CONSTITUTIONAL LAW II

POLICE POWER

MAXIMO CALALANG vs A. D. WILLIAMS, ET AL.,

Facts:

The National Traffic Commission, in its resolution of July 17, 1940, resolved to
recommend to the Director of the Public Works and to the Secretary of Public Works
and Communications that animal-drawn vehicles be prohibited from passing along the
following for a period of one year from the date of the opening of the Colgante Bridge to
traffic:

1) Rosario Street extending from Plaza Calderon de la Barca to Dasmariñas

Street from 7:30Am to 12:30 pm and from 1:30 pm to 530 pm; and

2) along Rizal Avenue extending from the railroad crossing at Antipolo Street to

Echague Street from 7 am to 11pm

The Chairman of the National Traffic Commission on July 18, 1940 recommended to the
Director of Public Works with the approval of the Secretary of Public Works the adoption
of
thethemeasure proposed in the resolution aforementioned in pursuance of the provisions
of theCommonwealth Act No. 548 which authorizes said Director with the approval from
the
Secretary of the Public Works and Communication to promulgate rules and regulations to
regulate and control the use of and traffic on national roads.

On August 2, 1940, the Director recommended to the Secretary the approval of the
recommendations made by the Chairman of the National Traffic Commission with
modifications. The Secretary of Public Works approved the recommendations on August
10,1940. The Mayor of Manila and the Acting Chief of Police of Manila have enforced
and caused to be enforced the rules and regulation. As a consequence, all animal-drawn
vehicles are not allowed to pass and pick up passengers in the places above mentioned to
the detriment not only of their owners but of the riding public as well.

Issues:
1) Whether the rules and regulations promulgated by the respondents pursuant to the
provisions of Commonwealth Act NO. 548 constitute an unlawful inference with
legitimate business or trade and abridged the right to personal liberty and freedom of
locomotion?
2) Whether the rules and regulations complained of infringe upon the constitutional
precept regarding the promotion of social justice to insure the well-being and economic
security of all the people?

Held:
1) No. The promulgation of the Act aims to promote safe transit upon and avoid
obstructions on national roads in the interest and convenience of the public. In enacting
said law, the National Assembly was prompted by considerations of public convenience
and welfare. It was inspired by the desire to relieve congestion of traffic, which is a
menace to the public safety. Public welfare lies at the bottom of the promulgation of the
said law and the state in order to promote the general welfare may interfere with personal
liberty, with property, and with business and occupations. Persons and property may be
subject to all kinds of restraints and burdens in order to secure the general comfort,
health, and prosperity of the State. To this fundamental aims of the government, the
rights of the individual are subordinated. Liberty is a blessing which should not be made
to prevail over authority because society will fall into anarchy. Neither should authority
be made to prevail over liberty because then the individual will fall into slavery. The
paradox lies in the fact that the apparent curtailment of liberty is precisely the very means
of insuring its preserving.

2) No. Social justice is “neither communism, nor despotism, nor atomism, nor anarchy,”
but the humanization of laws and the equalization of social and economic forces by the
State so that justice in its rational and objectively secular conception may at least be
approximated. Social justice means the promotion of the welfare of all the people, the
adoption by the Government of measures calculated to insure economic stability of all the
competent elements of society, through the maintenance of a proper economic and social
equilibrium in the interrelations of the members of the community, constitutionally,
through the adoption of measures legally justifiable, or extra-constitutionally, through the
exercise of powers underlying the existence of all governments on the time-honored
principles of salus populi estsuprema lex.

Social justice must be founded on the recognition of the necessity of interdependence

among divers and diverse units of a society and of the protection that should be equally
and evenly extended to all groups as a combined force in our social and economic life,
consistent with the fundamental and paramount objective of the state of promoting health,
comfort and quiet of all persons, and of bringing about “the greatest good to the greatest
number.”

ICHONG VS HERNANDEZ
FACTS:
The Legislature passed R.A. 1180 (An Act to Regulate the Retail Business). Its purpose
was to prevent persons who are not citizens of the Phil. from having a stranglehold upon
the people’s economic life.
• a prohibition against aliens and against associations, partnerships, or corporations
the capital of which are not wholly owned by Filipinos, from engaging directly or
indirectly in the retail trade
• aliens actually engaged in the retail business on May 15, 1954 are allowed to
continue their business, unless their licenses are forfeited in accordance with law,
until their death or voluntary retirement. In case of juridical persons, ten years
after the approval of the Act or until the expiration of term.
Citizens and juridical entities of the United States were exempted from this Act.
• provision for the forfeiture of licenses to engage in the retail business for violation
of the laws on nationalization, economic control weights and measures and labor
and other laws relating to trade, commerce and industry.
• provision against the establishment or opening by aliens actually engaged in the
retail business of additional stores or branches of retail business
Lao Ichong, in his own behalf and behalf of other alien residents, corporations and
partnerships affected by the Act, filed an action to declare it unconstitutional for the ff:
reasons:
1. it denies to alien residents the equal protection of the laws and deprives them of
their liberty and property without due process
2. the subject of the Act is not expressed in the title
3. the Act violates international and treaty obligations
4. the provisions of the Act against the transmission by aliens of their retail business
thru hereditary succession

ISSUE: WON the Act deprives the aliens of the equal protection of the laws.

HELD: The law is a valid exercise of police power and it does not deny the aliens the
equal protection of the laws. There are real and actual, positive and fundamental
differences between an alien and a citizen, which fully justify the legislative classification
adopted.

RATIO:
The equal protection clause does not demand absolute equality among residents. It
merely requires that all persons shall be treated alike, under like circumstances and
conditions both as to privileges conferred and liabilities enforced.

The classification is actual, real and reasonable, and all persons of one class are treated
alike.

The difference in status between citizens and aliens constitutes a basis for reasonable
classification in the exercise of police power.

Official statistics point out to the ever-increasing dominance and control by alien of the
retail trade. It is this domination and control that is the legislature’s target in the
enactment of the Act.

The mere fact of alienage is the root cause of the distinction between the alien and the
national as a trader. The alien is naturally lacking in that spirit of loyalty and enthusiasm
for the Phil. where he temporarily stays and makes his living. The alien owes no
allegiance or loyalty to the State, and the State cannot rely on him/her in times of crisis or
emergency.

While the citizen holds his life, his person and his property subject to the needs of the
country, the alien may become the potential enemy of the State.

The alien retailer has shown such utter disregard for his customers and the people on
whom he makes his profit. Through the illegitimate use of pernicious designs and
practices, the alien now enjoys a monopolistic control on the nation’s economy
endangering the national security in times of crisis and emergency.

LUTZ VS. ARANETA

Facts: Commonwealth Act No. 567, otherwise known as Sugar Adjustment Act was
promulgated in 1940 “to stabilize the sugar industry so as to prepare it for the eventuality
of the loss of its preferential position in the United States market and the imposition of
export taxes.” Plaintiff, Walter Lutz, in his capacity as Judicial Administrator of the
Intestate Estate of Antonio Jayme Ledesma, seeks to recover from the Collector of
Internal Revenue the sum of P14,666.40 paid by the estate as taxes, under Sec.3 of
the Act, alleging that such tax is unconstitutional and void, being levied for the aid and
support of the sugar industry exclusively, which in plaintiff’s opinion is not a public
purpose for which a tax may be constitutionally levied. The action has been dismissed by
the Court of First Instance.

Issue: Whether or not the tax imposed is constitutional.

Held: Yes. The act is primarily an exercise of the police power. It is shown in
the Act that the tax is levied with a regulatory purpose, to provide means for the
rehabilitation and stabilization of the threatened sugar industry.

It is inherent in the power to tax that a state be free to select the subjects of taxation, and
it has been repeatedly held that “inequalities which result from a singling out of one
particular class for taxation or exemption infringe no constitutional limitation.”

The funds raised under the Act should be exclusively spent in aid of the sugar industry,
since it is that very enterprise that is being protected. It may be that other industries are
also in need of similar protection; but the legislature is not required by the Constitution to
adhere to a policy of “all or none.”
ERMITA-MALATE HOTEL VS CITY MAYOR OF MANILA
Facts: On June 13, 1963, the Municipal Board of Manila passed Ordinance No. 4760
with the following provisions questioned for its violation of due process:
1. refraining from entertaining or accepting any guest or customer unless it fills out a
prescribed form in the lobby in open view;
2. prohibiting admission o less than 18 years old;
3. usurious increase of license fee to P4,500 and 6,000 o 150% and 200%
respectively (tax issue also);
4. making unlawful lease or rent more than twice every 24 hours; and
5. cancellation of license for subsequent violation.
The lower court issued preliminary injunction and petitioners raised the case to SC on
certiorari.

Issue: Is the ordinance compliant with the due process requirement of the constitution?

Held: Ordinance is a valid exercise of police power to minimize certain practices hurtful
to public morals. There is no violation o constitutional due process for being reasonable
and the ordinance is enjoys the presumption of constitutionality absent any irregularity on
its face. Taxation may be made to implement a police power and the amount, object, and
instance of taxation is dependent upon the local legislative body. Judgment of lower court
reversed and injunction lifted.

CITY OF MANILA VS. LAGUIO

FACTS: Private respondent Malate Tourist Development Corporation (MTDC) is a
corporation engaged in the business of operating hotels, motels, hostels and lodging
houses. It built and opened Victoria Court in Malate which was licensed as a motel
although duly accredited with the DOT as a hotel. On 28 June 1993, MTDC filed a
Petition for Declaratory Relief with Prayer for a Writ of Preliminary Injunction and/or
Temporary Restraining Order7 with the lower court impleading as defendants, herein
petitioners City of Manila, Hon. Alfredo S. Lim (Lim), Hon. Joselito L. Atienza, and the
members of the City Council of Manila (City Council). MTDC prayed that the
Ordinance, insofar as it includes motels and inns as among its prohibited establishments,
be declared invalid and unconstitutional.
Enacted by the City Council and approved by petitioner City Mayor, the said Ordinance
is entitled–

AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION OF

BUSINESSES PROVIDING CERTAIN FORMS OF AMUSEMENT,
ENTERTAINMENT, SERVICES AND FACILITIES IN THE ERMITA-MALATE
AREA, PRESCRIBING PENALTIES FOR VIOLATION THEREOF, AND FOR
OTHER PURPOSES.
Judge Laguio rendered the assailed Decision (in favour of respondent).
On 11 January 1995, petitioners filed the present Petition, alleging that the following
errors were committed by the lower court in its ruling:

(1) It erred in concluding that the subject ordinance is ultra vires, or otherwise, unfair,
unreasonable and oppressive exercise of police power;
(2) It erred in holding that the questioned Ordinance contravenes P.D. 499 which allows
operators of all kinds of commercial establishments, except those specified therein; and
(3) It erred in declaring the Ordinance void and unconstitutional.

ISSUE: WON the ordinance is unconstitutional.

