IV.

FUNDAMENTAL POWERS OF THE STATE

A. GENERAL PRICIPLES

POWER OF THE COURTS TO ANNUL IMPROVIDENT EXERCISE OF POLICE POWER

G.R. No. L-3491 June 24, 1983

CITY GOVERNMENT OF QUEZON CITY and CITY COUNCIL OF QUEZON CITY, petitioners,
vs.
HON. JUDGE VICENTE G. ERICTA as Judge of the Court of First Instance of Rizal, Quezon City, Branch XVIII;
HIMLAYANG PILIPINO, INC., respondents.

Facts:

Section 9 of Ordinance No. 6118, S-64 provides that at least 6% of the total area of the memorial park cemetery
shall be set aside for the charity burial of deceased persons who are paupers and have been residents of Quezon
City for at least 5 years prior to their death. As such, the Quezon City engineer required the respondent, Himlayang
Pilipino Inc, to stop any further selling and/or transaction of memorial park lots in Quezon City where the owners
thereof have failed to donate the required 6% space intended for paupers burial.

The then Court of First Instance and its judge, Hon. Ericta, declared Section 9 of Ordinance No. 6118, S-64 null and
void.

Petitioners argued that the taking of the respondent’s property is a valid and reasonable exercise of police power
and that the land is taken for a public use as it is intended for the burial ground of paupers. They further argued
that the Quezon City Council is authorized under its charter, in the exercise of local police power, ” to make such
further ordinances and resolutions not repugnant to law as may be necessary to carry into effect and discharge the
powers and duties conferred by this Act and such as it shall deem necessary and proper to provide for the health
and safety, promote the prosperity, improve the morals, peace, good order, comfort and convenience of the city
and the inhabitants thereof, and for the protection of property therein.”

On the otherhand, respondent Himlayang Pilipino, Inc. contended that the taking or confiscation of property was
obvious because the questioned ordinance permanently restricts the use of the property such that it cannot be
used for any reasonable purpose and deprives the owner of all beneficial use of his property.

Issue:
Is Section 9 of the ordinance in question a valid exercise of the police power?

Held:

No. The Sec. 9 of the ordinance is not a valid exercise of the police power.

Occupying the forefront in the bill of rights is the provision which states that ‘no person shall be deprived of life,
liberty or property without due process of law’ (Art. Ill, Section 1 subparagraph 1, Constitution). On the other hand,
there are three inherent powers of government by which the state interferes with the property rights, namely-. (1)
police power, (2) eminent domain, (3) taxation. These are said to exist independently of the Constitution as
necessary attributes of sovereignty.

An examination of the Charter of Quezon City (Rep. Act No. 537), does not reveal any provision that would justify
the ordinance in question except the provision granting police power to the City. Section 9 cannot be justified
under the power granted to Quezon City to tax, fix the license fee, and regulate such other business, trades, and
occupation as may be established or practised in the City. The power to regulate does not include the power to
prohibit or confiscate. The ordinance in question not only confiscates but also prohibits the operation of a
memorial park cemetery.

Police power is defined by Freund as ‘the power of promoting the public welfare by restraining and regulating the
use of liberty and property’. It is usually exerted in order to merely regulate the use and enjoyment of property of
the owner. If he is deprived of his property outright, it is not taken for public use but rather to destroy in order to
promote the general welfare. In police power, the owner does not recover from the government for injury
sustained in consequence thereof.

Under the provisions of municipal charters which are known as the general welfare clauses, a city, by virtue of its
police power, may adopt ordinances to the peace, safety, health, morals and the best and highest interests of the
municipality. It is a well-settled principle, growing out of the nature of well-ordered and society, that every holder
of property, however absolute and may be his title, holds it under the implied liability that his use of it shall not be
injurious to the equal enjoyment of others having an equal right to the enjoyment of their property, nor injurious
to the rights of the community. A property in the state is held subject to its general regulations, which are
necessary to the common good and general welfare. Rights of property, like all other social and conventional rights,
are subject to such reasonable limitations in their enjoyment as shall prevent them from being injurious, and to
such reasonable restraints and regulations, established by law, as the legislature, under the governing and
controlling power vested in them by the constitution, may think necessary and expedient. The state, under the
police power, is possessed with plenary power to deal with all matters relating to the general health, morals, and
safety of the people, so long as it does not contravene any positive inhibition of the organic law and providing that
such power is not exercised in such a manner as to justify the interference of the courts to prevent positive wrong
and oppression.

However, in the case at hand, there is no reasonable relation between the setting aside of at least six (6) percent of
the total area of an private cemeteries for charity burial grounds of deceased paupers and the promotion of health,
morals, good order, safety, or the general welfare of the people. The ordinance is actually a taking without
compensation of a certain area from a private cemetery to benefit paupers who are charges of the municipal
corporation. Instead of building or maintaining a public cemetery for this purpose, the city passes the burden to
private cemeteries.

The expropriation without compensation of a portion of private cemeteries is not covered by Section 12(t) of
Republic Act 537, the Revised Charter of Quezon City which empowers the city council to prohibit the burial of the
dead within the center of population of the city and to provide for their burial in a proper place subject to the
provisions of general law regulating burial grounds and cemeteries. When the Local Government Code, Batas
Pambansa Blg. 337 provides in Section 177 (q) that a Sangguniang panlungsod may “provide for the burial of the
dead in such place and in such manner as prescribed by law or ordinance” it simply authorizes the city to provide
its own city owned land or to buy or expropriate private properties to construct public cemeteries. This has been
the law and practise in the past. It continues to the present. Expropriation, however, requires payment of just
compensation. The questioned ordinance is different from laws and regulations requiring owners of subdivisions to
set aside certain areas for streets, parks, playgrounds, and other public facilities from the land they sell to buyers of
subdivision lots. The necessities of public safety, health, and convenience are very clear from said requirements
which are intended to insure the development of communities with salubrious and wholesome environments. The
beneficiaries of the regulation, in turn, are made to pay by the subdivision developer when individual lots are sold
to home-owners.
WHEREFORE, the petition for review is hereby DISMISSED. The decision of the respondent court is affirmed.

B. POLICE POWER

PHILIPPINE PRESS INSTITUTE VS. COMELEC [244 SCRA 272; G.R. No. 119694; 22 May 1995]
Saturday, January 31, 2009 Posted by Coffeeholic Writes
Labels: Case Digests, Political Law

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

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

Issue:

Whether or not Comelec Resolution No. 2772 is unconstitutional.

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

"No legislature can bargain away the public health or the public morals.

" Stone v. Mississippi 101 U.S. (11 Otto) 814, 25 L.Ed. 1079 (1880).

In 1867 Mississippi granted a 25–year charter to a lottery company for an initial fee of $5,000 and an annual tax of
$1,000. The following year, however, the state adopted a new constitutional text, one clause of which forbade the
legislature to authorize lotteries or the sale of lottery tickets. In 1870 the legislature enacted a statute which, in
effect, repealed the charter of 1867. In 1874 the state attorney general began legal proceedings against the
company, and state courts ruled that it could no longer do business within Mississippi. The company then obtained
a writ of error from the U.S. Supreme Court. Mr. Chief Justice WAITE delivered the opinion of the court. ... It is now
too late to contend that any contract which a State actually enters into when granting a charter to a private
corporation is not within the protection of the clause in the Constitution of the United States that prohibits States
from passing laws impairing the obligation of contracts. ... The doctrines of Dartmouth College v. Woodward [1819]
have become so imbedded in the jurisprudence of the United States as to make them to all intents and purposes a
part of the Constitution itself. In this connection, however, it is to be kept in mind that it is not the charter which is
protected, but only any contract the charter may contain. If there is no contract, there is nothing in the grant on
which the Constitution can act. Consequently, the first inquiry in this class of cases always is, whether a contract
has in fact been entered into, and if so, what its obligations are. In the present case the question is whether the
State of Mississippi, in its sovereign capacity, did by the charter now under consideration bind itself irrevocably by a
contract. ... There can be no dispute but that ... the legislature of the State chartered a lottery company ... for
twenty-five years. ... If the legislature that granted this charter had the power to bind the people of the State and
all succeeding legislatures to allow the corporation to continue its corporate business during the whole term of its
authorized existence, there is no doubt about the sufficiency of the language employed to effect that object. ...
Whether the alleged contract exists, therefore, or not, depends on the authority of the legislature to bind the State
and the people of the State in that way. All agree that the legislature cannot bargain away the police power of a
State. ... Many attempts have been made in this court and elsewhere to define the police power, but never with
entire success. It is always easier to determine whether a particular case comes within the general scope of the
power, than to give an abstract definition of the power itself which will be in all respects accurate. No one denies,
however, that it extends to all matters affecting the public health or the public morals. Beer Co. v. Mass. [1878];
Patterson v. Ky. [1878]. Neither can it be denied that lotteries are proper subjects for the exercise of this power.
When the government is untrammelled by any claim of vested rights or chartered privileges, no one has ever
supposed that lotteries could not lawfully be suppressed, and those who manage them punished severely as
violators of the rules of social morality. ... The question is therefore directly presented, whether ... the legislature of
a State can, by the charter of a lottery company, defeat the will of the people, authoritatively expressed, in relation
to the further continuance of such business in their midst. We think it cannot. No legislature can bargain away the
public health or the public morals. The people themselves cannot do it, much less their servants. ... Government is
organized with a view to their preservation, and cannot divest itself of the power to provide for them. For this
purpose the largest legislative discretion is allowed, and the discretion cannot be parted with any more than the
power itself. Beer Company. ... In Dartmouth College ... Chief Justice Marshall ... was careful to say ... "that the
framers of the Constitution did not intend to restrain States in the regulation of their civil institutions, adopted for
internal government, and that the instrument they have given us is not to be so construed." The present case, we
think, comes within this limitation. ... ... [T]he power of governing is a trust committed by the people to the
government, no part of which can be granted away. The people, in their sovereign capacity, have established their
agencies for the preservation of the public health and the public morals, and the protection of public and private
rights. These several agencies can govern according to their discretion, if within the scope of their general
authority, while in power; but they cannot give away nor sell the discretion of those that are to come after them, in
respect to matters the government of which, from the very nature of things, must "vary with varying
circumstances." ... The contracts which the Constitution protects are those that relate to property rights, not
governmental. It is not always easy to tell on which side of the line which separates governmental from property
rights a particular case is to be put; but in respect to lotteries there can be no difficulty. ... They are species of
gambling, and wrong in their influences. They disturb the checks and balances of a well-ordered community. ...
Certainly the right to suppress them is governmental, to be exercised at all times by those in power, at their
discretion. Any one, therefore, who accepts a lottery charter does so with the implied understanding that the
people, in their sovereign capacity, and through their properly constituted agencies, may resume it at any time
when the public good shall require, whether it be paid for or not. ... Judgment affirmed

Ichong vs Hernandez

FACTS:
The Legislature passed R.A. 1180 (An Act to Regulate the Retail Business). Its purpose was to prevent persons who
are not citizens of the Phil. from having a stranglehold upon the people’s economic life.

a prohibition against aliens and against associations, partnerships, or corporations the capital of which are not
wholly owned by Filipinos, from engaging directly or indirectly in the retail trade

aliens actually engaged in the retail business on May 15, 1954 are allowed to continue their business, unless their
licenses are forfeited in accordance with law, until their death or voluntary retirement. In case of juridical persons,
ten years after the approval of the Act or until the expiration of term.

Citizens and juridical entities of the United States were exempted from this Act.

provision for the forfeiture of licenses to engage in the retail business for violation of the laws on nationalization,
economic control weights and measures and labor and other laws relating to trade, commerce and industry.

provision against the establishment or opening by aliens actually engaged in the retail business of additional stores
or branches of retail business

Lao Ichong, in his own behalf and behalf of other alien residents, corporations and partnerships affected by the Act,
filed an action to declare it unconstitutional for the ff: reasons:

it denies to alien residents the equal protection of the laws and deprives them of their liberty and property without
due process

the subject of the Act is not expressed in the title

the Act violates international and treaty obligations

the provisions of the Act against the transmission by aliens of their retail business thru hereditary succession
ISSUE: WON the Act deprives the aliens of the equal protection of the laws.

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

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

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

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

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

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

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

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

TAXING POWER MAY BE USED AS AN IMPLEMENT OF POLICE POWER

Lutz vs. Araneta [December 22, 1955, (98 Phil 148)]

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

Issue: Whether or not the tax imposed is constitutional.

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

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

The funds raised under the Act should be exclusively spent in aid of the sugar industry, since it is that very
enterprise that is being protected. It may be that other industries are also in need of similar protection; but the
legislature is not required by the Constitution to adhere to a policy of “all or none.”

Tio vs Videogram Regulatory Commission (G.R. No. 75697)

Facts: The case is a petition filed by petitioner on behalf of videogram operators adversely affected by Presidential
Decree No. 1987, “An Act Creating the Videogram Regulatory Board” with broad powers to regulate and supervise
the videogram industry.

A month after the promulgation of the said Presidential Decree, the amended the National Internal Revenue Code
provided that:

“SEC. 134. Video Tapes. — 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.”

“Section 10. Tax on Sale, Lease or Disposition of Videograms. — Notwithstanding any provision of law to the
contrary, the province shall collect a tax of thirty percent (30%) of the purchase price or rental rate, as the case may
be, for every sale, lease or disposition of a videogram containing a reproduction of any motion picture or
audiovisual program.”

“Fifty percent (50%) of the proceeds of the tax collected shall accrue to the province, and the other fifty percent
(50%) shall accrue to the municipality where the tax is collected; PROVIDED, That in Metropolitan Manila, the tax
shall be shared equally by the City/Municipality and the Metropolitan Manila Commission.”

The rationale behind the tax provision is to curb the proliferation and unregulated circulation of videograms
including, among others, videotapes, discs, cassettes or any technical improvement or variation thereof, have
greatly prejudiced the operations of movie houses and theaters. Such unregulated circulation have caused a sharp
decline in theatrical attendance by at least forty percent (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.

