Lambino vs COMELEC The COMELEC denied the petition citing The framers of the Constitution intended requirements in gathering
ution intended requirements in gathering the signatures –
G.R. No. 174153 October 25, 2006
FACTS: On 25 August 2006, Lambino et al
filed a petition with the COMELEC to hold
a plebiscite that will ratify their initiative
petition to change the 1987 Constitution
under Section 5(b) and (c)2 and Section 73
of Republic Act No. 6735 or the Initiative
and Referendum Act.
The Lambino Group alleged that their
petition had the support of 6,327,952
individuals constituting at least twelve per
centum (12%) of all registered voters, with
each legislative district represented by at
least three per centum (3%) of its registered
voters. The Lambino Group also claimed
that COMELEC election registrars had
verified the signatures of the 6.3 million
individuals.
The Lambino Group’s initiative petition
changes the 1987 Constitution by
modifying Sections 1-7 of Article VI
(Legislative Department)4 and Sections 1-4
of Article VII (Executive Department) and
by adding Article XVIII entitled
“Transitory Provisions.” These proposed
changes will shift the present Bicameral-
Presidential system to a Unicameral-
Parliamentary form of government.
On 30 August 2006, the Lambino Group
filed an Amended Petition with the
COMELEC indicating modifications in the
proposed Article XVIII (Transitory
Provisions) of their initiative.
Santiago v. COMELEC declaring RA 6735
inadequate to implement the initiative
clause on proposals to amend the
Constitution.
ISSUES: 1. Whether the Lambino Group’s
initiative petition complies with Section 2,
Article XVII of the Constitution on
amendments to the Constitution through a
people’s initiative;
2. Whether this Court should revisit its
ruling in Santiago declaring RA 6735
“incomplete, inadequate or wanting in
essential terms and conditions” to
implement the initiative clause on
proposals to amend the Constitution; and
RULING:
1. The Initiative Petition Does Not
Comply with Section 2, Article XVII of the
Constitution on Direct Proposal by the
People
Section 2, Article XVII of the Constitution is
the governing constitutional provision that
allows a people’s initiative to propose
amendments to the Constitution. This
section states:
Sec. 2. Amendments to this Constitution
may likewise be directly proposed by the
people through initiative upon a petition of
at least twelve per centum of the total
number of registered voters of which every
legislative district must be represented by
at least three per centum of the registered
voters therein. x x x x (Emphasis supplied)
that the “draft of the proposed
constitutional amendment” should be
“ready and shown” to the people “before”
they sign such proposal. The framers
plainly stated that “before they sign there is
already a draft shown to them.” The
framers also “envisioned” that the people
should sign on the proposal itself because
the proponents must “prepare that
proposal and pass it around for signature.”
The essence of amendments “directly
proposed by the people through initiative
upon a petition” is that the entire proposal
on its face is a petition by the people. This
means two essential elements must be
present. First, the people must author and
thus sign the entire proposal. No agent or
representative can sign on their behalf.
Second, as an initiative upon a petition, the
proposal must be embodied in a petition.
These essential elements are present only
if the full text of the proposed
amendments is first shown to the people
who express their assent by signing such
complete
proposal in a petition. Thus, an amendment
is “directly proposed by the people through
initiative upon a petition” only if the people
sign on a petition that contains the full text
of the proposed amendments.
There is no presumption that the
proponents observed the constitutional
requirements in gathering the signatures.
The proponents bear the burden of proving
that they complied with the constitutional
that the petition contained, or incorporated
by attachment, the full text of the proposed
amendments.
The Lambino Group did not attach to their
present petition with this Court a copy of
the paper that the people signed as their
initiative petition. The Lambino Group
submitted to this Court a copy of a
signature sheet after the oral arguments of
26 September 2006 when they filed their
Memorandum on 11 October 2006.
2. A Revisit of Santiago v. COMELEC
is Not Necessary
The present petition warrants dismissal for
failure to comply with the basic
requirements of Section 2, Article XVII of
the Constitution on the conduct and scope
of a people’s initiative to amend the
Constitution. There is no need to revisit this
Court’s ruling in Santiago declaring RA
6735 “incomplete, inadequate or wanting in
essential terms and conditions” to cover the
system of initiative to amend the
Constitution. An affirmation or reversal of
Santiago will not change the outcome of the
present petition. Thus, this Court must
decline to revisit Santiago which effectively
ruled that RA 6735 does not comply with
the requirements of the Constitution to
implement the initiative clause on
amendments to the Constitution.
Imbong vs COMELEC G.R. No. L-32432
September 11, 1970
RAUL M. GONZALES vs COMELEC
G.R. No. L-32443 September 11, 1970
Ponente: Makasiar
Facts: These two separate but related
petitions for declaratory relief were filed
pursuant to Sec. 19 of R.A. No. 6132 by
petitioners Manuel B. Imbong and Raul M.
Gonzales, both members of the Bar,
taxpayers and interested in running as
candidates for delegates to the
Constitutional Convention. Both impugn
the constitutionality of R.A. No. 6132,
claiming during the oral argument that it
prejudices their rights as such candidates.
On March 16, 1967, Congress, acting as a
Constituent Assembly pursuant to Art. XV
of the Constitution, passed Resolution No.
2 which among others called for a
Constitutional Convention to propose
constitutional amendments to be
composed of two delegates from each
representative district who shall have the
same qualifications as those of
Congressmen, to be elected on the second
Tuesday of November, 1970 in accordance
with the Revised Election Code.
On June 17, 1969, Congress, also acting as
a Constituent Assembly, passed
Resolution No. 4 amending the aforesaid
Resolution No. 2 of March 16, 1967 by
providing that the convention “shall be
composed of 320 delegates apportioned
among the existing representative districts
according to the number of their
respective inhabitants: Provided, that a
representative district shall be entitled to
at least two delegates, who shall have the
same qualifications as those required of
members of the House of
Representatives,” “and that any other
details relating to the specific
apportionment of delegates, election of
delegates to, and the holding of, the
Constitutional Convention shall be
embodied in an implementing legislation:
Provided, that it shall not be inconsistent
with the provisions of this Resolution.”
On August 24, 1970, Congress, acting as a
legislative body, enacted Republic Act No.
6132, implementing Resolutions Nos. 2
and 4, and expressly repealing R.A. No.
4914.
Petitioner Raul M. Gonzales assails the
validity of the entire law as well as the
particular provisions embodied in Sections
2, 4, 5, and par. 1 of 8(a). Petitioner Manuel
B. Imbong impugns the constitutionality of
only par. I of Sec. 8(a) of said R.A. No.
6132 practically on the same grounds
advanced by petitioner Gonzales.
Issue: Whether the Congress has a
right to call for Constitutional
Convention;
Whether the parameters set by such a call
is constitutional.
Decision:
The Congress has the authority to call for a
Constitutional Convention as a
Constituent Assembly. Furthermore,
specific provisions assailed by the
petitioners are deemed as constitutional.
Ratio: – Sec 4 RA 6132: it is simply an
application of Sec 2 Art 12 of Constitution
-Constitutionality of enactment of RA
6132: Congress acting as Constituent
Assembly, has full authority to propose
amendments, or call for convention for the
purpose by votes and these votes were
attained by Resolution 2 and 4
– Sec 2 RA 6132: it is a mere
implementation of Resolution 4 and is
enough that the basis employed for such
apportions is reasonable. Macias case
relied by Gonzales is not reasonable for
that case granted more representatives to
provinces with less population and vice
versa. In this case, Batanes is equal to the
number of delegates I other provinces with
more population.
– Sec 5: State has right to create office and
parameters to qualify/disqualify members
thereof. Furthermore, this disqualification
is only temporary. This is a safety
mechanism to prevent political figures
from controlling elections and to allow
them to devote more time to the
Constituional Convention.
– Par 1 Sec 8: this is to avoid debasement
of electoral process and also to assure
candidates equal opportunity since
candidates must now depend on their
individual merits, and not the support of
political parties. This provision does not
create discrimination towards any
particular Party/group, it applies to all
organizations.
Dissenting Opinion:
Justice Fernando “ I find it difficult to
reconcile the decision reached insofar as
the aforesaid ban on political parties and
civic, professional and other organizations
is concerned with the explicit provision
that the freedom to form associations or
societies for purposes not contrary to law
shall not be abridged.
The right of an individual to join others of
a like persuasion to pursue common
objectives and to engage in activities is
embraced within if not actually
encouraged by the regime of liberty
ordained by the Constitution. This
particular freedom has an indigenous cast,
its origin being traceable to the Malolos
Constitution.
Defensor-Santiago v. COMELEC
G.R. No. 127325, March 19, 1997
FACTS: Under the 1935 and 1973
Constitutions, only two methods of
proposing amendments to, or revision of,
the Constitution were recognized: (1) by
Congress upon a vote of three-fourths of all
its members and (2) by a constitutional
convention.
Under the 1987 Constitution, in Section 2 of
Article XVII, the system of initiative was
introduced through which the people may
directly propose amendments to the
Constitution.
In 1996, Atty. Jesus Delfin filed with
COMELEC a "Petition to Amend the
Constitution, to Lift Term Limits of Elective
Officials, by People's Initiative" (Delfin
Petition)
The Delfin Petition alleged that the
provisions sought to be amended are
Sections 4 and 7 of Article VI, Section 4 of
Article VII, and Section 8 of Article X of the
Constitution. Attached to the petition is a
copy of a "Petition for Initiative on the 1987
Constitution" embodying the proposed
amendments. It moved that Comelec fix the
time and dates for signature gathering.
After it is signed by at least twelve per cent
of the total number of registered voters in
the country it will be formally filed with the
COMELEC
Senator Roco filed a Motion to Dismiss
contending that the Delfin Petition is not
the initiatory petition properly cognizable
by the COMELEC. What vests jurisdiction
upon the COMELEC is the filing of a
petition for initiative which is already
signed by the required number of
registered voters. Proponents of a
constitutional amendment cannot avail of
the authority and resources of the
COMELEC to assist them in securing the
required number of signatures.
Senator Miriam Defensor Santiago and
others filed an action for prohibition raising
the argument that: (1) The constitutional
provision on people's initiative to amend
the Constitution can only be implemented
by law and no such law has been passed.
While Republic Act 6735 provides for three
systems of initiative (on the Constitution,
on statutes, and on local legislation),
however, said law is inadequate with
respect to a system of initiative on the
Constitution. (2) The people's initiative is
limited to amendments to the Constitution,
not to revision thereof. Extending or lifting
of term limits constitutes a revision and is,
therefore, outside the power of the people's
initiative
ISSUE: Whether the Delfin Petition should
be granted.
RULING: No.
System of Initiative
The system of initiative on the Constitution
under Section 2 of Article XVII of the
Constitution is not self-execu
While the Constitution has recognized or
granted the right of the people to directly
propose amendments to the Constitution
through the system of initiative, the people
cannot exercise it if Congress, for whatever
reason, does not provide for its
implementation by way of a law or statute.
Based on the interpellations of the 1986
Constitutional Commission which drafted
the 1987 Constitution, initiative can only
relate to "amendments" not "revision” of
the Constitution. Moreover, the process of
proposing amendments to the Constitution
through initiative must be more rigorous
and difficult than the initiative on
legislation.
RA 6735 is Inadequate to cover the System
of Initiative on the Constitution
RA 6735 was, as its history reveals,
intended to cover initiative to propose
amendments to the Constitution. However,
RA 6735 is incomplete, inadequate, or
wanting in essential terms and conditions
insofar as initiative on amendments to the
Constitution is concerned.
Although Section 3 (Definition of Terms) of
RA 6753 defines initiative on amendments
to the Constitution, itdoes not provide for
the contents of a petition for initiative on
the Constitution. Other provisions of the
Act cannot be made to apply to fill in the
gap since these provisions expressly refer
to “proposed laws sought to be enacted,
approved or rejected, amended or
repealed”
While RA 6735 provides separate Subtitles
for initiative and referendum on laws and
ordinances, no subtitle is provided for
initiative on the Constitution. This
omission means that the main thrust of RA
6753 is initiative and referendum on
national and local laws. If Congress
intended RA 6735 to fully provide for the
implementation of the initiative on
amendments to the Constitution, it could
have provided for a subtitle therefor.
A sufficient standard is one which defines
legislative policy, marks its limits, maps out
its boundaries and specifies the public
agency to apply it. It indicates the
circumstances under which the legislative
command is to be effected.
Invalid Delegation to Comelec (Lack of
Sufficient Standard)
The deficiency of RA 6735 is fatal and
cannot be cured by "empowering" the
COMELEC "to promulgate such rules and
regulations as may be necessary to carry
out the purposes of the Act”.
Empowering the COMELEC, an
administrative body exercising quasi-
judicial functions, to promulgate rules and
regulations is a form of delegation of
legislative authority. However, in every
case of permissible delegation, there must
be a showing that the delegation itself is
valid.
RA 6735 failed to satisfy both requirements
in subordinate legislation (“completeness
test” and “sufficient standard test”). The
delegation of the power to the COMELEC
is then invalid. Necessarily, COMELEC
cannot validly promulgate rules and
regulations to implement the exercise of the
right of the people to directly propose
amendments to the Constitution through
the system of initiative. It does not have
that power under R.A. No. 6735
Petition for Initiative to Propose
Amendments on the Constitution
Under Section 2 of Article XVII of the
Constitution and Section 5(b)of RA 6735, a
petition for initiative on the Constitution
must be signed by at least 12% of the total
number of registered voters of which every
legislative district is represented by at least
3% of the registered voters therein. The
Delfin Petition does not contain signatures
of the required number of voters. Delfin
admits that the purpose of his petition is
primarily to obtain assistance in his drive to
gather signatures. Without the required
signatures, the petition cannot be deemed
validly initiated.
Since the Delfin Petition is not the initiatory
petition under RA 6735 and COMELEC
Resolution No. 2300, it cannot be
entertained or given cognizance of by the
COMELEC.
Given the foregoing, the court stated that
further discussion on the issue of whether
the proposal to lift the term limits of
elective national and local officials is an
amendment to, and not a revision of, the
Constitution is rendered unnecessary, if not
academic.
This deliberate omission indicates that the
matter of people's initiative to amend the
Constitution was left to some separate and
future law.
Subordinate Legislation (Delegation to fill
in gaps in the law)
The rule is that what has been delegated,
cannot be delegated or as expressed in a
Latin maxim: potestasdelegata non
delegaripotest.
The recognized exceptions to the rule are as
follows:
(1) Delegation of tariff powers to the
President under Section 28(2) of Article VI
of the Constitution;
(2) Delegation of emergency powers to the
President under Section 23(2) of Article VI
of the Constitution;
(3) Delegation to the people at large;
(4) Delegation to local governments; and
(5) Delegation to administrative bodies
The delegation is valid only if the law (a) is
complete in itself, setting forth therein the
policy to be executed, carried out, or
implemented by the delegate; and (b) fixes
a sufficient standard - the limits of which
are sufficiently determinate and
determinable - to which the delegate must
conform in the performance of his
functions.
Tolentino v. Comelec
Facts: By virtue of the resolutions of the
Congress of the Philippines, the
Constitutional Convention of 1971 came
into being in order to amend the
Constitution. On September 28, 1971, the
Convention approved Organic Resolution
No. 1, containing the proposed amendment
to Section 1 of Article V of the Constitution.
This proposed amendment, which would
be submitted to the people on a single
“election” or plebiscite, was only partial
and only refers to the age qualifications for
the exercise for the exercise of suffrage.
Later on, the late President Macapagal
called upon the COMELEC to help the
Convention in implementing the said
resolution, to which the latter conceded but
on certain conditions.
The herein petitioner, Arturo Tolentino,
filed the instant petition, to prohibit the
respondents from implementing the
Organic Resolution No. 1 and the other
resolutions passed by the Convention. He
argued that the said resolutions were null
and void on the ground that the calling and
holding of plebiscite is lodged exclusively
to the Congress. Moreover, under Section 1
of Article XV of the Constitution, the
proposed amendment cannot be presented
to the people for ratification separately
from each and all of the amendments to be
drafted and proposed by the Constitution.
On the other hand, The
respondents and intervenors contended
that the Convention, as a necessary
consequence of its power to propose
amendments, has the power to fix the date
and lay down the details of the petition of
the plebiscites for the ratification of any
amendment of the Constitution.
Issue: Is there any limitation or
condition in Section 1 of Article XV of the
Constitution which is violated by the act of
the Convention for the plebiscite on the sole
amendment contained in Organic
Resolition 1?
Ruling: Yes, The Court held that there is.
It is the condition and limitation that all the
amendments to be proposed by the same
Convention must be submitted to the
people in a single “election” or plebiscite.
This is the doctrine of proper submission.
To justify its decision, the Court
said that the Constitution unequivocably
says “an election” which means only one
and thus, leaving no room for doubt on
how many “elections” or plebiscites may be
held by the Convention.
It being indisputable that the
amendment being proposed to be
submitted to a plebiscite was only the first
amendment the Convention would
propose. The Court stated that the
plebiscite being called for the purpose of
submitting the same for ratification is not
authorized by Section 1 of Article XV of the
Constitution. Hence, all acts of the
Convention and the respondent
COMELEC in that direction were null and
void.
