Poli Case Digests

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE STO. TOMAS V. SALAC deployment abroad of OFWs and performing artists. A TRO was issued G.R. No. 152642, 152710, 167590, 182978-79, 184298-99 enjoining RTC-QC from enforcing its decision. November 13, 2012 CRUZ Later, Sec. 29 and 30 of R.A 8042 was expressly repealed by R.A 9422. This law was signed by Pres. Gloria Arroyo. Respondents Salac, et al. told DOCTRINE: the Court that they agree with the Republic's view that the repeal of Sections 29 and 30 of R.A. 8042 renders the issues they raised by their The rule is settled that every statute has in its favor the presumption of action moot and academic. constitutionality. The Court cannot inquire into the wisdom or expediency II. G.R. 167590 on Constitutionality of Sections 6, 7, and 9 of R.A. of the laws enacted by the Legislative Department. Hence, in the absence 8042 --- respondent Philippine Association of Service Exporters, Inc. of a clear and unmistakable case that the statute is unconstitutional, the (PASEI) filed a petition for declaratory relief and prohibition with prayer for Court must uphold its validity. issuance of TRO and writ of preliminary injunction before the RTC of Manila, seeking to annul Sections 6, 7, and 9 of R.A. 8042 for being FACTS: unconstitutional. Section 6 defines the crime of "illegal recruitment" and enumerates the acts constituting the same. Section 7 provides the These consolidated cases pertain to the constitutionality of certain penalties for prohibited acts. Section 9 of R.A. 8042 allowed the filing of provisions of Republic Act 8042, otherwise known as the Migrant Workers criminal actions arising from "illegal recruitment" before the RTC of the and Overseas Filipinos Act of 1995. province or city where the offense was committed or where the offended party actually resides at the time of the commission of the offense. On June 7, 1995 Congress enacted R.A 8042 or the Migrant Workers and Overseas Filipinos Act of 1995 that, for among other purposes, sets the The RTC of Manila declared Section 6 unconstitutional after hearing on the Government's policies on overseas employment and establishes a higher ground that its definition of "illegal recruitment" is vague as it fails to standard of protection and promotion of the welfare of migrant workers, distinguish between licensed and non-licensed recruiters and for that their families, and overseas Filipinos in distress. reason gives undue advantage to the non-licensed recruiters in violation of the right to equal protection of those that operate with government I. G.R. 152642 and G.R. 152710 (Constitutionality of Sections 29 licenses or authorities. (Take note: Actually, "illegal recruitment" as and 30, R.A. 8042) --- Respondents Rey Salac filed a petition defined in Section 6 is clear and unambiguous and, contrary to the RTC's for certiorari, prohibition and mandamus with TRO and preliminary finding, actually makes a distinction between licensed and non-licensed injunction against petitioners, the DOLE Secretary, the POEA recruiters. By its terms, persons who engage in "canvassing, enlisting, Administrator, and the TESDA Secretary-General before the RTC of Quezon contracting, transporting, utilizing, hiring, or procuring workers" without City. Salac, et al. sought to: 1) nullify DOLE Department Order 10 (DOLE the appropriate government license or authority are guilty of illegal DO 10) and POEA Memorandum Circular 15 (POEA MC 15); 2) prohibit the recruitment whether or not they commit the wrongful acts enumerated in DOLE, POEA, and TESDA from implementing the same and from further that section. On the other hand, recruiters who engage in the canvassing, issuing rules and regulations that would regulate the recruitment and enlisting, etc. of OFWs, although with the appropriate government license placement of overseas Filipino workers (OFWs); and 3) also enjoin them or authority, are guilty of illegal recruitment only if they commit any of the to comply with the policy of deregulation mandated under Sections 29 and wrongful acts enumerated in Section 6. 30 of Republic Act 8042. RTC granted Salac, et al.'s petition and ordered the government agencies mentioned to deregulate the recruitment and Section 7 was also declared unconstitutional on the ground that its placement of OFWs. The RTC also annulled DOLE DO 10, POEA MC 15, sweeping application of the penalties failed to make any distinction as to and all other orders, circulars and issuances that are inconsistent with the the seriousness of the act committed for the application of the penalty policy of deregulation under R.A. 8042. The government officials imposed on such violation. concerned filed the present petition in G.R. 152642 and G. R 152710 seeking to annul the RTC's decision and have the same enjoined Section 9 of R.A. 8042 was also invalidated on the ground that allowing pending action on the petition. The Philippine Association of Service the offended parties to file the criminal case in their place of residence Exporters, Inc. and CALEA (The Confederated Association of Licensed would negate the general rule on venue of criminal cases which is the Entertainment Agencies, Incorporated) intervened claiming that the RTC place where the crime or any of its essential elements were committed. March 20, 2002 Decision gravely affected them since it paralyzed the Venue, said the RTC, is jurisdictional in penal laws and, allowing the filing 1 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE of criminal actions at the place of residence of the offended parties violates workers but their rights as human beings. It also provides that deployment their right to due process. (Take Note: there is nothing arbitrary or of migrant workers shall only be available to countries where the unconstitutional in Congress fixing an alternative venue for violations of Philippines has concluded bilateral agreements or arrangements. Section 6 of R.A. 8042 that differs from the venue established by the Rules II. As to Sec 6, 7, and 9, all are rendered constitutional. (those “take note” on Criminal Procedure. Indeed, Section 15 (a), Rule 110 of the latter Rules in parenthesis on the facts above explains why it is constitutional) allows exceptions provided by laws.)|| III. G.R. 167590, G.R. 182978-79, and G.R. 184298-99 (Constitutionality of Section 10, last sentence of 2nd paragraph)--Respondent spouses Simplicio and Mila Cuaresma (the Cuaresmas) filed a claim for death and insurance benefits and damages against petitioners Becmen Service Exporter and Promotion, Inc. (Becmen) and White Falcon Services, Inc. (White Falcon) for the death of their daughter Jasmin Cuaresma while working as staff nurse in Riyadh, Saudi Arabia. LA dismissed the claim but NLRC found petitioners Becmen and Falcon jointly and severally liable for the death, ordering them to pay $113,000.00 as actual damages. Jasmine died of criminal violence and rape. Becmen and White Falcon appealed the NLRC Decision to the CA. CA held Becmen and White Falcon jointly and severally liable with their Saudi Arabian employer for actual damages, with Becmen having a right of reimbursement from White Falcon. Becmen and White Falcon appealed the CA Decision to this Court. The Court found Jasmin's death not work-related or work-connected since her rape and death did not occur while she was on duty at the hospital or doing acts incidental to her employment. The Court deleted the award of actual damages but ruled that Becmen's corporate directors and officers are solidarily liable with their company for its failure to investigate the true nature of her death. Becmen and White Falcon abandoned their legal, moral, and social duty to assist the Cuaresmas in obtaining justice for their daughter. Now,the corporate directors and officers of Becmen, namely, Gumabay, et al.. questioned the constitutionality of the last sentence of the second paragraph of Section 10, R.A. 8042 which holds the corporate directors, officers and partners jointly and solidarily liable with their company for money claims filed by OFWs against their employers and the recruitment firms. ISSUE: WON R.A 8042 is constitutional. HELD: I. As to the constitutionality of Sec. 29 and Sec 30. It was rendered moot and academic. R.A 9422 adopted the policy of close government regulation of the recruitment and deployment of OFWs. It states among others that POEA, in addition to its powers, to inform migrant not only their rights as

The court said, in fixing uniform penalties for each of the enumerated acts under Section 6, Congress was within its prerogative to determine what individual acts are equally reprehensible, consistent with the State policy of according full protection to labor, and deserving of the same penalties. It is not within the power of the Court to question the wisdom of this kind of choice. Notably, this legislative policy has been further stressed in July 2010 with the enactment of R.A. 10022 which increased even more the duration of the penalties of imprisonment and the amounts of fine for the commission of the acts listed under Section 7. What is the spirit behind the law? Obviously, in fixing such tough penalties, the law considered the unsettling fact that OFWs must work outside the country's borders and beyond its immediate protection. The law must, therefore, make an effort to somehow protect them from conscienceless individuals within its jurisdiction who, fueled by greed, are willing to ship them out without clear assurance that their contracted principals would treat such OFWs fairly and humanely. III. The Court HOLDS the last sentence of the second paragraph of Section 10 of Republic Act 8042 valid and constitutional. The Court has already held, pending adjudication of this case, that the liability of corporate directors and officers is not automatic. To make them jointly and solidarily liable with their company, there must be a finding that they were remiss in directing the affairs of that company, such as sponsoring or tolerating the conduct of illegal activities. In the case of Becmen and White Falcon, while there is evidence that these companies were at fault in not investigating the cause of Jasmin's death, there is no mention of any evidence in the case against them that intervenors Gumabay, et al., Becmen's corporate officers and directors, were personally involved in their company's particular actions or omissions in Jasmin's case. As a final note, R.A. 8042 is a police power measure intended to regulate the recruitment and deployment of OFWs. It aims to curb, if not eliminate, the injustices and abuses suffered by numerous OFWs seeking to work abroad. The rule is settled that every statute has in its favor the presumption of constitutionality. The Court cannot inquire into the wisdom or expediency of the laws enacted by the Legislative Department. Hence, in the absence of a clear and unmistakable case that the statute is unconstitutional, the Court must uphold its validity.

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New York Times vs US 403 U.S. 713 (1971)

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE government sought a similar injunction against the Post in the District of Columbia.

DOCTRINE: Any system of prior restraint comes to this court bears a heavy presumption AGAINST its constitutional validity. The government thus carry a heavy burden of showing a justification for the imposition of such a restraint. FACTS: Over the years the Supreme Court has disagreed on the limits that can be placed on the 1st Amendment guarantees of freedom of speech and press. In 1971, the Court faced these issues again in a case brought by the New York Times. The newspaper had obtained a copy of documents known as “The Pentagon Papers”—an internal Defense Department report that detailed government deception with regard to the Vietnam War. The Pentagon Papers surfaced at a time when the American people were deeply divided on the question of United States involvement in the war. The New York Times fought for the right to publish the papers under the umbrella of the 1st Amendment. The Pentagon Papers, officially known as “History of U.S. Decision-Making Process on Vietnam Policy,” were illegally copied and then leaked to the press. The New York Times and the Washington Post had obtained the documents. Acting at the Government's request, the United States district court in New York issued a temporary injunction—a court order—that directed the New York Times not to publish the documents. The Government claimed that the publication of the papers would endanger the security of the United States. The New York Times appealed the order to the United States Supreme Court, arguing that prior restraint— preventing publication—violated the 1st Amendment. From June 12 to 14, 1971, the New York Times published a series of articles about the origins of the Vietnam War. The articles were based on a forty-seven-volume Defense Department study covering the years 1945 to 1968, which had been leaked to the Times by Daniel Ellsberg, a former Defense Department analyst. Although the study contained only information regarding events that occurred before 1968, the government contended that the study contained "secret" and "top secret" information. Further, the government alleged that publication of the information could prolong the Vietnam War and threaten the safe return of U.S. prisoners of war. On June 15, 1971, the government sued in New York federal district court, seeking an injunction prohibiting the Times from continuing to publish information from the Pentagon Papers. Soon after, the Washington Post began publishing material from the study; accordingly, the

It was the Nixon Administration that attempted to prevent the New York Times and Washington Post from publishing materials. The President argued that prior restraint was necessary to protect national security. Contentions: For the New York Times: The 1st Amendment's guarantee of freedom of the press protects the newspaper in the publication of these documents. One of the few restraints on executive power in matters of national defense is a knowledgeable population. The press must be free to inform the American people. In addition, the Government has failed to show that publication of the Pentagon Papers would endanger national security. For the United States: The 1st Amendment does not guarantee an absolute freedom of the press, especially when the nation's security is involved. The Court must strike a balance between the fundamentally important right to a free press and the equally important duty of the Government to protect the nation. Allowing the publication of these documents would establish a dangerous precedent for future cases involving national security. ISSUE: WON prior restraint of publication constitutes violation of the first amendment HELD: Yes. Any system of prior restraint comes to this court bearing a heavy presumption AGAINST its constitutionality. The government, thus carry a heavy burden of showing a justification for the imposition of such a restraint. In this case, the government has not MET that burden. The Supreme Court decided on a 6-3 vote that a prior restraint could not be imposed on publication of the Pentagon Papers. The whole Court noted that the government "carries a heavy burden of showing justification for the imposition of such a restraint" and stated that the government had failed to meet that burden. The Court could not agree on a precise standard for determining when the government may impose a prior restraint on free speech, or even whether the government could ever impose a prior restraint. Dissent on Separation of Powers:

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POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE The scope of the judicial function in passing upon activities of the PHILIPPINE PRESS INSTITUTE, INC. V. COMELEC Executive Branch in the field of foreign affairs is very narrowly restricted. G.R. No. 119694, May 22, 1995 This view is dictated by the doctrine of Separation of Powers. The doctrine GATACELO prohibiting prior restraints does not prevent the courts from maintaining status quo long enough to act responsibly. The First Amendment is only DOCTRINE: part of the Constitution. The cases should be remanded to be developed expeditiously. To compel print media companies to donate "Comelec space" amounts to "taking" of private personal property for public use or purposes. The taking Concurrence. To find that the President has “inherent power” to halt the of private property for public use is, of course, authorized by the publication of news by resort to the courts would wipe out the First Constitution, but not without payment of "just compensation" (Article III, Amendment of the United States Constitution [Constitution]. Section 9). The First Amendment of the Constitution leaves no room for governmental restraint on the press. There is, moreover, no statute barring the No attempt was made to demonstrate that a real and palpable or urgent publication by the press of the material that the Times and Post seek to necessity for the taking of print space confronted the Comelec and that publish. Section 2 of Resolution No. 2772 was itself the only reasonable and calibrated response to such necessity available to the Comelec. The First Amendment of the Constitution tolerates no prior judicial restraints of the press predicated upon surmise or conjecture that FACTS: untoward consequences may result. Thus, only governmental allegation and proof that publication must inevitably, Comelec promulgated Resolution No. 2772 which allowed Comelec to directly and immediately cause the occurrence of an event kindred to procure free print space of not less than 1/2 page in at least one imperiling the safety of a transport already at sea can support the issuance newspaper of general circulation in every province or city for use as of an interim restraining order. 'Comelec Space' (Section 2). The 'Comelec Space' shall be allocated, through lottery, by the Commission, free of charge, among all Unless and until the Government has clearly made its case, the First candidates within the area in which the newspaper, magazine or periodical Amendment of the Constitution commands that no injunction be issued. is circulated to enable the candidates to make known their qualifications, The responsibility must be where the power is. The Executive must have their stand on public issues and their platforms and programs of the large duty to determine and preserve the degree of internal security government – in short, dissemination of vital election information. necessary to exercise its power effectively. The Executive is correct with respect to some of the documents here, but disclosure of any of them will Furthermore, the resolution stated that no newspaper or publication shall not result in irreparable danger to the public. allow to be printed or published in the news, opinion, features, or other sections of the newspaper or publication accounts or comments which Additional Info: What is this first amendment? When the constitution of US manifestly favor or oppose any candidate or political party by unduly or was drafted in 1789, many people opposed this document because of the repeatedly referring to or including therein said candidate or political absence of bill of rights to safeguard certain basic freedom. They feared party. However, unless the facts and circumstances clearly indicate that this absence would allow the central government to curtail the otherwise, the Commission will respect the determination by the publisher freedom of the press, assembly and speech. In response to this clamor, and/or editors of the newspapers or publication that the accounts or views James Madison, proposed series of amendment to their constitution to published are significant, newsworthy and of public interest (Section 8). satisfy US citizens that these liberties is beyond government abridge. Later on, this amendment was called the First Amendment. It has three parts. Comelec directed several newspapers, which previously gave 2 pages a.) civil rights shall not be abridged on account of religious belief, b.) during the 1992 elections, to people shall not be restrained to peaceably assemble, and c.) people shall provide free print space of not less than 1/2 page for use as 'Comelec not be deprived of their right to speak, to write, or publish their Space'. sentiments, and the freedom of the press, as one of the great bulwarks shall be inviolable. Petitioner’s contention: Resolution No. 2772 was unconstitutional and void; they claimed that there was taking of private property for public use without just compensation. It also constituted impositions of involuntary 4 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE servitude. And that the resolution violated freedom of speech, of the press reasonable relationship between that power and the enforcement and and of expression. administration of election laws by Comelec must be shown; it is not casually to be assumed. The resolution does not constitute a valid exercise Respondent’s contention: SolGen claims that Resolution No. 2772 of the power of eminent domain.||| does not impose upon any obligation as it does not provide any criminal or administrative sanction for non-compliance with that Resolution. And even Thus, public funds, not publishers solely, should bear costs for public if the questioned Resolution and its implementing letter directives are information of electoral processes. The economic costs of informing the viewed as mandatory, the same would nevertheless be valid as an general public about the qualifications and programs of those seeking exercise of the police power of the State. elective office are most appropriately distributed as widely as possible throughout our society by the utilization of public funds, especially funds ISSUE: raised by taxation, rather than cast solely on one small sector of society, i.e., print media enterprises. The benefits which flow from a heightened WON the Comelec, through the subject resolution, validly exercised its level of information on and the awareness of the electoral process are power of eminent domain and police power. commonly thought to be community-wide; the burdens should be allocated on the same basis. HELD: Re police power: Firstly, there was no effort (and apparently no inclination No. on the part of Comelec) to show that the police power — essentially a Re eminent domain: To compel print media companies to donate "Comelec power of legislation — has been constitutionally delegated to respondent space" amounts to "taking" of private personal property for public use or Commission. Secondly, while private property may indeed be validly taken purposes. The resolution failed to specify the intended frequency of such in the legitimate exercise of the police power of the state, there was no compulsory "donation": only once during the period from 6 March 1995 (or attempt to show compliance in the instant case with the requisites of a 21 March 1995) until 12 May 1995? or everyday or once a week? or as lawful taking under the police power. Section 2 is a blunt and heavy often as Comelec may direct during the same period? The extent of the instrument that purports, without a showing of existence of a national taking or deprivation is not insubstantial; this is not a case of a de emergency or other imperious public necessity, indiscriminately and minimis temporary limitation or restraint upon the use of private property. without regard to the individual business condition of particular The monetary value of the compulsory "donation," measured by the newspapers or magazines located in differing parts of the country, to take advertising rates ordinarily charged by newspaper publishers whether in private property of newspaper or magazine publishers. No attempt was cities or in non-urban areas, may be very substantial indeed. The taking of made to demonstrate that a real and palpable or urgent necessity for the private property for public use is, of course, authorized by the taking of print space confronted the Comelec and that Section 2 of Constitution, but not without payment of "just compensation" (Article III, Resolution No. 2772 was itself the only reasonable and calibrated response Section 9). And apparently the necessity of paying compensation for to such necessity available to the Comelec. Section 2 does not constitute a "Comelec space" is precisely what is sought to be avoided by respondent valid exercise of the police power of the State. Commission, whether the Resolution is read as petitioner PPI reads it, as an assertion of authority to require newspaper publishers to "donate" free NB. Re freedom of speech etc.: The distinction between paid political print space for Comelec purposes, or as an exhortation, or perhaps an advertisements on the one hand and news reports, commentaries and appeal, to publishers to donate free print space, as the Resolution expressions of belief or opinion by reporters, broadcasters, editors, etc. on attempts to suggest. The threshold requisites for a lawful taking of private the other hand, can realistically be given operative meaning only in actual property for public use need to be examined here: one is the necessity for cases or controversies, on a case-to-case basis, in terms of very specific the taking; another is the legal authority to effect the taking. The element sets of facts. At all events, the Court is bound to note that PPI has failed to of necessity for the taking has not been shown by respondent Comelec. It allege any specific affirmative action on the part of Comelec designed to has not been suggested that the members of PPI are unwilling to sell print enforce or implement Section 8. PPI has not claimed that it or any of its space at their normal rates to Comelec for election purposes. Indeed, the members has sustained actual or imminent injury by reason of Comelec unwillingness or reluctance of Comelec to buy print space lies at the heart action under Section 8. Put a little differently, the Court considers that the of the problem. Similarly, it has not been suggested, let alone precise constitutional issue here sought to be raised — whether or not demonstrated, that Comelec has been granted the power of eminent Section 8 of Resolution No. 2772 constitutes a permissible exercise of the domain either by the Constitution or by the legislative authority. A Comelec's power under Article IX, Section 4 of the Constitution is not ripe 5 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE for judicial review for lack of an actual case or controversy involving, as Tio claimed that Section 10 was unconstitutional because the tax imposed the very lis mota thereof, the constitutionality of Section 8. is harsh, confiscatory, oppressive and/or in unlawful restraint of trade in violation of the due process clause of the Constitution, etc. Tio v. Videogram Regulatory Board G.R. No. L-75697, June 18, 1987 ISSUE: DOCTRINE:

WON the power of taxation was validly exercised.

The public purpose of a tax may legally exist even if the motive which impelled the legislature to impose the tax was to favor one industry over another. "It is inherent in the power to tax that a state be free to select the subjects of taxation, and it has been repeatedly held that "inequities which result from a singling out of one particular class for taxation or exemption infringe no constitutional limitation'." Taxation has been made the implement of the state's police power.

HELD:

FACTS: PD No. 1994 amended the National Internal Revenue Code providing, inter alia: SEC. 134. There shall be collected on each processed video-tape cassette, ready for playback, regardless of length, an annual tax of five pesos; Provided, That locally manufactured or imported blank video tapes shall be subject to sales tax. The rationale relates to: 1) the proliferation and unregulated circulation of videograms that have greatly prejudiced the operations of moviehouses and theaters, and have caused a sharp decline in theatrical attendance by at least 40% and a tremendous drop in the collection of sales, contractor's specific, amusement and other taxes, thereby resulting in substantial losses estimated at P450 Million annually in government revenues; 2) videogram establishments collectively earn around P600 Million per annum from rentals, sales and disposition of videograms, and such earnings have not been subjected to tax, thereby depriving the Government of approximately P180 Million in taxes each year; 3) proper taxation of the activities of videogram establishments will not only alleviate the dire financial condition of the movie industry upon which more than 75,000 families and 500,00 workers depend for their livelihood, but also provide an additional source of revenue for the Government, and at the same time rationalize the heretofore distribution of videograms; 4) the rampant and unregulated showing of obscene videogram features constitutes a clear and present danger to the moral and spiritual well-being of the youth, and impairs the mandate of the Constitution for the State to support the rearing of the youth for civic efficiency and the development of moral character and promote their physical, intellectual, and social being; etc.

Yes. It is beyond serious question that a tax does not cease to be valid merely because it regulates, discourages, or even definitely deters the activities taxed. The power to impose taxes is one so unlimited in force and so searching in extent, that the courts scarcely venture to declare that it is subject to any restrictions whatever, except such as rest in the discretion of the authority which exercises it. The tax imposed by the DECREE is not only a regulatory but also a revenue measure prompted by the realization that earnings of videogram establishments of around P600 million per annum have not been subjected to tax, thereby depriving the Government of an additional source of revenue. It is an end-user tax, imposed on retailers for every videogram they make available for public viewing. It is similar to the 30% amusement tax imposed or borne by the movie industry which the theater-owners pay to the government, but which is passed on to the entire cost of the admission ticket, thus shifting the tax burden on the buying or the viewing public. It is a tax that is imposed uniformly on all videogramoperators. The levy of the 30% tax is for a public purpose. It was imposed primarily to answer the need for regulating the video industry, particularly because of the rampant film piracy, the flagrant violation of intellectual property rights, and the proliferation of pornographic video tapes. And while it was also an objective of the DECREE to protect the movie industry, the tax remains a valid imposition. The public purpose of a tax may legally exist even if the motive which impelled the legislature to impose the tax was to favor one industry over another. "It is inherent in the power to tax that a state be free to select the subjects of taxation, and it has been repeatedly held that "inequities which result from a singling out of one particular class for taxation or exemption infringe no constitutional limitation'." Taxation has been made the implement of the state's police power. At bottom, the rate of tax is a matter better addressed to the taxing legislature. Ortigas vs. Court of Appeals G.R. No. 126102. December 4, 2000 GOMEZ Doctrine:

