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Tablarin v.

Gutierrez (J) [GR 78164, 31 July 1987] En Banc, Feliciano (J): 13


concur

Facts: Teresita Tablarin, Ma. Luz Ciriaco, Ma. Nimfa B. Rovira, and Evangelina S.
Labao sought admission into colleges or schools of medicine for the school
year 1987-1988. However, they either did not take or did not successfully take
the National Medical Admission Test (NMAT) required by the Board of Medical
Education and administered by the Center for Educational Measurement (CEM).
On 5 March 1987, Tablarin, et. al., in behalf of applicants for admission into the
Medical Colleges who have not taken up or successfully hurdled the NMAT, filed
with the Regional Trial Court (RTC), National Capital Judicial Region, a Petition
for Declaratory Judgment and Prohibition with a prayer for Temporary
Restraining Order (TRO) and Preliminary Injunction, to enjoin the Secretary of
Education, Culture and Sports, the Board of Medical Education and the Center
for Educational Measurement from enforcing Section 5 (a) and (f) of Republic
Act 2382, as amended, and MECS Order 52 (series of 1985), dated 23 August
1985 [which established a uniform admission test (NMAT) as an additional
requirement for issuance of a certificate of eligibility for admission into medical
schools of the Philippines, beginning with the school year 1986-1987] and from
requiring the taking and passing of the NMAT as a condition for securing
certificates of eligibility for admission, from proceeding with accepting
applications for taking the NMAT and from administering the NMAT as
scheduled on 26 April 1987 and in the future. After hearing on the petition for
issuance of preliminary injunction, the trial court denied said petition on 20
April 1987. The NMAT was conducted and administered as previously
scheduled. Tablarin, et. al. accordingly filed a Special Civil Action for Certiorari
with the Supreme Court to set aside the Order of the RTC judge denying the
petition for issuance of a writ of preliminary injunction.

Issue: Whether NMAT requirement for admission to medical colleges


contravenes the Constitutional guarantee for the accessibility of education to
all, and whether such regulation is invalid and/or unconstitutional.

Held: No. Republic Act 2382, as amended by Republic Acts 4224 and 5946,
known as the "Medical Act of 1959" defines its basic objectives to govern (a) the
standardization and regulation of medical education; (b) the examination for
registration of physicians; and (c) the supervision, control and regulation of the
practice of medicine in the Philippines. The Statute created a Board of Medical
Education and prescribed certain minimum requirements for applicants to
medical schools. The State is not really enjoined to take appropriate steps to
make quality education "accessible to all who might for any number of reasons
wish to enroll in a professional school but rather merely to make such
education accessible to all who qualify under "fair, reasonable and equitable
admission and academic requirements." The regulation of the practice of
medicine in all its branches has long been recognized as a reasonable method
of protecting the health and safety of the public. The power to regulate and
control the practice of medicine includes the power to regulate admission to
the ranks of those authorized to practice medicine. Legislation and
administrative regulations requiring those

Villanueva v. Castaneda [GR L-61311, 21 September 1987] First Division, Cruz


(J): 3 concur, 1 on leave.

Facts: On 7 November 1961, the municipal council of San Fernando (Pampanga)


adopted Resolution 218 authorizing some 24 members of the Fernandino
United Merchants and Traders Association (FUMTA) to construct permanent
stalls and sell along Mercado street, on a strip of land measuring 12 by 77
meters(talipapa). The action was protested on 10 November 1961 by Felicidad
Villanueva, Fernando Caisip, Antonio Liang, Felina Miranda, Ricardo Puno,
Florencio Laxa, and Rene Ocampo (claiming that they were granted previous
authorization by the municipal government to conduct business therein), in
Civil Case 2040, where the Court of First Instance (CFI) Pampanga, Branch 2,
issued a writ of preliminary injunction that prevented the FUMTA members from
constructing the said stalls until final resolution of the controversy. On 18
January 1964, while the case was pending, the municipal council of San
Fernando adopted Resolution 29, which declared the subject area as "the
parking place and as the public plaza of the municipality," thereby impliedly
revoking Resolution 218 (series of 1961). On 2 November 1968, Judge Andres
C. Aguilar decided the aforesaid case and held that the land occupied by
Villanueva, et. al., being public in nature, was beyond the commerce of man
and therefore could not be the subject of private occupancy. The writ of
preliminary injunction was made permanent. The decision was not enforced as
the petitioners were not evicted from the place. The number of vendors in the
area (talipapa) ballooned to 200. The area deteriorated increasingly to the great
prejudice of the community in general, as the makeshift stalls render the area
as virtual fire trap. The problem festered for some more years under a
presumably uneasy truce among the protagonists, none of whom made any
move, for some reason. On 12 January 1982, the Association of Concerned
Citizens and Consumers of San Fernando filed a petition for the immediate
implementation of Resolution 29, to restore the property to its original and
customary use as a public plaza. Acting thereon after an investigation
conducted by the municipal attorney, OIC (Office of the Mayor) Vicente Macalino
issued on 14 June 1982 a resolution requiring the municipal treasurer and the
municipal engineer to demolish the stalls beginning 1 July 1982. The
Villanueva, et. al. filed a petition for prohibition with the CFI Pampanga (Civil
Case 6470) on 26 June 1982. The judge denied the petition on 19 July 1982,
and the motion for reconsideration on 5 August 1982, prompting Villanueva,
et. al. to file a petition on certiorari with the Supreme Court. Paterno Guevarra,
who replaced Macalino as OIC of San Fernando, was impleaded.

Issue: Whether the demolition of the stalls in the place known as talipapa,
pursuant to Resolution 29 of the municipal government, is valid;
notwithstanding alleged contractual arrangements of market lessees
(Villanueva, et.al.) with the municipal government.

Held: Yes. Police power under the general welfare clause authorizes the
municipal council to 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. Police power cannot be surrendered or bargained away through the
medium of a contract. In fact, a public plaza is beyond the commerce of man
and so cannot be the subject of lease or any other contractual undertaking. The
lease of a public plaza of a municipality in favor of a private person is null and
void. A plaza cannot be used for the construction of market stalls, specially of
residences, and that such structures constitute a nuisance subject to abatement
according to law. On the other hand, a portion of a public sidewalk is likewise
beyond the commerce of man. Any contract entered into in connection with the
sidewalk, is ipso facto null and ultra vires. The sidewalk was intended for and
was used by the public, in going from one place to another. The streets and
public places of the city shall be kept free and clear for the use of the public,
and the sidewalks and crossings for the pedestrians, and the same shall only be
used or occupied for other purposes as provided by ordinance or regulation.
Stalls block the free passage of pedestrians resulting to clogged with vehicular
traffic.