Videogram(s) establishments collectively earn around P600 Million per annum from rentals, sales and disposition
of videograms, and these earnings have not been subjected to tax, thereby depriving the Government of
approximately P180 Million in taxes each year.

The unregulated activities of videogram establishments have also affected the viability of the movie industry.

Issues:

(1) Whether or not tax imposed by the DECREE is a valid exercise of police power.

(2) Whether or nor the DECREE is constitutional.

Held: Taxation has been made the implement of the state’s police power. 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.

We find no clear violation of the Constitution which would justify us in pronouncing Presidential Decree No. 1987
as unconstitutional and void. While the underlying objective of the DECREE is to protect the moribund movie
industry, there is no question that public welfare is at bottom of its enactment, considering “the unfair competition
posed by rampant film piracy; the erosion of the moral fiber of the viewing public brought about by the availability
of unclassified and unreviewed video tapes containing pornographic films and films with brutally violent
sequences; and losses in government revenues due to the drop in theatrical attendance, not to mention the fact
that the activities of video establishments are virtually untaxed since mere payment of Mayor’s permit and
municipal license fees are required to engage in business.”

WHEREFORE, the instant Petition is hereby dismissed. No costs.

Gaston vs. Republic Planters Bank (Ponente: Melencio-Herrera)

Doctrine/s:
(1) Revenues derived from taxes cannot be used for purely private purposes or for the exclusive benefit ofprivate
persons.
(2) A tax may be levied with a regulatory purpose, i.e. to provide means for the stabilization of the sugarindustry
and such levy is primarily in the exercise of the police power of the State

Facts:Petitioners are sugar producers, sugarcane planters and millers

, who have come to this Court in their individual capacitiesand in representation of other sugar producers, planters
and millers, said to be so numerous that it is impracticable to bring themall before the Court although the subject
matter of the present controversy is of common interest to all sugar producers, whetherparties in this action or not.
Respondent Philippine Sugar Commission (PHILSUCOM, for short) was formerly the government office tasked
withthe function of regulating and supervising the sugar industry until it was superseded by its co-respondent
SugarRegulatory Administration (SRA, for brevity) under Executive Order No. 18 on May 28, 1986.
Although said ExecutiveOrder abolished the PHILSUCOM, its existence as a juridical entity was mandated to
continue for three (3) more years "for thepurpose of prosecuting and defending suits by or against it and enables it
to settle and close its affairs, to dispose of and convey itsproperty and to distribute its assets."
Angel H. Severino, Jr., et al.
, who are sugarcane planters planting and milling their sugarcane in different mill districts of NegrosOccidental,
were allowed to intervene by the Court, since they have common cause with petitioners and respondents
havinginterposed no objection to their intervention. Subsequently, on January 14,1988,
the National Federation of Sugar Planters(NFSP)
also moved to intervene, which the Court allowed on February 16,1988.Petitioners and Intervenors have come to
this Court praying for
a Writ of Mandamus
to compel PHILSUCOM to implement andaccomplish the pr
ivatization of Republic Planter’s Bank by the transfer and distribution
of the shares of stock in the said bank
claiming that they are the true beneficial owners
of the 761,416 common shares valued at P36,548,000 and 53,005,045preferred shares with a total par value of
P254,424,224.72
for the reason that the said investment had been funded by thededuction of P1 per Picul from sugar proceeds of the sugar
producers commencing the year 1978-1979 until thepresent as stabilization fund pursuant to P.D. No. 388.
Respondents PHILSUCOM and SRA, for their part, squarely traverse the petition arguing that no trust results from
Section 7 of P.D.No. 388; that
the stabilization fees collected are considered government funds under the Government Auditing Code
;that the transfer of shares of stock from PHILSUCOM to the sugar producers would be irregular, if not illegal; and
that this suit isbarred by laches.The Solicitor General aptly summarizes the basic issues thus: (1)
whether the stabilization fees collected from sugarplanters and millers pursuant to Section 7 of P.D. No. 388 are funds in trust for
them, or public funds
; and (2)
whether shares of stock in respondent Bank paid for with said stabilization fees belong to the PHILSUCOM or to
thedifferent sugar planters and millers from whom the fees were collected or levied.

Issue/s:
(1) Whether the stabilization fees collected from sugar planters and millers pursuant to Section 7 of P.D.
No.388 are public funds.
(2) Whether shares of stock in respondent Bank paid for with said stabilization fees belong to the
differentsugar planters and millers from whom the fees were collected or levied.

Held: (1) Yes;The stabilization fees collected are in the nature of a tax, which is within the power of the State to
impose for thepromotion of the sugar industry
(Lutz vs. Araneta ,98 Phil.148 ). They constitute sugar liens (Sec. 7[b], P.D. No. 388). The collections made accrue to a
"Special Fund," a "Development and Stabilization Fund," almost Identical to the "Sugar Adjustment and
Stabilization Fund" created under Section 6 of Commonwealth Act 567.
The tax collected is not in a pureexercise of the taxing power. It is levied with a regulatory purpose, to provide
means for the stabilization of thesugar industry. The levy is primarily in the exercise of the police power of the
State
(Lutz vs. Araneta, supra.).

The protection of a large industry constituting one of the great sources of the state's wealth and thereforedirectly
or indirectly affecting the welfare of so great a portion of the population of the State is affected to suchan extent by
public interests as to be within the police power of the sovereign. (Johnson vs. State ex rel.Marey, 128 So. 857,
cited in Lutz vs. Araneta,supra ).
Thestabilization fees in question are levied by the State upon sugar millers, planters and producers for a specialpurpose
—
that of "financing thegrowth and development of the sugar industry and all its components, stabilizationof the domestic market
including the foreign market the fact that the State has taken possession of moneyspursuant to law is sufficient
to constitute them state funds, even though they are held for a special purpose
(Lawrence vs. American Surety Co., 263 Mich 586, 249 ALR 535, cited in 42 Am. Jur. Sec. 2, p. 718). Having been levied
for aspecial purpose, the revenues collected are to be treated as a special fund, to be, in the language of the
statute,"administered in trust' for the purpose intended.
Once the purpose has been fulfilled or abandoned, the balance, if any, is tobe transferred to the general funds
of the Government. That is the essence of the trust intended (See 1987 Constitution, Article VI,Sec. 29(3), lifted
from the 1935 Constitution, Article VI, Sec. 23(l]).The character of the Stabilization Fund as a special fund is
emphasized by the fact that the funds are deposited in the PhilippineNational Bank and not in the Philippine
Treasury, moneys from which may be paid out only in pursuance of an appropriation madeby law (1987)
Constitution, Article VI, Sec. 29[1],1973 Constitution, Article VIII, Sec. 18[l]).

(2.) No;That the fees were collected from sugar producers, planters and millers, and
that the funds were channeled to the purchaseof shares of stock in respondent Bank do not convert the funds
into a trust fired for their benefit nor make them thebeneficial owners of the shares so purchased.
It is but rational that the fees be collected from them since it is also they whoare to be benefited from the
expenditure of the funds derived from it.
The investment in shares of respondent Bank is notalien to the purpose intended because of the Bank's
character as a commodity bank for sugar conceived for theindustry's growth and development.
Furthermore, of note is the fact that one-half, (1/2) or PO.50 per picul, of the amountlevied under P.D. No. 388 is to
be utilized for the "payment of salaries and wages of personnel, fringe benefits and allowances ofofficers and
employees of PHILSUCOM" thereby immediately negating the claim that the entire amount levied is in trust
for sugar,producers, planters and millers.
To rule in petitioners' favor would contravene the general principle that revenues derived from taxes cannot
beused for purely private purposes or for the exclusive benefit of private persons.
The Stabilization Fund is to be utilized forthe benefit of the entire sugar industry, "and all its components,
stabilization of the domestic market," including the foreign marketthe industry being of vital importance to the
country's economy and to national interest.

OSMEÑA vs. ORBOS

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

" To avoid the taint of unlawful delegation of the power to tax, there must be a standard which implies that the
legislature determines matter of principle and lays down fundamental policy."

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

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

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

EMINENT DOMAIN MAY BE USED AS AN IMPLEMENT TO ATTAIN POLICE OBJECTIVE

ASSO. OF SMALL LANDOWNERS VS. SEC. OF DAR [175 SCRA 343; G.R. NO. L-78742; 14 JUL 1989]

Facts: Several petitions are the root of the case:

a. A petition alleging the constitutionality of PD No. 27, EO 228 and 229 and RA 6657. Subjects of the petition are a
9-hectare and 5 hectare Riceland worked by four tenants. Tenants were declared full owners by EO 228 as qualified
farmers under PD 27. The petitioners now contend that President Aquino usurped the legislature’s power.

b. A petition by landowners and sugarplanters in Victoria’s Mill Negros Occidental against Proclamation 131 and EO
229. Proclamation 131 is the creation of Agrarian Reform Fund with initial fund of P50Billion.

c. A petition by owners of land which was placed by the DAR under the coverage of Operation Land Transfer.

d. A petition invoking the right of retention under PD 27 to owners of rice and corn lands not exceeding seven
hectares.

Issue: Whether or Not the aforementioned EO’s, PD, and RA were constitutional.

Held: The promulgation of PD 27 by President Marcos was valid in exercise of Police power and eminent domain.

The power of President Aquino to promulgate Proc. 131 and EO 228 and 229 was authorized under Sec. 6 of the
Transitory Provisions of the 1987 Constitution. Therefore it is a valid exercise of Police Power and Eminent Domain.

RA 6657 is likewise valid. The carrying out of the regulation under CARP becomes necessary to deprive owners of
whatever lands they may own in excess of the maximum area allowed, there is definitely a taking under the power
of eminent domain for which payment of just compensation is imperative. The taking contemplated is not a mere
limitation of the use of the land. What is required is the surrender of the title and the physical possession of said
excess and all beneficial rights accruing to the owner in favour of the farmer.

A statute may be sustained under the police power only if there is concurrence of the lawful subject and the
method.

Subject and purpose of the Agrarian Reform Law is valid, however what is to be determined is the method
employed to achieve it.

RETROACTIVE EFFECT; NON-IMPAIRMENT OF CONTRACTS OR VESTED RIGHTS CLAUSES WILL HAVE TO YIELD TO
THE SUPERIOR AND LEGITIMATE EXERCISE OF POLICE POWER

Ortigas & Co. v. CA (G.R. No. 126102. December 4, 2000)

FACTS:

Ortigas & Co. sold to Emilia Hermoso a parcel of land located in Greenhills Subdivision, San Juan with several
restrictions in the contract of sale that said lot be used exclusively for residential purposes, among others, until
December 31, 2025. Later, a zoning ordinance was issued by MMC (now MMDA) reclassifying the area as
commercial. Private respondent (Ismael Mathay III) leased the subject lot from Hermoso and built a single storey
building for Greenhills Autohaus, Inc., a car sales company. Ortigas & Co. filed a petition a complaint which sought
the demolition of the constructed car sales company to against Hermoso as it violated the terms and conditions of
the Deed of Sale. Trial court ruled in favor of Ortigas & Co. Mathay raised the issue to the Court of Appeals from
which he sought favorable ruling. Hence, the instant petition.

ISSUE:

Whether or not the zoning ordinance may impair contracts entered prior to its effectivity.

HELD:

Yes. The zoning ordinance, as a valid exercise of police power may be given effect over any standing contract.
Hence, petition is denied.

RATIO:

A law enacted in the exercise of police power to regulate or govern certain activities or transactions could be given
retroactive effect and may reasonably impair vested rights or contracts. Police power legislation is applicable not
only to future contracts, but equally to those already in existence. Non-impairment of contracts or vested rights
clauses will have to yield to the superior and legitimate exercise by the State of police power to promote the
health, morals, peace, education, good order, safety, and general welfare of the people. Moreover, statutes in
exercise of valid police power must be read into every contract. Noteworthy, in Sangalang vs. Intermediate
Appellate Court, the Supreme Court already upheld subject ordinance as a legitimate police power measure.

PNB vs. Office of the President G.R. No. 164815

Effect of Retroactive Laws of Curative and Remedial in Nature

FACTS:

Private respondents are buyers on installment of subdivision. However, the subdivision developer mortgaged the

lands in favor of the petitioner even though the sale of land was already executed. Unaware of the foregoing facts,

the private respondents continued to comply with their obligation as buyers. The subdivision developer later on

defaulted and PNB foreclosed on the mortgage and became the owner of the lots. A decision by the HLURB and

OAALA ruled that PNB may collect from private respondents only the remaining amortization payment and cannot

compel them to pay again for the lots they had already bought from the subdivision developer. The Office of the

President affirmed this decision by declaring Presidential Decree 957*.

ISSUE/S:

Whether Presidential Decree 957 applies to sale of land prior to its enactment

HELD/DECISION:

Under Article 4 of the Civil Code, there shall be no retroactive effect of the law unless the contrary is provided. PD

957, though implied, intended to include real estate mortgages executed prior to its enactment and therefore must

take effect to protect the innocent purchasers from swindling and fraudulent manipulations and illegal scheme of

subdivision developers. The court ascertained that they will not follow the letter of the statue if it will not reflect

the intent and purpose of the legislature, which is to uphold social justice and the protection of human rights. It

would also be illogical if PD 957 which seeks to oust the fraudulent practices would not be applied to existing

mortgage contract due to some a technicality.

