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FIRST DIVISION

[G.R. No. 47800. December 2, 1940.]

MAXIMO CALALANG, Petitioner, v. A. D. WILLIAMS, ET AL., Respondents.

Maximo Calalang in his own behalf.

Solicitor General Ozaeta and Assistant Solicitor General Amparo for respondents Williams,
Fragante and Bayan

City Fiscal Mabanag for the other respondents.

SYLLABUS

1. CONSTITUTIONAL LAW; CONSTITUTIONALITY OF COMMONWEALTH ACT No.


648; DELEGATION OF LEGISLATIVE POWER; AUTHORITY OF DIRECTOR OF PUBLIC
WORKS AND SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS TO
PROMULGATE RULES AND REGULATIONS. — The provisions of section 1 of
Commonwealth Act No. 648 do not confer legislative power upon the Director of Public Works
and the Secretary of Public Works and Communications. The authority therein conferred upon
them and under which they promulgated the rules and regulations now complained of is not to
determine what public policy demands but merely to carry out the legislative policy laid down by
the National Assembly in said Act, to wit, "to promote safe transit upon, and avoid obstructions
on, roads and streets designated as national roads by acts of the National Assembly or by
executive orders of the President of the Philippines" and to close them temporarily to any or all
classes of traffic "whenever the condition of the road or the traffic thereon makes such action
necessary or advisable in the public convenience and interest." The delegated power, if at all,
therefore, is not the determination of what the law shall be, but merely the ascertainment of the
facts and circumstances upon which the application of said law is to be predicated. To
promulgate rules and regulations on the use of national roads and to determine when and how
long a national road should be closed to traffic, in view of the condition of the road or the traffic
thereon and the requirements of public convenience and interest, is an administrative function
which cannot be directly discharged by the National Assembly. It must depend on the discretion
of some other government official to whom is confided the duty of determining whether the
proper occasion exists for executing the law. But it cannot be said that the exercise of such
discretion is the making of the law.

2. ID.; ID.; POLICE POWER; PERSONAL LIBERTY; GOVERNMENTAL AUTHORITY. —


Commonwealth Act No. 548 was passed by the National Assembly in the exercise of the
paramount police power of the state. Said Act, by virtue of which the rules and regulations
complained of were promulgated, aims to promote safe transit upon and avoid obstructions on
national roads, in the interest and convenience of the public. In enacting said law, therefore, the
National Assembly was prompted by considerations of public convenience and welfare. It was
inspired by a desire to relieve congestion of traffic, which is, to say the least, a menace to public
safety. Public welfare, then, lies at the bottom of the enactment of said law, and the state in order
to promote the general welfare may interfere with personal liberty, with property, and with
business and occupations. Persons and property may be subjected to all kinds of restraints and
burdens, in order to secure the general comfort, health, and prosperity of the state (U.S. v. Gomer
Jesus, 31 Phil., 218). To this fundamental aim of our Government the rights of the individual are
subordinated. Liberty is a blessing without which life is a misery, but liberty should not be made
to prevail over authority because then society will fall into anarchy. Neither should authority be
made to prevail over liberty because then the individual will fall into slavery. The citizen should
achieve the required balance of liberty and authority in his mind through education and, personal
discipline, so that there may be established the resultant equilibrium, which means peace and
order and happiness for all. The moment greater authority is conferred upon the government,
logically so much is withdrawn from the residuum of liberty which resides in the people. The
paradox lies in the fact that the apparent curtailment of liberty is precisely the very means of
insuring its preservation.

3. ID.; ID.; SOCIAL JUSTICE. — 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 principle of salus populi est
suprema lex. Social justice, therefore, 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 the health,
comfort, and quiet of all persons, and of bringing about "the greatest good to the greatest
number."

DECISION

LAUREL, J.:

Maximo Calalang, in his capacity as a private citizen and as a taxpayer of Manila, brought before
this court this petition for a writ of prohibition against the respondents, A. D. Williams, as
Chairman of the National Traffic Commission; Vicente Fragante, as Director of Public Works;
Sergio Bayan, as Acting Secretary of Public Works and Communications; Eulogio Rodriguez, as
Mayor of the City of Manila; and Juan Dominguez, as Acting Chief of Police of Manila.

It is alleged in the petition that the National Traffic Commission, in its resolution of July 17,
1940, resolved to recommend to the Director of Public Works and to the Secretary of Public
Works and Communications that animal-drawn vehicles be prohibited from passing along
Rosario Street extending from Plaza Calderon de la Barca to Dasmariñas Street, from 7:30 a.m.
to 12:30 p.m. and from 1:30 p.m. to 5:30 p.m.; and along Rizal Avenue extending from the
railroad crossing at Antipolo Street to Echague Street, from 7 a.m. to 11 p.m., from a period of
one year from the date of the opening of the Colgante Bridge to traffic; that the Chairman of the
National Traffic Commission, on July 18, 1940 recommended to the Director of Public Works
the adoption of the measure proposed in the resolution aforementioned, in pursuance of the
provisions of Commonwealth Act No. 548 which authorizes said Director of Public Works, with
the approval of the Secretary of Public Works and Communications, to promulgate rules and
regulations to regulate and control the use of and traffic on national roads; that on August 2,
1940, the Director of Public Works, in his first indorsement to the Secretary of Public Works and
Communications, recommended to the latter the approval of the recommendation made by the
Chairman of the National Traffic Commission as aforesaid, with the modification that the closing
of Rizal Avenue to traffic to animal-drawn vehicles be limited to the portion thereof extending
from the railroad crossing at Antipolo Street to Azcarraga Street; that on August 10, 1940, the
Secretary of Public Works and Communications, in his second indorsement addressed to the
Director of Public Works, approved the recommendation of the latter that Rosario Street and
Rizal Avenue be closed to traffic of animal-drawn vehicles, between the points and during the
hours as above indicated, for a period of one year from the date of the opening of the Colgante
Bridge to traffic; that the Mayor of Manila and the Acting Chief of Police of Manila have
enforced and caused to be enforced the rules and regulations thus adopted; that as a consequence
of such enforcement, 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.

It is contended by the petitioner that Commonwealth Act No. 548 by which the Director of
Public Works, with the approval of the Secretary of Public Works and Communications, is
authorized to promulgate rules and regulations for the regulation and control of the use of and
traffic on national roads and streets is unconstitutional because it constitutes an undue delegation
of legislative power. This contention is untenable. As was observed by this court in Rubi v.
Provincial Board of Mindoro (39 Phil, 660, 700), "The rule has nowhere been better stated than
in the early Ohio case decided by Judge Ranney, and since followed in a multitude of cases,
namely: ’The true distinction therefore is between the delegation of power to make the law,
which necessarily involves a discretion as to what it shall be, and conferring an authority or
discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot
be done; to the latter no valid objection can be made.’ (Cincinnati, W. & Z. R. Co. v. Comm’rs.
Clinton County, 1 Ohio St., 88.) Discretion, as held by Chief Justice Marshall in Wayman v.
Southard (10 Wheat., 1) may be committed by the Legislature to an executive department or
official. The Legislature may make decisions of executive departments or subordinate officials
thereof, to whom it has committed the execution of certain acts, final on questions of fact. (U.S.
v. Kinkead, 248 Fed., 141.) The growing tendency in the decisions is to give prominence to the
’necessity’ of the case."cralaw virtua1aw library
Section 1 of Commonwealth Act No. 548 reads as follows:jgc:chanrobles.com.ph

"SECTION 1. To promote safe transit upon, and avoid obstructions on, roads and streets
designated as national roads by acts of the National Assembly or by executive orders of the
President of the Philippines, the Director of Public Works, with the approval of the Secretary of
Public Works and Communications, shall promulgate the necessary rules and regulations to
regulate and control the use of and traffic on such roads and streets. Such rules and regulations,
with the approval of the President, may contain provisions controlling or regulating the
construction of buildings or other structures within a reasonable distance from along the national
roads. Such roads may be temporarily closed to any or all classes of traffic by the Director of
Public Works and his duly authorized representatives whenever the condition of the road or the
traffic thereon makes such action necessary or advisable in the public convenience and interest,
or for a specified period, with the approval of the Secretary of Public Works and
Communications."cralaw virtua1aw library

The above provisions of law do not confer legislative power upon the Director of Public Works
and the Secretary of Public Works and Communications. The authority therein conferred upon
them and under which they promulgated the rules and regulations now complained of is not to
determine what public policy demands but merely to carry out the legislative policy laid down by
the National Assembly in said Act, to wit, "to promote safe transit upon and avoid obstructions
on, roads and streets designated as national roads by acts of the National Assembly or by
executive orders of the President of the Philippines" and to close them temporarily to any or all
classes of traffic "whenever the condition of the road or the traffic makes such action necessary
or advisable in the public convenience and interest." The delegated power, if at all, therefore, is
not the determination of what the law shall be, but merely the ascertainment of the facts and
circumstances upon which the application of said law is to be predicated. To promulgate rules
and regulations on the use of national roads and to determine when and how long a national road
should be closed to traffic, in view of the condition of the road or the traffic thereon and the
requirements of public convenience and interest, is an administrative function which cannot be
directly discharged by the National Assembly. It must depend on the discretion of some other
government official to whom is confided the duty of determining whether the proper occasion
exists for executing the law. But it cannot be said that the exercise of such discretion is the
making of the law. As was said in Locke’s Appeal (72 Pa. 491): "To assert that a law is less than
a law, because it is made to depend on a future event or act, is to rob the Legislature of the power
to act wisely for the public welfare whenever a law is passed relating to a state of affairs not yet
developed, or to things future and impossible to fully know." The proper distinction the court
said was this: "The Legislature cannot delegate its power to make the law; but it can make a law
to delegate a power to determine some fact or state of things upon which the law makes, or
intends to make, its own action depend. To deny this would be to stop the wheels of government.
There are many things upon which wise and useful legislation must depend which cannot be
known to the law-making power, and, must, therefore, be a subject of inquiry and determination
outside of the halls of legislation." (Field v. Clark, 143 U. S. 649, 694; 36 L. Ed. 294.)
In the case of People v. Rosenthal and Osmeña, G.R. Nos. 46076 and 46077, promulgated June
12, 1939, and in Pangasinan Transportation v. The Public Service Commission, G.R. No. 47065,
promulgated June 26, 1940, this Court had occasion to observe that the principle of separation of
powers has been made to adapt itself to the complexities of modern governments, giving rise to
the adoption, within certain limits, of the principle of "subordinate legislation," not only in the
United States and England but in practically all modern governments. Accordingly, with the
growing complexity of modern life, the multiplication of the subjects of governmental
regulations, and the increased difficulty of administering the laws, the rigidity of the theory of
separation of governmental powers has, to a large extent, been relaxed by permitting the
delegation of greater powers by the legislative and vesting a larger amount of discretion in
administrative and executive officials, not only in the execution of the laws, but also in the
promulgation of certain rules and regulations calculated to promote public interest.

The petitioner further contends that the rules and regulations promulgated by the respondents
pursuant to the provisions of Commonwealth Act No. 548 constitute an unlawful interference
with legitimate business or trade and abridge the right to personal liberty and freedom of
locomotion. Commonwealth Act No. 548 was passed by the National Assembly in the exercise
of the paramount police power of the state.

Said Act, by virtue of which the rules and regulations complained of were promulgated, aims to
promote safe transit upon and avoid obstructions on national roads, in the interest and
convenience of the public. In enacting said law, therefore, the National Assembly was prompted
by considerations of public convenience and welfare. It was inspired by a desire to relieve
congestion of traffic. which is, to say the least, a menace to public safety. Public welfare, then,
lies at the bottom of the enactment of said law, and the state in order to promote the general
welfare may interfere with personal liberty, with property, and with business and occupations.
Persons and property may be subjected to all kinds of restraints and burdens, in order to secure
the general comfort, health, and prosperity of the state (U.S. v. Gomez Jesus, 31 Phil., 218). To
this fundamental aim of our Government the rights of the individual are subordinated. Liberty is
a blessing without which life is a misery, but liberty should not be made to prevail over authority
because then society will fall into anarchy. Neither should authority be made to prevail over
liberty because then the individual will fall into slavery. The citizen should achieve the required
balance of liberty and authority in his mind through education and personal discipline, so that
there may be established the resultant equilibrium, which means peace and order and happiness
for all. The moment greater authority is conferred upon the government, logically so much is
withdrawn from the residuum of liberty which resides in the people. The paradox lies in the fact
that the apparent curtailment of liberty is precisely the very means of insuring its preservation.
The scope of police power keeps expanding as civilization advances. As was said in the case of
Dobbins v. Los Angeles (195 U.S. 223, 238; 49 L. ed. 169), "the right to exercise the police
power is a continuing one, and a business lawful today may in the future, because of the changed
situation, the growth of population or other causes, become a menace to the public health and
welfare, and be required to yield to the public good." And in People v. Pomar (46 Phil., 440), it
was observed that "advancing civilization is bringing within the police power of the state today
things which were not thought of as being within such power yesterday. The development of
civilization, the rapidly increasing population, the growth of public opinion, with an increasing
desire on the part of the masses and of the government to look after and care for the interests of
the individuals of the state, have brought within the police power many questions for regulation
which formerly were not so considered."cralaw virtua1aw library

The petitioner finally avers that 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. The promotion of social justice, however, is to be achieved
not through a mistaken sympathy towards any given group. 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
principle of salus populi est suprema lex.

Social justice, therefore, 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 the health, comfort, and
quiet of all persons, and of bringing about "the greatest good to the greatest number."cralaw
virtua1aw library

In view of the foregoing, the writ of prohibition prayed for is hereby denied, with costs against
the petitioner. So ordered.

Avanceña, C.J., Imperial, Diaz. and Horrilleno. JJ. concur.


FIRST DIVISIONt

G.R. No. 120095 August 5, 1996

JMM PROMOTION AND MANAGEMENT, INC., and KARY INTERNATIONAL,


INC., Petitioner, v. HON. COURT OF APPEALS, HON. MA. NIEVES CONFESSOR, then
Secretary of the Department of Labor and Employment, HON. JOSE BRILLANTES, in his
capacity as acting Secretary of the Department of Labor and Employment and HON.
FELICISIMO JOSON, in his capacity as Administrator of the Philippine Overseas Employment
Administration, Respondents.

KAPUNAN, J.:

The limits of government regulation under the State's police power are once again at the vortex
of the instant controversy. Assailed is the government's power to control deployment of female
entertainers to Japan by requiring an Artist Record Book (ARB) as a precondition to the
processing by the POEA of any contract for overseas employment. By contending that the right
to overseas employment is a property right within the meaning of the Constitution, petitioners
vigorously aver that deprivation thereof allegedly through the onerous requirement of an ARB
violates the due process clause and constitutes an invalid exercise of the police power.

The factual antecedents are undisputed.

Following the much-publicized death of Maricris Sioson in 1991, former President Corazon C.
Aquino ordered a total ban against the deployment of performing artists to Japan and other
foreign destinations. The ban was, however, rescinded after leaders of the overseas employment
industry promised to extend full support for a program aimed at removing kinks in the system of
deployment. In its place, the government, through the Secretary of Labor and Employment,
subsequently issued Department Order No. 28, creating the Entertainment Industry Advisory
Council (EIAC), which was tasked with issuing guidelines on the training, testing certification
and deployment of performing artists abroad.

Pursuant to the EIAC's recommendations, 1 the Secretary of Labor, on January 6, 1994, issued
Department Order No. 3 establishing various procedures and requirements for screening
performing artists under a new system of training, testing, certification and deployment of the
former. Performing artists successfully hurdling the test, training and certification requirement
were to be issued an Artist's Record Book (ARB), a necessary prerequisite to processing of any
contract of employment by the POEA. Upon request of the industry, implementation of the
process, originally scheduled for April 1, 1994, was moved to October 1, 1994.

Thereafter, the Department of Labor, following the EIAC's recommendation, issued a series of
orders fine-tuning and implementing the new system. Prominent among these orders were the
following issuances:
1. Department Order No. 3-A, providing for additional guidelines on the training, testing,
certification and deployment of performing artists.

2. Department Order No. 3-B, pertaining to the Artist Record Book (ARB) requirement, which
could be processed only after the artist could show proof of academic and skills training and has
passed the required tests.

3. Department Order No. 3-E, providing the minimum salary a performing artist ought to
received (not less than US$600.00 for those bound for Japan) and the authorized deductions
therefrom.

4. Department Order No. 3-F, providing for the guidelines on the issuance and use of the ARB
by returning performing artists who, unlike new artists, shall only undergo a Special Orientation
Program (shorter than the basic program) although they must pass the academic test.

In Civil Case No. 95-72750, the Federation of Entertainment Talent Managers of the Philippines
(FETMOP), on January 27, 1995 filed a class suit assailing these department orders, principally
contending that said orders 1) violated the constitutional right to travel; 2) abridged existing
contracts for employment; and 3) deprived individual artists of their licenses without due process
of law. FETMOP, likewise, averred that the issuance of the Artist Record Book (ARB) was
discriminatory and illegal and "in gross violation of the constitutional right... to life liberty and
property." Said Federation consequently prayed for the issuance of a writ of preliminary
injunction against the aforestated orders.

On February 2, 1992, JMM Promotion and Management, Inc. Kary International, Inc., herein
petitioners, filed a Motion for Intervention in said civil case, which was granted by the trial court
in an Order dated 15 February, 1995.

However, on February 21, 1995, the trial court issued an Order denying petitioners' prayed for a
writ of preliminary injunction and dismissed the complaint.

On appeal from the trial court's Order, respondent court, in CA G.R. SP No. 36713 dismissed the
same. Tracing the circumstances which led to the issuance of the ARB requirement and the
assailed Department Order, respondent court concluded that the issuance constituted a valid
exercise by the state of the police power.

We agree.

The latin maxim salus populi est surprema lex embodies the character of the entire spectrum of
public laws aimed at promoting the general welfare of the people under the State's police power.
As an inherent attribute of sovereignty which virtually "extends to all public needs," 2 this "least
limitable" 3 of governmental powers grants a wide panoply of instruments through which the
state, as parens patriae gives effect to a host of its regulatory powers.

Describing the nature and scope of the police power, Justice Malcolm, in the early case of Rubi
v. Provincial Board of Mindoro 4 wrote:
"The police power of the State," one court has said... is a power coextensive with self-protection,
and is not inaptly termed "the law of overruling necessity." It may be said to be that inherent and
plenary power in the state which enables it to prohibit all things hurtful to the comfort, safety and
welfare of society." Carried onward by the current of legislature, the judiciary rarely attempts to
dam the onrushing power of legislative discretion, provided the purposes of the law do not go
beyond the great principles that mean security for the public welfare or do not arbitrarily
interfere with the right of the individual. 5

Thus, police power concerns government enactments which precisely interfere with personal
liberty or property in order to promote the general welfare or the common good. As the assailed
Department Order enjoys a presumed validity, it follows that the burden rests upon petitioners to
demonstrate that the said order, particularly, its ARB requirement, does not enhance the public
welfare or was exercised arbitrarily or unreasonably.

A thorough review of the facts and circumstances leading to the issuance of the assailed orders
compels us to rule that the Artist Record Book requirement and the questioned Department Order
related to its issuance were issued by the Secretary of Labor pursuant to a valid exercise of the
police power.

In 1984, the Philippines emerged as the largest labor sending country in Asia dwarfing the labor
export of countries with mammoth populations such as India and China. According to the
National Statistics Office, this diaspora was augmented annually by over 450,000 documented
and clandestine or illegal (undocumented) workers who left the country for various destinations
abroad, lured by higher salaries, better work opportunities and sometimes better living
conditions.

Of the hundreds of thousands of workers who left the country for greener pastures in the last few
years, women composed slightly close to half of those deployed, constituting 47% between
1987-1991, exceeding this proportion (58%) by the end of 1991, 6 the year former President
Aquino instituted the ban on deployment of performing artists to Japan and other countries as a
result of the gruesome death of Filipino entertainer Maricris Sioson.

It was during the same period that this Court took judicial notice not only of the trend, but also of
the fact that most of our women, a large number employed as domestic helpers and entertainers,
worked under exploitative conditions "marked by physical and personal abuse." 7 Even then, we
noted that "[t]he sordid tales of maltreatment suffered by migrant Filipina workers, even rape and
various forms of torture, confirmed by testimonies of returning workers" compelled "urgent
government action." 8

Pursuant to the alarming number of reports that a significant number of Filipina performing
artists ended up as prostitutes abroad (many of whom were beaten, drugged and forced into
prostitution), and following the deaths of number of these women, the government began
instituting measures aimed at deploying only those individuals who met set standards which
would qualify them as legitimate performing artists. In spite of these measures, however, a
number of our countrymen have nonetheless fallen victim to unscrupulous recruiters, ending up
as virtual slaves controlled by foreign crime syndicates and forced into jobs other than those
indicated in their employment contracts. Worse, some of our women have been forced into
prostitution.

Thus, after a number of inadequate and failed accreditation schemes, the Secretary of Labor
issued on August 16, 1993, D.O. No. 28, establishing the Entertainment Industry Advisory
Council (EIAC), the policy advisory body of DOLE on entertainment industry matters. 9 Acting
on the recommendations of the said body, the Secretary of Labor, on January 6, 1994, issued the
assailed orders. These orders embodied EIAC's Resolution No. 1, which called for guidelines on
screening, testing and accrediting performing overseas Filipino artists. Significantly, as the
respondent court noted, petitioners were duly represented in the EIAC, 10 which gave the
recommendations on which the ARB and other requirements were based.