HELD: The Court is of the opinion, and so holds, that the lower court did not err in
declaring the Ordinance, as it did, ultra vires and therefore null and void.
The tests of a valid ordinance are well established. A long line of decisions has held that
for an ordinance to be valid, it must not only be within the corporate powers of the local
government unit to enact and must be passed according to the procedure prescribed by
law, it must also conform to the following substantive requirements:
(1) must not contravene the Constitution or any statute;
(2) must not be unfair or oppressive;
(3) must not be partial or discriminatory;
(4) must not prohibit but may regulate trade;
(5) must be general and consistent with public policy; and
(6) must not be unreasonable.
The Ordinance was passed by the City Council in the exercise of its police power, an
enactment of the City Council acting as agent of Congress. This delegated police power
is found in Section 16 of the LGC, known as the general welfare clause.
The inquiry in this Petition is concerned with the validity of the exercise of such
delegated power.

A. The Ordinance contravenes

the Constitution

The enactment of the Ordinance was an invalid exercise of delegated power as it is

unconstitutional and repugnant to general laws.
The police power granted to LGUs must always be exercised with utmost observance of
the rights of the people to due process and equal protection of the law. Due process
requires the intrinsic validity of the law in interfering with the rights of the person to his
life, liberty and property.

Requisites for the valid exercise

of Police Power are not met

To successfully invoke the exercise of police power as the rationale for the enactment of
the Ordinance, and to free it from the imputation of constitutional infirmity, not only
must it appear that the interests of the public generally, as distinguished from those of a
particular class, require an interference with private rights, but the means adopted must
be reasonably necessary for the accomplishment of the purpose and not unduly
oppressive upon individuals.60 It must be evident that no other alternative for the
accomplishment of the purpose less intrusive of private rights can work. A reasonable
relation must exist between the purposes of the police measure and the means employed
for its accomplishment, for even under the guise of protecting the public interest,
personal rights and those pertaining to private property will not be permitted to be
arbitrarily invaded.
Lacking a concurrence of these two requisites, the police measure shall be struck down as
an arbitrary intrusion into private rights ⎯a violation of the due process clause.

The object of the Ordinance was, accordingly, the promotion and protection of the social
and moral values of the community. Granting for the sake of argument that the objectives
of the Ordinance are within the scope of the City Council’s police powers, the means
employed for the accomplishment thereof were unreasonable and unduly oppressive.

The worthy aim of fostering public morals and the eradication of the community’s social
ills can be achieved through means less restrictive of private rights; it can be attained by
reasonable restrictions rather than by an absolute prohibition. The closing down and
transfer of businesses or their conversion into businesses “allowed” under the Ordinance
have no reasonable relation to the accomplishment of its purposes. Otherwise stated, the
prohibition of the enumerated establishments will not per se protect and promote the
social and moral welfare of the community; it will not in itself eradicate the alluded
social ills of prostitution, adultery, fornication nor will it arrest the spread of sexual
disease in Manila.

The enumerated establishments are lawful pursuits which are not per se offensive to the
moral welfare of the community. While a motel may be used as a venue for immoral
sexual activity, it cannot for that reason alone be punished. It cannot be classified as a
house of ill-repute or as a nuisance per se on a mere likelihood or a naked assumption.

If the City of Manila so desires to put an end to prostitution, fornication and other social
ills, it can instead impose reasonable regulations such as daily inspections of the
establishments for any violation of the conditions of their licenses or permits; it may
exercise its authority to suspend or revoke their licenses for these violations; and it may
even impose increased license fees. In other words, there are other means to reasonably
accomplish the desired end.

It is readily apparent that the means employed by the Ordinance for the achievement of
its purposes, the governmental interference itself, infringes on the constitutional
guarantees of a person’s fundamental right to liberty and property.

Modality employed is
unlawful taking
It is an ordinance which permanently restricts the use of property that it can not be used
for any reasonable purpose goes beyond regulation and must be recognized as a taking of
the property without just compensation.78 It is intrusive and violative of the private
property rights of individuals.
There are two different types of taking that can be identified. A “possessory” taking
occurs when the government confiscates or physically occupies property. A “regulatory”
taking occurs when the government’s regulation leaves no reasonable economically
viable use of the property.

What is crucial in judicial consideration of regulatory takings is that government

regulation is a taking if it leaves no reasonable economically viable use of property in a
manner that interferes with reasonable expectations for use. When the owner of real
property has been called upon to sacrifice all economically beneficial uses in the name of
the common good, that is, to leave his property economically idle, he has suffered a
taking.

The Ordinance gives the owners and operators of the “prohibited” establishments three
(3) months from its approval within which to “wind up business operations or to transfer
to any place outside of the Ermita-Malate area or convert said businesses to other kinds
of business allowable within the area.” The directive to “wind up business operations”
amounts to a closure of the establishment, a permanent deprivation of property, and is
practically confiscatory. Unless the owner converts his establishment to accommodate an
“allowed” business, the structure which housed the previous business will be left empty
and gathering dust. It is apparent that the Ordinance leaves no reasonable economically
viable use of property in a manner that interferes with reasonable expectations for use.
The second and third options⎯ to transfer to any place outside of the Ermita-Malate area
or to convert into allowed businesses⎯are confiscatory as well. The penalty of
permanent closure in cases of subsequent violations found in Section 4 of the Ordinance
is also equivalent to a “taking” of private property.

Petitioners cannot take refuge in classifying the measure as a zoning ordinance. A zoning
ordinance, although a valid exercise of police power, which limits a “wholesome”
property to a use which can not reasonably be made of it constitutes the taking of such
property without just compensation. Private property which is not noxious nor intended
for noxious purposes may not, by zoning, be destroyed without compensation. Such
principle finds no support in the principles of justice as we know them. The police
powers of local government units which have always received broad and liberal
interpretation cannot be stretched to cover this particular taking.

Further, The Ordinance confers upon the mayor arbitrary and unrestricted power to close
down establishments. Ordinances such as this, which make possible abuses in its
execution, depending upon no conditions or qualifications whatsoever other than the
unregulated arbitrary will of the city authorities as the touchstone by which its validity is
to be tested, are unreasonable and invalid. The Ordinance should have established a rule
by which its impartial enforcement could be secured. Similarly, the Ordinance does not
specify the standards to ascertain which establishments “tend to disturb the community,”
“annoy the inhabitants,” and “adversely affect the social and moral welfare of the
community.”

The cited case supports the nullification of the Ordinance for lack of comprehensible
standards to guide the law enforcers in carrying out its provisions.

Petitioners cannot therefore order the closure of the enumerated establishments without
infringing the due process clause. These lawful establishments may be regulated, but not
prevented from carrying on their business.

B. The Ordinance violates Equal

Protection Clause

In the Court’s view, there are no substantial distinctions between motels, inns, pension
houses, hotels, lodging houses or other similar establishments. By definition, all are
commercial establishments providing lodging and usually meals and other services for
the public. No reason exists for prohibiting motels and inns but not pension houses,
hotels, lodging houses or other similar establishments. The classification in the instant
case is invalid as similar subjects are not similarly treated, both as to rights conferred and
obligations imposed. It is arbitrary as it does not rest on substantial distinctions bearing a
just and fair relation to the purpose of the Ordinance.

The Court likewise cannot see the logic for prohibiting the business and operation of
motels in the Ermita-Malate area but not outside of this area. A noxious establishment
does not become any less noxious if located outside the area.

The standard “where women are used as tools for entertainment” is also discriminatory as
prostitution⎯one of the hinted ills the Ordinance aims to banish⎯is not a profession
exclusive to women. Both men and women have an equal propensity to engage in
prostitution. Thus, the discrimination is invalid.

C. The Ordinance is repugnant

to general laws; it is ultra vires

The Ordinance is in contravention of the Code (Sec 458) as the latter merely empowers
local government units to regulate, and not prohibit, the establishments enumerated in
Section 1 thereof.

With respect to cafes, restaurants, beerhouses, hotels, motels, inns, pension houses,
lodging houses, and other similar establishments, the only power of the City Council to
legislate relative thereto is to regulate them to promote the general welfare. The Code still
withholds from cities the power to suppress and prohibit altogether the establishment,
operation and maintenance of such establishments.

It is well to point out that petitioners also cannot seek cover under the general welfare
clause authorizing the abatement of nuisances without judicial proceedings. That tenet
applies to a nuisance per se, or one which affects the immediate safety of persons and
property and may be summarily abated under the undefined law of necessity. It can not
be said that motels are injurious to the rights of property, health or comfort of the
community. It is a legitimate business. If it be a nuisance per accidens it may be so
proven in a hearing conducted for that purpose. A motel is not per se a nuisance
warranting its summary abatement without judicial intervention.

Not only does the Ordinance contravene the Code, it likewise runs counter to the
provisions of P.D. 499. As correctly argued by MTDC, the statute had already converted
the residential Ermita-Malate area into a commercial area. The decree allowed the
establishment and operation of all kinds of commercial establishments except warehouse
or open storage depot, dump or yard, motor repair shop, gasoline service station, light
industry with any machinery or funeral establishment. The rule is that for an ordinance to
be valid and to have force and effect, it must not only be within the powers of the council
to enact but the same must not be in conflict with or repugnant to the general law.

Conclusion
All considered, the Ordinance invades fundamental personal and property rights and
impairs personal privileges. It is constitutionally infirm. The Ordinance contravenes
statutes; it is discriminatory and unreasonable in its operation; it is not sufficiently
detailed and explicit that abuses may attend the enforcement of its sanctions. And not to
be forgotten, the City Council under the Code had no power to enact the Ordinance and is
therefore ultra vires, null and void.

Petition Denied.

WHITE LIGHT CORPORATION VS. CITY OF MANILA

Facts:
On December 3, 1992, City Mayor Alfredo S. Lim signed into law Manila City
Ordinance No. 7774 entitled “An Ordinance Prohibiting Short-Time Admission, Short-
Time Admission Rates, and Wash-Up Rate Schemes in Hotels, Motels, Inns, Lodging
Houses, Pension Houses, and Similar Establishments in the City of Manila” (the
Ordinance).” The ordinance sanctions any person or corporation who will allow the
admission and charging of room rates for less than 12 hours or the renting of rooms more
than twice a day.
The petitioners White Light Corporation (WLC), Titanium Corporation (TC), and Sta.
Mesa Tourist and Development Corporation (STDC), who own and operate several hotels
and motels in Metro Manila, filed a motion to intervene and to admit attached complaint-
in-intervention on the ground that the ordinance will affect their business interests as
operators. The respondents, in turn, alleged that the ordinance is a legitimate exercise of
police power.

RTC declared Ordinance No. 7774 null and void as it “strikes at the personal liberty of
the individual guaranteed and jealously guarded by the Constitution.” Reference was
made to the provisions of the Constitution encouraging private enterprises and the
incentive to needed investment, as well as the right to operate economic enterprises.
Finally, from the observation that the illicit relationships the Ordinance sought to
dissuade could nonetheless be consummated by simply paying for a 12-hour stay.

When elevated to CA, the respondents asserted that the ordinance is a valid exercise of
police power pursuant to Section 458 (4)(iv) of the Local Government Code which
confers on cities the power to regulate the establishment, operation and maintenance of
cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging houses and
other similar establishments, including tourist guides and transports. Also, they
contended that under Art III Sec 18 of Revised Manila Charter, they have the power to
enact all ordinances it may deem necessary and proper for the sanitation and safety, the
furtherance of the prosperity and the promotion of the morality, peace, good order,
comfort, convenience and general welfare of the city and its inhabitants and to fix
penalties for the violation of ordinances.