Doctrine of State Immunity Entitlement
of Immunity, Justiciable or Political
Question
JOSUE JAVELLANA vs. THE
EXECUTIVE SECRETARY
G.R. NO. 36142. March 31, 1973
FACTS:
The Plebiscite Case
On March 16, 1967, Congress of the
Philippines passed Resolution No. 2, which
was amended by Resolution No. 4 of said
body, adopted on June 17, 1969, calling a
Convention to propose amendments to the
Constitution of the Philippines.
Said Resolution No. 2, as amended, was
implemented by Republic Act No. 6132,
approved on August 24, 1970, pursuant to
the provisions of which the election of
delegates to the said Convention was held
on November 10, 1970, and the 1971
Constitutional Convention began to
perform its functions on June 1, 1971.
While the Convention was in session on
September 21, 1972, the President issued
Proclamation No. 1081 placing the entire
Philippines under Martial Law.
On November 29, 1972, the Convention
approved its Proposed Constitution of the
Republic of the Philippines. The next day,
November 30, 1972, the President of the
Philippines issued Presidential Decree No.
73, “submitting to the Filipino people for
ratification or rejection the Constitution of
the Republic of the Philippines proposed
by the 1971 Constitutional Convention, and
appropriating funds therefor,” as well as
setting the plebiscite for said ratification or
rejection of the Proposed Constitution on
January 15, 1973.
On December 7, 1972, Charito Planas filed
a case against the Commission on Elections,
the Treasurer of the Philippines and the
Auditor General, to enjoin said
“respondents or their agents from
implementing Presidential Decree No. 73,
in any manner, until further orders of the
Court,” upon the grounds, inter alia, that
said Presidential Decree “has no force and
effect as law because the calling … of such
plebiscite, the setting of guidelines for the
conduct of the same, the prescription of the
ballots to be used and the question to be
answered by the voters, and the
appropriation of public funds for the
purpose, are, by the Constitution, lodged
exclusively in Congress …,” and “there is
no proper submission to the people of said
Proposed Constitution set for January 15,
1973, there being no freedom of speech,
press and assembly, and there being no
sufficient time to inform the people of the
contents thereof.”
On December 17, 1972, the President had
issued an order temporarily suspending
the effects of Proclamation No. 1081, for the
purpose of free and open debate on the
Proposed Constitution.
On December 23, the President announced
the postponement of the plebiscite for the
ratification or rejection of the Proposed
Constitution. No formal action to this effect
was taken until January 7, 1973, when
General Order No. 20 was issued, directing
“that the plebiscite scheduled to be held on
January 15, 1978, be postponed until
further notice.” Said General Order No. 20,
moreover, “suspended in the meantime”
the “order of December 17, 1972,
temporarily suspending the effects of
Proclamation No. 1081 for purposes of free
and open debate on the proposed
Constitution.”
Because of these events relative to the
postponement of the aforementioned
plebiscite, the Court deemed it fit to refrain,
for the time being, from deciding the
aforementioned cases, for neither the date
nor the conditions under which said
plebiscite would be held were known or
announced officially. Then, again,
Congress was, pursuant to the 1935
Constitution, scheduled to meet in regular
session on January 22, 1973, and since the
main objection to Presidential Decree No.
73 was that the President does not have the
legislative authority to call a plebiscite and
appropriate funds therefor, which
Congress unquestionably could do,
particularly in view of the formal
postponement of the plebiscite by the
President reportedly after consultation
with, among others, the leaders of Congress
and the Commission on Elections the Court
deemed it more imperative to defer its final
action on these cases.
“In the afternoon of January 12, 1973, the
petitioners in Case G.R. No. 
L-35948 filed
an “urgent motion,” praying that said case
be decided “as soon as possible, preferably
not later than January 15, 1973.”
The next day, January 13, 1973, which was
a Saturday, the Court issued a resolution
requiring the respondents in said three (3)
cases to comment on said “urgent motion”
and “manifestation,” “not later than
Tuesday noon, January 16, 1973.” Prior
thereto, or on January 15, 1973, shortly
before noon, the petitioners in said Case
G.R. No. L-35948 riled a “supplemental
motion for issuance of restraining order
and inclusion of additional respondents,”
praying: “… that a restraining order be
issued enjoining and restraining
respondent Commission on Elections, as
well as the Department of Local
Governments and its head, Secretary Jose
Roño; the Department of Agrarian Reforms
and its head, Secretary Conrado Estrella;
the National Ratification Coordinating
Committee and its Chairman, Guillermo de
Vega; their deputies, subordinates and
substitutes, and all other officials and
persons who may be assigned such task,
from collecting, certifying, and announcing
and reporting to the President or other
officials concerned, the so-called Citizens’
Assemblies referendum results allegedly
obtained when they were supposed to have
met during the period comprised between
January 10 and January 15, 1973, on the two
questions quoted in paragraph 1 of this
Supplemental Urgent Motion.”
On the same date January 15, 1973 the
Court passed a resolution requiring the
respondents in said case G.R. No. L-35948
to file “file an answer to the said motion not
later than 4 P.M., Tuesday, January 16,
1973,” and setting the motion for hearing
“on January 17, 1973, at 9:30 a.m.” While
the case was being heard, on the date last
mentioned, at noontime, the Secretary of
Justice called on the writer of this opinion
and said that, upon instructions of the
President, he (the Secretary of Justice) was
delivering to him (the writer) a copy of
Proclamation No. 1102, which had just been
signed by the President. Thereupon, the
writer returned to the Session Hall and
announced to the Court, the parties in G.R.
No. L-35948 inasmuch as the hearing in
connection therewith was still going on and
the public there present that the President
had, according to information conveyed by
the Secretary of Justice, signed said
Proclamation No. 1102, earlier that
morning.
The Ratification Case
On January 20, 1973, just two days before
the Supreme Court decided the sequel of
plebiscite cases, Javellana filed this suit
against the respondents to restrain them
from implementing any of the provisions of
the proposed Constitution not found in the
present 1935 Constitution. This is a petition
filed by him as a Filipino citizen and a
qualified and registered voter and as a class
suit, for himself and in behalf of all citizens
and voters similarly situated. Javellana also
alleged that the President had announced
the immediate implementation of the new
constitution, thru his Cabinet, respondents
including.
Respondents are acting without or in excess
of jurisdiction in implementing the said
proposed constitution upon ground that
the President as Commander-in-Chief of
the AFP is without authority to create the
Citizens Assemblies; without power to
approve proposed constitution; without
power to proclaim the ratification by the
Filipino people of the proposed
constitution; and the election held to ratify
the proposed constitution was not a free
election, hence null and void.
Following that, petitioners prayed for the
nullification of Proclamation No. 1102 and
any order, decree, and proclamation which
have the same import and objective.
ISSUES:
1. Whether or not the issue of the
validity of Proclamation No. 1102
is a justiciable question.
2. Whether or not the constitution
proposed by the 1971
Constitutional Convention has
been ratified validly conforming
to the applicable constitutional
and statutory provisions.
3. Whether or not the proposed
Constitution has been acquiesced
in (with or without valid
ratification) by the people.
4. Whether or not the petitioners are
entitled for relief.
5. Whether or not the proposed
Constitution by the 1971
Constitutional Convention in
force.
RULINGS:
It is a justiciable and a non-political
question.
To determine whether or not the new
constitution is in force depends upon
whether or not the said new constitution
has been ratified in accordance with the
requirements of the 1935 Constitution. It is
well settled that the matter of ratification of
an amendment to the constitution should
be settled applying the provisions of the
constitution in force at the time of the
alleged ratification of the old constitution.
The issue whether the new constitution
proposed has been ratified in accordance
with the provisions of Article XV of the
1935 Constitution is justiciable as
jurisprudence here and in the US (from
whom we patterned our 1935 Constitution)
shall show.
The Constitution was not validly ratified as
held by six (6) members of the court.
The Constitution does not allow Congress
or anybody else to vest in those lacking the
qualifications and having the
disqualifications mentioned in the
Constitution the right of suffrage.
The votes of persons less than 21 years of
age render the proceedings in the Citizen’s
assemblies void. Proceedings held in such
Citizen’s Assemblies were fundamentally
irregular, in that persons lacking the
qualifications prescribed in Article V
Section 1 of the 1935 Constitution were
allowed to vote in said Assemblies. And,
since there is no means by which the
invalid votes of those less than 21 years of
age can be separated or segregated from
those of the qualified voters, the
proceedings in the Citizen’s Assemblies
must be considered null and void.
Viva voce voting for the ratification of the
constitution is void. Article XV of the 1935
Constitution envisages with the term
“votes cast” choices made on ballots – not
orally or by raising hands – by the persons
taking part in plebiscites. This is but natural
and logical, for, since the early years of the
American regime, we had adopted the
Australian Ballot System, with its major
characteristics, namely, uniform official
ballots prepared and furnished by the
Government and secrecy in the voting,
with the advantage of keeping records that
permit judicial inquiry, when necessary,
into the accuracy of the election returns.
The plebiscite on the constitution not
having been conducted under the
supervision of COMELEC is void. The
point is that, such of the Barrio Assemblies
as were held took place without the
intervention of the COMELEC and without
complying with the provisions of the
Election Code of 1971 or even of those of
Presidential Decree No. 73. The procedure
therein mostly followed is such that there is
no reasonable means of checking the
accuracy of the returns filed by the officers
who conducted said plebiscites. This is
another patent violation of Article X of the
1935 Constitution which form part of the
fundamental scheme set forth in the 1935
Constitution, as amended, to insure the
“free, orderly, and honest” expression of
the people’s will. For this, the alleged
plebiscite in the Citizen’s Assemblies is null
and void, insofar as the same are claimed to
have ratified the revised Constitution
No majority vote has been reached by the
Court.
Four (4) of its members, namely, Justices
Barredo, Makasiar, Antonio and Esguerra
hold that “the people have already
accepted the 1973 Constitution.”
Two (2) members of the Court hold that
there can be no free expression, and there
has even been no expression, by the people
qualified to vote all over the Philippines, of
their acceptance or repudiation of the
proposed Constitution under Martial Law.
Justice Fernando states that “(I)f it is
conceded that the doctrine stated in some
American decisions to the effect that
independently of the validity of the
ratification, a new Constitution once
accepted acquiesced in by the people must
be accorded recognition by the Court, I am
not at this stage prepared to state that such
doctrine calls for application in view of the
shortness of time that has elapsed and the
difficulty of ascertaining what is the mind
of the people in the absence of the freedom
of debate that is a concomitant feature of
martial law.”
Three (3) members of the Court express
their lack of knowledge and/or
competence to rule on the question. Justices
Makalintal and Castro are joined by Justice
Teehankee in their statement that “Under a
regime of martial law, with the free
expression of opinions through the usual
media vehicle restricted, (they) have no
means of knowing, to the point of judicial
certainty, whether the people have
accepted the Constitution.”
The Court is not prepared to concede that
the acts the officers and offices of the
Executive Department, in line with
Proclamation No. 1102, connote
recognition of or acquiescence to the
proposed Constitution.
A department of the Government cannot
“recognize” its own acts. Recognition
normally connotes the acknowledgment by
a party of the acts of another. Individual
acts of recognition by members of Congress
do not constitute congressional
recognition, unless the members have
performed said acts in session duly
assembled. This is a well-established
principle of Administrative Law and of the
Law of Public Officers. The compliance by
the people with the orders of martial law
government does not constitute
acquiescence to the proposed Constitution.
Neither does the Court prepared to declare
that the people’s inaction as regards
Proclamation No. 1102, and their
compliance with a number of Presidential
orders, decrees and/or instructions, some
or many of which have admittedly had
salutary effects, issued subsequently
thereto, amounts to a ratification, adoption
or approval of said Proclamation No. 1102.
The intimidation is there, and inaction or
obedience of the people, under these
conditions, is not necessarily an act of
conformity or acquiescence.
As regards the applicability to these cases
of the “enrolled bill” rule, it is well to
remember that the same refers to a
document certified to the President for his
action under the Constitution by the Senate
President and the Speaker of the House of
Reps, and attested to by the respective
Secretaries of both Houses, concerning
legislative measures approved by said
Houses. Whereas, Proclamation No. 1102 is
an act of the President declaring the results
of a plebiscite on the proposed
Constitution, an act which Article X of the
1935 Constitution denies the executive
department of the Government.
In all other respects and with regard to the
other respondent in said case, petitions
therein should be given due course, there
being more than prima facie showing that
the proposed Constitution has not been
ratified in accordance with Article XV of
the 1935 Constitution, either strictly,
substantially, or has been acquiesced in by
the people or majority thereof; that said
proposed Constitution is not in force and
effect; and that the 1935 Constitution is still
the Fundamental Law of the Land, without
prejudice to the submission of said
proposed Constitution to the people at a
plebiscite for its ratification or rejection in
accordance with Articles V, X and XV of the
1935 Constitution and the provisions of the
Revised Election Code in force at the time
of such plebiscite.
Being the vote of the majority, there is no
further judicial obstacle to the new
Constitution being considered in force and
effect.
Four (4) members of the Court, namely,
Justices Barredo, Makasiar, Antonio and
Esguerra hold that it is in force by virtue of
the people’s acceptance thereof; 4 members
of the Court, namely, Justices Makalintal,
Castro, Fernando and Teehankee cast no
vote thereon on the premise stated in their
votes on the third question that they could
not state with judicial certainty whether the
people have accepted or not accepted the
Constitution; and 2 members of the Court,
voted that the Constitution proposed by the
1971 Constitutional Convention is not in
force; with the result, there are not enough
votes to declare that the new Constitution
is not in force.
HOLY SEE VS. ROSARIO and
STARBRIGHT
FACTS: Holy See exercises sovereignty
over the Vatican City in Rome, Italy, and is
represented in the Philippines by the Papal
Nuncio.
This petition arose from a controversy over
a parcel of land consisting of 6,000 square
meters located in the Municipality of
Paranaque registered in the name of
petitioner. Said lot was contiguous with
two other lots registered in the name of the
Philippine Realty Corporation (PRC).
The three lots were sold to Ramon Licup,
through Msgr. Domingo A. Cirilos, Jr.,
acting as agent to the sellers. Later, Licup
assigned his rights to the sale to Starbright.
In view of the refusal of the squatters to
vacate the lots sold to starbright, a dispute
arose as to who of the parties has the
responsibility of evicting and clearing the
land of squatters. Complicating the
relations of the parties was the sale by
petitioner of Lot 5-A to Tropicana
Properties and Development Corporation
(Tropicana).
Private respondent filed a complaint with
the Regional Trial Court, Branch 61,
Makati, Metro Manila for annulment of the
sale of the three parcels of land, and specific
performance and damages against
petitioner, represented by the Papal
Nuncio, and three other defendants:
namely, Msgr. Domingo A. Cirilos, Jr., the
PRC and Tropicana.
Petitioner moved to dismiss the complaint
for lack of jurisdiction based on sovereign
immunity from suit.
The trial court issued an order denying,
among others, petitioner’s motion to
dismiss after finding that petitioner “shed
off its sovereign immunity by entering into
the business contract in question.”
Petitioner in its petition invokes the
privilege of sovereign immunity and
denied that the acquisition and its
subsequent disposal were made for profit
but for its Apostolic mission in the
Philippines.
ISSUE: Whether the Holy See may still
invoke sovereign immunity when it enters
the business contract in question.
RULING: Yes. The Republic of the
Philippines has accorded the Holy See the
status of a foreign sovereign. The Holy See,
through its Ambassador, the Papal Nuncio,
has had diplomatic representations with
the Philippine government since 1957. This
appears to be the universal practice in
international relations.
There are two conflicting concepts of
sovereign immunity, each widely held and
firmly established. According to the
classical or absolute theory, a sovereign
cannot, without its consent, be made a
respondent in the courts of another
sovereign. According to the newer or
restrictive theory, the immunity of the
sovereign is recognized only with regard to
public acts or acts jure imperii of a state,
but not with regard to private acts or acts
jure gestionis. If the act is in pursuit of a
sovereign activity, or an incident thereof,
then it is an act jure imperii, especially
when it is not undertaken for gain or profit.
In the case at bench, if petitioner has bought
and sold lands in the ordinary course of a
real estate business, surely the said
transaction can be categorized as an act jure
gestionis. However, petitioner has denied
that the acquisition and subsequent
disposal of Lot 5-A were made for profit
but claimed that it acquired said property
for the site of its mission or the Apostolic
Nunciature in the Philippines. Private
respondent failed to dispute said claim.
Lot 5-A was acquired by petitioner as a
donation from the Archdiocese of Manila.
The donation was made not for commercial
purpose, but for the use of petitioner to
construct thereon the official place of
residence of the Papal Nuncio. The right of
a foreign sovereign to acquire property,
real or personal, in a receiving state,
necessary for the creation and maintenance
of its diplomatic mission, is recognized in
the 1961 Vienna Convention on Diplomatic
Relations (Arts. 20-22). This treaty was
concurred in by the Philippine Senate and
entered into force in the Philippines on
November 15, 1965.
The decision to transfer the property and
the subsequent disposal thereof are
likewise clothed with a governmental
character. Petitioner did not sell Lot 5-A for
profit or gain. It merely wanted to dispose
off the same because the squatters living
thereon made it almost impossible for
petitioner to use it for the purpose of the
donation. The fact that squatters have
occupied and are still occupying the lot,
and that they stubbornly refuse to leave the
premises, has been admitted by private
respondent in its complaint.