Clearly, the welfare of Filipino performing artists, particularly the women was paramount in the
issuance of Department Order No. 3. Short of a total and absolute ban against the deployment of
performing artists to "high risk" destinations, a measure which would only drive recruitment
further underground, the new scheme at the very least rationalizes the method of screening
performing artists by requiring reasonable educational and artistic skills from them and limits
deployment to only those individuals adequately prepared for the unpredictable demands of
employment as artists abroad. It cannot be gainsaid that this scheme at least lessens the room for
exploitation by unscrupulous individuals and agencies.

Moreover, here or abroad, selection of performing artists is usually accomplished by auditions,


where those deemed unfit are usually weeded out through a process which is inherently
subjective and vulnerable to bias and differences in taste. The ARB requirement goes one step
further, however, attempting to minimize the subjectivity of the process by defining the
minimum skills required from entertainers and performing artists. As the Solicitor General
observed, this should be easily met by experienced artists possessing merely basic skills. The test
are aimed at segregating real artists or performers from those passing themselves off as such,
eager to accept any available job and therefore exposing themselves to possible exploitation.

As to the other provisions of Department Order No. 3 questioned by petitioners, we see nothing
wrong with the requirements for document and booking confirmation (D.O. 3-C), a minimum
salary scale (D.O. 3-E), or the requirement for registration of returning performers. The
requirement for a venue certificate or other documents evidencing the place and nature or work
allows the government closer monitoring of foreign employers and helps keep our entertainers
away from prostitution fronts and other worksites associated with unsavory, immoral, illegal or
exploitative practices. Parenthetically, none of these issuances appear to us, by any stretch of the
imagination, even remotely unreasonable or arbitrary. They address a felt need of according
greater protection for an oft-exploited segment of our OCW's. They respond to the industry's
demand for clearer and more practicable rules and guidelines. Many of these provisions were
fleshed out following recommendations by, and after consultations with, the affected sectors and
non-government organizations. On the whole, they are aimed at enhancing the safety and
security of entertainers and artists bound for Japan and other destinations, without stifling the
industry's concerns for expansion and growth.
In any event, apart from the State's police power, the Constitution itself mandates government to
extend the fullest protection to our overseas workers. The basic constitutional statement on labor,
embodied in Section 18 of Article II of the Constitution provides:

Sec. 18. The State affirms labor as a primary social economic force. It shall protect the rights of
workers and promote their welfare.

More emphatically, the social justice provisions on labor of the 1987 Constitution in its first
paragraph states:

The State shall afford full protection to labor, local and overseas, organized and unorganized and
promote full employment and equality of employment opportunities for all.

Obviously, protection to labor does not indicate promotion of employment alone. Under the
welfare and social justice provisions of the Constitution, the promotion of full employment,
while desirable, cannot take a backseat to the government's constitutional duty to provide
mechanisms for the protection of our workforce, local or overseas. As this Court explained in
Philippine Association of Service Exporters (PASEI) v. Drilon, 11 in reference to the recurring
problems faced by our overseas workers:

What concerns the Constitution more paramountly is that such an employment be above all,
decent, just, and humane. It is bad enough that the country has to send its sons and daughters to
strange lands because it cannot satisfy their employment needs at home. Under these
circumstances, the Government is duty-adequate protection, personally and economically, while
away from home.

We now go to petitioners' assertion that the police power cannot, nevertheless, abridge the right
of our performing workers to return to work abroad after having earlier qualified under the old
process, because, having previously been accredited, their accreditation became a "property
right," protected by the due process clause. We find this contention untenable.

A profession, trade of calling is a property right within the meaning of our constitutional
guarantees. One cannot be deprived of the right to work and right to make a living because these
rights are property rights, the arbitrary and unwarranted deprivation of which normally
constitutes an actionable wrong. 12

Nevertheless, no right is absolute, and the proper regulation of a profession, calling, business or
trade has always been upheld as a legitimate subject of a valid exercise of the police power by
the state particularly when their conduct affects either the execution of legitimate governmental
functions, the preservation of the State, the public health and welfare and public morals.
According to the maxim, sic utere tuo ut alienum non laedas, it must of course be within the
legitimate range of legislative action to define the mode and manner in which every one may so
use of his own property so as not to pose injury to himself or others. 13

In any case, where the liberty curtailed affects at most the rights of property, the permissible
scope of regulatory measures is certainly much
wider. 14 To pretend that licensing or accreditation requirements violates the due process clause
is to ignore the settled practice, under the mantle of the police power, of regulating entry to the
practice of various trades or professions. Professionals leaving for abroad are required to pass
rigid written and practical exams before they are deemed fit to practice their trade. Seamen are
required to take tests determining their seamanship. Locally, the Professional Regulation
Commission has began to require previously licensed doctors and other professionals to furnish
documentary proof that they has either re-trained or had undertaken continuing education courses
as a requirement for renewal of their licenses. It is not claimed that these requirements pose an
unwarranted deprivation of a property right under the due process clause. So long as
professionals and other workers meet reasonable regulatory standards no such deprivation exists.

Finally, it is a futile gesture on the part of petitioners to invoke the non-impairment clause of the
Constitution to support their argument that the government cannot enact the assailed regulatory
measures because they abridge the freedom to contract. In Philippine Association of Service
Exporters, Inc. v. Drilon, we held that "[t]he non-impairment clause of the Constitution... must
yield to the loftier purposes targeted by the government." 15 Equally important, into every
contract is read provisions of existing law, and always, a reservation of the police power for so
long as the agreement deals with a subject impressed with the public welfare.

A last point. Petitioners suggest that the singling out of entertainers and performing artists under
the assailed department orders constitutes class legislation which violates the equal protection
clause of the Constitution. We do not agree.

The equal protection clause is directed principally against undue favor and individual or class
privilege. It is not intended to prohibit legislation which is limited to the object to which it is
directed or by the territory in which it is to operate. It does not require absolute equality, but
merely that all persons be treated alike under like conditions both as to privileges conferred and
liabilities imposed. 16 We have held, time and again, that the equal protection clause of the
Constitution does not forbid classification for so long as such classification is based on real and
substantial differences having a reasonable relation to the subject of the particular
legislation. 17 If classification is germane to the purpose of the law, concerns all members of the
class, and applies equally to present and future conditions, the classification does not violate the
equal protection guarantee.

In the case at bar, the challenged Department Order clearly applies to all performing artists and
entertainers destined for jobs abroad. These orders, we stressed hereinfore, further the
Constitutional mandate requiring government to protect our workforce, particularly those who
may be prone to abuse and exploitation as they are beyond the physical reach of government
regulatory agencies. The tragic incidents must somehow stop, but short of absolutely curtailing
the right of these performers and entertainers to work abroad, the assailed measures enable our
government to assume a measure of control.

WHEREFORE, finding no reversible error in the decision sought to be reviewed, petition is


hereby DENIED.

SO ORDERED.
G.R. No. 74457 March 20, 1987

RESTITUTO YNOT, Petitioner, vs. INTERMEDIATE APPELLATE COURT, THE STATION


COMMANDER, INTEGRATED NATIONAL POLICE, BAROTAC NUEVO, ILOILO and
THE REGIONAL DIRECTOR, BUREAU OF ANIMAL INDUSTRY, REGION IV, ILOILO
CITY, Respondents.

Ramon A. Gonzales for petitioner.

CRUZ, J.:

The essence of due process is distilled in the immortal cry of Themistocles to Alcibiades "Strike
- but hear me first!" It is this cry that the petitioner in effect repeats here as he challenges the
constitutionality of Executive Order No. 626-A.chanroblesvirtualawlibrarychanrobles virtual law
library

The said executive order reads in full as follows:

WHEREAS, the President has given orders prohibiting the interprovincial movement of carabaos
and the slaughtering of carabaos not complying with the requirements of Executive Order No.
626 particularly with respect to age;chanrobles virtual law library

WHEREAS, it has been observed that despite such orders the violators still manage to
circumvent the prohibition against inter-provincial movement of carabaos by transporting
carabeef instead; andchanrobles virtual law library

WHEREAS, in order to achieve the purposes and objectives of Executive Order No. 626 and the
prohibition against interprovincial movement of carabaos, it is necessary to strengthen the said
Executive Order and provide for the disposition of the carabaos and carabeef subject of the
violation;chanrobles virtual law library

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of


the powers vested in me by the Constitution, do hereby promulgate the following:chanrobles
virtual law library

SECTION 1. Executive Order No. 626 is hereby amended such that henceforth, no carabao
regardless of age, sex, physical condition or purpose and no carabeef shall be transported from
one province to another. The carabao or carabeef transported in violation of this Executive Order
as amended shall be subject to confiscation and forfeiture by the government, to be distributed to
charitable institutions and other similar institutions as the Chairman of the National Meat
Inspection Commission may ay see fit, in the case of carabeef, and to deserving farmers through
dispersal as the Director of Animal Industry may see fit, in the case of
carabaos.chanroblesvirtualawlibrarychanrobles virtual law library

SECTION 2. This Executive Order shall take effect


immediately.chanroblesvirtualawlibrarychanrobles virtual law library
Done in the City of Manila, this 25th day of October, in the year of Our Lord, nineteen hundred
and eighty.

(SGD.) FERDINAND E. MARCOS

President

Republic of the Philippines

The petitioner had transported six carabaos in a pump boat from Masbate to Iloilo on January 13,
1984, when they were confiscated by the police station commander of Barotac Nuevo, Iloilo, for
violation of the above measure. 1 The petitioner sued for recovery, and the Regional Trial Court
of Iloilo City issued a writ of replevin upon his filing of a supersedeas bond of P12,000.00. After
considering the merits of the case, the court sustained the confiscation of the carabaos and, since
they could no longer be produced, ordered the confiscation of the bond. The court also declined
to rule on the constitutionality of the executive order, as raise by the petitioner, for lack of
authority and also for its presumed validity. 2chanrobles virtual law library

The petitioner appealed the decision to the Intermediate Appellate Court,* 3 which upheld the
trial court, ** and he has now come before us in this petition for review on certiorari.

The thrust of his petition is that the executive order is unconstitutional insofar as it authorizes
outright confiscation of the carabao or carabeef being transported across provincial boundaries.
His claim is that the penalty is invalid because it is imposed without according the owner a right
to be heard before a competent and impartial court as guaranteed by due process. He complains
that the measure should not have been presumed, and so sustained, as constitutional. There is
also a challenge to the improper exercise of the legislative power by the former President under
Amendment No. 6 of the 1973 Constitution. 4chanrobles virtual law library

While also involving the same executive order, the case of Pesigan v. Angeles 5 is not applicable
here. The question raised there was the necessity of the previous publication of the measure in
the Official Gazette before it could be considered enforceable. We imposed the requirement then
on the basis of due process of law. In doing so, however, this Court did not, as contended by the
Solicitor General, impliedly affirm the constitutionality of Executive Order No. 626-A. That is
an entirely different matter.chanroblesvirtualawlibrarychanrobles virtual law library

This Court has declared that while lower courts should observe a becoming modesty in
examining constitutional questions, they are nonetheless not prevented from resolving the same
whenever warranted, subject only to review by the highest tribunal. 6We have jurisdiction under
the Constitution to "review, revise, reverse, modify or affirm on appeal or certiorari, as the law
or rules of court may provide," final judgments and orders of lower courts in, among others, all
cases involving the constitutionality of certain measures. 7 This simply means that the resolution
of such cases may be made in the first instance by these lower
courts.chanroblesvirtualawlibrarychanrobles virtual law library
And while it is true that laws are presumed to be constitutional, that presumption is not by any
means conclusive and in fact may be rebutted. Indeed, if there be a clear showing of their
invalidity, and of the need to declare them so, then "will be the time to make the hammer fall,
and heavily," 8 to recall Justice Laurel's trenchant warning. Stated otherwise, courts should not
follow the path of least resistance by simply presuming the constitutionality of a law when it is
questioned. On the contrary, they should probe the issue more deeply, to relieve the abscess,
paraphrasing another distinguished jurist, 9 and so heal the wound or excise the
affliction.chanroblesvirtualawlibrarychanrobles virtual law library

Judicial power authorizes this; and when the exercise is demanded, there should be no shirking
of the task for fear of retaliation, or loss of favor, or popular censure, or any other similar
inhibition unworthy of the bench, especially this Court.chanroblesvirtualawlibrarychanrobles
virtual law library

The challenged measure is denominated an executive order but it is really presidential decree,
promulgating a new rule instead of merely implementing an existing law. It was issued by
President Marcos not for the purpose of taking care that the laws were faithfully executed but in
the exercise of his legislative authority under Amendment No. 6. It was provided thereunder that
whenever in his judgment there existed a grave emergency or a threat or imminence thereof or
whenever the legislature failed or was unable to act adequately on any matter that in his
judgment required immediate action, he could, in order to meet the exigency, issue decrees,
orders or letters of instruction that were to have the force and effect of law. As there is no
showing of any exigency to justify the exercise of that extraordinary power then, the petitioner
has reason, indeed, to question the validity of the executive order. Nevertheless, since the
determination of the grounds was supposed to have been made by the President "in his judgment,
" a phrase that will lead to protracted discussion not really necessary at this time, we reserve
resolution of this matter until a more appropriate occasion. For the nonce, we confine ourselves
to the more fundamental question of due process.chanroblesvirtualawlibrarychanrobles virtual
law library

It is part of the art of constitution-making that the provisions of the charter be cast in precise and
unmistakable language to avoid controversies that might arise on their correct interpretation.
That is the Ideal. In the case of the due process clause, however, this rule was deliberately not
followed and the wording was purposely kept ambiguous. In fact, a proposal to delineate it more
clearly was submitted in the Constitutional Convention of 1934, but it was rejected by Delegate
Jose P. Laurel, Chairman of the Committee on the Bill of Rights, who forcefully argued against
it. He was sustained by the body. 10

The due process clause was kept intentionally vague so it would remain also conveniently
resilient. This was felt necessary because due process is not, like some provisions of the
fundamental law, an "iron rule" laying down an implacable and immutable command for all
seasons and all persons. Flexibility must be the best virtue of the guaranty. The very elasticity of
the due process clause was meant to make it adapt easily to every situation, enlarging or
constricting its protection as the changing times and circumstances may
require.chanroblesvirtualawlibrarychanrobles virtual law library
Aware of this, the courts have also hesitated to adopt their own specific description of due
process lest they confine themselves in a legal straitjacket that will deprive them of the elbow
room they may need to vary the meaning of the clause whenever indicated. Instead, they have
preferred to leave the import of the protection open-ended, as it were, to be "gradually
ascertained by the process of inclusion and exclusion in the course of the decision of cases as
they arise." 11 Thus, Justice Felix Frankfurter of the U.S. Supreme Court, for example, would go
no farther than to define due process - and in so doing sums it all up - as nothing more and
nothing less than "the embodiment of the sporting Idea of fair play." 12

When the barons of England extracted from their sovereign liege the reluctant promise that that
Crown would thenceforth not proceed against the life liberty or property of any of its subjects
except by the lawful judgment of his peers or the law of the land, they thereby won for
themselves and their progeny that splendid guaranty of fairness that is now the hallmark of the
free society. The solemn vow that King John made at Runnymede in 1215 has since then
resounded through the ages, as a ringing reminder to all rulers, benevolent or base, that every
person, when confronted by the stern visage of the law, is entitled to have his say in a fair and
open hearing of his cause.chanroblesvirtualawlibrarychanrobles virtual law library

The closed mind has no place in the open society. It is part of the sporting Idea of fair play to
hear "the other side" before an opinion is formed or a decision is made by those who sit in
judgment. Obviously, one side is only one-half of the question; the other half must also be
considered if an impartial verdict is to be reached based on an informed appreciation of the
issues in contention. It is indispensable that the two sides complement each other, as unto the
bow the arrow, in leading to the correct ruling after examination of the problem not from one or
the other perspective only but in its totality. A judgment based on less that this full appraisal, on
the pretext that a hearing is unnecessary or useless, is tainted with the vice of bias or intolerance
or ignorance, or worst of all, in repressive regimes, the insolence of
power.chanroblesvirtualawlibrarychanrobles virtual law library

The minimum requirements of due process are notice and hearing 13 which, generally speaking,
may not be dispensed with because they are intended as a safeguard against official arbitrariness.
It is a gratifying commentary on our judicial system that the jurisprudence of this country is rich
with applications of this guaranty as proof of our fealty to the rule of law and the ancient
rudiments of fair play. We have consistently declared that every person, faced by the awesome
power of the State, is entitled to "the law of the land," which Daniel Webster described almost
two hundred years ago in the famous Dartmouth College Case, 14 as "the law which hears before
it condemns, which proceeds upon inquiry and renders judgment only after trial." It has to be so
if the rights of every person are to be secured beyond the reach of officials who, out of mistaken
zeal or plain arrogance, would degrade the due process clause into a worn and empty
catchword.chanroblesvirtualawlibrarychanrobles virtual law library

This is not to say that notice and hearing are imperative in every case for, to be sure, there are a
number of admitted exceptions. The conclusive presumption, for example, bars the admission of
contrary evidence as long as such presumption is based on human experience or there is a
rational connection between the fact proved and the fact ultimately presumed
therefrom. 15 There are instances when the need for expeditions action will justify omission of
these requisites, as in the summary abatement of a nuisance per se, like a mad dog on the loose,
which may be killed on sight because of the immediate danger it poses to the safety and lives of
the people. Pornographic materials, contaminated meat and narcotic drugs are inherently
pernicious and may be summarily destroyed. The passport of a person sought for a criminal
offense may be cancelled without hearing, to compel his return to the country he has
fled. 16 Filthy restaurants may be summarily padlocked in the interest of the public health and
bawdy houses to protect the public morals. 17 In such instances, previous judicial hearing may
be omitted without violation of due process in view of the nature of the property involved or the
urgency of the need to protect the general welfare from a clear and present
danger.chanroblesvirtualawlibrarychanrobles virtual law library

The protection of the general welfare is the particular function of the police power which both
restraints and is restrained by due process. The police power is simply defined as the power
inherent in the State to regulate liberty and property for the promotion of the general
welfare. 18 By reason of its function, it extends to all the great public needs and is described as
the most pervasive, the least limitable and the most demanding of the three inherent powers of
the State, far outpacing taxation and eminent domain. The individual, as a member of society, is
hemmed in by the police power, which affects him even before he is born and follows him still
after he is dead - from the womb to beyond the tomb - in practically everything he does or owns.
Its reach is virtually limitless. It is a ubiquitous and often unwelcome intrusion. Even so, as long
as the activity or the property has some relevance to the public welfare, its regulation under the
police power is not only proper but necessary. And the justification is found in the venerable
Latin maxims, Salus populi est suprema lex and Sic utere tuo ut alienum non laedas, which call
for the subordination of individual interests to the benefit of the greater
number.chanroblesvirtualawlibrarychanrobles virtual law library

It is this power that is now invoked by the government to justify Executive Order No. 626-A,
amending the basic rule in Executive Order No. 626, prohibiting the slaughter of carabaos except
under certain conditions. The original measure was issued for the reason, as expressed in one of
its Whereases, that "present conditions demand that the carabaos and the buffaloes be conserved
for the benefit of the small farmers who rely on them for energy needs." We affirm at the outset
the need for such a measure. In the face of the worsening energy crisis and the increased
dependence of our farms on these traditional beasts of burden, the government would have been
remiss, indeed, if it had not taken steps to protect and preserve
them.chanroblesvirtualawlibrary chanrobles virtual law library

A similar prohibition was challenged in United States v. Toribio, 19 where a law regulating the
registration, branding and slaughter of large cattle was claimed to be a deprivation of property
without due process of law. The defendant had been convicted thereunder for having slaughtered
his own carabao without the required permit, and he appealed to the Supreme Court. The
conviction was affirmed. The law was sustained as a valid police measure to prevent the
indiscriminate killing of carabaos, which were then badly needed by farmers. An epidemic had
stricken many of these animals and the reduction of their number had resulted in an acute decline
in agricultural output, which in turn had caused an incipient famine. Furthermore, because of the
scarcity of the animals and the consequent increase in their price, cattle-rustling had spread
alarmingly, necessitating more effective measures for the registration and branding of these
animals. The Court held that the questioned statute was a valid exercise of the police power and
declared in part as follows:

To justify the State in thus interposing its authority in behalf of the public, it must appear, first,
that the interests of the public generally, as distinguished from those of a particular class, require
such interference; and second, that the means are reasonably necessary for the accomplishment
of the purpose, and not unduly oppressive upon individuals.
...chanroblesvirtualawlibrary chanrobles virtual law library

From what has been said, we think it is clear that the enactment of the provisions of the statute
under consideration was required by "the interests of the public generally, as distinguished from
those of a particular class" and that the prohibition of the slaughter of carabaos for human
consumption, so long as these animals are fit for agricultural work or draft purposes was a
"reasonably necessary" limitation on private ownership, to protect the community from the loss
of the services of such animals by their slaughter by improvident owners, tempted either by
greed of momentary gain, or by a desire to enjoy the luxury of animal food, even when by so
doing the productive power of the community may be measurably and dangerously affected.