Facts: The Municipal Board of City of Butuan passed Oridinance No 640 on 21


April 1969, “penalizing any person , group of persons , entity or engeged in the
business of selling admission tickets to any movie… to require children
between 7-12 years of age to pay full payment for ticket should only be charged
one half.” Petitioners Carlos Balacuit , et al as managers of theaters assailed the
validity and constitutionality of the said ordinance. The court adjudged in
favour of the respondents hence the petition for review. Petitioners contend
that it violates due process clause of the Constitution for being oppressive ,
unfair , unjust, confiscatory and an undue restraint of trade.
Issue: Whether or not Ordinance 640 – prohibiting selling of theatre admission
tickets to children 7-12 y/o at full price is constitutional or not?
Decision: Decision reversed. Ordinance 640 declared unconstitutional. For the
assailed ordinance be held constitutional it must pass the test of police power.
To invoke the exercise the police power, it must be for the interest of the public
without interfering with private rights and adoptive means must be reasonably
necessary for the accomplishment of the purpose and not unduly oppressive
upon individuals.
While it is true that a business may be regulated, it is equally true that such
regulation must be within the bounds of reason, that is, the regulatory
ordinance must be reasonable, and its provisions cannot be oppressive
amounting to an arbitrary interference with the business or calling subject of
regulation. The right of the owner to fix a price at which his property shall be
sold or used is an inherent attribute of the property itself and, as such, within
the protection of the due process clause. Hence, the proprietors of a theater
have a right to manage their property in their own way, to fix what prices of
admission they think most for their own advantage, and that any person who
did not approve could stay away.
Sangalang v. IAC [GR 71169, 25 August 1989] En Banc, Sarmiento (J): 11
concur, 3 took no part

Facts: The Supreme Court promulgated its decision on 22 December 1988. Two
(2) motions for reconsideration were filed by Atty. Sangco (in behalf of the
Sangalangs, GR71169) and Atty. Sison (in behalf of Bel-Air Village Association
[BAVA]), and a motion for reconsideration/clarification filed by Atty. Funk (GR
74376, 76394, 78182, and 82281). The motion for reconsideration (GR 71169),
filed by the Sangalangs, was anchored on two grounds: (1) that contrary to the
SC decision, Jupiter Street is for the exclusive use of Bel-Air Village residents;
and (b) that the Ayala Corporation did contrive to acquire membership at BAVA
purposely to bargain for access to Jupiter Street by the general public.
Subsequently, BAVA informed the Court that it was adopting the Sangalangs'
motion for reconsideration. The motion for reconsideration (in GRs 74376,
76394, 78182, and 82281) raises more or less the same questions and asks
furthermore that the Supreme Court delete the award of damages granted by
the Court of Appeals.

Issue: Whether the general public has right to to use Jupiter and Orbit streets in
Bel-Air Village, and whether the demolition of the gates in said streets was valid
or lawful.

Held: Yes. The Deed of Donation executed by the Ayala Corporation covering
Jupiter and Orbit Streets effectively required both passageways open to the
general public. The donation gave the general public equal right to it. The
opening of Jupiter Street was warranted by the demands of the common good,
in terms of traffic decongestion and public convenience. The opening of Orbit
Street is upheld for the same rationale. The demolition of the gates at Orbit and
Jupiter Streets does not amount to deprivation of property without due process
of law or expropriation without just compensation, as there is no taking of
property involved in the case. The challenged act of the Mayor is, rather, in the
concept of police power. The gate, the destruction of which opened Orbit
Street, has the character of a public nuisance in the sense that it hinders and
impairs the use of property. Article 699 of the Civil Code provides that the
remedies against a public nuisance are (1) A prosecution under the Penal Code
or any local ordinance; or (2) A civil action; or (3) Abatement, without judicial
proceedings. In addition, under Article 701 of the Code, summary abatement
(without judicial proceeding) may be carried out by the Mayor himself.
Del Rosario v. Bengzon [GR 88265, 21 December 1989] En Banc, Grino-Aquino
(J): 12 concur, 2 concur in result

Facts: On 15 March 1989, the full text of Republic Act 6675 was published in
two newspapers of general circulation in the Philippines. The law took effect on
30 March 1989, 15 days after its publication, as provided in Section 15 thereof.
Section 7, Phase 3 of Administrative Order 62 was amended by Administrative
Order 76 dated 28 August 1989 by postponing to 1 January 1990 the effectivity
of the sanctions and penalties for violations of the law, provided in Sections 6
and 12 of the Generics Act and Sections 4 and 7 of the Administrative Order.
Officers of the Philippine Medical Association, the national organization of
medical doctors in the Philippines, on behalf of their professional brethren who
are of kindred persuasion, filed a class suit requesting the Court to declare
some provisions (specifically penal) of the Generics Act of 1988 and the
implementing Administrative Order 62 issued pursuant thereto as
unconstitutional, hence, null and void. The petition was captioned as an action
for declaratory relief, over which the Court does not exercise jurisdiction.
Nevertheless, in view of the public interest involved, the Court decided to treat
it as a petition for prohibition instead.

Issue: Whether the prohibition against the use by doctors of "no substitution"
and/or words of similar importin their prescription in the Generics Act is a
lawful regulation.

Held: Yes. There is no constitutional infirmity in the Generics Act; rather, it


implements the constitutional mandate for the State "to protect and promote
the right to health of the people" and "to make essential goods, health and
other social services available to all the people at affordable cost" (Section 15,
Art. II and Section 11, Art. XIII, 1987 Constitution). The prohibition against the
use by doctors of "no substitution" and/or words of similar import in their
prescription, is a valid regulation to prevent the circumvention of the law. It
secures to the patient the right to choose between the brand name and its
generic equivalent since his doctor is allowed to write both the generic and the
brand name in his prescription form. If a doctor is allowed to prescribe a brand-
name drug with "no substitution," the patient's option to buy a lower-priced, but
equally effective, generic equivalent would thereby be curtailed. The law aims to
benefit the impoverished (and often sickly) majority of the population in a still
developing country like ours, not the affluent and generally healthy minority.
Humberto Basco vs Philippine Amusements and Gaming Corporation