*Section 18: Mortgages. No mortgage on any unit or lot shall be made by the owner or developer without prior

written approval of the Authority. Such approval shall not be granted unless it is shown that the proceeds of the

mortgage loan shall be used for the development of the condominium or subdivision project and effective

measures have been provided to ensure such utilization. The loan value of each lot or unit covered by the mortgage

shall be determined and the buyer thereof, if any, shall be notified before the release of the loan. The buyer may, at

his option, pay his installment for the lot or unit directly to the mortgagee who shall apply the payments to the

corresponding mortgage indebtedness secured by the particular lot or unit being paid for, with a view to enabling

said buyer to obtain title over the lot or unit promptly after full payment thereto;

POLICE POWER/Public Health; THE RIGHT TO PRACTICE A PROFESSION

PROFESSIONAL REGULATIONS COMMISSION VS. ARLENE DE GUZMAN, ET AL., June 21, 2004

Facts:
After the Professional Regulations Commission (PRC) released the names of successful examinees in the Medical
Licensure Examination, the Board of Medicines observed that the grades of the 79 Fatima College of Medicine
successful examinees were unusually and exceptionally high in the two (2) most difficult subjects of the exam, i.e.,
Biochemistry and Obstetrics and Gynecology.

The Board then issued Resolution No. 19 withholding the registration as physicians of all the examinees from
Fatima College of Medicine. Compared with other examines from other schools, the results of those from Fatima
were not only incredibly high but unusually clustered close to each other. The NBI Investigation found that the
“Fatima examinees gained early access to the test questions.”

On July 5, 1993, the respondents-examinees filed a petition for mandamus before the RTC of Manila to compel the
PRC to give them their licenses to practice medicine. Meanwhile on July 21, 1993, the Board of medicine issued
Resolution No. 21 charging the respondents of immorality, dishonest conduct, fraud and deceit and recommended
that the test results of the Fatima Examinees be nullified.

On December 19, 1994, the RTC of Manila promulgated its decision ordering the PRC to allow the respondents to
take the physician’s oath and to register them as physicians. The same was appealed by the PRC to the Court of
Appeals which sustained the RTC decision.

Hence, this petition.

Held:

It must be stressed that the power to regulate the practice of a profession or pursuit of an occupation cannot be
exercised by the State in an arbitrary, despotic or oppressive manner. However, the regulating body has the right to
grant or forbid such privilege in accordance with certain conditions.

But like all rights and freedoms guaranteed by the Constitution, their exercise may be regulated pursuant to the
police power of the State to safeguard health, morals, peace, education, order, safety, and general welfare of the
people. As such, mandamus will not lie to compel the Board of Medicine to issue licenses for the respondents to
practice medicine.

RA 2382 which prescribes the requirements for admission to the practice of medicine, the qualifications of the
candidates for the board examination, the scope and conduct of the examinations, the grounds for the denying of
the issuance of a physician’s license, or revoking a license that has been issued. It is therefore clear that the
examinee must prove that he has fully complied with all the conditions and requirements imposed by law and the
licensing authority to be granted the privilege to practice medicine. In short, he shall have all the qualifications and
none of the disqualifications. The petition is therefore granted.

RIGHT TO CARRY FIREARM MERELY A STATUTORY RIGHT AND SUBJECT TO POLICE POWER

Chavez vs Romulo GR 157036 09 June 2004

Facts: GMA delivered a speech to PNP directing PNP Chief Hermogenes Ebdane to suspend the issuance pf Permit

to Carry Firearms Outside of Residence PTCFOR). Ebdane issued guidelines banning carrying firearms outside of

residence. Petitioner, Francisco Chaves requested DILG to reconsider the implementation. The request was denied.

Hence the petition for prohibition and injunction against Executive Secretary Alberto Romulo and PNP Chief

Ebdane.

Issue: Whether or not revocation of PTCFOR is a violation of right to property? Whether or not the banning of

carrying firearms outside the residence is a valid exercise of police power?

Decision: Petition dismissed. Just like ordinary licenses in other regulated fields, PTCFOR may be revoked any time.

It does not confer an absolute right, but only a personal privilege to be exercised under existing restrictions. A

licensee takes his license subject to such conditions as the Legislature sees fit to impose, and one of the statutory

conditions of this license is that it might be revoked. Revocation of it does not deprive the defendant of any

property, immunity, or privilege.

The basis for its issuance was the need for peace and order in the society. the assailed Guidelines do not entirely

prohibit possession of firearms. What they proscribe is merely the carrying of firearms outside of residence.

However, those who wish to carry their firearms outside of their residences may re-apply for a new PTCFOR. This is

a reasonable regulation. If the carrying of firearms is regulated, necessarily, crime incidents will be curtailed.

TIMBER PERMITS ETC. DO NOT VEST IN THE GRANTEE AN IRREVOCABLE RIGHT

SOUTHEAST MINDANAO GOLDMINING CORP. vs. BALITE PORTALMINING COOP., et al.[G.R. No. 135190, April 3,
2002]
FACTS:

O n M a rc h 1 0 , 1 9 8 8 , M a rc o p p e r M i n i n g C o r p o rati o n ( M a rc o p p e r ) wa s g ra n te d E x p l o r
ati o n Pe r m i t N o . 1 3 3 ( E P N o . 1 3 3 ) o ve r 4 , 4 9 1 h e c t a r e s o f l a n d , w h i c h i n c l u d e d t h e Diwalwal
area. On June

27, 2991, Congress enacted Republic Act No. 7076, or the People's Small-
Scale Minin g Act. The law established a People's Small-Scale Minin g Program to
b e implemented by the Secretary of the DENR and created the Provincial Mining Regulatory Board (PMRB) under
the DENR Secretary's direct supervision and control.

S u b s e q u e n t l y, a p e ti ti o n fo r t h e ca n c e l l ati o n o f E P N o . 1 3 3 a n d t h e a d m i s s i o n o f
a Mineral Production Sharing Arrangement (MPSA) proposal over Diwalwal was filed before the DENR Regional
Executive Director, docketed as RED Mines Case.

On February 16, 1994, while the RED Mines case was pending, Marcopper assigned its EP No. 133 to
peti ti oner Southeast Mindanao Gold Mining Corporati on (SEM), which in turn applied for an integrated
MPSA over the land covered by the permit. In due ti me, the Mines and Geosciences Bureau Regional
Offi ce No. XI in Davao City (MGB-XI) accepted and registered the integrated MPSA application of petitioner and
thereafter, several MAC cases were filed.

On March 3, 1995, Republic Act No. 7942, the Philippine Mining Act, was enacted. Pursuant to
this statute, the MAC cases were referred to a Regional Panel of Arbitrators (RPA) tasked to resolve disputes
involving confl icti ng mining rights. The RPA subsequently took cognizance of the RED Mines case, which
was consolidated with the MAC cases.

On June 24, 1997, the DENR Secretary issued Memorandum Order No. 97-03
whichp ro v i d e d t h at t h e D E N R s h a l l st u d y t h o ro u g h l y a n d ex h a u sti v e l y t h e o p ti o n o f d i r e t st
a te utilization of the mineral resources in the Diwalwal Gold-Rush Area.

On July 16, 1997, peti ti oner fi led a special civil acti on for certi orari, prohibiti on
and mandamus before the Court of Appeals against PMRB-Davao, the DENR Secretary and Balite Communal Portal
Mining Cooperative (BCPMC). It prayed for the nullification of the above-quoted Memorandum Order No. 97-03 on
the ground that the "direct state utilization" espoused therein would effecti vely impair its vested rights
under EP No. 133; and that the memorandum order arbitrarily imposed the unwarranted condition that
certain studies be conducted before mining and environmental laws are enforced by the DENR.
ISSUE:

Whether or not the "direct state uti lizati on scheme" espoused in MO 97-03 divested petitioner
of its vested right to the gold rush area under its EP No. 133.

HELD:

No. M O 9 7 - 0 3 d i d n o t c o n c l u s i v e l y a d o p t " d i re c t st at e u ti l i z ati o n " a s a p o l i c y

i n resolving the Diwalwal dispute. The terms of the memorandum clearly indicate that what
was directed hereunder was merely a study of this option and nothing else. Contrary to petitioner's contention, it
did not grant any management/operating or profit-sharing agreement to small-scale miners or to any party, for
that matter, but simply instructed the DENR offi cials concerned to undertake studies to determine its
feasibility. As to the alleged "vested rights" claimed by petitioner, it is well to note that the same is invariably based
on EP No. 133, whose validity is still being disputed in the Consolidated Mines cases. A reading of the appealed
MAB decision reveals that the continued efficacy of EP No. 133 is one of the issues raised in said cases, with
respondents therein asserti ng that Marcopper cannot legally assign the permit which purportedly had
expired. In other words, whether or not peti ti oner actually has a vested right over Diwalwal under EP No.
133 is sti ll an indefi nite and unsett led matter. And unti l a positi ve pronouncement is made by the
appellate court in the Consolidated Mines cases, EP No. 133 cannot be deemed as a source of any conclusive
rights that can be impaired by the issuance of MO 97-03. It must likewise be pointed out that under no
circumstances may petitioner's rights under EP No. 133 be regarded as total and absolute. As correctly held by the
Court of Appeals EP No.133 merely evidences a privilege granted by the State, which may be amended,
modifi ed or rescinded when the nati onal interest so requires. This is necessarily so since the
explorati on, development and utilization of the country's natural mineral resources are matters impressed with
great public interest. Like timber permits, mining exploration permits do not vest in the grantee any permanent or
irrevocable right within the purview of the non-impairment of contract and due process clauses of the
Consti tuti on, since the State, under its all-encompassing police power, may alter, modify or amend the
same, in accordance with the demands of the general welfare. A d d i ti o n a l l y, t h e r e c a n
b e n o va l i d o p p o s i ti o n ra i s e d a ga i n st a m e re st u d y o f a n alternative which the State, through the
DENR, is authorized to undertake in the first place. Worth noting is Article XII, Section 2, of the 1987 Constitution
and Section 4, Chapter II of the Philippine Mining Act of 1995. Thus, the State may pursue the constitutional policy
of full control and supervision of the explorati on, development and uti lizati on of the country's natural
mineral resources, by either directly undertaking the same or by entering into agreements with qualified
entities. The DENR Secretary acted within his authority when he ordered a study of the fi rst opti on,
which may be undertaken consistently in accordance with the consti tuti onal policy enunciated
above. Obviously, the State may not be precluded from considering a direct takeover of the mines, if
it is the only plausible remedy in sight to the gnawing complexiti es generated by the gold rush.

MOTOR VEHICLE LICENCE NOT A PROPERTY RIGHT; SUBJECT OT POLICE POWER

MMDA v. Garin, 456 SCRA 176, GR 130230 (2005)

Facts: The issue arose from an incident involving the respondent Dante O. Garin, a lawyer, who was issued a traffic
violation receipt (TVR) by MMDA and his driver's license confiscated for parking illegally along Gandara Street,
Binondo, Manila, on August 1995.

Shortly before the expiration of the TVR's validity, the respondent addressed a letter to then MMDA Chairman
Prospero Oreta requesting the return of his driver's license, and expressing his preference for his case to be filed in
court.

Receiving no immediate reply, Garin filed the original complaint with application for preliminary injunction,
contending that, in the absence of any implementing rules and regulations, Sec. 5(f) of Rep. Act No. 7924 grants the
MMDA unbridled discretion to deprive erring motorists of their licenses, pre-empting a judicial determination of
the validity of the deprivation, thereby violating the due process clause of the Constitution.

The respondent further contended that the provision violates the constitutional prohibition against undue
delegation of legislative authority, allowing as it does the MMDA to fix and impose unspecified — and therefore
unlimited — fines and other penalties on erring motorists.

The trial court rendered the assailed decision in favor of herein respondent.

Issue:

1. WON MMDA, through Sec. 5(f) of Rep. Act No. 7924 could validly exercise police power.

HELD: Police Power, having been lodged primarily in the National Legislature, cannot be exercised by any group or
body of individuals not possessing legislative power. The National Legislature, however, may delegate this power to
the president and administrative boards as well as the lawmaking bodies of municipal corporations or local
government units (LGUs). Once delegated, the agents can exercise only such legislative powers as are conferred on
them by the national lawmaking body.

Our Congress delegated police power to the LGUs in the Local Government Code of 1991. 15 A local government is
a "political subdivision of a nation or state which is constituted by law and has substantial control of local affairs."
16 Local government units are the provinces, cities, municipalities and barangays, which exercise police power
through their respective legislative bodies.

Metropolitan or Metro Manila is a body composed of several local government units. With the passage of Rep. Act
No. 7924 in 1995, Metropolitan Manila was declared as a "special development and administrative region" and the
administration of "metro-wide" basic services affecting the region placed under "a development authority" referred
to as the MMDA. Thus:

The MMDA is, as termed in the charter itself, a "development authority." It is an agency created for the purpose of
laying down policies and coordinating with the various national government agencies, people's organizations, non-
governmental organizations and the private sector for the efficient and expeditious delivery of basic services in the
vast metropolitan area. All its functions are administrative in nature and these are actually summed up in the
charter itself
* Section 5 of Rep. Act No. 7924 enumerates the "Functions and Powers of the Metro Manila Development
Authority." The contested clause in Sec. 5(f) states that the petitioner shall "install and administer a single ticketing
system, fix, impose and collect fines and penalties for all kinds of violations of traffic rules and regulations, whether
moving or non-moving in nature, and confiscate and suspend or revoke drivers' licenses in the enforcement of such
traffic laws and regulations, the provisions of Rep. Act No. 4136 and P.D. No. 1605 to the contrary
notwithstanding," and that "(f)or this purpose, the Authority shall enforce all traffic laws and regulations in Metro
Manila, through its traffic operation center, and may deputize members of the PNP, traffic enforcers of local
government units, duly licensed security guards, or members of non-governmental organizations to whom may be
delegated certain authority, subject to such conditions and requirements as the Authority may impose."

EXPANDED SENIOR CITIZEN ACT VALID EXERCISE OF POLICE POWER

Carlos Superdrug Corp. v. DSWD, 526 SCRA 130 (2007)

Facts: Petitioners are domestic corporations and proprietors operating drugstores in the Philippines. Petitioners
assail the constitutionality of Section 4(a) of RA 9257, otherwise known as the “Expanded Senior Citizens Act of
2003.” Section 4(a) of RA 9257 grants twenty percent (20%) discount as privileges for the Senior Citizens. Petitioner
contends that said law is unconstitutional because it constitutes deprivation of private property.

