G.R. No.

141314 November 15, 2002

REPUBLIC OF THE PHILIPPINES, REPRESENTED BY ENERGY REGULATORY BOARD petitioner,
vs.
MANILA ELECTRIC COMPANY, respondent.
G.R. No. 141369 November 15, 2002
Facts:
The MERALCO filed with the energy Regulatory Body (ERB), an application for the revision of its rate
schedules. The application reflected an average increase of 21 centavos per kilowatthour (kwh) in its
distribution charge. The application also included a prayer for provisional approval of the increase pursuant to
Section 16(c) of the Public Service Act and Section 8 of Executive Order No. 172.
On January 28, 1994, the ERB issued an Order granting a provisional increase of P0.184 per kwh, subject to
the following condition. In the same Order, the ERB requested the Commission on Audit (COA) to conduct an
audit and examination of the books and other records of account of the applicant for such period of time and to
submit a copy thereof to the ERB immediately upon completion.
In February 1997, COA submitted its "COA Report" which contained, among others, the recommendation not
to include income taxes paid by MERALCO as part of its operating expenses for purposes of rate
determination and the use of the net average investment method for the computation of the proportionate
value of the properties used by MERALCO during the test year for the determination of the rate base.
Subsequently, the ERB rendered its decision adopting the above recommendations and authorized MERALCO
to implement a rate adjustment. The ERB held that income tax should not be treated as operating expense as
this should be borne by the stockholders who are recipients of the income or profits realized from the operation
of their business.
On appeal, the Court of Appeals set aside the ERB decision insofar as it directed the reduction of the
MERALCO rates by an average of P0.167 per kwh and the refund of such amount to MERALCO's customers
beginning February 1994 and until its billing cycle beginning February 1998. Separate Motions for
Reconsideration filed by the petitioners were denied by the Court of Appeals.
Issues:
1. Whether in ruling that income tax paid by MERALCO should be treated as part of its operating expenses
and thus considered in determining the amount of increase in rates imposed by MERALCO; and
2. Whether in rejecting the net average investment method used by the COA and the ERB, it should adopt the
average investment method used by MERALCO.
Held:
The regulation of rates to be charged by public utilities is founded upon the police powers of the State and
statutes prescribing rules for the control and regulation of public utilities are a valid exercise thereof.
When private property is used for a public purpose and is affected with public interest, it ceases to be juris
privati only and becomes subject to regulation. The regulation is to promote the common good. Submission to
regulation may be withdrawn by the owner by discontinuing use; but as long as use of the property is
continued, the same is subject to public regulation.
In regulating rates charged by public utilities, the State protects the public against arbitrary and excessive rates
while maintaining the efficiency and quality of services rendered. However, the power to regulate rates does
not give the State the right to prescribe rates which are so low as to deprive the public utility of a reasonable
return on investment. Thus, the rates prescribed by the State must be one that yields a fair return on the public
utility upon the value of the property performing the service and one that is reasonable to the public for the
services rendered. While the power to fix rates is a legislative function, whether exercised by the legislature
itself or delegated through an administrative agency, a determination of whether the rates so fixed are
reasonable and just is a purely judicial question and is subject to the review of the courts.
The ERB was created under Executive Order No. 172 to regulate, among others, the distribution of energy
resources and to fix rates to be charged by public utilities involved in the distribution of electricity. In the fixing
of rates, the only standard which the legislature is required to prescribe for the guidance of the administrative

authority is that the rate be reasonable and just.

In the cases at bar, findings and conclusions of the ERB on the rate that can be charged by MERALCO to the
public should be respected. The function of the court, in exercising its power of judicial review, is to determine
whether under the facts and circumstances, the final order entered by the administrative agency is unlawful or
unreasonable. The ERB correctly ruled that income tax should not be included in the computation of operating
expenses of a public utility. Accordingly, the burden of paying income tax should be Meralco's alone and should
not be shifted to the consumers by including the same in the computation of its operating expenses.
The principle behind the inclusion of operating expenses in the determination of a just and reasonable rate is to
allow the public utility to recoup the reasonable amount of expenses it has incurred in connection with the
services it provides. Under the "net average investment method," properties and equipment used in the
operation of a public utility are entitled to a return only on the actual number of months they are in service
during the period.
The petitions are granted but the decision of the Court of Appeals is reversed. Respondent Meralco is
authorized to adopt a rate adjustment in the amount of P0.017 per kilowatthour, effective with respect to
MERALCO's billing cycles beginning February 1994. Further, in accordance with the decision of the ERB dated
February 16, 1998, the excess average amount of P0.167 per kilowatt-hour starting with the applicant's billing
cycles beginning February 1998 is ordered to be refunded to MERALCO's customers or correspondingly
credited in their favor for future consumption.

itation. 116 U.S. 616, 6 S. Ct. 524, 29 L. Ed. 746 (1886)

Brief Fact Summary. Certain documents were requested by the government in connection with a
proceeding
regarding
fraud
to
avoid
paying
duties
on
certain
items.
Synopsis of Rule of Law. The Fourth Amendment of the United States Constitution (Constitution)
protects against the invasion into a persons private matters and will not allow the government to
compel a person to produce private papers through subpoena

Facts. Several cases of plate glass were confiscated from the defendants by federal customs agents
due to suspicion that certain documents had been falsified for the purposes of avoiding customs fees
or duties. During the course of the proceedings, the defendants were ordered by the judge to produce
documents showing the quantity and value of the shipments. The defendants protested under the
theory that they could not be compelled to produce evidence against themselves, but the motion was
overruled
and
judgment
was
entered
for
the
government.
Issue. Whether a compulsory production of a persons private papers to be used in evidence against
him in a judicial proceeding is an unreasonable search and seizure within the meaning of the Fourth
Amendment of the Constitution?