Petitioners argued that the ordinance is unconstitutional and void since it violates the
right to privacy and freedom of movement; it is an invalid exercise of police power; and
it is unreasonable and oppressive interference in their business.
CA, in turn, reversed the decision of RTC and affirmed the constitutionality of the
ordinance. First, it held that the ordinance did not violate the right to privacy or the
freedom of movement, as it only penalizes the owners or operators of establishments that
admit individuals for short time stays. Second, the virtually limitless reach of police
power is only constrained by having a lawful object obtained through a lawful method.
The lawful objective of the ordinance is satisfied since it aims to curb immoral activities.
There is a lawful method since the establishments are still allowed to operate. Third, the
adverse effect on the establishments is justified by the well-being of its constituents in
general.
Hence, the petitioners appeared before the SC.

Issue:
Whether Ordinance No. 7774 is a valid exercise of police power of the State.

Held:
No. Ordinance No. 7774 cannot be considered as a valid exercise of police power, and as
such, it is unconstitutional.
The facts of this case will recall to mind not only the recent City of Manila v Laguio Jr
ruling, but the 1967 decision in Ermita-Malate Hotel and Motel Operations Association,
Inc., v. Hon. City Mayor of Manila. The common thread that runs through those
decisions and the case at bar goes beyond the singularity of the localities covered under
the respective ordinances. All three ordinances were enacted with a view of regulating
public morals including particular illicit activity in transient lodging establishments. This
could be described as the middle case, wherein there is no wholesale ban on motels and
hotels but the services offered by these establishments have been severely restricted. At
its core, this is another case about the extent to which the State can intrude into and
regulate the lives of its citizens.

The test of a valid ordinance is well established. A long line of decisions including City
of Manila has held that for an ordinance to be valid, it must not only be within the
corporate powers of the local government unit to enact and pass according to the
procedure prescribed by law, it must also conform to the following substantive
requirements: (1) must not contravene the Constitution or any statute; (2) must not be
unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but
may regulate trade; (5) must be general and consistent with public policy; and (6) must
not be unreasonable.

The ordinance in this case prohibits two specific and distinct business practices, namely
wash rate admissions and renting out a room more than twice a day. The ban is evidently
sought to be rooted in the police power as conferred on local government units by the
Local Government Code through such implements as the general welfare clause.

Police power is based upon the concept of necessity of the State and its corresponding
right to protect itself and its people. Police power has been used as justification for
numerous and varied actions by the State.

The apparent goal of the ordinance is to minimize if not eliminate the use of the covered
establishments for illicit sex, prostitution, drug use and alike. These goals, by themselves,
are unimpeachable and certainly fall within the ambit of the police power of the State.
Yet the desirability of these ends do not sanctify any and all means for their achievement.
Those means must align with the Constitution.

SC contended that if they were to take the myopic view that an ordinance should be
analyzed strictly as to its effect only on the petitioners at bar, then it would seem that the
only restraint imposed by the law that they were capacitated to act upon is the injury to
property sustained by the petitioners. Yet, they also recognized the capacity of the
petitioners to invoke as well the constitutional rights of their patrons – those persons who
would be deprived of availing short time access or wash-up rates to the lodging
establishments in question. The rights at stake herein fell within the same fundamental
rights to liberty. Liberty as guaranteed by the Constitution was defined by Justice
Malcolm to include “the right to exist and the right to be free from arbitrary restraint or
servitude. The term cannot be dwarfed into mere freedom from physical restraint of the
person of the citizen, but is deemed to embrace the right of man to enjoy the facilities
with which he has been endowed by his Creator, subject only to such restraint as are
necessary for the common welfare,
Indeed, the right to privacy as a constitutional right must be recognized and the invasion
of it should be justified by a compelling state interest. Jurisprudence accorded recognition
to the right to privacy independently of its identification with liberty; in itself it is fully
deserving of constitutional protection. Governmental powers should stop short of certain
intrusions into the personal life of the citizen.

An ordinance which prevents the lawful uses of a wash rate depriving patrons of a
product and the petitioners of lucrative business ties in with another constitutional
requisite for the legitimacy of the ordinance as a police power measure. It must appear
that the interests of the public generally, as distinguished from those of a particular class,
require an interference with private rights and the means must be reasonably necessary
for the accomplishment of the purpose and not unduly oppressive of private rights. It
must also be evident that no other alternative for the accomplishment of the purpose less
intrusive of private rights can work. More importantly, a reasonable relation must exist
between the purposes of the measure and the means employed for its accomplishment, for
even under the guise of protecting the public interest, personal rights and those pertaining
to private property will not be permitted to be arbitrarily invaded.

Lacking a concurrence of these requisites, the police measure shall be struck down as an
arbitrary intrusion into private rights.
The behavior which the ordinance seeks to curtail is in fact already prohibited and could
in fact be diminished simply by applying existing laws. Less intrusive measures such as
curbing the proliferation of prostitutes and drug dealers through active police work would
be more effective in easing the situation. So would the strict enforcement of existing laws
and regulations penalizing prostitution and drug use. These measures would have
minimal intrusion on the businesses of the petitioners and other legitimate merchants.
Further, it is apparent that the ordinance can easily be circumvented by merely paying the
whole day rate without any hindrance to those engaged in illicit activities. Moreover,
drug dealers and prostitutes can in fact collect “wash rates” from their clientele by
charging their customers a portion of the rent for motel rooms and even apartments.

SC reiterated that individual rights may be adversely affected only to the extent that may
fairly be required by the legitimate demands of public interest or public welfare. The
State is a leviathan that must be restrained from needlessly intruding into the lives of its
citizens. However well¬-intentioned the ordinance may be, it is in effect an arbitrary and
whimsical intrusion into the rights of the establishments as well as their patrons. The
ordinance needlessly restrains the operation of the businesses of the petitioners as well as
restricting the rights of their patrons without sufficient justification. The ordinance rashly
equates wash rates and renting out a room more than twice a day with immorality without
accommodating innocuous intentions.
WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals is
REVERSED, and the Decision of the Regional Trial Court of Manila, Branch 9, is
REINSTATED. Ordinance No. 7774 is hereby declared UNCONSTITUTIONAL. No
pronouncement as to costs.
MMDA VS TRACKWORKS RAIL TRANSIT ADVERTISING, VENDING AND
PROMOTIONS, INC.
Facts: In 1997, the Government, through the Department of Transportation and
Communications, entered into a build-lease-transfer agreement (BLT agreement) with
Metro Rail Transit Corporation, Limited (MRTC) pursuant to Republic Act No. 6957
(Build, Operate and Transfer Law), under which MRTC undertook to build MRT3
subject to the condition that MRTC would own MRT3 for 25 years, upon the expiration
of which the ownership would transfer to the Government. In 1998, respondent
Trackworks Rail Transit Advertising, Vending & Promotions, Inc. (Trackworks) entered
into a contract for advertising services with MRTC. Trackworks thereafter installed
commercial billboards, signages and other advertising media in the different parts of the
MRT3. In 2001, however, MMDA requested Trackworks to dismantle the billboards,
signages and other advertising media pursuant to MMDA Regulation No. 96-009,
whereby MMDA prohibited the posting, installation and display of any kind or form of
billboards, signs, posters, streamers, in any part of the road, sidewalk, center island,
posts, trees, parks and open space. After Trackworks refused the request of MMDA,
MMDA proceeded to dismantle the former’s billboards and similar forms of
advertisement.

Issue: Whether MMDA has the power to dismantle, remove or destroy the billboards,
signages and other advertising media installed by Trackworks on the interior and exterior
structures of the MRT3.

Ruling: That Trackworks derived its right to install its billboards, signages and other
advertising media in the MRT3 from MRTC’s authority under the BLT agreement to
develop commercial premises in the MRT3 structure or to obtain advertising income
therefrom is no longer debatable. Under the BLT agreement, indeed, MRTC owned the
MRT3 for 25 years, upon the expiration of which MRTC would transfer ownership of the
MRT3 to the Government.
Considering that MRTC remained to be the owner of the MRT3 during the time material
to this case, and until this date, MRTC’s entering into the contract for advertising services
with Trackworks was a valid exercise of ownership by the former. In fact,
in Metropolitan Manila Development Authority v. Trackworks Rail Transit Advertising,
Vending & Promotions, Inc., this Court expressly recognized Trackworks’ right to install
the billboards, signages and other advertising media pursuant to said contract. The latter’s
right should, therefore, be respected.
It is futile for MMDA to simply invoke its legal mandate to justify the dismantling of
Trackworks’ billboards, signages and other advertising media. MMDA simply had no
power on its own to dismantle, remove, or destroy the billboards, signages and other
advertising media installed on the MRT3 structure by Trackworks. In Metropolitan
Manila Development Authority v. Bel-Air Village Association, Inc., Metropolitan Manila
Development Authority v. Viron Transportation Co., Inc., and Metropolitan Manila
Development Authority v. Garin, the Court had the occasion to rule that MMDA’s powers
were limited to the formulation, coordination, regulation, implementation, preparation,
management, monitoring, setting of policies, installing a system, and administration.
Nothing in Republic Act No. 7924 granted MMDA police power, let alone legislative
power.

The Court also agrees with the CA’s ruling that MMDA Regulation No. 96-009 and
MMC Memorandum Circular No. 88-09 did not apply to Trackworks’ billboards,
signages and other advertising media. The prohibition against posting, installation and
display of billboards, signages and other advertising media applied only to public areas,
but MRT3, being private property pursuant to the BLT agreement between the
Government and MRTC, was not one of the areas as to which the prohibition applied.

ASSOCIATION OF SMALL LANDOWNERS V. SECRETARY OF DAR

FACTS:
These are consolidated cases involving common legal questions including serious
challenges to the constitutionality of R.A. No. 6657 also known as the "Comprehensive
Agrarian Reform Law of 1988"

In G.R. No. 79777, the petitioners are questioning the P.D No. 27 and E.O Nos. 228 and
229 on the grounds inter alia of separation of powers, due process, equal protection and
the constitutional limitation that no private property shall be taken for public use without
just compensation.

In G.R. No. 79310, the petitioners in this case claim that the power to provide for a
Comprehensive Agrarian Reform Program as decreed by the Constitution belongs to the
Congress and not to the President, the also allege that Proclamation No. 131 and E.O No.
229 should be annulled for violation of the constitutional provisions on just
compensation, due process and equal protection. They contended that the taking must be
simultaneous with payment of just compensation which such payment is not
contemplated in Section 5 of the E.O No. 229.

In G.R. No. 79744, the petitioner argues that E.O Nos. 228 and 229 were invalidly issued
by the President and that the said executive orders violate the constitutional provision that
no private property shall be taken without due process or just compensation which was
denied to the petitioners.