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POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE A law enacted in the exercise of police power to regulate or govern certain activities or transactions could be given retroactive effect and may WON CA erred in ruling that a contractual right is automatically discarded reasonably impair vested rights or contracts. Police power legislation is once it conflicts with police power (MMC Ordinance No. 81-01) applicable not only to future contracts, but equally to those already in existence. Nonimpairment of contracts or vested rights clauses will have to HELD: yield to the superior and legitimate exercise by the State of police power to promote the health, morals, peace, education, good order, safety, and The SC noted that in issuing the disputed writ of preliminary injunction, general welfare of the people. Moreover, statutes in exercise of valid police the trial court observed that the contract of sale was entered into in power must be read into every contract. August 1976, while the zoning ordinance was enacted only in March 1981. The trial court reasoned that since private respondent had failed to show FACTS: that MMC Ordinance No. 81-01 had retroactive effect, said ordinance should be given prospective application only, citing Co vs. Intermediate On August 25, 1976, petitioner Ortigas & Company sold to Emilia Appellate Court, 162 SCRA 390 (1988). Hermoso, a parcel of land with an area of 1,508 square meters, located in Greenhills Subdivision IV, San Juan, Metro Manila. The contract of sale In general, we agree that laws are to be construed as having only provided that the lot be used exclusively for residential purposes only, and prospective operation. Lex prospicit, non respicit. Equally settled, only not more than one single-family residential building will be constructed laws existing at the time of the execution of a contract are applicable thereon; the BUYER shall not erect any sign or billboard on the roof for thereto and not later statutes, unless the latter are specifically intended to advertising purposes; no single-family residential building shall be erected have retroactive effect.A later law which enlarges, abridges, or in any until the building plans, specification have been approved by the SELLER; manner changes the intent of the parties to the contract necessarily restrictions shall run with the land and shall be construed as real impairs the contract itself and cannot be given retroactive effect without covenants until December 31, 2025 when they shall cease and violating the constitutional prohibition against impairment of contracts. terminate.These and the other conditions were duly annotated on the certificate of title issued to Emilia. But, the foregoing principles do admit of certain exceptions. One involves police power. A law enacted in the exercise of police power to regulate or In 1981, the Metropolitan Manila Commission (now Metropolitan Manila govern certain activities or transactions could be given retroactive effect Development Authority) enacted MMC Ordinance No. 81-01, also known as and may reasonably impair vested rights or contracts. Police power the Comprehensive Zoning Area for the National Capital Region. The legislation is applicable not only to future contracts, but equally to those ordinance reclassified as a commercial area a portion of Ortigas Avenue already in existence. Nonimpairment of contracts or vested rights clauses from Madison to Roosevelt Streets of Greenhills Subdivision where the lot will have to yield to the superior and legitimate exercise by the State of is located. On June 8, 1984, private respondent Ismael Mathay III leased police power to promote the health, morals, peace, education, good order, the lot from Emilia Hermoso and J.P. Hermoso Realty Corp.. The lease safety, and general welfare of the people. Moreover, statutes in exercise of contract did not specify the purposes of the lease. Thereupon, private valid police power must be read into every contract. respondent constructed a single story commercial building for Greenhills Autohaus, Inc., a car sales company. Following the SC ruling in Ortigas & Co., Ltd. vs. Feati Bank & Trust Co., Thereafter, petitioner filed a complaint against Emilia Hermoso with the 94 SCRA 533 (1979), the contractual stipulations annotated on the RTC of Pasig. The complaint sought the demolition of the said commercial Torrens Title, on which Ortigas relies, must yield to the ordinance. When structure for having violated the terms and conditions of the Deed of Sale. that stretch of Ortigas Avenue from Roosevelt Street to Madison Street Petitioner asked for the issuance of a TRO and a writ of preliminary was reclassified as a commercial zone by the Metropolitan Manila injunction. Commission in March 1981, the restrictions in the contract of sale between Ortigas and Hermoso, limiting all construction on the disputed lot to RTC- granted the writ of preliminary injunction in favor of Ortigas. CAsingle-family residential buildings, were deemed extinguished by the ruled in favor of Mathay. It held that MMC Ordinance No. 81-01 effectively retroactive operation of the zoning ordinance and could no longer be nullified the restrictions allowing only residential use of the property in enforced. While our legal system upholds the sanctity of contract so that a question. CA- denied Ortigas’ motion for reconsideration. contract is deemed law between the contracting parties, nonetheless, stipulations in a contract cannot contravene “law, morals, good customs, ISSUE: public order, or public policy.” Otherwise such stipulations would be 7 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE deemed null and void. Respondent court correctly found that the trial in the state is held subject to its general regulations, necessary to the court committed in this case a grave abuse of discretion amounting to common good and general welfare. want of or excess of jurisdiction in refusing to treat Ordinance No. 81-01 as applicable to Civil Case No. 64931. In a number of cases, we laid down the test to determine the validity of a police measure, thus: Chavez vs. Romulo (1) The interests of the public generally, as distinguished from those of G.R. No. 157036. June 9, 2004 a particular class, require the exercise of the police power; and (2) The means employed are reasonably necessary for the DOCTRINE: accomplishment of the purpose and not unduly oppressive upon individuals. In a number of cases, the SC laid down the test to determine the validity of a police measure, thus: The interests of the public generally, as Deeper reflection will reveal that the test merely reiterates the essence of distinguished from those of a particular class, require the exercise of the the constitutional guarantees of substantive due process, equal protection, police power; and the means employed are reasonably necessary for the and non-impairment of property rights. accomplishment of the purpose and not unduly oppressive upon individuals. It is apparent from the assailed Guidelines that the basis for its issuance was the need for peace and order in the society. Owing to the FACTS: proliferation of crimes, particularly those committed by the New People’s Army (NPA), which tends to disturb the peace of the community, President In January 2003, President Gloria Macapagal-Arroyo delivered a speech Arroyo deemed it best to impose a nationwide gun ban. Undeniably, the before the members of the PNP stressing the need for a nationwide gun motivating factor in the issuance of the assailed Guidelines is the interest ban in all public places to avert the rising crime incidents. She directed of the public in general. the then PNP Chief, respondent Ebdane, to suspend the issuance of The only question that can then arise is whether the means employed are Permits to Carry Firearms Outside of Residence (PTCFOR). This was appropriate and reasonably necessary for the accomplishment of the prompted by the latest killing of former NPA leader Rolly Kintanar. purpose and are not unduly oppressive. In the instant case, the assailed Guidelines do not entirely prohibit possession of firearms. What they Acting on President Arroyo’s directive, respondent Ebdane issued the proscribe is merely the carrying of firearms outside of residence. However, assailed Guidelines in the Implementation of the Ban on the Carrying of those who wish to carry their firearms outside of their residences may reFirearms Outside of Residence. Petitioner Francisco I. Chavez, a licensed apply for a new PTCFOR. This we believe is a reasonable regulation. If gun owner to whom a PTCFOR has been issued, requested the Department the carrying of firearms is regulated, necessarily, crime incidents will be of Interior and Local Government (DILG) to reconsider the implementation curtailed. Criminals carry their weapon to hunt for their victims; they do of the assailed Guidelines. However, his request was denied. Thus, he not wait in the comfort of their homes. With the revocation of all PTCFOR, filed the present petition impleading public respondents Ebdane, as Chief it would be difficult for criminals to roam around with their guns. On the of PNP; Alberto G. Romulo, as Executive Secretary; and Gerry L. Barias, as other hand, it would be easier for the PNP to apprehend them. Chief of the PNP-Firearms and Explosives Division. Notably, laws regulating the acquisition or possession of guns have ISSUE: frequently been upheld as reasonable exercise of the police power. In State vs. Reams, it was held that the legislature may regulate the right to WON the issuance of the assailed Guidelines is a valid exercise of police bear arms in a manner conducive to the public peace. With the promotion power of public peace as its objective and the revocation of all PTCFOR as the means, we are convinced that the issuance of the assailed Guidelines HELD: constitutes a reasonable exercise of police power. At any rate, assuming that petitioner’s PTCFOR constitutes a property right protected by the Constitution, the same cannot be considered as absolute as to be placed beyond the reach of the State’s police power. All property

MMDA vs. BEL-AIR VILLAGE ASSOCIATION GR. NO. 135962; MARCH 27, 2000 LAZARO

8 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE commonwealth, and for the subjects of the same. The power is plenary and its scope is vast and pervasive, reaching and justifying measures for MMDA is not vested with police power. Its functions are merely public health, public safety, public morals, and the general welfare. It administrative in nature. bears stressing that police power is lodged primarily in the National Legislature. It cannot be exercised by any group or body of individuals not FACTS: possessing legislative power. The National Legislature, however, may delegate this power to the President and administrative boards as well as Petitioner MMDA is a government agency tasked with the delivery of basic the lawmaking bodies of municipal corporations or local government units. services in Metro Manila. Respondent Bel-Air Village Association, Inc. Once delegated, the agents can exercise only such legislative powers as (BAVA) is a non-stock, non-profit corporation whose members are are conferred on them by the national lawmaking body. homeowners in Bel-Air Village, a private subdivision in Makati City. Respondent BAVA is the registered owner of Neptune Street, a road beside The scope of the MMDA's function is limited to the delivery of seven (7) Bel-Air Village.||| Respondent received from petitioner, through its basic services. One of these is transport and traffic management which Chairman, a notice dated December 22, 1995 requesting respondent to includes the formulation and monitoring of policies, standards and projects open Neptune Street to public vehicular traffic starting January 2, 1996.||| to rationalize the existing transport operations, infrastructure On the same day, respondent was apprised that the perimeter wall requirements, the use of thoroughfares and promotion of the safe separating the subdivision from the adjacent Kalayaan Avenue would be movement of persons and goods. It also covers the mass transport system demolished. Respondent instituted against petitioner before the Regional and the institution of a system of road regulation, the administration of all Trial Court for injunction. After due hearing, the trial court denied issuance traffic enforcement operations, traffic engineering services and traffic of a preliminary injunction. Respondent questioned the denial before the education programs, including the institution of a single ticketing system in Court of Appeals. The appellate court conducted an ocular inspection of Metro Manila for traffic violations. Under this service, the MMDA is Neptune Street 3 and on February 13, 1996, it issued a writ of preliminary expressly authorized "to set the policies concerning traffic" and "coordinate injunction enjoining the implementation of the MMDA's proposed action. and regulate the implementation of all traffic management programs." In The appellate court rendered a Decision on the merits of the case finding addition, the MMDA may "install and administer a single ticketing system," that the MMDA has no authority to order the opening of Neptune Street, a fix, impose and collect fines and penalties for all traffic violations. private subdivision road and cause the demolition of its perimeter walls. It held that the authority is lodged in the City Council of Makati by ordinance. It will be noted that the powers of the MMDA are limited to the following acts: formulation, coordination, regulation, implementation, preparation, Petitioner MMDA claims that it has the authority to open Neptune Street to management, monitoring, setting of policies, installation of a system and public traffic because it is an agent of the state endowed with police power administration. There is no syllable in R.A. No. 7924 that grants the MMDA in the delivery of basic services in Metro Manila. One of these basic police power, let alone legislative power. Even the Metro Manila Council services is traffic management which involves the regulation of the use of has not been delegated any legislative power. Unlike the legislative bodies thoroughfares to insure the safety, convenience and welfare of the general of the local government units, there is no provision in R.A. No. 7924 that public. empowers the MMDA or its Council to "enact ordinances, approve resolutions and appropriate funds for the general welfare" of the ISSUE: inhabitants of Metro Manila. The MMDA is, as termed in the charter itself, a "development authority." It is an agency created for the purpose of laying WON MMDA has the authority to order the opening of Neptune Street and down policies and coordinating with the various national government the demolition of the perimeter wall pursuant to its alleged police power. agencies, people's organizations, non-governmental organizations and the private sector for the efficient and expeditious delivery of basic services in HELD: the vast metropolitan area. All its functions are administrative in nature and these are actually summed up in the charter itself. No. Police power is an inherent attribute of sovereignty. It has been The MMDA has no power to enact ordinances for the welfare of the defined as the power vested by the Constitution in the legislature to make, community. It is the local government units, acting through their ordain, and establish all manner of wholesome and reasonable laws, respective legislative councils, that possess legislative power and police statutes and ordinances, either with penalties or without, not repugnant to power. In the case at bar, the Sangguniang Panlunsod of Makati City did the Constitution, as they shall judge to be for the good and welfare of the not pass any ordinance or resolution ordering the opening of Neptune DOCTRINE:

9 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE Street, hence, its proposed opening by petitioner MMDA is illegal and the gained early access to the test questions. Respondents then filed a special respondent Court of Appeals did not err in so ruling. civil action for mandamus with the RTC of Manila. Moreover, the MMDA was created to put some order in the metropolitan transportation system, but unfortunately the powers granted by its charter are limited. Its good intentions cannot justify the opening for public use of a private street in a private subdivision without any legal warrant. The promotion of the general welfare is not antithetical to the preservation of the rule of law. PROFESSIONAL REGULATION COMMISSION (PRC) vs. DE GUZMAN G.R. No. 144681. JUNE 21, 2004 DOCTRINE: The Professional Regulation Commission, pursuant to the exercise of its police power, has the authority to regulate the medical profession. FACTS: The respondents are all graduates of the Fatima College of Medicine, Valenzuela City, Metro Manila. They passed the Physician Licensure Examination conducted in February 1993 by the Board of Medicine (Board). Petitioner Professional Regulation Commission (PRC) then released their names as successful examinees in the medical licensure examination. Shortly thereafter, the Board observed that the grades of the seventy-nine successful examinees from Fatima College in the two most difficult subjects in the medical licensure exam, Biochemistry (Bio-Chem) and Obstetrics and Gynecology (OB-Gyne), were unusually and exceptionally high. Eleven Fatima examinees scored 100% in Bio-Chem and ten got 100% in OB-Gyne, another eleven got 99% in Bio-Chem, and twenty-one scored 99% in OB-Gyne. The Board also observed that many of those who passed from Fatima got marks of 95% or better in both subjects, and no one got a mark lower than 90%. A comparison of the performances of the candidates from other schools was made. The Board observed that strangely, the unusually high ratings were true only for Fatima College examinees. It was a record-breaking phenomenon in the history of the Physician Licensure Examination. The Board issued Resolution No. 19, withholding the registration as physicians of all the examinees from the Fatima College of Medicine. The PRC asked the National Bureau of Investigation (NBI) to investigate whether any anomaly or irregularity marred the February 1993 Physician Licensure Examination. the NBI found that "the questionable passing rate of Fatima examinees in the [1993] Physician Examination leads to the conclusion that the Fatima examinees

ISSUE: WON the petition for mandamus will lie. HELD: No. The function of mandamus is not to establish a right but to enforce one that has been established by law. If no legal right has been violated, there can be no application of a legal remedy, and the writ of mandamus is a legal remedy for a legal right. There must be a well-defined, clear and certain legal right to the thing demanded. It is long established rule that a license to practice medicine is a privilege or franchise granted by the government. It is true that this Court has upheld the constitutional right of every citizen to select a profession or course of study subject to a fair, reasonable, and equitable admission and academic requirements. But like all rights and freedoms guaranteed by the Charter, their exercise may be so regulated pursuant to the police power of the State to safeguard health, morals, peace, education, order, safety, and general welfare of the people. Thus, persons who desire to engage in the learned professions requiring scientific or technical knowledge may be required to take an examination as a prerequisite to engaging in their chosen careers. This regulation takes particular pertinence in the field of medicine, to protect the public from the potentially deadly effects of incompetence and ignorance among those who would practice medicine. It must be stressed, nevertheless, that the power to regulate the exercise of a profession or pursuit of an occupation cannot be exercised by the State or its agents in an arbitrary, despotic, or oppressive manner. A political body that regulates the exercise of a particular privilege has the authority to both forbid and grant such privilege in accordance with certain conditions. Such conditions may not, however, require giving up ones constitutional rights as a condition to acquiring the license. Under the view that the legislature cannot validly bestow an arbitrary power to grant or refuse a license on a public agency or officer, courts will generally strike down license legislation that vests in public officials discretion to grant or refuse a license to carry on some ordinarily lawful business, profession, or activity without prescribing definite rules and conditions for the guidance of said officials in the exercise of their power. In the present case, the aforementioned guidelines are provided for in Rep. Act No. 2382, as amended, which prescribes the requirements for admission to the practice of medicine, the qualifications of candidates for

10 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE the board examinations, the scope and conduct of the examinations, the grounds for denying the issuance of a physician's license, or revoking a Thereafter, the Department of Labor, following the EIAC's license that has been issued. Verily, to be granted the privilege to practice recommendation, issued a series of orders fine-tuning and implementing medicine, the applicant must show that he possesses all the qualifications the new system which include, among others: and none of the disqualifications. Furthermore, it must appear that he has fully complied with all the conditions and requirements imposed by the law Department Order No. 3-B, pertaining to the Artist Record Book (ARB) and the licensing authority. Should doubt taint or mar the compliance as requirement, which could be processed only after the artist could show being less than satisfactory, then the privilege will not issue. For said proof of academic and skills training and has passed the required tests. privilege is distinguishable from a matter of right, which may be demanded if denied. Thus, without a definite showing that the aforesaid requirements Federation of Entertainment Talent Managers of the Philippines (FETMOP), and conditions have been satisfactorily met, the courts may not grant the on January 27, 1995 filed a class suit assailing these department orders, writ of mandamus to secure said privilege without thwarting the legislative principally contending that said orders 1) violated the constitutional right will. to travel; 2) abridged existing contracts for employment; and 3) deprived individual artists of their licenses without due process of law. FETMOP, JMM PROMOTION AND MANAGEMENT, INC. VS. CA likewise, averred that the issuance of the Artist Record Book (ARB) was G.R. No. 120095. August 5, 1996 discriminatory and illegal and "in gross violation of the constitutional right MUÑEZ . . . to life liberty and property." Said Federation consequently prayed for the issuance of a writ of preliminary injunction against the aforestated DOCTRINE: orders. No right is absolute, and the proper regulation of a profession, calling, business or trade has always been upheld as a legitimate subject of a valid exercise of the police power by the State particularly when their conduct affects either the execution of legitimate governmental functions, the preservation of the State, the public health and welfare and public morals.

JMM Promotion and Management, Inc. and Kary International, Inc., herein petitioners, filed a Motion for Intervention in said civil case, which was granted by the trial court but which later denied petitioner’s prayer for a writ of preliminary injunction and dismissed the complaint. ISSUE:

FACTS: Following the much-publicized death of Maricris Sioson in 1991, former President Corazon C. Aquino ordered a total ban against the deployment of performing artists to Japan and other foreign destinations. The ban was, however, rescinded after leaders of the overseas employment industry promised to extend full support for a program aimed at removing kinks in the system of deployment. In its place, the government, through the Secretary of Labor and Employment, subsequently issued Department Order No. 28 creating the Entertainment Industry Advisory Council (EIAC) which was tasked with issuing guidelines on the training, testing certification and deployment of performing artists abroad. Pursuant to the EIAC's recommendations, the Secretary of Labor, on January 6, 1994, issued Department Order No. 3 establishing various procedures and requirements for screening performing artists under a new system of training, testing, certification and deployment of the former. Performing artists successfully hurdling the test, training and certification requirement were to be issued an Artist's Record Book (ARB), a necessary prerequisite to processing of any contract of employment by the POEA.

WON the Artist Record Book requirement and the other Department Orders were issued by the Secretary of Labor pursuant to a valid exercise of the police power. HELD: YES. The latin maxim salus populi est suprema lex embodies the character of the entire spectrum of public laws aimed at promoting the general welfare of the people under the State's police power. As an inherent attribute of sovereignty which virtually "extends to all public needs," this "least limitable" of governmental powers grants a wide panoply of instruments through which the state, as parens patriae gives effect to a host of its regulatory powers. Thus, police power concerns government enactments which precisely interfere with personal liberty or property in order to promote the general welfare or the common good. As the assailed Department Order enjoys a presumed validity, it follows that the burden rests upon petitioners to demonstrate that the said order, particularly, its ARB requirement, does not enhance the public welfare or was exercised arbitrarily or unreasonably.

11 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE Pursuant to the alarming number of reports that a significant workers. The basic constitutional statement on labor, embodied in Section number of Filipina performing artists ended up as prostitutes abroad 18 of Article II of the Constitution provides: (many of whom were beaten, drugged and forced into prostitution), and following the deaths of a number of these women, the government began Sec. 18.The State affirms labor as a primary social economic force. It shall instituting measures aimed at deploying only those individuals who met protect the rights of workers and promote their welfare. set standards which would qualify them as legitimate performing artists. In spite of these measures, however, a number of our countrymen have Obviously, protection to labor does not indicate promotion of employment nonetheless fallen victim to unscrupulous recruiters, ending up as virtual alone. Under the welfare and social justice provisions of the Constitution, slaves controlled by foreign crime syndicates and forced into jobs other the promotion of full employment, while desirable, cannot take a than those indicated in their employment contracts. Worse, some of our backseat to the government's constitutional duty to provide mechanisms women have been forced into prostitution. for the protection of our workforce, local or overseas. Clearly, the welfare of Filipino performing artists, particularly the women was paramount in the issuance of Department Order No. 3. Short of a total and absolute ban against the deployment of performing artists to "high-risk" destinations, a measure which would only drive recruitment further underground, the new scheme at the very least rationalizes the method of screening performing artists by requiring reasonable educational and artistic skills from them and limits deployment to only those individuals adequately prepared for the unpredictable demands of employment as artists abroad. It cannot be gainsaid that this scheme at least lessens the room for exploitation by unscrupulous individuals and agencies. As to the other provisions of Department Order No. 3 questioned by petitioners, we see nothing wrong with the requirement for document and booking confirmation (D.O. 3-C), a minimum salary scale (D.O. 3-E), or the requirement for registration of returning performers. The requirement for a venue certificate or other documents evidencing the place and nature of work allows the government closer monitoring of foreign employers and helps keep our entertainers away from prostitution fronts and other worksites associated with unsavory, immoral, illegal or exploitative practices. Parenthetically, none of these issuances appear to us, by any stretch of the imagination, even remotely unreasonable or arbitrary. They address a felt need of according greater protection for an oft-exploited segment of our OCW's. They respond to the industry's demand for clearer and more practicable rules and guidelines. Many of these provisions were fleshed out following recommendations by, and after consultations with, the affected sectors and non-government organizations. On the whole, they are aimed at enhancing the safety and security of entertainers and artists bound for Japan and other destinations, without stifling the industry's concerns for expansion and growth. In any event, apart from the State's police power, the Constitution itself mandates government to extend the fullest protection to our overseas

We now go to petitioners' assertion that the police power cannot, nevertheless, abridge the right of our performing workers to return to work abroad after having earlier qualified under the old process, because, having previously been accredited, their accreditation became a "property right," protected by the due process clause. We find this contention untenable. A profession, trade or calling is a property right within the meaning of our constitutional guarantees. One cannot be deprived of the right to work and the right to make a living because these rights are property rights, the arbitrary and unwarranted deprivation of which normally constitutes an actionable wrong. Nevertheless, no right is absolute, and the proper regulation of a profession, calling, business or trade has always been upheld as a legitimate subject of a valid exercise of the police power by the State particularly when their conduct affects either the execution of legitimate governmental functions, the preservation of the State, the public health and welfare and public morals. According to the maxim, sic utere tuo ut alienum non laedas, it must of course be within the legitimate range of legislative action to define the mode and manner in which every one may so use his own property so as not to pose injury to himself or others. In any case, where the liberty curtailed affects at most the rights of property, the permissible scope of regulatory measures is certainly much wider. To pretend that licensing or accreditation requirements violates the due process clause is to ignore the settled practice, under the mantle of the police power, of regulating entry to the practice of various trades or professions. Professionals leaving for abroad are required to pass rigid written and practical exams before they are deemed fit to practice their trade. Seamen are required to take tests determining their seamanship. Locally, the Professional Regulation Commission has began to require previously licensed doctors and other professionals to furnish documentary proof that they had either re-trained

12 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE or had undertaken continuing education courses as a requirement for On January 15, 1976 the decision was rendered upholding the renewal of their licenses. It is not claimed that these requirements pose an constitutionality and validity of Ordinance No. 84 and dismissing the cases. unwarranted deprivation of a property right under the due process clause. Hence this petition for certiorari by way of appeal. So long as professionals and other workers meet reasonable regulatory standards no such deprivation exists. ISSUE: Petition is DISMISSED.

WON a municipal corporation, Bocaue, Bulacan, can prohibit the exercise of a lawful trade, the operation of night clubs, and the pursuit of a lawful occupation, such clubs employing hostesses.

DELA CRUZ VS. PARAS G.R. Nos. L-42571-72. July 25, 1983

HELD:

DOCTRINE: It is a general rule that ordinances passed by virtue of the implied power found in the general welfare clause must be reasonable, consonant with the general powers and purposes of the corporation, and not inconsistent with the laws or policy of the State. FACTS: On November 5, 1975, two cases for prohibition with preliminary injunction were filed with the Court of First Instance of Bulacan. The Ordinance is known as the Prohibition and Closure Ordinance of Bocaue, Bulacan. Sec. 3 and 4 provide: Section 3. — Prohibition in the Issuance and Renewal of Licenses, Permits. — Being the principal cause in the decadence of morality and because of their other adverse effects on this community as explained above, no operator of night clubs, cabarets or dance halls shall henceforth be issued permits/licenses to operate within the jurisdiction of the municipality and no license/permit shall be issued to any professional hostess, hospitality girls and professional dancer for employment in any of the aforementioned establishments. The prohibition in the issuance of licenses/permits to said persons and operators of said establishments shall include prohibition in the renewal thereof. Section 4.— Revocation of Permits and Licenses.— The licenses and permits issued to operators of night clubs, cabarets or dance halls which are now in operation including permits issued to professional hostesses, hospitality girls and professional dancers are hereby revoked upon the expiration of the thirty-day period given them as provided in Section 8 hereof and thenceforth, the operation of these establishments within the jurisdiction of the municipality shall be illegal.