PACU vs Secretary of Education, 97 Phil 806 1955

G.R. No. L-5279 October 31, 1955

PHILIPPINE ASSOCIATION OF COLLEGES AND UNIVERSITIES, ETC
., petitioner,
vs.SECRETARY OF EDUCATION and the BOARD OF TEXTBOOKS,
respondents.
Manuel C. Briones, Vicente G. Sinco, Manuel V. Gallego and Enrique M. Fernando for
petitioner.Office of the Solicitor General Pompeyo Diaz and Assistant Solicitor General
Francisco Carreon for respondents
FACTS:The Philippine Association of Colleges and Universities made a petition that Acts
No.2706 othe
rwise known as the Act making the Inspection and Recognition of private schoolsand colleges
obligatory for the Secretary of Public Instruction and was amended by Act No.
3075 and Commonwealth Act No. 180 be declared unconstitutional on the grounds that 1) theact
deprives the owner of the school and colleges as well as teachers and parents of liberty
andproperty without due process of Law; 2) it will also deprive the parents of their Natural
Rightsand duty to rear their children for civic efficiency and 3) its provisions conferred on
theSecretary of Education unlimited powers and discretion to prescribe rules and
standardsconstitute towards unlawful delegation of Legislative powers

Antonio Araneta vs Judge Rafael Dinglasan

4 Phil. 368 Political Law First Emergency Powers Cases
Antonio Araneta is being charged for allegedly violating of Executive Order 62 which regulates rentals for
houses and lots for residential buildings. Judge Rafael Dinglasan was the judge hearing the case. Araneta
appealed seeking to prohibit Dinglasan and the Fiscal from proceeding with the case. He averred that EO
62 was issued by virtue of Commonwealth Act (CA) No. 671 which he claimed ceased to exist, hence, the
EO has no legal basis.
Three other cases were consolidated with this one. L-3055 which is an appeal by Leon Ma. Guerrero, a
shoe exporter, against EO 192 which controls exports in the Philippines; he is seeking to have permit
issued to him.

L-3054 is filed by Eulogio Rodriguez to prohibit the treasury from disbursing funds [from 49-50] pursuant
to EO 225.
L-3056 filed by Antonio Barredo is attacking EO 226 which was appropriating funds to hold the national
elections.
They all aver that CA 671, otherwise known as AN ACT DECLARING A STATE OF TOTAL EMERGENCY
AS A RESULT OF WAR INVOLVING THE PHILIPPINES AND AUTHORIZING THE PRESIDENT TO
PROMULGATE RULES AND REGULATIONS TO MEET SUCH EMERGENCY or simply the Emergency
Powers Act, is already inoperative and that all EOs issued pursuant to said CA had likewise ceased.
ISSUE: Whether or not CA 671 has ceased.
HELD: Yes. CA 671, which granted emergency powers to the president, became inoperative ex proprio
vigore when Congress met in regular session on May 25, 1946, and that Executive Orders Nos. 62, 192,
225 and 226 were issued without authority of law. In setting the first regular session of Congress instead
of the first special session which preceded it as the point of expiration of the Act, the SC is giving effect to
the purpose and intention of the National Assembly. In a special session, the Congress may consider
general legislation or only such subjects as he (President) may designate. Such acts were to be good
only up to the corresponding dates of adjournment of the following sessions of the Legislature, unless
sooner amended or repealed by the National Assembly. Even if war continues to rage on, new legislation
must be made and approved in order to continue the EPAs, otherwise it is lifted upon reconvening or upon
early repeal.

LAUREL V. GARCIA
187 SCRA 797

FACTS:
The subject Roppongi property is one of the properties acquired by the
Philippines from Japan pursuant to a Reparations Agreement. The property is where
the Philippine Embassy was once located, before it transferred to the Nampeidai
property. It was decided that the properties would be
available to sale or disposition. One of the first properties opened up for public
auction was the Roppongi property, despite numerous oppositions from different
sectors.

HELD:
The Roppongi property was acquired together with the other properties through
reparation agreements. They were assigned to the government sector and that
the Roppongi property was specifically designated under the agreement to house
the Philippine embassy.

It is of public dominion unless it is convincingly shown that the property has

become patrimonial. The respondents have failed to do so.
As property of public dominion, the Roppongi lot is outside the commerce of man. It
cannot be alienated. Its ownership is a special collective ownership for general
use and payment, in application to the satisfaction of collective needs, and resides
in the social group. The purpose is not to serve the State as the juridical person
but the citizens; it is intended for the common and public welfare and cannot be the
object of appropriation.
The fact that the Roppongi site has not been used for a long time for actual Embassy
service doesnt automatically convert it to patrimonial property. Any such
conversion happens only if the property is withdrawn from public use. A property
continues to be part of the public domain, not available for
private appropriation or ownership until there is a formal declaration on the part of the
government to withdraw it from being such.

MMDA vs BAVA 328 SCRA 836

Facts: Metropolitan Manila Development Authority (MMDA), petitioner
herein, is a Government Agency tasked with the delivery of basic services in
Metro Manila. Bel-Air Village Association (BAVA), respondent herein, received
a letter of request from the petitioner to open Neptune Street of Bel-Air
Village for the use of the public. The said opening of Neptune Street will be
for the safe and convenient movement of persons and to regulate the flow
of traffic in Makati City. This was pursuant to MMDA law or Republic Act No.
7924. On the same day, the respondent was appraised that the perimeter
wall separating the subdivision and Kalayaan Avenue would be demolished.
The respondent, to stop the opening of the said street and demolition of the
wall, filed a preliminary injunction and a temporary restraining order.
Respondent claimed that the MMDA had no authority to do so and the lower
court decided in favor of the Respondent. Petitioner appealed the decision
of the lower courts and claimed that it has the authority to open Neptune
Street to public traffic because it is an agent of the State that can practice

police power in the delivery of basic services in Metro Manila.