In the light of the tests mentioned above, we hold with the Toribio Case that the carabao, as the
poor man's tractor, so to speak, has a direct relevance to the public welfare and so is a lawful
subject of Executive Order No. 626. The method chosen in the basic measure is also reasonably
necessary for the purpose sought to be achieved and not unduly oppressive upon individuals,
again following the above-cited doctrine. There is no doubt that by banning the slaughter of these
animals except where they are at least seven years old if male and eleven years old if female
upon issuance of the necessary permit, the executive order will be conserving those still fit for
farm work or breeding and preventing their improvident
depletion.chanroblesvirtualawlibrary chanrobles virtual law library

But while conceding that the amendatory measure has the same lawful subject as the original
executive order, we cannot say with equal certainty that it complies with the second
requirement, viz., that there be a lawful method. We note that to strengthen the original measure,
Executive Order No. 626-A imposes an absolute ban not on the slaughter of the carabaos but on
their movement, providing that "no carabao regardless of age, sex, physical condition or purpose
(sic) and no carabeef shall be transported from one province to another." The object of the
prohibition escapes us. The reasonable connection between the means employed and the purpose
sought to be achieved by the questioned measure is missingchanrobles virtual law library

We 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. As for the carabeef, the prohibition is made to apply to it as otherwise, so says
executive order, it could be easily circumvented by simply killing the animal. Perhaps so.
However, if the movement of the live animals for the purpose of preventing their slaughter
cannot be prohibited, it should follow that there is no reason either to prohibit their transfer as,
not to be flippant dead meat.chanroblesvirtualawlibrarychanrobles virtual law library
Even if a reasonable relation between the means and the end were to be assumed, we would still
have to reckon with the sanction that the measure applies for violation of the prohibition. The
penalty is outright confiscation of the carabao or carabeef being transported, to be meted out by
the executive authorities, usually the police only. In the Toribio Case, the statute was sustained
because the penalty prescribed was fine and imprisonment, to be imposed by the court after trial
and conviction of the accused. Under the challenged measure, significantly, no such trial is
prescribed, and the property being transported is immediately impounded by the police and
declared, by the measure itself, as forfeited to the
government.chanroblesvirtualawlibrarychanrobles virtual law library

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, which was ordered confiscated upon his failure to produce the
carabaos when ordered by the trial court. The executive order defined the prohibition, convicted
the petitioner and immediately imposed punishment, which was carried out forthright. The
measure struck at once and pounced upon the petitioner without giving him a chance to be heard,
thus denying him the centuries-old guaranty of elementary fair
play.chanroblesvirtualawlibrarychanrobles virtual law library

It has already been remarked that there are occasions when notice and hearing may be validly
dispensed with notwithstanding the usual requirement for these minimum guarantees of due
process. It is also conceded that summary action may be validly taken in administrative
proceedings as procedural due process is not necessarily judicial only. 20 In the exceptional
cases accepted, however. there is a justification for the omission of the right to a previous
hearing, to wit, the immediacy of the problem sought to be corrected and the urgency of the need
to correct it.chanroblesvirtualawlibrarychanrobles virtual law library

In the case before us, there was no such pressure of time or action calling for the petitioner's
peremptory treatment. The properties involved were not even inimical per se as to require their
instant destruction. There certainly was no reason why the offense prohibited by the executive
order should not have been proved first in a court of justice, with the accused being accorded all
the rights safeguarded to him under the Constitution. Considering that, as we held in Pesigan v.
Angeles, 21 Executive Order No. 626-A is penal in nature, the violation thereof should have
been pronounced not by the police only but by a court of justice, which alone would have had the
authority to impose the prescribed penalty, and only after trial and conviction of the
accused.chanroblesvirtualawlibrarychanrobles virtual law library

We also mark, on top of all this, the questionable manner of the disposition of the confiscated
property as prescribed in the questioned executive order. It is there authorized that the seized
property shall "be distributed to charitable institutions and other similar institutions as the
Chairman of the National Meat Inspection Commission may see fit, in the case of carabeef, and
to deserving farmers through dispersal as the Director of Animal Industry may see fit, in the case
of carabaos." (Emphasis supplied.) The phrase "may see fit" is an extremely generous and
dangerous condition, if condition it is. It is laden with perilous opportunities for partiality and
abuse, and even corruption. One searches in vain for the usual standard and the reasonable
guidelines, or better still, the limitations that the said officers must observe when they make their
distribution. There is none. Their options are apparently boundless. Who shall be the fortunate
beneficiaries of their generosity and by what criteria shall they be chosen? Only the officers
named can supply the answer, they and they alone may choose the grantee as they see fit, and in
their own exclusive discretion. Definitely, there is here a "roving commission," a wide and
sweeping authority that is not "canalized within banks that keep it from overflowing," in short, a
clearly profligate and therefore invalid delegation of legislative
powers.chanroblesvirtualawlibrarychanrobles virtual law library

To sum up then, we find that the challenged measure is an invalid exercise of the police power
because the method employed to conserve the carabaos is not reasonably necessary to the
purpose of the law and, worse, is unduly oppressive. Due process is violated because the owner
of the property confiscated is denied the right to be heard in his defense and is immediately
condemned and punished. The conferment on the administrative authorities of the power to
adjudge the guilt of the supposed offender is a clear encroachment on judicial functions and
militates against the doctrine of separation of powers. There is, finally, also an invalid delegation
of legislative powers to the officers mentioned therein who are granted unlimited discretion in
the distribution of the properties arbitrarily taken. For these reasons, we hereby declare
Executive Order No. 626-A unconstitutional.chanroblesvirtualawlibrarychanrobles virtual law
library

We agree with the respondent court, however, that the police station commander who
confiscated the petitioner's carabaos is not liable in damages for enforcing the executive order in
accordance with its mandate. The law was at that time presumptively valid, and it was his
obligation, as a member of the police, to enforce it. It would have been impertinent of him, being
a mere subordinate of the President, to declare the executive order unconstitutional and, on his
own responsibility alone, refuse to execute it. Even the trial court, in fact, and the Court of
Appeals itself did not feel they had the competence, for all their superior authority, to question
the order we now annul.chanroblesvirtualawlibrarychanrobles virtual law library

The Court notes that if the petitioner had not seen fit to assert and protect his rights as he saw
them, this case would never have reached us and the taking of his property under the challenged
measure would have become a fait accompli despite its invalidity. We commend him for his
spirit. Without the present challenge, the matter would have ended in that pump boat in Masbate
and another violation of the Constitution, for all its obviousness, would have been perpetrated,
allowed without protest, and soon forgotten in the limbo of relinquished
rights.chanroblesvirtualawlibrarychanrobles virtual law library

The strength of democracy lies not in the rights it guarantees but in the courage of the people to
invoke them whenever they are ignored or violated. Rights are but weapons on the wall if, like
expensive tapestry, all they do is embellish and impress. Rights, as weapons, must be a promise
of protection. They become truly meaningful, and fulfill the role assigned to them in the free
society, if they are kept bright and sharp with use by those who are not afraid to assert
them.chanroblesvirtualawlibrarychanrobles virtual law library
WHEREFORE, Executive Order No. 626-A is hereby declared unconstitutional. Except as
affirmed above, the decision of the Court of Appeals is reversed. The supersedeas bond is
cancelled and the amount thereof is ordered restored to the petitioner. No
costs.chanroblesvirtualawlibrary chanrobles virtual law library

SO ORDERED.

Teehankee, C.J., Yap, Fernan, Narvasa, Gutierrez, Jr., Paras, Gancayco, Padilla Bidin Sarmiento
and Cortes, JJ., concur.chanroblesvirtualawlibrarychanrobles virtual law library

Melencio-Herrera and Feliciano, JJ., are on leave.


EN BANC

[G.R. No. L-81958. June 30, 1988.]

PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC., Petitioner, v. HON.


FRANKLIN M. DRILON as Secretary of Labor and Employment, and TOMAS D.
ACHACOSO, as Administrator of the Philippine Overseas Employment
Administration, Respondents.

Gutierrez & Alo Law Offices for petitioner.

DECISION

SARMIENTO, J.:

The petitioner, Philippine Association of Service Exporters, Inc. (PASEI, for short), a firm
"engaged principally in the recruitment of Filipino workers, male and female, for overseas
placement," 1 challenges the Constitutional validity of Department Order No. 1, Series of 1988,
of the Department of Labor and Employment, in the character of "GUIDELINES GOVERNING
THE TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND
HOUSEHOLD WORKERS," in this petition for certiorari and prohibition. Specifically, the
measure is assailed for "discrimination against males or females;" 2 that it "does not apply to all
Filipino workers but only to domestic helpers and females with similar skills;" 3 and that it is
violative of the right to travel. It is held likewise to be an invalid exercise of the lawmaking
power, police power being legislative, and not executive, in character.

In its supplement to the petition, PASEI invokes Section 3, of Article XIII, of the Constitution,
providing for worker participation "in policy and decision-making processes affecting their rights
and benefits as may be provided by law." 4 Department Order No. 1, it is contended, was passed
in the absence of prior consultations. It is claimed, finally, to be in violation of the Charter’s non-
impairment clause, in addition to the "great and irreparable injury" that PASEI members face
should the Order be further enforced.

On May 25, 1988, the Solicitor General, on behalf of the respondents Secretary of Labor and
Administrator of the Philippine Overseas Employment Administration, filed a Comment
informing the Court that on March 8, 1988, the respondent Labor Secretary lifted the deployment
ban in the states of Iraq, Jordan, Qatar, Canada, Hongkong, United States, Italy, Norway,
Austria, and Switzerland. ** In submitting the validity of the challenged "guidelines," the
Solicitor General invokes the police power of the Philippine State.

It is admitted that Department Order No. 1 is in the nature of a police power measure. The only
question is whether or not it is valid under the Constitution.
The concept of police power is well-established in this jurisdiction. It has been defined as the
"state authority to enact legislation that may interfere with personal liberty or property in order to
promote the general welfare." 5 As defined, it consists of (1) an imposition of restraint upon
liberty or property, (2) in order to foster the common good. It is not capable of an exact
definition but has been, purposely, veiled in general terms to underscore its all-comprehensive
embrace.chanrobles virtual lawlibrary

"Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the future
where it could be done, provides enough room for an efficient and flexible response to conditions
and circumstances thus assuring the greatest benefits." 6

It finds no specific Constitutional grant for the plain reason that it does not owe its origin to the
Charter. Along with the taxing power and eminent domain, it is inborn in the very fact of
statehood and sovereignty. It is a fundamental attribute of government that has enabled it to
perform the most vital functions of governance. Marshall, to whom the expression has been
credited, 7 refers to it succinctly as the plenary power of the State "to govern its citizens." 8

"The police power of the State . . . is a power coextensive with self-protection, and it is not
inaptly termed the ‘law of overwhelming necessity.’ It may be said to be that inherent and
plenary power in the State which enables it to prohibit all things hurtful to the comfort, safety,
and welfare of society." 9

It constitutes an implied limitation on the Bill of Rights. According to Fernando, it is "rooted in


the conception that men in organizing the state and imposing upon its government limitations to
safeguard constitutional rights did not intend thereby to enable an individual citizen or a group of
citizens to obstruct unreasonably the enactment of such salutary measures calculated to ensure
communal peace, safety, good order, and welfare." 10 Significantly, the Bill of Rights itself does
not purport to be an absolute guaranty of individual rights and liberties "Even liberty itself, the
greatest of all rights, is not unrestricted license to act according to one’s will." 11 It is subject to
the far more overriding demands and requirements of the greater number.

Notwithstanding its extensive sweep, police power is not without its own limitations. For all its
awesome consequences, it may not be exercised arbitrarily or unreasonably. Otherwise, and in
that event, it defeats the purpose for which it is exercised, that is, to advance the public good.
Thus, when the power is used to further private interests at the expense of the citizenry, there is a
clear misuse of the power. 12

In the light of the foregoing, the petition must be dismissed.

As a general rule, official acts enjoy a presumed validity. 13 In the absence of clear and
convincing evidence to the contrary, the presumption logically stands.

The petitioner has shown no satisfactory reason why the contested measure should be nullified.
There is no question that Department Order No. 1 applies only to "female contract workers," 14
but it does not thereby make an undue discrimination between the sexes. It is well-settled that
"equality before the law" under the Constitution 15 does not import a perfect identity of rights
among all men and women. It admits of classifications, provided that (1) such classifications rest
on substantial distinctions; (2) they are germane to the purposes of the law; (3) they are not
confined to existing conditions; and (4) they apply equally to all members of the same class. 16

The Court is satisfied that the classification made — the preference for female workers — rests
on substantial distinctions.

As a matter of judicial notice, the Court is well aware of the unhappy plight that has befallen our
female labor force abroad, especially domestic servants, amid exploitative working conditions
marked by, in not a few cases, physical and personal abuse. The sordid tales of maltreatment
suffered by migrant Filipina workers, even rape and various forms of torture, confirmed by
testimonies of returning workers, are compelling motives for urgent Government action. As
precisely the caretaker of Constitutional rights, the Court is called upon to protect victims of
exploitation. In fulfilling that duty, the Court sustains the Government’s efforts.chanrobles
virtual lawlibrary

The same, however, cannot be said of our male workers. In the first place, there is no evidence
that, except perhaps for isolated instances, our men abroad have been afflicted with an identical
predicament. The petitioner has proffered no argument that the Government should act similarly
with respect to male workers. The Court, of course, is not impressing some male chauvinistic
notion that men are superior to women. What the Court is saying is that it was largely a matter of
evidence (that women domestic workers are being ill-treated abroad in massive instances) and
not upon some fanciful or arbitrary yardstick that the Government acted in this case. It is
evidence capable indeed of unquestionable demonstration and evidence this Court accepts. The
Court cannot, however, say the same thing as far as men are concerned. There is simply no
evidence to justify such an inference. Suffice it to state, then, that insofar as classifications are
concerned, this Court is content that distinctions are borne by the evidence. Discrimination in
this case is justified.

As we have furthermore indicated, executive determinations are generally final on the Court.
Under a republican regime, it is the executive branch that enforces policy. For their part, the
courts decide, in the proper cases, whether that policy, or the manner by which it is implemented,
agrees with the Constitution or the laws, but it is not for them to question its wisdom. As a co-
equal body, the judiciary has great respect for determinations of the Chief Executive or his
subalterns, especially when the legislature itself has specifically given them enough room on
how the law should be effectively enforced. In the case at bar, there is no gainsaying the fact, and
the Court will deal with this at greater length shortly, that Department Order No. 1 implements
the rule-making powers granted by the Labor Code. But what should be noted is the fact that in
spite of such a fiction of finality, the Court is on its own persuaded that prevailing conditions
indeed call for a deployment ban.

There is likewise no doubt that such a classification is germane to the purpose behind the
measure. Unquestionably, it is the avowed objective of Department Order No. 1 to "enhance the
protection for Filipino female overseas workers." 17 This Court has no quarrel that in the midst
of the terrible mistreatment Filipina workers have suffered abroad, a ban on deployment will be
for their own good and welfare.

The Order does not narrowly apply to existing conditions. Rather, it is intended to apply
indefinitely so long as those conditions exist. This is clear from the Order itself ("Pending review
of the administrative and legal measures, in the Philippines and in the host countries . . ." 18),
meaning to say that should the authorities arrive at a means impressed with a greater degree of
permanency, the ban shall be lifted. As a stop-gap measure, it is possessed of a necessary
malleability, depending on the circumstances of each case. Accordingly, it provides:chanrob1es
virtual 1aw library

9. LIFTING OF SUSPENSION. — The Secretary of Labor and Employment (DOLE) may, upon
recommendation of the Philippine Overseas Employment Administration (POEA), lift the
suspension in countries where there are:chanrob1es virtual 1aw library

1. Bilateral agreements or understanding with the Philippines, and/or,

2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and protection
of Filipino workers. 19

The Court finds, finally, the impugned guidelines to be applicable to all female domestic
overseas workers. That it does not apply to "all Filipina workers" 20 is not an argument for
unconstitutionality. Had the ban been given universal applicability, then it would have been
unreasonable and arbitrary. For obvious reasons, not all of them are similarly circumstanced.
What the Constitution prohibits is the singling out of a select person or group of persons within
an existing class, to the prejudice of such a person or group or resulting in an unfair advantage to
another person or group of persons. To apply the ban, say exclusively to workers deployed by A,
but not to those recruited by B, would obviously clash with the equal protection clause of the
Charter. It would be a classic case of what Chase refers to as a law that "takes property from A
and gives it to B." 21 It would be an unlawful invasion of property rights and freedom of contract
and needless to state, an invalid act. 22 (Fernando says: "Where the classification is based on
such distinctions that make a real difference as infancy, sex, and stage of civilization of minority
groups, the better rule, it would seem, is to recognize its validity only if the young, the women,
and the cultural minorities are singled out for favorable treatment. There would be an element of
unreasonableness if on the contrary their status that calls for the law ministering to their needs is
made the basis of discriminatory legislation against them. If such be the case, it would be
difficult to refute the assertion of denial of equal protection." 23 In the case at bar, the assailed
Order clearly accords protection to certain women workers, and not the contrary.)

It is incorrect to say that Department Order No. 1 prescribes a total ban on overseas deployment.
From scattered provisions of the Order, it is evident that such a total ban has not been
contemplated. We quote:chanrob1es virtual 1aw library

5. AUTHORIZED DEPLOYMENT — The deployment of domestic helpers and workers of


similar skills defined herein to the following [sic] are authorized under these guidelines and are
exempted from the suspension.chanrobles.com:cralaw:red
5.1 Hirings by immediate members of the family of Heads of State and Government;

5.2 Hirings by Minister, Deputy Minister and the other senior government officials; and

5.3 Hirings by senior officials of the diplomatic corps and duly accredited international
organizations.

5.4 Hirings by employers in countries with whom the Philippines have [sic] bilateral labor
agreements or understanding.

x x x

7. VACATIONING DOMESTIC HELPERS AND WORKERS OF SIMILAR SKILLS —


Vacationing domestic helpers and/or workers of similar skills shall be allowed to process with
the POEA and leave for worksite only if they are returning to the same employer to finish an
existing or partially served employment contract. Those workers returning to worksite to serve a
new employer shall be covered by the suspension and the provision of these guidelines.

x x x

9. LIFTING OF SUSPENSION — The Secretary of Labor and Employment (DOLE) may, upon
recommendation of the Philippine Overseas Employment Administration (POEA), lift the
suspension in countries where there are:chanrob1es virtual 1aw library

1. Bilateral agreements or understanding with the Philippines, and/or,

2. Existing mechanisms providing for sufficient safeguards to ensure the welfare and protection
of Filipino workers. 24

x x x

The consequence the deployment ban has on the right to travel does not impair the right. The
right to travel is subject, among other things, to the requirements of "public safety," "as may be
provided by law." 25 Department Order No. 1 is a valid implementation of the Labor Code, in
particular, its basic policy to "afford protection to labor," 26 pursuant to the respondent
Department of Labor’s rule-making authority vested in it by the Labor Code. 27 The petitioner
assumes that it is unreasonable simply because of its impact on the right to travel, but as we have
stated, the right itself is not absolute. The disputed Order is a valid qualification thereto.

Neither is there merit in the contention that Department Order No. 1 constitutes an invalid
exercise of legislative power. It is true that police power is the domain of the legislature, but it
does not mean that such an authority may not be lawfully delegated. As we have mentioned, the
Labor Code itself vests the Department of Labor and Employment with rule-making powers in
the enforcement whereof. 28
The petitioners’s reliance on the Constitutional guaranty of worker participation "in policy and
decision-making processes affecting their rights and benefits." 29 is not well-taken. The right
granted by this provision, again, must submit to the demands and necessities of the State’s power
of regulation.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

The Constitution declares that:chanrob1es virtual 1aw library

Sec 3. The State shall afford full protection to labor, local and overseas, organized and
unorganized, and promote full employment and equality of employment opportunities for all. 30

"Protection to labor" does not signify the promotion of employment alone. What concerns the
Constitution more paramountly is that such an employment be above all, decent, just, and
humane. It is bad enough that the country has to send its sons and daughters to strange lands
because it cannot satisfy their employment needs at home. Under these circumstances, the
Government is duty-bound to insure that our toiling expatriates have adequate protection,
personally and economically, while away from home. In this case, the Government has evidence,
an evidence the petitioner cannot seriously dispute, of the lack or inadequacy of such protection,
and as part of its duty, it has precisely ordered an indefinite ban on deployment.

The Court finds furthermore that the Government has not indiscriminately made use of its
authority. It is not contested that it has in fact removed the prohibition with respect to certain
countries as manifested by the Solicitor General.

The non-impairment clause of the Constitution, invoked by the petitioner, must yield to the
loftier purposes targetted by the Government. 31 Freedom of contract and enterprise, like all
other freedoms, is not free from restrictions, more so in this jurisdiction, where laissez faire has
never been fully accepted as a controlling economic way of life.

This Court understands the grave implications the questioned Order has on the business of
recruitment. The concern of the Government, however, is not necessarily to maintain profits of
business firms. In the ordinary sequence of events, it is profits that suffer as a result of
Government regulation. The interest of the State is to provide a decent living to its citizens. The
Government has convinced the Court in this case that this is its intent. We do not find the
impugned Order to be tainted with a grave abuse of discretion to warrant the extraordinary relief
prayed for.chanrobles law library

WHEREFORE, the petition is DISMISSED. No costs.

SO ORDERED.

Yap (C.J.), Fernan, Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin,
Cortes and Griño-Aquino, JJ., concur.

Gutierrez, Jr. and Medialdea, JJ., on leave.


EN BANC

G.R. No. 78742 July 14, 1989

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D.