In 1977, the Philippine Amusements and Gaming Corporation (PAGCOR) was


created by Presidential Decree 1067-A. PD 1067-B meanwhile granted PAGCOR
the power “to establish, operate and maintain gambling casinos on land or
water within the territorial jurisdiction of the Philippines.” PAGCOR’s operation
was a success hence in 1978, PD 1399 was passed which expanded PAGCOR’s
power. In 1983, PAGCOR’s charter was updated through PD 1869. PAGCOR’s
charter provides that PAGCOR shall regulate and centralize all games of chance
authorized by existing franchise or permitted by law. Section 1 of PD 1869
provides:
Section 1. Declaration of Policy. It is hereby declared to be the policy of the
State to centralize and integrate all games of chance not heretofore authorized
by existing franchises or permitted by law.
Atty. Humberto Basco and several other lawyers assailed the validity of the law
creating PAGCOR. They claim that PD 1869 is unconstitutional because a) it
violates the equal protection clause and b) it violates the local autonomy clause
of the constitution.
Basco et al argued that PD 1869 violates the equal protection clause because it
legalizes PAGCOR-conducted gambling, while most other forms of gambling are
outlawed, together with prostitution, drug trafficking and other vices.
Anent the issue of local autonomy, Basco et al contend that P.D. 1869 forced
cities like Manila to waive its right to impose taxes and legal fees as far as
PAGCOR is concerned; that Section 13 par. (2) of P.D. 1869 which exempts
PAGCOR, as the franchise holder from paying any “tax of any kind or form,
income or otherwise, as well as fees, charges or levies of whatever nature,
whether National or Local” is violative of the local autonomy principle.
ISSUE:
1. Whether or not PD 1869 violates the equal protection clause.
2. Whether or not PD 1869 violates the local autonomy clause.
HELD:
1. No. Just how PD 1869 in legalizing gambling conducted by PAGCOR is
violative of the equal protection is not clearly explained in Basco’s petition. The
mere fact that some gambling activities like cockfighting (PD 449) horse racing
(RA 306 as amended by RA 983), sweepstakes, lotteries and races (RA 1169 as
amended by BP 42) are legalized under certain conditions, while others are
prohibited, does not render the applicable laws, PD. 1869 for one,
unconstitutional.
Basco’s posture ignores the well-accepted meaning of the clause “equal
protection of the laws.” The clause does not preclude classification of
individuals who may be accorded different treatment under the law as long as
the classification is not unreasonable or arbitrary. A law does not have to
operate in equal force on all persons or things to be conformable to Article III,
Sec 1 of the Constitution. The “equal protection clause” does not prohibit the
Legislature from establishing classes of individuals or objects upon which
different rules shall operate. The Constitution does not require situations which
are different in fact or opinion to be treated in law as though they were the
same.
2. No. Section 5, Article 10 of the 1987 Constitution provides:
Each local government unit shall have the power to create its own source of
revenue and to levy taxes, fees, and other charges subject to such guidelines
and limitation as the congress may provide, consistent with the basic policy on
local autonomy. Such taxes, fees and charges shall accrue exclusively to the
local government.
A close reading of the above provision does not violate local autonomy
(particularly on taxing powers) as it was clearly stated that the taxing power of
LGUs are subject to such guidelines and limitation as Congress may provide.
Further, the City of Manila, being a mere Municipal corporation has no inherent
right to impose taxes. The Charter of the City of Manila is subject to control by
Congress. It should be stressed that “municipal corporations are mere creatures
of Congress” which has the power to “create and abolish municipal
corporations” due to its “general legislative powers”. Congress, therefore, has
the power of control over Local governments. And if Congress can grant the
City of Manila the power to tax certain matters, it can also provide for
exemptions or even take back the power.
Further still, local governments have no power to tax instrumentalities of the
National Government. PAGCOR is a government owned or controlled
corporation with an original charter, PD 1869. All of its shares of stocks are
owned by the National Government. Otherwise, its operation might be
burdened, impeded or subjected to control by a mere Local government.
This doctrine emanates from the “supremacy” of the National Government over
local governments.

Gancayco vs. City Government of Quezon City and MMDA – July 18, 2006 (G.R.
No. 177807) MMDA vs. Gancayco – May 10 2007 (G.R. No. 177933)
FACTS: The consolidated petitions of Retired Justice Emilio Gancayco, City
Government of Quezon City and the Metro Manila Development Authority
stemmed from a local ordinance pertaining to Construction of Arcades, and the
clearing of Public Obstructions. Gaycanco owns a property, of which he was
able to obtain a building permit for a two-storey commercial building, which
was situated along EDSA, in an area which was designated as part of a
Business/Commercial Zone by the Quezon City Council. The Quezon City
Council also issued Ordinance No. 2904, which orders the construction of
Arcades for Commercial Buildings. The ordinance was amended to not require
the properties located at the Quezon City - San Juan boundary, and commercial
buildings from Balete - Seattle Street to construct the arcades, moreover,
Gancayco had been successful in his petition to have his property, already
covered by the amended ordinance, exempted from the ordinance. MMDA on
April 28, 2003, sent a notice to Gancayco, under Ordinance no. 2904, part of
his property had to be demolished, if he did not clear that part within 15 days,
which Gancayco did not comply with, and so the MMDA had to demolish the
party wall, or “wing walls.” Gancayco then filed a temporary restraining order
and/or writ of preliminary injunction before the RTC of Quezon City, seeking to
prohibit the demolition of his property, without due process and just
compensation, claiming that Ordinance no. 2904 was discriminatory and
selective. He sought the declaration of nullity of the ordinance and payment for
damages. MMDA contended that Gancayco cannot seek nullification of an
ordinance that he already violated, and that the ordinance had the presumption
of constitutionality, and it was approved by the Quezon City Council, taking to
note that the Mayor signed the ordinance. The RTC, however, declared that the
Ordinance was unconstitutional, invalid and void ab initio. MMDA appealed to
the Court of Appeals, and the CA partly granted the appeal, with the contention
that the ordinance was to be modified; it was constitutional because the
intention of the ordinance was to uplift the standard of living, and business in
the commercial area, as well as to protect the welfare of the general public
passing by the area, however the injunction against the enforcement and
implementation of the ordinance is lifted. With that decision, the MMDA and
Gancayco filed Motions for Reconsideration, which the CA denied, as both
parties have no new issues raised. Therefore they petitioned to the Court.

ISSUES: Whether or not the wing wall of Gancayco’s property can be constituted
as a public nuisance. Whether or not MMDA was in their authority to demolish
Gancayco’s property.

HELD: The court affirmed the decision of the Court of Appeals. The court
decided that the wing wall of Gancayco’s building was not a nuisance per se, as
under Art. 694 of the Civil Code of the Philippines, nuisance is defined as any
act, omission, establishment, business, condition or property, or anything else
that (1) injures of endangers the health or safety of the others; (2) annoys or
offends the senses; (3) shocks, defies or disregards decency or morality; (4)
obstruct or interferes with the free passage of any public highway or street, or
any body of water; or (5) hinders or impairs the use of property. A nuisance
may be a nuisance per se or a nuisance per accidens. A nuisance per se are
those which affect the immediate safety of persons and property and may
summarily be abated under the undefined law of necessity. As Gaycanco was
able to procure a building permit to construct the building, it was implied that
the city engineer did not consider the building as such of a public nuisance, or
a threat to the safety of persons and property. The MMDA was only to enforce
Authoritative power on development of Metro Manila, and was not supposed to
act with Police Power as they were not given the authority to do such by the
constitution, nor was it expressed by the DPWH when the ordinance was
enacted. Therefore, MMDA acted on its own when it illegally demolished
Gancayco’s property, and was solely liable for the damage.