Issue: Whether or not the MMDA has the mandate to open Neptune Street
to public traffic pursuant to its regulatory and police powers.
Held: The Court held that the MMDA does not have the capacity to exercise
police power. Police power is primarily lodged in the National Legislature.
However, police power may be delegated to government units. Petitioner
herein is a development authority and not a political government unit.
Therefore, the MMDA cannot exercise police power because it cannot be
delegated to them. It is not a legislative unit of the government. Republic
Act No. 7924 does not empower the MMDA to enact ordinances, approve
resolutions and appropriate funds for the general welfare of the inhabitants
of Manila. There is no syllable in the said act that grants MMDA police
power. It is an agency created for the purpose of laying down policies and
coordinating with various national government agencies, peoples
organizations, non-governmental organizations and the private sector for
the efficient and expeditious delivery of basic services in the vast
metropolitan area.
ACEBEDO OPTICAL CO. INC VS CA 329 SCRA 314
Facts: Acebedo Optical applied for a business permit to operate in Iligan
City. After hearing the sides of local optometrists, Mayor Cabili of Iligan
granted the permit but he attached various special conditions which
basically made Acebedos dependent upon prescriptions to be issued by
local optometrists. Acebedo is not allowed to practice optometry within the
city. Acebedo however acquiesced to the said conditions and operated
under the permit. Later, Acebedo was charged for violating the said
conditions and was subsequently suspended from operating within Iligan.
Acebedo then assailed the validity of the attached conditions. The local
optometrists argued that Acebedo is estopped in assailing the said
conditions because it acquiesced to the same and that the imposition of the
special conditions is a valid exercise of police power; that such conditions
were entered upon by the city in its proprietary function hence the permit is
actually a contract.
ISSUE: Whether or not the special conditions attached by the mayor is a
valid exercise of police power.
HELD: NO. Acebedo was applying for a business permit to operate its
business and not to practice optometry (the latter being within the
jurisdiction PRC Board of Optometry). The conditions attached by the mayor
is ultra vires hence cannot be given any legal application therefore estoppel
does not apply. It is neither a valid exercise of police power. Though the
mayor can definitely impose conditions in the granting of permits, he must
base such conditions on law or ordinances otherwise the conditions are ultra
vires. Lastly, the granting of the license is not a contract, it is a special
privilege estoppels does not apply.

Binay vs Domingo
Facts: On September 27, 1988, petitioner Municipality, through its Council,
approved Resolution No. 60 (A resolution to confirm and/or ratify the
ongoing burial assistance program extending P500 to a bereaved family,
funds to be taken out of unappropriated available funds existing in the
municipal treasury.) Metro Manila Commission approved Resolution No. 60.
Thereafter, the municipal secretary certified a disbursement fired of
P400,000 for the implementation of the program. However, COA
disapproved Resolution 60 and disallowed in audit the disbursement of
funds. COA denied the petitioners reconsideration as Resolution 60has no
connection or relation between the objective sought to be attained and the
alleged public safety, general welfare, etc of the inhabitant of Makati. Also,
the Resolution will only benefit a few individuals. Public funds should only be
used for public purposes.
Issue: WON Resolution No. 60, re-enacted under Resolution No. 243, of the
Municipality of Makati is a valid exercise of police power under the general
welfare clause
Held: Yes, The police power is a governmental function, an inherent
attribute of sovereignty, which was born with civilized government. It is
founded largely on the maxims, "Sic utere tuo et ahenum non laedas and
"Salus populi est suprema lex Itsfundamental purpose is securing the
general welfare, comfort and convenience of the people. Police power is
inherent in the state but not in municipal corporations).Before a municipal
corporation may exercise such power, there must be a valid delegation of
such power by the legislature which is the repository of the inherent powers
of the State. A valid delegation of police power may arise from express
delegation, or be inferred from the mere fact of the creation of the
municipal corporation; and as a general rule, municipal corporations may
exercise police powers within the fair intent and purpose of their creation which are
reasonably proper to give effect to the powers expressly granted, and
statutes conferring powers on public corporations have been construed as
empowering them to do the things essential to the enjoyment of life and
desirable for the safety of the people. Municipal governments exercise this
power under the general welfare clause: pursuant thereto they are clothed
with authority to "enact such ordinances and issue such regulations as may
be necessary to carry out and discharge the responsibilities conferred upon
it by law, and such as shall be necessary and proper to provide for the
health, safety, comfort and convenience, maintain peace and order,
improve public morals, promote the prosperity and general welfare of the
municipality and the inhabitants thereof, and insure the protection of
property therein." And under Section 7 of BP 337, "every local government
unit shall exercise the powers expressly granted, those necessarily implied
there from, as well