GOMEZ, GERARDO B. ALARCIO, FELIPE A. GUICO, JR., BERNARDO M. ALMONTE,
CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO, FELISA I. LLAMIDO, FAUSTO J.
SALVA, REYNALDO G. ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE,
TEODORO B. MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA,
FELICISIMA C. ARRESTO, CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO,
CIRILA A. JOSE & NAPOLEON S. FERRER, Petitioners, vs. HONORABLE SECRETARY
OF AGRARIAN REFORM, Respondent.

G.R. No. 79310 July 14, 1989

ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA,


HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO and PLANTERS' COMMITTEE,
INC., Victorias Mill District, Victorias, Negros Occidental, Petitioners, vs. JOKER ARROYO,
PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM COUNCIL, Respondents.

G.R. No. 79744 July 14, 1989

INOCENTES PABICO, Petitioner, vs. HON. PHILIP E. JUICO, SECRETARY OF THE


DEPARTMENT OF AGRARIAN REFORM, HON. JOKER ARROYO, EXECUTIVE
SECRETARY OF THE OFFICE OF THE PRESIDENT, and Messrs. SALVADOR TALENTO,
JAIME ABOGADO, CONRADO AVANCENA and ROBERTO TAAY, Respondents.

G.R. No. 79777 July 14, 1989

NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., Petitioners, vs. HON. PHILIP ELLA
JUICO, as Secretary of Agrarian Reform, and LAND BANK OF THE
PHILIPPINES, Respondents.chanrobles virtual law library

CRUZ, J.:

In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his
life on his way to Mycenae after performing his eleventh labor. The two wrestled mightily and
Hercules flung his adversary to the ground thinking him dead, but Antaeus rose even stronger to
resume their struggle. This happened several times to Hercules' increasing amazement. Finally,
as they continued grappling, it dawned on Hercules that Antaeus was the son of Gaea and could
never die as long as any part of his body was touching his Mother Earth. Thus forewarned,
Hercules then held Antaeus up in the air, beyond the reach of the sustaining soil, and crushed
him to death.chanroblesvirtualawlibrary chanrobles virtual law library
Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the
powerful Antaeus weakened and died.chanroblesvirtualawlibrary chanrobles virtual law library

The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental
forces of life and death, of men and women who, like Antaeus need the sustaining strength of the
precious earth to stay alive.chanroblesvirtualawlibrary chanrobles virtual law library

"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of
this precious resource among our people. But it is more than a slogan. Through the brooding
centuries, it has become a battle-cry dramatizing the increasingly urgent demand of the
dispossessed among us for a plot of earth as their place in the
sun.chanroblesvirtualawlibrary chanrobles virtual law library

Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure
the well-being and economic security of all the people," 1 especially the less privileged. In 1973,
the new Constitution affirmed this goal adding specifically that "the State shall regulate the
acquisition, ownership, use, enjoyment and disposition of private property and equitably diffuse
property ownership and profits." 2 Significantly, there was also the specific injunction to
"formulate and implement an agrarian reform program aimed at emancipating the tenant from the
bondage of the soil." 3 chanrobles virtual law library

The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also
adopted one whole and separate Article XIII on Social Justice and Human Rights, containing
grandiose but undoubtedly sincere provisions for the uplift of the common people. These include
a call in the following words for the adoption by the State of an agrarian reform program:

SEC. 4. The State shall, by law, undertake an agrarian reform program founded on the right of
farmers and regular farmworkers, who are landless, to own directly or collectively the lands they
till or, in the case of other farmworkers, to receive a just share of the fruits thereof. To this end,
the State shall encourage and undertake the just distribution of all agricultural lands, subject to
such priorities and reasonable retention limits as the Congress may prescribe, taking into account
ecological, developmental, or equity considerations and subject to the payment of just
compensation. In determining retention limits, the State shall respect the right of small
landowners. The State shall further provide incentives for voluntary land-sharing.

Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had
already been enacted by the Congress of the Philippines on August 8, 1963, in line with the
above-stated principles. This was substantially superseded almost a decade later by P.D. No. 27,
which was promulgated on October 21, 1972, along with martial law, to provide for the
compulsory acquisition of private lands for distribution among tenant-farmers and to specify
maximum retention limits for landowners.chanroblesvirtualawlibrary chanrobles virtual law
library

The people power revolution of 1986 did not change and indeed even energized the thrust for
agrarian reform. Thus, on July 17, 1987, President Corazon C. Aquino issued E.O. No. 228,
declaring full land ownership in favor of the beneficiaries of P.D. No. 27 and providing for the
valuation of still unvalued lands covered by the decree as well as the manner of their payment.
This was followed on July 22, 1987 by Presidential Proclamation No. 131, instituting a
comprehensive agrarian reform program (CARP), and E.O. No. 229, providing the mechanics for
its implementation.chanroblesvirtualawlibrary chanrobles virtual law library

Subsequently, with its formal organization, the revived Congress of the Philippines took over
legislative power from the President and started its own deliberations, including extensive public
hearings, on the improvement of the interests of farmers. The result, after almost a year of
spirited debate, was the enactment of R.A. No. 6657, otherwise known as the Comprehensive
Agrarian Reform Law of 1988, which President Aquino signed on June 10, 1988. This law,
while considerably changing the earlier mentioned enactments, nevertheless gives them
suppletory effect insofar as they are not inconsistent with its provisions. 4chanrobles virtual law
library

The above-captioned cases have been consolidated because they involve common legal
questions, including serious challenges to the constitutionality of the several measures mentioned
above. They will be the subject of one common discussion and resolution, The different
antecedents of each case will require separate treatment, however, and will first be explained
hereunder.chanroblesvirtualawlibrary chanrobles virtual law library

G.R. No. 79777 chanrobles virtual law library

Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229,
and R.A. No. 6657.chanroblesvirtualawlibrary chanrobles virtual law library

The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by
petitioner Nicolas Manaay and his wife and a 5-hectare riceland worked by four tenants and
owned by petitioner Augustin Hermano, Jr. The tenants were declared full owners of these lands
by E.O. No. 228 as qualified farmers under P.D. No. 27.chanroblesvirtualawlibrary chanrobles
virtual law library

The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on 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.chanroblesvirtualawlibrary chanrobles virtual law library

They contend that President Aquino usurped legislative power when she promulgated E.O. No.
228. The said measure is invalid also for violation of Article XIII, Section 4, of the Constitution,
for failure to provide for retention limits for small landowners. Moreover, it does not conform to
Article VI, Section 25(4) and the other requisites of a valid
appropriation.chanroblesvirtualawlibrary chanrobles virtual law library

In connection with the determination of just compensation, the petitioners argue that the same
may be made only by a court of justice and not by the President of the Philippines. They invoke
the recent cases of EPZA v. Dulay 5and Manotok v. National Food Authority. 6 Moreover, the
just compensation contemplated by the Bill of Rights is payable in money or in cash and not in
the form of bonds or other things of value.chanroblesvirtualawlibrary chanrobles virtual law
library

In considering the rentals as advance payment on the land, the executive order also deprives the
petitioners of their property rights as protected by due process. The equal protection clause is
also violated because the order places the burden of solving the agrarian problems on the owners
only of agricultural lands. No similar obligation is imposed on the owners of other
properties.chanroblesvirtualawlibrary chanrobles virtual law library

The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the
owners of the lands occupied by them, E.O. No. 228 ignored judicial prerogatives and so
violated due process. Worse, the measure would not solve the agrarian problem because even the
small farmers are deprived of their lands and the retention rights guaranteed by the
Constitution.chanroblesvirtualawlibrary chanrobles virtual law library

In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the
earlier cases of Chavez v. Zobel, 7Gonzales v. Estrella, 8and Association of Rice and Corn
Producers of the Philippines, Inc. v. The National Land Reform Council. 9 The determination of
just compensation by the executive authorities conformably to the formula prescribed under the
questioned order is at best initial or preliminary only. It does not foreclose judicial intervention
whenever sought or warranted. At any rate, the challenge to the order is premature because no
valuation of their property has as yet been made by the Department of Agrarian Reform. The
petitioners are also not proper parties because the lands owned by them do not exceed the
maximum retention limit of 7 hectares.chanroblesvirtualawlibrary chanrobles virtual law library

Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for
retention limits on tenanted lands and that in any event their petition is a class suit brought in
behalf of landowners with landholdings below 24 hectares. They maintain that the determination
of just compensation by the administrative authorities is a final ascertainment. As for the cases
invoked by the public respondent, the constitutionality of P.D. No. 27 was merely assumed
in Chavez, while what was decided in Gonzales was the validity of the imposition of martial
law.chanroblesvirtualawlibrary chanrobles virtual law library

In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O. Nos.
228 and 229 (except Sections 20 and 21) have been impliedly repealed by R.A. No. 6657.
Nevertheless, this statute should itself also be declared unconstitutional because it suffers from
substantially the same infirmities as the earlier measures.chanroblesvirtualawlibrary chanrobles
virtual law library

A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner
of a 1. 83- hectare land, who complained that the DAR was insisting on the implementation of
P.D. No. 27 and E.O. No. 228 despite a compromise agreement he had reached with his tenant
on the payment of rentals. In a subsequent motion dated April 10, 1989, he adopted the
allegations in the basic amended petition that the above- mentioned enactments have been
impliedly repealed by R.A. No. 6657.chanroblesvirtualawlibrary chanrobles virtual law library
G.R. No. 79310 chanrobles virtual law library

The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias,
Negros Occidental. Co-petitioner Planters' Committee, Inc. is an organization composed of 1,400
planter-members. This petition seeks to prohibit the implementation of Proc. No. 131 and E.O.
No. 229.chanroblesvirtualawlibrary chanrobles virtual law library

The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program
as decreed by the Constitution belongs to Congress and not the President. Although they agree
that the President could exercise legislative power until the Congress was convened, she could
do so only to enact emergency measures during the transition period. At that, even assuming that
the interim legislative power of the President was properly exercised, Proc. No. 131 and E.O.
No. 229 would still have to be annulled for violating the constitutional provisions on just
compensation, due process, and equal protection.chanroblesvirtualawlibrary chanrobles virtual
law library

They also argue that under Section 2 of Proc. No. 131 which provides: chanrobles virtual law
library

Agrarian Reform Fund.-There is hereby created a special fund, to be known as the Agrarian
Reform Fund, an initial amount of FIFTY BILLION PESOS (P50,000,000,000.00) to cover the
estimated cost of the Comprehensive Agrarian Reform Program from 1987 to 1992 which shall
be sourced from the receipts of the sale of the assets of the Asset Privatization Trust and Receipts
of sale of ill-gotten wealth received through the Presidential Commission on Good Government
and such other sources as government may deem appropriate. The amounts collected and
accruing to this special fund shall be considered automatically appropriated for the purpose
authorized in this Proclamation the amount appropriated is in futuro, not in esse. The money
needed to cover the cost of the contemplated expropriation has yet to be raised and cannot be
appropriated at this time.chanroblesvirtualawlibrary chanrobles virtual law library

Furthermore, they contend that taking must be simultaneous with payment of just compensation
as it is traditionally understood, i.e., with money and in full, but no such payment is
contemplated in Section 5 of the E.O. No. 229. On the contrary, Section 6, thereof provides that
the Land Bank of the Philippines "shall compensate the landowner in an amount to be
established by the government, which shall be based on the owner's declaration of current fair
market value as provided in Section 4 hereof, but subject to certain controls to be defined and
promulgated by the Presidential Agrarian Reform Council." This compensation may not be paid
fully in money but in any of several modes that may consist of part cash and part bond, with
interest, maturing periodically, or direct payment in cash or bond as may be mutually agreed
upon by the beneficiary and the landowner or as may be prescribed or approved by the
PARC.chanroblesvirtualawlibrary chanrobles virtual law library

The petitioners also argue that in the issuance of the two measures, no effort was made to make a
careful study of the sugar planters' situation. There is no tenancy problem in the sugar areas that
can justify the application of the CARP to them. To the extent that the sugar planters have been
lumped in the same legislation with other farmers, although they are a separate group with
problems exclusively their own, their right to equal protection has been
violated.chanroblesvirtualawlibrarychanrobles virtual law library

A motion for intervention was filed on August 27,1987 by the National Federation of Sugarcane
Planters (NASP) which claims a membership of at least 20,000 individual sugar planters all over
the country. On September 10, 1987, another motion for intervention was filed, this time by
Manuel Barcelona, et al., representing coconut and riceland owners. Both motions were granted
by the Court.chanroblesvirtualawlibrary chanrobles virtual law library

NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and
that, in any event, the appropriation is invalid because of uncertainty in the amount appropriated.
Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide for an initial
appropriation of fifty billion pesos and thus specifies the minimum rather than the maximum
authorized amount. This is not allowed. Furthermore, the stated initial amount has not been
certified to by the National Treasurer as actually available.chanroblesvirtualawlibrary chanrobles
virtual law library

Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and
convincing evidence the necessity for the exercise of the powers of eminent domain, and the
violation of the fundamental right to own property.chanroblesvirtualawlibrary chanrobles virtual
law library

The petitioners also decry the penalty for non-registration of the lands, which is the expropriation
of the said land for an amount equal to the government assessor's valuation of the land for tax
purposes. On the other hand, if the landowner declares his own valuation he is unjustly required
to immediately pay the corresponding taxes on the land, in violation of the uniformity
rule.chanroblesvirtualawlibrary chanrobles virtual law library

In his consolidated Comment, the Solicitor General first invokes the presumption of
constitutionality in favor of Proc. No. 131 and E.O. No. 229. He also justifies the necessity for
the expropriation as explained in the "whereas" clauses of the Proclamation and submits that,
contrary to the petitioner's contention, a pilot project to determine the feasibility of CARP and a
general survey on the people's opinion thereon are not indispensable prerequisites to its
promulgation.chanroblesvirtualawlibrary chanrobles virtual law library

On the alleged violation of the equal protection clause, the sugar planters have failed to show
that they belong to a different class and should be differently treated. The Comment also
suggests the possibility of Congress first distributing public agricultural lands and scheduling the
expropriation of private agricultural lands later. From this viewpoint, the petition for prohibition
would be premature.chanroblesvirtualawlibrary chanrobles virtual law library

The public respondent also points out that the constitutional prohibition is against the payment of
public money without the corresponding appropriation. There is no rule that only money already
in existence can be the subject of an appropriation law. Finally, the earmarking of fifty billion
pesos as Agrarian Reform Fund, although denominated as an initial amount, is actually the
maximum sum appropriated. The word "initial" simply means that additional amounts may be
appropriated later when necessary.chanroblesvirtualawlibrary chanrobles virtual law library

On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf,
assailing the constitutionality of E.O. No. 229. In addition to the arguments already raised,
Serrano contends that the measure is unconstitutional because:

(1) Only public lands should be included in the CARP; chanrobles virtual law library

(2) E.O. No. 229 embraces more than one subject which is not expressed in the title; chanrobles
virtual law library

(3) The power of the President to legislate was terminated on July 2, 1987; and chanrobles
virtual law library

(4) The appropriation of a P50 billion special fund from the National Treasury did not originate
from the House of Representatives.

G.R. No. 79744 chanrobles virtual law library

The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of
due process and the requirement for just compensation, placed his landholding under the
coverage of Operation Land Transfer. Certificates of Land Transfer were subsequently issued to
the private respondents, who then refused payment of lease rentals to
him.chanroblesvirtualawlibrary chanrobles virtual law library

On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding
under Operation Land transfer and asked for the recall and cancellation of the Certificates of
Land Transfer in the name of the private respondents. He claims that on December 24, 1986, his
petition was denied without hearing. On February 17, 1987, he filed a motion for
reconsideration, which had not been acted upon when E.O. Nos. 228 and 229 were issued. These
orders rendered his motion moot and academic because they directly effected the transfer of his
land to the private respondents.chanroblesvirtualawlibrary chanrobles virtual law library

The petitioner now argues that:

(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the
Philippines.chanroblesvirtualawlibrary chanrobles virtual law library

(2) The said executive orders are violative of the constitutional provision that no private property
shall be taken without due process or just compensation.chanroblesvirtualawlibrary chanrobles
virtual law library

(3) The petitioner is denied the right of maximum retention provided for under the 1987
Constitution.
The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before Congress
convened is anomalous and arbitrary, besides violating the doctrine of separation of powers. The
legislative power granted to the President under the Transitory Provisions refers only to
emergency measures that may be promulgated in the proper exercise of the police
power.chanroblesvirtualawlibrary chanrobles virtual law library

The petitioner also invokes his rights not to be deprived of his property without due process of
law and to the retention of his small parcels of riceholding as guaranteed under Article XIII,
Section 4 of the Constitution. He likewise argues that, besides denying him just compensation for
his land, the provisions of E.O. No. 228 declaring that:

Lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972 shall be
considered as advance payment for the land.

is an unconstitutional taking of a vested property right. It is also his contention that the inclusion
of even small landowners in the program along with other landowners with lands consisting of
seven hectares or more is undemocratic.chanroblesvirtualawlibrary chanrobles virtual law library

In his Comment, the Solicitor General submits that the petition is premature because the motion
for reconsideration filed with the Minister of Agrarian Reform is still unresolved. As for the
validity of the issuance of E.O. Nos. 228 and 229, he argues that they were enacted pursuant to
Section 6, Article XVIII of the Transitory Provisions of the 1987 Constitution which
reads: chanrobles virtual law library

The incumbent president shall continue to exercise legislative powers until the first Congress is
convened.chanroblesvirtualawlibrary chanrobles virtual law library

On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on
October 21. 1972, the tenant-farmer of agricultural land was deemed the owner of the land he
was tilling. The leasehold rentals paid after that date should therefore be considered amortization
payments.chanroblesvirtualawlibrary chanrobles virtual law library

In his Reply to the public respondents, the petitioner maintains that the motion he filed was
resolved on December 14, 1987. An appeal to the Office of the President would be useless with
the promulgation of E.O. Nos. 228 and 229, which in effect sanctioned the validity of the public
respondent's acts.chanroblesvirtualawlibrary chanrobles virtual law library

G.R. No. 78742 chanrobles virtual law library

The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice
and corn lands not exceeding seven hectares as long as they are cultivating or intend to cultivate
the same. Their respective lands do not exceed the statutory limit but are occupied by tenants
who are actually cultivating such lands.chanroblesvirtualawlibrary chanrobles virtual law library

According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:
No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be ejected or
removed from his farmholding until such time as the respective rights of the tenant- farmers and
the landowner shall have been determined in accordance with the rules and regulations
implementing P.D. No. 27.

The petitioners claim 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 required under the above-quoted decree. They therefore ask the Court for a writ of
mandamus to compel the respondent to issue the said
rules.chanroblesvirtualawlibrary chanrobles virtual law library

In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474
removing any right of retention from persons who own other agricultural lands of more than 7
hectares in aggregate area or lands used for residential, commercial, industrial or other purposes
from which they derive adequate income for their family. And even assuming that the petitioners
do not fall under its terms, the regulations implementing P.D. No. 27 have already been issued,
to wit, the Memorandum dated July 10, 1975 (Interim Guidelines on Retention by Small
Landowners, with an accompanying Retention Guide Table), Memorandum Circular No. 11
dated April 21, 1978, (Implementation Guidelines of LOI No. 474), Memorandum Circular No.
18-81 dated December 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and
Retention by Small Landowners), and DAR Administrative Order No. 1, series of 1985
(Providing for a Cut-off Date for Landowners to Apply for Retention and/or to Protest the
Coverage of their Landholdings under Operation Land Transfer pursuant to P.D. No. 27). For
failure to file the corresponding applications for retention under these measures, the petitioners
are now barred from invoking this right.chanroblesvirtualawlibrary chanrobles virtual law library

The public respondent also stresses that the petitioners have prematurely initiated this case
notwithstanding the pendency of their appeal to the President of the Philippines. Moreover, the
issuance of the implementing rules, assuming this has not yet been done, involves the exercise of
discretion which cannot be controlled through the writ of mandamus. This is especially true if
this function is entrusted, as in this case, to a separate department of the
government.chanroblesvirtualawlibrary chanrobles virtual law library

In their Reply, the petitioners insist that the above-cited measures are not applicable to them
because they do not own more than seven hectares of agricultural land. Moreover, assuming
arguendo that the rules were intended to cover them also, the said measures are nevertheless not
in force because they have not been published as required by law and the ruling of this Court
in Tanada v. Tuvera. 10 As for LOI 474, the same is ineffective for the additional reason that a
mere letter of instruction could not have repealed the presidential
decree.chanroblesvirtualawlibrary chanrobles virtual law library

I chanrobles virtual law library

Although holding neither purse nor sword and so regarded as the weakest of the three
departments of the government, the judiciary is nonetheless vested with the power to annul the
acts of either the legislative or the executive or of both when not conformable to the fundamental
law. This is the reason for what some quarters call the doctrine of judicial supremacy. Even so,
this power is not lightly assumed or readily exercised. The doctrine of separation of powers
imposes upon the courts a proper restraint, born of the nature of their functions and of their
respect for the other departments, in striking down the acts of the legislative and the executive as
unconstitutional. The policy, indeed, is a blend of courtesy and caution. To doubt is to sustain.
The theory is that before the act was done or the law was enacted, earnest studies were made by
Congress or the President, or both, to insure that the Constitution would not be
breached.chanroblesvirtualawlibrary chanrobles virtual law library

In addition, the Constitution itself lays down stringent conditions for a declaration of
unconstitutionality, requiring therefor the concurrence of a majority of the members of the
Supreme Court who took part in the deliberations and voted on the issue during their session en
banc. 11 And as established by judge made doctrine, the Court will assume jurisdiction over a
constitutional question only if it is shown that the essential requisites of a judicial inquiry into
such a question are first satisfied. Thus, there must be an actual case or controversy involving a
conflict of legal rights susceptible of judicial determination, the constitutional question must
have been opportunely raised by the proper party, and the resolution of the question is
unavoidably necessary to the decision of the case itself. 12chanrobles virtual law library