In G.R. No 78742 the petitioners claim that they cannot eject their tenants and so are
unable to enjoy their right of retention because the Department of Agrarian Reform has
so far not issued the implementing rules of the decree. They therefore ask the Honorable
Court for a writ of mandamus to compel the respondents to issue the said rules.

ISSUE:
Whether or not the laws being challenged is a valid exercise of Police power or Power of
Eminent Domain.
RULING:
Police Power through the Power of Eminent Domain, though there
are traditional distinction between the police power and the power of eminent domain,
property condemned under police power is noxious or intended for noxious purpose, the
compensation for the taking of such property is not subject to compensation, unlike the
taking of the property in Eminent Domain or the power of expropriation which requires
the payment of just compensation to the owner of the property expropriated.

RESTITUTO YNOT VS IAC

On January 13, 1984, the petitioner transported six carabaos in a pump boat from
Masbate to Iloilo when the same was confiscated by the police station commander of
Barotac Nuevo, Iloilo for the violation of E.O. 626-A. A case was filed by the petitioner
questioning the constitutionality of executive order and the recovery of the carabaos.
After considering the merits of the case, the confiscation was sustained and the court
declined to rule on the constitutionality issue. The petitioner appealed the decision to the
Intermediate Appellate Court but it also upheld the ruling of RTC.

Issue:
Is E.O. 626-A unconstitutional?

Ruling:
The Respondent contends that it is a valid exercise of police power to justify EO 626-A
amending EO 626 in asic rule prohibiting the slaughter of carabaos except under certain
conditions. The supreme court said that The reasonable connection between the means
employed and the purpose sought to be achieved by the questioned measure is missing
the Supreme Court do not see how the prohibition of the inter-provincial transport of
carabaos can prevent their indiscriminate slaughter, considering that they can be killed
anywhere, with no less difficulty in one province than in another. Obviously, retaining
the carabaos in one province will not prevent their slaughter there, any more than moving
them to another province will make it easier to kill them there

The Supreme Court found E.O. 626-A unconstitutional. The executive act defined the
prohibition, convicted the petitioner and immediately imposed punishment, which was
carried out forthright. Due process was not properly observed. In the instant case, the
carabaos were arbitrarily confiscated by the police station commander, were returned to
the petitioner only after he had filed a complaint for recovery and given a supersedeas
bond of P12,000.00. The measure struck at once and pounced upon the petitioner without
giving him a chance to be heard, thus denying due process.
PASEI vs DRILON

Facts:Petitioner, Phil association of Service Exporters, Inc., is engaged principally in the

recruitment of Filipino workers, male and female of overseas employment. It challenges
the constitutional validity of Dept. Order No. 1 (1998) of DOLE entitled “Guidelines
Governing the Temporary Suspension of Deployment of Filipino Domestic and
Household Workers.” It claims that such order is a discrimination against males and
females. The Order does not apply to all Filipino workers but only to domestic helpers
and females with similar skills, and that it is in violation of the right to travel, it also
being an invalid exercise of the lawmaking power. Further, PASEI invokes Sec 3 of Art
13 of the Constitution, providing for worker participation in policy and decision-making
processes affecting their rights and benefits as may be provided by law. Thereafter the
Solicitor General on behalf of DOLE submitting to the validity of the challenged
guidelines involving the police power of the State and informed the court that the
respondent have lifted the deployment ban in some states where there exists bilateral
agreement with the Philippines and existing mechanism providing for sufficient
safeguards to ensure the welfare and protection of the Filipino workers.

Issue:Whether or not there has been a valid classification in the challenged Department
Order No. 1.

Decision:SC in dismissing the petition ruled that there has been valid classification, the
Filipino female domestics working abroad were in a class by themselves, because of the
special risk to which their class was exposed. There is no question that Order No.1
applies only to female contract workers but it does not thereby make an undue
discrimination between sexes. It is well settled hat equality before the law under the
constitution does not import a perfect identity of rights among all men and women. It
admits of classification, provided that:
1. Such classification rests on substantial distinctions
2. That they are germane to the purpose of the law
3. They are not confined to existing conditions
4. They apply equally to al members of the same class

In the case at bar, the classifications made, rest on substantial distinctions.

Dept. Order No. 1 does not impair the right to travel. The consequence of the deployment
ban has on the right to travel does not impair the right, as the right to travel is subjects
among other things, to the requirements of “public safety” as may be provided by law.
Deployment ban of female domestic helper is a valid exercise of police power. Police
power as been defined as the state authority to enact legislation that may interfere with
personal liberty or property in order to promote general welfare. Neither is there merit in
the contention that Department Order No. 1 constitutes an invalid exercise of legislative
power as the labor code vest the DOLE with rule making powers.
LOZANO VS MARTINEZ
Facts:

Petitioners were charged with violation of Batas Pambansa Bilang 22 (Bouncing Check
Law). They moved seasonably to quash the informations on the ground that
the acts charged did not constitute an offense, the statute being unconstitutional. The
motions were denied by the respondent trial courts, except in one case, wherein the trial
court declared the law unconstitutional and dismissed the case. The parties
adversely affected thus appealed.

Issue:

1. Whether or not BP 22 is violative of the constitutional provision on non-imprisonment

due to debt
2. Whether it impairs freedom of contract
3. Whether it contravenes the equal protection clause

Held:

1. The enactment of BP 22 is a valid exercise of the police power and is not repugnant to
the constitutional inhibition against imprisonment for debt. The gravamen of the offense
punished by BP 22 is the act of making and issuing a worthless check or a check that is
dishonored upon its presentation for payment. It is not the non-payment of an
obligation which the law punishes. The law is not intended or designed to coerce a debtor
to pay his debt. The thrust of the law is to prohibit, under pain of penal sanctions, the
making of worthless checks and putting them in circulation. Because of its deleterious
effects on the public interest, the practice is proscribed by the law. The law punishes
the act not as an offense against property, but an offense against public order.

Unlike a promissory note, a check is not a mere undertaking to pay an amount of money.
It is an order addressed to a bank and partakes of a representation that the drawer has
funds on deposit against which the check is drawn, sufficient to ensure payment upon its
presentation to the bank. There is therefore an element of certainty or assurance that the
instrument will be paid upon presentation. For this reason, checks have become
widely acceptedas a medium of payment in trade and commerce. Although not legal
tender, checks have come to be perceived as convenient substitutes for currency in
commercial and financial transactions. The basis or foundation of such perception is
confidence. If such confidence is shaken, the usefulness of checks as currency substitutes
would be greatly diminished or may become nil. Any practice therefore tending to
destroy that confidence should be deterred for the proliferation of worthless checks can
only create havoc in trade circles and the banking community.

The effects of the issuance of a worthless check transcends the private interests of the
parties directly involved in the transaction and touches the interests of the community at
large. The mischief it creates is not only a wrong to the payee or holder, but also an injury
to the public. The harmful practice of putting valueless commercial papers in circulation,
multiplied a thousand fold, can very wen pollute the channels of trade and
commerce, injure the banking system and eventually hurt the welfare of society and the
public interest.

2. The freedom of contract which is constitutionally protected is freedom to enter into

“lawful” contracts. Contracts which contravene public policy are not lawful. Besides, we
must bear in mind that checks can not be categorized as mere contracts. It is a
commercial instrument which, in this modem day and age, has become a convenient
substitute for money; it forms part of the banking system and therefore not entirely free
from the regulatory power of the state.

3. There is no substance in the claim that the statute in question denies equal protection of
the laws or is discriminatory, since it penalizes the drawer of the check, but not the payee.
It is contended that the payee is just as responsible for the crime as the drawer of the
check, since without the indispensable participation of the payee by his acceptance of the
check there would be no crime. This argument is tantamount to saying that, to give equal
protection, the law should punish both the swindler and the swindled. The petitioners’
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. (Lozano vs Martinez, G.R. No. L-63419, December 18, 1986)

DECS VS SAN DIEGO

Facts:
Respondent San Diego has flunked the NMAT (National Medical Admission Test) three
times. When he applied to take again, petitioner rejected his application based on
the “three-flunk-rule”. He then filed a petition before the RTC on the ground of due
process and equal protection and challenging the constitutionality of the order. The
petition was granted by the RTC therefore this petition.

Issue:
Whether or not the NMAT “three-flunk-rule” order is valid and constitutional.

Ruling:
Yes. It is the right and responsibility of the State to insure that the medical profession is
not infiltrated by incompetents to whom patients may unwarily entrust their lives and
health. The method employed by the challenged regulation is not irrelevant to the purpose
of the law nor is it arbitrary or oppressive. The right to quality education is not absolute.
The Constitution provides that “ every citizen has the right to choose a profession or
course of study, subject to fair, reasonable and equitable admission and academic
requirements”. It is not enough to simply invoke the right to quality education as a
guarantee of the Constitution but one must show that he is entitled to it because of his
preparation and promise. Petition was granted and the RTC ruling was reversed.
CITY GOVERNMENT OF QUEZON VS ERICTA
Facts:
An ordinance was promulgated in Quezon city which approved the the regulation
ofestablishment of private cemeteries in the said city. According to the ordinance, 6% of
the total area of the private memorial park shall be set aside for charity burial of deceased
persons who are paupers and have been residents of QC. Himlayang Pilipino, a private
memorial park, contends that the taking or confiscation of property restricts the use of
property such that it cannot be used for any reasonable purpose and deprives the owner of
all beneficial use of his property. It also contends that the taking is not a valid exercise of
police power, since the properties taken in the exercise of police power are destroyed and
not for the benefit of the public.

Issue:
Whether or not the ordinance made by Quezon City is a valid taking of private property

Ruling:
No, the ordinance made by Quezon City is not a valid way of taking private property. The
ordinace is actually a taking without compensation of a certain area from a private
cemetery to benefit paupers who are charges of the municipal corporation. Instead of
building or maintaing a public cemeteries. State's exercise of the power of expropriation
requires payment of just compensation. Passing the ordinance without benefiting the
owner of the property with just compensation or due process, would amount to unjust
taking of a real property. Since the property that is needed to be taken will be used for the
public's benefit, then the power of the state to expropriate will come forward and not the
police power of the state.

OSG VS AYALA LAND

Facts:
This is a Petition for Review on Certiorari, under Rule 45 of the Revised Rules of Court,
filed by petitioner seeking the reversal and setting aside of the decision of CA which
affirmed the decision of RTC, which denied the Motion for Reconsideration of OSG. The
RTC adjudged that respondents Ayala Land Incorporated (Ayala Land), Robinsons Land
Corporation (Robinsons), Shangri-la Plaza Corporation (Shangri-la), and SM Prime
Holdings, Inc. (SM Prime) could not be obliged to provide free parking spaces in their
malls to their patrons and the general public.

The Senate Committee on Trade and Commerce found that the collection of parking fees
by shopping malls is contrary to National Building Code and figuratively speaking, the
Code has “expropriated” the land for parking. Also, Committee stated that the collection
of parking fees would be against Article II of RA 9734 (Consumer Act of the Philippines)
as to the State’s policy of protecting the interest of consumers. Moreover, Section 201 of
the National Building Code gives the responsibility for the administration and
enforcement of the provisions of the Code, including the imposition of penalties for
administrative violations thereof to the Secretary of Public Works. This is not being
strictly followed as the LGUs are tasked to discharge the regulatory powers of DPWH
instead of DPWH instead.