NO. This Court holds that reliance on the police power is insufficient to justify the enactment of the assailed ordinance. It must be declared null and void. Police power is granted to municipal corporations in general terms as follows: "General power of council to enact ordinances and make regulations. - The municipal council shall enact such ordinances and make such regulations, not repugnant to law, as may be necessary to carry into effect and discharge the powers and duties conferred upon it by law and such as shall seem necessary and proper to provide for the health and safety, promote the prosperity, improve the morals, peace, good order, comfort, and convenience of the municipality and the inhabitants thereof, and for the protection of property therein." An ordinance enacted by virtue thereof, according to Justice Moreland, speaking for the Court in the leading case of United States v. Abendan 12 "is valid, unless it contravenes the fundamental law of the Philippine Islands, or an Act of the Philippine Legislature, or unless it is against public policy, or is unreasonable, oppressive, partial, discriminating, or in derogation of common right. Where the power to legislate upon a given subject, and the mode of its exercise and the details of such legislation are not prescribed, the ordinance passed pursuant thereto must be a reasonable exercise of the power, or it will be pronounced invalid." In another case penned by Justice Malcolm where the present Administrative Code provision was applied, it was stated by this Court: "The general welfare clause has two branches: One branch attaches itself to the main trunk of municipal authority, and relates to such ordinances and regulations as may be necessary to carry into effect and discharge the powers and duties conferred upon the municipal council by law. With this class we are not here directly concerned. The second branch of the clause is much more independent of the specific functions of the council which are enumerated by law. It authorizes such ordinances as shall seem necessary and proper to provide for the health and safety, promote the prosperity, improve the morals, peace, good order, comfort, and convenience of the municipality and the inhabitants thereof, and for the protection of property

13 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE therein.' It is a general rule that ordinances passed by virtue of the implied judicial correction. That is to comply with the legislative will to allow the power found in the general welfare clause must be reasonable, consonant operation and continued existence of night clubs subject to appropriate with the general powers and purposes of the corporation, and not regulations. In the meanwhile, to compel petitioners to close their inconsistent with the laws or policy of the State." If night clubs were establishments, the necessary result of an affirmance, would amount to no merely then regulated and not prohibited, certainly the assailed ordinance more than a temporary termination of their business. During such time, would pass the test of validity. In the two leading cases above set forth, their employees would undergo a period of deprivation. Certainly, if such this Court had stressed reasonableness, consonant with the general an undesirable outcome can be avoided, it should be. The law should not powers and purposes of municipal corporations, as well as consistency be susceptible to the reproach that it displays less than sympathetic with the laws or policy of the State. It cannot be said that such a sweeping concern for the plight of those who, under a mistaken appreciation of a exercise of a lawmaking power by Bocaue could qualify under the term municipal power, were thus left without employment. Such a deplorable reasonable. The objective of fostering public morals, a worthy and consequence is to be avoided. If it were not thus, then the element of desirable end can be attained by a measure that does not encompass too arbitrariness enters the picture. That is to pay less, very much less, than wide a field. Certainly the ordinance on its face is characterized by full deference to the due process clause with its mandate of fairness and overbreadth. The purpose sought to be achieved could have been attained reasonableness. by reasonable restrictions rather than by an absolute prohibition. Certiorari is granted and the decision of the lower court is reversed, set The decision now under review refers to Republic Act No. 938 as aside, and nullified. amended. It was originally enacted on June 20, 1953. It is entitled: "AN ACT GRANTING MUNICIPAL OR CITY BOARDS AND COUNCILS THE POWER REPUBLIC OF THE PHILIPPINES vs. PHILIPPINE LONG DISTANCE TO REGULATE THE ESTABLISHMENT, MAINTENANCE AND OPERATION OF TELEPHONE COMPANY CERTAIN PLACES OF AMUSEMENT WITHIN THEIR RESPECTIVE G.R. No. L-18841. January 27, 1969 TERRITORIAL JURISDICTIONS.' The Constitution mandates: "Every bill MURILLO shall embrace only one subject which shall be expressed in the title thereof." Since there is no dispute as the title limits the power to DOCTRINE: regulating, not prohibiting, it would result in the statute being invalid if, as was done by the Municipality of Bocaue, the operation of a night club was The State may, in the exercise of its power to expropriate, require a public prohibited. There is a wide gap between the exercise of a regulatory power utility to render services in the general interest, provided just "to provide for the health and safety, promote the prosperity, improve the compensation compensation is paid therefor. morals, and to interdict any calling, occupation, or enterprise. In accordance with the well-settled principle of constitutional construction FACTS: that between two possible interpretations by one of which it will be free from constitutional infirmity and by the other tainted by such grave defect, Sometime in 1933, the defendant PLDT entered into an agreement with the former is to be preferred. A construction that would save rather than RCA Communications Inc., an American corporation, whereby telephone one that would affix the seal of doom certainly commends itself. We have messages coming from the US and received by RCA’s domestic station, done so before We do so again. could automatically be transferred to the lines of PLDT, and vice versa. The petitioner, meanwhile, established the Bureau of Telecommunications. There is reinforcement to the conclusion reached by virtue of a specific It set up its own Government Telephone System by utilizing its own provision of the recently-enacted Local Government Code. The general appropriation and equipment and by renting trunk lines of the PLDT. welfare clause, a reiteration of the Administrative Code provision, is set Thereafter, the State also entered into an agreement with RCA for a joint forth in the first paragraph of Section 149 defining the powers and duties overseas telephone service. of the sangguniang bayan. (hindi ko na cinopy paste sobrang haba) It is clear that municipal corporations cannot prohibit the operation of night Alleging that petitioner is in competition with them, PLDT notified the clubs. They may be regulated, but not prevented from carrying on their former about the competition. PLDT complained that the Bureau was business. It would be, therefore, an exercise in futility if the decision under violating the conditions for using the trunk lines not only for the use of review were sustained. All that petitioners would have to do is to apply government offices but even to serve private persons or the general once more for licenses to operate night clubs. A refusal to grant licenses, public. PLDT gave a notice that if violations were not stopped, PLDT would because no such businesses could legally open, would be subject to sever the connections -which PLDT did. Receiving no reply, PLDT 14 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE disconnected the trunk lines being rented by petitioner; thus, prompting Cuanco and Ernesto Ching Cuanco Kho which is abutting E. R. Santos the plaintiff to file a case before the CFI praying for judgment commanding Street. However, it ix claimed that, as early as February 1993, they had PLDT to execute a contract with the Bureau for the use of the facilities of sold the said property to petitioner JILCSFI as evidenced by a deed of sale PLDT’s telephone system, and for a writ of preliminary injunction against 9 bearing the signature of defendant Ernesto Ching Cuanco Kho and his the defendant to restrain the severance of the existing trunk lines and wife. When apprised about the complaint, JILCSFI filed a motion for leave restore those severed. to intervene. ISSUE: Whether or not the defendant PLDT can be compelled to enter into a contract with the plaintiff. HELD: Yes. The SC explained that “ x x x while the Republic may not compel the PLDT to celebrate a contract with it, the Republic may, in the exercise of the sovereign power of eminent domain, require the telephone company to permit interconnection of the government telephone system and that of the PLDT, as the needs of the government service may require, subject to the payment of just compensation to be determined by the court.” Considering (1) that the PLDT franchise is non- exclusive, (2) that it is unable to adequately cope with the current demands for telephone service, as shown by the number of pending applications therefor; and (3) that the PLDT's right to just compensation for the services rendered to the Government telephone system and its users is herein recognized and preserved, the objections of PLDT are without merit. To uphold the PLDT's contention is to subordinate the needs of the general public. JESUS IS LORD CHRISTIAN SCHOOL FOUNDATION, INC. vs. MUNICIPALITY (now CITY) OF PASIG G.R. No. 152230. August 9, 2005 DOCTRINE: One essential requisite for the exercise of the power of eminent domain is to prove the mandatory requirement of a valid and definite offer to the owner of the property (and its rejection thereof by the latter) before filing its complaint.

RTC allowed the expropriation proceedings. Court of Appeals affirmed the lower court’s decision for the construction of an access road. Petitioner argues that there was no valid and definite offer made before a complaint for eminent domain was filed as the law requires (Art. 35, Rules and Regulations Implementing the Local Government Code). Respondent contends that a letter to purchase was offered to the previous owners and the same was not accepted. ISSUE: Whether or not a letter to purchase is sufficient enough as a definite and valid offer to expropriate. HELD: No. Failure to prove compliance with the mandatory requirement of a valid and definite offer will result in the dismissal of the complaint. The purpose of the mandatory requirement to be first made to the owner is to encourage settlements and voluntary acquisition of property needed for public purposes in order to avoid the expense and delay of a court of action. In the present case, the respondent failed to prove that before it filed its complaint, it made a written definite and valid offer to acquire the property for public use as an access road. The only evidence adduced by the respondent to prove its compliance with Section 19 of the Local Government Code is the photocopy of the letter purportedly bearing the signature of Engr. Jose Reyes, to only one of the co-owners, Lorenzo Ching Cuanco. It bears stressing, however, that the respondent offered the letter only to prove its desire or intent to acquire the property for a right-of-way. The document was not offered to prove that the respondent made a definite and valid offer to acquire the property. Hence, the decision of the lower court and CA are set aside. REPUBLIC VS LEGASPI 670 SCRA 110, G.R. No. 177611. April 18, 2012 GLORIA

FACTS: The Municipality of Pasig needed an access road from E. R. Santos Street, a municipal road near the Pasig Public Market, to Barangay Sto. Tomas Bukid, Pasig, where 60 to 70 houses, mostly made of light materials, were located. The municipality then decided to acquire 51 square meters out of the 1,791-square meter property of Lorenzo Ching Cuanco, Victor Ching

DOCTRINE: The power of eminent domain is the ultimate right of the sovereign power to appropriate any property within its territorial sovereignty for a public