Private respondent is not left without any
legal remedy for the redress of its
grievances. Under both Public
International Law and Transnational Law,
a person who feels aggrieved by the acts of
a foreign sovereign can ask his own
government to espouse his cause through
diplomatic channels.
Private respondent can ask the Philippine
government, through the Foreign Office, to
espouse its claims against the Holy See. Its
first task is to persuade the Philippine
government to take up with the Holy See
the validity of its claims. Of course, the
Foreign Office shall first make a
determination of the impact of its espousal
on the relations between the Philippine
government and the Holy See. Once the
Philippine government decides to espouse
the claim, the latter ceases to be a private
cause.
WHEREFORE, the petition for certiorari is
GRANTED and the complaint against
petitioner is DISMISSED.
Liang v. People, G.R. No. 125865, January
28, 2000
Doctrine: Courts cannot blindly adhere and
take on its face a communication from the
Department of Foreign Affairs that a particular
person is covered by any immunity; Due
process is a right of the accused as much as it is
of the prosecution.
Facts:Petitioner is an economist working
with the Asian Development Bank (ADB).
He was charge for allegedly uttering
defamatory words against fellow ADB
worker before the MeTC of Mandaluyong.
He was arrested and subsequently released
in jail after fixing bail. The next day, the
MeTC judge received an “office of
protocol” from the DFA stating that
petitioner is covered by immunity from
legal process under Section 45 of the
Agreement between the ADB and the
Philippine Government regarding the
Headquarters of the ADB in the country.
Based on the said protocol communication
that petitioner is immune from suit, the
MeTC judge without notice to the
prosecution dismissed the two criminal
cases.
Issue: Whether or not the petitioner is
immune from the legal process?
Ruling: No. The DFA’s determination that
a certain person is covered by immunity is
only preliminary which has no binding
effect in courts. In receiving ex-parte the
DFA’s advice and in
motupropriodismissing the two criminal
cases without notice to the prosecution, the
latter’s right to due process was violated. It
should be noted that due process is a right
of the accused as much as it is of the
prosecution. The needed inquiry in what
capacity petitioner was acting at the time of
the alleged utterances requires for its
resolution evidentiary basis that has yet to
be presented at the proper time. At any
rate, it has been ruled that the mere
invocation of the immunity clause does not
ipso facto result in the dropping of the
charges.
ARIGO VS. SWIFT
FACTS: In 1988, Tubbataha was declared a
National Marine Park by virtue
of Proclamation No. 306 issued by
President Corazon C. Aquino on August
11, 1988. Located in the middle of Central
Sulu Sea, 150 kilometers southeast of
Puerto Princesa City, Tubbataha lies at the
heart of the Coral Triangle, the global
center of marine biodiversity.
In 1993, Tubbataha was inscribed
by the United Nations
Educational Scientific and Cultural
Organization (UNESCO) as a World
Heritage Site. It was recognized as one of
the Philippines' oldest ecosystems,
containing excellent examples of pristine
reefs and a high diversity of marine life.
The 97,030-hectare protected marine park
is also an important habitat
for internationally threatened and
endangered marine species. UNESCO
cited Tubbataha's outstanding universal
value as an important and
significant natural habitat for in situ
conservation of biological diversity; an
example representing significant on-going
ecological and biological processes; and
an area of exceptional natural beauty and
aesthetic importance.
On April 6, 2010, Congress passed Republic
Act (R.A.) No. 10067,3 otherwise known as
the "Tubbataha Reefs Natural Park (TRNP)
Act of 2009" "to ensure the protection and
conservation of the globally
significant economic, biological,
sociocultural, educational and scientific
values of the Tubbataha Reefs into
perpetuity for the enjoyment of present and
future generations." Under the "no-take"
policy, entry into the waters of TRNP
is strictly regulated and many human
activities are prohibited and penalized
or fined, including fishing, gathering,
destroying and disturbing the
resources within the TRNP. The law
likewise created the Tubbataha Protected
Area Management Board (TPAMB) which
shall be the sole policy-making and permit-
granting body of the TRNP.
The USS Guardian is an Avenger-
class mine countermeasures ship of the US
Navy. In December 2012, the US Embassy
in the Philippines requested diplomatic
clearance for the said vessel "to enter and
exit the territorial waters of the Philippines
and to arrive at the port of Subic Bay for the
purpose of routine ship replenishment,
maintenance, and crew liberty."4 On
January 6, 2013, the ship left Sasebo, Japan
for Subic Bay, arriving on January 13, 2013
after a brief stop for fuel in Okinawa, Japan.
On January 15, 2013, the USS
Guardian departed Subic Bay for its next
port of call in Makassar, Indonesia. On
January 17, 2013 at 2:20 a.m. while
transiting the Sulu Sea, the ship ran
aground on the northwest side of South
Shoal of the Tubbataha Reefs, about 80
miles east-southeast of Palawan. No cine
was injured in the incident, and there have
been no reports of leaking fuel or oil.
On January 20, 2013, U.S. 7th Fleet
Commander, Vice Admiral Scott Swift,
expressed regret for the incident in a press
statement.5Likewise, US Ambassador to
the Philippines Harry K. Thomas, Jr., in a
meeting at the Department of Foreign
Affairs (DFA) on February 4, "reiterated his
regrets over the grounding incident and
assured Foreign Affairs Secretazy Albert
F. del Rosario that the United States will
provide appropriate compensation for
damage to the reef caused by the ship."6 By
March 30, 2013, the US Navyled salvage
team had finished removing the last piece
of the grounded ship from the coral reef.
ISSUES: Whether the case file against the
US respondent is a case file against its state.
1. Whether the US respondents is
immune from suit.
RULING: The immunity of the
State from suit, known also as the doctrine
of sovereign immunity or non-suability of
the State, 17 is expressly provided in Article
XVI of the 1987 Constitution which states:
Section 3. The State may not be sued
without its consent.
In United States of America v. Judge
Guinto, 18 we discussed the principle of
state immunity from suit, as follows:
The rule that a state may not be sued
without its consent, now expressed in
Article XVI, Section 3, of the 1987
Constitution, is one of the generally
accepted principles of international law
that we have adopted as part of the law of
our land under Article II, Section 2. xx x.
Even without such affirmation, we would
still be bound by the generally accepted
principles of international law under the
doctrine of incorporation. Under this
doctrine, as accepted by the majority of
states, such principles are deemed
incorporated in the law of every civilized
state as a condition and consequence of its
membership in the society of nations. Upon
its admission to such society, the state is
automatically obligated to comply with
these principles in its relations with other
states.
As applied to the local state, the doctrine of
state immunity is based on the justification
given by Justice Holmes that "there can be
no legal right against the authority which
makes the law on which the right depends."
[Kawanakoa v. Polybank, 205 U.S. 349]
There are other practical reasons for the
enforcement of the doctrine. In the case of
the foreign state sought to be impleaded
in the local jurisdiction, the added
inhibition is expressed in the maxim par
in parem, non habet imperium. All states
are sovereign equals and cannot
assert jurisdiction over one another. A
contrary disposition would, in
the language of a celebrated case, "unduly
vex the peace of nations." [De Haber v.
Queen of Portugal, 17 Q. B. 171]
While the doctrine appears to prohibit only
suits against the state without its consent, it
is also applicable to complaints filed
against officials of the state for acts
allegedly performed by them in
the discharge of their duties. The rule is
that if the judgment against such officials
will require the state itself to perform an
affirmative act to satisfy the same, such as
the appropriation of the amount needed to
pay the damages awarded against them,
the suit must be regarded as against
the state itself although it has not been
formally impleaded. [Garcia v. Chief of
Staff, 16 SCRA 120] In such a situation, the
state may move to dismiss the complaint on
the ground that it has been filed without its
consent.
In the case of Minucher v. Court of
Appeals,20 we further expounded on the
immunity of foreign states from the
jurisdiction of local courts, as follows:
The precept that a State cannot be sued in the
courts of a foreign state is a long-standing
rule of customary international law then
closely identified with the personal
immunity of a foreign sovereign from suit
and, with the emergence of democratic
states, made to attach not just to the person
of the head of state, or his representative,
but also distinctly to the state itself in its
sovereign capacity. If the acts giving rise
to a suit arc those of a foreign government
done by its foreign agent, although
not necessarily a diplomatic personage,
but acting in his official capacity, the
complaint could be barred by the
immunity of the foreign sovereign from
suit without its consent. Suing a
representative of a state is believed to be, in
effect, suing the state itself. The
proscription is not accorded for the benefit
of an individual but for the State, in whose
service he is, under the maxim - par in
parem, non habet imperium - that all
states are soverr ign equals and cannot
assert jurisdiction over one another.
The implication, in broad terms, is that if
the judgment against an official would
require the state itself to perform an
affirmative act to satisfy the award, such as
the appropriation of the amount needed to
pay the damages decreed against him, the
suit must be regarded as being against the
state itself, although it has not been
formally impleaded.21 (Emphasis
supplied.)
In the same case we also mentioned that in
the case of diplomatic immunity, the
privilege is not an immunity from the
observance of the law of the territorial
sovereign or from ensuing legal liability; it
is, rather, an immunity from the exercise of
territorial jurisdiction.
This traditional rule of State immunity
which exempts a State from being sued in
the courts of another State without the
former's consent or waiver has evolved into
a restrictive doctrine which distinguishes
sovereign and governmental acts (Jure
imperii) from private, commercial
and proprietary acts (Jure gestionis). Under
the restrictive rule of State immunity, State
immunity extends only to acts Jure imperii.
The restrictive application of State
immunity is proper only when the
proceedings arise out of commercial
transactions of the foreign sovereign, its
commercial activities or economic affairs.
1. This traditional rule of State
immunity which exempts a State
from being sued in the courts of
another State without the former's
consent or waiver has evolved
into a restrictive doctrine which
distinguishes sovereign and
governmental acts (Jure imperii)
from private, commercial
and proprietary acts (Jure
gestionis). Under the restrictive
rule of State immunity, State
immunity extends only to acts
Jure imperii. The
restrictive application of State
immunity is proper only when the
proceedings arise out of
commercial transactions of the
foreign sovereign, its
commercial activities or economic
affairs. 24
In Shauf v. Court of Appeals,25 we
discussed the limitations of the State
immunity principle, thus:
It is a different matter where the public
official is made to account in his capacity
as such for acts contrary to law and
injurious to the rights of plaintiff. As was
clearly set forth by Justice Zaldivar
in Director of the Bureau of
Telecommunications, et al. vs. Aligaen, etc.,
et al. : "Inasmuch as the State authorizes
only legal acts by its officers, unauthorized
acts of government officials or officers are
not acts of the State, and an action against
the officials or officers by one whose
rights have been invaded or violated by
such acts, for the protection of his rights, is
not a suit against the State within the rule
of immunity of the State from suit. In the
same tenor, it has been said that an action
at law or suit in equity against a State
officer or the director of a State department
on the ground that, while claiming to act
for the State, he violates or invades
the personal and property rights of the
plaintiff, under an unconstitutional act or
under an assumption of authority which he
does not have, is not a suit against the State
within the constitutional provision that the
State may not be sued without its consent."
The rationale for this ruling is that
the doctrine of state immunity cannot be
used as an instrument for perpetrating an
injustice.
The aforecited authorities are clear on the
matter. They state that the doctrine of
immunity from suit will not apply and
may not be invoked where the public
official is being sued in his private and
personal capacity as an ordinary citizen.
The cloak of protection afforded
the officers and agents of the government is
removed the moment they are sued in their
individual capacity. This situation usually
arises where the public official acts without
authority or in excess of the powers vested
in him. It is a well-settled principle of law
that a public official may be liable in
his personal private capacity for whatever
damage he may have caused by his act
done with malice and in bad faith, or
beyond the scope of his authority or
jurisdiction.26 (Emphasis supplied.)
In this case, the US respondents were sued
in their official capacity as commanding
officers of the US Navy who had control
and supervision over the USS Guardian
and its crew. The alleged act or omission
resulting in the unfortunate grounding of
the USS Guardian on the TRNP was
committed while they were performing
official military duties. Considering that
the satisfaction of a judgment against said
officials will require remedial actions and
appropriation of funds by the US
government, the suit is deemed to be one
against the US itself. The principle of State
immunity therefore bars the exercise of
jurisdiction by this Court over the persons
of respondents Swift, Rice and Robling.
SEAFDEC VS. NLRC
G.R. Nos. 97468-70, September 2 1993, 241
SCRA 580
FACTS: Two labor cases were filed by the
herein private respondents against the
petitioner, Southeast Asian Fisheries
Development Center (SEAFDEC), before
the National Labor Relations Commission
(NLRC), Regional Arbitration Branch,
Iloilo City. In these cases, the private
respondents claim having been wrongfully
terminated from their employment by the
petitioner.
The petitioner, who claims to be an
international inter-government
organization composed of various
Southeast Asian countries, filed a Motion to
Dismiss, challenged the jurisdiction of the
public respondent in taking cognizance of
the above cases.
The private respondents, as well as
respondent labor arbiter, allege that the
petitioner is not immune from suit and
assuming that if, indeed, it is an
international organization, it has, however,
impliedly, if not expressly, waived its
immunity by belatedly raising the issue of
jurisdiction.
ISSUE:Whether or not the petitioner is
immune from suit.
HELD: The Court ruled for the petitioner.
It is beyond question that petitioner
SEAFDEC is an international agency
enjoying diplomatic immunity. It has
already been held in Southeast Asian
Fisheries Development Center-
Aquaculture Department vs. National
Labor Relations Commission (G.R. No.
86773, 206 SCRA 283/1992). Petitioner
Southeast Asian Fisheries Development
Center-Aquaculture Department
(SEAFDEC-AQD) is an international
agency beyond the jurisdiction of public
respondent NLRC.
Being an intergovernmental organization,
SEAFDEC including its Departments
(AQD), enjoys functional independence
and freedom from control of the state in
whose territory its office is located. One of
the basic immunities of an international
organization is immunity from local
jurisdiction, i.e., that it is immune from the
legal writs and processes issued by the
tribunals of the country where it is found.
The obvious reason for this is that the
subjection of such an organization to the
authority of the local courts would afford a
convenient medium thru which the host
government may interfere in their
operations or even influence or control its
policies and decisions of the organization;
besides, such objection to local jurisdiction
would impair the capacity of such body to
discharge its responsibilities impartially on
behalf of its member-states
DFA vs NLRC
G.R. No. 113191, September 18, 1996
Facts:On 27 January 1993, private
respondent Magnayi filed an illegal
dismissal case and violation of the “labor-
only” contracting law against Asian
Development Bank. Two summonses were
served, one sent directly to the ADB and the
other through the Department of Foreign
Affairs. ADB and the DFA notified
respondent Labor Arbiter that the ADB, as
well as its President and Officers, were
covered by an immunity from legal process
except for borrowings, guaranties or the
sale of securities pursuant to Article 50(1)
and Article 55 of the Agreement
Establishing the Asian Development Bank
(the "Charter") in relation to Section 5 and
Section 44 of the Agreement Between The
Bank and The Government Of The
Philippines Regarding The Bank's
Headquarters (the "Headquarters
Agreement").
The Labor Arbiter took cognizance of the
complaint on the impression that the ADB
had waived its diplomatic immunity from
suit and, in time, rendered a decision in
favor of Magnayi. The ADB did not appeal
the decision. Instead, on 03 November
1993, the DFA referred the matter to the
NLRC; in its referral, the DFA sought a
"formal vacation of the void judgment."
When DFA failed to obtain a favorable
decision from the NLRC, it filed a petition
for certiorari.
Issues:
1. Whether or not ADB is immune from
suit.
2. Whether or not by entering into service
contracts with different private companies,
ADB has descended to the level of an
ordinary party to a commercial transaction
giving rise to a waiver of its immunity from
suit.
3. Whether or not the DFA has the legal
standing to file the present petition
Held:
1. Under the Charter and Headquarters
Agreement, the ADB enjoys immunity
from legal process of every form, except in
the specified cases of borrowing and
guarantee operations, as well as the
purchase, sale and underwriting of
securities. The Bank’s officers, on their part,
enjoy immunity in respect of all acts
performed by them in their official
capacity. The Charter and the
Headquarters Agreement granting these
immunities and privileges are treaty
covenants and commitments voluntarily
assumed by the Philippine government
which must be respected.
Being an international organization that
has been extended a diplomatic status, the
ADB is independent of the municipal
law. "One of the basic immunities of an
international organization is immunity
from local jurisdiction, i.e., that it is
immune from the legal writs and processes
issued by the tribunals of the country
where it is found. The obvious reason for
this is that the subjection of such an
organization to the authority of the local
courts would afford a convenient medium
thru which the host government may
interfere in their operations or even
influence or control its policies and
decisions of the organization; besides, such
subjection to local jurisdiction would
impair the capacity of such body to
discharge its responsibilities impartially on
behalf of its member-states."
2. No. The ADB didn't descend to the level
of an ordinary party to a commercial
transaction, which should have constituted
a waiver of its immunity from suit, by
entering into service contracts with
different private companies. “There are
two conflicting concepts of sovereign
immunity, each widely held and firmly
established. According to the classical or
absolute theory, a sovereign cannot,
without its consent, be made a respondent
in the Courts of another sovereign.
According to the newer or restrictive
theory, the immunity of the sovereign is
recognized only with regard to public acts
or acts jure imperii of a state, but not with
regard to private act or acts jure gestionis.