Issue: Whether or not RA 9257 is unconstitutional

Held: Petition is dismissed. The law is a legitimate exercise of police power which, similar to the power of eminent
domain, has general welfare for its object.

Accordingly, it has been described as “the most essential, insistent and the least limitable of powers, extending as it
does to all the great public needs.” It is the power vested in the legislature by the constitution to make, ordain, and
establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with penalties or without,
not repugnant to the constitution, as they shall judge to be for the good and welfare of the commonwealth, and of
the subjects of the same.”

For this reason, when the conditions so demand as determined by the legislature, property rights must bow to the
primacy of police power because property rights, though sheltered by due process, must yield to general welfare.

MEMORANDUM ORDER NO. 409, ISSUED BY THE PRESIDENT CONSTITUTIN AN AD HOC COMMITTEE TO MANAGE
AND TAKE OVER ITS AFFAIRS, IS INVALID.
 [G.R. No. 127249. February 27, 1998]

CAMARINES NORTE ELECTRIC COOPERATIVE, INC. (CANORE-CO); RUBEN N. BARRAMEDA; ELVIS L. ESPIRITU;
MERARDO G. ENERO, JR.; MARCELITO B. ABAS; and REYNALDO V. ABUNDO, petitioners, vs. HON. RUBEN
D. TORRES, in his capacity as Executive Secretary; REX TANTIONGCO; HONESTO DE JESUS; ANDRES
IBASCO; TEODULO M. MEA; and VICENTE LUKBAN, respondent.

DECISION
DAVIDE, JR., J.:

May the Office of the President validly constitute an ad hoc committee to take over and manage the affairs of
an electric cooperative?
This is the key issue in this original action for certiorari and prohibition under Rule 65 of the Rules of Court
wherein the petitioners seek to (a) annul and set aside Memorandum Order No. 409 of the Office of the President
dated 3 December 1996 constituting an Ad Hoc Committee to take over and manage the affairs of the Camarines
Norte Electric Cooperative, Inc., (hereafter CANORECO) until such time as a general membership meeting can be
called to decide the serious issues affecting the said cooperative and normalcy in operations is restored"; and (b)
prohibit the respondents from performing acts or continuing proceedings pursuant to the Memorandum Order.
The factual backdrop of this case is not complicated.
Petitioner CANORECO is an electric cooperative organized under the provisions of P.D. No. 269, otherwise
known as the National Electrification Administration Decree, as amended by P.D. No. 1645.
On 10 March 1990, then President Corazon C. Aquino signed into law R.A. No. 6938 and R.A. No. 6939. The
former is the Cooperative Code of the Philippines, while the latter created the Cooperative Development Authority
(CDA) and vested solely upon the CDA the power to register cooperatives.
Article 122 of the Cooperative Code expressly provides that electric cooperatives shall be covered by the
Code. Article 128 of the said Code and Section 17 of R.A. No. 6939 similarly provide that cooperatives created
under P.D. No. 269, as amended by P.D. No. 1645, shall have three years within which to qualify and register with
the CDA and that after they shall have so qualified and registered, the provisions of Sections 3 and 5 of P.D. No.
1645 shall no longer be applicable to them. These Sections 3 and 5 read as follows:

SEC. 3. Section 5(a), Chapter II of Presidential Decree No. 269 is hereby amended by adding sub-paragraph (6) to
read as follows:

(6) To authorize the NEA Administrator to designate, subject to the confirmation of the Board Administrators, an
Acting General Manager and/or Project Supervisor for a Cooperative where vacancies in the said positions occur
and/or when the interest of the Cooperative and the program so requires, and to prescribe the functions of said
Acting General Manager and/or Project Supervisor, which powers shall not be nullified, altered or diminished by
any policy or resolution of the Board of Directors of the Cooperative concerned.

...

SEC. 5. Section 10, Chapter II of Presidential Decree No. 269 is hereby amended to read as follows:

Section 10. Enforcement Powers and Remedies. -- In the exercise of its power of supervision and control over
electric cooperatives and other borrower, supervised or controlled entities, the NEA is empowered to issue orders,
rules and regulations and motu proprio or upon petition of third parties, to conduct investigations, referenda and
other similar actions in all matters affecting said electric cooperatives and other borrower, or supervised or
controlled entities.

...
Finally, the repealing clause (Article 127) of the Cooperative Code provides:

Provided, however, That nothing in this Code shall be interpreted to mean the amendment or repeal of any
provision of Presidential Decree No. 269: Provided, further, That the electric cooperatives which qualify as such
under this Code shall fall under the coverage thereof.

CANORECO registered with the CDA pursuant to R.A. No. 6938 and R.A. No. 6939. On 8 March 1993, the CDA
issued a Certificate of Provisional Registration (T-003-93) to CANORECO effective for two years. [1] On 1 March 1995,
the CDA extended this provisional registration until 4 May 1997. [2] However, on 10 July 1996, CANORECO filed with
the CDA its approved amendments to its Articles of Cooperation converting itself from a non-stock to a stock
cooperative pursuant to the provisions of R.A. No. 6938 and the Omnibus Implementing Rules and Regulations on
Electric Cooperatives. On the same date the CDA issued a Certificate of Registration [3] of the amendments to
CANORECO Articles of Cooperation certifying that CANORECO is registered as a full-[f]ledged cooperative under
and by virtue of R.A. 6938.
Previously, on 11 March 1995, the Board of Directors of CANORECO [4] approved Resolution No. 22 appointing
petitioner Reynaldo V. Abundo as permanent General Manager. The Board was composed of

Ruben N. Barrameda -- President

Elvis L. Espiritu -- Vice president

Merardo G. Enero, Jr. -- Secretary

Marcelito B. Abas -- Treasurer

Antonio R. Obias -- Director

Luis A. Pascua -- Director

Norberto Z. Ochoa -- Director

Leonida Z. Manalo -- OIC GM/Ex-Officio

On 28 May 1995, Antonio Obias, Norberto Ochoa, Luis Pascua, and Felicito Ilan held a special meeting of the
Board of Directors of CANORECO. The minutes of the meeting[5] showed that President Ruben Barrameda, Vice-
President Elvis Espiritu, and Treasurer Marcelito Abas were absent; that Obias acted as temporary chairman; that
the latter informed those present that it was the responsibility of the Board after the annual meeting to meet and
elect the new set of officers, but that despite the fact that he had called the attention of President Barrameda and
Directors Abas and Espiritu for the holding thereof, the three chose not to appear; and that those present in the
special meeting declared all positions in the board vacant and thereafter proceeded to hold elections by secret
balloting with all the directors present considered candidates for the positions. The following won and were
declared as the newly elected officers of the CANORECO:

President . . . . . . . . Norberto Ochoa

Vice President . . . . Antonio Obias

Secretary . . . . . . . . Felicito Ilan

Treasurer. . . . . . . . Luis Pascua

Thereupon, these newly elected officers approved the following resolutions:

1) Resolution No. 27, c.s. -- confirming the election of the new set of officers of the Board of Directors of
CANORECO

2) Resolution No. 28, c.s. -- recalling Resolution No. 22, c.s. appointing Mr. Reynaldo V. Abundo as permanent
General Manager in view of the fact that such appointment was in violation of the provisions of R.A. 6713;
declaring the position of General Manager as vacant; and designating Mr. Oscar Acobera as Officer-in-
Charge

3) Resolution No. 29, c.s. -- authorizing the Board President, or in his absence, the Vice-
President, countersigned by the Treasurer, or in his absence, the Secretary, to be the only officers who can
transfer funds from savings to current accounts; and authorizing the Officer-in-Charge, Mr. Acobera, to
issue checks without countersignature in an amount not to exceed P3,000.00 and in excess thereof, to be
countersigned by the President and/or the Treasurer

4) Resolution No. 30, c.s. -- hiring the services of Atty. Juanito Subia as retainer-lawyer for CANORECO. [6]

The petitioners challenged the above resolutions and the election of officers by filing with the CDA a Petition
for Declaration of Nullity of Board Resolutions and Election of Officers with Prayer for Issuance of
Injunction/Temporary Restraining Order, which the CDA docketed as CDA-CO Case No. 95-010.
In its Resolution of 15 February 1996,[7] the CDA resolved the petition in favor of the petitioners and decreed
as follows:

WHEREFORE, premises considered, the Board Meeting of May 28, 1995, participated by the respondents, and all
the Resolutions issued on such occasion, are hereby declared NULL AND VOID AB INITIO.

Likewise, the election of respondents Norberto Ochoa, Antonio Obias, Felicito Ilan, and Luis Pascua, as President,
Vice-President, Secretary, and Treasurer, respectively, of CANORECO is hereby declared NULL AND VOID AB INITIO.

Hence, respondents Norberto Ochoa, Antonio Obias, Felicito Ilan, and Luis Pascua are hereby ordered to refrain
from representing themselves as President, Vice-President, Secretary, and Treasurer, respectively, of
CANORECO. The same respondents are further ordered to refrain from acting as authorized signatories to the bank
accounts of CANORECO.

Further respondent Felicito Ilan is hereby ordered to refrain from exercising the duties and functions of a member
of the Board of CANORECO until the election protest is resolved with finality by the proper forum. In the meantime,
the incumbency of petitioner Merardo Enero, Jr. as Director of the CANORECO Board is hereby recognized.

A status quo is hereby ordered as regards the position of General Manager, being held by Mr. Reynaldo Abundo,
considering that the recall of his appointment was done under a void Resolution, and that the designation of Mr.
Oscar Acodera as Officer-in-Charge, under the same void Resolution, has no force and effect.
Finally, respondents Antonio Obias, Norberto Ochoa, Luisito Pascua, and petitioners Ruben Barrameda, Elvis
Espiritu, Marcelito Abas and Merardo Enero, Jr. are hereby ordered to work together, as Board of Directors, for the
common good of CANORECO and its consumer-members, and to maintain an atmosphere of sincere cooperation
among the officers and members of CANORECO.

On 28 June 1996, in defiance of the abovementioned Resolution of the CDA and with the active participation
of some officials of the National Electrification Administration (NEA), the group of Norberto Ochoa, Antonio Obias,
Felicito Ilan, and Luis Pascua forcibly took possession of the offices of CANORECO and assumed the duties as
officers thereof.[8]
On 26 September 1996, pursuant to the writ of execution and order to vacate issued by the CDA, the
petitioners were able to reassume control of the CANORECO and to perform their respective functions. [9]
On 3 December 1996, the President of the Philippines issued Memorandum Order No. 409 [10] onstituting
an Ad Hoc Committee to temporarily take over and manage the affairs of CANORECO. It reads as follows:

To efficiently and effectively address the worsening problem of the Camarines Norte Electric Cooperative, Inc.
(CANORECO) and in order not to prejudice and endanger the interest of the people who rely on the said
cooperative for their supply of electricity, an AD HOC Committee is hereby constituted to take over and manage the
affairs of CANORECO until such time as a general membership meeting can be called to decide the serious issues
affecting the said cooperative and normalcy in operations is restored.Further, if and when warranted, the present
Board of Directors may be called upon by the Committee for advisory services without prejudice to the receipt of
their per diems as may be authorized by existing rules and regulations.

The AD HOC Committee shall be composed of the following:

REX TANTIONGCO -- Chairman

Presidential Assistant on Energy Affairs

HONESTO DE JESUS -- Member

Cooperative Development Authority Nominee

ANDRES IBASCO -- Member

Cooperative Development Authority Nominee

TEODULO M. MEA -- Member

National Electrification Administration Nominee

VICENTE LUKBAN -- Member

National Electrification Administration Nominee

The said Committee shall have the following functions:

1. Designate the following upon the recommendation of the Chairman:

 1.1 an Acting General Manager who shall handle the day-to-day operations of the Cooperative. In
the meantime, the General Manager shall be deemed to be on leave without prejudice to
the payment of his salaries legally due him; and

1.2 a Comptroller who shall handle the financial affairs of the Cooperative.

2. Ensure that:

The AD HOC Committee shall submit a written report to the President, through the Office of the Executive
Secretary, every two (2) weeks from the effectivity of this Order.

A General Membership Meeting shall be called by the AD HOC Committee to determine whether or not there is a
need to change the composition of the membership of the Cooperatives Board of Directors. If the need exists, the
AD HOC Committee shall call for elections. Once the composition of the Board of Directors is finally settled, it shall
decide on the appointment of a General Manager in accordance with prescribed laws, rules and regulations. Upon
the appointment of a General Manager, the Committee shall become functus officio.

This Memorandum Order shall take effect immediately.