ROXAS & co. vs CA 321 scra 106

FACTS:
This case involves three (3) haciendas in Nasugbu, Batangas owned by
petitioner and the validity of the acquisition of these haciendas by the
government under Republic Act No. 6657, the Comprehensive Agrarian
Reform Law of 1988.Petitioner Roxas & Co. is a domestic corporation and is
the registered owner of three haciendas, namely, Haciendas Palico, Banilad
and Caylaway, all located in the Municipality of Nasugbu, Batangas.
On July 27, 1987, the Congress of the Philippines formally convened
and took over legislative power from the President. T h i s C o n g re s s
p a s s e d Re p u b l i c Ac t N o. 6 6 5 7 , t h e Comprehensive Agrarian Reform
Law (CARL) of 1988. The Act was signed by the President on June 10, 1988
and took effect on June 15, 1988.Before the law's effectivity, on May 6,
1988, petitioner filed with respondent DAR a voluntary offer to sell Hacienda
Caylaway pursuant to the provisions of E.O. No. 229. Haciendas Palico
and Banilad were later placed under compulsory acquisition by
respondent DAR in accordance with the CARL., petitioner applied with the
DAR for conversion of Haciendas Palico and Banilad from agricultural to nonagricultural lands under the provisions of the CARL.
On July 14, 1993, petitioner sent a letter to the DAR Regional Director
reiterating its request for conversion of the two haciendas. Despite
petitioner's application for conversion, respondent DAR proceeded with the
acquisition of the two Haciendas. The LBP trust accounts as compensation
for Hacienda Palico were replaced by respondent DAR with cash and LBP
bonds. On October 22, 1993, from the mother title of TCT No. 985 of the
Hacienda, respondent DAR registered Certificate of Land Ownership
Award(CLOA) No. 6654. On October 30, 1993, CLOA's were distributed to
farmer beneficiaries. On August 6, 1992, petitioner, through its President,
Eduardo J. Roxas, sent a letter to the Secretary of respondent DAR
withdrawing its VOS (voluntary offer to sell) of Hacienda Caylaway. The
Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the
reclassification of Hacienda Caylaway from agricultural to non-agricultural.
As a result, petitioner informed respondent DAR that it was applying for
conversion of Hacienda Caylaway from agricultural to other uses.
In a letter dated September 28, 1992, respondent DAR Secretary informed
petitioner that a reclassification of the land would not exempt it from
agrarian reform. Respondent Secretary also denied petitioner's
withdrawal of the VOS on the ground that withdrawal could only be
based on specific grounds such as unsuitability of the soil for agriculture, or
if the slope of the land is over 18 degrees and that the land is undeveloped.
Despite the denial of the Voluntary Offer to sell withdrawal of Hacienda
Caylaway, on May 11, 1993, petitioner filed its application for conversion of
both Haciendas Palico and Banilad. , through its President, Eduardo Roxas,
reiterated its request to withdraw the VOS over Hacienda Caylaway in light

of the following:1) Certification issued by Conrado I. Gonzales, Officer-inCharge, Department of Agriculture, Region 4, 4th Floor, ATI (BA) Bldg.,
Diliman, Quezon City dated March 1, 1993 stating that the lands subject of
referenced titles "are not feasible and economically sound for further
agricultural development.2) Resolution No. 19 of the Sangguniang Bayan of
Nasugbu, Batangas approving the Zoning Ordinance reclassifying areas
covered by the referenced titles to non-agricultural which was enacted after
extensive consultation with government agencies, including [the
Department of Agrarian Reform], and the requisite public hearings.3)
Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated
March 8, 1993 approving the Zoning Ordinance enacted by the Municipality
of Nasugbu.4) Letter dated December 15, 1992 issued by Reynaldo U.
Garcia of the Municipal Planning & Development, Coordinator and
Deputized Zoning Administrator addressed to Mrs. Alicia P. Logarta
advising that the Municipality of Nasugbu, Batangas has no objection
to the conversion of the lands subject of referenced titles to nonagricultural. Petitioner alleged that the Municipality of Nasugbu, where the
haciendas are located, had been declared a tourist zone, that the land is not
suitable for agricultural production, and that the Sangguniang Bayan of
Nasugbu had reclassified the land to non-agricultural..Petitioner urges the
Court to take cognizance of the conversion proceedings and rule accordingly
ISSUE:
WON the courts are in a better position to resolve petitioner's application for
conversion of land.
HELD :
NO. Respondent DAR is in a better position to resolve petitioner's application
for conversion, being primarily the agency possessing the necessary
expertise on the matter The DAR's mandate over applications for conversion
was first laid down in Section 4 (j) and Section 5 (l) of Executive Order No.
129-A, Series of 1987 and reiterated in the CARL and Memorandum Circular
No. 54, Series of 1993 of the Office of the President. The DAR's jurisdiction
over applications for conversion is provided as follows:
A. The Department of Agrarian Reform (DAR) is mandated to "approve or
disapprove applications for conversion, restructuring or readjustment of
agricultural lands into non-agricultural uses," pursuant to Section 4 (j) of
Executive Order No. 129-A, Series of 1987.
B. Sec. 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR, exclusive
authority to approve or disapprove applications for conversion of
agricultural lands for residential, commercial, industrial and other land uses.
C. Sec. 65 of R.A. No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law of 1988, likewise empowers the DAR to authorize
under certain conditions, the conversion of agricultural lands.
D. Sec. 4 of Memorandum Circular No. 54, Series of 1993 of the Office of the
President, provides that "action on applications for land use conversion on
individual landholdings shall remain as the responsibility of the DAR, which
shall utilize as its primary reference ,documents on the comprehensive land
use plans and accompanying ordinances passed upon and approved by the
local government units concerned, together with the National Land Use
Policy, pursuant to R.A. No. 6657 and E.O. No. 129-A.
Applications for conversion were initially governed by DAR A.O. No.
1, Series of 1990 entitled "Revised Rules and Regulations Governing