Maria Carolina Araullo vs Benigno Aquino III

When President Benigno Aquino III took office, his administration noticed the
sluggish growth of the economy. The World Bank advised that the economy
needed a stimulus plan. Budget Secretary Florencio “Butch” Abad then came up
with a program called the Disbursement Acceleration Program (DAP).
The DAP was seen as a remedy to speed up the funding of government
projects. DAP enables the Executive to realign funds from slow moving projects
to priority projects instead of waiting for next year’s appropriation. So what
happens under the DAP was that if a certain government project is being
undertaken slowly by a certain executive agency, the funds allotted therefor will
be withdrawn by the Executive. Once withdrawn, these funds are declared as
“savings” by the Executive and said funds will then be reallotted to other
priority projects. The DAP program did work to stimulate the economy as
economic growth was in fact reported and portion of such growth was
attributed to the DAP (as noted by the Supreme Court).
Other sources of the DAP include the unprogrammed funds from the General
Appropriations Act (GAA). Unprogrammed funds are standby appropriations
made by Congress in the GAA.
Meanwhile, in September 2013, Senator Jinggoy Estrada made an exposé
claiming that he, and other Senators, received Php50M from the President as an
incentive for voting in favor of the impeachment of then Chief Justice Renato
Corona. Secretary Abad claimed that the money was taken from the DAP but
was disbursed upon the request of the Senators.
This apparently opened a can of worms as it turns out that the DAP does not
only realign funds within the Executive. It turns out that some non-Executive
projects were also funded; to name a few: Php1.5B for the CPLA (Cordillera
People’s Liberation Army), Php1.8B for the MNLF (Moro National Liberation
Front), P700M for the Quezon Province, P50-P100M for certain Senators each,
P10B for Relocation Projects, etc.
This prompted Maria Carolina Araullo, Chairperson of the Bagong Alyansang
Makabayan, and several other concerned citizens to file various petitions with
the Supreme Court questioning the validity of the DAP. Among their
contentions was:
DAP is unconstitutional because it violates the constitutional rule which
provides that “no money shall be paid out of the Treasury except in pursuance
of an appropriation made by law.”
Secretary Abad argued that the DAP is based on certain laws particularly the
GAA (savings and augmentation provisions thereof), Sec. 25(5), Art. VI of the
Constitution (power of the President to augment), Secs. 38 and 49 of Executive
Order 292 (power of the President to suspend expenditures and authority to
use savings, respectively).
Issues:
I. Whether or not the DAP violates the principle “no money shall be paid out of
the Treasury except in pursuance of an appropriation made by law” (Sec. 29(1),
Art. VI, Constitution).
II. Whether or not the DAP realignments can be considered as impoundments by
the executive.
III. Whether or not the DAP realignments/transfers are constitutional.
IV. Whether or not the sourcing of unprogrammed funds to the DAP is
constitutional.
V. Whether or not the Doctrine of Operative Fact is applicable.
HELD:
I. No, the DAP did not violate Section 29(1), Art. VI of the Constitution. DAP was
merely a program by the Executive and is not a fund nor is it an appropriation.
It is a program for prioritizing government spending. As such, it did not violate
the Constitutional provision cited in Section 29(1), Art. VI of the Constitution. In
DAP no additional funds were withdrawn from the Treasury otherwise, an
appropriation made by law would have been required. Funds, which were
already appropriated for by the GAA, were merely being realigned via the DAP.
II. No, there is no executive impoundment in the DAP. Impoundment of funds
refers to the President’s power to refuse to spend appropriations or to retain or
deduct appropriations for whatever reason. Impoundment is actually prohibited
by the GAA unless there will be an unmanageable national government budget
deficit (which did not happen). Nevertheless, there’s no impoundment in the
case at bar because what’s involved in the DAP was the transfer of funds.
III. No, the transfers made through the DAP were unconstitutional. It is true that
the President (and even the heads of the other branches of the government) are
allowed by the Constitution to make realignment of funds, however, such
transfer or realignment should only be made “within their respective offices”.
Thus, no cross-border transfers/augmentations may be allowed. But under the
DAP, this was violated because funds appropriated by the GAA for the Executive
were being transferred to the Legislative and other non-Executive agencies.
Further, transfers “within their respective offices” also contemplate realignment
of funds to an existing project in the GAA. Under the DAP, even though some
projects were within the Executive, these projects are non-existent insofar as
the GAA is concerned because no funds were appropriated to them in the GAA.
Although some of these projects may be legitimate, they are still non-existent
under the GAA because they were not provided for by the GAA. As such,
transfer to such projects is unconstitutional and is without legal basis.
On the issue of what are “savings”
These DAP transfers are not “savings” contrary to what was being declared by
the Executive. Under the definition of “savings” in the GAA, savings only occur,
among other instances, when there is an excess in the funding of a certain
project once it is completed, finally discontinued, or finally abandoned. The
GAA does not refer to “savings” as funds withdrawn from a slow moving
project. Thus, since the statutory definition of savings was not complied with
under the DAP, there is no basis at all for the transfers. Further, savings should
only be declared at the end of the fiscal year. But under the DAP, funds are
already being withdrawn from certain projects in the middle of the year and
then being declared as “savings” by the Executive particularly by the DBM.
IV. No. Unprogrammed funds from the GAA cannot be used as money source
for the DAP because under the law, such funds may only be used if there is a
certification from the National Treasurer to the effect that the revenue
collections have exceeded the revenue targets. In this case, no such
certification was secured before unprogrammed funds were used.
V. Yes. The Doctrine of Operative Fact, which recognizes the legal effects of an
act prior to it being declared as unconstitutional by the Supreme Court, is
applicable. The DAP has definitely helped stimulate the economy. It has funded
numerous projects. If the Executive is ordered to reverse all actions under the
DAP, then it may cause more harm than good. The DAP effects can no longer be
undone. The beneficiaries of the DAP cannot be asked to return what they
received especially so that they relied on the validity of the DAP. However, the
Doctrine of Operative Fact may not be applicable to the authors, implementers,
and proponents of the DAP if it is so found in the appropriate tribunals (civil,
criminal, or administrative) that they have not acted in good faith.

tuason vs. register of deeds of caloocan city

Gaston vs Republic Planter’s Bank 158 SCRA 622

Facts:
Petitioners are sugar producers and planters and millers filed a MANDAMUS to
implement the privatization of Republic Planters Bank, and for the transfer of
the shares in the government bank to sugar producers and planters. (because
they are allegedly the true beneficial owners of the bank since they pay P1.00
per picul of sugar from the proceeds of sugar producers as STABILIZATION
FEES)

The shares are currently held by Philsucom / Sugar Regulatory Admin.


The Solgen countered that the stabilization fees are considered government
funds and that the transfer of shares to from Philsucom to the sugar producers
would be irregular.

Issue:

1. What is the nature of the P1.00 stabilization fees collected from sugar
producers?
2. Are they funds held in trust for them, or are they public funds?
3. Are the shares in the bank (paid using these fees) owned by the
government Philsucom or privately by the different sugar
planters from whom such fees were collected?

Ruling:
PUBLIC FUNDS. While it is true that the collected fees were used to buy shares in
RPB, it did not collect said fees for the account of sugar producers. The
stabilization fees were charged on sugar produced and milled which ACCRUED
TO PHILSUCOM, under PD 338.

The fees collected ARE IN THE NATURE OF A TAX., which is within the power of
the state to impose FOR THE PROMOTION OF THE SUGAR INDUSTRY. They
constitute sugar liens. The collections accrue to a SPECIAL FUNDS. It is levied
not purely for taxation, but for regulation, to provide means TO STABILIZE THE
SUGAR INDUSTRY. The levy is primarily an exercise of police powers.