With particular regard to the requirement of proper party as applied in the cases before us, we
hold that the same is satisfied by the petitioners and intervenors because each of them has
sustained or is in danger of sustaining an immediate injury as a result of the acts or measures
complained of. 13And even if, strictly speaking, they are not covered by the definition, it is still
within the wide discretion of the Court to waive the requirement and so remove the impediment
to its addressing and resolving the serious constitutional questions
raised.chanroblesvirtualawlibrary chanrobles virtual law library

In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to
question the constitutionality of several executive orders issued by President Quirino although
they were invoking only an indirect and general interest shared in common with the public. The
Court dismissed the objection that they were not proper parties and ruled that "the transcendental
importance to the public of these cases demands that they be settled promptly and definitely,
brushing aside, if we must, technicalities of procedure." We have since then applied this
exception in many other cases. 15chanrobles virtual law library

The other above-mentioned requisites have also been met in the present
petitions.chanroblesvirtualawlibrary chanrobles virtual law library

In must be stressed that despite the inhibitions pressing upon the Court when confronted with
constitutional issues like the ones now before it, it will not hesitate to declare a law or act invalid
when it is convinced that this must be done. In arriving at this conclusion, its only criterion will
be the Constitution as God and its conscience give it the light to probe its meaning and discover
its purpose. Personal motives and political considerations are irrelevancies that cannot influence
its decision. Blandishment is as ineffectual as intimidation.chanroblesvirtualawlibrary chanrobles
virtual law library
For all the awesome power of the Congress and the Executive, the Court will not hesitate to
"make the hammer fall, and heavily," to use Justice Laurel's pithy language, where the acts of
these departments, or of any public official, betray the people's will as expressed in the
Constitution.chanroblesvirtualawlibrary chanrobles virtual law library

It need only be added, to borrow again the words of Justice Laurel, that -

... when the judiciary mediates to allocate constitutional boundaries, it does not assert any
superiority over the other departments; it does not in reality nullify or invalidate an act of the
Legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution
to determine conflicting claims of authority under the Constitution and to establish for the parties
in an actual controversy the rights which that instrument secures and guarantees to them. This is
in truth all that is involved in what is termed "judicial supremacy" which properly is the power of
judicial review under the Constitution. 16

The cases before us categorically raise constitutional questions that this Court must categorically
resolve. And so we shall.chanroblesvirtualawlibrary chanrobles virtual law library

IIchanrobles virtual law library

We proceed first to the examination of the preliminary issues before resolving the more serious
challenges to the constitutionality of the several measures involved in these
petitions.chanroblesvirtualawlibrary chanrobles virtual law library

The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under
martial law has already been sustained in Gonzales v. Estrella and we find no reason to modify
or reverse it on that issue. As for the power of President Aquino to promulgate Proc. No. 131 and
E.O. Nos. 228 and 229, the same was authorized under Section 6 of the Transitory Provisions of
the 1987 Constitution, quoted above.chanroblesvirtualawlibrary chanrobles virtual law library

The said measures were issued by President Aquino before July 27, 1987, when the Congress of
the Philippines was formally convened and took over legislative power from her. They are not
"midnight" enactments intended to pre-empt the legislature because E.O. No. 228 was issued on
July 17, 1987, and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued on
July 22, 1987. Neither is it correct to say that these measures ceased to be valid when she lost her
legislative power for, like any statute, they continue to be in force unless modified or repealed by
subsequent law or declared invalid by the courts. A statute does not ipso facto become
inoperative simply because of the dissolution of the legislature that enacted it. By the same
token, President Aquino's loss of legislative power did not have the effect of invalidating all the
measures enacted by her when and as long as she possessed
it.chanroblesvirtualawlibrary chanrobles virtual law library

Significantly, the Congress she is alleged to have undercut has not rejected but in fact
substantially affirmed the challenged measures and has specifically provided that they shall be
suppletory to R.A. No. 6657 whenever not inconsistent with its provisions. 17 Indeed, some
portions of the said measures, like the creation of the P50 billion fund in Section 2 of Proc. No.
131, and Sections 20 and 21 of E.O. No. 229, have been incorporated by reference in the CARP
Law. 18chanrobles virtual law library

That fund, as earlier noted, is itself being questioned on the ground that it does not conform to
the requirements of a valid appropriation as specified in the Constitution. Clearly, however, Proc.
No. 131 is not an appropriation measure even if it does provide for the creation of said fund, for
that is not its principal purpose. An appropriation law is one the primary and specific purpose of
which is to authorize the release of public funds from the treasury. 19 The creation of the fund is
only incidental to the main objective of the proclamation, which is agrarian
reform.chanroblesvirtualawlibrary chanrobles virtual law library

It should follow that the specific constitutional provisions invoked, to wit, Section 24 and
Section 25(4) of Article VI, are not applicable. With particular reference to Section 24, this
obviously could not have been complied with for the simple reason that the House of
Representatives, which now has the exclusive power to initiate appropriation measures, had not
yet been convened when the proclamation was issued. The legislative power was then solely
vested in the President of the Philippines, who embodied, as it were, both houses of
Congress.chanroblesvirtualawlibrary chanrobles virtual law library

The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be
invalidated because they do not provide for retention limits as required by Article XIII, Section 4
of the Constitution is no longer tenable. R.A. No. 6657 does provide for such limits now in
Section 6 of the law, which in fact is one of its most controversial provisions. This section
declares:

Retention Limits. - Except as otherwise provided in this Act, no person may own or retain,
directly or indirectly, any public or private agricultural land, the size of which shall vary
according to factors governing a viable family-sized farm, such as commodity produced, terrain,
infrastructure, and soil fertility as determined by the Presidential Agrarian Reform Council
(PARC) created hereunder, but in no case shall retention by the landowner exceed five (5)
hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the
following qualifications: (1) that he is at least fifteen (15) years of age; and (2) that he is actually
tilling the land or directly managing the farm; Provided, That landowners whose lands have been
covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained by
them thereunder, further, That original homestead grantees or direct compulsory heirs who still
own the original homestead at the time of the approval of this Act shall retain the same areas as
long as they continue to cultivate said homestead.

The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have only
one subject, to be expressed in its title, deserves only short attention. It is settled that the title of
the bill does not have to be a catalogue of its contents and will suffice if the matters embodied in
the text are relevant to each other and may be inferred from the title. 20chanrobles virtual law
library

The Court wryly observes that during the past dictatorship, every presidential issuance, by
whatever name it was called, had the force and effect of law because it came from President
Marcos. Such are the ways of despots. Hence, it is futile to argue, as the petitioners do in G.R.
No. 79744, that LOI 474 could not have repealed P.D. No. 27 because the former was only a
letter of instruction. The important thing is that it was issued by President Marcos, whose word
was law during that time.chanroblesvirtualawlibrary chanrobles virtual law library

But for all their peremptoriness, these issuances from the President Marcos still had to comply
with the requirement for publication as this Court held in Tanada v. Tuvera. 21 Hence, unless
published in the Official Gazette in accordance with Article 2 of the Civil Code, they could not
have any force and effect if they were among those enactments successfully challenged in that
case. LOI 474 was published, though, in the Official Gazette dated November
29,1976.) chanrobles virtual law library

Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of
mandamus cannot issue to compel the performance of a discretionary act, especially by a specific
department of the government. That is true as a general proposition but is subject to one
important qualification. Correctly and categorically stated, the rule is that mandamus will lie to
compel the discharge of the discretionary duty itself but not to control the discretion to be
exercised. In other words, mandamus can issue to require action only but not specific action.

Whenever a duty is imposed upon a public official and an unnecessary and unreasonable delay in
the exercise of such duty occurs, if it is a clear duty imposed by law, the courts will intervene by
the extraordinary legal remedy of mandamus to compel action. If the duty is purely ministerial,
the courts will require specific action. If the duty is purely discretionary, the courts
by mandamus will require action only. For example, if an inferior court, public official, or board
should, for an unreasonable length of time, fail to decide a particular question to the great
detriment of all parties concerned, or a court should refuse to take jurisdiction of a cause when
the law clearly gave it jurisdiction mandamus will issue, in the first case to require a decision,
and in the second to require that jurisdiction be taken of the cause. 22

And while it is true that as a rule the writ will not be proper as long as there is still a plain,
speedy and adequate remedy available from the administrative authorities, resort to the courts
may still be permitted if the issue raised is a question of law. 23chanrobles virtual law library

IIIchanrobles virtual law library

There are traditional distinctions between the police power and the power of eminent domain that
logically preclude the application of both powers at the same time on the same subject. In the
case of City of Baguio v. NAWASA, 24 for example, where a law required the transfer of all
municipal waterworks systems to the NAWASA in exchange for its assets of equivalent value,
the Court held that the power being exercised was eminent domain because the property involved
was wholesome and intended for a public use. Property condemned under the police power is
noxious or intended for a noxious purpose, such as a building on the verge of collapse, which
should be demolished for the public safety, or obscene materials, which should be destroyed in
the interest of public morals. The confiscation of such property is not compensable, unlike the
taking of property under the power of expropriation, which requires the payment of just
compensation to the owner.chanroblesvirtualawlibrary chanrobles virtual law library
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits of the
police power in a famous aphorism: "The general rule at least is that while property may be
regulated to a certain extent, if regulation goes too far it will be recognized as a taking." The
regulation that went "too far" was a law prohibiting mining which might cause the subsidence of
structures for human habitation constructed on the land surface. This was resisted by a coal
company which had earlier granted a deed to the land over its mine but reserved all mining rights
thereunder, with the grantee assuming all risks and waiving any damage claim. The Court held
the law could not be sustained without compensating the grantor. Justice Brandeis filed a lone
dissent in which he argued that there was a valid exercise of the police power. He said:

Every restriction upon the use of property imposed in the exercise of the police power deprives
the owner of some right theretofore enjoyed, and is, in that sense, an abridgment by the State of
rights in property without making compensation. But restriction imposed to protect the public
health, safety or morals from dangers threatened is not a taking. The restriction here in question
is merely the prohibition of a noxious use. The property so restricted remains in the possession of
its owner. The state does not appropriate it or make any use of it. The state merely prevents the
owner from making a use which interferes with paramount rights of the public. Whenever the use
prohibited ceases to be noxious - as it may because of further changes in local or social
conditions - the restriction will have to be removed and the owner will again be free to enjoy his
property as heretofore.

Recent trends, however, would indicate not a polarization but a mingling of the police power and
the power of eminent domain, with the latter being used as an implement of the former like the
power of taxation. The employment of the taxing power to achieve a police purpose has long
been accepted. 26As for the power of expropriation, Prof. John J. Costonis of the University of
Illinois College of Law (referring to the earlier case of Euclid v. Ambler Realty Co., 272 US 365,
which sustained a zoning law under the police power) makes the following significant remarks:

Euclid, moreover, was decided in an era when judges located the Police and eminent domain
powers on different planets. Generally speaking, they viewed eminent domain as encompassing
public acquisition of private property for improvements that would be available for public use,"
literally construed. To the police power, on the other hand, they assigned the less intrusive task
of preventing harmful externalities a point reflected in the Euclid opinion's reliance on an
analogy to nuisance law to bolster its support of zoning. So long as suppression of a privately
authored harm bore a plausible relation to some legitimate "public purpose," the pertinent
measure need have afforded no compensation whatever. With the progressive growth of
government's involvement in land use, the distance between the two powers has contracted
considerably. Today government often employs eminent domain interchangeably with or as a
useful complement to the police power-- a trend expressly approved in the Supreme Court's 1954
decision in Berman v. Parker, which broadened the reach of eminent domain's "public use" test
to match that of the police power's standard of "public purpose." 27chanrobles virtual law library

The Berman case sustained a redevelopment project and the improvement of blighted areas in the
District of Columbia as a proper exercise of the police power. On the role of eminent domain in
the attainment of this purpose, Justice Douglas declared:
If those who govern the District of Columbia decide that the Nation's Capital should be beautiful
as well as sanitary, there is nothing in the Fifth Amendment that stands in the
way.chanroblesvirtualawlibrary chanrobles virtual law library

Once the object is within the authority of Congress, the right to realize it through the exercise of
eminent domain is clear.chanroblesvirtualawlibrary chanrobles virtual law library

For the power of eminent domain is merely the means to the end. 28chanrobles virtual law
library

In Penn Central Transportation Co. v. New York City, 29decided by a 6-3 vote in 1978, the U.S
Supreme Court sustained the respondent's Landmarks Preservation Law under which the owners
of the Grand Central Terminal had not been allowed to construct a multi-story office building
over the Terminal, which had been designated a historic landmark. Preservation of the landmark
was held to be a valid objective of the police power. The problem, however, was that the owners
of the Terminal would be deprived of the right to use the airspace above it although other
landowners in the area could do so over their respective properties. While insisting that there was
here no taking, the Court nonetheless recognized certain compensatory rights accruing to Grand
Central Terminal which it said would "undoubtedly mitigate" the loss caused by the regulation.
This "fair compensation," as he called it, was explained by Prof. Costonis in this
wise: chanrobles virtual law library

In return for retaining the Terminal site in its pristine landmark status, Penn Central was
authorized to transfer to neighboring properties the authorized but unused rights accruing to the
site prior to the Terminal's designation as a landmark - the rights which would have been
exhausted by the 59-story building that the city refused to countenance atop the Terminal.
Prevailing bulk restrictions on neighboring sites were proportionately relaxed, theoretically
enabling Penn Central to recoup its losses at the Terminal site by constructing or selling to others
the right to construct larger, hence more profitable buildings on the transferee sites. 30chanrobles
virtual law library

The cases before us present no knotty complication insofar as the question of compensable
taking is concerned. To the extent that the measures under challenge merely prescribe retention
limits for landowners, there is an exercise of the police power for the regulation of private
property in accordance with the Constitution. But where, to carry out such regulation, it becomes
necessary to deprive such owners of whatever lands they may own in excess of the maximum
area allowed, there is definitely a taking under the power of eminent domain for which payment
of just compensation is imperative. The taking contemplated is not a mere limitation of the use of
the land. What is required is the surrender of the title to and the physical possession of the said
excess and all beneficial rights accruing to the owner in favor of the farmer-beneficiary. This is
definitely an exercise not of the police power but of the power of eminent
domain.chanroblesvirtualawlibrary chanrobles virtual law library

Whether as an exercise of the police power or of the power of eminent domain, the several
measures before us are challenged as violative of the due process and equal protection
clauses.chanroblesvirtualawlibrary chanrobles virtual law library
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits
are prescribed has already been discussed and dismissed. It is noted that although they excited
many bitter exchanges during the deliberation of the CARP Law in Congress, the retention limits
finally agreed upon are, curiously enough, not being questioned in these petitions. We therefore
do not discuss them here. The Court will come to the other claimed violations of due process in
connection with our examination of the adequacy of just compensation as required under the
power of expropriation.chanroblesvirtualawlibrary chanrobles virtual law library

The argument of the small farmers that they have been denied equal protection because of the
absence of retention limits has also become academic under Section 6 of R.A. No. 6657.
Significantly, they too have not questioned the area of such limits. There is also the complaint
that they should not be made to share the burden of agrarian reform, an objection also made by
the sugar planters on the ground that they belong to a particular class with particular interests of
their own. However, no evidence has been submitted to the Court that the requisites of a valid
classification have been violated.chanroblesvirtualawlibrary chanrobles virtual law library

Classification has been defined as the grouping of persons or things similar to each other in
certain particulars and different from each other in these same particulars. 31 To be valid, it must
conform to the following requirements: (1) it must be based on substantial distinctions; (2) it
must be germane to the purposes of the law; (3) it must not be limited to existing conditions
only; and (4) it must apply equally to all the members of the class. 32The Court finds that all
these requisites have been met by the measures here challenged as arbitrary and
discriminatory.chanroblesvirtualawlibrary chanrobles virtual law library

Equal protection simply means that all persons or things similarly situated must be treated alike
both as to the rights conferred and the liabilities imposed. 33The petitioners have not shown that
they belong to a different class and entitled to a different treatment. The argument that not only
landowners but also owners of other properties must be made to share the burden of
implementing land reform must be rejected. There is a substantial distinction between these two
classes of owners that is clearly visible except to those who will not see. There is no need to
elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a
valid classification. Its decision is accorded recognition and respect by the courts of justice
except only where its discretion is abused to the detriment of the Bill of
Rights.chanroblesvirtualawlibrary chanrobles virtual law library

It is worth remarking at this juncture that a statute may be sustained under the police power only
if there is a concurrence of the lawful subject and the lawful method. Put otherwise, the interests
of the public generally as distinguished from those of a particular class require the interference of
the State and, no less important, the means employed are reasonably necessary for the attainment
of the purpose sought to be achieved and not unduly oppressive upon individuals. 34As the
subject and purpose of agrarian reform have been laid down by the Constitution itself, we may
say that the first requirement has been satisfied. What remains to be examined is the validity of
the method employed to achieve the constitutional goal.chanroblesvirtualawlibrary chanrobles
virtual law library
One of the basic principles of the democratic system is that where the rights of the individual are
concerned, the end does not justify the means. It is not enough that there be a valid objective; it
is also necessary that the means employed to pursue it be in keeping with the Constitution. Mere
expediency will not excuse constitutional shortcuts. There is no question that not even the
strongest moral conviction or the most urgent public need, subject only to a few notable
exceptions, will excuse the bypassing of an individual's rights. It is no exaggeration to say that a,
person invoking a right guaranteed under Article III of the Constitution is a majority of one even
as against the rest of the nation who would deny him that
right.chanroblesvirtualawlibrary chanrobles virtual law library

That right covers the person's life, his liberty and his property under Section 1 of Article III of
the Constitution. With regard to his property, the owner enjoys the added protection of Section 9,
which reaffirms the familiar rule that private property shall not be taken for public use without
just compensation.chanroblesvirtualawlibrary chanrobles virtual law library

This brings us now to the power of eminent domain.chanroblesvirtualawlibrary chanrobles


virtual law library

IV

Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands
intended for public use upon payment of just compensation to the owner. Obviously, there is no
need to expropriate where the owner is willing to sell under terms also acceptable to the
purchaser, in which case an ordinary deed of sale may be agreed upon by the parties. 35 It is only
where the owner is unwilling to sell, or cannot accept the price or other conditions offered by the
vendee, that the power of eminent domain will come into play to assert the paramount authority
of the State over the interests of the property owner. Private rights must then yield to the
irresistible demands of the public interest on the time-honored justification, as in the case of the
police power, that the welfare of the people is the supreme law.

But for all its primacy and urgency, the power of expropriation is by no means absolute (as
indeed no power is absolute). The limitation is found in the constitutional injunction that "private
property shall not be taken for public use without just compensation" and in the abundant
jurisprudence that has evolved from the interpretation of this principle. Basically, the
requirements for a proper exercise of the power are: (1) public use and (2) just
compensation.chanroblesvirtualawlibrary chanrobles virtual law library

Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State
should first distribute public agricultural lands in the pursuit of agrarian reform instead of
immediately disturbing property rights by forcibly acquiring private agricultural lands.
Parenthetically, it is not correct to say that only public agricultural lands may be covered by the
CARP as the Constitution calls for "the just distribution of all agricultural lands." In any event,
the decision to redistribute private agricultural lands in the manner prescribed by the CARP was
made by the legislative and executive departments in the exercise of their discretion. We are not
justified in reviewing that discretion in the absence of a clear showing that it has been
abused.chanroblesvirtualawlibrary chanrobles virtual law library
A becoming courtesy admonishes us to respect the decisions of the political departments when
they decide what is known as the political question. As explained by Chief Justice Concepcion in
the case of Tañada v. Cuenco: 36

The term "political question" connotes what it means in ordinary parlance, namely, a question of
policy. It refers to "those questions which, under the Constitution, are to be decided by the
people in their sovereign capacity; or in regard to which full discretionary authority has been
delegated to the legislative or executive branch of the government." It is concerned with issues
dependent upon the wisdom, not legality, of a particular measure.

It is true that the concept of the political question has been constricted with the enlargement of
judicial power, which now includes the authority of the courts "to determine whether or not there
has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government." 37Even so, this should not be construed as a
license for us to reverse the other departments simply because their views may not coincide with
ours.chanroblesvirtualawlibrary chanrobles virtual law library

The legislature and the executive have been seen fit, in their wisdom, to include in the CARP the
redistribution of private landholdings (even as the distribution of public agricultural lands is first
provided for, while also continuing apace under the Public Land Act and other cognate laws).
The Court sees no justification to interpose its authority, which we may assert only if we believe
that the political decision is not unwise, but illegal. We do not find it to be
so.chanroblesvirtualawlibrary chanrobles virtual law library

In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:

Congress having determined, as it did by the Act of March 3,1909 that the entire St. Mary's river
between the American bank and the international line, as well as all of the upland north of the
present ship canal, throughout its entire length, was "necessary for the purpose of navigation of
said waters, and the waters connected therewith," that determination is conclusive in
condemnation proceedings instituted by the United States under that Act, and there is no room
for judicial review of the judgment of Congress ... .