As such, Senate Committee recommended that: 1) Office of Solicitor General should

institute the action to enjoin the collction of parking fees and enforce the sanctions for
violation of National Building Code; 2) DTI pursuant to RA 7394 should enforce the
provisions of Code relative to parking; and 3) Congress should amend and update the
National Building Code to prohibit the collection of parking fees and its waiver of
liability.

Respondent SM Prime assailed the recommendation of the Committee and filed a Petition
for Declaratory Relief under Rule 63 of the Revised Rules of Court against DPWH and
local building officials, contending that: 1) Rule XIX of Implementing Rules and
Regulations of National Building Code is unconstitutional and void; 2) respondent has
the legal right to lease parking spaces; and 3) National Building Code IRR is ineffective
as it was not published for 3 consecutive weeks in newspaper of general circulation as
mandated by Section 211 of PD 1096.

OSG then filed a Petition for Declaratory Relief and Injunction (with Prayer for
Temporary Restraining Order and Writ of Preliminary Injunction) to the RTC against
respondents, prohibiting them from collecting parking fees and contending that their
practice of charging parking fees is violative of National Building Code.

The RTC held that: 1) OSG has the capacity to institute the proceeding it being a
controversy of public welfare; 2) a petition for declaratory relief is proper since all the
requisites are present; 3) the Building Code with its IRR does not necessarily impose that
parking spaces shall be free of charge and providing parking spaces for free can be
considered as unlawful taking of property right without just compensation; and 4) there
was no sufficient evidence to justify any award for damages. They deemed that the
respondents are not obligated to provide parking spaces free of charge.

OSG appealed the decision to CA, saying that RTC erred in holding that the National
Building Code did not intend the parking spaces to be free of charge. On the otherhand,
respondent SM filed a separate appeal to the CA, contending that: 1) RTC erred in failing
to declare Rule XIX of IRR as unconstitutional; 2) RTC erred in failing to declare IRR
ineffective for not having been published as required by law; 3) RTC erred in dismissing
the OSG’s petition for failure to exhaust administrative remedies; and 4) RTC erred in
failing to declare that OSG has no legal standing as it is not a real party-in-interest.

CA denied the appeals of both petitioners and respondents on the following grounds: 1)
OSG did not fail to exhaust administrative remedies and that an administrative review is
not a condition precedent to judicial relief where the question in dispute is purely a legal
one and nothing of an administrative nature is to be or can be done; 2) the validity of
National Building Code IRR cannot be proceeded as it was not discussed in RTC and the
controversy could be settled on other grounds without touching the issue of validity since
the courts should refrain from passing upon the constitutionality of a law; and 3) Section
803 of National Building Code and Rule XIX of IRR are clear that they are only intended
to control the occupancy of areas and structures, and in the absence of provision of law,
respondents could not be obliged to provide parking spaces free of charge.
As such, OSG presented itself to SC for the instant Petition for Review.

Issues:
1. Whether the CA erred in affirming the ruling of RTC that respondents are not obliged
to provide free parking spaces to their customers or the public.
2. Whether the petition of OSG for prohibiting the collection of parking fees is a valid
exercise of the police power of State.

Held:
1. No. The CA was correct in affirming the ruling of RTC, and the respondents are not
obliged to provide free parking spaces. SC found no merit in the OSG’s petition:

Sec 803 of National Building Code.

Percentage of Site Occupancy states that maximum site occupancy shall be governed by
the use, type of construction, and height of the building and the use, area, nature, and
location of the site; and subject to the provisions of the local zoning requirements and in
accordance with the rules and regulations promulgated by the Secretary.

RULE XIX – PARKING AND LOADING SPACE REQUIREMENTS

Pursuant to Section 803 of the National Building Code (PD 1096) providing for
maximum site occupancy, the following provisions on parking and loading space
requirements shall be observed:
1. The parking space ratings listed below are minimum off-street requirements for
specific uses/occupancies for buildings/structures:
1.1 The size of an average automobile parking slot shall be computed as 2.4 meters by
5.00 meters for perpendicular or diagonal parking, 2.00 meters by 6.00 meters for
parallel parking. A truck or bus parking/loading slot shall be computed at a minimum of
3.60 meters by 12.00 meters. The parking slot shall be drawn to scale and the total
number of which shall be indicated on the plans and specified whether or not parking
accommodations, are attendant-managed. (See Section 2 for computation of parking
requirements).
x x x x
1.7 Neighborhood shopping center – 1 slot/100 sq. m. of shopping floor area

SECTION 102. Declaration of Policy

It is hereby declared to be the policy of the State to safeguard life, health, property, and
public welfare, consistent with the principles of sound environmental management and
control; and to this end, make it the purpose of this Code to provide for all buildings and
structures, a framework of minimum standards and requirements to regulate and control
their location, site, design, quality of materials, construction, use, occupancy, and
maintenance.
The requirement of free-of-charge parking, the OSG argues, greatly contributes to the
aim of safeguarding “life, health, property, and public welfare, consistent with the
principles of sound environmental management and control.” Adequate parking spaces
would contribute greatly to alleviating traffic congestion when complemented by quick
and easy access thereto because of free-charge parking. Moreover, the power to regulate
and control the use, occupancy, and maintenance of buildings and structures carries with
it the power to impose fees and, conversely, to control — partially or, as in this case,
absolutely — the imposition of such fees.

The explicit directive of the above is that respondents, as operators/lessors of

neighborhood shopping centers, should provide parking and loading spaces with the
minimum ratio of one slot per 100 square meters of shopping floor area. There is nothing
therein pertaining to the collection (or non-collection) of parking fees by respondents. In
fact, the term “parking fees” cannot even be found at all in the entire National Building
Code and its IRR. One rule of statutory construction is that if a statute is clear and
unequivocal, it must be given its literal meaning and applied without any attempt at
interpretation. Since Section 803 of the National Building Code and Rule XIX of its IRR
do not mention parking fees, then simply, said provisions do not regulate the collection of
the same.

The OSG cannot rely on Section 102 of the National Building Code to expand the
coverage of Section 803 of the same Code and Rule XIX of the IRR, so as to include the
regulation of parking fees. The OSG limits its citation to the first part of Section 102 of
the National Building Code declaring the policy of the State “to safeguard life, health,
property, and public welfare, consistent with the principles of sound environmental
management and control”; but totally ignores the second part of said provision, which
reads, “and to this end, make it the purpose of this Code to provide for all buildings and
structures, a framework of minimum standards and requirements to regulate and control
their location, site, design, quality of materials, construction, use, occupancy, and
maintenance.” While the first part of Section 102 of the National Building Code lays
down the State policy, it is the second part thereof that explains how said policy shall be
carried out in the Code. Section 102 of the National Building Code is not an all-
encompassing grant of regulatory power to the DPWH Secretary and local building
officials in the name of life, health, property, and public welfare. On the contrary, it limits
the regulatory power of said officials to ensuring that the minimum standards and
requirements for all buildings and structures, as set forth in the National Building Code,
are complied with.

Consequently, the OSG cannot claim that in addition to fixing the minimum requirements
for parking spaces for buildings, Rule XIX of the IRR also mandates that such parking
spaces be provided by building owners free of charge. If Rule XIX is not covered by the
enabling law, then it cannot be added to or included in the implementing rules. The rule-
making power of administrative agencies must be confined to details for regulating the
mode or proceedings to carry into effect the law as it has been enacted, and it cannot be
extended to amend or expand the statutory requirements or to embrace matters not
covered by the statute. Administrative regulations must always be in harmony with the
provisions of the law because any resulting discrepancy between the two will always be
resolved in favor of the basic law.
2. No. The petition of OSG to prohibit collection of parking fees is not a valid exercise of
the police power of State.
It is not sufficient for the OSG to claim that “the power to regulate and control the use,
occupancy, and maintenance of buildings and structures carries with it the power to
impose fees and, conversely, to control, partially or, as in this case, absolutely, the
imposition of such fees.” Firstly, the fees within the power of regulatory agencies to
impose are regulatory fees. It has been settled law in this jurisdiction that this broad and
all-compassing governmental competence to restrict rights of liberty and property carries
with it the undeniable power to collect a regulatory fee. It looks to the enactment of
specific measures that govern the relations not only as between individuals but also as
between private parties and the political society. True, if the regulatory agencies have the
power to impose regulatory fees, then conversely, they also have the power to remove the
same. Even so, it is worthy to note that the present case does not involve the imposition
by the DPWH Secretary and local building officials of regulatory fees upon respondents;
but the collection by respondents of parking fees from persons who use the mall parking
facilities. Secondly, assuming arguendo that the DPWH Secretary and local building
officials do have regulatory powers over the collection of parking fees for the use of
privately owned parking facilities, they cannot allow or prohibit such collection
arbitrarily or whimsically. Whether allowing or prohibiting the collection of such parking
fees, the action of the DPWH Secretary and local building officials must pass the test of
classic reasonableness and propriety of the measures or means in the promotion of the
ends sought to be accomplished.

Without using the term outright, the OSG is actually invoking police power to justify the
regulation by the State, through the DPWH Secretary and local building officials, of
privately owned parking facilities, including the collection by the owners/operators of
such facilities of parking fees from the public for the use thereof. The Court finds,
however, that in totally prohibiting respondents from collecting parking fees, the State
would be acting beyond the bounds of police power.

Police power is the power of promoting the public welfare by restraining and regulating
the use of liberty and property. It is usually exerted in order to merely regulate the use
and enjoyment of the property of the owner. The power to regulate, however, does not
include the power to prohibit. A fortiori, the power to regulate does not include the power
to confiscate. Police power does not involve the taking or confiscation of property, with
the exception of a few cases where there is a necessity to confiscate private property in
order to destroy it for the purpose of protecting peace and order and of promoting the
general welfare; for instance, the confiscation of an illegally possessed article, such as
opium and firearms.

When there is a taking or confiscation of private property for public use, the State is no
longer exercising police power, but another of its inherent powers, namely, eminent
domain. Eminent domain enables the State to forcibly acquire private lands intended for
public use upon payment of just compensation to the owner.
Normally, of course, the power of eminent domain results in the taking or appropriation
of title to, and possession of, the expropriated property; but no cogent reason appears why
the said power may not be availed of only to impose a burden upon the owner of
condemned property, without loss of title and possession. It is a settled rule that neither
acquisition of title nor total destruction of value is essential to taking. It is usually in
cases where title remains with the private owner that inquiry should be made to determine
whether the impairment of a property is merely regulated or amounts to a compensable
taking. A regulation that deprives any person of the profitable use of his property
constitutes a taking and entitles him to compensation, unless the invasion of rights is so
slight as to permit the regulation to be justified under the police power. Similarly, a
police regulation that unreasonably restricts the right to use business property for
business purposes amounts to a taking of private property, and the owner may recover
therefor.
Although in the present case, title to and/or possession of the parking facilities remain/s
with respondents, the prohibition against their collection of parking fees from the public,
for the use of said facilities, is already tantamount to a taking or confiscation of their
properties. The State is not only requiring that respondents devote a portion of the latter’s
properties for use as parking spaces, but is also mandating that they give the public access
to said parking spaces for free. Such is already an excessive intrusion into the property
rights of respondents. Not only are they being deprived of the right to use a portion of
their properties as they wish, they are further prohibited from profiting from its use or
even just recovering therefrom the expenses for the maintenance and operation of the
required parking facilities.
In conclusion, the total prohibition against the collection by respondents of parking fees
from persons who use the mall parking facilities has no basis in the National Building
Code or its IRR. The State also cannot impose the same prohibition by generally
invoking police power, since said prohibition amounts to a taking of respondents’
property without payment of just compensation.
WHEREFORE, the instant Petition for Review on Certiorari is hereby DENIED. The
Decision dated 25 January 2007 and Resolution dated 14 March 2007 of the Court of
Appeals in CA-G.R. CV No. 76298, affirming in toto the Joint Decision dated 29 May
2002 of the Regional Trial Court of Makati City, Branch 138, in Civil Cases No. 00-1208
and No. 00-1210 are hereby AFFIRMED. No costs.