“Certainly, the mere entering into a
contract by a foreign state with a private
party cannot be the ultimate test. Such an
act can only be the start of the inquiry. The
logical question is whether the foreign state
is engaged in the activity in the regular
course of business. If the foreign state is not
engaged regularly in a business or trade,
the particular act or transaction must then
be tested by its nature. If the act is in pursuit
of a sovereign activity, or an incident
thereof, then it is an act jure imperii,
especially when it is not undertaken for
gain or profit.”
The service contracts referred to by private
respondent have not been intended by the
ADB for profit or gain but are official acts
over which a waiver of immunity would
not attach.
3. Yes. The DFA's function includes, among
its other mandates, the determination of
persons and institutions covered by
diplomatic immunities, a determination
which, when challenged, entitles it to seek
relief from the court so as not to seriously
impair the conduct of the country's foreign
relations. The DFA must be allowed to
plead its case whenever necessary or
advisable to enable it to help keep the
credibility of the Philippine government
before the international community. When
international agreements are concluded,
the parties thereto are deemed to have
likewise accepted the responsibility of
seeing to it that their agreements are duly
regarded. In our country, this task falls
principally on the DFA as being the highest
executive department with the competence
and authority to so act in this aspect of the
international arena. In Holy See vs. Hon.
Rosario, Jr., this Court has explained the
matter in good detail; viz:
"In Public International Law, when a state
or international agency wishes to plead
sovereign or diplomatic immunity in a
foreign court, it requests the Foreign Office
of the state where it is sued to convey to the
court that said defendant is entitled to
immunity.
"In the case at bench, the Department of
Foreign Affairs, through the Office of Legal
Affairs moved with this Court to be
allowed to intervene on the side of
petitioner. The Court allowed the said
Department to file its memorandum in
support of petitioner's claim of sovereign
immunity.
"In some cases, the defense of sovereign
immunity was submitted directly to the
local courts by the respondents through
their private counsels. In cases where the
foreign states bypass the Foreign Office, the
courts can inquire into the facts and make
their own determination as to the nature of
the acts and transactions involved."
-------------------------------------------------------
Fontanilla vs Maliaman
Facts: A pick up owned by the National
Irrigation Administration and driven
officially by its regular driver, Hugo Garcia,
bumped a bicycle ridden by Francisco
Fontanilla, which resulted in the latter's
death. The parents of Francisco filed a suit
for damages against Garcia and the NIA, as
Garcia's employer. After trial, the court
awarded actual, moral and exemplary
damages to Spouses Fontanilla. NIA
appealed. The Solicitor General contends
that the NIA does not perform solely and
primarily proprietary functions but is an
agency of the government tasked with
governmental functions, and is therefore
not liable for the tortious act of its driver
Hugo Garcia, who was not its special agent.
Issue: May NIA, a government agency, be
held liable for the damages caused by the
negligent act of its driver who was not its
special agent?
Ruling:
Yes. NIA is a government agency with a
juridical personality separate and
distinct from the government. It is not a
mere agency of the government but a
corporate body performing proprietary
functions. Therefore, it may be held liable
for the damages caused by the negligent act
of its driver who was not its special agent.
HON. RAMON J. FAROLAN, JR., vs.
CTA
FACTS: On January 30, 1972, the vessel S/S
"Pacific Hawk" with Registry No. 170
arrived at the Port of Manila carrying,
among others, 80 bales of screen net
consigned to BagongBuhay Trading
(BagongBuhay). Said importation was
declared through a customs broker under
Entry No. 8651-72 as 80 bales of screen net
of 500 rolls with a gross weight of 12,777
kilograms valued at $3,750.00 and classified
under Tariff Heading No. 39.06-B of the
Tariff and Customs Code2 at 35% ad
valorem. Since the customs examiner found
the subject shipment reflective of the
declaration, BagongBuhay paid the duties
and taxes due in the amount of P11,350.00
which was paid through the Bank of Asia
under Official Receipt No. 042787 dated
February 1, 1972. Thereafter, the customs
appraiser made a return of duty.
Acting on the strength of an information
that the shipment consisted of "mosquito
net" made of nylon dutiable under Tariff
Heading No. 62.02 of the Tariff and
Customs Code, the Office of the Collector
of Customs ordered a re-examination of the
shipment. A report on the re-examination
revealed that the shipment consisted of 80
bales of screen net, each bale containing 20
rolls or a total of 1,600 rolls.3 Re-appraised,
the shipment was valued at $37,560.00 or
$10.15 per yard instead of $.075 per yard as
previously declared. Furthermore, the
Collector of Customs determined the
subject shipment as made of synthetic
(polyethylene) woven fabric classifiable
under Tariff Heading No. 51.04-B at 100%
ad valorem. Thus, BagongBuhay Trading
was assessed P272,600.00 as duties and
taxes due on the shipment in question.4
Since the shipment was also mis-declared
as to quantity and value, the Collector of
Customs forfeited the subject shipment in
favor of the government.
Private respondent filed an appeal for the
decision rendered by the Collector of
Customs, the Commissioner of Customs
affirmed the decision of the Collector of
Customs, the MR that was filed by the
private respondent was denied as well. The
case was then elevated to the CTA which
the decision of the Commissioner of
Customs was reversed by the said court.
On August 20, 1976, private respondent
filed a petition asking for the release of the
questioned goods which this Court denied.
After several motions for the early
resolution of this case and for the release of
goods and in view of the fact that the goods
were being exposed to the natural
elements, we ordered the release of the
goods on June 2, 1986.
Private respondent alleges that of the
143,454 yards (64 bales) released to
BagongBuhay, only 116,950 yards were in
good condition and the 26,504 yards were
in bad condition. Consequently, private
respondent demands that the Bureau of
Customs be ordered to pay for damages for
the 43,050 yards 13 it actually lost.
ISSUE:
Whether or not the Collector of Customs
may be held liable for the 43,050 yards
actually lost by private respondent.
HELD:
The Bureau of Customs cannot be held
liable for actual damages that the private
respondent sustained with regard to its
goods. Otherwise, to permit private
respondent's claim to prosper would
violate the doctrine of sovereign immunity.
Since it demands that the Commissioner of
Customs be ordered to pay for actual
damages it sustained, for which ultimately
liability will fall on the government, it is
obvious that this case has been converted
technically into a suit against the state.
On this point, the political doctrine that "the
state may not be sued without its consent,"
categorically applies.30 As
unincorporated government agency
without any separate juridical personality
of its own, the Bureau of Customs enjoys
immunity from suit. Along with the Bureau
of Internal Revenue, it is invested with an
inherent power of sovereignty, namely,
taxation. As an agency, the Bureau of
Customs performs the governmental
function of collecting revenues which is
definitely not a proprietary function. Thus,
private respondent's claim for damages
against the Commissioner of Customs must
fail.
CHINA NATIONAL MACHINERY &
EQUIPMENT GROUP vs. JUDGE
SANTAMARIA
G.R. No. 185572; February 7, 2012
FACTS: The CNMEG entered into a
Memorandum of Understanding with the
North Luzon Railways Corp. for the
conduct of a feasibility study on a possible
railway line from Manila to San Fernando,
La Union. Then, EXIM Bank and DOF
entered into a MOU wherein China agreed
to extend credit to the Philippine for the
said proposed project on which the Chinese
government designated EXIM Bank as the
lender, while the Philippine government
named the DOF as the borrower. The North
Luzon Railways Corporation and CNMEG
executed a contract of agreement for the
construction of Section I, Phase I of the
Northrail Project from Caloocan to
Malolos. The contract price for the
Northrail Project was pegged at USD
421,050,000. On that, the Philippine
an
government entered into a financial
agreement (Buyer Credit Loan Agreement)
with EXIM Bank to extend a credit in the
amount of USD 400M in order to finance
the project. A civil case for Annulment of
Contract with TRO was then filed by
private respondent against CNMEG, the
Office of the Executive Secretary, the DOF,
the DBM, the NEDA and Northrail alleging
that the Contract Agreement and Loan
Agreement were void for being contrary to
(a) the Constitution; (b) R.A. No. 9184
(Government Procurement Reform Act); (c)
PD. No. 1445 (Government Auditing
Code); and (d) Executive Order No. 292
(Administrative Code).
ISSUE: Whether CNMEG is entitled to
immunity, precluding it from being sued
before a local court.
RULING:
CNMEG is not entitled to immunity from
suit before a local court. As it stands now,
the application of the doctrine of immunity
from suit has been restricted to sovereign or
governmental activities (jure imperii) of
which the mantle of state immunity cannot
be extended to commercial, private and
proprietary acts (jure gestionis). The Court
provides that CNMEG is engaged in
proprietary activity for it shows that
CNMEG sought the construction of the
Luzon Railways as a proprietary venture,
and it was CNMEG who initiated the
undertaking, and not the Chinese
government. Furthermore, CNMEG failed
to adduce evidence that it is immune from
suit under Chinese law. The Court explains
that even assuming CNMEG performs
governmental functions, such claim does
not automatically vest it with immunity
and this view finds support in Malong v.
PNR, in which this Court held that
immunity from suit is determined by the
character of the objects for which the entity
was organized. Certainly, the mere
entering into a contract by a foreign state
with a private party cannot be the ultimate
test. Such an act can only be the start of the
inquiry. The logical question, the Court
explains, is whether the foreign state is
engaged in the activity in the regular course
of business. If the foreign state is not
engaged regularly in a business or trade,
the particular act or transaction must then
be tested by its nature. If the act is in pursuit
of a sovereign activity, or an incident
thereof, then it is an act jure imperii,
especially when it is not undertaken for
gain or profit. The distinction lies in
whether the agency is incorporated or
unincorporated. Thus, although CNMEG
claims to be a government-owned
corporation, it failed to adduce evidence
that it has not consented to be sued under
Chinese law. Following this Court’s ruling
in Deutsche Gesellschaft, in the absence of
evidence to the contrary, CNMEG is to be
presumed as a GOCC without an original
charter. As a result, it has the capacity to
sue and be sued under Section 36 of the
Corporation Code.
Furthermore, the Court provides that
CNMEG failed to present certification from
the DFA, on which when a state or
international agency wishes to plead
sovereign or diplomatic immunity in a
foreign court, it requests the Foreign Office
of the state where it is sued to convey to the
court that said defendant is entitled to
immunity.
-------------------------------------------------------
CIVIL AERONAUTICS
ADMINISTRATION vs. CA
Facts: Private respondent is a naturalized
Filipino citizen and at the time of the
incident was the Honorary Consul Geileral
of Israel in the Philippines.
In the afternoon, private respondent with
several other persons went to the Manila
International Airport to meet his future
son-in-law. In order to get a better view of
the incoming passengers, he and his group
proceeded to the viewing deck or terrace of
the airport.
While walking on the terrace, private
respondent slipped over an elevation about
four (4) inches high at the far end of the
terrace. As a result, private respondent fell
on his back and broke his thigh bone. The
next day private respondent was operated
on for about three hours.
Private respondent then filed an action for
damages based on quasi-delict with the CFI
of Rizal, Branch VII against petitioner Civil
Aeronautics Administration or CAA as the
entity empowered "to administer, operate,
manage, control, maintain and develop the
Manila International Airport ... ."
Said claim for damages included, aside
from the medical and hospital bills,
consequential damages for the expenses of
two lawyers who had to go abroad in
private respondent's stead to finalize
certain business transactions and for the
publication of notices announcing the
postponement of private respondent's
daughter's wedding which had to be
cancelled because of his accident.
Judgment was rendered in private
respondent's favour. Appeal was file but
denied. Hence this petition.
Issue: WON the suit against CAA is really
a suit against the Republic of the
Philippines which cannot be sued without
its consent, which was not given in this
case.
Ruling: Invoking the rule that the State
cannot be sued without its consent,
petitioner contends that being an agency of
the government, it cannot be made a party-
defendant in this case.This Court has
already held otherwise in the case
of National Airports Corporation v. Teodoro,
Sr.
Petitioner contends: that the said ruling
does not apply in this case because: First, in
the Teodoro case, the CAA was sued only
in a substituted capacity, the National
Airports Corporation being the original
party. Second, in the Teodoro case, the
cause of action was contractual in nature
while here, the cause of action is based on a
quasi-delict. Third, there is no specific
provision in Republic Act No. 776, the law
governing the CAA, which would justify
the conclusion that petitioner was
organized for business and not for
governmental purposes.
Arguments are untenable. First,
the Teodoro case, far from stressing the
point that the CAA was only substituted for
the National Airports Corporation, in fact
treated the CAA as the real party in interest
when it stated that: xxx xxxxxx ... To all
legal intents and practical purposes, the
National Airports Corporation is dead and
the Civil Aeronautics Administration is its
heir or legal representative, acting by the
law of its creation upon its own rights and
in its own name. The better practice there
should have been to make the Civil
Aeronautics Administration the third party
defendant instead of the National Airports
Corporation. xxxxxxxxxSecond, the
Teodoro case did not make any
qualification or limitation as to whether or
not the CAA's power to sue and be sued
applies only to contractual obligations. The
Court in the Teodoro case ruled that
Sections 3 and 4 of Executive Order 365
confer upon the CAA, without any
qualification, the power to sue and be sued,
albeit only by implication. Accordingly,
this Court's pronouncement that where
such power to sue and be sued has been
granted without any qualification, it can
include a claim based on tort or quasi-delict
.x xxxThird, it has already been settled in
the Teodoro case that the CAA as an agency
is not immune from suit, it being engaged
in functions pertaining to a private entity.
xxxxxxxxx The Civil Aeronautics
Administration comes under the category
of a private entity. Although not a body
corporate it was created, like the National
Airports Corporation, not to maintain a
necessary function of government, but to
run what is essentially a business, even if
revenues be not its prime objective but
rather the promotion of travel and the
convenience of the travelling public. It is
engaged in an enterprise which, far from
being the exclusive prerogative of state,
may, more than the construction of public
roads, be undertaken by private concerns.
True, the law prevailing in 1952 when the
Teodoro case was promulgated was Exec.
Order 365 (Reorganizing the Civil
Aeronautics Administration and
Abolishing the National Airports
Corporation). Republic Act No. 776 (Civil
Aeronautics Act of the Philippines),
subsequently did not alter the character of
the CAA's objectives. The pertinent
provisions cited in the Teodoro case,
particularly Secs. 3 and 4 of Exec. Order
365, which led the Court to consider the
CAA in the category of a private entity
were retained substantially in Republic Act
776, Sec. 32 (24) and (25).<äre||anº•1
xxxxxxxxx From Republic Act 776, Sec. 32
(24) and (25), it can be seen that the CAA is
tasked with private or non-governmental
functions which operate to remove it from
the purview of the rule on State immunity
from suit. For the correct rule as set forth in
the Tedoro case states:
xxxxxxxxx Not all government entities,
whether corporate or non-corporate, are
immune from suits. Immunity functions
suits is determined by the character of the
objects for which the entity was organized. The
rule is thus stated in Corpus Juris:
Suits against State agencies with relation to
matters in which they have assumed to act
in private or non-governmental capacity,
and various suits against certain
corporations created by the state for public
purposes, but to engage in matters
partaking more of the nature of ordinary
business rather than functions of a
governmental or political character, are not
regarded as suits against the state. The
latter is true, although the state may own
stock or property of such a corporation for
by engaging in business operations
through a corporation, the state divests
itself so far of its sovereign character, and
by implication consents to suits against the
corporation.
In the recent case of Malong v. Philippine
National Railways [it was held that the
Philippine National Railways, although
owned and operated by the government,
was not immune from suit as it does not
exercise sovereign but purely proprietary
and business functions. Accordingly, as the
CAA was created to undertake the
management of airport operations which
primarily involve proprietary functions, it
cannot avail of the immunity from suit
accorded to government agencies
performing strictly governmental
functions.
WHEREFORE, finding no reversible error,
the Petition for review on certiorari is
DENIED and the decision of the Court of
Appeals in CA-G.R. No. 51172-R is
AFFIRMED.
-------------------------------------------------------
E. MERRITT vs.GOVERNMENT OF THE
PHILIPPINE ISLANDS
DOCTRINES:
■ By consenting to be sued a state simply
waives its immunity from suit, but it does
not concede its liability.
■ The State is responsible in like manner
when it acts through a special agent; but not
when the damage has been caused by the
official to whom the task done properly
pertains. (Art. 2180 par. 6, Civil Code)
■ The state is not responsible for the
damages suffered by private individuals in
consequence of acts performed by its
employees in the discharge of the functions
pertaining to their office, because neither
fault nor even negligence can be presumed
on the part of the state in the organization
of branches of public service and in the
appointment of its agents.
■ The State is not liable for the torts
committed by its officers or agents whom it
employs, except when expressly made so
by legislative enactment. The government
does not undertake to guarantee to any
person the fidelity of the officers or agents
whom it employs since that would involve
it in all its operations in endless
embarrassments, difficulties and losses,
which would be subversive of the public
interest.
FACTS: Merrit was riding a motorcycle
along Padre Faura Street when he was
bumped by the ambulance of the General
Hospital. Merrit sustained severe injuries
rendering him unable to return to work.