As earlier observed, the requirement for public use has already been settled for us by the
Constitution itself No less than the 1987 Charter calls for agrarian reform, which is the reason
why private agricultural lands are to be taken from their owners, subject to the prescribed
maximum retention limits. The purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No.
6657 are only an elaboration of the constitutional injunction that the State adopt the necessary
measures "to encourage and undertake the just distribution of all agricultural lands to enable
farmers who are landless to own directly or collectively the lands they till." That public use, as
pronounced by the fundamental law itself, must be binding on
us.chanroblesvirtualawlibrary chanrobles virtual law library

The second requirement, i.e., the payment of just compensation, needs a longer and more
thoughtful examination.chanroblesvirtualawlibrary chanrobles virtual law library
Just compensation is defined as the full and fair equivalent of the property taken from its owner
by the expropriator. 39 It has been repeatedly stressed by this Court that the measure is not the
taker's gain but the owner's loss. 40 The word "just" is used to intensify the meaning of the word
"compensation" to convey the idea that the equivalent to be rendered for the property to be taken
shall be real, substantial, full, ample. 41chanrobles virtual law library

It bears repeating that the measures challenged in these petitions contemplate more than a mere
regulation of the use of private lands under the police power. We deal here with an actual taking
of private agricultural lands that has dispossessed the owners of their property and deprived them
of all its beneficial use and enjoyment, to entitle them to the just compensation mandated by the
Constitution.chanroblesvirtualawlibrary chanrobles virtual law library

As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the
following conditions concur: (1) the expropriator must enter a private property; (2) the entry
must be for more than a momentary period; (3) the entry must be under warrant or color of legal
authority; (4) the property must be devoted to public use or otherwise informally appropriated or
injuriously affected; and (5) the utilization of the property for public use must be in such a way
as to oust the owner and deprive him of beneficial enjoyment of the property. All these requisites
are envisioned in the measures before us.chanroblesvirtualawlibrary chanrobles virtual law
library

Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its
taking possession of the condemned property, as "the compensation is a public charge, the good
faith of the public is pledged for its payment, and all the resources of taxation may be employed
in raising the amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that:

Upon receipt by the landowner of the corresponding payment or, in case of rejection or no
response from the landowner, upon the deposit with an accessible bank designated by the DAR
of the compensation in cash or in LBP bonds in accordance with this Act, the DAR shall take
immediate possession of the land and shall request the proper Register of Deeds to issue a
Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR
shall thereafter proceed with the redistribution of the land to the qualified beneficiaries.

Objection is raised, however, to the manner of fixing the just compensation, which it is claimed
is entrusted to the administrative authorities in violation of judicial prerogatives. Specific
reference is made to Section 16(d), which provides that in case of the rejection or disregard by
the owner of the offer of the government to buy his land-

... the DAR shall conduct summary administrative proceedings to determine the compensation
for the land by requiring the landowner, the LBP and other interested parties to submit evidence
as to the just compensation for the land, within fifteen (15) days from the receipt of the notice.
After the expiration of the above period, the matter is deemed submitted for decision. The DAR
shall decide the case within thirty (30) days after it is submitted for decision.

To be sure, the determination of just compensation is a function addressed to the courts of justice
and may not be usurped by any other branch or official of the government. EPZA v.
Dulay 44resolved a challenge to several decrees promulgated by President Marcos providing that
the just compensation for property under expropriation should be either the assessment of the
property by the government or the sworn valuation thereof by the owner, whichever was lower.
In declaring these decrees unconstitutional, the Court held through Mr. Justice Hugo E.
Gutierrez, Jr.:

The method of ascertaining just compensation under the aforecited decrees constitutes
impermissible encroachment on judicial prerogatives. It tends to render this Court inutile in a
matter which under this Constitution is reserved to it for final
determination.chanroblesvirtualawlibrary chanrobles virtual law library

Thus, although in an expropriation proceeding the court technically would still have the power to
determine the just compensation for the property, following the applicable decrees, its task
would be relegated to simply stating the lower value of the property as declared either by the
owner or the assessor. As a necessary consequence, it would be useless for the court to appoint
commissioners under Rule 67 of the Rules of Court. Moreover, the need to satisfy the due
process clause in the taking of private property is seemingly fulfilled since it cannot be said that
a judicial proceeding was not had before the actual taking. However, the strict application of the
decrees during the proceedings would be nothing short of a mere formality or charade as the
court has only to choose between the valuation of the owner and that of the assessor, and its
choice is always limited to the lower of the two. The court cannot exercise its discretion or
independence in determining what is just or fair. Even a grade school pupil could substitute for
the judge insofar as the determination of constitutional just compensation is
concerned.chanroblesvirtualawlibrary chanrobles virtual law library

x x x chanrobles virtual law library

In the present petition, we are once again confronted with the same question of whether the
courts under P.D. No. 1533, which contains the same provision on just compensation as its
predecessor decrees, still have the power and authority to determine just compensation,
independent of what is stated by the decree and to this effect, to appoint commissioners for such
purpose.chanroblesvirtualawlibrary chanrobles virtual law library

This time, we answer in the affirmative.

xxx

It is violative of due process to deny the owner the opportunity to prove that the valuation in the
tax documents is unfair or wrong. And it is repulsive to the basic concepts of justice and fairness
to allow the haphazard work of a minor bureaucrat or clerk to absolutely prevail over the
judgment of a court promulgated only after expert commissioners have actually viewed the
property, after evidence and arguments pro and con have been presented, and after all factors and
considerations essential to a fair and just determination have been judiciously evaluated.

A reading of the aforecited Section 16(d) will readily show that it does not suffer from the
arbitrariness that rendered the challenged decrees constitutionally objectionable. Although the
proceedings are described as summary, the landowner and other interested parties are
nevertheless allowed an opportunity to submit evidence on the real value of the property. But
more importantly, the determination of the just compensation by the DAR is not by any means
final and conclusive upon the landowner or any other interested party, for Section 16(f) clearly
provides:

Any party who disagrees with the decision may bring the matter to the court of proper
jurisdiction for final determination of just compensation.

The determination made by the DAR is only preliminary unless accepted by all parties
concerned. Otherwise, the courts of justice will still have the right to review with finality the said
determination in the exercise of what is admittedly a judicial
function.chanroblesvirtualawlibrary chanrobles virtual law library

The second and more serious objection to the provisions on just compensation is not as easily
resolved.chanroblesvirtualawlibrary chanrobles virtual law library

This refers to Section 18 of the CARP Law providing in full as follows:

SEC. 18. Valuation and Mode of Compensation. - The LBP shall compensate the landowner in
such amount as may be agreed upon by the landowner and the DAR and the LBP, in accordance
with the criteria provided for in Sections 16 and 17, and other pertinent provisions hereof, or as
may be finally determined by the court, as the just compensation for the
land.chanroblesvirtualawlibrary chanrobles virtual law library

The compensation shall be paid in one of the following modes, at the option of the
landowner: chanrobles virtual law library

(1) Cash payment, under the following terms and conditions:

(a) For lands above fifty (50) hectares, insofar as the excess hectarage is concerned - Twenty-five
percent (25%) cash, the balance to be paid in government financial instruments negotiable at any
time.chanroblesvirtualawlibrary chanrobles virtual law library

(b) For lands above twenty-four (24) hectares and up to fifty (50) hectares - Thirty percent (30%)
cash, the balance to be paid in government financial instruments negotiable at any
time.chanroblesvirtualawlibrary chanrobles virtual law library

(c) For lands twenty-four (24) hectares and below - Thirty-five percent (35%) cash, the balance
to be paid in government financial instruments negotiable at any time.

(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares,


physical assets or other qualified investments in accordance with guidelines set by the
PARC; chanrobles virtual law library

(3) Tax credits which can be used against any tax liability; chanrobles virtual law library
(4) LBP bonds, which shall have the following features:

(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent (10%) of the face
value of the bonds shall mature every year from the date of issuance until the tenth (10th) year:
Provided, That should the landowner choose to forego the cash portion, whether in full or in part,
he shall be paid correspondingly in LBP bonds; chanrobles virtual law library

(b) Transferability and negotiability. Such LBP bonds may be used by the landowner, his
successors-in- interest or his assigns, up to the amount of their face value, for any of the
following: chanrobles virtual law library

(i) Acquisition of land or other real properties of the government, including assets under the
Asset Privatization Program and other assets foreclosed by government financial institutions in
the same province or region where the lands for which the bonds were paid are
situated; chanrobles virtual law library

(ii) Acquisition of shares of stock of government-owned or controlled corporations or shares of


stock owned by the government in private corporations; chanrobles virtual law library

(iii) Substitution for surety or bail bonds for the provisional release of accused persons, or for
performance bonds; chanrobles virtual law library

(iv) Security for loans with any government financial institution, provided the proceeds of the
loans shall be invested in an economic enterprise, preferably in a small and medium- scale
industry, in the same province or region as the land for which the bonds are paid; chanrobles
virtual law library

(v) Payment for various taxes and fees to government: Provided, That the use of these bonds for
these purposes will be limited to a certain percentage of the outstanding balance of the financial
instruments; Provided, further, That the PARC shall determine the percentages mentioned
above; chanrobles virtual law library

(vi) Payment for tuition fees of the immediate family of the original bondholder in government
universities, colleges, trade schools, and other institutions; chanrobles virtual law library

(vii) Payment for fees of the immediate family of the original bondholder in government
hospitals; and chanrobles virtual law library

(viii) Such other uses as the PARC may from time to time allow.

The contention of the petitioners in G.R. No. 79777 is that the above provision is
unconstitutional insofar as it requires the owners of the expropriated properties to accept just
compensation therefor in less than money, which is the only medium of payment allowed. In
support of this contention, they cite jurisprudence holding that:
The fundamental rule in expropriation matters is that the owner of the property expropriated is
entitled to a just compensation, which should be neither more nor less, whenever it is possible to
make the assessment, than the money equivalent of said property. Just compensation has always
been understood to be the just and complete equivalent of the loss which the owner of the thing
expropriated has to suffer by reason of the expropriation . 45 (Emphasis supplied.)

In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:

It is well-settled that just compensation means the equivalent for the value of the property at the
time of its taking. Anything beyond that is more, and anything short of that is less, than just
compensation. It means a fair and full equivalent for the loss sustained, which is the measure of
the indemnity, not whatever gain would accrue to the expropriating entity. The market value of
the land taken is the just compensation to which the owner of condemned property is entitled, the
market value being that sum of money which a person desirous, but not compelled to buy, and an
owner, willing, but not compelled to sell, would agree on as a price to be given and received for
such property. (Emphasis supplied.)

In the United States, where much of our jurisprudence on the subject has been derived, the
weight of authority is also to the effect that just compensation for property expropriated is
payable only in money and not otherwise. Thus -

The medium of payment of compensation is ready money or cash. The condemnor cannot
compel the owner to accept anything but money, nor can the owner compel or require the
condemnor to pay him on any other basis than the value of the property in money at the time and
in the manner prescribed by the Constitution and the statutes. When the power of eminent
domain is resorted to, there must be a standard medium of payment, binding upon both parties,
and the law has fixed that standard as money in cash. 47(Emphasis supplied.)chanrobles virtual
law library

Part cash and deferred payments are not and cannot, in the nature of things, be regarded as a
reliable and constant standard of compensation. 48

"Just compensation" for property taken by condemnation means a fair equivalent in money,
which must be paid at least within a reasonable time after the taking, and it is not within the
power of the Legislature to substitute for such payment future obligations, bonds, or other
valuable advantage. 49(Emphasis supplied.)

It cannot be denied from these cases that the traditional medium for the payment of just
compensation is money and no other. And so, conformably, has just compensation been paid in
the past solely in that medium. However, we do not deal here with the traditional excercise of the
power of eminent domain. This is not an ordinary expropriation where only a specific property of
relatively limited area is sought to be taken by the State from its owner for a specific and perhaps
local purpose.chanroblesvirtualawlibrary chanrobles virtual law library

What we deal with here is a revolutionary kind of


expropriation.chanroblesvirtualawlibrary chanrobles virtual law library
The expropriation before us affects all private agricultural lands whenever found and of whatever
kind as long as they are in excess of the maximum retention limits allowed their owners. This
kind of expropriation is intended for the benefit not only of a particular community or of a small
segment of the population but of the entire Filipino nation, from all levels of our society, from
the impoverished farmer to the land-glutted owner. Its purpose does not cover only the whole
territory of this country but goes beyond in time to the foreseeable future, which it hopes to
secure and edify with the vision and the sacrifice of the present generation of Filipinos.
Generations yet to come are as involved in this program as we are today, although hopefully only
as beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow through
our thoughtfulness today. And, finally, let it not be forgotten that it is no less than the
Constitution itself that has ordained this revolution in the farms, calling for "a just distribution"
among the farmers of lands that have heretofore been the prison of their dreams but can now
become the key at least to their deliverance.chanroblesvirtualawlibrary chanrobles virtual law
library

Such a program will involve not mere millions of pesos. The cost will be tremendous.
Considering the vast areas of land subject to expropriation under the laws before us, we estimate
that hundreds of billions of pesos will be needed, far more indeed than the amount of P50 billion
initially appropriated, which is already staggering as it is by our present standards. Such amount
is in fact not even fully available at this time.chanroblesvirtualawlibrary chanrobles virtual law
library

We assume that the framers of the Constitution were aware of this difficulty when they called for
agrarian reform as a top priority project of the government. It is a part of this assumption that
when they envisioned the expropriation that would be needed, they also intended that the just
compensation would have to be paid not in the orthodox way but a less conventional if more
practical method. There can be no doubt that they were aware of the financial limitations of the
government and had no illusions that there would be enough money to pay in cash and in full for
the lands they wanted to be distributed among the farmers. We may therefore assume that their
intention was to allow such manner of payment as is now provided for by the CARP Law,
particularly the payment of the balance (if the owner cannot be paid fully with money), or indeed
of the entire amount of the just compensation, with other things of value. We may also suppose
that what they had in mind was a similar scheme of payment as that prescribed in P.D. No. 27,
which was the law in force at the time they deliberated on the new Charter and with which they
presumably agreed in principle.chanroblesvirtualawlibrary chanrobles virtual law library

The Court has not found in the records of the Constitutional Commission any categorical
agreement among the members regarding the meaning to be given the concept of just
compensation as applied to the comprehensive agrarian reform program being contemplated.
There was the suggestion to "fine tune" the requirement to suit the demands of the project even
as it was also felt that they should "leave it to Congress" to determine how payment should be
made to the landowner and reimbursement required from the farmer-beneficiaries. Such
innovations as "progressive compensation" and "State-subsidized compensation" were also
proposed. In the end, however, no special definition of the just compensation for the lands to be
expropriated was reached by the Commission. 50chanrobles virtual law library
On the other hand, there is nothing in the records either that militates against the assumptions we
are making of the general sentiments and intention of the members on the content and manner of
the payment to be made to the landowner in the light of the magnitude of the expenditure and the
limitations of the expropriator.chanroblesvirtualawlibrary chanrobles virtual law library

With these assumptions, the Court hereby declares that the content and manner of the just
compensation provided for in the afore- quoted Section 18 of the CARP Law is not violative of
the Constitution. We do not mind admitting that a certain degree of pragmatism has influenced
our decision on this issue, but after all this Court is not a cloistered institution removed from the
realities and demands of society or oblivious to the need for its enhancement. The Court is as
acutely anxious as the rest of our people to see the goal of agrarian reform achieved at last after
the frustrations and deprivations of our peasant masses during all these disappointing decades.
We are aware that invalidation of the said section will result in the nullification of the entire
program, killing the farmer's hopes even as they approach realization and resurrecting the spectre
of discontent and dissent in the restless countryside. That is not in our view the intention of the
Constitution, and that is not what we shall decree today.chanroblesvirtualawlibrary chanrobles
virtual law library

Accepting the theory that payment of the just compensation is not always required to be made
fully in money, we find further that the proportion of cash payment to the other things of value
constituting the total payment, as determined on the basis of the areas of the lands expropriated,
is not unduly oppressive upon the landowner. It is noted that the smaller the land, the bigger the
payment in money, primarily because the small landowner will be needing it more than the big
landowners, who can afford a bigger balance in bonds and other things of value. No less
importantly, the government financial instruments making up the balance of the payment are
"negotiable at any time." The other modes, which are likewise available to the landowner at his
option, are also not unreasonable because payment is made in shares of stock, LBP bonds, other
properties or assets, tax credits, and other things of value equivalent to the amount of just
compensation.chanroblesvirtualawlibrary chanrobles virtual law library

Admittedly, the compensation contemplated in the law will cause the landowners, big and small,
not a little inconvenience. As already remarked, this cannot be avoided. Nevertheless, it is
devoutly hoped that these countrymen of ours, conscious as we know they are of the need for
their forebearance and even sacrifice, will not begrudge us their indispensable share in the
attainment of the ideal of agrarian reform. Otherwise, our pursuit of this elusive goal will be like
the quest for the Holy Grail.chanroblesvirtualawlibrarychanrobles virtual law library

The complaint against the effects of non-registration of the land under E.O. No. 229 does not
seem to be viable any more as it appears that Section 4 of the said Order has been superseded by
Section 14 of the CARP Law. This repeats the requisites of registration as embodied in the
earlier measure but does not provide, as the latter did, that in case of failure or refusal to register
the land, the valuation thereof shall be that given by the provincial or city assessor for tax
purposes. On the contrary, the CARP Law says that the just compensation shall be ascertained on
the basis of the factors mentioned in its Section 17 and in the manner provided for in Section
16.chanroblesvirtualawlibrary chanrobles virtual law library
The last major challenge to CARP is that the landowner is divested of his property even before
actual payment to him in full of just compensation, in contravention of a well- accepted principle
of eminent domain.chanroblesvirtualawlibrary chanrobles virtual law library

The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to
the expropriator only upon full payment of the just compensation. Jurisprudence on this settled
principle is consistent both here and in other democratic jurisdictions. Thus: chanrobles virtual
law library

Title to property which is the subject of condemnation proceedings does not vest the condemnor
until the judgment fixing just compensation is entered and paid, but the condemnor's title relates
back to the date on which the petition under the Eminent Domain Act, or the commissioner's
report under the Local Improvement Act, is filed. 51chanrobles virtual law library

... although the right to appropriate and use land taken for a canal is complete at the time of
entry, title to the property taken remains in the owner until payment is actually
made. 52(Emphasis supplied.) chanrobles virtual law library

In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that title to
property does not pass to the condemnor until just compensation had actually been made. In fact,
the decisions appear to be uniformly to this effect. As early as 1838, in Rubottom v.
McLure, 54 it was held that "actual payment to the owner of the condemned property was a
condition precedent to the investment of the title to the property in the State" albeit "not to the
appropriation of it to public use." In Rexford v. Knight, 55 the Court of Appeals of New York
said that the construction upon the statutes was that the fee did not vest in the State until the
payment of the compensation although the authority to enter upon and appropriate the land was
complete prior to the payment. Kennedy further said that "both on principle and authority the
rule is ... that the right to enter on and use the property is complete, as soon as the property is
actually appropriated under the authority of law for a public use, but that the title does not pass
from the owner without his consent, until just compensation has been made to him." chanrobles
virtual law library

Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that:

If the laws which we have exhibited or cited in the preceding discussion are attentively examined
it will be apparent that the method of expropriation adopted in this jurisdiction is such as to
afford absolute reassurance that no piece of land can be finally and irrevocably taken from an
unwilling owner until compensation is paid ... . (Emphasis supplied.)