POWER OF EMINENT DOMAIN

CITY OF MANILA VS. CHINESE COMMUNITY

Facts: The City of Manila, plaintiff herein, prayed for the expropriation of a portion
private cemetery for the conversion into an extension of Rizal Avenue. Plaintiff claims
that it is necessary that such public improvement be made in the said portion of the
private cemetery and that the said lands are within their jurisdiction.

Defendants herein answered that the said expropriation was not necessary because other
routes were available. They further claimed that the expropriation of the cemetery would
create irreparable loss and injury to them and to all those persons owing and interested in
the graves and monuments that would have to be destroyed.
The lower court ruled that the said public improvement was not necessary on the
particular-strip of land in question. Plaintiff herein assailed that they have the right to
exercise the power of eminent domain and that the courts have no right to inquire and
determine the necessity of the expropriation. Thus, the same filed an appeal.

Issue: Whether or not the courts may inquire into, and hear proof of the necessity of the
expropriation.

Held: The courts have the power of restricting the exercise of eminent domain to the
actual reasonable necessities of the case and for the purposes designated by the law. The
moment the municipal corporation or entity attempts to exercise the authority conferred,
it must comply with the conditions accompanying the authority. The necessity for
conferring the authority upon a municipal corporation to exercise the right of
eminent domain is admittedly within the power of the legislature. But whether or not
the municipal corporation or entity is exercising the right in a particular case under the
conditions imposed by the general authority, is a question that the courts have the right to
inquire to.

REPUBLIC VS PLDT
FACTS:

Sometime in 1933, the defendant PLDT entered into an agreement with RCA
Communications Inc., an American corporation, whereby telephone messages coming
from the US and received by RCA’s domestic station, could automatically be transferred
to the lines of PLDT, and vice versa.

The plaintiff through the Bureau of Telecommunications, after having set up its
own Government Telephone System, by utilizing its own appropriation and equipment
and by renting trunk lines of the PLDT, entered into an agreement with RCA for a joint
overseas telephone service.

Alleging that plaintiff is in competition with them, PLDT notified the former and
receiving no reply, disconnected the trunk lines being rented by the same; thus,
prompting the plaintiff to file a case before the CFI praying for judgment commanding
PLDT to execute a contract with the Bureau for the use of the facilities of PLDT’s
telephone system, and for a writ of preliminary injunction against the defendant to
restrain the severance of the existing trunk lines and restore those severed.

ISSUE:

Whether or not the defendant PLDT can be compelled to enter into a contract
with the plaintiff.

HELD:

“ x x x while the Republic may not compel the PLDT to celebrate a contract with
it, the Republic may, in the exercise of the sovereign power of eminent domain, require
the telephone company to permit interconnection of the government telephone system
and that of the PLDT, as the needs of the government service may require, subject to
the payment of just compensation to be determined by the court.”

PEOPLE VS FAJARDO
Facts:
Fajardo was mayor in Baao, Camrines Sur when the municipal council passed the
ordinance that prohibits the construction of a building that blocks the view of the town plaza.
Moreover, it redirects the grant of permission to the mayor.
After his incumbency, Fajardo applied for a permit to build a building beside the gasoline
station near the town plaza. His request was repeatedly denied. He continued with the
construction under the rationale that he needed a house to stay in because the old one was
destroyed by a typhoon.
He was convicted and ordered to pay a fine and demolish the building due to its obstructing
view.
He appealed to the CA, which in turn forwarded the petition due to the question of the
ordinance’s constitutionality.

Issue: Is the ordinance constitutional?

Held: No, petition granted.

Ratio:
The ordinance doesn’t state any standard that limits the grant of power to the mayor. It is an
arbitrary and unlimited conferment.
Ordinances which thus invest a city council with a discretion which is purely arbitrary, and
which may be exercised in the interest of a favored few, are unreasonable and invalid. The
ordinance should have established a rule by which its impartial enforcement could be
secured. All of the authorities cited above sustain this conclusion.
The ordinance is unreasonable and oppressive, in that it operates to permanently deprive
appellants of the right to use their own property; hence, it oversteps the bounds of police
power, and amounts to a taking of appellants property without just compensation.
While property may be regulated to the interest of the general welfare, and the state may
eliminate structures offensive to the sight, the state may not permanently divest owners of
the beneficial use of their property and practically confiscate them solely to preserve or
assure the aesthetic appearance of the community.
Fajardo would be constrained to let the land be fallow and not be used for urban purposes.
To do this legally, there must be just compensation and they must be given an opportunity to
be heard.
An ordinance which permanently so restricts the use of property that it can not be used for
any reasonable purpose goes, it is plain, beyond regulation and must be recognized as a
taking of the property.
The validity was also refuted by the Admin Code which states:
SEC. 2243. Certain legislative powers of discretionary character. — The municipal council
shall have authority to exercise the following discretionary powers:
xxx xxx xxx
(c) To establish fire limits in populous centers, prescribe the kinds of buildings that may be
constructed or repaired within them, and issue permits for the creation or repair thereof,
charging a fee which shall be determined by the municipal council and which shall not be
less than two pesos for each building permit and one peso for each repair permit issued. The
fees collected under the provisions of this subsection shall accrue to the municipal school
fund.
Since, there was absolutely no showing in this case that the municipal council had either
established fire limits within the municipality or set standards for the kind or kinds of buildings
to be constructed or repaired within them before it passed the ordinance in question, it is
clear that said ordinance was not conceived and promulgated under the express authority of
sec. 2243 (c)

REPUBLIC VS. VDA. DE CASTELLVI

FACTS: After the owner of a parcel of land that has been rented and occupied by the
government in 1947 refused to extend the lease, the latter commenced expropriation
proceedings in 1959. During the assessment of just compensation, the government argued
that it had taken the property when the contract of lease commenced and not when the
proceedings begun. The owner maintains that the disputed land was not taken when the
government commenced to occupy the said land as lessee because the essential elements
of the “taking” of property under the power of eminent domain, namely (1) entrance and
occupation by condemnor upon the private property for more than a momentary period,
and (2) devoting it to a public use in such a way as to oust the owner and deprive him of
all beneficial enjoyment of the property, are not present.

ISSUE: Whether or not the taking of property has taken place when the condemnor has
entered and occupied the property as lesse.

HELD: No, the property was deemed taken only when the expropriation proceedings
commenced in 1959.
The essential elements of the taking are: (1) Expropriator must enter a private property,
(2) for more than a momentary period, (3) and under warrant of legal authority, (4)
devoting it to public use, or otherwise informally appropriating or injuriously affecting it
in such a way as (5) substantially to oust the owner and deprive him of all beneficial
enjoyment thereof.
In the case at bar, these elements were not present when the government entered and
occupied the property under a contract of lease.

PHILIPPINE PRESS INSTITUTE VS. COMELEC

Facts: Respondent Comelec promulgated Resolution No. 2772 directing newspapers to
provide free Comelec space of not less than one-half page for the common use of
political parties and candidates. The Comelec space shall be allocated by the
Commission, free of charge, among all candidates to enable them to make known their
qualifications, their stand on public Issue and their platforms of government. The
Comelec space shall also be used by the Commission for dissemination of vital election
information.

Petitioner Philippine Press Institute, Inc. (PPI), a non-profit organization of newspaper

and magazine publishers, asks the Supreme Court to declare Comelec Resolution No.
2772 unconstitutional and void on the ground that it violates the prohibition imposed by
the Constitution upon the government against the taking of private property for public use
without just compensation. On behalf of the respondent Comelec, the Solicitor General
claimed that the Resolution is a permissible exercise of the power of supervision (police
power) of the Comelec over the information operations of print media enterprises during
the election period to safeguard and ensure a fair, impartial and credible election.

Issue:
Whether or not Comelec Resolution No. 2772 is unconstitutional.

Held: The Supreme Court declared the Resolution as unconstitutional. It held that to
compel print media companies to donate “Comelec space” amounts to “taking” of private
personal property without payment of the just compensation required in expropriation
cases. Moreover, the element of necessity for the taking has not been established by
respondent Comelec, considering that the newspapers were not unwilling to sell
advertising space. The taking of private property for public use is authorized by the
constitution, but not without payment of just compensation. Also Resolution No. 2772
does not constitute a valid exercise of the police power of the state. In the case at bench,
there is no showing of existence of a national emergency to take private property of
newspaper or magazine publishers.

SUMULONG VS GUERRERO
Facts: On December 5, 1997 the National Housing Authority (NHA) filed a complaint
for expropriation of parcels of land for the expansion of Bagong Nayon Hosing Project to
provide housing facilities to low-salaried government employees, covering approximately
twenty five (25) hectares in Antipolo, Rizal. This included the lots of petitioners Lorenzo
Sumulong (6,667 sq.m.) and Emilia Vidanes-Balaoing (3,333 sq.m.). The land sought to
be expropriated were valued by the NHA at one peso (P1.00) per square meter adopting
the market value fixed by the provincial assessor in accordance with presidential decrees
prescribing the valuation of property in expropriation proceedings.

Together with the complaint was a motion for immediate possession of the properties.
The NHA deposited the amount of P158,980.00 with the Phil. Nat’l Bank, representing
the “total market value” of the subject 25 ha. of land, pursuant to P.D. No. 1224 which
defines “the policy on the expropriation of private property for socialized housing upon
payment of just compensation.”

On January 17, 1978, respondent Judge Buenaventura S. Guerrero issued a writ of

possession pertaining to the subject parcels of land. Petitioners filed a motion for
reconsideration on the ground that they had been deprived of the possession of their
property without due process of law. This was however, denied. Hence, this petition
challenging the orders of respondent Judge and assailing the constitutionality of P.D. No.
1224, as amended.
Petitioners contend that the taking of their property subsumed under the topics of public
use, just compensation, and due process.

Issues:
(1) Whether “socialized housing” as defined in P.D. 1224, as amended, for the purpose of
condemnation proceedings is not “public use” since it will benefit only “a handful of
people, bereft of public character,” hence it is not a valid exercise of the State’s power of
eminent domain.