On 11 December 1996, the petitioners filed this petition wherein they claim that
I. THE PRESIDENT HAS NO POWER TO TAKE OVER AND MANAGE OR TO ORDER THE TAKE-OVER OR
MANAGEMENT OF CANORECO.
II. [THE] TAKE-OVER OF CANORECO BY THE AD HOC COMMITTEE IS UNLAWFUL DESPITE DESIGNATION
OF CANORECO CONSUMERS AS MEMBERS OF AD HOC COMMITTEE.
III. [THE] RELEGATION OF PETITIONERS AS MERE ADVISERS TO THE AD HOC COMMITTEE AMOUNTS TO
REMOVAL FROM OFFICE WHICH THE PRESIDENT HAS NO POWER TO DO. MOREOVER, PETITIONERS
REMOVAL VIOLATES PETITIONERS RIGHT TO DUE PROCESS OF LAW.
IV. THE PRESIDENT IS LIKEWISE WITHOUT POWER TO DESIGNATE OR ORDER THE DESIGNATION OF AN
ACTING GENERAL MANAGER FOR CANORECO AND TO CONSIDER THE INCUMBENT REYNALDO V.
ABUNDO TO BE ON LEAVE.
The petitioners assert that there is no provision in the Constitution or in a statute expressly, or even impliedly,
authorizing the President or his representatives to take over or order the take-over of electric
cooperatives. Although conceding that while the State, through its police power, has the right to interfere with
private business or commerce, they maintain that the exercise thereof is generally limited to the regulation of the
business or commerce and that the power to regulate does not include the power to take over, control, manage, or
direct the operation of the business. Accordingly, the creation of the Ad Hoc Committee for the purpose of take-
over was illegal and void.
The petitioners further claim that Memorandum Order No. 409 removed them from their positions as
members of the Board of Directors of CANORECO. The President does not have the authority to appoint, much less
to remove, members of the board of directors of a private enterprise including electric cooperatives. He cannot rely
on his power of supervision over the NEA to justify the designation of an acting general manager for CANORECO
under P.D. No. 269 as amended by P.D. No. 1645, for CANORECO had already registered with the CDA pursuant to
R.A. No. 6938 and R.A. No. 6939; hence, the latter laws now govern the internal affairs of CANORECO.
On 3 January 1997, the petitioners filed an Urgent Motion for Issuance of a Temporary Restraining Order.
On 9 January 1997, the petitioners filed a Manifestation and Motion informing the Court that on 8 January
1997 respondent Rex Tantiongco notified the petitioners that theAd Hoc Committee was taking over the affairs and
management of CANORECO effective as of that date. [11] They reiterated their plea for the issuance of a temporary
restraining order because the Ad Hoc Committee has taken control of CANORECO and usurped the functions of the
individual petitioners.
In the Resolution dated 13 January 1997, we required respondents to comment on the petition.
Despite four extensions granted it, the Office of the Solicitor General (OSG) failed to file its Comment. Hence,
in the resolution of 16 July 1997 we deemed the OSG to have waived the filing of its Comment and declared this
case submitted for decision. The OSGs motion to admit its Comment, as well as the attached Comment, belatedly
filed on 24 July 1997 was merely noted without action in the resolution of 13 August 1997. We also subsequently
denied for lack of merit its motion for reconsideration.
We find the instant petition impressed with merit.
Having registered itself with the CDA pursuant to Section 128 of R.A. No. 6938 and Section 17 of R.A. No.
6939, CANORECO was brought under the coverage of said laws. Article 38 of R.A. No. 6938 vests upon the board of
directors the conduct and management of the affairs of cooperatives, and Article 39 provides for the powers of the
board of directors. These sections read:

Article 38. Composition of the Board of Directors. -- The conduct and management of the affairs of a cooperative
shall be vested in a board of directors which shall be composed of not less than five (5) nor more than fifteen (15)
members elected by the general assembly for a term fixed in the by-laws but not exceeding a term of two (2) years
and shall hold office until their successors are duly elected and qualified, or until duly removed. However, no
director shall serve for more than three (3) consecutive terms.

Article 39. Powers of the Board of Directors. -- The board of directors shall direct and supervise the business,
manage the property of the cooperative and may, by resolution, exercise all such powers of the cooperative as are
not reserved for the general assembly under this Code and the by-laws.

As to the officers of cooperatives, Article 43 of the Code provides:

ART. 43. Officers of the Cooperatives. The board of directors shall elect from among themselves only the chairman
and vice-chairman, and elect or appoint other officers of the cooperative from outside of the board in accordance
with their by-laws. All officers shall serve during good behavior and shall not be removed except for cause and after
due hearing. Loss of confidence shall not be a valid ground for removal unless evidenced by acts or omissions
causing loss of confidence in the honesty and integrity of such officer.No two (2) or more persons with relationship
up to the third degree of consanguinity or affinity shall serve as elective or appointive officers in the same board. [12]

Under Article 34 of the Code, the general assembly of cooperatives has the exclusive power, which cannot be
delegated, to elect or appoint the members of the board of directors and to remove them for cause. Article 51
thereof provides for removal of directors and officers as follows:

ART. 51. Removal. -- An elective officer, director, or committee member may be removed by a vote of two-thirds
(2/3) of the voting members present and constituting a quorum, in a regular or special general assembly meeting
called for the purpose. The person involved shall be given an opportunity to be heard at said assembly.

Memorandum Order No. 409 clearly removed from the Board of Directors of CANORECO the power to
manage the affairs of CANORECO and transferred such power to the Ad Hoc Committee, albeit
temporarily. Considering that (1) the take-over will be until such time that a general membership meeting can be
called to decide the serious issues affecting the said cooperative and normalcy in operations is restored, and (2) the
date such meeting shall be called and the determination of whether there is a need to change the composition of
the membership of CANORECOs Board of Directors are exclusively left to the Ad Hoc Committee, it necessarily
follows that the incumbent directors were, for all intents and purposes, suspended at the least, and removed, at
the most, from their office. The said Memorandum did no less to the lawfully appointed General Manager by
directing that upon the settlement of the issue concerning the composition of the board of directors the
Committee shall decide on the appointment of a general manager. In the meantime, it authorized the Committee
to designate upon the recommendation of the Chairman an Acting Manager, with the lawfully appointed Manager
considered on leave, but who is, however, entitled to the payment of his salaries.
Nothing in law supported the take-over of the management of the affairs of CANORECO, and the suspension,
if not removal, of the Board of Directors and the officers thereof.
It must be pointed out that the controversy which resulted in the issuance of the Memorandum Order
stemmed from a struggle between two groups vying for control of the management of CANORECO. One faction was
led by the group of Norberto Ochoa, while the other was petitioners group whose members were, at that time, the
incumbent directors and officers. It was the action of Ochoa and his cohorts in holding a special meeting on 28 May
1995 and then declaring vacant the positions of cooperative officers and thereafter electing themselves to the
positions of president, vice-president, treasurer, and secretary of CANORECO which compelled the petitioners to
file a petition with the CDA. The CDA thereafter came out with a decision favorable to the petitioners.
Obviously there was a clear case of intra-cooperative dispute. Article 121 of the Cooperative Code is explicit
on how the dispute should be resolved; thus:

ART. 121. Settlement of Disputes. -- Disputes among members, officers, directors, and committee members, and
intra-cooperative disputes shall, as far as practicable, be settled amicably in accordance with the conciliation or
mediation mechanisms embodied in the by-laws of the cooperative, and in applicable laws.

Should such a conciliation/mediation proceeding fail, the matter shall be settled in a court of competent
jurisdiction.

Complementing this Article is Section 8 of R.A. No. 6939, which provides:

SEC. 8. Mediation and Conciliation. Upon request of either or both or both parties, the [CDA] shall mediate and
conciliate disputes with the cooperative or between cooperatives: Provided, That if no mediation or conciliation
succeeds within three (3) months from request thereof, a certificate of non-resolution shall be issued by the
commission prior to the filing of appropriate action before the proper courts.

Even granting for the sake of argument that the party aggrieved by a decision of the CDA could pursue an
administrative appeal to the Office of the President on the theory that the CDA is an agency under its direct
supervision and control, still the Office of the President could not in this case, motu proprio or upon request of a
party, supplant or overturn the decision of the CDA. The record does not disclose that the group of Norberto Ochoa
appealed from the decision of the CDA in CDA-CO Case No. 95-010 to the Office of the President as the head of the
Executive Department exercising supervision and control over said agency. In fact the CDA had already issued a
Cease and Desist Order dated 14 August 1996 ordering Antonio Obias, Norberto Ochoa, Luis Pascua, Felicito Ilan
and their followers to cease and desist from acting as the Board of Directors and Officers of Camarines Norte
Electric Cooperative (CANORECO) and to refrain from implementing their Resolution calling for the District V
Election on August 17 and 24, 1996. [13] Consequently, the said decision of the CDA had long become final and
executory when Memorandum Order No. 409 was issued on 3 December 1996. That Memorandum cannot then be
considered as one reversing the decision of the CDA which had attained finality.
Under Section 15, Chapter III of Book VII of the Administrative Code of 1987 (Executive Order No. 292),
decisions of administrative agencies become final and executory fifteen days after receipt of a copy thereof by the
party adversely affected unless within that period an administrative appeal or judicial review, if proper, has been
perfected. One motion for reconsideration is allowed. A final resolution or decision of an administrative agency also
binds the Office of the President even if such agency is under the administrative supervision and control of the
latter.
 We have stated before, and reiterate it now, that administrative decisions must end sometime, as fully as
public policy demands that finality be written on judicial controversies. Public interest requires that proceedings
already terminated should not be altered at every step, for the rule of non quieta movere prescribes that what had
already been terminated should not be disturbed. A disregard of this principle does not commend itself to sound
public policy.[14]
Neither can police power be invoked to clothe with validity the assailed Memorandum Order No. 409. Police
power is the power inherent in a government to enact laws, within constitutional limits, to promote the order,
safety, health, morals, and general welfare of society. [15] It is lodged primarily in the legislature. By virtue of a valid
delegation of legislative power, it may also be exercised by the President and administrative boards, as well as the
lawmaking bodies on all municipal levels, including the barangay.[16]Delegation of legislative powers to the
President is permitted in Sections 23(2) and 28(2) of Article VI of the Constitution. [17] The pertinent laws on
cooperatives, namely, R.A. No. 6938, R.A. No. 6939, and P.D. No. 269 as amended by P.D. No. 1645 do not provide
for the President or any other administrative body to take over the internal management of a cooperative. Article
98 of R.A. 6938 instead provides:

ART. 98. Regulation of Public Service Cooperatives. -- (1) The internal affairs of public service cooperatives such as
the rights and privileges of members, the rules and procedures for meetings of the general assembly, board of
directors and committees; for the election and qualification of officers, directors, and committee members;
allocation and distribution of surpluses, and all other matters relating to their internal affairs shall be governed by
this Code.

We do not then hesitate to rule that Memorandum Order No. 409 has no constitutional and statutory basis. It
violates the basic underlying principle enshrined in Article 4(2) of R.A. No. 6938 that cooperatives are democratic
organizations and that their affairs shall be administered by persons elected or appointed in a manner agreed upon
by the members. Likewise, it runs counter to the policy set forth in Section 1 of R.A. No. 6939 that the State shall,
except as provided in said Act, maintain a policy of non-interference in the management and operation of
cooperatives.
WHEREFORE, the instant petition is GRANTED and Memorandum Order No. 409 of the President is hereby
declared INVALID. SO ORDERED.

NO PROVISION IN RA 7924 THAT EMPOWERS THE MMDA TO ENACT ORDINANCES, APPROVOE RESOLUTIONS
AND APPROPRIATE FUNDS FOR THE GENERAL WELFARE

MMDA v Bel-Air Village Association, Inc.

FACTS:

On December 30, 1995, respondent received from petitioner a notice requesting the former to open its private

road, Neptune Street, to public vehicular traffic starting January 2, 1996. On the same day, respondent was

apprised that the perimeter separating the subdivision from Kalayaan Avenue would be demolished.

Respondent instituted a petition for injunction against petitioner, praying for the issuance of a TRO and preliminary

injunction enjoining the opening of Neptune Street and prohibiting the demolition of the perimeter wall.
ISSUE:

WON MMDA has the authority to open Neptune Street to public traffic as an agent of the state endowed with

police power.

HELD:

A ‘local government’ is a “political subdivision of a nation or state which is constituted by law and has substantial

control of local affairs”. It is a “body politic and corporate” – one endowed with powers as a political subdivision of

the National Government and as a corporate entity representing the inhabitants of its territory (LGC of 1991).

Our Congress delegated police power to the LGUs in Sec.16 of the LGC of 1991. It empowers the sangguniang

panlalawigan, panlungsod and bayan to “enact ordinances, approve resolutions and appropriate funds for the

general welfare of the [province, city or municipality] and its inhabitants pursuant to Sec.16 of the Code and in

the proper exercise of the [LGU’s corporate powers] provided under the Code.”

There is no syllable in RA 7924 that grants the MMDA police power, let alone legislative power. Unlike the

legislative bodies of the LGUs, there is no grant of authority in RA 7924 that allows the MMDA to enact ordinances

and regulations for the general welfare of the inhabitants of Metro Manila. The MMDA is merely a “development

authority” and not a political unit of government since it is neither an LGU or a public corporation endowed with

legislative power. The MMDA Chairman is not an elective official, but is merely appointed by the President with the

rank and privileges of a cabinet member.

In sum, the MMDA has no power to enact ordinances for the welfare of the community. It is the LGUs, acting

through their respective legislative councils, that possess legislative power and police power.

The Sangguniang Panlungsod of Makati City did not pass any ordinance or resolution ordering the opening of

Neptune Street, hence, its proposed opening by the MMDA is illegal.

On the Flag Schemes alleged lack of legal basis, we note that all the cities and municipalities within the MMDAs
jurisdiction,[7] except Valenzuela City, have each enacted anti-jaywalking ordinances or traffic
management codes with provisions for pedestrian regulation. Such fact serves as sufficient basis for respondents
implementation of schemes, or ways and means, to enforce the anti-jaywalking ordinances and similar
regulations

ERNESTO B. FRANCISCO, JR., G.R. No. 166501

VS . HON. BAYANI F. FERNANDO,
Petitioner Ernesto B. Francisco, Jr. (petitioner), as member of the Integrated Bar of the Philippines and taxpayer,

filed this original action for the issuance of the writs of Prohibition and Mandamus. Petitioner prays for the

Prohibition writ to enjoin respondents Bayani F. Fernando, Chairman of the Metropolitan Manila Development

Authority (MMDA) and the MMDA (respondents) from further implementing its wet flag scheme (Flag Scheme).
[1]
The Mandamus writ is to compel respondents to respect and uphold the x x x rights of pedestrians to due

process x x x and equal protection of the laws x x x.