It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21,
1972 and declared that he shall "be deemed the owner" of a portion of land consisting of a
family-sized farm except that "no title to the land owned by him was to be actually issued to him
unless and until he had become a full-fledged member of a duly recognized farmers'
cooperative." It was understood, however, that full payment of the just compensation also had to
be made first, conformably to the constitutional
requirement.chanroblesvirtualawlibrary chanrobles virtual law library
When E.O. No. 228, categorically stated in its Section 1 that:

All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land
they acquired by virtue of Presidential Decree No. 27. (Emphasis supplied.)

it was obviously referring to lands already validly acquired under the said decree, after proof of
full-fledged membership in the farmers' cooperatives and full payment of just compensation.
Hence, it was also perfectly proper for the Order to also provide in its Section 2 that the "lease
rentals paid to the landowner by the farmer- beneficiary after October 21, 1972 (pending transfer
of ownership after full payment of just compensation), shall be considered as advance payment
for the land."chanrobles virtual law library

The CARP Law, for its part, conditions the transfer of possession and ownership of the land to
the government on receipt by the landowner of the corresponding payment or the deposit by the
DAR of the compensation in cash or LBP bonds with an accessible bank. Until then, title also
remains with the landowner. 57 No outright change of ownership is contemplated
either.chanroblesvirtualawlibrary chanrobles virtual law library

Hence, the argument that the assailed measures violate due process by arbitrarily transferring
title before the land is fully paid for must also be rejected.chanroblesvirtualawlibrary chanrobles
virtual law library

It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27,
as recognized under E.O. No. 228, are retained by him even now under R.A. No. 6657. This
should counter-balance the express provision in Section 6 of the said law that "the landowners
whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area
originally retained by them thereunder, further, That original homestead grantees or direct
compulsory heirs who still own the original homestead at the time of the approval of this Act
shall retain the same areas as long as they continue to cultivate said homestead." chanrobles
virtual law library

In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal
filed by the petitioners with the Office of the President has already been resolved. Although we
have said that the doctrine of exhaustion of administrative remedies need not preclude immediate
resort to judicial action, there are factual issues that have yet to be examined on the
administrative level, especially the claim that the petitioners are not covered by LOI 474 because
they do not own other agricultural lands than the subjects of their
petition.chanroblesvirtualawlibrary chanrobles virtual law library

Obviously, the Court cannot resolve these issues. In any event, assuming that the petitioners have
not yet exercised their retention rights, if any, under P.D. No. 27, the Court holds that they are
entitled to the new retention rights provided for by R.A. No. 6657, which in fact are on the whole
more liberal than those granted by the decree.chanroblesvirtualawlibrary chanrobles virtual law
library

V chanrobles virtual law library


The CARP Law and the other enactments also involved in these cases have been the subject of
bitter attack from those who point to the shortcomings of these measures and ask that they be
scrapped entirely. To be sure, these enactments are less than perfect; indeed, they should be
continuously re-examined and rehoned, that they may be sharper instruments for the better
protection of the farmer's rights. But we have to start somewhere. In the pursuit of agrarian
reform, we do not tread on familiar ground but grope on terrain fraught with pitfalls and
expected difficulties. This is inevitable. The CARP Law is not a tried and tested project. On the
contrary, to use Justice Holmes's words, "it is an experiment, as all life is an experiment," and so
we learn as we venture forward, and, if necessary, by our own mistakes. We cannot expect
perfection although we should strive for it by all means. Meantime, we struggle as best we can in
freeing the farmer from the iron shackles that have unconscionably, and for so long, fettered his
soul to the soil.chanroblesvirtualawlibrary chanrobles virtual law library

By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform
program are removed, to clear the way for the true freedom of the farmer. We may now glimpse
the day he will be released not only from want but also from the exploitation and disdain of the
past and from his own feelings of inadequacy and helplessness. At last his servitude will be
ended forever. At last the farm on which he toils will be his farm. It will be his portion of the
Mother Earth that will give him not only the staff of life but also the joy of living. And where
once it bred for him only deep despair, now can he see in it the fruition of his hopes for a more
fulfilling future. Now at last can he banish from his small plot of earth his insecurities and dark
resentments and "rebuild in it the music and the dream." chanrobles virtual law library

WHEREFORE, the Court holds as follows:

1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are SUSTAINED
against all the constitutional objections raised in the herein
petitions.chanroblesvirtualawlibrary chanrobles virtual law library

2. Title to all expropriated properties shall be transferred to the State only upon full payment of
compensation to their respective owners.chanroblesvirtualawlibrary chanrobles virtual law
library

3. All rights previously acquired by the tenant- farmers under P.D. No. 27 are retained and
recognized.chanroblesvirtualawlibrary chanrobles virtual law library

4. Landowners who were unable to exercise their rights of retention under P.D. No. 27 shall
enjoy the retention rights granted by R.A. No. 6657 under the conditions therein
prescribed.chanroblesvirtualawlibrarychanrobles virtual law library

5. Subject to the above-mentioned rulings all the petitions are DISMISSED, without
pronouncement as to costs.

SO ORDERED.
Fernan, (C.J.), Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Padilla,
Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea and Regalado, JJ., .
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 159796 July 17, 2007

ROMEO P. GEROCHI, KATULONG NG BAYAN (KB) and ENVIRONMENTALIST CONSUMERS


NETWORK, INC. (ECN), Petitioners,
vs.
DEPARTMENT OF ENERGY (DOE), ENERGY REGULATORY COMMISSION (ERC), NATIONAL
POWER CORPORATION (NPC), POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT
GROUP (PSALM Corp.), STRATEGIC POWER UTILITIES GROUP (SPUG), and PANAY
ELECTRIC COMPANY INC. (PECO), Respondents.

DECISION

NACHURA, J.:

Petitioners Romeo P. Gerochi, Katulong Ng Bayan (KB), and Environmentalist Consumers Network,
Inc. (ECN) (petitioners), come before this Court in this original action praying that Section 34 of
Republic Act (RA) 9136, otherwise known as the "Electric Power Industry Reform Act of 2001"
(EPIRA), imposing the Universal Charge,1 and Rule 18 of the Rules and Regulations (IRR)2 which
seeks to implement the said imposition, be declared unconstitutional. Petitioners also pray that the
Universal Charge imposed upon the consumers be refunded and that a preliminary injunction and/or
temporary restraining order (TRO) be issued directing the respondents to refrain from implementing,
charging, and collecting the said charge.3 The assailed provision of law reads:

SECTION 34. Universal Charge. — Within one (1) year from the effectivity of this Act, a universal
charge to be determined, fixed and approved by the ERC, shall be imposed on all electricity end-
users for the following purposes:

(a) Payment for the stranded debts4 in excess of the amount assumed by the National
Government and stranded contract costs of NPC5 and as well as qualified stranded contract
costs of distribution utilities resulting from the restructuring of the industry;

(b) Missionary electrification;6

(c) The equalization of the taxes and royalties applied to indigenous or renewable sources of
energy vis-à-vis imported energy fuels;

(d) An environmental charge equivalent to one-fourth of one centavo per kilowatt-hour


(₱0.0025/kWh), which shall accrue to an environmental fund to be used solely for watershed
rehabilitation and management. Said fund shall be managed by NPC under existing
arrangements; and

(e) A charge to account for all forms of cross-subsidies for a period not exceeding three (3)
years.
The universal charge shall be a non-bypassable charge which shall be passed on and collected from
all end-users on a monthly basis by the distribution utilities. Collections by the distribution utilities
and the TRANSCO in any given month shall be remitted to the PSALM Corp. on or before the
fifteenth (15th) of the succeeding month, net of any amount due to the distribution utility. Any end-
user or self-generating entity not connected to a distribution utility shall remit its corresponding
universal charge directly to the TRANSCO. The PSALM Corp., as administrator of the fund, shall
create a Special Trust Fund which shall be disbursed only for the purposes specified herein in an
open and transparent manner. All amount collected for the universal charge shall be distributed to
the respective beneficiaries within a reasonable period to be provided by the ERC.

The Facts

Congress enacted the EPIRA on June 8, 2001; on June 26, 2001, it took effect.7

On April 5, 2002, respondent National Power Corporation-Strategic Power Utilities Group8 (NPC-
SPUG) filed with respondent Energy Regulatory Commission (ERC) a petition for the availment from
the Universal Charge of its share for Missionary Electrification, docketed as ERC Case No. 2002-
165.9

On May 7, 2002, NPC filed another petition with ERC, docketed as ERC Case No. 2002-194,
praying that the proposed share from the Universal Charge for the Environmental charge of ₱0.0025
per kilowatt-hour (/kWh), or a total of ₱119,488,847.59, be approved for withdrawal from the Special
Trust Fund (STF) managed by respondent Power Sector Assets and

Liabilities Management Group (PSALM)10 for the rehabilitation and management of watershed
areas.11

On December 20, 2002, the ERC issued an Order12 in ERC Case No. 2002-165 provisionally
approving the computed amount of ₱0.0168/kWh as the share of the NPC-SPUG from the Universal
Charge for Missionary Electrification and authorizing the National Transmission Corporation
(TRANSCO) and Distribution Utilities to collect the same from its end-users on a monthly basis.

On June 26, 2003, the ERC rendered its Decision13 (for ERC Case No. 2002-165) modifying its
Order of December 20, 2002, thus:

WHEREFORE, the foregoing premises considered, the provisional authority granted to petitioner
National Power Corporation-Strategic Power Utilities Group (NPC-SPUG) in the Order dated
December 20, 2002 is hereby modified to the effect that an additional amount of ₱0.0205 per
kilowatt-hour should be added to the ₱0.0168 per kilowatt-hour provisionally authorized by the
Commission in the said Order. Accordingly, a total amount of ₱0.0373 per kilowatt-hour is hereby
APPROVED for withdrawal from the Special Trust Fund managed by PSALM as its share from the
Universal Charge for Missionary Electrification (UC-ME) effective on the following billing cycles:

(a) June 26-July 25, 2003 for National Transmission Corporation (TRANSCO); and

(b) July 2003 for Distribution Utilities (Dus).

Relative thereto, TRANSCO and Dus are directed to collect the UC-ME in the amount of ₱0.0373
per kilowatt-hour and remit the same to PSALM on or before the 15th day of the succeeding month.
In the meantime, NPC-SPUG is directed to submit, not later than April 30, 2004, a detailed report to
include Audited Financial Statements and physical status (percentage of completion) of the projects
using the prescribed format. 1avv phi 1

Let copies of this Order be furnished petitioner NPC-SPUG and all distribution utilities (Dus).

SO ORDERED.

On August 13, 2003, NPC-SPUG filed a Motion for Reconsideration asking the ERC, among
others,14 to set aside the above-mentioned Decision, which the ERC granted in its Order dated
October 7, 2003, disposing:

WHEREFORE, the foregoing premises considered, the "Motion for Reconsideration" filed by
petitioner National Power Corporation-Small Power Utilities Group (NPC-SPUG) is hereby
GRANTED. Accordingly, the Decision dated June 26, 2003 is hereby modified accordingly.

Relative thereto, NPC-SPUG is directed to submit a quarterly report on the following:

1. Projects for CY 2002 undertaken;

2. Location

3. Actual amount utilized to complete the project;

4. Period of completion;

5. Start of Operation; and

6. Explanation of the reallocation of UC-ME funds, if any.

SO ORDERED.15

Meanwhile, on April 2, 2003, ERC decided ERC Case No. 2002-194, authorizing the NPC to draw
up to ₱70,000,000.00 from PSALM for its 2003 Watershed Rehabilitation Budget subject to the
availability of funds for the Environmental Fund component of the Universal Charge.16

On the basis of the said ERC decisions, respondent Panay Electric Company, Inc. (PECO) charged
petitioner Romeo P. Gerochi and all other end-users with the Universal Charge as reflected in their
respective electric bills starting from the month of July 2003.17

Hence, this original action.

Petitioners submit that the assailed provision of law and its IRR which sought to implement the same
are unconstitutional on the following grounds:

1) The universal charge provided for under Sec. 34 of the EPIRA and sought to be
implemented under Sec. 2, Rule 18 of the IRR of the said law is a tax which is to be collected
from all electric end-users and self-generating entities. The power to tax is strictly a
legislative function and as such, the delegation of said power to any executive or
administrative agency like the ERC is unconstitutional, giving the same unlimited authority.
The assailed provision clearly provides that the Universal Charge is to be determined, fixed
and approved by the ERC, hence leaving to the latter complete discretionary legislative
authority.

2) The ERC is also empowered to approve and determine where the funds collected should
be used.

3) The imposition of the Universal Charge on all end-users is oppressive and confiscatory
and amounts to taxation without representation as the consumers were not given a chance
to be heard and represented.18

Petitioners contend that the Universal Charge has the characteristics of a tax and is collected to fund
the operations of the NPC. They argue that the cases19 invoked by the respondents clearly show the
regulatory purpose of the charges imposed therein, which is not so in the case at bench. In said
cases, the respective funds20 were created in order to balance and stabilize the prices of oil and
sugar, and to act as buffer to counteract the changes and adjustments in prices, peso devaluation,
and other variables which cannot be adequately and timely monitored by the legislature. Thus, there
was a need to delegate powers to administrative bodies.21 Petitioners posit that the Universal Charge
is imposed not for a similar purpose.

On the other hand, respondent PSALM through the Office of the Government Corporate Counsel
(OGCC) contends that unlike a tax which is imposed to provide income for public purposes, such as
support of the government, administration of the law, or payment of public expenses, the assailed
Universal Charge is levied for a specific regulatory purpose, which is to ensure the viability of the
country's electric power industry. Thus, it is exacted by the State in the exercise of its inherent police
power. On this premise, PSALM submits that there is no undue delegation of legislative power to the
ERC since the latter merely exercises a limited authority or discretion as to the execution and
implementation of the provisions of the EPIRA.22

Respondents Department of Energy (DOE), ERC, and NPC, through the Office of the Solicitor
General (OSG), share the same view that the Universal Charge is not a tax because it is levied for a
specific regulatory purpose, which is to ensure the viability of the country's electric power industry,
and is, therefore, an exaction in the exercise of the State's police power. Respondents further
contend that said Universal Charge does not possess the essential characteristics of a tax, that its
imposition would redound to the benefit of the electric power industry and not to the public, and that
its rate is uniformly levied on electricity end-users, unlike a tax which is imposed based on the
individual taxpayer's ability to pay. Moreover, respondents deny that there is undue delegation of
legislative power to the ERC since the EPIRA sets forth sufficient determinable standards which
would guide the ERC in the exercise of the powers granted to it. Lastly, respondents argue that the
imposition of the Universal Charge is not oppressive and confiscatory since it is an exercise of the
police power of the State and it complies with the requirements of due process.23

On its part, respondent PECO argues that it is duty-bound to collect and remit the amount pertaining
to the Missionary Electrification and Environmental Fund components of the Universal Charge,
pursuant to Sec. 34 of the EPIRA and the Decisions in ERC Case Nos. 2002-194 and 2002-165.
Otherwise, PECO could be held liable under Sec. 4624 of the EPIRA, which imposes fines and
penalties for any violation of its provisions or its IRR.25

The Issues

The ultimate issues in the case at bar are:


1) Whether or not, the Universal Charge imposed under Sec. 34 of the EPIRA is a tax; and

2) Whether or not there is undue delegation of legislative power to tax on the part of the
ERC.26

Before we discuss the issues, the Court shall first deal with an obvious procedural lapse.

Petitioners filed before us an original action particularly denominated as a Complaint assailing the
constitutionality of Sec. 34 of the EPIRA imposing the Universal Charge and Rule 18 of the EPIRA's
IRR. No doubt, petitioners have locus standi. They impugn the constitutionality of Sec. 34 of the
EPIRA because they sustained a direct injury as a result of the imposition of the Universal Charge
as reflected in their electric bills.

However, petitioners violated the doctrine of hierarchy of courts when they filed this "Complaint"
directly with us. Furthermore, the Complaint is bereft of any allegation of grave abuse of discretion
on the part of the ERC or any of the public respondents, in order for the Court to consider it as a
petition for certiorari or prohibition.

Article VIII, Section 5(1) and (2) of the 1987 Constitution27 categorically provides that:

SECTION 5. The Supreme Court shall have the following powers:

1. Exercise original jurisdiction over cases affecting ambassadors, other public ministers and
consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas
corpus.

2. Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the rules of
court may provide, final judgments and orders of lower courts in:

(a) All cases in which the constitutionality or validity of any treaty, international or executive
agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in
question.

But this Court's jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto,
and habeas corpus, while concurrent with that of the regional trial courts and the Court of Appeals,
does not give litigants unrestrained freedom of choice of forum from which to seek such relief.28 It
has long been established that this Court will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate courts, or where exceptional and compelling
circumstances justify availment of a remedy within and call for the exercise of our primary
jurisdiction.29 This circumstance alone warrants the outright dismissal of the present action.

This procedural infirmity notwithstanding, we opt to resolve the constitutional issue raised herein. We
are aware that if the constitutionality of Sec. 34 of the EPIRA is not resolved now, the issue will
certainly resurface in the near future, resulting in a repeat of this litigation, and probably involving the
same parties. In the public interest and to avoid unnecessary delay, this Court renders its ruling now.

The instant complaint is bereft of merit.

The First Issue


To resolve the first issue, it is necessary to distinguish the State’s power of taxation from the police
power.

The power to tax is an incident of sovereignty and is unlimited in its range, acknowledging in its very
nature no limits, so that security against its abuse is to be found only in the responsibility of the
legislature which imposes the tax on the constituency that is to pay it.30 It is based on the principle
that taxes are the lifeblood of the government, and their prompt and certain availability is an
imperious need.31 Thus, the theory behind the exercise of the power to tax emanates from necessity;
without taxes, government cannot fulfill its mandate of promoting the general welfare and well-being
of the people.32

On the other hand, police power is the power of the state to promote public welfare by restraining
and regulating the use of liberty and property.33 It is the most pervasive, the least limitable, and the
most demanding of the three fundamental powers of the State. The justification is found in the Latin
maxims salus populi est suprema lex (the welfare of the people is the supreme law) and sic utere tuo
ut alienum non laedas (so use your property as not to injure the property of others). As an inherent
attribute of sovereignty which virtually extends to all public needs, police power grants a wide
panoply of instruments through which the State, as parens patriae, gives effect to a host of its
regulatory powers.34 We have held that the power to "regulate" means the power to protect, foster,
promote, preserve, and control, with due regard for the interests, first and foremost, of the public,
then of the utility and of its patrons.35

The conservative and pivotal distinction between these two powers rests in the purpose for which
the charge is made. If generation 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 revenue is
incidentally raised does not make the imposition a tax.36

In exacting the assailed Universal Charge through Sec. 34 of the EPIRA, the State's police power,
particularly its regulatory dimension, is invoked. Such can be deduced from Sec. 34 which
enumerates the purposes for which the Universal Charge is imposed37 and which can be amply
discerned as regulatory in character. The EPIRA resonates such regulatory purposes, thus:

SECTION 2. Declaration of Policy. — It is hereby declared the policy of the State:

(a) To ensure and accelerate the total electrification of the country;

(b) To ensure the quality, reliability, security and affordability of the supply of electric power;

(c) To ensure transparent and reasonable prices of electricity in a regime of free and fair
competition and full public accountability to achieve greater operational and economic
efficiency and enhance the competitiveness of Philippine products in the global market;

(d) To enhance the inflow of private capital and broaden the ownership base of the power
generation, transmission and distribution sectors;

(e) To ensure fair and non-discriminatory treatment of public and private sector entities in the
process of restructuring the electric power industry;

(f) To protect the public interest as it is affected by the rates and services of electric utilities
and other providers of electric power;
(g) To assure socially and environmentally compatible energy sources and infrastructure;

(h) To promote the utilization of indigenous and new and renewable energy resources in
power generation in order to reduce dependence on imported energy;

(i) To provide for an orderly and transparent privatization of the assets and liabilities of the
National Power Corporation (NPC);

(j) To establish a strong and purely independent regulatory body and system to ensure
consumer protection and enhance the competitive operation of the electricity market; and

(k) To encourage the efficient use of energy and other modalities of demand side
management.

From the aforementioned purposes, it can be gleaned that the assailed Universal Charge is not a
tax, but an exaction in the exercise of the State's police power. Public welfare is surely promoted.

Moreover, it is a well-established doctrine that the taxing power may be used as an implement of
police power.38 In Valmonte v. Energy Regulatory Board, et al.39 and in Gaston v. Republic Planters
Bank,40 this Court held that the Oil Price Stabilization Fund (OPSF) and the Sugar Stabilization Fund
(SSF) were exactions made in the exercise of the police power. The doctrine was reiterated
in Osmeña v. Orbos41 with respect to the OPSF. Thus, we disagree with petitioners that the instant
case is different from the aforementioned cases. With the Universal Charge, a Special Trust Fund
(STF) is also created under the administration of PSALM.42 The STF has some notable
characteristics similar to the OPSF and the SSF, viz.:

1) In the implementation of stranded cost recovery, the ERC shall conduct a review to
determine whether there is under-recovery or over recovery and adjust (true-up) the level of
the stranded cost recovery charge. In case of an over-recovery, the ERC shall ensure that
any excess amount shall be remitted to the STF. A separate account shall be created for
these amounts which shall be held in trust for any future claims of distribution utilities for
stranded cost recovery. At the end of the stranded cost recovery period, any remaining
amount in this account shall be used to reduce the electricity rates to the end-users.43

2) With respect to the assailed Universal Charge, if the total amount collected for the same is
greater than the actual availments against it, the PSALM shall retain the balance within the
STF to pay for periods where a shortfall occurs.44

3) Upon expiration of the term of PSALM, the administration of the STF shall be transferred
to the DOF or any of the DOF attached agencies as designated by the DOF Secretary.45

The OSG is in point when it asseverates:

Evidently, the establishment and maintenance of the Special Trust Fund, under the last paragraph of
Section 34, R.A. No. 9136, is well within the pervasive and non-waivable power and responsibility of
the government to secure the physical and economic survival and well-being of the community, that
comprehensive sovereign authority we designate as the police power of the State.46

This feature of the Universal Charge further boosts the position that the same is an exaction
imposed primarily in pursuit of the State's police objectives. The STF reasonably serves and assures
the attainment and perpetuity of the purposes for which the Universal Charge is imposed, i.e., to
ensure the viability of the country's electric power industry.

The Second Issue

The principle of separation of powers ordains that each of the three branches of government has
exclusive cognizance of and is supreme in matters falling within its own constitutionally allocated
sphere. A logical corollary to the doctrine of separation of powers is the principle of non-delegation of
powers, as expressed in the Latin maxim potestas delegata non delegari potest (what has been
delegated cannot be delegated). This is based on the ethical principle that such delegated power
constitutes not only a right but a duty to be performed by the delegate through the instrumentality of
his own judgment and not through the intervening mind of another. 47

In the face of the increasing complexity of modern life, delegation of legislative power to various
specialized administrative agencies is allowed as an exception to this principle.48 Given the volume
and variety of interactions in today's society, it is doubtful if the legislature can promulgate laws that
will deal adequately with and respond promptly to the minutiae of everyday life. Hence, the need to
delegate to administrative bodies - the principal agencies tasked to execute laws in their specialized
fields - the authority to promulgate rules and regulations to implement a given statute and effectuate
its policies. All that is required for the valid exercise of this power of subordinate legislation is that the
regulation be germane to the objects and purposes of the law and that the regulation be not in
contradiction to, but in conformity with, the standards prescribed by the law. These requirements are
denominated as the completeness test and the sufficient standard test.