Conversion of Private Agricultural Lands and Non-Agricultural Uses," and

DAR A.O. No. 2, Series of 1990 entitled "Rules o f Pro c e d u re G o v e rn i n g
t h e Pro c e s s i n g a n d A p p ro v a l o f A p p l i c a t i o n s f o r L a n d U s e
C o n v e r s i o n . " T h e s e A. O. ' s a n d o t h er i m p l e m e n t i n g g u i d e l i n e s ,
i n c l u d i n g Pre s i d e n t i a l i s s u a n c e s a n d n a t i o n a l p o l i c i e s re l a t e d
t o l a n d u s e c o n v e r s i o n h a v e b e e n consolidated in DAR A.O. No. 07,
Series of 1997. Under this recent issuance, the guiding principle in land use
conversion is:
to preserve prime agricultural lands for food production while, at the same
time, recognizing the need of the other sectors of society(housing,
industry and commerce) for land, when coinciding with the
objectives of the Comprehensive Agrarian Reform Law to promote
social justice, industrialization and the optimum use of land as a national
resource for public welfare. "Land Use" refers to the manner of utilization of
land, including its allocation, development and management. "Land Use
Conversion" refers to the act or process of changing the current use of a
piece of agricultural land into some other use as approved by the DAR. The
conversion of agricultural land to uses other than agricultural requires field
investigation and conferences with the occupants of the land. They involve
factual findings and highly technical matters within the special training and
expertise of the DAR. DAR A.O. No. 7, Series of 1997 lays down with
specifi city how the DAR must go about its task. This time, the fi eld
investigation is not conducted by the MARO but by a special task
force, known as the Center for Land Use Policy Planning and
Implementation (CLUPPI-DAR Central Office). The procedure is that once
an application for conversion is filed, the CLUPPI prepares the Notice
of Posting. The MARO only posts the notice and thereafter issues a
certificate to the fact of posting. The CLUPPI conducts the field investigation
and dialogues with the applicants and the farmer beneficiaries to ascertain
the information necessary for the processing of the application. The
Chairman of the CLUPPI deliberates on the merits of the investigation report
and recommends the appropriate action. This recommendation is
transmitted to the Regional Director, thru the Undersecretary, or
Secretary of Agrarian Reform. Applications involving more than fifty
hectares are approved or disapproved by the Secretary. The procedure does
not end with the Secretary, however. The Order provides that the
decision of the Secretary may be appealed to the Offi ce of the
President or the Court of Appeals, as the case may be, viz :Appeal from
the decision of the Undersecretary shall be made to the Secretary, and from
the Secretary to the Office of the President o r th e C o u r t o f A p p e a l s a s
t h e c a s e m a y b e. T h e m o d e o f a p p e a l / m o t i o n f o r
re c o n s i d e r a t i o n , a n d t h e a p p e a l f e e , f ro m Undersecretary to the
Office of the Secretary shall be the same as that of the Regional Director to
the Office of the Secretary.
Indeed, the doctrine of primary jurisdiction does not warrant a court
to arrogate unto itself authority to resolve a controversy
the jurisdiction over which is initially lodged with an administrative body of
special competence. Respondent DAR is in a better position to resolve
petitioner's application for conversion, being primarily the agency
possessing the necessary expertise on the matter. The power to determine
whether Haciendas Palico, Banilad and Caylaway are non-agricultural,
hence, exempt from the coverage of the CARL lies with the DAR, not with
this Court.

MARTIN CENTENO, vs. HON. VICTORIA VILLALON-PORNILLOS

236 SCRA 197
Facts: The officers of a group of elderly men of a civic organization known
as the Samahang Katandaan ng Nayon ng Tikay launched a fund drive for
the purpose of renovating the chapel of Barrio Tikay, Malolos, Bulacan.
Martin Centeno, the chairman of the group, approached Judge Adoracion G.
Angeles, a resident of Tikay, and solicited from her a contribution of
P1,500.00. It is admitted that the solicitation was made without a permit
from the Department of Social Welfare and Development. As a
consequence, an information was filed against Centeno, for violation of PD
No. 1564 or the Solicitation Permit Law. Centeno filed a motion to quash the
information on the ground that the facts alleged therein do not constitute an
offense, claiming that PD No. 1564 only covers solicitations made for
charitable or public welfare purposes, but not those made for a religious
purpose such as the construction of a chapel.
Issue: Should the phrase "charitable purposes" be construed in its broadest
sense so as to include a religious purpose?
Ruling: No and that legislative enactments specifically spelled out
"charitable" and "religious" in an enumeration, whereas Presidential Decree
No. 1564 merely stated "charitable or public welfare purposes," only goes to
show that the framers of the law in question never intended to include
solicitations for religious purposes within its coverage. Otherwise, there is
no reason why it would not have so stated expressly.
Solicitation for religious purposes may be subject to proper regulation by the
State in the exercise of police power. However, in the case at bar,
considering that solicitations intended for a religious purpose are not within
the coverage of Presidential Decree No. 1564, as earlier demonstrated,
petitioner cannot be held criminally liable therefor and therefore acquitted.

Del Mar v. PAGCOR

G. R. 138298 (August 24, 2001)
FACTS: Respondents sought a clarification of the issues raised in their
motion for reconsideration, namely:
a. whether PAGCOR itself has a valid franchise to conduct jai-alai games,
b. whether PAGCOR can operate, maintain or manage jai-alai games in
association with BELLE and FILGAME
HELD:

The court ruled that only PAGCOR alone possesses a valid franchise to
operate, maintain and/or manage jai-alai games. PAGCOR may not operate
jai-alai games in association with BELLE and FILGAME.

Eminent Domain
Heirs of Suguitan v City of Mandaluyong
FACTS: The Sangguniang Panglungsod of Mandaluyong City issued a
resolution authorizing Mayor Abalos to institute expropriation proceedings
over the property of Suguitan. The city filed a complaint for expropriation
when Suguitan refused to sell the property. The city later assumed
possession of the property by virtue of a writ of possession issued by the
trial court. The court later issued an order of expropriation. Petitioners argue
that the local government units delegated power of eminent domain must
be exercised through the issuance of an ordinance, not by mere resolution.