The fact that the State has taken money pursuant to law is sufficient to
constitute them as STATE FUNDS, even though held for a special purpose.
Having been levied for a special purpose, the revenues are treated as a special
fund, administered in trust for the purpose intended. Once the purpose has
been fulfilled or abandoned, the balance will be transferred to the general funds
of gov’t.

It is a special fund since the funds are deposited in PNB, not in the National
Treasury.

The sugar planters are NOT BENEFICIAL OWNERS. The money is collected from
them only because they it is also they who are to be benefited from the
expenditure of funds derived from it. The investing of the funds in RPB is not
alien to the purpose since the Bank is a commodity bank for sugar, conceived
for the sugar industry’ growth and development.

Revenues derived from taxes cannot be used purely for private purposes or for
the exclusive benefit of private persons. The Stabilization Fund is to be utilized
for the benefit of the ENTIRE SUGAR INDUSTRY, and all its components,
stabilization of domestic and foreign markets, since the sugar industry is of
vital importance to the country’s economy and national interest.

OSMEÑA vs. ORBOS


220 SCRA 703
GR No. 99886, March 31, 1993

" To avoid the taint of unlawful delegation of the power to tax, there must be a
standard which implies that the legislature determines matter of principle and
lays down fundamental policy."
FACTS: Senator John Osmeña assails the constitutionality of paragraph 1c of PD
1956, as amended by EO 137, empowering the Energy Regulatory Board (ERB)
to approve the increase of fuel prices or impose additional amounts on
petroleum products which proceeds shall accrue to the Oil Price Stabilization
Fund (OPSF) established for the reimbursement to ailing oil companies in the
event of sudden price increases. The petitioner avers that the collection on oil
products establishments is an undue and invalid delegation of legislative power
to tax. Further, the petitioner points out that since a 'special fund' consists of
monies collected through the taxing power of a State, such amounts belong to
the State, although the use thereof is limited to the special purpose/objective
for which it was created. It thus appears that the challenge posed by the
petitioner is premised primarily on the view that the powers granted to the ERB
under P.D. 1956, as amended, partake of the nature of the taxation power of
the State.

ISSUE: Is there an undue delegation of the legislative power of taxation?

HELD: None. It seems clear that while the funds collected may be referred to as
taxes, they are exacted in the exercise of the police power of the State.
Moreover, that the OPSF as a special fund is plain from the special treatment
given it by E.O. 137. It is segregated from the general fund; and while it is
placed in what the law refers to as a "trust liability account," the fund
nonetheless remains subject to the scrutiny and review of the COA. The Court is
satisfied that these measures comply with the constitutional description of a
"special fund." With regard to the alleged undue delegation of legislative
power, the Court finds that the provision conferring the authority upon the ERB
to impose additional amounts on petroleum products provides a sufficient
standard by which the authority must be exercised. In addition to the general
policy of the law to protect the local consumer by stabilizing and subsidizing
domestic pump rates, P.D. 1956 expressly authorizes the ERB to impose
additional amounts to augment the resources of the Fund.

Republic vs. Intermediate Appellate Court [GR 71176, 21 May 1990] Third
Division, Fernan (CJ): 2 concur, 2 took no part

Facts: Avegon, Inc., offered 4 parcels of land with a total area of 9,650 square
meters located at 2090 Dr. Manuel L. Carreon Street, Manila, for sale to the City
School Board of Manila on 21 July 1973 at P2,300,000. The school board was
willing to buy at P1,800,000 but the then Mayor of Manila intervened and
volunteered to negotiate with Avegon, Inc. for a better price. Inasmuch as the
alleged negotiation did not materialize, on 3 June 1974, Avegon, Inc. sold the
property and its improvements to Amerex Electronics, Phils. Corporation for
P1,800,000. Thereafter, TCTs 115571, 115572, 115573 and 115574 were
issued in favor of Amerex. On 29 August 1975, the Solicitor General filed for
the Department of Education and Culture (DEC) a complaint against Amerex for
the expropriation of said property before the Court of First Instance of Manila
(Civil Case 99190), stating therein that the property was needed by the
government as a permanent site for the Manuel de la Fuente High School (later
renamed Don Mariano Marcos Memorial High School); that the fair marketvalue
of the property had been declared by Amerex as P2,435,000, and that the
assessor had determined its market value as P2,432,042 and assessed it for
taxation purposes in the amount of P1,303,470. On 9 October 1975, the court
issued an order directing the sheriff to place the Republic in possession of the
property, after informing the court that the assessed value of the property for
taxation purposes had been deposited with the Philippine National Bank (PNB)
in Escolta, Manila on 30 September 1975. The plaintiff took actual possession
thereof on 13 October 1975. Amerex filed a motion to dismiss the complaint
stating that while it was not contesting the merits of the complaint, the same
failed to categorically state the amount of just compensation for the property. It
therefore prayed that in consonance with Presidential Decree 794, the just
compensation be fixed at P2,432,042, the market value of the property
determined by the assessor which was lower than Amerex's own declaration.
Alleging that its motion to dismiss merely sought a clarification on the just
compensation for the property, Amerex filed a motion to withdraw the
Republic's deposit of P1,303,470 with the PNB without prejudice to its
entitlement to the amount of P1,128,572, the balance of the just compensation
of P2,432,042 insisted upon. On 3 December 1975, the lower court issued an
order vesting the Republic with the lawful right to take the property upon
payment of just compensation as provided by law. On 19 December 1975, after
the parties had submitted the names of their respective recommendees to the
appraisal committee, the lower court appointed Atty. Narciso Pena, Aurelio V.
Aquino and Atty. Higinio Sunico as commissioners. On 24 January 1977, the
commissioners submitted their appraisal report finding that the fair market
value of the property was P2,763,400. Both parties objected to the report of the
commissioners. On 15 March 1977, the lower court rendered a decision, "fixing
the amount of P2,258.018.57 as just compensation for the property of the
defendant and declaring the plaintiff entitled to possess and appropriate it to
the public use alleged in the complaint and to retain it upon payment of the
said amount, after deducting the amount of P1,303,470.00, with legal interest
from October 13, 1975 when the plaintiff was placed in possession of the real
property, and upon payment to each of the commissioners of the sum of
P35.00 for their attendance during the hearings held on January 23, February
16, May 11, July 23, September 17, October 12 and December 10, 1976, plus
P500.00 each for the preparation of the report, and the costs." The Republic
elevated the case to the then Intermediate Appellate Court (IAC) for review. On
29 October 1984, it affirmed the appealed decision with the modification that
the Republic of the Philippines be exempted from the payment of the
commissioners' fees, the P500.00 granted each of them for he preparation of
the report and the costs. Its motion for the reconsideration of said decision
having been denied, the Republic filed the petition for review.

Issue: Whether the just compensation for the expropriated property should be
the price first offered to the Government in 1973.