Petitioner contends that the Flag Scheme: (1) has no legal basis because the MMDAs governing body, the

Metro Manila Council, did not authorize it; (2) violates the Due Process Clause because it is a summary punishment

for jaywalking; (3) disregards the Constitutional protection against cruel, degrading, and inhuman punishment; and

(4) violates pedestrian rights as it exposes pedestrians to various potential hazards. [2]

In their Comment, respondents sought the dismissal of the petition for petitioners lack of standing to litigate and

for violation of the doctrine of hierarchy of courts. Alternatively, respondents contended that the Flag Scheme is a

valid preventive measure against jaywalking.

Petitioner filed a Reply, claiming that the Court should take cognizance of the case as it raises issues of paramount

and transcendental importance. Petitioner also contended that he filed this petition directly with the Court

because the issues raised in the petition deserve the direct x x x intervention of the x x x [C]ourt x x x.

We dismiss the petition.

A citizen can raise a constitutional question only when (1) he can show that he has personally suffered some actual

or threatened injury because of the allegedly illegal conduct of the government; (2) the injury is fairly traceable to

the challenged action; and (3) a favorable action will likely redress the injury. [3] On the other hand, a party suing as

a taxpayer must specifically show that he has a sufficient interest in preventing the illegal expenditure of money
raised by taxation and that he will sustain a direct injury as a result of the enforcement of the questioned statute.
[4]
Petitioner meets none of the requirements under either category.

Nor is there merit to petitioners claim that the Court should relax the standing requirement because of the

transcendental importance of the issues the petition raises.As an exception to the standing requirement, the

transcendental importance of the issues raised relates to the merits of the petition. [5] Thus, the party invoking it

must show, among others, the presence of a clear disregard of a constitutional or statutory prohibition. [6] Petitioner

has not shown such clear constitutional or statutory violation.

On the Flag Schemes alleged lack of legal basis, we note that all the cities and municipalities within the MMDAs

jurisdiction,[7] except Valenzuela City, have each enacted anti-jaywalking ordinances or traffic management codes

with provisions for pedestrian regulation. Such fact serves as sufficient basis for respondents implementation of

schemes, or ways and means, to enforce the anti-jaywalking ordinances and similar regulations. After all, the

MMDA is an administrative agency tasked with the implementation of rules and regulations enacted by proper

authorities.[8] The absence of an anti-jaywalking ordinance in Valenzuela City does not detract from this conclusion

absent any proof that respondents implemented the Flag Scheme in that city.

Further, the petition ultimately calls for a factual determination of whether the Flag Scheme is a reasonable

enforcement of anti-jaywalking ordinances and similar enactments. This Court is not a trier of facts. [9] The petition

proffers mere surmises and speculations on the potential hazards of the Flag Scheme. This Court cannot determine

the reasonableness of the Flag Scheme based on mere surmises and speculations.

Lastly, petitioner violated the doctrine of hierarchy of courts when he filed this petition directly with us. This Courts

jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, and habeas corpus, while concurrent

with the Regional Trial Courts and the Court of Appeals, does not give litigants unrestrained freedom of choice of

forum from which to seek such relief.[10] We relax this rule only in exceptional and compelling circumstances. [11] This

is not the case here. WHEREFORE, we DISMISS the petition. SO ORDERED.

__________________________________________________________

DOTC NOT MMDA AUTHORIZED TO IMPLEMENT PORJECT UNDER EO125

MMDA v. Viron Transportation Co., Inc.,530 SCRA 341 (2007)

Facts: PGMA issued EO 179, which provided for the establishment of a Mass Transport System for Greater Manila.
Pursuant to this EO, the Metro manila Council of the MMDA cited the need to remove the bus terminals located
along major thoroughfares of Metro Manila. Respondents, provincial bus operators who had bus terminals that
were threatened to be removed, alleges that EO should be declared unconstitutional and illegal for transgressing
the possessory rights of owners and operators of public land transportation units over their respective terminals

Issue: Whether or not EO 179 is a valid exercise of police power

Held: Petition denied. EO 179 is null and void. MMDA has no police power, let alone legislative power. In light of the
administrative nature of its powers and functions, the MMDA is devoid of authority to implement the Project as
envisioned by the EO; hence it could not have been validly designated by the President to undertake the Project. It
follows that the MMDA cannot validly order the elimination of the respondents’ terminals.

Police power rests primarily with the legislature, such power may be delegated, as it is in fact increasingly being
delegated. By virtue of a valid delegation, the power may be exercised by the President and administrative boards
as well as by the lawmaking bodies of municipal corporations or local government under an express delegation by
the LGC of 1991.

Measures calculated to promote the safety and convenience of the people using the thoroughfares by the
regulation of vehicular traffic present a proper subject for the exercise of police power.

On Constitutional Law, “The true role of Constitutional Law is to effect an equilibrium between authority and
liberty so that rights are exercised within the framework of the law and the laws are enacted with due deference to
rights.”

TESTS FOR VALID EXERCISE OF POLICE POWER

TAXICAB OPERATORS OF METRO MANILA VS. BOARD OF TRANSPORTATION, digested

GR # L-59234, September 30, 1982 (Constitutional Law – Police Power, Equal Protection)
FACTS: Petitioner assailed the constitutionality of an administrative regulation phasing out taxicabs more than six
years old on grounds that it is violative of the constitutional rights of equal protection because it is only enforced in
Manila and directed solely towards the taxi industry.

Respondents contend that the purpose of the regulation is the promotion of safety and comfort of the riding public
from the dangers posed by old and dilapidated taxis.

ISSUE: Whether or not an administrative regulation phasing out taxicabs more than six years old is a valid exercise
of police power.

HELD: No, the State in the exercise of its police power, can prescribe regulations to promote the safety and general
welfare of the people. In addition, there is no infringement of the equal protection clause because it is common
knowledge that taxicabs in Manila are subjected to heavier traffic pressure and more constant use, creating a
substantial distinction from taxicabs of other places

Velasco vs. Villegas [G.R. No. L-24153 (120 SCRA), February 14, 1983]

Facts: Petitioners herein are members of the Sta. Cruz Barbershop Association. This is an appeal from the lower
court's(LC) order dismissing their suit for declatory relief. They are challenging the constitutionality of Ord. No.
4964. They contend that it amounts to deprivation of properties and their means of livelihood without due process
of law.

The assailed ordinance is worded thus: "It shall be prohibited for any operator of any barber shop to conduct the
business of massaging customers or other persons in any adjacent room or rooms of said barber shop, or in any
room or rooms within the same building where the barber shop is located as long as the operator of the barber
shop and the room where massaging is conducted is the same person."

Respondent in its reply, said that the Ordinance No. 4964 is constitutional and such is just an exercise of the state's
inherent power (police power).

Issue: Whether or not the assailed Ordinance violated the petitioner's right to property and their means of
livelihood.

Held: Ordinance is Constitutional. Petition is dismissed, LC decision affirmed.

Enactment of such (Ordinance) is a valid exercise of Police Power.

The objectives of the Ordinance are:

(1) To impose payment of license fees for engaging in the business of massage clinics, and;

(2) To forestall possible immorality which might grow from the construction of a separate room for massaging
customers.

This Court has been most liberal in sustaining ordinances based on the general welfare clause. And for that reason,
the petitioners’ rights were not violated and they are not deprived of the due process of law.

Lim vs. Pacquing [G.R. No. 115044. January 27, 1995]

FACTS:
The Charter of the City of Manila was enacted by Congress on 18 June 1949 (R.A. No. 409).

 On 1 January 1951, Executive Order No. 392 was issued transferring the authority to regulate jai-alais from
local government to the Games and Amusements Board (GAB).
 On 07 September 1971, however, the Municipal Board of Manila nonetheless passed Ordinance No. 7065
entitled “An Ordinance Authorizing the Mayor To Allow And Permit The Associated Development Corporation
To Establish, Maintain And Operate A Jai-Alai In The City Of Manila, Under Certain Terms And Conditions And
For Other Purposes.”
 On 20 August 1975, Presidential Decree No. 771 was issued by then President Marcos. The decree,
entitled “Revoking All Powers and Authority of Local Government(s) To Grant Franchise, License or Permit And
Regulate Wagers Or Betting By The Public On Horse And Dog Races, Jai-Alai Or Basque Pelota, And Other
Forms Of Gambling”, in Section 3 thereof, expressly revoked all existing franchises and permits issued by local
governments.
In May 1988, Associated Development Corporation (ADC) tried to operate a Jai-Alai. The government through
Games and Amusement Board intervened and invoked Presidential Decree No. 771 which expressly revoked all
existing franchises and permits to operate all forms of gambling facilities (including Jai-Alai) by local governments.
ADC assails the constitutionality of P.D. No. 771.

ISSUE:
Whether or not P.D. No. 771 is violative of the equal protection and non-impairment clauses of the Constitution.

HELD:
NO. P.D. No. 771 is valid and constitutional.

RATIO:
Presumption against unconstitutionality. There is nothing on record to show or even suggest that PD No. 771 has
been repealed, altered or amended by any subsequent law or presidential issuance (when the executive still
exercised legislative powers).
Neither can it be tenably stated that the issue of the continued existence of ADC’s franchise by reason of the
unconstitutionality of PD No. 771 was settled in G.R. No. 115044, for the decision of the Court’s First Division in
said case, aside from not being final, cannot have the effect of nullifying PD No. 771 as unconstitutional, since only
the Court En Banc has that power under Article VIII, Section 4(2) of the Constitution.
And on the question of whether or not the government is estopped from contesting ADC’s possession of a valid
franchise, the well-settled rule is that the State cannot be put in estoppel by the mistakes or errors, if any, of its
officials or agents. (Republic v. Intermediate Appellate Court, 209 SCRA 90)

Ynot v IAC (1987) 148 SCRA 659

Facts:
Petitioner transported 6 caracbaos from Masbate to Iloilo in 1984 and these wer confiscated by the station
commander in Barotac, Iloilo for violating E.O. 626 A which prohibits transportation of a carabao or carabeef from
one province to another. Confiscation will be a result of this.
The petitioner sued for recovery, and the Regional Trial Court of Iloilo City issued a writ of replevin upon his filing of
a supersedeas bond of P12,000.00. After considering the merits of the case, the court sustained the confiscation of
the carabaos and, since they could no longer be produced, ordered the confiscation of the bond. The court also
declined to rule on the constitutionality of the executive order, as raise by the petitioner, for lack of authority and
also for its presumed validity.
The same result was decided in the trial court.
In the Supreme Court, he then petitioned against the constitutionality of the E.O. due to the outright confiscation
without giving the owner the right to heard before an impartial court as guaranteed by due process. He also
challenged the improper exercise of legislative power by the former president under Amendment 6 of the 1973
constitution wherein Marcos was given emergency powers to issue letters of instruction that had the force of law.
Issue: Is the E.O. constitutional?

Holding: The EO is unconstitutional. Petition granted.

Ratio:
The lower courts are not prevented from examining the constitutionality of a law.
Constitutional grant to the supreme court to review.
Justice Laurel's said, “courts should not follow the path of least resistance by simply presuming the constitutionality
of a law when it is questioned. On the contrary, they should probe the issue more deeply, to relieve the abscess,
and so heal the wound or excise the affliction.”
The challenged measure is denominated an executive order but it is really presidential decree, promulgating a new
rule instead of merely implementing an existing law due to the grant of legislative authority over the president
under Amendment number 6.
Provisions of the constitution should be cast in precise language to avoid controvery. In the due process clause,
however, the wording was ambiguous so it would remain resilient. This was due to the avoidance of an “iron rule
“laying down a stiff command for all circumstances. There was flexibility to allow it to adapt to every situation with
varying degrees at protection for the changing conditions.
Courts have also refrained to adopt a standard definition for due processlest they be confined to its interpretation
like a straitjacket.
There must be requirements of notice and hearing as a safeguard against arbitrariness.
There are exceptions such as conclusive presumption which bars omission of contrary evidence as long as such
presumption is based on human experience or rational connection between facts proved and fact presumed. An
examples is a passport of a person with a criminal offense cancelled without hearing.
The protection of the general welfare is the particular function of police power which both restrains and is
restrained by dure process. This power was invoked in 626-A, in addition to 626 which prohibits slaughter of
carabos with an exception.
While 626-A has the same lawful subjectas the original executive order, it can’t be said that it complies with the
existence of a lawful method. The transport prohibition and the purpose sought has a gap.
Summary action may be taken in valid admin proceedings as procedural due process is not juridical only due to the
urgency needed to correct it.
There was no reason why the offense in the E.O. would not have been proved in a court of justice with the accused
acquired the rights in the constitution.
The challenged measure was an invalid exercise of police power because the method toconfiscate carabos was
oppressive.
Due process was violated because the owener was denied the right to be heard or his defense and punished
immediately.
This was a clear encroachment on judicial functions and against the separataion of powers.
The policeman wasn’t liable for damages since the law during that time was valid.

JMM PROMOTION AND MANAGEMENT, INC. v. CA 260 SCRA 319 August 5, 1996

FACTS:

The Federation of Entertainment Talent Managers of the Philippines (FETMOP for brevity) filed a class suit on
January 27, 1995 assailing that the Department Order No. 3 which establishes various procedures and
requirements for screening performing artists under a new system of training, testing, certification and deployment
of the former and other related issuance, principally contending that the said orders, 1.)violated the constitutional
right to travel; 2.) abridged existing contracts for employment; and 3.) deprived individual artists of their licenses
without due process of law. FETMOP also averred that the issuance of the Artist Record Book (ARB) was
discriminatory and illegal and in gross violation of the constitutional right to life liberty and property. FETMOP
prayed for the issuance of the writ of preliminary injunction against the orders.

JMM Promotion and Management, Inc. (JMM for brevity) and Kary International, Inc. (Kary for brevity) filed a
motion for intervention in the civil case which was granted by the trial court on February 15, 1995. However, on
February 21, 1995, the trial court issued an order denying petitioner's prayer for writ of preliminary injunction and
dismissed the compliant. An appeal was made to the trial court regarding its decision but it was also however,
dismissed. As a consequences, ARB requirement was issed. The Court of Appeals upheld the trial court's decision
and concluded that the said issuance constituted a valid exercise of Police power.