HELD: The law may delegate the power of eminent domain to local
government units that shall exercise the same through an ordinance. The
local government unit failed to comply with this requirement when they
exercised their power of eminent domain through a resolution. The Local
Government Codes requirement of an ordinance prevails over the
Implementing Rules and Regulations requiring the issuance of a resolution.

Paranaque vs VM Reality
Facts: Petitioner sought to exercise its power of eminent domain based on
a resolution by the municipal council. Petitioner cites a previous case
wherein a resolution gave authority to exercise eminent domain. Petitioner
also relies on the Implementing Rules, which provides that a resolution
authorizes a Local Government Unit to exercise eminent domain.
Issue: Whether or Not an LGU can exercise its power of eminent domain
pursuant to a resolution by its law-making body.
Held: Under Section 19, of the present Local Government Code (RA 7160),
it is stated as the first requisite that LGUs can exercise its power of eminent
domain if there is an ordinance enacted by its legislative body enabling the
municipal chief executive. A resolution is not an ordinance, the former is
only an opinion of a law-making body, the latter is a law. The case cited by
Petitioner involves BP 337, which was the previous Local Government Code,
which is obviously no longer in effect. RA 7160 prevails over the
Implementing Rules, the former being the law itself and the latter only an
administrative rule which cannot amend the former.

Telebap vs Comelec
Facts: Petitioner Telecommunications and Broadcast Attorneys of the
Philippines, Inc. (TELEBAP) is an organization of lawyers of radio and
television broadcasting companies. It was declared to be without legal
standing to sue in this case as, among other reasons, it was not able to
show that it was to suffer from actual or threatened injury as a result of the
subject law. Petitioner GMA Network, on the other hand, had the requisite
standing to bring the constitutional challenge. Petitioner operates radio and
television broadcast stations in the Philippines affected by the enforcement
of Section 92, B.P. No. 881.
Petitioners challenge the validity of Section 92, B.P. No. 881 which provides:
Comelec Time- The Commission shall procure radio and television time to
be known as the Comelec Time which shall be allocated equally and
impartially among the candidates within the area of coverage of all radio
and television stations. For this purpose, the franchise of all radio
broadcasting and television stations are hereby amended so as to provide
radio or television time, free of charge, during the period of campaign.
Petitioner contends that while Section 90 of the same law requires COMELEC
to procure print space in newspapers and magazines with payment, Section
92 provides that air time shall be procured by COMELEC free of charge. Thus
it contends that Section 92 singles out radio and television stations to
provide free air time.
Petitioner claims that it suffered losses running to several million pesos in
providing COMELEC Time in connection with the 1992 presidential election
and 1995 senatorial election and that it stands to suffer even more should it
be required to do so again this year. Petitioners claim that the primary
source of revenue of the radio and television stations is the sale of air time
to advertisers and to require these stations to provide free air time is to
authorize unjust taking of private property. According to petitioners, in 1992
it lost P22,498,560.00 in providing free air time for one hour each day and,
in this years elections, it stands to lost P58,980,850.00 in view of
COMELECs requirement that it provide at least 30 minutes of prime time
daily for such.
Issues:
(1) Whether of not Section 92 of B.P. No. 881 denies radio and television
broadcast companies the equal protection of the laws.
(2) Whether or not Section 92 of B.P. No. 881 constitutes taking of property
without due process of law and without just compensation.
Held: Petitioners argument is without merit. All broadcasting, whether
radio or by television stations, is licensed by the government. Airwave
frequencies have to be allocated as there are more individuals who want to

broadcast that there are frequencies to assign. Radio and television

broadcasting companies, which are given franchises, do not own the
airwaves and frequencies through which they transmit broadcast signals
and images. They are merely given the temporary privilege to use them.
Thus, such exercise of the privilege may reasonably be burdened with the
performance by the grantee of some form of public service. In granting the
privilege to operate broadcast stations and supervising radio and television
stations, the state spends considerable public funds in licensing and
supervising them.
The argument that the subject law singles out radio and television stations
to provide free air time as against newspapers and magazines which require
payment of just compensation for the print space they may provide is
likewise without merit. Regulation of the broadcast industry requires
spending of public funds which it does not do in the case of print media. To
require the broadcast industry to provide free air time for COMELEC is a fair
exchange for what the industry gets. As radio and television broadcast
stations do not own the airwaves, no private property is taken by the
requirement that they provide air time to the COMELEC.

Taxation
Philex Mining vs CIR
Facts: From July 1, 1980 to December 31, 1981, Philex Mining Corp.
purchased from several oil companies, refined and manufactured minerals,
motor fuels, and diesel fuel oils. Specific taxes of P2,492,677.22 were paid.
On October 22, 1982, the company availed of the provisions of RA 1435
granting refund of 25% of the tax paid and provided proof of the use of the
oils, as required. Pending such claim for refund (P623,169.30 representing
the 25%) with the CIR, the company filed another claim for refund with the
same amount plus 20% interest thereon with the CTA on November 16,
1982. The CTA granted the refund but only P16,747.36 which was based on
the amount deemed paid under Sections 1 & 2 of RA 1435. Philex contends
the refund should be based on the actual specific taxes paid as per the
increased rates provided in Sections 142 and 145 (which became Sections
153 and 156) of the NIRC.
Held: CTA is incorrect. In 1977, PD 1158 codified all existing laws. Sections
142 and 145 of the Tax Code, as amended by Sections 1 and 2 of RA 1435
were re-numbered to Sections 153 and 156. Later, these sections were
amended by PD 1672 and subsequently by EO 672 increasing the tax rates
for certain oil and fuel products. In effect, the reason for the refund ceased
to exist. (The purpose of the tax was for Highway Special Fund which was
abolished in 1985). SC affirmed therefore the decision of the CA & CTA that
the basis of tax refund under RA 1435 is computed on the basis of the
specific tax deemed paid under Sections 1 & 2 and not the increased rates
actually paid under the 1977 NIRC, citing several cases in support thereof.