Held: The determination of just compensation for a condemned property is


basically a judicial function. As the court is not bound by the commissioners'
report, it may make such order or render such judgment as shall secure to the
plaintiff the property essential to the exercise of its right of condemnation, and
to the defendant just compensation for the property expropriated. For that
matter, the Supreme Court may even substitute its own estimate of the value as
gathered from the record. Hence, although the determination of just
compensation appears to be a factual matter which is ordinarily outside the
ambit of its jurisdiction, the Supreme Court may disturb the lower court's
factual finding on appeal when there is clear error or grave abuse of discretion.
Herein, the just compensation prescribed by the lower court is based on the
commissioners' recommendation which in turn is founded on the "audited"
statements of Amerex that the property is worth P2,258,018.57. The
Certification from the accounting firm issued to Amerex merely compared the
figures in the schedules or "audited" statements with those of the records and
books of accounts of Amerex. As no investigation was made as to the veracity
of the figures in the account, there was no audit in the real sense of the term.
Thus, the accuracy of the "audited" statements is therefore suspect. Besides the
fact that the Republic was not furnished a copy of the audited statements which
were also not introduced in evidence, Enrique P. Esteban, vice-president and
treasurer of Amerex, and even a representative of the accounting firm, were
likewise not presented during the trial thereby depriving the Republic of the
opportunity to cross-examine them. The Supreme Court having declared as
unconstitutional the mode offixing just compensation under Presidential Decree
794 in Export Processing Zone Authority vs. Dulay (GR 59603, 29 April 1987),
just compensation should be determined either at the time of the actual taking
of the government or at the time of the judgment of the court, whichever
comes first. The reasonableness of the 5 June 1975 appraisal fixing at
P2,400,000 the fair market value of the property, is bolstered by the fact that
on 4 June 1975, Traders Commodities Corporation offered to buy the property
at P2,750,000. It must be emphasized, however, that legal interest on the
balance of the just compensation of P2,400,000 after deducting the amount of
P1,303,470 which had been delivered to Amerex, should be paid by the
Republic from the time the government actually took over the property. Much
as the Court realizes the need of the government, under these trying times, to
get the best possible price for the expropriated property considering the
ceaseless and continuing necessity for schools, the Court cannot agree with the
Republic that the just compensation for the property should be the price it
commanded when it was first offered for sale to the City School Board of
Manila.

Ansaldo vs. Tantuico [GR 50147, 3 August 1990] First Division, Narvasa (J): 4
concur

Facts: Two lots of private ownership were taken by the Government and used
for the widening of a road more than forty-three years ago, without benefit of
an action of eminent domain or agreement with its owners, albeit without
protest by the latter. The lots belong to Jose Ma. Ansaldo and Maria Angela
Ansaldo, are covered by title in their names, and have an aggregate area of
1,041 square meters. These lots were taken from the Ansaldos sometime in
1947 by the Department of Public Works, Transportation and Communication
and made part of what used to be Sta. Mesa Street and is now Ramon
Magsaysay Avenue at San Juan, Metro Manila. Said owners made no move
whatever until 26 years later. They wrote to ask for compensation for their land
on 22 January 1973. Their claim was referred to the Secretary of Justice who
rendered an opinion dated 22 February 1973, that just compensation should be
paid in accordance with Presidential Decree (PD) 76, and thus advised that the
corresponding expropriation suit be forthwith instituted to fix the just
compensation to be paid to the Ansaldos. Pursuant to the said opinion, the
Commissioner of Public Highways requested the Provincial Assessor of Rizal to
make a redetermination of the market value of the Ansaldos' property in
accordance with PD 76. The new valuation was made, after which the Auditor of
the Bureau of Public Highways forwarded the Ansaldos' claim to the Auditor
General with the recommendation that payment be made on the basis of the
"current and fair market value and not on the fair market value at the time of
taking." The Commission on Audit, however, declined to adopt the
recommendation. In a decision handed down on 26 September 1973, the Acting
Chairman ruled that "the amount of compensation to be paid to the claimants is
to be determined as of the time of the taking of the subject lots," i.e. 1947. The
ruling was reiterated by the Commission on 8 September 1978, and again on
25 January 1979 when it denied the Ansaldos' motion for reconsideration. The
Ansaldos appealed to the Supreme Court.

Issue: Whether the valuation of just compensation should be determined at the


time of taking in 1947, especially in light of the absence of any expropriation
proceeding undertaken before the said taking.

Held: Where the institution of an expropriation action precedes the taking of


the property subject thereof, the just compensation is fixed as of the time of
the filing of the complaint. This is so provided by the Rules of Court, the
assumption of possession by the expropriator ordinarily being conditioned on
its deposits with the National or Provincial Treasurer of the value of the
property as provisionally ascertained by the court having jurisdiction of the
proceedings. There are instances, however, where the expropriating agency
takes over the property prior to the expropriation suit. In these instances, the
just compensation shall be determined as of the time of taking, not as of the
time of filing of the action of eminent domain. There was undoubtedly a taking
of the Ansaldos' property when the Government obtained possession thereof
and converted it into a part of a thoroughfare for public use. It is as of the time
of such a taking, to repeat, that the just compensation for the property is to be
established. The value of the Ansaldos' property must be ascertained as of the
year 1947, when it was actually taken, and not at the time of the filing of the
expropriation suit, which, by the way, still has to be done. It is as of that time
that the real measure of their loss may fairly be adjudged. The value, once
fixed, shall earn interest at the legal rate until full payment is effected,
conformably with other principles laid down by case law. The Court thus
directed the Department of Public Works and Highways to institute the
appropriate expropriation action over the land in question so that the just
compensation due its owners may be determined in accordance with the Rules
of Court, with interest at the legal rate of 6% per annum from the time of taking
until full payment is made.
National Power Corporation vs. Gutierrez [GR 60077, 18 January 1991] Third
Division, Bidin (J): 2 concur, 1 concurs with reservation