15 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE purpose thru a method that partakes the nature of a compulsory sale. The ISSUE: fact that property is being utilized by respondents for their own private purposes is, consequently, not a valid reason to deny exercise of the right Whether or not the Republic has the right to expropriate the remaining lot of expropriation, for as long as the taking is for a public purpose and just in question. compensation is paid. HELD: FACTS: YES. “The RTC compounded its error when, acting on the motions for The case involves the alienation of a property in Miag-ao, Iloilo. UP Visayas reconsideration filed by the parties, it issued the assailed Order, denying (UPV) acquired Lot No. 1, consisting of ten lots, through a contract of sale petitioner’s right of expropriation over Lot Nos. 21609-A, 21609-D, 21609with respondent Rosalina Libo-on. UPV immediately took possession of the F, 21609-G, 21609-H, 21609-I and 21609-J, on the ground that the same property, and started building thereon road networks, infrastructure and were already used by respondents for their businesses and/or school facilities as part of its educational development plan. However, 2 residences. Subject to the direct constitutional qualification that “private years from such sale, Rosalina wrote a letter, informing UPV that she was property shall not be taken for public use without just compensation,” the rescinding the sale of the subject parcel on the ground that she was no power of eminent domain is, after all, the ultimate right of the sovereign longer the owner of the property in view of her 5 September 1978 power to appropriate any property within its territorial sovereignty for a conveyance thereof by way of barter in favor of respondents Legaspi et al. public purpose through a method that partakes the nature of a compulsory Republic, thru UPV, then filed against respondents the complaint for sale. The fact that said lots are being utilized by respondents Legaspis for eminent domain, alleging, among other matters, that the subject parcel is their own private purposes is, consequently, not a valid reason to deny within the approved and delineated campus of the UPV which had wellexercise of the right of expropriation, for as long as the taking is for a established its presence in the area by building its laboratories, public purpose and just compensation is paid. Our review of the classrooms, faculty and student centers, among other facilities; and, that documents attached to the pleadings filed in connection with the petition it had been constrained to resort to expropriation in view of the failure of before the CA and this Court failed to yield any basis for the RTC’s its efforts to negotiate with respondents for the retention of the property pronouncement that UPV excluded the area occupied by the Villa Marina on which it constructed considerable improvements already being used for Resort from its exercise of the right of expropriation. This is belied by academic purposes. Maintaining that the fair market value of the property Republic’s motion for continuation of the condemnation proceedings for the at the time of its entry was P49,298.00, UPV sought confirmation of its seven remaining lots into which Lot No. 1 had been subdivided, UPV’s right of condemnation as well as the fixing of the just compensation for letter-protest against respondent Rodolfo Legaspi, Sr.’s occupation of the the property. property, its motion for the grant of a writ of possession of the entire lot and the motions for reconsideration of petitioner and UPV filed from the The RTC issued an order granting petitioner’s motion to allow UPV to condemnation order. Considering that the site of the Villa Marina Resort continue its possession of the subject parcel upon deposit with the Iloilo appears to have already been earmarked for UPV’s proposed National Provincial Treasurer of the sum of P50,070.00, representing the Institute of Marine Biotechnology, the RTC clearly abused its discretion provisional valuation of the property. Consequently, the RTC issued a when it ruled that the exclusion of 31,617 square meters from the original condemnation order. Such order initially included only three lots of the 40,133 sought to be expropriated would not adversely affect UPV’s ten lots in Lot No. 1, so Republic moved for the continuation of the operations. Granted that no part of the ground of a public cemetery can be condemnation proceedings insofar as the remaining seven lots were taken for other public uses under a general authority, there is, likewise, no concerned. The RTC issued a condemnation order for the remaining lots, showing in the record of the location and area of the public cemetery of with the exclusion of the Villa Marina Beach Resort. Seeking the inclusion Miag-ao in relation to the subject property.” The CA’s Decision is therefore of such lot in the expropriation, Republic filed a motion for reconsideration, REVERSED and SET ASIDE. which was denied by the RTC. Republic then filed the Rule 65 petition for certiorari and mandamus, assailing the RTC’s order dated 31 May 2004 on NPC VS ILETO the ground that grave abuse of discretion attended the denial of the 678 SCRA 107, G.R. No. 169957, July 11, 2012. expropriation of the subject lots after the right to expropriate the same was earlier upheld in the likewise assailed order dated 17 November 2003. DOCTRINE: The petition was denied.

16 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE Expropriation cases which do not involve mere liens on the property in the form of aerial easements, such as installment of transmission lines, require HELD: payment of just compensation because of the imposition of additional limitations to the landowners interfering with the owner’s right to possess YES. “Republic Act No. 6395 grants the NPC the power to acquire ‘property and enjoy their properties. incident to, or necessary, convenient or proper to carry out the purposes The determination of just compensation in expropriation cases is a for which [it] was created,’ namely: the construction of generation and function addressed to the discretion of the courts, and may not be usurped transmission facilities to provide electricity for the entire country. xxx At by any other department of the government. the heart of this argument is the mistaken assumption that what are involved are mere liens on the property in the form of aerial easements. FACTS: While it may be true that the transmission lines merely pass over the affected properties, the easement imposes the additional limitation that To materialize its Northwestern Luzon Transmission Project, the National the landowners are prohibited from constructing any improvements or Power Corporation (NPC) filed a complaint, which was subsequently planting any trees that exceed three (3) meters within the aerial right of amended, seeking to expropriate certain parcels of land in Bulacan owned way area. This prohibition clearly interferes with the landowners’ right to by Ileto et al. After depositing with the Land Bank the amount of possess and enjoy their properties. xxx Apart from interfering with the Php204,566.60, the NPC received actual possession of the properties. To attributes of ownership, we have articulated in our observation in National determine the value of the just compensation, the RTC constituted a team Power Corp. v. Sps. Gutierrez that these transmission lines, because of the of commissioners. However, owners Heirs of Sofia Mangahas of one high-tension current that passes through them, pose a danger to the lives property and the NPC filed with the RTC a jointly executed compromise and limbs of those in the surrounding areas, and, thus, serve to limit the agreement on NPC’s acquisition of 13,855 sq m. of the 95,445 sq m. activities that can be done on these lands. We also declared in National property owned by the former for payment with an assessed value of Power Corporation v. Purefoods Corporation that Section 3A of Republic Php250.00/sqm. Such compromise agreement was found by the RTC to Act No. 6395, as amended (which provides a fixed formula in the be valid. Bugayong, the commissioner for NPC, opposed such agreement, computation of just compensation in cases of acquisition of easements of and recommended that NPC pay an easement fee of 10% of right of way) is not binding upon this Court. This is in keeping with the Php85.00/sqm. for the agricultural land that would merely be traversed by established rule that the determination of ‘just compensation’ in eminent the transmission lines. But the RTC approved Commissioners Tanyag and domain cases is a judicial function.” It was established by the Supreme Villacorta’s recommendation of payment of just compensation for all Court that it is necessary for NPC to pay to the landowners just affected lands pegged at Php250.00/sqm. The NPC filed a motion for compensation for the affected properties instead of mere easement fees, reconsideration, which was denied by the RTC. The OSG, representing because of the nature of the public use for which the expropriation was NPC, filed an appeal with the CA, assailing the approval of the compromise intended. NPC’s reliance on the provision in R.A. No. 6395, requiring the agreement, and the propriety of paying just compensation instead of payment of mere easement fee, was misplaced. merely the 10% easement fee pursuant to Section 3A of R.A. No. 6395, as amended. YES. Such determination of just compensation in expropriation cases is a function addressed to the discretion of the courts, and may not be usurped The CA (1) affirmed the validity of the compromise agreement, (2) upheld by any other department of the government. Any valuation for just the Php250.00 valuation of just compensation in the compromise compensation provided in statutes may only serve as guiding principle, but agreement for being congruent with the amount of just compensation for not substitute the court’s own decision. In this regard, both the RTC and residential lands as listed by the NPC in its Board Res. No. 97-246, and (3) the CA erred in using the statutes in determining just compensation. recognized the error of RTC in fixing valuation of other expropriated lands Although the determination of just compensation lies within the trial at Php250.00 although they are not residential. court’s discretion, it should not be done arbitrarily or capriciously. The decision of the trial court must be based on all established rules, correct ISSUE: legal principles, and competent evidence. The courts are proscribed from basing their judgments on speculations and surmises. In light of the (1) Whether or not the NPC must pay just compensation to landowners foregoing, we find that the trial court arbitrarily fixed the amount of just instead of a mere aerial easement fee. compensation due the landowners at Php250.00 per square meter. Thus, (2) Whether or not the CA and the RTC erred in the determination of the the Court has no alternative but to remand the case to the court of origin just compensation. for the proper determination of just compensation. 17 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE predecessor-in-interest. The said properties were to be sold and FILSTREAM INTERNATIONAL INCORPORATED distributed to qualified tenants of the area pursuant to the Land Use vs. COURT OF APPEALS Development Program of the City of Manila. G.R. No. 125218. January 23, 1998 CRUZ, CHANINE On May 23, 1994, City of Manila filed a complaint for eminent domain before the RTC of Manila, seeking to expropriate the aforecited DOCTRINE: parcels of land owned by Filstream which are situated at Antonio Rivera Local government units are not given an unbridled authority when Street, Tondo II, Manila. exercising their power of eminent domain in pursuit of solutions to these Pursuant to the complaint filed by City of Manila, the trial court issued a problems, thus, the exercise by local government units of the Writ of Possession in favor of the former which ordered the power of eminent domain is not without limitations. transfer of possession over the disputed premises to the City of Manila. FACTS:

ISSUE:

Filstream International, Inc., is the registered owner of the properties subject of this dispute consisting of adjacent parcels of land situated in Antonio Rivera Street, Tondo II, Manila. On January 7, 1993, petitioner filed an ejectment suit before the Metropolitan Trial Court of Manila against the occupants of the above mentioned parcels of land (herein private respondents in G. R. No. 128077) on the grounds of termination of the lease contract and non-payment of rentals. Judgment was rendered by the MTC ordering private respondents to vacate the premises and pay back rentals to petitioner.

Whether or not the City of Manila has the power to expropriate private property despite a final judgment in favor of Filstream?

Not satisfied, private respondents appealed the decision to the Regional Trial Court of Manila, which in turn affirmed the decision of the MTC in its decision. Still not content, private respondents proceeded to the Court of Appeals via a petition for review. The result however remained the same as the CA affirmed the decision of the RTC. Thereafter, no further action was taken by the private respondents, as a result of which the decision in the ejectment suit became final and executory. However, it appeared that during the pendency of the ejectment proceedings, private respondents filed a complaint for Annulment of Deed of Exchange against Filstream. It was at this stage that respondent City of Manila came into the picture when the city government approved Ordinance No. 7813 on November 5, 1993, authorizing Mayor Alfredo S. Lim to initiate the acquisition by negotiation, expropriation, purchase, or other legal means certain parcels of land registered under T.C.T. Nos. 169193, 169198, 169190, 169200, 169202 and 169192 of the Registry of Deeds of Manila which formed part of the properties of Filstream then occupied by private respondents. Subsequently, the City of Manila approved Ordinance No. 7855 declaring the expropriation of certain parcels of land situated along Antonio Rivera and Fernando Ma. Guerrero streets in Tondo, Manila which were owned by Mr. Enrique Quijano Gutierrez, petitioner's

RULING: Yes. There is no dispute as to the existence of a final and executory judgment in favor of petitioner Filstream ordering the ejectment of private respondents from the properties subject of the dispute. However, it must also be conceded that the City of Manila has an undeniable right to exercise its power of eminent domain within its jurisdiction. More specifically, the City of Manila has the power to expropriate private property in the pursuit of its urban land reform and housing program as explicitly laid out in the Revised Charter of the City of Manila. In fact, the City of Manila's right to exercise these prerogatives notwithstanding the existence of a final and executory judgment over the property to be expropriated has been upheld by this Court in the case of Philippine Columbian Association vs. Panis. Nevertheless, despite the existence of a serious dilemma, local government units are not given an unbridled authority when exercising their power of eminent domain in pursuit of solutions to these problems. The basic rules shall have to be followed. The exercise by local government units of the power of eminent domain is not without limitations. Private lands rank last in the order of priority for purposes of socialized housing. In the same vein, expropriation proceedings are to be resorted to only when the other modes of acquisition have been exhausted. Compliance with these conditions must be deemed mandatory because these are the only safeguards in securing the right of owners of private property to due process when their property is expropriated for public use.