ISSUE:

Whether or not the the said issuance is a valid exercise of Police Power.

RULING:

Yes, the ARB requirement and questioned Department Order related to its issuance were issued by the Secretary of
Labor pursuant to a valid exercise of Police Power by the State. The proper regulation of a profession, calling,
business or trade has always been upheld as a legitimate subject of a valid exercise of police power by the state
particularly when their conduct afffects either the execution of a 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 (use your property in such a fashion so as to not disturb others) 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 right of property, the permissible scope of regulatory
measures is certainly much wider. To pretend that licensing or accreditation requirements violates 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 profession. Professional leaving for abroad are required to pass rigid written and practical exams
before they are deemed fit to practice their trade. It is not claimed that these requirements pose an unwarranted
deprivation of a property right under the due process clause. So long as professionals and other workers meet
reasonable regulatory standards no such deprivation exists.

LUCENA GRAND CENTRAL TERMINAL, INC., petitioner, vs. JAC LINER, INC., respondent.
G.R. No. 148339. February 23, 2005

Facts: The City of Lucena enacted an ordinance which provides, inter alia, that: all buses, mini-buses and out-of-
town passenger jeepneys shall be prohibited from entering the city and are hereby directed to proceed to the
common terminal, for picking-up and/or dropping of their passengers; and (b) all temporary terminals in the City of
Lucena are hereby declared inoperable starting from the effectivity of this ordinance. It also provides that all
jeepneys, mini-buses, and buses shall use the grand central terminal of the city. JAC Liner, Inc. assailed the city
ordinance as unconstitutional on the ground that, inter alia, the same constituted an invalid exercise of police
power, an undue taking of private property, and a violation of the constitutional prohibition against monopolies.

Issue: Whether or not the ordinance satisfies the requisite of valid exercise of police power, i.e. lawful subject and
lawful means.

Held: The local government may be considered as having properly exercised its police power only if the following
requisites are met: (1) the interests of the public generally, as distinguished from those of a particular class, require
the interference of the State, and (2) the means employed are reasonably necessary for the attainment of the
object sought to be accomplished and not unduly oppressive upon individuals. Otherwise stated, there must be a
concurrence of a lawful subject and lawful method
The questioned ordinances having been enacted with the objective of relieving traffic congestion in the City of
Lucena, they involve public interest warranting the interference of the State. The first requisite for the proper
exercise of police power is thus present. This leaves for determination the issue of whether the means employed by
the Lucena Sangguniang Panlungsod to attain its professed objective were reasonably necessary and not unduly
oppressive upon individuals. The ordinances assailed herein are characterized by overbreadth. They go beyond
what is reasonably necessary to solve the traffic problem. Additionally, since the compulsory use of the terminal
operated by petitioner would subject the users thereof to fees, rentals and charges, such measure is unduly
oppressive, as correctly found by the appellate court. What should have been done was to determine exactly
where the problem lies and then to stop it right there.
The true role of Constitutional Law is to effect an equilibrium between authority and liberty so that rights are
exercised within the framework of the law and the laws are enacted with due deference to rights. It is its
reasonableness, not its effectiveness, which bears upon its constitutionality. If the constitutionality of a law were
measured by its effectiveness, then even tyrannical laws may be justified whenever they happen to be effective.

TATEL VS. MUNICIPALITY OF VIRAC [207 SCRA 157; G.R. No. 40243; 11 Mar 1992]
Facts: Petitioner Celestino Tatel owns a warehouse in barrio Sta. Elena, Municipality of Virac. Complaints were
received by the municipality concerning the disturbance caused by the operation of the abaca bailing machine
inside petitioner’s warehouse. A committee was then appointed by the municipal council, and it noted from its
investigation on the matter that an accidental fire within the warehouse of the petitioner created a danger to the
lives and properties of the people in the neighborhood. Resolution No. 29 was then passed by the Municipal
council declaring said warehouse as a public nuisance within a purview of Article 694 of the New Civil Code.
According to respondent municipal officials, petitioner’s warehouse was constructed in violation of Ordinance No.
13, series of 1952, prohibiting the construction of warehouses near a block of houses either in the poblacion or
barrios without maintaining the necessary distance of 200 meters from said block of houses to avoid loss of lives
and properties by accidental fire. On the other hand, petitioner contends that Ordinance No. 13 is unconstitutional.

Issues:

(1) Whether or not petitioner’s warehouse is a nuisance within the meaning Article 694 of the Civil Code

(2) Whether or not Ordinance No. 13, series of 1952 of the Municipality of Virac is unconstitutional and void.

Held: The storage of abaca and copra in petitioner’s warehouse is a nuisance under the provisions of Article 694 of
the Civil Code. At the same time, Ordinance No. 13 was passed by the Municipal Council of Virac in the exercise of
its police power. It is valid because it meets the criteria for a valid municipal ordinance: 1) must not contravene the
Constitution or any statute, 2) must not be unfair or oppressive, 3) must not be partial or discriminatory, 4) must
not prohibit but may regulate trade, 5) must be general and consistent with public policy, and 6) must not be
unreasonable. The purpose of the said ordinance is to avoid the loss of property and life in case of fire which is one
of the primordial obligation of government. The lower court did not err in its decision.

C. POWER OF EMINENT DOMAIN

Didipio Earth Savers Multipurpose Association et al vs DENR Sec Elisea Gozun et al

Facts: In 1987, Cory rolled out EO 279 w/c empowered DENR to stipulate with foreign companies when it comes to
either technical or financial large scale exploration or mining. In 1995, Ramos signed into law RA 7942 or the
Philippine Mining Act. In 1994, Ramos already signed an FTAA with Arimco Mining Co, an Australian company. The
FTAA authorized AMC (later CAMC) to explore 37,000 ha of land in Quirino and N. Vizcaya including Brgy Didipio.
After the passage of the law, DENR rolled out its implementing RRs. Didipio petitioned to have the law and the RR
to be annulled as it is unconstitutional and it constitutes unlawful taking of property. In seeking to nullify Rep. Act
No. 7942 and its implementing rules DAO 96-40 as unconstitutional, petitioners set their sight on Section 76 of Rep.
Act No. 7942 and Section 107 of DAO 96-40 which they claim allow the unlawful and unjust “taking” of private
property for private purpose in contradiction with Section 9, Article III of the 1987 Constitution mandating that
private property shall not be taken except for public use and the corresponding payment of just compensation.
They assert that public respondent DENR, through the Mining Act and its Implementing Rules and Regulations,
cannot, on its own, permit entry into a private property and allow taking of land without payment of just
compensation.

Traversing petitioners’ assertion, public respondents argue that Section 76 is not a taking provision but a valid
exercise of the police power and by virtue of which, the state may prescribe regulations to promote the health,
morals, peace, education, good order, safety and general welfare of the people. This government regulation
involves the adjustment of rights for the public good and that this adjustment curtails some potential for the use or
economic exploitation of private property. Public respondents concluded that “to require compensation in all such
circumstances would compel the government to regulate by purchase.”

Issue: Whether or not RA 7942 and the DENR RRs are valid.

Held: The SC ruled against Didipio. The SC noted the requisites of eminent domain. They are;

(1) the expropriator must enter a private property;

(2) the entry must be for more than a momentary period.

(3) the entry must be under warrant or color of legal authority;

(4) the property must be devoted to public use or otherwise informally appropriated or injuriously affected;
(5) the utilization of the property for public use must be in such a way as to oust the owner and deprive him of
beneficial enjoyment of the property.

In the case at bar, Didipio failed to show that the law is invalid. Indeed there is taking involved but it is not w/o just
compensation. Sec 76 of RA 7942 provides for just compensation as well as section 107 of the DENR RR. To wit,

Section 76. xxx Provided, that any damage to the property of the surface owner, occupant, or concessionaire as a
consequence of such operations shall be properly compensated as may be provided for in the implementing rules
and regulations.

Section 107. Compensation of the Surface Owner and Occupant- Any damage done to the property of the surface
owners, occupant, or concessionaire thereof as a consequence of the mining operations or as a result of the
construction or installation of the infrastructure mentioned in 104 above shall be properly and justly compensated.

Further, mining is a public policy and the government can invoke eminent domain to exercise entry, acquisition and
use of private lands.

AN EJECTMENT SUIT DOES NOT PREVAIL OVER THE STATE’S POWER OF EMINENT DOMAIN

Republic vs. Tagle

Facts: Helena Benitez is a registered owner of 2 parcels of land in Bgy. Salwag, Dasmarinas, Cavite. Sometime in
Sept. 1982, the Philippine Government, through the Philippine Human Resources Development Center (PHRDC), an
agency under the Ministry of Human Settlements, negotiated with the Japanese International Cooperation Agency
(JICA) Survey Team on technicalities of the establishment of ASEAN Human Resources Development Project in the
Philippines. Among the the 5 main programs of the proposed project was the Construction Manpower
Development Center (CMDC), an agency now under the Department of Trade and Industry.

Several transaction and agreements were entered into between Benitez (together with Philippine Women’s
University) and the PHRDC with regards to the lease and consequently, the possible sale of the land which did not
push through because of Benitez’s desistance. Thereafter, Benitez and PWU demanded from PHRDC the payment
of rentals and to vacate the premises. Benitez later filed an unlawful detainer case against PHRDC. In turn, the state
through DTI (with GMA as undersecretary), to which CMDF is attached instituted a complaint for Eminent Domain,
pursuant to EO 1935. In compliance with Section 2, Rule 67 of the Rules of Court, as amended by Presidential
Decree No. 42, DTI deposited with PNB in favor of Benitez P708,490 an amount equivalent to the provisional value
of the land sought to be expropriated. Subsequently, DTI filed a Motion for Issuance of Writ of Possession which
had been granted but subsequently quashed by MTC Judge Tagle.

Issue: Whether Judge Tagle may quash a writ of possession on the ground that the expropriating government
agency is already occupying the property sought to be expropriated.

Held: No. Judge Tagle is required to issue a writ of possession in favor DTI pursuant to Sec. 7 of EO 1035:

“SEC 7. Expropriation. If the parties fail to agree in negotiation of the sale of the land as provided in the preceding
section, the government implementing agency/instrumentality concerned shall have authority to immediately
institute expropriation proceedings through the Office of the Solicitor General, as the case may be. The just
compensation to be paid for the property acquired through expropriation shall be in accordance with the
provisions of P.D. No. 1533. Courts shall give priority to the adjudication of cases on expropriation and shall
immediately issue the necessary writ of possession upon deposit by the government implementing
agency/instrumentality concerned of an amount equivalent to ten per cent (10%) of the amount of just
compensation provided under P.D. No. 1533; Provided, That the period within which said writ of possession shall
be issued shall in no case extend beyond five (5) days from the date such deposit was made.”

Under this statutory provision, when the government or its authorized agent makes the required deposit, the trial
court has a ministerial duty to issue a writ of possession.

The expropriation of real property does not include mere physical entry or occupation of land. Although eminent
domain usually involves a taking of title, there may also be compensable taking of only some, not all, of the
property interests in the bundle of rights that constitute ownership. The writ of possession is both necessary and
practical, because mere physical possession that is gained by entering the property is not equivalent to
expropriating it with the aim of acquiring ownership over, or even the right to possess, the expropriated property.

Clearly, an ejectment suit ordinarily should not prevail over the State’s power of eminent domain. DTI has
deposited not just the 10 percent required under EO 1035, but the whole amount of the just compensation that
private respondent is entitled to. Thus, there is no any legal impediment for the issuance of a writ of possession in
favor of DTI. Precisely, the purpose of instituting expropriation proceedings is to prevent petitioner from being
ejected from the subject property; otherwise, the above-mentioned absurd and circuitous rulings would arise.
 REAL PROPERTY MAY THROUGH EXPROPRIATION, BE SUBJECTED TO AN EASEMENT OF RIGHT OF WAY

REPUBLIC OF THE PHILIPPINES VS. PLDT, digested

26 SCRA 620 (1969) (Constitutional Law – Eminent Domain, Expropriation, Just Compensation)
FACTS: Public petitioner commenced a suit against private respondent praying for the right of the Bureau of
Telecommunications to demand interconnection between the Government Telephone System and that of PLDT, so
that the Government Telephone System could make use of the lines and facilities of the PLDT. Private respondent
contends that it cannot be compelled to enter into a contract where no agreement is had between them.

ISSUE: Whether or not interconnection between PLDT and the Government Telephone System can be a valid object
for expropriation.

HELD: Yes, in the exercise of the sovereign power of eminent domain, the Republic may require the telephone
company to permit interconnection as the needs of the government service may require, subject to the payment of
just compensation. The use of lines and services to allow inter-service connection between the both telephone
systems, through expropriation can be a subject to an easement of right of way.

THE POWER OF EMINENT DOMAIN IS NOT INHERENT IN LGU

Masikip v. City of Pasig

FACTS:

Lourdes Dela Paz Masikip is the registered owner of a parcel of land, which the City of Pasig sought to expropriate a

portion thereof for the “sports development and recreational activities” of the residents of Barangay Caniogan. This

was in January 1994. Masikip refused.

On March 23, 1994, City of Pasig sought again to expropriate said portion of land for the alleged purpose that it

was “in line with the program of the Municipal Government to provide land opportunities to deserving poor

sectors of our community.”

Petitioner protested, so City of Pasig filed with the trial court a complaint for expropriation. The Motion to Dismiss

filed by Masikip was dismissed by the rial court on the ground that there was genuine necessity to expropriate the

property. Case was elevated to the Court of Appeals, which dismissed petition for lack of merit.

Hence, this petition.