Further, although Philex paid the taxes on their oil and fuel purchases based
on the increased rates, the latter law did not specifically provide for a refund
based on the increased rates. Since the grant of refund privileges must be
strictly construed against the taxpayer, the basis for the refund remains to
be the amounts deemed paid under Sections 1 and 2 of RA 1435. Also, there
is no merit to petitioners assertion that equity and justice demands that
the computation for tax refunds be based on actual amounts paid under
Sections 153 and 156 of the NIRC, there being no tax exemption solely on
the ground of equity.
SC finally held: The rule is that no interest on refund of tax can be awarded
unless authorized by law of the collection of the tax was attended by
arbitrariness. An action is not arbitrary when exercised honestly and upon
due consideration where there is room for two opinions, however much of it
may be believed that an erroneous conclusion was reached. Arbitrariness
presupposes inexcusable or obstinate disregard of legal provisions. None of
the exceptions are presents in this case. Respondents decision was based
on an honest interpretation of the law. We see no reason why there should
be payment of interest.

CIR vs CA 1998
Facts: Private respondent YMCA is a non-stock, non-profit institution, which
conducts various programs and activities that are beneficial to the public,
especially the young people, pursuant to its religious, educational and
charitable objectives. YMCA earned an income from leasing out a portion of
its premises to small shop owners and from parking fees collected from nonmembers. The Commissioner of Internal Revenue (CIR) issued an
assessment for deficiency income tax, deficiency expanded withholding
taxes on rentals and professional fees and deficiency withholding tax on
wages. YMCA protested the assessment.
Issue: Whether or not the income of private respondent YMCA from rentals
of small shops and parking fees is exempt from taxation
Held: YMCA argues that Art. VI, Sec. 28(3) of the Constitution exempts
charitable institutions from the payment not only of property taxes but also
of income tax from any source. The Court is not persuaded. The debates,

interpellations and expressions of opinion of the framers of the Constitution

reveal their intent. Justice Hilario Davide Jr., a former constitutional
commissioner, stressed during the Concom debate that what is exempted is
not the institution itself; those exempted from real estate taxes are lands,
buildings and improvements actually, directly and exclusively used for
religious, charitable or educational purposes. Fr. Joaquin Bernas, an eminent
authority on the Constitution and also a member of the Concom, adhered to
the same view that the exemption created by said provision pertained only
to property taxes. In his treatise on taxation, Justice Jose Vitug concurs,
stating that the tax exemption covers property taxes only. Indeed, the
income tax exemption claimed by YMCA finds no basis in Art. VI, Sec. 28(3)
of the Constitution.
YMCA also invokes Art. XIV, Sec. 4(3) of the Constitution claiming that YMCA
is a non-stock, non-profit educational institution whose revenues and assets
are used actually, directly and exclusively for educational purposes so it is
exempt from taxes on its properties and income. The Court reiterates that
YMCA is exempt from the payment of property tax, but not income tax on
the rentals from its property. The bare allegation alone that it is a non-stock,
non-profit educational institution is insufficient to justify its exemption from
the payment of income tax. Laws allowing tax exemption are construed
strictissimi juris. Hence, for the YMCA to be granted the exemption it claims
under the aforecited provision, it must prove with substantial evidence that:
1. it falls under the classification non-stock, non-profit educational
institution; and 2. the income it seeks to be exempted from taxation is used
actually, directly and exclusively for educational purposes. However, the
Court notes that not a scintilla of evidence was submitted by YMCA to prove
that it met the said requisites.
YMCA is not an educational institution within the purview of Art. XIV, Sec.
4(3) of the Constitution. The term educational institution, when used in
laws granting tax exemptions, refers to a school, seminary, college or
educational establishment. Therefore, YMCA cannot be deemed one of the
educational institutions covered by the said constitutional provision.
Moreover, the Court notes that YMCA did not submit proof of the
proportionate amount of the subject income that was actually, directly and
exclusively used for educational purposes.

CHAVEZ vs PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT

Facts:-Petitioner Francisco I Chavez (in his capacity as taxpayer, citizen and a
former government official) initiated this original action seeking(1) to