(2) Whether NHA has the discretion to determine the size of the property/properties to be
expropriated.

(3) Whether P.D. 1224, as amended, allows unjust and unfair valuations arbitrarily fixed
by government assessors.

(4) Whether petitioners were denied due process because their parcels of land were
immediately possessed by the NHA by virtue of the writ of possession ordered by the
respondent judge.

Held:
(1) P.D. 1224 defines “socialized housing” as, “the construction of dwelling units for the
middle and lower class members of our society, including the construction of the
supporting infrastructure and other facilities.” The “public use” requirement for a valid
exercise of the power of eminent domain is a flexible and evolving concept influenced by
changing conditions. The taking to be valid must be for public use. As long as the
purpose of the taking is public, then the power of eminent domain comes into play. It is
accurate to state then that at present, whatever may be beneficially employed for the
general welfare satisfies the requirement of public use. Ergo, “socialized housing” falls
within the confines of “public use.”

(2) The State acting through the NHA is vested with broad discretion to designate the
particular property/properties to be taken for socialized housing purposes and how much
thereof may be expropriated. Absent a clear showing of fraud, bad faith, or gross abuse of
discretion, which petitioners failed to demonstrate, the Court will give due weight to and
leave undisturbed the NHA’s choice and the size of the site for the project. The right to
use, enjoyment and disposal of private property is tempered by and has to yield to the
demands of the common good.

(3) Yes. The provisions on just compensation found in Presidential Decrees No. 1224,
1259, and 1313 are the same provisions found in P.D. No.’s 76, 464, 794, and 1533
which were declared unconstitutional for being encroachments on judicial prerogative.
Just compensation means the value of the property at the time of the taking. It means a
fair and full equivalent for the loss sustained. Tax values can serve as guides but cannot
be absolute substitute for just compensation.
(4) Yes. The petitioners were denied of due process. P.D. 1224, as amended, violates
procedural due process as it allows immediate taking of possession, control and
disposition of property without giving the owner his day in court. Respondent Judge
ordered the issuance of a writ of possession without notice and without hearing.

MANOSCA VS. CA
Facts: Petitioners inherited a piece of land when the parcel was ascertained by the NHI to
have been the birth site of Felix Y. Manalo, the founder of Iglesia Ni Cristo, it passed
Resolution No. 1, declaring the land to be a national historical landmark. Petitioners
moved to dismiss the complaint on the main thesis that the intended expropriation was
not for a public purpose and, incidentally, that the act would constitute an application of
public funds, directly or indirectly, for the use, benefit, or support of Iglesia ni Cristo, a
religious entity, contrary to the provision of Section 29(2), Article VI, of the 1987
Constitution.

Issue: Whether or not the expropriation of the land whereat Manalo was born is valid
and constitutional.

Held: Yes. The taking to be valid must be for public use. There was a time when it was
felt that a literal meaning should be attached to such a requirement. Whatever project is
undertaken must be for the public to enjoy, as in the case of streets or parks. Otherwise,
expropriation is not allowable. It is not so any more. As long as the purpose of the taking
is public, then the power of eminent domain comes into play. As just noted, the
constitution in at least two cases, to remove any doubt, determines what public use is.
One is the expropriation of lands to be subdivided into small lots for resale at cost to
individuals. The other is the transfer, through the exercise of this power, of utilities and
other private enterprise to the government. It is accurate to state then that at present
whatever may be beneficially employed for the general welfare satisfies the requirement
of public use.

EPZA VS. DULAY

Facts: The four parcels of land which are the subject of this case is where the Mactan
Export Processing Zone Authority in Cebu (EPZA) is to be constructed. Private
respondent San Antonio Development Corporation (San Antonio, for brevity), in which
these lands are registered under, claimed that the lands were expropriated to the
government without them reaching the agreement as to the compensation. Respondent
Judge Dulay then issued an order for the appointment of the commissioners to determine
the just compensation. It was later found out that the payment of the government to San
Antonio would be P15 per square meter, which was objected to by the latter contending
that under PD 1533, the basis of just compensation shall be fair and according to the fair
market value declared by the owner of the property sought to be expropriated, or by the
assessor, whichever is lower. Such objection and the subsequent Motion for
Reconsideration were denied and hearing was set for the reception of the commissioner’s
report. EPZA then filed this petition for certiorari and mandamus enjoining the
respondent from further hearing the case.

Issue: Whether or Not the exclusive and mandatory mode of determining just
compensation in PD 1533 is unconstitutional.

Held: The Supreme Court ruled that the mode of determination of just compensation in
PD 1533 is unconstitutional.

The method of ascertaining just compensation constitutes impermissible encroachment to

judicial prerogatives. It tends to render the courts inutile in a matter in which under the
Constitution is reserved to it for financial determination. The valuation in the decree may
only serve as guiding principle or one of the factors in determining just compensation,
but it may not substitute the court’s own judgment as to what amount should be awarded
and how to arrive at such amount. The determination of just compensation is a judicial
function. The executive department or the legislature may make the initial determination
but when a party claims a violation of the guarantee in the Bill of Rights that the private
party may not be taken for public use without just compensation, no statute, decree, or
executive order can mandate that its own determination shall prevail over the court’s
findings. Much less can the courts be precluded from looking into the justness of the
decreed compensation.

MUNICIPALITY OF PARANAQUE VS. V.M. REALTY CORPORATION

Facts:
Pursuant to Sangguniang Bayan Resolution No. 93-95, Series of 1993, the Municipality
of Parañaque filed a Complaint for expropriation against V.M. Realty Corporation, over
two parcels of land. Allegedly, the complaint was filed “for the purpose of alleviating the
living conditions of the underprivileged by providing homes for the homeless through a
socialized housing project.” Petitioner, pursuant to its Sangguniang Bayan Resolution
No. 577, Series of 1991, previously made an offer to enter into a negotiated sale of the
property with private respondent, which the latter did not accept. The RTC authorized
petitioner to take possession of the subject property upon its deposit with the clerk of
court of an amount equivalent to 15% of its fair market value. Private Respondent filed
an answer alleging that (a) the complaint failed to state a cause of action because it was
filed pursuant to a resolution and not to an ordinance as required by RA 7160; and (b) the
cause of action, if any, was barred by a prior judgment or res judicata. On private
respondent’s motion, its answer was treated as a motion to dismiss. The trial court
dismissed the complaint
Issue:
Whether a Local Government Unit 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.

REPUBLIC VS. HEIRS OF BORBON

Facts: NAPOCOR entered a property located in Barangay San Isidro, Batangas City in
order to construct and maintain transmission lines. Respondents heirs of Saturnino Q.
Borbon owned the property. NAPOCOR filed a complaint for expropriation in the
Regional Trial Court in Batangas City (RTC), seeking the acquisition of an easement of
right of way over a portion of the property.
The respondents staunchly maintained that NAPOCOR had not negotiated with them
before entering the property and that the entry was done without their
consent; nonetheless, they tendered no objection to NAPOCOR’s entry provided it would
pay just compensation not only for the portion sought to be expropriated but for the entire
property whose potential was greatly diminished, if not totally lost, due to the project.
During the pendency of an appeal, NAPOCOR filed a Manifestation and Motion to
Discontinue Expropriation Proceedings, informing that the parties failed to reach an
amicable agreement; that the property sought to be expropriated was no longer necessary
for public purpose because of the intervening retirement of the transmission lines
installed on the respondents’ property; that because the public purpose for which such
property would be used thereby ceased to exist, the proceedings for expropriation should
no longer continue, and the State was now duty-bound to return the property to its
owners; and that the dismissal or discontinuance of the expropriation proceedings was in
accordance with Section 4, Rule 67 of the Rules of Court.
Issue: Whether or not the expropriation proceedings should be discontinued or dismissed
pending appeal.
Ruling: The dismissal of the proceedings for expropriation at the instance of NAPOCOR
is proper, but, conformably with Section 4, Rule 67 of the Rules of Court, the dismissal
or discontinuance of the proceedings must be upon such terms as the court deems just and
equitable.
Before anything more, we remind the parties about the nature of the power of eminent
domain. The right of eminent domain is “the ultimate right of the sovereign power to
appropriate, not only the public but the private property of all citizens within the
territorial sovereignty, to public purpose.” But the exercise of such right is not unlimited,
for two mandatory requirements should underlie the Government’s exercise of the power
of eminent domain, namely: (1) that it is for a particular public purpose; and (2) that just
compensation be paid to the property owner. These requirements partake the nature of
implied conditions that should be complied with to enable the condemnor to keep the
property expropriated.
Public use, in common acceptation, means “use by the public.” However, the concept has
expanded to include utility, advantage or productivity for the benefit of the
public. “Public use” has now been held to be synonymous with “public interest,” “public
benefit,” and “public convenience.”
It is essential that the element of public use of the property be maintained
throughout the proceedings for expropriation. The effects of abandoning the public
purpose were explained in Mactan-Cebu International Airport Authority v. Lozada, Sr.,
to wit:
More particularly, with respect to the element of public use, the expropriator should
commit to use the property pursuant to the purpose stated in the petition for expropriation
filed, failing which, it should file another petition for the new purpose.If not, it is then
incumbent upon the expropriator to return the said property to its private owner, if
the latter desires to reacquire the same. Otherwise, the judgment of expropriation
suffers an intrinsic flaw, as it would lack one indispensable element for the proper
exercise of the power of eminent domain, namely, the particular public purpose for
which the property will be devoted. Accordingly, the private property owner would
be denied due process of law, and the judgment would violate the property owner’s
right to justice, fairness and equity.
It is not denied that the purpose of the plaintiff was to acquire the land in question for
public use. The fundamental basis then of all actions brought for the expropriation of
lands, under the power of eminent domain, is public use. That being true, the very
moment that it appears at any stage of the proceedings that the expropriation is not for a
public use, the action must necessarily fail and should be dismissed, for the reason that
the action cannot be maintained at all except when the expropriation is for some public
use. That must be true even during the pendency of the appeal or at any other stage of the
proceedings. If, for example, during the trial in the lower court, it should be made to
appear to the satisfaction of the court that the expropriation is not for some public use, it
would be the duty and the obligation of the trial court to dismiss the action. And even
during the pendency of the appeal, if it should be made to appear to the satisfaction of the
appellate court that the expropriation is not for public use, then it would become the duty
and the obligation of the appellate court to dismiss it.
Verily, the retirement of the transmission lines necessarily stripped the
expropriation proceedings of the element of public use. To continue with the
expropriation proceedings despite the definite cessation of the public purpose of the
project would result in the rendition of an invalid judgment in favor of the
expropriator due to the absence of the essential element of public use.
Accordingly, the Court grants the motion to discontinue the proceedings subject to the
conditions to be shortly mentioned hereunder, and requires the return of the property to
the respondents. Having said that, we must point out that NAPOCOR entered the
property without the owners’ consent and without paying just compensation to the
respondents. Neither did it deposit any amount as required by law prior to its entry. The
Constitution is explicit in obliging the Government and its entities to pay just
compensation before depriving any person of his or her property for public use.
Considering that in the process of installing transmission lines, NAPOCOR destroyed
some fruit trees and plants without payment, and the installation of the transmission lines
went through the middle of the land as to divide the property into three lots, thereby
effectively rendering the entire property inutile for any future use, it would be unfair for
NAPOCOR not to be made liable to the respondents for the disturbance of their property
rights from the time of entry until the time of restoration of the possession of the
property.
In view of the discontinuance of the proceedings and the eventual return of the
property to the respondents, there is no need to pay “just compensation” to them
because their property would not be taken by NAPOCOR. Instead of full market
value of the property, therefore, NAPOCOR should compensate the respondents for
the disturbance of their property rights from the time of entry until the time of
restoration of the possession by paying to them actual or other compensatory
damages.
This should mean that the compensation must be based on what they actually lost as a
result and by reason of their dispossession of the property and of its use, including the
value of the fruit trees, plants and crops destroyed by NAPOCOR’s construction of the
transmission lines. Considering that the dismissal of the expropriation proceedings is a
development occurring during the appeal, the Court now treats the dismissal of the
expropriation proceedings as producing the effect of converting the case into an action
for damages. For that purpose, the Court remands the case to the court of origin for
further proceedings. The court of origin shall treat the case as if originally filed as an
action for damages.