The legislature later enacted Act 2457
authorizing Merritt to file a suit against the
Government in order to fix the
responsibility for the collision between his
motorcycle and the ambulance of the
General Hospital, and to determine the
amount of the damages, if any, to which he
is entitled. After trial, the lower court held
that the collision was due to the negligence
of the driver of the ambulance. It then
determined the amount of damages and
ordered the government to pay the same.
ISSUES:
1. Did the Government, in enacting the Act
2457, simply waive its immunity from suit
or did it also concede its liability to the
plaintiff?
2. Is the Government liable for the negligent
act of the driver of the ambulance?
HELD:1. By consenting to be sued a state
simply waives its immunity from suit. It
does not thereby concede its liability to
plaintiff, or create any cause of action in his
favor, or extend its liability to any cause not
previously recognized. It merely gives a
remedy to enforce a preexisting liability
and submits itself to the jurisdiction of the
court, subject to its right to interpose any
lawful defense.
2. Under the Civil Code, the state is liable
when it acts through a special agent, but not
when the damage should have been caused
by the official to whom properly it
pertained to do the act performed. A
special agent is one who receives a definite
and fixed order or commission, foreign to
the exercise of the duties of his office if he
is a special official. This concept does not
apply to any executive agent who is an
employee of the acting administration and
who on his own responsibility performs the
functions which are inherent in and
naturally pertain to his office and which are
regulated by law and the regulations. The
driver of the ambulance of the General
Hospital was not a special agent; thus the
Government is not liable.
-------------------------------------------------------
REPUBLIC VS. FELICIANO
FACTS:
On January 22, 1970, Feliciano filed a
complaint with CFI of Camarines Sur
against the Republic of the Philippines,
represented by the Land Authority, for the
recovery of ownership and possession of a
parcel of land, consisting of four (4) lots
situated in the Barrio of Salvacion,
Municipality of Tinambac, Camarines Sur.
He alleged that he bought the property in
question from Victor Gardiola by virtue of
a Contract of Sale dated May 31, 1952,
followed by a Deed of Absolute Sale on
October 30, 1954; that Gardiola had
acquired the property by purchase from the
heirs of Francisco Abrazado whose title to
the said property was evidenced by
an informacionposesoria that upon plaintiff's
purchase of the property, he took actual
possession of the same, introduced various
improvements therein and caused it to be
surveyed in July 1952, which survey was
approved by the Director of Lands on
October 24, 1954;
November 1, 1954, President Ramon
Magsaysay issued Proclamation No. 90
reserving for settlement purposes, under
the administration of the National
Resettlement and Rehabilitation
Administration (NARRA), a tract of land
situated in the Municipalities of Tinambac
and Siruma, Camarines Sur, after which the
NARRA and its successor agency, the Land
Authority, started sub-dividing and
distributing the land to the settlers; that the
property in question, while located within
the reservation established under
Proclamation No. 90, was the private
property of plaintiff and should therefore
be excluded therefrom. Plaintiff prayed
that he be declared the rightful and true
owner of the property in question
consisting of 1,364.4177 hectares; that his
title of ownership based
on informacionposesoria of his
predecessor-in-interest be declared legal
valid and subsisting and that defendant
be ordered to cancel and nullify all awards
to the settlers.
The trial court rendered a decision
declaring Lot No. 1 to be the private
property of Feliciano and the rest of the
property, Lots 2, 3 and 4, reverted to the
public domain.
The trial court reopened the case due to the
filing of a motion to intervene and to set
aside the decision of the trial court by 86
settlers, alleging that they had been in
possession of the land for more than 20
years under claim of ownership. The trial
court ordered the settlers to present their
evidence but they did not appear at the day
of presentation of evidence. Feliciano, on
the other hand, presented additional
evidence. Thereafter, the case was
submitted for decision and the trial court
ruled in favor of Feliciano.
The settlers immediately filed a motion for
reconsideration. The case was reopened to
allow them to present their evidence. But
before this motion was acted upon,
Feliciano filed a motion for execution with
the Appellate Court but it was denied.
The settlers filed a motion to dismiss on the
ground that the Republic of the Philippines
cannot be sued without its consent and
hence the action cannot prosper. The
motion was opposed by Feliciano.
trial court issued the questioned order
dismissing the case for lack of jurisdiction.
Respondent moved for reconsideration,
while the Solicitor General, on behalf of the
Republic of the Philippines filed its
opposition thereto, maintaining that the
dismissal was proper on the ground of non-
suability of the State and also on the ground
that the existence and/or authenticity of
the purported possessory information title
of the respondents' predecessor-in-interest
had not been demonstrated and that at any
rate, the same is not evidence of title, or if it
is, its efficacy has been lost by prescription
and laches.
MR DENIED. plaintiff again went to the
Intermediate Appellate Court on petition
for certiorari. On April 30, 1985, the
respondent appellate court rendered its
decision reversing the order of Judge Lising
and remanding the case to the court a
quo for further proceedings. Hence this
petition.
ISSUE: WON the state can be sued for
recovery and possession of a parcel of land.
RULING:
NO. The doctrine of non-suability of the
State has proper application in this case.
The plaintiff has impleaded the Republic of
the Philippines as defendant in an action
for recovery of ownership and possession
of a parcel of land, bringing the State to
court just like any private person who is
claimed to be usurping a piece of property.
A suit for the recovery of property is not an
action in rem, but an action in personam. It
is an action directed against a specific party
or parties, and any judgment therein binds
only such party or parties. The complaint
filed by plaintiff, the private respondent
herein, is directed against the Republic of
the Philippines, represented by the Land
Authority, a governmental agency created
by Republic Act No. 3844.
By its caption and its allegation and prayer,
the complaint is clearly a suit against the
State, which under settled jurisprudence is
not permitted, except upon a showing that
the State has consented to be sued, either
expressly or by implication through the
use of statutory language too plain to be
misinterpreted.2 There is no such showing
in the instant case. Worse, the complaint
itself fails to allege the existence of such
consent. This is a fatal defect, 3 and on this
basis alone, the complaint should have
been dismissed.
The failure of the petitioner to assert the
defense of immunity from suit when the
case was tried before the court a quo, as
alleged by private respondent, is not fatal.
It is now settled that such defense "may be
invoked by the courts suasponte at any
stage of the proceedings." 4
Private respondent contends that the
consent of petitioner may be read from the
Proclamation itself, when it established the
reservation " subject to private rights, if any
there be. " We do not agree. No such
consent can be drawn from the language of
the Proclamation. The exclusion of existing
private rights from the reservation
established by Proclamation No. 90 can not
be construed as a waiver of the immunity
of the State from suit. Waiver of immunity,
being a derogation of sovereignty, will not
be inferred lightly. but must be construed
in strictissimi juris. 5Moreover, the
Proclamation is not a legislative act. The
consent of the State to be sued must
emanate from statutory authority. Waiver
of State immunity can only be made by an
act of the legislative body.
The inscription in the property registry of
an informacionposesoria under the Spanish
Mortgage Law was a means provided by
the law then in force in the Philippines
prior to the transfer of sovereignty from
Spain to the United States of America, to
record a claimant's actual possession of a
piece of land, established through an ex
parte proceeding conducted in accordance
with prescribed rules. 7 Such inscription
merely furnishes, at best, prima
facieevidence of the fact that at the time the
proceeding was held, the claimant was in
possession of the land under a claim of
right as set forth in his application. 8 The
possessory information could ripen into a
record of ownership after the lapse of 20
years (later reduced to 10 years), upon the
fulfillment of the requisites prescribed in
Article 393 of the Spanish Mortgage Law.
There is no showing in the case at bar that
the informacionposesoria held by the
respondent had been converted into a
record of ownership. Such possessory
information, therefore, remained at best
mere prima facie evidence of possession.
-------------------------------------------------------
U.P. v. Dizon, G.R.No. 18112, August 23,
2012
FACTS: University of the Philippines (UP)
entered into a General Construction
Agreement with respondent Stern Builders
Corporation (Stern Builders) for the
construction and renovation of the
buildings in the campus of the UP in
Los Bas. UP was able to pay its first and
second billing. However, the third billing
worth P273,729.47 was not paid due to its
disallowance by the Commission on Audit
(COA). Thus, Stern Builders sued the UP to
collect the unpaid balance.
On November 28, 2001, the RTC rendered
its decision ordering UP to pay Stern
Builders. Then on January 16, 2002, the UP
filed its motion for reconsideration. The
RTC denied the motion. The denial of the
said motion was served upon
Atty. Felimon Nolasco (Atty.Nolasco) of
the UPLB Legal Office on May 17, 2002.
Notably, Atty. Nolasco was not the counsel
of record of the UP but the OLS in Diliman,
Quezon City.
Thereafter, the UP filed a notice of appeal
on June 3, 2002. However, the RTC denied
due course to the notice of appeal for
having been filed out of time. On October 4,
2002, upon motion of Stern Builders, the
RTC issued the writ of execution.
On appeal, both the CA and the High Court
denied UPs petition. The denial became
final and executory. Hence, Stern Builders
filed in the RTC its motion for execution
despite their previous motion having
already been granted and despite the writ
of execution having already issued. On
June 11, 2003, the RTC granted another
motion for execution filed on May 9, 2003
(although the RTC had already issued the
writ of execution on October 4, 2002).
Consequently, the sheriff served notices of
garnishment to the UPs depositary banks
and the RTC ordered the release of the
funds.
Aggrieved, UP elevated the matter to the
CA. The CA sustained the RTC. Hence, this
petition.
ISSUES:
I. Was UP's funds validly garnished?
II. Has the UP's appeal dated June 3, 2002
been filed out of time?
HELD: UP's funds, being government funds,
are not subject to garnishment. (Garnishment of
public funds; suability vs. liability of the State)
Despite its establishment as a body
corporate, the UP remains to be a
"chartered institution" performing a
legitimate government function.
Irrefragably, the UP is a government
instrumentality, performing the States
constitutional mandate of promoting
quality and accessible education. As a
government instrumentality, the UP
administers special funds sourced from the
fees and income enumerated under Act No.
1870 and Section 1 of Executive Order No.
714, and from the yearly appropriations, to
achieve the purposes laid down by Section
2 of Act 1870, as expanded in Republic Act
No. 9500. All the funds going into the
possession of the UP, including any interest
accruing from the deposit of such funds in
any banking institution, constitute a
"special trust fund," the disbursement of
which should always be aligned with the
UPs mission and purpose, and should
always be subject to auditing by the COA.
The funds of the UP are government funds
that are public in character. They include
the income accruing from the use of real
property ceded to the UP that may be spent
only for the attainment of its institutional
objectives.
A marked distinction exists between
suability of the State and its liability. As the
Court succinctly stated in Municipality of
San Fernando, La Union v. Firme: A
distinction should first be made between
suability and liability. "Suability depends
on the consent of the state to be sued,
liability on the applicable law and the
established facts. The circumstance that a
state is suable does not necessarily mean
that it is liable; on the other hand, it can
never be held liable if it does not first
consent to be sued. Liability is not conceded
by the mere fact that the state has allowed
itself to be sued. When the state does waive
its sovereign immunity, it is only giving the
plaintiff the chance to prove, if it can, that
the defendant is liable.
The Constitution strictly mandated that "no
money shall be paid out of the Treasury
except in pursuance of an appropriation
made by law." The execution of the
monetary judgment against the UP was
within the primary jurisdiction of the COA.
It was of no moment that a final
and executory decision already validated
the claim against the UP.
HELD: The period of appeal did not start
without effective service of decision upon
counsel of record. (The doctrine of immutability
of a final judgment; service of judgments; fresh-
period rule; computation of time)
At stake in the UPs plea for equity was the
return of the amount of
P16,370,191.74 illegally garnished from its
trust funds. Obstructing the plea is the
finality of the judgment based on the
supposed tardiness of UPs appeal, which
the RTC declared on September 26, 2002. It
is true that a decision that has attained
finality becomes immutable and
unalterable, and cannot be modified in any
respect, even if the modification is meant to
correct erroneous conclusions of fact and
law, and whether the modification is made
by the court that rendered it or by this
Court as the highest court of the land. But
the doctrine of immutability of a final
judgment has not been absolute, and has
admitted several exceptions, among them:
(a) the correction of clerical errors; (b) the
so-called nunc pro tunc entries that cause
no prejudice to any party; (c) void
judgments; and (d) whenever
circumstances transpire after the finality of
the decision that render its execution unjust
and inequitable. We rule that the UPs plea
for equity warrants the Courts exercise of
the exceptional power to disregard the
declaration of finality of the judgment of
the RTC for being in clear violation of the
UPs right to due process.
Firstly, the service of the denial of the
motion for reconsideration upon
Atty. Nolasco of the UPLB Legal Office was
invalid and ineffectual because he was
admittedly not the counsel of record of the
UP. Verily, the service of the denial of the
motion for reconsideration could only be
validly made upon the OLS in Diliman, and
no other. It is settled that where a party has
appeared by counsel, service must be made
upon such counsel. This is clear enough
from Section 2, second paragraph, of Rule
13, Rules of Court, which explicitly states
that: "If any party has appeared by counsel,
service upon him shall be made upon his
counsel or one of them, unless service upon
the party himself is ordered by the court.
Where one counsel appears for several
parties, he shall only be entitled to one copy
of any paper served upon him by the
opposite side."
Secondly, even assuming that the service
upon Atty. Nolasco was valid and
effective, such that the remaining period for
the UP to take a timely appeal would end
by May 23, 2002, it would still not be correct
to find that the judgment of the RTC
became final and immutable thereafter due
to the notice of appeal being filed too late
on June 3, 2002. In so declaring the
judgment of the RTC as final against the
UP, the CA and the RTC applied the rule
contained in the second paragraph of
Section 3, Rule 41 of the Rules of Court to
the effect that the filing of a motion for
reconsideration interrupted the running of
the period for filing the appeal; and that the
period resumed upon notice of the denial of
the motion for reconsideration. For that
reason, the CA and the RTC might not be
taken to task for strictly adhering to the rule
then prevailing.
However, equity calls for the retroactive
application in the UPs favor of the fresh-
period rule that the Court first announced
in mid-September of 2005 through its
ruling in Neypes v. Court of Appeals, viz:
"to standardize the appeal periods
provided in the Rules and to afford litigants
fair opportunity to appeal their cases, the
Court deems it practical to allow a fresh
period of 15 days within which to file the
notice of appeal in the Regional Trial Court,
counted from receipt of the order
dismissing a motion for a new trial or
motion for reconsideration." The
retroactive application of the fresh-period
rule, a procedural law that aims "to
regiment or make the appeal period
uniform, to be counted from receipt of the
order denying the motion for new trial,
motion for reconsideration (whether full or
partial) or any final order or resolution," is
impervious to any serious challenge. This is
because there are no vested rights in rules
of procedure.
Consequently, even if the reckoning started
from May 17, 2002, when
Atty. Nolasco received the denial, the UPs
filing on June 3, 2002 of the notice of appeal
was not tardy within the context of the
fresh-period rule. For the UP, the fresh
period of 15-days counted from service of
the denial of the motion for reconsideration
would end on June 1, 2002, which was a
Saturday. Hence, the UP had until the next
working day, or June 3, 2002, a Monday,
within which to appeal, conformably with
Section 1 of Rule 22, Rules of Court, which
holds that: "If the last day of the period, as
thus computed, falls on a Saturday, a
Sunday, or a legal holiday in the place
where the court sits, the time shall not run
until the next working day.
GRANTE
CITY OF MANILA V. TEOTICO
FACTS: January 27 1958, 8:00pm: Genaro
Teotico was at the corner of Old Luneta and
P. Burgos Ave., Manila (in a loading and
unloading zone) waiting for a jeepney. He
hailed a jeep and as he stepped down the
curb to board the jeepney, he fell inside an
uncovered and unlighted catch basin or
manhole on P. Burgos Avenue. Due to the
fall, his head hit the rim of the manhole
breaking his eyeglasses and causing broken
pieces thereof to pierce his left eyelid. As
blood flowed therefrom, impairing his
vision, several persons came to his
assistance and pulled him out of the
manhole. One of them brought Teotico to
the Philippine General Hospital, where his
injuries were treated, after which he was
taken home. In addition to the lacerated
wound in his left upper eyelid, Teotico
suffered contusions on the left thigh, the
left upper arm, the right leg and the upper
lip apart from an abrasion on the right
infra-patella region.
Teotico filed with the CFI Manila
a complaint for damages against the City of
Manila, its mayor, engineer, city health
officer, treasurer, and chief of police. He
alleged that at the time of the event, he was
a practicing public accountant, a
businessman and a professor at UE.
Because of the incident, he was subjected to
humiliation and ridicule by his business
associates and friends. During the period of
his treatment, plaintiff was under constant
fear and anxiety for the welfare of his minor
children since he was their only support.
Due to the filing of this case, plaintiff has
obligated himself to pay his counsel the
sum of P2, 000.00.
On the part of the City, it alleged
that said catchbasin was reported to be
uncovered and the same was covered at
that same day. However, it was again
reported that the cover was missing but
was replaced the same day. The City never
received any report that the same
catchbasin was not covered. Also, the City
alleged that they attend to these actions
immediately but due to the lucrative scrap
iron business, the stealing of metals that
were used to cover the catchbasin was
rampant. CFI dismissed the complaint by
Teotico. On appeal, the decision was
affirmed by the Court of Appeals, except
insofar as the City of Manila is concerned,
which was sentenced to pay damages in the
aggregate sum of P6,750.00.Hence, this
appeal by the City of Manila.