prohibit and enjoin respondents [PCGG and its chairman] from privately
entering into, perfecting and/or executing any agreement with the heirs of
the late President Ferdinand E. Marcos . . . relating to and concerning the
properties and assets of Ferdinand Marcos located in the Philippines and/or
abroad including the so-called Marcos gold hoard"; and(2) to compel
respondent[s] to make public all negotiations and agreement, be they
ongoing or perfected, and all documents related to or relating to such
negotiations and agreement between the PCGG and the Marcos heirs."Chavez is the same person initiated the prosecution of the Marcoses and
their cronies who committed unmitigated plunder of the public treasury and
the systematic subjugation of the country's economy; he says that what
impelled him to bring this action were several news reports bannered in a
number of broadsheets sometime in September 1997. These news items
referred to (1) the alleged discovery of billions of dollars of Marcos assets
deposited in various coded accounts in Swiss banks; and (2) the reported
execution of a compromise, between the government (through PCGG) and
the Marcos heirs, on how to split or share these assets.-PETITIONER
DEMANDS that respondents make public any and all negotiations and
agreements pertaining to PCGG's task of recovering the Marcoses' ill-gotten
wealth. He claims that any compromise on the alleged billions of ill-gotten
wealth involves an issue of "paramount public interest," since it has a
"debilitating effect on the country's economy" that would be greatly
prejudicial to the national interest of the Filipino people. Hence, the people
in general have a right to know the transactions or deals being contrived
and effected by the government.-RESPONDENT ANSWERS that they do not
deny forging a compromise agreement with the Marcos heirs. They claim,
though, that petitioner's action is premature, because there is no showing
that he has asked the PCGG to disclose the negotiations and the
Agreements. And even if he has, PCGG may not yet be compelled to make
any disclosure, since the proposed terms and conditions of the Agreements
have not become effective and binding.-PETITIONER INVOKES
Sec. 7 [Article III]. The right of the people to information on matters of public
concern shall be recognized. Access to official records, and to documents,
and papers pertaining to official acts, transactions, or decisions, as well as
to government research data used as basis for policy development, shall be
afforded the citizen, subject to such limitations as may be provided by law.
Sec. 28 [Article II]. Subject to reasonable conditions prescribed by law, the
State adopts and implements a policy of full public disclosure of all its
transactions involving public interest
-RESPONDENT ANSWERS that the above constitutional provisions refer to
completed and operative official acts, not to those still being considered.
Issue: Whether or not the Court could require the PCGG to disclose to the
public the details of any agreement, perfected or not, with the Marcoses.
Ruling: WHEREFORE, the petition is GRANTED. The General and
Supplemental Agreement dated December 28, 1993, which PCGG and the
Marcos heirs entered into are hereby declared NULL AND VOID for being
contrary to law and the Constitution. Respondent PCGG, its officers and all
government functionaries and officials who are or may be directly ot
indirectly involved in the recovery of the alleged ill-gotten wealth of the
Marcoses and their associates are DIRECTED to disclose to the public the
terms of any proposed compromise settlement, as well as the final

agreement, relating to such alleged ill-gotten wealth, in accordance with the

discussions embodied in this Decision. No pronouncement as to cost.
RD:The "information" and the "transactions" referred to in the subject
provisions of the Constitution have as yet no defined scope and extent.
There are no specific laws prescribing the exact limitations within which the
right may be exercised or the correlative state duty may be obliged.
However, the following are some of the recognized restrictions:(1) national
security matters and intelligence information- there is a governmental
privilege against public disclosure with respect to state secrets regarding
military, diplomatic and other national security matters. 24 But where there
is no need to protect such state secrets, the privilege may not be invoked to
with hold documents and other information, 25 provided that they are
examined "in strict confidence" and given "scrupulous protection."(2) trade
secrets and banking transactions-trade or industrial secrets (pursuant to the
Intellectual Property Code 27 and other related laws) as well as banking
transactions (pursuant to the Secrecy of Bank Deposits Act 28)are also
exempted from compulsory disclosure(3) criminal matters- Also excluded are
classified law enforcement matters, such as those relating to the
apprehension, the prosecution and the detention of criminals, which courts
neither may nor inquire into prior to such arrest, detention and prosecution.
Efforts at effective law enforcement would be seriously jeopardized by free
public access to, for example, police information regarding rescue
operations, the whereabouts of fugitives, or leads on covert criminal
activities.(4) other confidential information.
The Ethical Standards Act 31 further prohibits public officials and employees
from using or divulging "confidential or classified information officially
known to them by reason of their office and not made available to the
public." Other acknowledged limitations to information access include
diplomatic correspondence, closed door Cabinet meetings and executive
sessions of either house of Congress, as well as the internal deliberations of
the Supreme Court.
-In Valmonte v. Belmonte Jr., the Court emphasized that the information
sought must be" matters of public concern," access to which may be limited
by law. Similarly, the state policy of full public disclosure extends only to
"transactions involving public interest" and may also be" subject to
reasonable conditions prescribed by law."- As to the meanings of the terms
"public interest" and "public concern," the Court, in Legaspi v. Civil Service
Commission, elucidated: In determining whether or not a particular
information is of public concern there is no rigid test which can be applied.
Public concern" like "public interest" is a term that eludes exact definition.
Both terms embrace a broad spectrum of subjects which the public may
want to know, either because these directly affect their lives, or simply
because such matters naturally arouse the interest of an ordinary citizen. In
the final analysis, it is for the courts to determine on a case by case basis
whether the matter at issue is of interest or importance, as it relates to or
affects the public.-As to whether or not the above cited constitutional
provisions guarantee access to information regarding ongoing negotiations
or proposals prior to the final agreement, this same clarification was sought
and clearly addressed by the constitutional commissioners during their deliberations,
MR. SUAREZ. And when we say "transactions" which should be distinguished
from contracts, agreements, or treaties or whatever, does the Gentleman

refer to the steps leading to the consummation of the contract, or does he

refer to the contract itself? MR. OPLE. The "transactions" used here, I
suppose, is generic and, therefore, it can cover both steps leading to a
contract, and already a consummated contract, Mr. Presiding Officer.MR.
SUAREZ. This contemplates inclusion of negotiations leading to the
consummation of the transaction? MR. OPLE. Yes, subject to reasonable
safeguards on the national interest.
- Considering the intent of the Constitution, the Court believes that it is
incumbent upon the PCGG and its officers, as well as other government
representatives, to disclose sufficient public information on any proposed
settlement they have decided to take up with the ostensible owners and
holders of ill-gotten wealth. Such information, though, must pertain to
definite propositions of the government, not necessarily to intra-agency or
inter-agency recommendations or communications during the stage when
common assertions are still in the process of being formulated or are in the
"exploratory" stage. There is a need, of course, to observe the same
restrictions on disclosure of information in general, as discussed above
such as on matters involving national security, diplomatic or foreign
relations, intelligence and other classified information.