18 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE Filstream's properties were expropriated and ordered condemned in favor of the City of Manila sans any showing that resort to the Whether or not Ordinance No. 1843 is violative of the Constitution? acquisition of other lands listed under Sec. 9 of RA 7279 have proved futile. Evidently, there was a violation of Filstream's right to due process RULING: which must accordingly be rectified. ED Yes. Under Section 48 of RA 7160, otherwise known as the Local LAGCAO vs. LABRA Government Code of 1991, local legislative power shall be exercised G.R. No. 155746, October 13, 2004 by the Sangguniang Panlungsod of the city. The legislative acts of the Sangguniang Panlungsod in the exercise of its lawmaking authority are DOCTRINE: denominated ordinances. Local government units have no inherent power of eminent domain and can exercise it only when expressly authorized While we recognize that housing is one of the most serious by the legislature. By virtue of RA 7160, Congress confer red social problems of the country, local government units do not upon local government units the power to expropriate. Ordinance No. possess unbridled authority to exercise their power of eminent 1843 which authorized the expropriation of petitioners’ lot was enacted by domain in seeking solutions to this problem. Thus, the exercise by local the Sangguniang Panlungsod of Cebu City to provide socialized government units of the power of eminent domain is not absolute. housing for the homeless and low -income residents of the City. However, while we recognize that housing is one of the most FACTS: serious social problems of the country, local government units do not possess unbridled authority to exercise their power The Province of Cebu donated 210 lots to the City of Cebu. But then, in of eminent domain in seeking solutions to this problem. There are two late 1965, the 210 lots, including Lot 1029, reverted to the Province of legal provisions which limit the exercise of this power: (1) no Cebu. Consequently, the province tried to annul the sale of Lot 1029 person shall be deprived of life, liberty, or property without due process by the City of Cebu to the petitioners. This prompted the latter of law, nor shall any person be denied the equal protection of the to sue the province for specific performance and damages in the then laws; and (2) private property shall not be taken for public use Court of First Instance. The court a quo ruled in favor of petitioners and without just compensation. Thus, the exercise by local government units ordered the Province of Cebu to execute the final deed of sale in favor of of the power of eminent domain is not absolute. In fact, Section 19 petitioners. The Court of Appeals affirmed the decision of the trial court. of RA 7160 itself explicitly states that such exercise must comply with the provisions of the Constitution and pertinent laws. After acquiring title, petitioners tried to take possession of the lot only to discover that it was ESLABAN, JR. vs. DE ONORIO already occupied by squatters. Thus G.R. No. 146062. June 28, 2001 petitioners instituted ejectment proceedings against the AREVALO squatters. The Municipal Trial Court in Cities (MTCC) ordering the squatters to vacate the lot. On appeal, the RTC affirmed the MTCC’s DOCTRINE: decision and issued a writ of execution and order of demolition. However, when the demolition order was about to be implemented, Cebu The value of the property must be determined either as of the date of the City Mayor Alvin Garcia wrote two letters to the MTCC, requesting the taking of the property or the filing of the complaint, “whichever came deferment of the demolition on the ground that t he City was still first.” looking for a relocation site for the squatters. Acting on the mayor’s request, the MTCC issued two orders suspending the demolition. FACTS: Unfortunately for petitioners, during the suspension period, the Sangguniang Panlungsod of Cebu City passed a resolution which identified Respondent Clarita Vda. de Enorio is the owner of a lot in Barangay M. Lot 1029 as a socialized housing site pursuant to RA 7279. Petitioners Roxas, Sto. Niño, South Cotabato. On October 6, 1981, Santiago Eslaban, filed with the RTC an action for declaration of nullity of Jr., Project Manager of the National Irrigation Administration (NIA), Ordinance No. 1843 for being unconstitutional. approved the construction of the main irrigation canal of the NIA on the said lot, affecting a 24,660 square meter portion thereof. Respondent’s ISSUE: husband agreed to the construction of the NIA canal provided that they be 19 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE paid by the government for the area taken after the processing of Comprehensive Agrarian Reform Law (R.A. No. 6657). Private documents by the Commission on Audit. respondent's certificates of title were cancelled and new ones were issued and distributed to farmer-beneficiaries. Sometime in 1983, a Right-of-Way agreement was executed between respondent and the NIA. The NIA then paid respondent the amount The lands were valued by the Land Bank of the Philippines at P19,312.24 of P4,180.00 as Right-of-Way damages. Respondent subsequently per hectare for the riceland and P4,267.68 per hectare for brushland. It executed an Affidavit of Waiver of Rights and Fees whereby she waived appears, however, that in the Statement of Agricultural Landholdings any compensation for damages to crops and improvements which she ("LISTASAKA") which private respondent had earlier filed with the suffered as a result of the construction of a right-of-way on her property. Department of Agrarian Reform (DAR), a lower "Fair Value Acceptable to On December 10, 1990, Respondent demanded payment for taking of Landowner" was stated and that based on this statement, the Land Bank property but petitioner refused to pay. RTC ordered NIA to pay of the Philippines valued private respondent's lands uniformly at P107,517.60 as just compensation. CA affirmed. P15,311.79 per hectare and fixed the amount of P390,557.84 as the total compensation to be paid for the lands. ISSUE: Private respondent rejected the government's offer. On December 12, Whether or not the value of just compensation shall be determined from 1992, private respondent filed a Petition for Just Compensation in the the time of the taking or from the time of the finality of the decision. Regional Trial Court of Tagum, Davao del Norte, sitting as a Special Agrarian Court. Private respondent prayed that DAR be ordered to pay HELD: P24,717.40 per hectare. Payment should be made from the time of the taking. With respect to the compensation which the owner of the condemned property is entitled to receive, it is likewise settled that it is the market value which should be paid or “that sum of money which a person, desirous but not compelled to buy, and an owner, willing but not compelled to sell, would agree on as a price to be given and received therefor. Further, just compensation means not only the correct amount to be paid to the owner of the land but also the payment of the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered “just” for then the property owner is made to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss. REPUBLIC (DAR) VS CA and ACIL CORPORATION GR NO. 122256 DOCTRINE: Thus Special Agrarian Courts, which are Regional Trial Courts, are given original and exclusive jurisdiction over two categories of cases, to wit: (1) "all petitions for the determination of just compensation to landowners" and (2) "the prosecution of all criminal offenses under [R.A. No. 6657]." FACTS: Acil Corporation owned several hectares of land in Linoan, Montevista, Davao del Norte, which the government took pursuant to the

However, the RTC dismissed its petition on the ground that private respondent should have appealed to the Department of Agrarian Reform Adjudication Board (DARAB), pursuant to the latter's Revised Rules of Procedure, before recourse to it (the RTC) could be had. In addition the RTC found that, in violation of the DARAB's rules of procedure the petition had been filed more than fifteen (15) days after notice of the decision of the PARAD. ISSUE: Whether in cases involving claims for just compensation under R.A. No. 6657 an appeal from the decision of the provincial adjudicator to the DARAB must first be made before a landowner can resort to the RTC under §57 HELD: No. Under the law, the Land Bank of the Philippines is charged with the initial responsibility of determining the value of lands placed under land reform and the compensation to be paid for their taking. Through notice sent to the landowner pursuant to §16(a) of R.A. No. 6657, the DAR makes an offer. In case the landowner rejects the offer, a summary administrative proceeding is held and afterward the provincial (PARAD), the regional (RARAD) or the central (DARAB) adjudicator as the case may be, depending on the value of the land, fixes the price to be paid for the land. If the landowner does not agree to the price fixed, he may bring the matter to the RTC acting as Special Agrarian Court. 8 This in essence is the procedure for the determination of compensation cases under R.A. No.

20 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE 6657. In accordance with it, the private respondent's case was properly Administrative Order No. 9, Series of 1990 and sought to compel the DAR brought by it in the RTC, and it was error for the latter court to have to expedite the pending summary administrative proceedings to finally dismissed the case. In the terminology of §57, the RTC, sitting as a determine the just compensation of their properties, and the Landbank to Special Agrarian Court, has "original and exclusive jurisdiction over all deposit in cash and bonds the amounts respectively "earmarked", petitions for the determination of just compensation to landowners." "reserved" and "deposited in trust accounts" for private respondents, and to allow them to withdraw the same. Through a Resolution of the Second LAND BANK OF THE PHILIPPINES VS. CA Division this Court referred the petition to respondent Court of Appeals for G.R. NO. 118712, OCTOBER 6, 1995 proper determination and disposition. Private respondents argued that MATILLANO Administrative Order No. 9, Series of 1990 was issued without jurisdiction and with grave abuse of discretion because it permits the opening of trust DOCTRINE: accounts by the Landbank, in lieu of depositing in cash or bonds in an accessible bank designated by the DAR, the compensation for the land There is no basis in allowing the opening of a trust account in behalf of the before it is taken and the titles are cancelled as provided under Section landowner as compensation for his property because, as heretofore 16(e) of RA 6657. 9 Private respondents also assail the fact that the DAR discussed, Section 16(e) of RA 6657 is very specific that the deposit must and the Landbank merely "earmarked", "deposited in trust" or "reserved" be made only in "cash" or in "LBP bonds". the compensation in their names as landowners despite the clear mandate that before taking possession of the property, the compensation must be FACTS: deposited in cash or in bonds. Petitioner DAR, however, maintained that Administrative Order No. 9 is a valid exercise of its rule-making power Separate petitions for review were filed by petitioners Department of pursuant to Section 49 of RA 6657. Moreover, the DAR maintained that Agrarian Reform (DAR) and LBP) following the adverse ruling by the CA in. the issuance of the "Certificate of Deposit" by the Landbank was a However, upon motion filed by private respondents, the petitions were substantial compliance with Section 16(e) of RA 6657 and the ruling in the ordered consolidated. Petitioners assail the decision of the CA which case of Association of Small Landowners in the Philippines, Inc., et al. vs. granted private respondents' Petition for Certiorari and Mandamus. Hon. Secretary of Agrarian Reform. For its part, petitioner Landbank a) DAR Administrative Order No. 9, Series of 1990 is declared null declared that the issuance of the Certificates of Deposits was in and void insofar as it provides for the opening of trust accounts in lieu of consonance with Circular Nos. 29, 29-A and 54 of the Land Registration deposits in cash or bonds; Authority where the words "reserved/deposited" were also used. b) Respondent Landbank is ordered to immediately deposit — not merely "earmark", "reserve" or "deposit in trust" — with an accessible On October 20, 1994, the respondent court rendered the assailed decision bank designated by respondent DAR in the names of the petitioners within in favor of private respondents. Petitioners filed a motion for the parameters of Sec. 18 (1) of RA 6657 reconsideration but respondent court denied the same. c) The DAR-designated bank is ordered to allow the petitioners to withdraw the above-deposited amounts without prejudice to the final ISSUE: determination of just compensation by the proper authorities; and Whether or not the opening of trust accounts by the Landbank, in lieu of d) Respondent DAR is ordered to 1) immediately conduct summary depositing in cash or bonds in an accessible bank designated by the DAR is administrative proceedings to determine the just compensation for the tantamount to Just Compensastion? lands of the petitioners giving the petitioners 15 days from notice within which to submit evidence and to 2) decide the cases within 30 days after HELD: they are submitted for decision. Private respondents are landowners whose landholdings were acquired by the DAR and subjected to transfer No.The contention is untenable. Section 16(e) of RA 6657 provides as schemes to qualified beneficiaries under the CARL Law. (CARL, Republic follows: Act No. 6657).Aggrieved by the alleged lapses of the DAR and the (e) Upon receipt by the landowner of the corresponding payment or, Landbank with respect to the valuation and payment of compensation for in case of rejection or no response from the landowner, upon the deposit their land pursuant to the provisions of RA 6657, private respondents filed with an accessible bank designated by the DAR of the compensation in with this Court a Petition for Certiorari and Mandamus with prayer for cash or in LBP bonds in accordance with this Act, the DAR shall take preliminary mandatory injunction. Private respondents questioned the immediate possession of the land and shall request the proper Register of validity of DAR Administrative Order No. 6, Series of 1992 6and DAR 21 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Reform (DAR) for P 10,480,000.00 or P 21,165.00. The Landbank of the Republic of the Philippines. . Philippines (LBP) used the guidelines set forth in DAR Administrative Order It is very explicit therefrom that the deposit must be made only in "cash" (AO) No. 17 series of 1989 as amended by DAR AO No. 3 series of 1991 to or in "LBP bonds". Nowhere does it appear nor can it be inferred that the fix the value of these lands. HFC rejected the valuation. The voluntary deposit can be made in any other form. If it were the intention to include a offer to sell was referred to the DAR adjudication Board. The Regional "trust account" among the valid modes of deposit, that should have been adjudicator fixed the value of landholdings at P 5,324,529.00. HFC filed a made express, or at least, qualifying words ought to have appeared from case with the Regional Trial Court (RTC)of Masbate acting as Special which it can be fairly deduced that a "trust account" is allowed. In sum, Agrarian Court against the DAR Secretary and LBP, praying to compensate there is no ambiguity in Section 16(e) of RA 6657 to warrant an expanded HFC for its landholdings amounting to P 12,440,000.00. In its amended construction of the term "deposit". The conclusive effect of administrative complaint, HFC increased the valuation P 20,000,000.00. LBP, on the other construction is not absolute. Action of an administrative agency may be hand, revalued the land under TCT No. T-2872 at P 1,373,244.78, which disturbed or set aside by the judicial department if there is an error of law, was formerly fixed at P 2,527,749.60; and TCT No. T-2549 at P a grave abuse of power or lack of jurisdiction or grave abuse of discretion 1,513,097.57, which was previously fixed at P 2,796,800.00. The RTC clearly conflicting with either the letter or the spirit of a legislative made its own valuation when the Board of Commissioners could not agree enactment. In this regard, it must be stressed that the function of on the common valuation. The RTC took judicial notice of the fact that a promulgating rules and regulations may be legitimately exercised only for portion of 10 hectares of that land is a commercial land because it is near the purpose of carrying the provisions of the law into effect. The power of the commercial district of Cataingan, Masbate. Both parties appealed to administrative agencies is thus confined to implementing the law or the Court of Appeals (CA). HFC argued that the government illegally failed putting it into effect. Corollary to this is that administrative regulations to pay just compensation pursuant when LBP opened trust account in its cannot extend the law and amend a legislative enactment, for settled is behalf which is contrary to existing jurisprudence. LBP on the other hand the rule that administrative regulations must be in harmony with the argued that the RTC erred when it disregarded the formula set forth in provisions of the law. And in case there is a discrepancy between the basic DAR AO No. 6 series of 1992 as amended by DAR AO No. 11 series of law and an implementing rule or regulation, it is the former that prevails. 1994 and in declaring the 10 hectares of that land as a commercial land. In the present suit, the DAR clearly overstepped the limits of its power to The CA decided in favor of HFC. CA held that the lower courts are not enact rules and regulations when it issued Administrative Circular No. 9. bound by the factors enumerated in Section 17 of RA 6657 which are mere There is no basis in allowing the opening of a trust account in behalf of the guide in determining just compensation. Also, the valuation by LBP based landowner as compensation for his property because, as heretofore on the formula was too low and, therefore, confiscatory. LBP argued that discussed, Section 16(e) of RA 6657 is very specific that the deposit must the CA erred in not applying the formula based on law and that the land be made only in "cash" or in "LBP bonds". In the same vein, petitioners taken pursuant to the State’s agrarian reform program involves both the cannot invoke LRA Circular Nos. 29, 29-A and 54 because these exercise of the State’s power of eminent domain and the police power of implementing regulations cannot outweigh the clear provision of the law. the State. Consequently, the just compensation for land taken for agrarian Respondent court therefore did not commit any error in striking down reform should be less than the just compensation given in the ordinary Administrative Circular No. 9 for being null and void. exercise of eminent domain. Hence, this petition. LBP v. HONEYCOMB FARMS CORPORATION G.R. No. 169903, February 29, 2012 DOCTRINE: The compensation to be paid should not be less than the market value of the property although the taking was not done in LBP’s traditional exercise of the power of eminent domain