(NO RP VS MUPAS, NPC VS POSADA, DPWH VS TECSON)

POWER OF TAXATION

PASCUAL VS. SECRETARY OF PUBLIC WORKS

"A law appropriating the public revenue is invalid if the public advantage or benefit,
derived from such expenditure, is merely incidental in the promotion of a particular
enterprise."

FACTS: Governor Wenceslao Pascual of Rizal instituted this action for declaratory relief,
with injunction, upon the ground that RA No. 920, which apropriates funds for public
works particularly for the construction and improvement of Pasig feeder road terminals.
Some of the feeder roads, however, as alleged and as contained in the tracings attached to
the petition, were nothing but projected and planned subdivision roads, not yet
constructed within the Antonio Subdivision, belonging to private respondent Zulueta,
situated at Pasig, Rizal; and which projected feeder roads do not connect any government
property or any important premises to the main highway. The respondents' contention is
that there is public purpose because people living in the subdivision will directly be
benefitted from the construction of the roads, and the government also gains from the
donation of the land supposed to be occupied by the streets, made by its owner to the
government.

ISSUE: Should incidental gains by the public be considered "public purpose" for the
purpose of justifying an expenditure of the government?

HELD: No. It is a general rule that the legislature is without power to appropriate public
revenue for anything but a public purpose. It is the essential character of the direct object
of the expenditure which must determine its validity as justifying a tax, and not the
magnitude of the interest to be affected nor the degree to which the general advantage of
the community, and thus the public welfare, may be ultimately benefited by their
promotion. Incidental to the public or to the state, which results from the promotion of
private interest and the prosperity of private enterprises or business, does not justify their
aid by the use public money.
The test of the constitutionality of a statute requiring the use of public funds is whether
the statute is designed to promote the public interest, as opposed to the furtherance of the
advantage of individuals, although each advantage to individuals might incidentally serve
the public.

PUNSALAN VS. MUNICIPAL BOARD OF MANILA

Facts: Petitioners, who are professionals in the city, assail Ordinance No. 3398 together
with the law authorizing it (Section 18 of the Revised Charter of the City of Manila). The
ordinance imposes a municipal occupation tax on persons exercising various professions
in the city and penalizes non-payment of the same. The law authorizing said ordinance
empowers the Municipal Board of the city to impose a municipal occupation tax on
persons engaged in various professions. Petitioners, having already paid their occupation
tax under section 201 of the National Internal Revenue Code, paid the tax under protest
as imposed by Ordinance No. 3398. The lower court declared the ordinance invalid and
affirmed the validity of the law authorizing it.

Issue: Whether or Not the ordinance and law authorizing it constitute class legislation,
and authorize what amounts to double taxation.

Held: The Legislature may, in its discretion, select what occupations shall be taxed, and
in its discretion may tax all, or select classes of occupation for taxation, and leave others
untaxed. It is not for the courts to judge which cities or municipalities should be
empowered to impose occupation taxes aside from that imposed by the National
Government. That matter is within the domain of political departments. The argument
against double taxation may not be invoked if one tax is imposed by the state and the
other is imposed by the city. It is widely recognized that there is nothing inherently
terrible in the requirement that taxes be exacted with respect to the same occupation by
both the state and the political subdivisions thereof. Judgment of the lower court is
reversed with regards to the ordinance and affirmed as to the law authorizing it.

JOSE J. FERRER, JR., VS. CITY MAYOR HERBERT BAUTISTA, CITY

COUNCIL OF QUEZON CITY, CITY TREASURER OF QUEZON CITY, AND
CITY ASSESSOR OF QUEZON CITY

Facts:

Petitioner, a QC property owner, assails the constitutionality of two QC ordinances,

namely Ordinance No. SP-2095, S-2011 or the Socialized Housing Tax of Quezon City
and Ordinance No. SP-2235, S-2013 on garbage collection fees.

Section 3 of SP-2095 provides:

SECTION 3. IMPOSITION. A special assessment equivalent to one-half percent (0.5%)
on the assessed value of land in excess of One Hundred Thousand Pesos (Php100,000.00)
shall be collected by the City Treasurer which shall accrue to the Socialized Housing
Programs of the Quezon City Government. The special assessment shall accrue to the
General Fund under a special account to be established for the purpose (i.e., programs
and projects for low-cost housing and other mass dwellings).
c

On the other hand, Ordinance No. SP-2235, S-2013 on garbage collection places the
rates of the imposable fee dependent on the land or floor area and whether the payee is an
occupant of a lot, condominium, social housing project or apartment.

Issues:

1. WON SP-2095, S-2011 on the Socialized Housing Tax (SHT) is valid.

a. WON the SHT is a tax which is within the QC government to impose.
b. WON the SHT violates the rule on equality.
c. WON the SHT is confiscatory or oppressive.
2. WON SP-2235, S-2013 on Garbage Fee is valid.
a. WON the Ordinance on Garbage Fee violates the rule on double taxation.
b. WON it violates the rule on equality.

Ruling:

1. SP-2095, S-2011 on the Socialized Housing Tax (SHT) is VALID.

a. Yes. The SHT charged by the QC Government is a tax which is within its power
to impose. Cities are allowed to exercise such other powers and discharge such
other functions and responsibilities as are necessary, appropriate, or incidental to
 efficient and effective provision of the basic services and facilities which include,
among others, programs and projects for low-cost housing and other mass
dwellings. The collections made accrue to its socialized housing programs and
projects. The tax is not a pure exercise of taxing power or merely to raise
revenue; it is levied with a regulatory purpose. The levy is primarily in the
exercise of the police power for the general welfare of the entire city. It is greatly
imbued with public interest. Removing slum areas in Quezon City is not only
beneficial to the underprivileged and homeless constituents but advantageous to
the real property owners as well. The situation will improve the value of the their
property investments, fully enjoying the same in view of an orderly, secure, and
safe community, and will enhance the quality of life of the poor, making them
law-abiding constituents and better consumers of business products.

b. No, the SHT does NOT violate the rule on equality. For the purpose of
undertaking a comprehensive and continuing urban development and housing
program, the disparities between a real property owner and an informal settler as
two distinct classes are too obvious and need not be discussed at length. The
differentiation conforms to the practical dictates of justice and equity and is not
discriminatory within the meaning of the Constitution. Notably, the public
purpose of a tax may legally exist even if the motive which impelled the
legislature to impose the tax was to favor one over another. It is inherent in the
power to tax that a State is free to select the subjects of taxation. Inequities which
result from a singling out of one particular class for taxation or exemption
infringe no constitutional limitation.

c. No, the SHT is NOT confiscatory nor oppressive. The reasonableness of

Ordinance No. SP-2095 cannot be disputed. It is not confiscatory or oppressive
since the tax being imposed therein is below what the UDHA actually allows.
While the law authorizes LGUs to collect SHT on lands with an assessed value of
more than P50,000.00, the questioned ordinance only covers lands with an
assessed value exceeding P100,000.00. Even better, on certain conditions, the
ordinance grants a tax credit equivalent to the total amount of the special
assessment paid beginning in the sixth (6th) year of its effectivity. Far from being
obnoxious, the provisions of the subject ordinance are fair and just.

2. SP-2235, S-2013 on Garbage Fee is INVALID. Although it does not violate the rule
on double taxation, it nonetheless violates the rule on equality.

a. SP-2235 does NOT violate the rule on double taxation.

The fee imposed for garbage collections under Ordinance No. SP-2235 is a charge
fixed for the regulation of an activity. In Progressive Development Corporation
v. Quezon City, the Court declared that “if the generating of revenue is the
primary purpose and regulation is merely incidental, the imposition is a tax; but if
regulation is the primary purpose, the fact that incidentally revenue is also
 obtained does not make the imposition a tax.” In a U.S. case, the garbage fee was
considered as a "service charge" rather than a tax as it was actually a fee for a
service given by the city which had previously been provided at no cost to its
citizens.

Hence, not being a tax, the contention that the garbage fee under Ordinance No.
SP-2235 violates the rule on double taxation must necessarily fail.
 
b. Yes, SP-2235 violates the rule on equality.

For the purpose of garbage collection, there is, in fact, no substantial distinction
between an occupant of a lot, on one hand, and an occupant of a unit in a
condominium, socialized housing project or apartment, on the other hand. Most
likely, garbage output produced by these types of occupants is uniform and does
not vary to a large degree; thus, a similar schedule of fee is both just and
equitable.

The rates being charged by the ordinance are unjust and inequitable: a resident of
a 200 sq. m. unit in a condominium or socialized housing project has to pay twice
the amount than a resident of a lot similar in size; unlike unit occupants, all
occupants of a lot with an area of 200 sq. m. and less have to pay a fixed rate of
Php100.00; and the same amount of garbage fee is imposed regardless of whether
the resident is from a condominium or from a socialized housing project.

Indeed, the classifications under Ordinance No. S-2235 are not germane to its
declared purpose of “promoting shared responsibility with the residents to attack
their common mindless attitude in over-consuming the present resources and in
generating waste.” Instead of simplistically categorizing the payee into land or
floor occupant of a lot or unit of a condominium, socialized housing project or
apartment, respondent City Council should have considered factors that could
truly measure the amount of wastes generated and the appropriate fee for its
collection. Factors include, among others, household age and size, accessibility to
waste collection, population density of the barangay or district, capacity to pay,
and actual occupancy of the property.  

Dispositive  Portion:  
 
WHEREFORE, the petition is PARTIALLY GRANTED. The constitutionality and
legality of Ordinance No. SP-2095, S-2011, or the “Socialized Housing Tax of Quezon
City,” is SUSTAINED for being consistent with Section 43 of Republic Act No. 7279.
On the other hand, Ordinance No. SP-2235, S-2013, which collects an annual garbage fee
on all domestic households in Quezon City, is hereby declared as
UNCONSTITUTIONAL AND ILLEGAL. Respondents are DIRECTED to REFUND
with reasonable dispatch the sums of money collected relative to its enforcement.