ISSUE: Whether the present case is
governed by Section 4 of Republic Act No.
409 (Charter of the City of Manila) OR
Article 2189 of the Civil Code.
(Sec.4 of RA 409): The city shall not be liable
or held for damages or injuries to persons or
property arising from the failure of the Mayor,
the Municipal Board, or any other city officer,
to enforce the provisions of this chapter, or any
other law or ordinance, or from negligence of
said Mayor, Municipal Board, or other officers
while enforcing or attempting to enforce said
provisions.
(1) Whether or not the City of Manila
can be held liable to Teotico for
damages 1) because the accident
involving him took place in a
national highway; and 2) because
the City of Manila has not been
negligent in connection therewith.
RULING: (1) The Court held
that the application of the Civil Code by the
CA is correct.
Article 2189 of the Civil Code:
Provinces, cities and municipalities
shall be liable for damages for the death of, or
injuries suffered by, any person by reason of
defective conditions of road, streets, bridges,
public buildings, and other public works under
their control or supervision.
Section 4 of the said Act refers to liability
arising from negligence, in general,
regardless of the object thereof, whereas
Article 2189 governs liability due to
"defective streets," in particular. Since the
present action is based upon the alleged
defective condition of a road, said Article
2189 is decisive thereon.
(2) At any rate, under Article 2189 of
the Civil Code, it is not necessary for the
liability therein established to attach that
the defective roads or streets belong to the
province, city or municipality from which
responsibility is exacted. What said article
requires is that the province, city or
municipality have either "control or
supervision" over said street or road. Even
if P. Burgos Avenue were, therefore, a
national highway, this circumstance would
not necessarily detract from its "control or
supervision" by the City of Manila, under
Republic Act 409. Said Act governs the
disposition or appropriation of the
highway funds and the giving of aid to
provinces, chartered cities and
municipalities in the construction of roads
and streets within their respective
boundaries.
The determination of whether or not P.
Burgos Avenue is under the control or
supervision of the City of Manila and
whether the latter is guilty of negligence,
in connection with the maintenance of
said road, which were decided by the
Court of Appeals in the affirmative, is one
of fact, and the findings of said Court
thereon are not subject to our review.
-------------------------------------------------------
USA vs Ruiz
Facts: The United States of
America had a naval base in Subic,
Zambales. The base was one of those
provided in the Military Bases Agreement
between the Philippines and the United
States. Sometime in May, 1972, the United
States invited the submission of bids for a
couple of repair projects. Eligio de Guzman
land Co., Inc. responded to the invitation
and submitted bids. Subsequent thereto,
the company received from the US two
telegrams requesting it to confirm its price
proposals and for the name of its bonding
company. The company construed this as
an acceptance of its offer so they complied
with the requests. The company received a
letter which was signed by William I.
Collins of Department of the Navy of the
United States, also one of the petitioners
herein informing that the company did not
qualify to receive an award for the projects
because of its previous unsatisfactory
performance rating in repairs, and that the
projects were awarded to third parties. For
this reason, a suit for specific performance
was filed by him against the US.
The complaint is to order the defendants to
allow the plaintiff to perform the work on
the projects and, in the event that specific
performance was no longer possible, to
order the defendants to pay damages. The
company also asked for the issuance of a
writ of preliminary injunction to restrain
the defendants from entering into contracts
with third parties for work on the projects.
The defendants entered their special
appearance for the purpose only of
questioning the jurisdiction of this court
over the subject matter of the complaint
and the persons of defendants, the subject
matter of the complaint being acts and
omissions of the individual defendants as
agents of defendant United States of
America, a foreign sovereign which has not
given her consent to this suit or any other
suit for the causes of action asserted in the
complaint.
ISSUE: Whether or not the US naval base in
bidding for said contracts exercise
governmental functions to be able to
invoke state immunity.
RULING:
The traditional rule of State immunity
exempts a State from being sued in the
courts of another State without its consent
or waiver. This rule is a necessary
consequence of the principles of
independence and equality of States.
However, the rules of International Law are
not petrified; they are constantly
developing and evolving. And because the
activities of states have multiplied, it has
been necessary to distinguish them-
between sovereign and governmental acts
(jure imperii) and private, commercial and
proprietary acts (jure gestionis). The result is
that State immunity now extends only to
acts jure imperil The restrictive application
of State immunity is now the rule in the
United States, the United Kingdom and
other states in western Europe.
The restrictive application of state
immunity is proper only when the
proceedings arise out of commercial
transactions of the foreign sovereign. Its
commercial activities of economic affairs. A
state may be descended to the level of an
individual and can thus be deemed to have
tacitly given its consent to be sued. Only
when it enters into business contracts.
That the correct test for the application of
State immunity is not the conclusion of a
contract by a State but the legal nature of
the act is shown in Syquia vs. Lopez, 84 Phil.
312 (1949). In that case the plaintiffs leased
three apartment buildings to the United
States of America for the use of its military
officials. The plaintiffs sued to recover
possession of the premises on the ground
that the term of the leases had expired.
They also asked for increased rentals until
the apartments shall have been vacated.
In Syquia,the United States concluded
contracts with private individuals but the
contracts notwithstanding the States was
not deemed to have given or waived its
consent to be sued for the reason that the
contracts were for jure imperii and not
for jure gestionis.
WHEREFORE, the petition is granted; the
questioned orders of the respondent judge
are set aside and Civil Case No. is
dismissed. Costs against the private
respondent.
FERNANDO A. FROILAN (plaintiff-
appellee) vs. PAN ORIENTAL SHIPPING
CO. (defendant-appellant) and
REPUBLIC OF THE PHILIPPINES
(intervenor-appellee)
FACTS:
Plaintiff, Froilan filed a complaint against
the defendant-appellant, Pan Oriental
Shipping Co., alleging that he purchased
from the Shipping Commission the vessel
for P200,000, paying P50,000 down and
agreeing to pay the balance in installments.
To secure the payment of the balance of the
purchase price, he executed a chattel
mortgage of said vessel in favor of the
Shipping Commission. For various reasons,
among them the non-payment of the
installments, the Shipping Commission
tool possession of said vessel and
considered the contract of sale cancelled.
The Shipping Commission chartered and
delivered said vessel to the defendant-
appellant Pan Oriental Shipping Co. subject
to the approval of the President of the
Philippines.
Plaintiff appealed the action of the
Shipping Commission to the President of
the Philippines and, in its meeting the
Cabinet restored him to all his rights under
his original contract with the Shipping
Commission. Plaintiff had repeatedly
demanded from the Pan Oriental Shipping
Co. the possession of the vessel in question
but the latter refused to do so.
Plaintiff, prayed that, upon the approval of
the bond accompanying his complaint, a
writ of replevin be issued for the seizure of
said vessel with all its equipment and
appurtenances, and that after hearing, he
be adjudged to have the rightful possession
thereof. The lower court issued the writ of
replevin prayed for by Froilan and by
virtue thereof the Pan Oriental Shipping
Co. was divested of its possession of said
vessel.
Pan Oriental protested to this restoration of
Plaintiff‘s rights under the contract of sale,
for the reason that when the vessel was
delivered to it, the Shipping
Administration had authority to dispose of
said authority to the property, Plaintiff
having already relinquished whatever
rights he may have thereon. Plaintiff paid
the required cash of P10,000.00 and as Pan
Oriental refused to surrender possession of
the vessel, he filed an action to recover
possession thereof and have him declared
the rightful owner of said property.
The Republic of the Philippines was
allowed to intervene in said civil case
praying for the possession of the vessel in
order that the chattel mortgage constituted
thereon may be foreclosed.
MAIN ISSUE: The lower court erred in
dismissing the counterclaim on the ground
of alleged lack of jurisdiction over the
intervenor Republic of the Philippines
(NON-SUABILITY OF THE
GOVERNMENT)
OTHER ISSUES:
A. The lower court erred in dismissing the
counterclaim on the ground of prior
judgment.
B. The lower court erred in dismissing the
counterclaim on the ground that the
counterclaim had no foundation because
made to a complaint in intervention that
contained no claim against the defendant.
RULING: (FOR THE MAIN ISSUE)
By filing its complaint in
intervention the Government in effect
waived its right of nonsuability.
DOCTRINE: The immunity of the state
from suits does not deprive it of the right to
sue private parties in its own courts. The
state as plaintiff may avail itself of the
different forms of actions open to private
litigants. In short, by taking the initiative
in an action against a private party, the
state surrenders its privileged position
and comes down to the level of the
defendant. The latter automatically
acquires, within certain limits, the right to
set up whatever claims and other defenses
he might have against the state.
(When the government enters into a
contract, for the State is then deem to have
divested itself of the mantle of sovereign
immunity and descended to the level of the
ordinary individual. Having done so, it
becomes subject to judicial action and
processes.)
RULING OTHER ISSUES:
A. The appellant's contention that
its counterclaim is not barred by
prior judgment (order of
February 8, 1952, dismissing the
complaint in intervention)
1. because said counterclaim
was filed on November 29,
1951, before the issuance of
the order invoked; and
2. because in said order of
February 8, the court
dismissed the complaint in
intervention, "without, of
course, precluding the
determination of the right of
the defendant in the instant
case," and subject to the
condition that the "release
and cancellation of the chattel
mortgage does not, however,
prejudge the question
involved between the
plaintiff and the defendant
which is still the subject of
determination in this case."
B. The lower court also erred in
holding that, as the intervenor
had not made any claim against
the defendant, the latter's
counterclaim had no foundation.
The complaint in intervention
sought to recover possession of
the vessel in question from the
plaintiff, and this claim is logically
adverse to the position assumed
by the defendant that it has a
better right to said possession
than the plaintiff who alleges in
his complaint that he is entitled to
recover the vessel from the
defendant. At any rate a
counterclaim should be judged by
its own allegations, and not by the
averments of the adverse party.
-------------------------------------------------------
Municipality of San Miguel vs Fernandez
Facts: In a civil case where the
Municipality of San Miguel was a
defendant, it was ruled by the trial court
that the Municipality should pay money
corresponding the payment of rentals it
received on a property which was also
ruled to be reconveyed against the plaintiff.
Upon finality of the judgement, RTC issued
a writ of execution which the municipality
moved to quash on the ground that its
property and funds are public in nature
therefore exempt from execution
Issue
Whether the funds of the Municipality of
San Miguel, Bulacan, in the hands of the
provincial and municipal treasurers of
Bulacan and San Miguel, respectively, are
public funds which are exempt from
execution for the satisfaction of the money
judgment
Ruling:
The court held that properties of municipal
corporations are exempt as they are held in
trust for the people, intended and used for
the accomplishment of the purposes for
which municipal corporations are created.
Also, Presidential Decree No. 477 " No
money shall be paid out of the treasury
except in pursuance of a lawful
appropriation or other specific statutory
authority". As such, there must be a
corresponding appropriation in the form of
an ordinance duly passed by the
Sangguniang Bayan before any money of
the municipality may be paid out. In the
case at bar, it has not been shown that the
Sangguniang Bayan has passed an
ordinance to this effect.
-------------------------------------------------------
Municipality of Makati vs CA
Facts: A portion of land owned by
private respondent Admiral Finance
Creditors Consortium, Inc. was
expropriated by Petitioner Municipality of
Makati in an action for eminent domain.
After the RTC fixed the appraised value of
the property at P5,291,666.00, and ordered
petitioner to pay this amount minus the
advanced payment of P338,160.00, it issued
the corresponding writ of execution
accompanied with a writ of garnishment of
funds of the petitioner in PNB.
Petitioner filed a motion for
reconsideration, contending that its funds
at the PNB could neither be garnished nor
levied upon execution, for to do so would
result in the disbursement of public funds
without the proper appropriation required
under the law.
Petitioner revealed to have two accounts in
PNB, the 1st is exclusively for the
expropriation of the subject property, with
an outstanding balance of P99,743.94,
which was taken from the 2nd account
intended for statutory obligations and
other purposes of the municipal
government.
The funds garnished by respondent sheriff
in excess of P99,743.94, which are public
funds earmarked for the municipal
government's other statutory obligations,
are exempted from execution without the
proper appropriation required under the
law.
Issue: Whether the funds of the
Municipality of Makati exempt from
garnishment and levy upon execution?
Ruling: Yes, the court ruled that public
funds are not subject to levy and execution,
unless otherwise provided for by statute.
Municipal revenues derived from taxes,
licenses and market fees, and which are
intended primarily and exclusively for the
purpose of financing the governmental
activities and functions of the municipality,
are exempt from execution.
Absent a showing that the municipal
council of Makati has passed an ordinance
appropriating from its public funds an
amount corresponding to the balance due
under the RTC decision, no levy under
execution may be validly effected on the
public funds of petitioner.
(However, the court ordered petitioner
Municipality of Makati to immediately pay
Philippine Savings Bank, Inc. and private
respondent the amount of P4,953,506.45.
since petitioner has enjoyed possession and
use of the subject property notwithstanding
its inexcusable failure to comply with its
legal obligation to pay just compensation.
The State's power of eminent domain
should be exercised within the bounds of
fair play and justice.)
-------------------------------------------------------
ARIGO VS SWIFT
FACTS: The USS Guardian is an Avenger-
class mine countermeasures ship of the US
Navy. In December 2012, the US Embassy
in the Philippines requested diplomatic
clearance for the said vessel “to enter and
exit the territorial waters of the Philippines
and to arrive at the port of Subic Bay for the
purpose of routine ship replenishment,
maintenance, and crew liberty.” On
January 6, 2013, the ship left Sasebo, Japan
for Subic Bay, arriving on January 13, 2013
after a brief stop for fuel in Okinawa, Japan.
On January 15, 2013, the USS
Guardian departed Subic Bay for its next
port of call in Makassar, Indonesia. On
January 17, 2013 at 2:20 a.m. while
transiting the Sulu Sea, the ship ran
aground on the northwest side of South
Shoal of the Tubbataha Reefs, about 80
miles east-southeast of Palawan. No one
was injured in the incident, and there have
been no reports of leaking fuel or oil.
Petitioners claim that the
grounding, salvaging and post-salvaging
operations of the USS Guardian cause and
continue to cause environmental damage of
such magnitude as to affect the provinces of
Palawan, Antique, Aklan, Guimaras, Iloilo,
Negros Occidental, Negros Oriental,
Zamboanga del Norte, Basilan, Sulu, and
Tawi-Tawi, which events violate their
constitutional rights to a balanced and
healthful ecology.
ISSUES:
1. Whether or not petitioners have
legal standing.
2. Whether or not US respondents
may be held liable for damages
caused by USS Guardian.
3. Whether or not the waiver of
immunity from suit under VFA
applies in this case.
HELD: First Issue: YES. Second issue:
YES.
The US respondents were sued in
their official capacity as commanding
officers of the US Navy who had control
and supervision over the USS Guardian
and its crew. The alleged act or omission
resulting in the unfortunate grounding of
the USS Guardian on the TRNP was
committed while they were performing
official military duties. Considering that
the satisfaction of a judgment against said
officials will require remedial actions and
appropriation of funds by the US
government, the suit is deemed to be one
against the US itself. The principle of State
immunity therefore bars the exercise of
jurisdiction by this Court over the persons
of respondents Swift, Rice and Robling.
During the deliberations, Senior
Associate Justice Antonio T. Carpio took
the position that the conduct of the US in
this case, when its warship entered a
restricted area in violation of R.A. No.
10067 and caused damage to the TRNP reef
system, brings the matter within the ambit
of Article 31 of the United Nations
Convention on the Law of the Sea
(UNCLOS). He explained that while
historically, warships enjoy sovereign
immunity from suit as extensions of their
flag State, Art. 31 of the UNCLOS creates
an exception to this rule in cases where
they fail to comply with the rules and
regulations of the coastal State regarding
passage through the latter’s internal
waters and the territorial sea.
In the case of warships, as
pointed out by Justice Carpio, they
continue to enjoy sovereign immunity
subject to the following exceptions:
Article 30: Non-compliance by warships
with the laws and regulations of the coastal
State
If any warship does not comply with the
laws and regulations of the coastal State
concerning passage through the territorial
sea and disregards any request for
compliance therewith which is made to it,
the coastal State may require it to leave the
territorial sea immediately.
Article 31: Responsibility of the flag State
for damage caused by a warship or other
government ship operated for non-
commercial purposes
The flag State shall bear international
responsibility for any loss or damage to the
coastal State resulting from the non-
compliance by a warship or other
government ship operated for non-
commercial purposes with the laws and
regulations of the coastal State concerning
passage through the territorial sea or with
the provisions of this Convention or other
rules of international law.
Article 32: Immunities of warships and
other government ships operated for non-
commercial purposes
With such exceptions as are
contained in subsection A and in articles 30
and 31, nothing in this Convention affects
the immunities of warships and other
government ships operated for non-
commercial purposes. A foreign warship’s
unauthorized entry into our internal
waters with resulting damage to marine
resources is one situation in which the
above provisions may apply.
But what if the offending warship is a non-party
to the UNCLOS, as in this case, the US?
According to Justice Carpio, although the
US to date has not ratified the UNCLOS, as
a matter of long-standing policy the US
considers itself bound by customary
international rules on the “traditional uses
of the oceans” as codified in UNCLOS.
