding obligation
Land Bank of the Philippines vs. Natividad, the Court categorically ruled:
to compensate the landowner for the expropriated property. This principle
"the seizure of the landholding did not take place on the date of effectivity
is embodied in Section 9, Article III of the Constitution, which provides:
of P.D. No. 27 but would take effect on the payment of just
"Private property shall not be taken for public use without just
compensation."
compensation." When the State exercises the power of eminent domain in
the implementation of its agrarian reform program, the constitutional
FACTS:
provision which governs is Section 4, Article XIII of the Constitution, which
provides that the State shall, by law, undertake an agrarian reform
Petitioner Land Bank of the Philippines (LBP) as the financial intermediary
program founded on the right of farmers and regular farmworkers who are
of the agrarian reform program of the government. Emiliano Santiago, Jr.
landless, to own directly or collectively the lands they till or, in the case of
(respondent) is one of the heirs of Emiliano Santiago (Santiago), the
other farmworkers, to receive a just share of the fruits thereof. To this
registered owner of an 18.5615-hectare parcel of land in Laur, Nueva
end, the State shall encourage and undertake the just distribution of all
Ecija. Pursuant to the governments Operation Land Transfer (OLT)
agricultural lands, subject to such priorities and reasonable retention limits
Program under Presidential Decree No. 27, the Department of Agrarian
as the Congress may prescribe, taking into account ecological,
Reform (DAR) acquired 17.4613 hectares of the subject property. In
developmental, or equity considerations, and subject to the payment of
determining the just compensation payable to Santiago, the LBP and the
just compensation. Notably, this provision also imposes upon the State
DAR used the following formula under Presidential Decree No. 27, which
the obligation of paying the landowner compensation for the land taken,
states: For the purpose of determining the cost of the land to be
even if it is for the governments agrarian reform purposes. Specifically,
transferred to the tenant- farmer pursuant to this Decree, the value of the
the provision makes use of the phrase just compensation, the same
land shall be equivalent to two and one-half (2-1/2) times the average
phrase used in Section 9, Article III of the Constitution. That the
harvest of three normal crop years immediately preceding the
compensation mentioned here pertains to the fair and full price of the
promulgation of this Decree and Executive Order No. 228, which provides
taken property.
for this formula:
cites this Courts ruling in Gabatin v. Land Bank of the Philippines, wherein
Land Value (LV) =
(Average Gross Production [AGP] x 2.5 Hectares x
we held that the GSP should be pegged at the time of the taking of the
Government Support Price [GSP])
properties, which in this case was deemed effected on October 21, 1972,
the effectivity date of Presidential Decree No. 27. This Court notes that
Using the foregoing formula, the land value of the subject property was
even before respondent filed a petition for the judicial determination of the
pegged at 3,915 cavans of palay, using 90 cavans of palay per year for the
just compensation due him for the subject property before the SAC Branch
irrigated portion and 44.33 cavans of palay per year for the unirrigated
23 on November 20, 1998, Republic Act No. 6657, otherwise known as the
portion, as the AGP per hectare in San Joseph, Laur, Nueva Ecija, as
Comprehensive Agrarian Reform Law of 1988, already took effect on June
established by the Barangay Committee on Land Production (BCLP), based
15, 1988. The determination of the just compensation therefore in this
on three normal crop years immediately preceding the promulgation of
case depends on the valuation formula to be applied: the formula under
Presidential Decree No. 27. As Santiago had died earlier on November 1,
Presidential Decree No. 27 and Executive Order No. 228 or the formula
1987 the LBP, in 1992, reserved in trust for his heirs the amount of P
under Republic Act No. 6657? This Court finds the case of Meneses v.