ISSUES: Whether the RTC erred when it made its own valuation and disregarded the DAR formula/ Whether application of DAR’s formula is mandatory in determining Just Compensation, hence the RTC and CA erred when both disregarded the same; Whether the compensation to be paid should be less than the market value of the property because the taking was not done in LBP’s traditional exercise of the power of eminent domain. HELD:

FACTS: Honeycomb Farms Corp. (HFC) voluntarily offered their two parcels of land to the Department of Agrarian

Petition GRANTED Mandatory application of the DAR formula To guide the RTC in its function as Special Agrarian Court, Section 17 of RA 6657 enumerates the factors that have to be taken into consideration to

22 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE accurately determine just compensation. This provision states: Section 17. Determination of Just Compensation. – In determining just compensation, The Supreme Court brushed aside the LBP’s attempt to differentiate just the cost of acquisition of the land, the current value of like properties, its compensation paid in what it terms as “traditional” exercise of eminent nature, actual use and income, the sworn valuation by the owner, the tax domain and eminent domain in the context of agrarian reform in Apo declarations, and the assessment made by government assessors, shall be Fruits Corporation and Hijo Plantation, Inc. v. Land Bank of the Philippines, considered. The social and economic benefits contributed by the farmers thus: To our mind, nothing is inherently contradictory in the public and the farmworkers and by the Government to the property, as well as purpose of land reform and the right of landowners to receive just the non-payment of taxes or loans secured from any government financing compensation for the expropriation by the State of their properties. That institution on the said land, shall be considered as additional factors to the petitioners are corporations that used to own large tracts of land determine its valuation. This ruling plainly impose on the RTC the duty to should not be taken against them. As Mr. Justice Isagani Cruz eloquently apply the formula laid down in the pertinent DAR administrative put it: [S]ocial justice – or any justice for that matter – is for the regulations to determine just compensation. deserving, whether he be a millionaire in his mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we are called upon to tilt Clearly, the CA and the RTC acted with grievous error when they the balance in favor of the poor, to whom the Constitution fittingly extends disregarded the formula laid down by the DAR, and chose instead to come its sympathy and compassion. But never is it justified to prefer the poor up with their own basis for the valuation of the subject land. The simply because they are poor, or to reject the rich simply because they are compensation to be paid should not be less than the market value of the rich, for justice must always be served, for poor and rich alike, according property although the taking was not done in LBP’s traditional exercise of to the mandate of the law. the power of eminent domain.The Supreme Court discredit the argument of LBP that since the taking done by the government for purposes of LBP VS. SANTIAGO agrarian reform is not a traditional exercise of the power of eminent G.R. NO. 182209, OCTOBER 3, 2012 domain but one which is done in pursuance of social justice and which involves the State’s police power, the just compensation to be paid to the DOCTRINE: landowners for these parcels of agricultural land should be less than the market value of the property. When the State exercises its inherent power It should also be pointed out, however, that in the more recent case of of eminent domain, the Constitution imposes the corresponding obligation Land Bank of the Philippines vs. Natividad, the Court categorically ruled: to compensate the landowner for the expropriated property. This principle "the seizure of the landholding did not take place on the date of effectivity is embodied in Section 9, Article III of the Constitution, which provides: of P.D. No. 27 but would take effect on the payment of just "Private property shall not be taken for public use without just compensation." compensation." When the State exercises the power of eminent domain in the implementation of its agrarian reform program, the constitutional FACTS: provision which governs is Section 4, Article XIII of the Constitution, which provides that the State shall, by law, undertake an agrarian reform Petitioner Land Bank of the Philippines (LBP) as the financial intermediary program founded on the right of farmers and regular farmworkers who are of the agrarian reform program of the government. Emiliano Santiago, Jr. landless, to own directly or collectively the lands they till or, in the case of (respondent) is one of the heirs of Emiliano Santiago (Santiago), the other farmworkers, to receive a just share of the fruits thereof. To this registered owner of an 18.5615-hectare parcel of land in Laur, Nueva end, the State shall encourage and undertake the just distribution of all Ecija. Pursuant to the government’s Operation Land Transfer (OLT) agricultural lands, subject to such priorities and reasonable retention limits Program under Presidential Decree No. 27, the Department of Agrarian as the Congress may prescribe, taking into account ecological, Reform (DAR) acquired 17.4613 hectares of the subject property. In developmental, or equity considerations, and subject to the payment of determining the just compensation payable to Santiago, the LBP and the just compensation. Notably, this provision also imposes upon the State DAR used the following formula under Presidential Decree No. 27, which the obligation of paying the landowner compensation for the land taken, states: For the purpose of determining the cost of the land to be even if it is for the government’s agrarian reform purposes. Specifically, transferred to the tenant- farmer pursuant to this Decree, the value of the the provision makes use of the phrase “just compensation,” the same land shall be equivalent to two and one-half (2-1/2) times the average phrase used in Section 9, Article III of the Constitution. That the harvest of three normal crop years immediately preceding the compensation mentioned here pertains to the fair and full price of the promulgation of this Decree and Executive Order No. 228, which provides taken property. for this formula: 23 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE cites this Court’s ruling in Gabatin v. Land Bank of the Philippines, wherein Land Value (LV) = (Average Gross Production [AGP] x 2.5 Hectares x we held that the GSP should be pegged at the time of the taking of the Government Support Price [GSP]) properties, which in this case was deemed effected on October 21, 1972, the effectivity date of Presidential Decree No. 27. This Court notes that Using the foregoing formula, the land value of the subject property was even before respondent filed a petition for the judicial determination of the pegged at 3,915 cavans of palay, using 90 cavans of palay per year for the just compensation due him for the subject property before the SAC Branch irrigated portion and 44.33 cavans of palay per year for the unirrigated 23 on November 20, 1998, Republic Act No. 6657, otherwise known as the portion, as the AGP per hectare in San Joseph, Laur, Nueva Ecija, as Comprehensive Agrarian Reform Law of 1988, already took effect on June established by the Barangay Committee on Land Production (BCLP), based 15, 1988. The determination of the just compensation therefore in this on three normal crop years immediately preceding the promulgation of case depends on the valuation formula to be applied: the formula under Presidential Decree No. 27. As Santiago had died earlier on November 1, Presidential Decree No. 27 and Executive Order No. 228 or the formula 1987 the LBP, in 1992, reserved in trust for his heirs the amount of P under Republic Act No. 6657? This Court finds the case of Meneses v. 135,482.12, as just compensation computed by LBP and DAR using the Secretary of Agrarian Reform applicable insofar as it has determined what above formula with P 35.00 as the GSP per cavan of palay for the year formula should be used in computing the just compensation for property 1972 under Executive Order No. 228. This amount was released to expropriated under Presidential Decree No. 27: Respondent correctly cited Santiago’s heirs on April 28, 1998 pursuant to this Court’s decision in LBP the case of Gabatin v. Land Bank of the Philippines, where the Court ruled vs. CA, on May 21, 1998 and June 1, 1998, also paid the heirs the sum of that "in computing the just compensation for expropriation proceedings, it P 353,122.62, representing the incremental interest of 6% on the is the value of the land at the time of the taking or October 21, 1972, the preliminary compensation, compounded annually for 22 years,20 pursuant effectivity date of P.D. No. 27, not at the time of the rendition of to Provincial Agrarian Reform Council (PARC) Resolution No. 94-24-121 judgment, which should be taken into consideration." Under P.D. No. 27 and DAR Administrative Order (AO) No. 13, series of 1994.However, on and E.O. No. 228, the following formula is used to compute the land value November 20, 1998, respondent, as a co-owner and administrator of the for palay: subject property, filed a petition before the RTC of Cabanatuan City acting as a Special Agrarian Court, for the "approval and appraisal of just LV (land value) = 2.5 x AGP x GSP x (1.06) compensation" due on the subject property. While respondent was in total agreement with the land valuation of the subject property at 3,915 cavans It should also be pointed out, however, that in the more recent case of of palay, he contended that the 1998 GSP per cavan, which was P 400.00, Land Bank of the Philippines vs. Natividad, the Court categorically ruled: should be used in the computation of the just compensation for the subject "the seizure of the landholding did not take place on the date of effectivity property. Moreover, the incremental interest of 6% compounded annually, of P.D. No. 27 but would take effect on the payment of just as per PARC Resolution No. 94-24-1, should be imposed on the principal compensation." Under Section 17 of R.A. No. 6657, the following factors amount from 1972 to 1998 or for 26 years. are considered in de termining just compensation, to wit: Sec. 17. Determination of Just Compensation. - In determining just compensation, The LBP is now before us, claiming that its petition should be allowed for the cost of acquisition of the land, the current value of like properties , its the following reason: nature, actual use and income, the sworn valuation by the owner, the tax declarations , and the assessment made by government assessors shall be ISSUE: considered. The social and economic benefits contributed by the farmers and the farm-workers and by the Government to the property as well as WHETHER OR NOT THE COURT OF APPEALS CAN DISREGARD THE the non-payment of taxes or loans secured from any government financing FORMULA PRESCRIBED UNDER P.D. 27 AND E.O. 228 IN FIXING THE JUST institution on the said land shall be considered as additional factors to COMPENSATION determine its valuation. Consequently, the question that arises is which of these two rulings should be applied? Under the circumstances of this case, HELD: the Court deems it more equitable to apply the ruling in the Natividad case. In said case, the Court applied the provisions of R.A. No. 6657 in LBP has been consistent in its position that the formula prescribed in computing just compensation for property expropriated under P.D. No. 27, Presidential Decree No. 27 and Executive Order No. 228 is the only stating, viz: Land Bank's contention that the property was acquired for formula that should be applied in the computation of the valuation of lands purposes of agrarian reform on October 21, 1972, the time of the acquired under Presidential Decree No. 27. In support of its position, LBP effectivity of PD 27, ergo just compensation should be based on the value 24 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO

POLITICAL LAW REVIEW CASE DIGESTS [3]: FUNDAMENTAL POWERS OF THE STATE of the property as of that time and not at the time of possession in 1993, is likewise erroneous. In Office of the President, Malacañang, Manila v. Court of Appeals, we ruled that the seizure of the land holding did not take place on the date of effectivity of PD 27 but would take effect on the payment of just compensation. Under the factual circumstances of this case, the agrarian reform process is still incomplete as the just compensation to be paid private respondents has yet to be settled. Considering the passage of Republic Act No. 6657 (RA 6657) before the completion of this process, the just compensation should be determined and the process concluded under the said law. Indeed, RA 6657 is the applicable law, with PD 27 and EO 228 having only suppletory effect, conformably with our ruling in Paris v. Alfeche. The assailed September 28, 2007 Decision and March 14, 2008 Resolution of the Court of Appeals in CA-G.R. SP No. 82467 are REVERSED and SET ASIDE for lack of factual and legal basis. Agrarian Case No. 125-AF is REMANDED back to the RTC of Cabanatuan City to determine the just compensation.

25 AREVALO, CRUZ (CHANINE), CRUZ (CHRISTINE), GATACELO, GLORIA, GOMEZ, LAZARO, MATILLANO, MUNEZ, MURILLO