The Court also fully concurred with Justice
Carpio’s view that non-membership in the
UNCLOS does not mean that the US will
disregard the rights of the Philippines as a
Coastal State over its internal waters and
territorial sea. We thus expect the US to
bear “international responsibility” under
Art. 31 in connection with the USS
Guardian grounding which adversely
affected the Tubbataha reefs. Indeed, it is
difficult to imagine that our long-time ally
and trading partner, which has been
actively supporting the country’s efforts to
preserve our vital marine resources, would
shirk from its obligation to compensate the
damage caused by its warship while
transiting our internal waters. Much less
can we comprehend a Government
exercising leadership in international
affairs, unwilling to comply with the
UNCLOS directive for all nations to
cooperate in the global task to protect and
preserve the marine environment as
provided in Article 197 of UNCLOS
Article 197: Cooperation on a global or
regional basis
States shall cooperate on a global basis and,
as appropriate, on a regional basis, directly
or through competent international
organizations, in formulating and
elaborating international rules, standards
and recommended practices and
procedures consistent with this
Convention, for the protection and
preservation of the marine environment,
taking into account characteristic regional
features.
In fine, the relevance of UNCLOS
provisions to the present controversy is
beyond dispute. Although the said treaty
upholds the immunity of warships from
the jurisdiction of Coastal States while
navigating the latter’s territorial sea, the
flag States shall be required to leave the
territorial sea immediately if they flout
the laws and regulations of the Coastal
State, and they will be liable for damages
caused by their warships or any other
government vessel operated for non-
commercial purposes under Article 31.
Third issue: NO.
The waiver of State immunity
under the VF A pertains only to criminal
jurisdiction and not to special civil actions
such as the present petition for issuance of
a writ of Kalikasan. In fact, it can be
inferred from Section 17, Rule 7 of the Rules
that a criminal case against a person
charged with a violation of an
environmental law is to be filed separately.
The Court considered a view that
a ruling on the application or non-
application of criminal jurisdiction
provisions of the VFA to US personnel who
may be found responsible for the
grounding of the USS Guardian, would be
premature and beyond the province of a
petition for a writ of Kalikasan.
The Court also found unnecessary
at this point to determine whether such
waiver of State immunity is indeed
absolute. In the same vein, we cannot grant
damages which have resulted from the
violation of environmental laws. The Rules
allows the recovery of damages, including
the collection of administrative fines under
R.A. No. 10067, in a separate civil suit or
that deemed instituted with the criminal
action charging the same violation of an
environmental law. The present petition
under the Rules is not the proper remedy to
assail the constitutionality of its provisions.
WHEREFORE, the petition for the issuance
of the privilege of the Writ of Kalikasan is
hereby DENIED.
No pronouncement as to costs.
-------------------------------------------------------
M. H. WYLIE and CAPT. JAMES
WILLIAMS v. AURORA I. RARANG and
THE HONORABLE INTERMEDIATE
APPELLATE COURT
FACTS:
The pivotal issue in this petition centers on
the extent of the "immunity from suit" of
the officials of a United States Naval Base
inside Philippine territory.
In February, 1978, M. H. Wylie was the
assistant administrative officer while Capt.
James Williams was the commanding
officer of the U. S. Naval Base in Subic Bay,
Olongapo City. Private respondent Aurora
I. Rarang was an employee in the Office of
the Provost Marshal assigned as
merchandise control guard.
M. H. Wylie, in his capacity as assistant
administrative officer of the U.S. Naval
Station supervised the publication of the
"Plan of the Day" (POD) which was
published daily the US Naval Base station.
On February 3, 1978, the POD published,
under the "NAVSTA ACTION LINE
INQUIRY" the following:
"Question: I have observed that Merchandise
Control inspector/inspectress are (sic)
consuming for their own benefit things they
have confiscateD from Base Personnel. The
observation is even more aggravated by
consuming such confiscated items as cigarettes
and food stuffs PUBLICLY. This is not to
mention 'Auring' who is in herself, a disgrace
to her division and to the Office of the Provost
Marshal. In lieu of this observation, may I
therefore, ask if the head of the Merchandise
Control Division is aware of this malpractice?
The private respondent was the only one
who was named "Auring" in the Office of
the Provost Marshal. That the private
respondent was the same "Auring" referred
to in the POD was conclusively proven
when on February 7, 1978, petitioner M. H.
Wylie wrote her a letter of apology for the
"inadvertent" publication.
The private respondent then commenced
an action for damages in the CFI of
Zambales against petitioners and the U.S.
Naval Base, alleging that the article
constituted injurious and malicious
defamation, and prayed that she be
awarded moral and exemplary damages.
The petitioners moved to dismiss on the
ground of lack of jurisdiction
The CFI ruled that the acts of the
defendants were not official acts of the
government of the United States but
personal and tortious acts which are
exceptions to the general rule that a
sovereign country cannot be sued in the
court of another country without its
consent.
On appeal, the IAC modified the amount of
damages but affirmed the rest of the CFI
judgment in toto and denied
reconsideration by the petitioners. Hence,
this petition.
ISSUE: Whether the questioned
publication is in the performance of
petitioners’ official functions, and were,
therefore, immune from suit.
RULING: No. In the case of United
States of America v. Guinto (182 SCRA 644
[1990]), we discussed the principle of the
state immunity from suit as follows:
"The rule that a state may not be sued
without its consent, now expressed in
Article XVI, Section 3, of the 1987
Constitution, is one of the generally
accepted principles of international law
that we have adopted as part of the law of
our land under Article II, Section 2."
Even without such affirmation, we would
still be bound by the generally accepted
principles of international law under the
doctrine of incorporation. Under this
doctrine, as accepted by the majority of
states, such principles are deemed
incorporated in the law of every civilized
state as a condition and consequence of its
membership in the society of nations. Upon
its admission to such society, the state is
automatically obligated to comply with
these principles in its relations with other
states.
As applied to the local state, the doctrine of
state immunity is based on the justification
given by Justice Holmes that 'there can be
no legal right against the authority which
makes the law on which the right depends.'
((Kawanakoa v. Polybank, 205 U.S. 349)
There are other practical reasons for the
enforcement of the doctrine. In the case of
the foreign state sought to be impleaded in
the local jurisdiction, the added inhibition
is expressed in the maxim par in parem, non
habet imperium. All states are sovereign
equals and cannot assert jurisdiction over
one another. A contrary disposition would,
in the language of a celebrated case,
'unduly vex the peace of nations.' (Da
Haber v. Queen of Portugal, 17 Q. B. 171)
While the doctrine appears to prohibit only
suits against the state without its consent, it
is also applicable to complaints filed
against officials of the state for acts
allegedly performed by them in the
discharge of their duties. the rule is that if
the judgment against such officials will
require the state itself to perform an
affirmative act to satisfy the same, such as
the appropriation of the amount needed to
pay the damages awarded against them,
the suit must be regarded as against the
state itself although it has not been formally
impleaded. (Garcia v. Chief of Staff, 16
SCRA 120) In such a situation, the state may
move to dismiss the complaint on the
ground that it has been filed without its
consent.
The consent of the state to be sued may be
manifested expressly or impliedly. Express
consent may be embodied in a general law
or a special law. Consent is implied when
the state enters into a contract it itself
commences litigation.
The above rules are subject to qualification.
Express consent is effected only by the will
of the legislature through the medium of a
duly enacted statute. (Republic v. Purisima,
78 SCRA 470) We have held that not all
contracts entered into by the government
will operate as a waiver of its non-suability;
distinction must be made between its
sovereign and proprietary acts. (United
States of America v. Ruiz, 136 SCRA 487)
There is no question that the two (2)
petitioners actively participated in
screening the features and articles in the
POD as part of their official functions.
Under the rule that U.S. officials in the
performance of their official functions are
immune from suit, then it should follow
that the petitioners may not be held liable
for the questioned publication.
It is to be noted, however, that the
petitioners were sued in their personal
capacities for their alleged tortious acts in
publishing a libelous article.
The question, therefore, arises - are
American naval officers who commit a
crime or tortious act while discharging
official functions still covered by the
principle of state immunity from suit?
Pursuing the question further, does the
grant of rights, power, and authority to the
United States under the RP-US Bases Treaty
cover immunity of its officers from crimes
and torts? Our answer is No.
The case of Chavez v. Sandiganbayan, 193
SCRA 282 [1991] gives the law on immunity
from suit of public officials:
“The general rule is that public officials can
be held personally accountable for acts
claimed to have been performed in
connection with official duties where they
have acted ultra vires or where there is
showing of bad faith.”
It may be argued that Captain James
Williams as commanding officer of the
naval base is far removed in the chain of
command from the offensive publication
and it would be asking too much to hold
him responsible for everything which goes
wrong on the base. This may be true as a
general rule.
In this particular case, however, the records
show that the offensive publication was
sent to the commanding officer for
approval and he approved it. The factual
findings of the two courts below are based
on the records. The petitioners have shown
no convincing reasons why our usual
respect for the findings of the trial court
and the respondent court should be
withheld in this particular case and why
their decisions should be reversed.
-------------------------------------------------------
POLICE POWER
METROPOLITAN MANILA
DEVELOPMENT
AUTHORITY, petitioner, vs. BEL-AIR
VILLAGE ASSOCIATION,
INC., respondent. G.R. NO. 135962,
MARCH 27, 2000. PUNO, J.:
FACTS:
Petitioner is a government agency tasked
with the delivery of basic services in Metro
Manila, while the respondent is a non.-
stock, non-profit corporation whose
member are homeowners in Bel-Air
Village, a private subdivision in Makati
City, and which is the owner of the
Neptune Street, a road inside Bel-Air
Village.
In 1995, respondent received from
petitioner, through its Chairman, a notice
dated December 22, 1995 requesting the
respondent to open Neptune Street to
public vehicular traffic in pursuant of
MMDA’s mandate law which requires it to
rationalize the use of roads and/or
thoroughfares for rhe safe and convenient
movement of persons – which Neptune
Street shall be opened to vehicular traffic.
In 1996, respondent instituted against the
petitioner before the RTC Branch 136,
Makati City, for injunction and prayed for
the issuance of TRO and Preliminary
Injunction enjoining the opening of
Neptune Street. The RTC denied the
issuance of a Preliminary Injunction.
Aggrieved, the respondent questioned the
denial before the CA. The CA conducted
ocular inspection and issued a writ of
preliminary injunction enjoining the
implementation of the MMDA’s proposed
action.
The CA found that the MMDA has no
authority to cause the opening of the
Neptune Street and the demolition of the
perimeter walls. Such power, according to
the CA is lodged with the City Council of
Makati by ordinance. The petitioner’s MR
was denied. Hence, this petition.
ISSUES
WON MMDA has the authority to open
Neptune Street to the Public pursuant to its
regulatory and police power?
RULING
No, Petitioner claims that it has the
authority to open Neptune Street to public
traffic because it is an agent of the state
endowed with police power in the delivery
of basic services In Metro Manila, and from
the premise that it has police power, there
is no need for the City of Makati to enact
ordinance opening the Neptune Street.
Police Power is an inherent attribute of
sovereignty. It has been defined as the
power vested by the Constitution in the
legislature 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 for the subjects of the
same. It bears stressing that the police
power is lodged in the National
Legislature. It cannot be exercised by any
group or body of individuals nor
possessing legislative power. The National
Legislature, however, may delegate this
power to the President and administrative
boards as well as the lawmaking bodied of
municipal corporations or the LGUs. Once
delegated, the agents can exercise only such
legislative power as are conferred on them
by the national lawmaking body.
It must be noted that the powers of MMDA
are limited to the following acts:
formulation, coordination, regulation,
implementation, preparation,
management, monitoring, setting of
policies, installation of a system and
administration. There is nothing in RA
7924 that grants the MMDA police power,
let alone legislative power.
Petition DENIED.
-------------------------------------------------------
PASEI v. Drilon
163 SCRA 386 (1988)
Facts: Philippine Association of Service
Exporters, Inc. (PASEI) is a firm engaged in
the recruitment of Filipino workers, male
and female, for overseas placement. In the
herein petition for certiorari and
prohibition, PASEI challenges the
Constitutional validity of the Department
of Labor and Employment’s Department
Order No. 1, Series of 1988, which serves as
guidelines for the temporary suspension of
deployment of Filipino domestic and
household workers. PASEI assails the
subject measure for:
1. discrimination against males or
females since it does not apply to
all Filipino workers but only to
domestic helpers and females
with similar skills
2. violation of the right to travel.
3. invalid exercise of the lawmaking
power, police power being
legislative, and not executive, in
character.
4. violation of non-impairment
clause
The Solicitor General, on behalf of the
respondents filed a Comment, informing
the Court that on March 8, 1988, the
respondent Drilon lifted the deployment
ban in the several states. In submitting the
validity of the challenged measure, the
Solicitor General invokes the police power
of the Philippine State.
Issue:
Whether or not DOLE’s Department Order
No. 1, Series of 1988 is valid police power
measure under the Constitution?
Ruling: Yes, it is a valid police
power measure.
Before explaining the rationale for their
decision on the issue, the Court defined and
explained the concept of police power. It
has been defined as the "state authority to
enact legislation that may interfere with
personal liberty or property in order to
promote the general welfare." As defined,
it consists of (1) an imposition of restraint
upon liberty or property, (2) in order to
foster the common good. It is not capable of
an exact definition but has been, purposely,
veiled in general terms to underscore its all-
comprehensive embrace.
Its scope, ever-expanding to meet the
exigencies of the times, even to anticipate
the future where it could be done, provides
enough room for an efficient and flexible
response to conditions and circumstances
thus assuring the greatest benefits. It may
be said to be that inherent and plenary
power in the State which enables it to
prohibit all things hurtful to the comfort,
safety, and welfare of society.
Based on the concept of police
power and since the Court was satisfied
that the classification made – the preference
for female workers — rests on substantial
distinction, it was held that the PASEI
failed to show the why the contested
measure should be nullified.
Moreover, the consequence the
deployment ban has on the right to travel
does not impair the right. The right to travel
is subject, among other things, to the
requirements of "public safety," "as may be
provided by law. The Court is well aware
of the unhappy plight that has befallen our
female labor force abroad, especially
domestic servants, which is compelling
motive for urgent Government action. As
precisely the caretaker of Constitutional
rights, the Court is called upon to protect
victims of exploitation. In fulfilling that
duty, the Court sustains the Government's
efforts.
The Court did not find merit in the
contention that Department Order No. 1
constitutes an invalid exercise of legislative
power. It is true that police power is the
domain of the legislature, but it does not
mean that such an authority may not be
lawfully delegated. As we have mentioned,
the Labor Code itself vests the Department
of Labor and Employment with rulemaking
powers in the enforcement whereof.
It was also held that the non-
impairment clause of the Constitution,
invoked by the petitioner, must yield to the
loftier purposes targetted by the
Government. The concern of the
Government, however, is not necessarily to
maintain profits of business firms. The
interest of the State is to provide a decent
living to its citizens.
Thus, the petition was dismissed.
-------------------------------------------------------
VALENTIN TIO vs. VIDEOGRAM
REGULATORY BOARD
FACTS: Petitioner assails the
constitutionality of Presidential Decree No.
1987 entitled “An Act Creating the
Videogram Regulatory Board” with broad
powers to regulate and supervise the
videogram industry.
On November 5, 1985, a month after the
promulgation of the abovementioned
decree, Presidential Decree No. 1994
amended the National Internal Revenue
Code providing, inter alia:
“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.
The rationale behind the enactment of the
DECREE, is set out in its preambular
clauses as follows:
1. WHEREAS, 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, and 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;
2. WHEREAS, videogram(s)
establishments collectively earn around
P600 Million per annum from rentals, sales
and disposition of videograms, and such
earnings have not been subjected to tax,
thereby depriving the Government of
approximately P180 Million in taxes each
year;
3. WHEREAS, the unregulated activities of
videogram establishments have also
affected the viability of the movie industry,
particularly the more than 1,200 movie
houses and theaters throughout the
country, and occasioned industry-wide
displacement and unemployment due to
the shutdown of numerous movie houses
and theaters;
4. “WHEREAS, in order to ensure national
economic recovery, it is imperative for the
Government to create an environment
conducive to growth and development of
all business industries, including the movie
industry which has an accumulated
investment of about P3 Billion;
5. WHEREAS, proper taxation of the
activities of videogram establishments will
not only alleviate the dire financial
condition of the movie industry upon
which more than 75,000 families and
500,000 workers depend for their
livelihood, but also provide an additional
source of revenue for the Government, and
at the same time rationalize the heretofore
uncontrolled distribution of videograms;
6. WHEREAS, the rampant and
unregulated showing of obscene
videogram features constitutes a clear and
present danger to the moral and spiritual
well-being of the youth, and impairs the
mandate of the Constitution for the State to
support the rearing of the youth for civic
efficiency and the development of moral
character and promote their physical,
intellectual, and social well-being;
7. WHEREAS, civic-minded citizens and
groups have called for remedial measures
to curb these blatant malpractices which
have
flaunted our censorship and copyright
laws;
8. WHEREAS, in the face of these grave
emergencies corroding the moral values of
the people and betraying the national
economic recovery program, bold
emergency measures must be adopted with
dispatch; x xx” (Numbering of paragraphs
supplied).