135,482.12, as just compensation computed by LBP and DAR using the
Secretary of Agrarian Reform applicable insofar as it has determined what
above formula with P 35.00 as the GSP per cavan of palay for the year
formula should be used in computing the just compensation for property
1972 under Executive Order No. 228. This amount was released to
expropriated under Presidential Decree No. 27: Respondent correctly cited
Santiagos heirs on April 28, 1998 pursuant to this Courts decision in LBP
the case of Gabatin v. Land Bank of the Philippines, where the Court ruled
vs. CA, on May 21, 1998 and June 1, 1998, also paid the heirs the sum of
that "in computing the just compensation for expropriation proceedings, it
P 353,122.62, representing the incremental interest of 6% on the
is the value of the land at the time of the taking or October 21, 1972, the
preliminary compensation, compounded annually for 22 years,20 pursuant
effectivity date of P.D. No. 27, not at the time of the rendition of
to Provincial Agrarian Reform Council (PARC) Resolution No. 94-24-121
judgment, which should be taken into consideration." Under P.D. No. 27
and DAR Administrative Order (AO) No. 13, series of 1994.However, on
and E.O. No. 228, the following formula is used to compute the land value
November 20, 1998, respondent, as a co-owner and administrator of the
for palay:
subject property, filed a petition before the RTC of Cabanatuan City acting
as a Special Agrarian Court, for the "approval and appraisal of just
LV (land value) = 2.5 x AGP x GSP x (1.06)
compensation" due on the subject property. While respondent was in total
agreement with the land valuation of the subject property at 3,915 cavans
It should also be pointed out, however, that in the more recent case of
of palay, he contended that the 1998 GSP per cavan, which was P 400.00,
Land Bank of the Philippines vs. Natividad, the Court categorically ruled:
should be used in the computation of the just compensation for the subject
"the seizure of the landholding did not take place on the date of effectivity
property. Moreover, the incremental interest of 6% compounded annually,
of P.D. No. 27 but would take effect on the payment of just
as per PARC Resolution No. 94-24-1, should be imposed on the principal
compensation." Under Section 17 of R.A. No. 6657, the following factors
amount from 1972 to 1998 or for 26 years.
are considered in de termining just compensation, to wit: Sec. 17.
Determination of Just Compensation. - In determining just compensation,
The LBP is now before us, claiming that its petition should be allowed for
the cost of acquisition of the land, the current value of like properties , its
the following reason:
nature, actual use and income, the sworn valuation by the owner, the tax
declarations , and the assessment made by government assessors shall be
ISSUE:
considered. The social and economic benefits contributed by the farmers
and the farm-workers and by the Government to the property as well as
WHETHER OR NOT THE COURT OF APPEALS CAN DISREGARD THE
the non-payment of taxes or loans secured from any government financing
FORMULA PRESCRIBED UNDER P.D. 27 AND E.O. 228 IN FIXING THE JUST
institution on the said land shall be considered as additional factors to
COMPENSATION
determine its valuation. Consequently, the question that arises is which of
these two rulings should be applied? Under the circumstances of this case,
HELD:
the Court deems it more equitable to apply the ruling in the Natividad
case. In said case, the Court applied the provisions of R.A. No. 6657 in
LBP has been consistent in its position that the formula prescribed in
computing just compensation for property expropriated under P.D. No. 27,
Presidential Decree No. 27 and Executive Order No. 228 is the only
stating, viz: Land Bank's contention that the property was acquired for
formula that should be applied in the computation of the valuation of lands
purposes of agrarian reform on October 21, 1972, the time of the
acquired under Presidential Decree No. 27. In support of its position, LBP
effectivity of PD 27, ergo just compensation should be based on the value
of the property as of that time and not at the time of possession in 1993,
is likewise erroneous. In Office of the President, Malacaang, Manila v.
Court of Appeals, we ruled that the seizure of the land holding did not take
place on the date of effectivity of PD 27 but would take effect on the
payment of just compensation. Under the factual circumstances of this
case, the agrarian reform process is still incomplete as the just
compensation to be paid private respondents has yet to be settled.
Considering the passage of Republic Act No. 6657 (RA 6657) before the
completion of this process, the just compensation should be determined
and the process concluded under the said law. Indeed, RA 6657 is the
applicable law, with PD 27 and EO 228 having only suppletory effect,
conformably with our ruling in Paris v. Alfeche. The assailed September
28, 2007 Decision and March 14, 2008 Resolution of the Court of Appeals
in CA-G.R. SP No. 82467 are REVERSED and SET ASIDE for lack of factual
and legal basis. Agrarian Case No. 125-AF is REMANDED back to the RTC
of Cabanatuan City to determine the just compensation.

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