Facts: The National Power Corporation (NAPOCOR), a government owned and


controlled entity, in accordance with Commonwealth Act 120, is invested with
the power of eminent domain for the purpose of pursuing its objectives, which
among others is the construction, operation, and maintenance of electric
transmission lines for distribution throughout the Philippines. For the
construction of its 230 KV MexicoLimay transmission lines, NAPOCOR's lines
have to pass the lands belonging to Matias Cruz, Heirs of Natalia Paule and
spouses Misericordia Gutierrez and Ricardo Malit (covered by tax declarations
907, 4281 and 7582, respectively). NAPOCOR initiated negotiations for the
acquisition of right of way easements over the aforementioned lots for the
construction of its transmission lines but unsuccessful in this regard, NAPOCOR
was constrained to file eminent domain proceedings against Gutierrez, et. al.
on 20 January 1965. Upon filing of the corresponding complaint, NAPOCOR
deposited the amount of P973.00 with the Provincial Treasurer of Pampanga,
tendered to cover the provisional value of the land of the Malit and Gutierrez.
And by virtue of which, NAPOCOR was placed in possession of the property of
the spouses so it could immediately proceed with the construction of its
Mexico-Limay 230 KV transmission line. In this connection, by the trial court's
order of 30 September 1965, the spouses were authorized to withdraw the
fixed provisional value of their land in the sum of P973.00. Meanwhile, for the
purpose of determining the fair and just compensation due Gutierrez, et. al.,
the court appointed 3 commissioners, comprised of one representative of
NAPOCOR, one for the affected families and the other from the court, who then
were empowered to receive evidence, conduct ocular inspection of the
premises, and thereafter, prepare their appraisals as to the fair and just
compensation to he paid to the owners of the lots. Hearings were consequently
held before said commissioners and during their hearings, the case of the Heirs
of Natalia Paule was amicably settled by virtue of a Right of Way Grant executed
by Guadalupe Sangalang for herself and in behalf of her co-heirs in favor of
NAPOCOR. The case against Matias Cruz was earlier decided by the court,
thereby leaving only the case against the spouses Malit and Gutierrez still to be
resolved. Accordingly, the commissioners submitted their individual reports.
With the reports submitted, the lower court rendered a decision, ordering
NAPOCOR to pay Malit and Gutierrez the sum of P10 per square meter as the
fair and reasonable compensation for the right-of-way easement of the affected
area, which is 760 squares, or a total sum of P7,600.00 and P800.00 as
attorney's fees. Dissatisfied with the decision, NAPOCOR filed a motion for
reconsideration which was favorably acted upon by the lower court, and in an
order dated 10 June 1973, it amended its previous decision, reducing the
amount awarded to to P5.00 per square meter as the fair and reasonable
market value of the 760 square meters belonging to the said spouses, in light
of the classification of the land to be partly commercial and partly agricultural.
Still not satisfied, an appeal was filed by the NAPOCOR with the Court of
Appeals but appellate court, on 9 March 1982, sustained the trial court.
NAPOCOR filed the petition for review on certiorari before the Supreme Court.

Issue: Whether the spouses are deprive of the property’s ordinary use and thus
the easement of right of way in favor of NAPOCOR constitutes taking.

Held: The acquisition of the right-of-way easement falls within the purview of
the power of eminent domain. Such conclusion finds support in similar cases of
easement of right-of-way where the Supreme Court sustained the award of just
compensation for private property condemned for public use. Herein, the
easement of right-of-way is definitely a taking under the power of eminent
domain. Considering the nature and effect of the installation of the 230 KV
Mexico-Limay transmission lines, the limitation imposed by NAPOCOR against
the use of the land for an indefinite period deprives spouses Malit and Gutierrez
of its ordinary use. For these reasons, the owner of the property expropriated is
entitled to a just compensation, which should be neither more nor less,
whenever it is possible to make the assessment, than the money equivalent of
said property. Just compensation has always been understood to be the just
and complete equivalent of the loss which the owner of the thing expropriated
has to suffer by reason of the expropriation. The price or value of the land and
its character at the time it was taken by the Government are the criteria for
determining just compensation. The above price refers to the market value of
the land which may be the full market value thereof. It appearing that the trial
court did not act capriciously and arbitrarily in setting the price of P5.00 per
square meter of the affected property, the said award is proper and not
unreasonable.

Manila Electric Company (MERALCO) vs. Pineda [GR 59791, 13 February 1992]
First Division, Medialdea (J): 3 concur

Facts: For the purpose of constructing a 230 KV Transmission line from Barrio
Malaya to Tower 220 at Pililla, Rizal, the Manila Electric Company (MERALCO)
needed portions of the land of Teofilo Arayon, Sr., Gil de Guzman, Lucito
Santiago and Teresa Bautista (simple fee owners), consisting of an aggregate
area of 237,321 square meters. Despite MERALCO's offers to pay compensation
and attempts to negotiate with Arayon, et. al., the parties failed to reach an
agreement. On 29 October 1974, a complaint for eminent domain was filed by
MERALCO against 42 defendants (including Teofilo Arayon Sr., Gil de Guzman,
Lucito Santiago, and Teresa Bautista) with the Court of First Instance (now
Regional Trial Court) of Rizal, Branch XXII, Pasig, Metro Manila. Despite the
opposition of Arayon, et. al., the court issued an Order dated 13 January 1975
authorizing MERALCO to take or enter upon the possession of the property
sought to be expropriated. On 13 July 1976, Arayon, et. al., filed a motion for
withdrawal of deposit claiming that they are entitled to be paid at P40.00 per
square meter or an approximate sum of P272,000.00 and prayed that they be
allowed to withdraw the sum of P71,771.50 from MERALCO's deposit-account
with the Philippine National Bank (PNB), Pasig Branch. However, Arayon, et. al.'s
motion was denied in an order dated 3 September 1976. Pursuant to a
government policy, MERALCO on 30 October 1979 sold to the National Power
Corporation (NAPOCOR) the power plants and transmission lines, including the
transmission lines traversing Arayon, et. al.'s property. On 11 February 1980,
the court issued an Order appointing the members of the Board of
Commissioners to make an appraisal of the properties. On 5 June 1980,
MERALCO filed a motion to dismiss the complaint on the ground that it has lost
all its interests over the transmission lines and properties under expropriation
because of their sale to the NAPOCOR. In view of this motion, the work of the
Commissioners was suspended. On 9 June 1981, Arayon, et. al. filed another
motion for payment, but despite the opposition of MERALCO, the court issued
an order dated 4 December 1981 granting the motion for payment of Arayon,
et. al. (P20,400 or P3.00 per square meter without prejudice to the just
compensation that may be proved in the final adjudication of the case). On 15
December 1981, Arayon, et. al. filed an Omnibus Motion praying that they be
allowed to withdraw an additional sum of P90,125.50 from MERALCO's deposit-
account with PNB. By order dated 21 December 1981, the court granted the
Omnibus Motion. Arayon, et. al. filed another motion dated 8 January 1982
praying that MERALCO be ordered to pay the sum of P169,200.00. On 12
January 1982, MERALCO filed a motion for reconsideration of the Orders and to
declare Arayon, et. al. in contempt of court for forging or causing to be forged
the receiving stamp of MERALCO's counsel and falsifying or causing to be
falsified the signature of its receiving clerk in their Omnibus Motion. On 9
February 1982, the court denied MERALCO's motion for reconsideration and
motion for contempt. In said order, the Court adjudged in favor of Arayon, et.
al. the fair market value of their property taken by MERALCO at P40.00 per
square meter for a total of P369.720.00; the amount to bearing legal interest
from 24 February 1975 until fully paid plus consequential damages in terms of
attorney's fees in the sum of P10,000.00; all these sums to be paid by
MERALCO the former with costs of suit, minus the amount of P102,800.00
already withdrawn by Arayon, et. al. Furthermore, the court stressed in said
order that "at this stage, the Court starts to appoint commissioners to
determine just compensation or dispenses with them and adopts the testimony
of a credible real estate broker, or the Judge himself would exercise his right to
formulate an opinion of his own as to the value of the land in question.
Nevertheless, if he formulates such an opinion, he must base it upon competent
evidence." MERALCO filed a petition for review on certiorari.

Issue: Whether the court can dispense with the assistance of a Board of
Commissioners in an expropriation proceeding and determine for itself the just
compensation.