Under the first test, the law must be complete in all its terms and conditions when it leaves the
legislature such that when it reaches the delegate, the only thing he will have to do is to enforce it.
The second test mandates adequate guidelines or limitations in the law to determine the boundaries
of the delegate's authority and prevent the delegation from running riot.49

The Court finds that the EPIRA, read and appreciated in its entirety, in relation to Sec. 34 thereof, is
complete in all its essential terms and conditions, and that it contains sufficient standards.

Although Sec. 34 of the EPIRA merely provides that "within one (1) year from the effectivity thereof,
a Universal Charge to be determined, fixed and approved by the ERC, shall be imposed on all
electricity end-users," and therefore, does not state the specific amount to be paid as Universal
Charge, the amount nevertheless is made certain by the legislative parameters provided in the law
itself. For one, Sec. 43(b)(ii) of the EPIRA provides:

SECTION 43. Functions of the ERC. — The ERC shall promote competition, encourage market
development, ensure customer choice and penalize abuse of market power in the restructured
electricity industry. In appropriate cases, the ERC is authorized to issue cease and desist order after
due notice and hearing. Towards this end, it shall be responsible for the following key functions in
the restructured industry:

xxxx

(b) Within six (6) months from the effectivity of this Act, promulgate and enforce, in accordance with
law, a National Grid Code and a Distribution Code which shall include, but not limited to the
following:

xxxx
(ii) Financial capability standards for the generating companies, the TRANSCO, distribution utilities
and suppliers: Provided, That in the formulation of the financial capability standards, the nature and
function of the entity shall be considered: Provided, further, That such standards are set to ensure
that the electric power industry participants meet the minimum financial standards to protect the
public interest. Determine, fix, and approve, after due notice and public hearings the universal
charge, to be imposed on all electricity end-users pursuant to Section 34 hereof;

Moreover, contrary to the petitioners’ contention, the ERC does not enjoy a wide latitude of
discretion in the determination of the Universal Charge. Sec. 51(d) and (e) of the EPIRA50 clearly
provides:

SECTION 51. Powers. — The PSALM Corp. shall, in the performance of its functions and for the
attainment of its objective, have the following powers:

xxxx

(d) To calculate the amount of the stranded debts and stranded contract costs of NPC
which shall form the basis for ERC in the determination of the universal charge;

(e) To liquidate the NPC stranded contract costs, utilizing the proceeds from sales and other
property contributed to it, including the proceeds from the universal charge.

Thus, the law is complete and passes the first test for valid delegation of legislative power.

As to the second test, this Court had, in the past, accepted as sufficient standards the following:
"interest of law and order;"51 "adequate and efficient instruction;"52 "public interest;"53 "justice and
equity;"54 "public convenience and welfare;"55 "simplicity, economy and efficiency;"56 "standardization
and regulation of medical education;"57 and "fair and equitable employment practices."58 Provisions
of the EPIRA such as, among others, "to ensure the total electrification of the country and the
quality, reliability, security and affordability of the supply of electric power"59 and "watershed
rehabilitation and management"60 meet the requirements for valid delegation, as they provide the
limitations on the ERC’s power to formulate the IRR. These are sufficient standards.

It may be noted that this is not the first time that the ERC's conferred powers were challenged.
In Freedom from Debt Coalition v. Energy Regulatory Commission,61 the Court had occasion to say:

In determining the extent of powers possessed by the ERC, the provisions of the EPIRA must not be
read in separate parts. Rather, the law must be read in its entirety, because a statute is passed as a
whole, and is animated by one general purpose and intent. Its meaning cannot to be extracted from
any single part thereof but from a general consideration of the statute as a whole. Considering the
intent of Congress in enacting the EPIRA and reading the statute in its entirety, it is plain to see that
the law has expanded the jurisdiction of the regulatory body, the ERC in this case, to enable the
latter to implement the reforms sought to be accomplished by the EPIRA. When the legislators
decided to broaden the jurisdiction of the ERC, they did not intend to abolish or reduce the powers
already conferred upon ERC's predecessors. To sustain the view that the ERC possesses only the
powers and functions listed under Section 43 of the EPIRA is to frustrate the objectives of the law.

In his Concurring and Dissenting Opinion62 in the same case, then Associate Justice, now Chief
Justice, Reynato S. Puno described the immensity of police power in relation to the delegation of
powers to the ERC and its regulatory functions over electric power as a vital public utility, to wit:
Over the years, however, the range of police power was no longer limited to the preservation of
public health, safety and morals, which used to be the primary social interests in earlier times. Police
power now requires the State to "assume an affirmative duty to eliminate the excesses and injustices
that are the concomitants of an unrestrained industrial economy." Police power is now exerted "to
further the public welfare — a concept as vast as the good of society itself." Hence, "police power is
but another name for the governmental authority to further the welfare of society that is the basic end
of all government." When police power is delegated to administrative bodies with regulatory
functions, its exercise should be given a wide latitude. Police power takes on an even broader
dimension in developing countries such as ours, where the State must take a more active role in
balancing the many conflicting interests in society. The Questioned Order was issued by the ERC,
acting as an agent of the State in the exercise of police power. We should have exceptionally good
grounds to curtail its exercise. This approach is more compelling in the field of rate-regulation of
electric power rates. Electric power generation and distribution is a traditional instrument of
economic growth that affects not only a few but the entire nation. It is an important factor in
encouraging investment and promoting business. The engines of progress may come to a
screeching halt if the delivery of electric power is impaired. Billions of pesos would be lost as a result
of power outages or unreliable electric power services. The State thru the ERC should be able to
exercise its police power with great flexibility, when the need arises.

This was reiterated in National Association of Electricity Consumers for Reforms v. Energy
Regulatory Commission63 where the Court held that the ERC, as regulator, should have sufficient
power to respond in real time to changes wrought by multifarious factors affecting public utilities.

From the foregoing disquisitions, we therefore hold that there is no undue delegation of legislative
power to the ERC.

Petitioners failed to pursue in their Memorandum the contention in the Complaint that the imposition
of the Universal Charge on all end-users is oppressive and confiscatory, and amounts to taxation
without representation. Hence, such contention is deemed waived or abandoned per Resolution64 of
August 3, 2004.65 Moreover, the determination of whether or not a tax is excessive, oppressive or
confiscatory is an issue which essentially involves questions of fact, and thus, this Court is precluded
from reviewing the same.66

As a penultimate statement, it may be well to recall what this Court said of EPIRA:

One of the landmark pieces of legislation enacted by Congress in recent years is the EPIRA. It
established a new policy, legal structure and regulatory framework for the electric power industry.
The new thrust is to tap private capital for the expansion and improvement of the industry as the
large government debt and the highly capital-intensive character of the industry itself have long been
acknowledged as the critical constraints to the program. To attract private investment, largely
foreign, the jaded structure of the industry had to be addressed. While the generation and
transmission sectors were centralized and monopolistic, the distribution side was fragmented with
over 130 utilities, mostly small and uneconomic. The pervasive flaws have caused a low utilization of
existing generation capacity; extremely high and uncompetitive power rates; poor quality of service
to consumers; dismal to forgettable performance of the government power sector; high system
losses; and an inability to develop a clear strategy for overcoming these shortcomings.

Thus, the EPIRA provides a framework for the restructuring of the industry, including the
privatization of the assets of the National Power Corporation (NPC), the transition to a competitive
structure, and the delineation of the roles of various government agencies and the private entities.
The law ordains the division of the industry into four (4) distinct sectors, namely: generation,
transmission, distribution and supply.
Corollarily, the NPC generating plants have to privatized and its transmission business spun off and
privatized thereafter.67

Finally, every law has in its favor the presumption of constitutionality, and to justify its nullification,
there must be a clear and unequivocal breach of the Constitution and not one that is doubtful,
speculative, or argumentative.68 Indubitably, petitioners failed to overcome this presumption in favor
of the EPIRA. We find no clear violation of the Constitution which would warrant a pronouncement
that Sec. 34 of the EPIRA and Rule 18 of its IRR are unconstitutional and void.

WHEREFORE, the instant case is hereby DISMISSED for lack of merit.

SO ORDERED.

ANTONIO EDUARDO B. NACHURA


Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chief Justice

LEONARDO A. QUISUMBING CONSUELO YNARES-SANTIAGO


Associate Justice Associate Justice

ANGELINA SANDOVAL-GUTIERREZ ANTONIO T. CARPIO


Associate Justice Associate Justice

MA. ALICIA AUSTRIA-MARTINEZ RENATO C. CORONA


Associate Justice Associate Justice

CONCHITA CARPIO MORALES ADOLFO S. AZCUNA


Associate Justice Associate Justice

DANTE O. TINGA MINITA V. CHICO-NAZARIO


Associate Justice Associate Justice

CANCIO C. GARCIA PRESBITERO J. VELASCO, JR.


Associate Justice Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the writer of the opinion
of the Court.

REYNATO S. PUNO
Chief Justice
SECOND DIVISION

[G.R. No. 111933. July 23, 1997.]

PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, Petitioner, v. NATIONAL


LABOR RELATIONS COMMISSION and LETTIE P. CORPUZ, Respondents.

Tanjuatco, Sta. Maria, & Tanjuatco for Petitioner.

Leano & Leano Law Office for Private Respondent.

SYNOPSIS

Private respondent, a traffic operator at the Manila International Traffic Division of the
Philippine Long Distance Telephone Company, was dismissed from the service for serious
misconduct and breach of trust for facilitating 34 calls using a disconnected number.

The Labor Arbiter set aside the dismissal of private respondent and ordered her reinstatement.
On appeal, the NLRC affirmed the Labor Arbiter’s decision.

Petitioner insists that respondent was guilty of defrauding them when she serviced 56 of the 439
calls coming from telephone number 98-68-16 and received numerous requests for overseas calls
virtually from the same calling number. The Supreme Court ruled that the subject phone calls
were neither unusual nor coincidental as other operators shared similar experiences. The more
frequent handling by the respondent of overseas calls from the same calling number than other
operators does not make respondent a party to such anomalous transaction.

Judgment affirmed.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE; TERMINATION OF


EMPLOYMENT; THE COURT HAS REMINDED EMPLOYERS THAT WHILE THE
POWER TO DISMISS IS A NORMAL PREROGATIVE OF THE EMPLOYER, THE SAME
IS NOT WITHOUT LIMITATIONS. — The Court has reminded employers that while the
power to dismiss is a normal prerogative of the employer, the same is not without limitations.
The right of an employer to freely discharge his employees is subject to regulation by the State,
basically through the exercise of its police power. This is so because the preservation of the lives
of citizens is a basic duty of the State, an obligation more vital than the preservation of corporate
profits.
2. ID.; ID.; ID.; IN TERMINATION CASES, THE EMPLOYER BEARS THE BURDEN OF
PROVING THAT THE DISMISSAL IS FOR JUST CAUSE. — It should be borne in mind that
in termination cases, the employer bears the burden of proving that the dismissal is for just cause
failing which would mean that the dismissal is not justified and the employee is entitled to
reinstatement. The essence of due process in administrative proceedings is the opportunity to
explain one’s side or a chance to seek reconsideration of the action or ruling complained of. The
twin requirements of notice and hearing constitute the essential elements of due process. This
simply means that the employer shall afford the worker ample opportunity to be heard and to
defend himself with the assistance of his representative, if he so desires. Ample opportunity
connotes every kind of assistance that management must accord the employee to enable him to
prepare adequately for his defense including legal representation. In the instant case, the
petitioner failed to convincingly establish valid bases on the alleged serious misconduct and loss
of trust and confidence.

3. ID.; ID.; ID.; RIGHTS OF ALL WORKERS TO SECURITY OF TENURE SHOULD NOT
BE DENIED ON MERE SPECULATION OF ANY UNCLEAR AND NEBULOUS BASIS. —
In carrying out and interpreting the Labor Code’s provisions and its implementing regulations,
the workingman’s welfare should be the primordial and paramount consideration. This kind of
interpretation gives meaning and substance to the liberal and compassionate spirit of the law as
provided for in Article 4 of the Labor Code, as amended, which states that "all doubts in the
implementation and interpretation of the provisions of the Labor Code including its
implementing rules and regulations shall be resolved in favor of labor, as well as the
Constitutional mandate that the State shall afford full protection to labor and promote full
employment opportunities for all. Likewise, it shall guarantee the rights of all workers to security
of tenure. Such constitutional right should not be denied on mere speculation of any unclear and
nebulous basis.

4. ID.; ID.; ID.; MORE FREQUENT HANDLING BY THE RESPONDENT EMPLOYEE OF


OVERSEAS CALLS FROM THE SAME CALLING NUMBER THAN OTHER OPERATORS
DOES NOT GIVE RISE TO THE CONCLUSION THAT HE WAS A PARTY TO SUCH
ANOMALOUS TRANSACTION; CASE AT BAR. — The records show that the subject phone
calls were neither unusual nor coincidental as other operators shared similar experiences. A
certain Eric Maramba declared that it is not impossible for an operator to receive continuous
calls from the same telephone number. He testified that at one time, he was a witness to several
calls consistently effected from 9:30 p.m. to 5:30 a.m. The calls having passed the verification
tone system, the incident was undoubtedly alarming enough but there was no way that he or his
co-operators could explain the same. This Court agrees with the labor arbiter when he stated that
the more frequent handling by the respondent of overseas calls from the same calling number
than other operators does not give rise to the conclusion that, indeed, respondent was a party to
such anomalous transaction. This Court will not sanction a dismissal premised on mere
conjectures and suspicions. To be a valid ground for respondent’s dismissal, the evidence must
be substantial and not arbitrary and must be founded on clearly established facts sufficient to
warrant his separation from work.
DECISION

ROMERO, J.:

This petition for certiorari pleads for the revocation of the November 16, 1992, decision of the
National Labor Relations Commission (NLRC), affirming in toto the resolution of Labor Arbiter
Jose G. De Vera dated February 28, 1991, as well as its resolution dated August 20, 1993,
denying petitioner’s motion for reconsideration for lack of merit.

Private respondent Lettie Corpuz was employed as traffic operator at the Manila International
Traffic Division (MITD) by the Philippine Long Distance Telephone Company (PLDT) for ten
years and nine months, from September 19, 1978, until her dismissal on June 17, 1989. Her
primary task was to facilitate requests for incoming and outgoing international calls through the
use of a digital switchboard.

Sometime in December 1987, PLDT’s rank-and-file employees and telephone operators went on
strike, prompting the supervisors of the MITD to discharge the former’s duties to prevent a total
shutdown of its business operations. "While in the course of their emergency assignments, two
supervisors almost simultaneously received two different requests for overseas calls bound for
different Middle East countries and both callers reported the same calling number (98-68-16)." 1
The tone verifications having yielded negative results, the callers were advised to hang up their
telephones to enable the supervisors to effect an alternative verification system by calling the
same number again. As in the first instance, the number remained unverified. Investigating the
seemingly anomalous incident, the matter was reported to the Quality Control Inspection
Department (QCID) which revealed that the subject number was temporarily disconnected on
June 10, 1987, and permanently on September 24, 1987. It also showed that 439 overseas calls
were made through the same number between May and November 1987.

On account of such disclosure, the microfiches containing the completed calls through telephone
number 98-68-16 were ordered to be re-run. It yielded the following results: (1) 235 telephone
operators handled the 439 calls placed through the supposedly disconnected number; (2)
respondent handled 56 or 12.8% of the total calls, while the other operators had an average of
only 1.8% calls each; (3) respondent completed one call on May 23, 1987 and effected 34 calls
after the disconnection, 24 of which were completed through tone verification while the other 10
calls were done without the requisite tone verification or call-back procedure, and 21 other calls
were cancelled; (4) of the 21 cancelled calls handled by respondent, one bared a BU report (party
unavailable) but fetched a long OCD (operator call duration) of 13 minutes and 21 seconds while
another call registered a BB report (called party, busy) but with an OCD of 22 minutes and 34
seconds, both considered unusually protracted by respondent for holding a connection; and (5)
respondent made several personal calls to telephone numbers 96-50-72, 99-92-82 and 97-25-68,
the latter being her home phone number.
Premised on the above findings, on July 26, 1988, MITD Manager Erlinda Kabigting directed
respondent to explain her alleged infraction, that is facilitating 34 calls using the disconnected
number.

Instead of tendering the required explanation, respondent requested a formal investigation to


allow her to confront the witnesses and rebut the proofs that may be brought against her. On
grounds of serious misconduct and breach of trust, the Legal Department recommended her
dismissal. In a letter dated June 16, 1989, respondent was terminated from employment effective
the following day.

In a complaint for illegal dismissal filed by respondent against petitioner, Labor Arbiter Jose G.
De Vera rendered a decision, the dispositive portion of which reads thus:jgc:chanrobles.com.ph

"WHEREFORE, all the foregoing premises being considered, judgment is hereby rendered
ordering the respondent company to reinstate the complainant to her former position with all the
rights, benefits and privileges thereto appertaining including seniority plus backwages which as
of February 28, 1991 already amounted to P103,381.50 (P5,043.00 mo. x 20.5 mos.). Further, the
respondent company is ordered to pay complainant attorney’s fees equivalent to ten percent
(10%) of such backwages that the latter may recover in this suit.

SO ORDERED." 2

On appeal, said decision was affirmed by the NLRC on November 16, 1992. Its motion for
reconsideration having been denied on August 20, 1993, petitioner filed the instant petition
for certiorari.

The instant petition must be dismissed. Petitioner failed to adduce any substantial argument that
would warrant a reversal of the questioned decision.

Time and again, this Court has reminded employers that while the power to dismiss is a normal
prerogative of the employer, the same is not without limitations. 3 The right of an employer to
freely discharge his employees is subject to regulation by the State, basically through the
exercise of its police power. This is so because the preservation of the lives of citizens is a basic
duty of the State, an obligation more vital than the preservation of corporate profits. 4

Petitioner insists that respondent was guilty of defrauding them when she serviced 56 of the 439
calls coming from telephone number 98-68-16 and received numerous requests for overseas calls
virtually from the same calling number, which could not have been a mere coincidence but most
likely was a pre-arranged undertaking in connivance with certain
subscribers.chanroblesvirtuallawlibrary:red

The records show, however, that the subject phone calls were neither unusual nor coincidental as
other operators shared similar experiences. A certain Eric Maramba declared that it is not
impossible for an operator to receive continuous calls from the same telephone number. He
testified that at one time, he was a witness to several calls consistently effected from 9:30 p.m. to
5:30 a.m. The calls having passed the verification tone system, the incident was undoubtedly
alarming enough but there was no way that he or his co-operators could explain the same.

The Court agrees with the labor arbiter when he stated that the more frequent handling by the
respondent of overseas calls from the same calling number than other operators does not give
rise to the conclusion that, indeed, respondent was a party to such anomalous transaction.

As regards petitioner’s claim that no call can be filed through a disconnected line, a certain Ms.
Bautista averred getting the same subject number after going through the standard verification
procedures. She added that this complexity extends even to other disconnected telephone lines.
Equally important is the fact that on February 7, 1989, or about two years after it was
permanently disconnected, "telephone number 98-68-16 was used in calling an international
number, 561-6800, that lasted for 46 minutes." 5 Telephone operator number 448 seems to have
been spared from any administrative sanction considering that this lapse has aggravated the
persistent problem concerning telephone number 98-68-16.

Thus, Labor Arbiter de Vera correctly ruled:jgc:chanrobles.com.ph

"It need not be emphasized here that there were lapses in certain operational aspects of the
respondent company which made the irregularity possible, for indeed there exists a mystery
about the serviceability of the subject telephone line. That there were personnel of the respondent
company involved who could have restored what was earlier disconnected permanently appears
certain. Nonetheless, exacting the ultimate blame upon the respondent (complainant) in the
absence of concrete inculpatory proofs of her complexity (sic) to an anomaly if there be one,
cannot be justified." 6

This Court will not sanction a dismissal premised on mere conjectures and suspicions. To be a
valid ground for respondent’s dismissal, the evidence must be substantial and not arbitrary and
must be founded on clearly established facts sufficient to warrant his separation from work. 7

It should be borne in mind that in termination cases, the employer bears the burden of proving
that the dismissal is for just cause failing which would mean that the dismissal is not justified
and the employee is entitled to reinstatement. 8 The essence of due process in administrative
proceedings is the opportunity to explain one’s side or a chance to seek reconsideration of the
action or ruling complained of. 9 The twin requirements of notice and hearing constitute the
essential elements of due process. This simply means that the employer shall afford the worker
ample opportunity to be heard and to defend himself with the assistance of his representative, if
he so desires. Ample opportunity connotes every kind of assistance that management must
accord the employee to enable him to prepare adequately for his defense including legal
representation. 10 In the instant case, the petitioner failed to convincingly establish valid bases
on the alleged serious misconduct and loss of trust and confidence.

In carrying out and interpreting the Labor Code’s provisions and its implementing regulations,
the workingman’s welfare should be the primordial and paramount consideration. This kind of
interpretation gives meaning and substance to the liberal and compassionate spirit of the law as
provided for in Article 4 of the Labor Code, as amended, which states that "all doubts in the
implementation and interpretation of the provisions of the Labor Code including its
implementing rules and regulations shall be resolved in favor of labor, 11 as well as the
Constitutional mandate that the State shall afford full protection to labor and promote full
employment opportunities for all. Likewise, it shall guarantee the rights of all workers to security
of tenure. Such constitutional right should not be denied on mere speculation of any unclear and
nebulous basis. 12

WHEREFORE, in view of the foregoing, the instant petition is DISMISSED and the decision
dated November 16, 1992 is AFFIRMED. Costs against petitioner Philippine Long Distance
Telephone Co.

SO ORDERED.

Regalado, Puno and Mendoza, JJ., concur.