ISSUE:

W/N there was genuine necessity to expropriate the property

HELD:

Eminent domain is “the right of a government to take and appropriate private property to the public use, whenever

the public exigency requires it, which can be done only on condition of providing a reasonably compensation

therefor.” It is the power of the State or its instrumentalities to take private property for public use and is

inseparable from sovereignty and inherent in government.

This power is lodged in the legislative branch of government. It delegates the power thereof to the LGUs, other

public entities and public utility corporations, subject only to constitutional limitations. LGUs have no inherent

power of eminent domain and may exercise it only when expressly authorized by statute.

Sec. 19, LGC: LGU may, through its chief executive and acting pursuant to an ordinance, exercise the power of

eminent domain for public use, purpose or welfare for the benefit of the poor and landless, upon payment of just

compensation, pursuant to the provisions of the Constitution and pertinent laws.

Provided:
(1) power of eminent domain may not be exercised unless a valid and definite offer has been previously made to

the owner and such offer was not accepted;

(2) LGU may immediately take possession of the property upon the filing of expropriation proceedings and upon

making a deposit with the proper court of at least 15% fair market value of the property based on the current tax

declaration; and

(3) amount to be paid for expropriated property shall be determined by the proper court, based on the fair market

value at the time of the taking of the property

There is already an established sports development and recreational activity center at Rainforest Park in Pasig City.

Evidently, there is no “genuine necessity” to justify the expropriation. The records show that the Certification

issued by the Caniogan Barangay Council which became the basis for the passage of Ordinance No. 4, authorizing

the expropriation, indicates that the intended beneficiary is the Melendres Compound Homeowner’s Association, a

private, non-profit organization, not the residents of Caniogan.

STRICT CONSTRUCTION WILL BE MADE AGAINST THE AGENCY EXERCISING THE POWER; FAILURE TO PROVE
DEFINITE AND VALID OFFER

JESUS IS LORD CHRISTIAN SCHOOL FOUNDATION, INC. VS. MUNICIPALITY (NOW CITY) OF PASIG, METRO
MANILA, digested

GR # 152230 August 9, 2005 (Constitutional Law – Eminent Domain, Expropriation, Valid and Definite Offer)

FACTS: Court of Appeals affirmed the lower court’s decision of declaring respondent municipality (now city) as
having the right to expropriate petitioner’s property 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.
 PRIVATE PROPERTY ALREADY DEVOTED TO PUBLIC USE CANNOT BE EXPROPRIATED BY A DELEGATE OF
LEGISLATURE ACTING UNDER A GENERAL GRANT OF AUTHORITY

City of Manila vs Chinese Community of Manila

City of Manila vs Chinese Community of Manila , GR 14355 (1D), 31 October 1919

FACTS: Petitioner (City of Manila) filed a petition praying that certain lands be expropriated for the purpose of
constructing a public improvement namely, the extension of Rizal Avenue, Manila and claiming that such
expropriation was necessary.
Herein defendants, on the other hand, alleged (a) that no necessity existed for said expropriation and (b) that the
land in question was a cemetery, which had been used as such for many years, and was covered with sepulchres
and monuments, and that the same should not be converted into a street for public purposes.

The lower court ruled that there was no necessity for the expropriation of the particular strip of land in question.
Petitioner therefore assails the decision of the lower court claiming that it (petitioner) has the authority to
expropriate any land it may desire; that the only function of the court in such proceedings is to ascertain the value
of the land in question; that neither the court nor the owners of the land can inquire into the advisable purpose of
the expropriation or ask any questions concerning the necessities therefor; that the courts are mere appraisers of
the land involved in expropriation proceedings, and, when the value of the land is fixed by the method adopted by
the law, to render a judgment in favor of the defendant for its value.

ISSUE: W/N the courts may inquire into and hear proof upon the necessity of the expropriation?
HELD: Yes. The courts have the power to restrict the exercise of eminent domain to the actual reasonable
necessities of the case and for the purposes designated by the law. When the municipal corporation or entity
attempts to exercise the authority conferred, it must comply with the conditions accompanying such authority. The
necessity for conferring the authority upon a municipal corporation to exercise the right of eminent domain is,
without question, within the power of the legislature. But whether or not the municipal corporation or entity is
exercising the right in a particular case under the conditions imposed by the general authority, is a question that
the courts have the right to inquire into

THE IMPOSITION OF AN EASEMENT OF A THREE METER STRIP ON THE PLAINTIFF’S PROPERTY WAS CONSIDERED

TAKING
Ayala de Roxas vs City of Manila

G.R. No. L-3144 November 19, 1907

Facts: Petitioner applied to the defendant city engineer for a license to construct a terrace over “the strip of land 3

meters in width between the main wall of her house and the edge of the said canal of Sibacon or San Jacinto, which

strip of land belongs exclusively to her”; but the defendant refused to grant the license or authorize the plaintiff to

build the terrace, because, as the plaintiff has been informed, the sole reason wherefore the license was denied is

because “the said defendants pretend to compel the plaintiff to leave vacant and without any construction

whatever thereon the said strip of 3 meters in width which is a portion of the ground belonging to her, in order to

use the same as the wharf or public way so that the plaintiff will only be able to use the said strip in the same

manner and for the same purposes as the public in general, thus losing the enjoyment, use, and exclusive

possession of the said strip of the property which the plaintiff and the former owners thereof have enjoyed quietly

and peacefully during more than seventy years. Additionally, it was agreed between both parties thatthe strip

above referred to had not been expropriated in whole or in part by the municipality of Manila, and that neither

had the latter offered any compensation for the same to the owner thereof.

Issue: Whether the non-issuance of a license to the petitioners is tantamount to a taking that requires just

compensation

Held: Yes.

What the defendants have therefore done is to prevent the plaintiffs from continuing to enjoy, use, and freely

dispose of such strip of their ground, as they had been doing up to the time when they applied for a license to

construct a terrace over said strip, and the defendants prevented it with the intention of establishing a public

easement provided for in an ordinance of their own which they consider is pursuant to the provisions of the Law of

Waters and of the Civil Code in force.

In the decision entered by the court on the 5th of May, 1906, regarding the demurrer, the following was set forth:

The easement of a zone for public use, authorized by article 73 of the Law of Waters of 1866, is developed in

articles 160 and 161, inclusive, of said law; the general interest on behalf of which the easement is supported is

determined, for navigation, by articles 160 and 161; for flotation, by article 162; for salvage, by article 163; and for
fishing, by article 164; in all of them the owner of the riverside property supports the easement “upon being

previously indemnified for loss and damage.” (Folio 41.)

Said zone for public use, the same as a towpath, is solely available for the purposes of navigation, flotation, fishing,

and salvage, being closed to any other use which be attempted; therefore, it is erroneous to pretend that the right

of the owner of the property bordering upon the stream can be reduced to the level of the public right; on the

contrary he should only be called upon to bear those burdens which are in the general interest, but not without

prior, or subsequently indemnity. (Folio 43.)

If as affirmed in statement No. 4, and accepted by the defendants, the Sibacon Creek is a canal — let us grant that it

is navigable, because it has been held by competent authority — and that under the name of a public wharf, which

is the largest in area, it is desired to establish a towpath, which is the smallest, it must be remembered that the law

does not grant it along navigable canals (art. 157), and, at all events, the establishment thereof must be preceded

by the corresponding indemnity. (Arts. 154 and 157.)

Under section 5 of the act of Congress of July 1, 1902, no legislation shall be enacted in the Philippine Islands which

shall deprive any person of life, liberty, or property without due process of law; and the due process of law in order

to deprive a person of his property is, according to the Code of Civil Procedure, reserved to the judicial

authority.The refusal to grant a license or the enactment of an ordinance whereby a person may be deprived of

property or rights, or an attempt thereat is made, without previously indemnifying him therefor, is not, nor can

it be, due process of law.

Considering that the easement intended to be established, whatever may be the object thereof, is not merely a real

right that will encumber the property, but is one tending to prevent the exclusive use of one portion of the same,

by expropriating it for a public use which, be it what it may, can not be accomplished unless the owner of the

property condemned or seized be previously and duly indemnified, it is proper to protect the appellant by means

of the remedy employed in such cases, as it is the only adequate remedy when no other legal action can be

resorted to, against an intent which is nothing short of an arbitrary restriction imposed by the city by virtue of the

coercive power with which the same is invested. The question involved here is not the actual establishment of an

easement which might be objected to by an action in court, but a mere act of obstruction, a refusal which is

beyond the powers of the city of Manila, because it is not simply a measure in connection with building
regulations, but is an attempt to suppress, without due process of law, real rights which are attached to the right of

ownership.

The imposition of an easement over a 3-meter strip of the plaintiff’s property could not legally be done without

payment to it of just compensation.

The Court commanded the defendant to issue said license.

TAKING MUST BE DEVOTED TO PUBLIC USE

Reyes vs. National Housing Authority (NHA) (January 20, 2003)

Facts: National Housing Authority filed several expropriation complaints on the sugarland owned by the petitioners
Reyes. The land is located in Dasmarinas, Cavite. The purpose of the expropriation is for the expansion of the
Dasmarinas Resettlement Project to accommodate the squatters who were relocated from Manila. The trial court
rendered judgment ordering the expropriation of these lots with payment of just compensation. It was affirmed by
the Supreme Court.

The petitioners Reyes alleged the failure of the respondents to comply with the Supreme Court order, so they filed
a complaint for forfeiture of their rights before the RTC of Quezon City. They also said that NHA did not relocate
squatters from Manila on the expropriated lands which violate the reason for public purpose. The petitioners
prayed that NHA be enjoined from disposing and alienating the expropriated properties and that judgment be
rendered forfeiting all its rights and interests under the expropriation judgment.

In the answer of NHA, they already paid a substantial amount to the petitioners. Thus, several issues are already
raised in the expropriation court.

The trial court dismissed the case. It held that NHA did not abandon the public purpose because the relocation of
squatters involves a long and tedious process. It also entered into a contract with a developer for the construction
of a low-cost housing to be sold to qualified low income beneficiaries. The payment of just compensation is
independent of the obligation of the petitioners to pay capital gains tax. Lastly, the payment of just compensation is
based on the value at the time the property was taken.
The Court of Appeals affirmed the decision.

Issue: Whether or not the property expropriated is taking for public purpose.

Held: The decision appealed is modified.

The 1987 Constitution explicitly provides for the exercise of the power of eminent domain over the private
properties upon payment of just compensation. Sec. 9, Article III states that private property shall not be taken for
public use without just compensation. The constitutional restraints are public use and just compensation.

The expropriation judgment declared that NHA has a lawful right to take petitioners properties “for the public use
or purpose of expanding the Dasmarinas Resettlement Project”.

The “public use” is synonymous with “public interest”, “public benefit”, “public welfare”, and “public convenience”.
The act of NHA in entering a contract with a real estate developer for the construction of low cost housing cannot
be taken to mean as a deviation from the stated public purpose of their taking.

Expropriation of private lands for slum clearance and urban development is for a public purpose even if the
developed area is later sold to private homeowners, commercial firms, entertainment and service companies and
other private concerns.

The expropriation of private property for the purpose of socialized housing for the marginalized sector is in
furtherance of the social justice provision under Section 1, Article XIII of the Constitution.

When land has been acquired for public use in fee simple unconditionally, either by the exercise of eminent domain
or by purchase, the former owner retains no rights in the land, and the public use may be abandoned, or the land
may be devoted to a different use, without any impairment of the estate or title acquired, or any reversion to the
former owner.

PUBLIC USE COVER USES WHICH, WHILE NOT DIRECTLY AVAILABLE TO THE PUBLIC, REDOUND TO THEIR INDIRECT
ADVANTAGE OR BENEFIT (TOURISM)
Heirs of Juancho Ardona vs. Reyes

Facts: The Philippine Tourism Authority filed 4 complaints with the Court of First Instance of Cebu City for the
expropriation of some 282 hectares of rolling land situated in barangay Alubog and Babag, Cebu City, under PTA¶s
express authority ³to acquire by purchase, by negotiation or by condemnation proceedings any private land
withinand without the tourist zones´ for the purposes indicated in Section 5, paragraph B(2), of its Revised Charter
(PD564). The heirs of Juancho Ardona et. Al, filed their oppositions, and had a common allegation in that the taking
is allegedly not impressed with public use under the Constitution; alleging that there is no specific
constitutional provision authorizing the taking of private property for tourism purposes; that assuming that PTA has
such power,the intended use cannot be paramount to the determination of the land as a land reform area; that
limiting the amount of compensation by legislative fiat is constitutionally repugnant; and that since the land is
under the land reform program, it is the Court of Agrarian Relations and not the Court of First Instance (CFI), that
has jurisdiction over the expropriation cases. The Philippine Tourism Authority having deposited with the Philippine
National Bank, Cebu City Branch, an amount equivalent to 10% of the value of the properties pursuant to
Presidential Decree No. 1533,the lower court issued separate orders authorizing PTA to take immediate possession
of the premises and directing the issuance of writs of possession. The Heirs of Ardona, et. al. then filed a petition
for certiorari with preliminary Injunction before the Supreme Court

Issue: Whether the expropriation of parcels of land for the purpose of constructing a sports complex by the
Philippine Tourism Authority be considered taking for ³public use.´

Held: The states power of eminent domain extends to the expropriation of land for tourism purposes although this
specific objective is not expressed in the constitution. The policy objectives of the framers can be expressed only in
general terms such as social justice, local autonomy, conservation and development of the national patrimony
public interest, and general welfare, among others. The programs to achieve these objectives vary from time to
time and according to place. To freeze specific programs like tourism into express provisions would make the
constitution more prolix than bulky code and require of the framers a prescience beyond Delphic proportions. The
particular mention in the constitution of agrarian reform and transfer of utilities and other private enterprises to
public ownership merely underscores the magnitude of the problems sought to be remedied by this programs.
They do not preclude nor limit the exercise of the power of eminent domain for the purposes like tourism and
other development program

TO BE CONTINUED…