Held: In an expropriation case where the principal issue is the determination of


just compensation, a trial before the Commissioners is indispensable to allow
the parties to present evidence on the issue of just compensation. The
appointment of at least 3 competent persons as commissioners to ascertain
just compensation for the property sought to be taken is a mandatory
requirement in expropriation cases. While it is true that the findings of
commissioners may be disregarded and the court may substitute its own
estimate of the value, the latter may only do so for valid reasons, i.e., where the
Commissioners have applied illegal principles to the evidence submitted to
them or where they have disregarded a clear preponderance of evidence, or
where the amount allowed is either grossly inadequate or excessive (Manila
Railroad Company v. Velasquez, 32 Phil. 286) Thus, trial with the aid of the
commissioners is a substantial right that may not be done away with
capriciously or for no reason at all. Moreover, in such instances, where the
report of the commissioners may be disregarded, the trial court may make its
own estimate of value from competent evidence that may be gathered from the
record. The "Joint Venture Agreement on Subdivision and Housing Projects"
executed by ABA Homes and Arayon, et. al. relied upon by the judge, in the
absence of any other proof of valuation of said properties, is incompetent to
determine just compensation. The judge's act of determining and ordering the
payment of just compensation without the assistance of a Board of
Commissioners is a flagrant violation of MERALCO's constitutional right to due
process and is a gross violation of the mandated rule established by the
Revised Rules of Court.
Province of Camarines Sur vs. Court of Appeals [GR 103125, 17 May 1993] First
Division, Quiason (J): 3 concur

Facts: On 22 December 1988, the Sangguniang Panlalawigan of the Province of


Camarines Sur passed Resolution 129, Series of 1988, authorizing the
Provincial Governor to purchase or expropriate property contiguous to the
provincial capitol site, in order to establish a pilot farm for non-food and non-
traditional agricultural crops and a housing project for provincial government
employees. Pursuant to the Resolution, the Province of Camarines Sur, through
its Governor, Hon. Luis R. Villafuerte, filed two separate cases for expropriation
against Ernesto N. San Joaquin and Efren N. San Joaquin with the Regional Trial
Court, Pili, Camarines Sur (Hon. Benjamin V. Panga presiding; Special Civil
Action Nos. P-17-89 and P-19-89). Forthwith, the Province of Camarines Sur
filed a motion for the issuance of a writ of possession. The San Joaquins failed
to appear at the hearing of the motion. The San Joaquins moved to dismiss the
complaints on the ground of inadequacy of the price offered for their property.
In an order dated 6 December 1989, the trial court denied the motion to
dismiss and authorized the Province of Camarines Sur to take possession of the
property upon the deposit with the Clerk of Court of the amount of P5,714.00,
the amount provisionally fixed by the trial court to answer for damages that San
Joaquin may suffer in the event that the expropriation cases do not prosper.
The trial court issued a writ of possession in an order dated 18 January 1990.
The San Joaquins filed a motion for relief from the order, authorizing the
Province of Camarines Sur to take possession of their property and a motion to
admit an amended motion to dismiss. Both motions were denied in the order
dated 26 February 1990. The San Joaquins filed their petition before the Court
of Appeals, praying (a) that Resolution No. 129, Series of 1988 of the
Sangguniang Panlalawigan be declared null and void; (b) that the complaints for
expropriation be dismissed; and (c) that the order dated December 6, 1989 (i)
denying the motion to dismiss and (ii) allowing the Province of Camarines Sur to
take possession of the property subject of the expropriation and the order
dated February 26, 1990, denying the motion to admit the amended motion to
dismiss, be set aside. They also asked that an order be issued to restrain the
trial court from enforcing the writ of possession, and thereafter to issue a writ
of injunction. The Court of Appeals set aside the order of the trial court, and
ordered the trial court to suspend the expropriation proceedings until after the
Province of Camarines Sur shall have submitted the requisite approval of the
Department of Agrarian Reform to convert the classification of the property of
the San Joaquins from agricultural to non-agricultural land. The Province of
Camarines Sur filed a petition for certiorari before the Supreme Court.

Issue: Whether the establishment of the Pilot Development Center and the
housing project are deemed for “public use.”

Held: Local government units have no inherent power of eminent domain and
can exercise it only when expressly authorized by the legislature. In delegating
the power to expropriate, the legislature may retain certain control or impose
certain restraints on the exercise thereof by the local governments. While such
delegated power may be a limited authority, it is complete within its limits.
Moreover, the limitations on the exercise of the delegated power must be
clearly expressed, either in the law conferring the power or in other legislations.
It is the legislative branch of the local government unit that shall determine
whether the use of the property sought to be expropriated shall be public, the
same being an expression of legislative policy. The courts defer to such
legislative determination and will intervene only when a particular undertaking
has no real or substantial relation to the public use. Statutes conferring the
power of eminent domain to political subdivisions cannot be broadened or
constricted by implication. Section 9 of BP 337 does not intimate in the least
that local government units must first secure the approval of the Department of
Land Reform for the conversion of lands from agricultural to non-agricultural
use, before they can institute the necessary expropriation proceedings.
Likewise, there is no provision in the Comprehensive Agrarian Reform Law
which expressly subjects the expropriation of agricultural lands by local
government units to the control of the Department of Agrarian Reform. The
rules on conversion of agricultural lands found in Section 4 (k) and 5 (1) of
Executive Order 129-A, Series of 1987, cannot be the source of the authority of
the Department of Agrarian Reform to determine the suitability of a parcel of
agricultural land for the purpose to which it would be devoted by the
expropriating authority. While those rules vest on the Department of Agrarian
Reform the exclusive authority to approve or disapprove conversions of
agricultural lands for residential, commercial or industrial uses, such authority
is limited to the applications for reclassification submitted by the land owners
or tenant beneficiaries. Further, there has been a shift from the literal to a
broader interpretation of "public purpose" or "public use" for which the power
of eminent domain may be exercised. The old concept was that the condemned
property must actually be used by the general public (e.g. roads, bridges, public
plazas, etc.) before the taking thereof could satisfy the constitutional
requirement of "public use". Under the new concept, "public use" means public
advantage, convenience or benefit, which tends to contribute to the general
welfare and the prosperity of the whole community, like a resort complex for
tourists or housing project. The expropriation of the property authorized by
Resolution 129, Series of 1988, is for a public purpose. The establishment of a
pilot development center would inure to the direct benefit and advantage of the
people of the Province of Camarines Sur. Once operational, the center would
make available to the community invaluable information and technology on
agriculture, fishery and the cottage industry. Ultimately, the livelihood of the
farmers, fishermen and craftsmen would be enhanced. The housing project also
satisfies the public purpose requirement of the Constitution. Housing is a basic
human need. Shortage in housing is a matter of state concern since it directly
and significantly affects public health, safety, the environment and in sum the
general welfare. Thus, the decision of the Court of Appeals is set aside insofar
as it (a) nullifies the trial court's order allowing the Province of Camarines Sur to
take possession of the property of the San Joaquins; (b) orders the trial court to
suspend the expropriation proceedings; and (c) requires the Province of
Camarines Sur to obtain the approval of the Department of Agrarian Reform to
convert or reclassify the property of the San Joaquins property from agricultural
to non-agricultural use.