Petitioner’s attack on the constitutionality
of the DECREE rests on the following
grounds among others:
1. Section 10 thereof, which imposes a tax of
30% on the gross receipts payable to the
local government is a RIDER and the same
is not germane to the subject matter thereof;
2. The tax imposed is harsh, confiscatory,
oppressive and/or in unlawful restraint of
trade in violation of the due process clause
of the Constitution;
3. There is over regulation of the video
industry as if it were a nuisance, which it is
not.”
ISSUE: Whether the Presidential Decree is
a valid exercise of Police Power.
Rule: YES.
“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 acrrue 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 foregoing provision is allied and
germane to, and is reasonably necessary for
the accomplishment of, the general object
of the DECREE, which is the regulation of
the video industry through the Videogram
Regulatory Board as expressed in its title.
The tax provision is not inconsistent with,
nor foreign to that general subject and title.
As a tool for regulation it is simply one of
the regulatory and control mechanisms
scattered throughout the DECREE. The
express purpose of the DECREE to include
taxation of the video industry in order to
regulate and rationalize the heretofore
uncontrolled distribution of videograms is
evident from Preambles 2 and 5, supra.
Those preambles explain the motives of the
lawmaker in presenting the measure. The
title of the DECREE, which is the creation
of the Videogram Regulatory Board, is
comprehensive enough to include the
purposes expressed in its Preamble and
reasonably covers all its provisions. It is
unnecessary to express all those objectives
in the title or that the latter be an index to
the body of the DECREE.
Petitioner also submits that the thirty
percent (30%) tax imposed is harsh and
oppressive, confiscatory, and in restraint of
trade. However, it is beyond serious
question that a tax does not cease to be
valid merely because it regulates,
discourages, or even definitely deters the
activities taxed. The power to impose taxes
is one so unlimited in force and so
searching in extent, that the courts scarcely
venture to declare that it is subject to any
restrictions whatever, except such as rest in
the discretion of the authority which
exercises it. In imposing a tax, the
legislature acts upon its constituents. This
is, in general, a sufficient security against
erroneous and oppressive taxation.
The tax imposed by the DECREE is not only
a regulatory but also a revenue measure
prompted by the realization that earnings
of videogram establishments of around
P600 million per annum have not been
subjected to tax, thereby depriving the
Government of an additional source of
revenue. It is an end-user tax, imposed on
retailers for every videogram they make
available for public viewing. It is similar to
the 30% amusement tax imposed or borne
by the movie industry which the theater-
owners pay to the government, but which
is passed on to the entire cost of the
admission ticket, thus shifting the tax
burden on the buying or the viewing
public. It is a tax that is imposed uniformly
on all videogram operators.
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.
Taxation has been made the implement of
the state’s police power. At bottom, the rate
of tax is a matter better addressed to the
taxing legislature.
We do not share petitioner’s fears that the
video industry is being over-regulated and
being eased out of existence as if it were a
nuisance. Being a relatively new industry,
the need for its regulation was apparent.
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 f
act 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.” The enactment of the
Decree has not brought about the “demise”
of the video industry. On the contrary,
video establishments are seen to have
proliferated in many places
notwithstanding the 30% tax imposed.
In the last analysis. what petitioner
basically questions is the necessity, wisdom
and expediency of the DECREE. These
considerations, however, are primarily and
exclusively a matter of legislative concern.
In fine, petitioner has not overcome the
presumption of validity which attaches to a
challenged statute. We find no clear
violation of the Constitution which would
justify us in pronouncing Presidential
Decree No. 1987 as unconstitutional and
void.
WHEREFORE, the instant Petition is
hereby dismissed. No costs.
SO ORDERED.
Acebedo Optical Company, Inc. v. CA, 329
SCRA 314 (2000)
Doctrine: "x xx While a business may be
regulated, such regulation must, however, be
within the bounds of reason, i.e., the regulatory
ordinance must be reasonable, and its provision
cannot be oppressive amounting to an arbitrary
interference with the business or calling subject
of regulation. A lawful business or calling may
not, under the guise of regulation, be
unreasonably interfered with even by the
exercise of police power. xxx
xxx The exercise of police power by the local
government is valid unless it contravenes the
fundamental law of the land or an act of the
legislature, or unless it is against public policy
or is unreasonable, oppressive, partial,
discriminating or in derogation of a common
right."
Facts: Acebedo Optical Company applied
with the Office of the City Mayor of Iligan
for a business permit. The City Mayor
issued such permit subject to special
conditions that the company cannot put up
an optical clinic but only a commercial
store; it cannot examine patients and
prescribe glasses; and it cannot sell
eyeglasses without a prescription from
an independent optometrist. Samahan ng
Optometrist ng Pilipinas lodged a
complaint against Acebedo for violating
the conditions which resulted in the
revocation of its permit.
Issue: Whether or not the City Mayor have
the authority to impose special conditions
in the grant of the business permit?
Ruling: No. Police power is essentially
regulatory in nature and the power to
issue license or grant business permits, if
for a regulatory purpose, is within the
ambit of this power. This power
necessarily includes the power to revoke
and to impose conditions. However, the
power to grant or issue licenses or business
permits must always be exercised in
accordance with law, with utmost
observance of the rights of all concerned to
due process and equal protection of the
law. What is sought by Acebedo from the
City Mayor is a permit to engage in the
business of running an optical shop. It does
not purport to seek a license to engage in
the practice of optometry. A business
permit is issued primarily to regulate the
conduct of business and the City Mayor
cannot, through the issuance of such
permit, regulate the practice of a
profession. Such a function is within the
exclusive domain of the administrative
agency specifically empowered by law to
supervise the profession, in this case the
Professional Regulations Commission
and the Board of Examiners in public, particularly in Metro-Manila, has, service as of the last day of registration of
Optometry. time and again, complained against, and each particular year and their respective
condemned, the continued operation of old plates shall he surrendered directly to the
------------------------------------------------------- and dilapidated taxis; WHEREAS, in order Board of Transportation for subsequent
Taxicab Operations of MM vs. BOT that the commuting public may be assured turnover to the Land Transportation
of comfort, convenience, and safety, a Commission. For an orderly
FACTS: program of phasing out of old and implementation of this Memorandum
dilapidated taxis should be adopted; Circular, the rules herein shall immediately
This Petition for "Certiorari, Prohibition
WHEREAS, after studies and inquiries be effective in Metro-Manila. Its
and Mandamus with Preliminary
made by the Board of Transportation, the implementation outside Metro Manila shall
Injunction and Temporary Restraining
latter believes that in six years of operation, be carried out only after the project has
Order" filed by the Taxicab Operators of
a taxi operator has not only covered the cost been implemented in Metro Manila and
Metro Manila, Inc., FelicisimoCabigao and
of his taxis, but has made reasonable profit only after the date has been determined by
Ace Transportation, seeks to declare the
for his investments; NOW, THEREFORE, the Board." Pursuant to the above BOT
nullity of Memorandum Circular No. 77-42,
pursuant to this policy, the Board hereby circular, respondent Director of the Bureau
dated October 10, 1977, of the Board of
declares that no car beyond six years shall of Land Transportation (BLT) issued
Transportation, and Memorandum
be operated as taxi, and in implementation Implementing Circular No. 52, dated
Circular No. 52, dated August 16, 1980, of
of the same hereby promulgates the August 15, 1980, instructing the Regional
the Bureau of Land Transportation.
following rules and regulations: 1. As of Director, the MV Registrars and other
Petitioner Taxicab Operators of Metro
December 31, 1977, all taxis of Model 1971 personnel of BLT, all within the National
Manila, Inc. (TOMMI) is a domestic
and earlier are ordered withdrawn from Capitol Region, to implement said Circular,
corporation composed of taxicab operators,
public service and thereafter may no longer and formulating a schedule of phase-out of
who are grantees of Certificates of Public
be registered and operated as taxis. In the vehicles to be allowed and accepted for
Convenience to operate taxicabs within the
registration of cards for 1978, only taxis of registration as public conveyances. To
City of Manila and to any other place in
Model 1972 and later shall be accepted for quote said Circular: "Pursuant to BOT
Luzon accessible to vehicular traffic.
registration and allowed for operation; 2. Memo Circular No. 77-42, taxi units with
Petitioners Ace Transportation
As of December 31, 1978, all taxis of Model year models over six (6) years old are now
Corporation and FelicisimoCabigao are
1972 are ordered withdrawn from public banned from operating as public utilities in
two of the members of TOMMI, each being
service and thereafter may no longer be Metro Manila. As such the units involved
an operator and grantee of such certificate
registered and operated as taxis. In the should be considered as automatically
of public convenience. On October 10,
registration of cars for 1979, only taxis of dropped as public utilities and, therefore,
1977, respondent Board of Transportation
Model 1973 and later shall be accepted for do not require any further dropping order
(BOT) issued Memorandum Circular No.
registration and allowed for operation; and from the BOT. "Henceforth, taxi units
77-42 which reads: SUBJECT: Phasing out
every year thereafter, there shall be a six- within the National Capitol Region having
and Replacement of Old and Dilapidated
year lifetime of taxi, to wit: 1980 - Model year models over 6 years old shall be
Taxis "WHEREAS, it is the policy of the
1974 1981 - Model 1975, etc. All taxis of refused registration. The following
government to insure that only safe and
earlier models than those provided above schedule of phase-out is herewith
comfortable units are used as public
are hereby ordered withdrawn from public prescribed for the guidance of all
conveyances; WHEREAS, the riding
concerned: "Year Model Automatic Phase-
Out Year 1980 1974 1981 1975 1982 1976
1983 1977 etc. etc. Strict compliance here is
desired." [2] In accordance therewith, cabs
of model 1971 were phase-out in
registration year 1978; those of model 1972,
in 1979; those of model 1973, in 1980; and
those of model 1974, in 1981. On January
27, 1981, petitioners filed a Petition with the
BOT, seeking to nullify MC
On January 27, 1981, petitioners filed a
Petition with the BOT, seeking to nullify
MC No. 77-42 or to stop its implementation;
to allow the registration and operation in
1981 and subsequent years of taxicabs of
model 1974, as well as those of earlier
models which were phased-out, provided
that, at the time of registration, they are
roadworthy and fit for operation. On
February 16, 1981, petitioners filed before
the BOT a "Manifestation and Urgent
Motion", praying for an early hearing of
their petition. The case was heard on
February 20, 1981. On November 28, 1981,
petitioners filed before the same Board a
"Manifestation and Urgent Motion to
Resolve or Decide Main Petition" praying
that the case be resolved or decided not
later than December 10, 1981 to enable
them, in case of denial, to avail of whatever
remedy they may have under the law for
the protection of their interests before their
1975 model cabs are phased-out on January
1, 1982. Petitioners, through its President,
allegedly made personal follow-ups of the
case, but was later informed that the
records of the case could not be located.
ISSUE: Whether the BOT Memo Circular
77-42 is a valid exercise of police power,
thus constitutional
RULING: The assailed BOT Memo
Circular is a valid exercise of Police Power
and does not have any infirmity.
Presidential Decree No. 101 grants to the
Board of Transportation the power "4. To
fix just and reasonable standards,
classification, regulations, practices,
measurements, or service to be furnished,
imposed, observed, and followed by
operators of public utility motor vehicles."
Section 2 of said Decree provides
procedural guidelines for said agency to
follow in the exercise of its powers: "Sec. 2.
Exercise of powers. - In the exercise of the
powers granted in the preceding section,
the Board shall proceed promptly along the
method of legislative inquiry. Apart from
its own investigation and studies, the
Board, in its discretion, may require the
cooperation and assistance of the Bureau of
Transportation among others that may be
able to furnish useful information or data in
the formulation of the Board of any policy,
plan or program in the implementation of
this Decree. The Board may also call
conferences, require the submission of
position papers or other documents,
information, or data by operators or other
persons that may be affected by the
implementation of this Decree, or employ
any other suitable means of inquiry. "
Petitioners contend that they were not
called upon to submit their position papers,
nor were they ever summoned to attend
any conference prior to the issuance of the
questioned BOT Circular. It is clear from
the provision aforequoted, the Board gives
it a wide range of choice in gathering
necessary information or data in the
formulation of any policy, plan or program.
It is not mandatory that it should first call a
conference or require the submission of
position papers or other documents from
operators or persons who may be affected,
this being only one of the options open to
the Board, which is given wide
discretionary authority.
Dispensing with a public hearing prior to
the issuance of the Circulars is neither
violative of procedural due process. As
held in Central Bank vs. Hon. Cloribel and
Banco Filipino, 44 SCRA 307 (1972):
"Previous notice and hearing as elements of
due process, are constitutionally required
for the protection of life or vested property
rights, as well as of liberty, when its
limitation or loss takes place in
consequence of a judicial or quasi-judicial
proceeding, generally dependent upon a
past act or event which has to be
established or ascertained. It is not essential
to the validity of general rules or
regulations promulgated to govern future
conduct of a class or persons or enterprises,
unless the law provides otherwise."
Petitioners further take the position that
fixing the ceiling at six (6) years is arbitrary
and oppressive because the road-
worthiness of taxicabs depends upon their
kind of maintenance and the use to which
they are subjected, and, therefore, their
actual physical condition should be taken
into consideration at the time of
registration. As public respondents
contend, however, it is impractical to
subject every taxicab to constant and
recurring evaluation, not to speak of the
fact that it can open the door to the
adoption of multiple standards, possible
collusion, and even graft and corruption.
A reasonable standard must be adopted to
apply to all vehicles affected uniformly,
fairly, and justly. The span of six years
supplies that reasonable standard. The
product of experience shows that by that
time taxis have fully depreciated, their cost
recovered, and a fair return on investment
obtained. They are also generally
dilapidated and no longer fit for safe and
comfortable service to the public specially
considering that they are in continuous
operation practically 24 hours everyday in
three shifts of eight hours per shift. With
that standard of reasonableness and
absence of arbitrariness, the requirement of
due process has been met. On Equal
Protection of the Law: Petitioners alleged
that the Circular in question violates their
right to equal protection of the law because
the same is being enforced in Metro Manila
only and is directed solely towards the taxi
industry. At the outset it should be pointed
out that implementation outside Metro
Manila is also envisioned in Memorandum
Circular No. 77-42. In fact, it is the
understanding of the Court that
implementation of the Circulars in Cebu
City is already being effected, with the BOT
in the process of conducting studies
regarding the operation of taxicabs in other
cities. The Board's reason for enforcing the
Circular initially in Metro Manila is that
taxicabs in this city, compared to those of
other places, are subjected to heavier traffic
pressure and more constant use. Thus is of
common knowledge. Considering that
traffic conditions are not the same in every
city, a substantial distinction exists so that
infringement of the equal protection clause
can hardly be successfully claimed. As
enunciated in the preambular clauses of the
challenged BOT Circular, the overriding
consideration is the safety and comfort of
the riding public from the dangers posed
by old and dilapidated taxis.
The State, in the exercise of its police power,
can prescribe regulations to promote the
health, morals, peace, good order, safety
and general welfare of the people. It can
prohibit all things hurtful to comfort, safety
and welfare of society. It may also regulate
property rights. In the language of Chief
Justice Enrique M. Fernando "the
necessities imposed by public welfare may
justify the exercise of governmental
authority to regulate even if thereby certain
groups may plausibly assert that their
interests are disregarded". In so far as the
non-application of the assailed Circulars to
other transportation services is
concerned,the equal protection clause does
not imply that the same treatment be
accorded all and sundry. It applies to things
or persons identically or similarly situated.
It permits of classification of the object or
subject of the law provided classification is
reasonable or based on substantial
distinction, which make for real
differences, and that it must apply equally
to each member of the class. What is
required under the equal protection clause
is the uniform operation by legal means so
that all persons under identical or similar
circumstance would be accorded the same
treatment both in privilege conferred and
the liabilities imposed. The challenged
Circulars satisfy the foregoing criteria.
The questioned Circulars do not suffer
from any constitutional infirmity. To
declare a law unconstitutional, the
infringement of constitutional right must
be clear, categorical and undeniable.
Test for valid exercise
Lawful Subject: Interest of the general
public (as distinguished from a particular
class required exercise). This means that the
activity or property sought to be regulated
affects the general welfare.
[TaxicabOperators v. Board of
Transportation, G.R. No. L-59234,
September 30, 1982].
Lawful Means: Means employed are
reasonably necessary for the
accomplishment of the purpose, and are
not unduly oppressive. [Tablarin v.
Gutierrez, G.R. No. 78164, July 31, 1987]
Least Restrictions of Individual Rights: It
must also be evident that no other
alternative for the accomplishment of the
purpose less intrusive of private rights can
work. [White Light Corporation, et al v.
City of Manila, G.R. No. 122846, January 20,
2009].
-------------------------------------------------------
DEL MAR VS. PAGCOR
346 SCRA 485
November 29, 2000
PAGCOR entered into an Agreement with
private respondents Belle Jai Alai
Corporation (BELLE) and Filipinas Gaming
Entertainment Totalizator Corporation
(FILGAME) wherein it was agreed that
BELLE will make available to PAGCOR the
required infrastructure facilities including
the main fronton, as well as provide the
needed funding for jai-alai operations with
no financial outlay from PAGCOR, while
PAGCOR handles the actual management
and operation of jai-alai.
PAGCOR's argues that under Section 11 of
P.D. 1869 they were granted the rights,
privileges, and authority to operate and
maintain gambling casinos, clubs, and
other recreation or amusement places,
sports, gaming pools, i.e., basketball,
football, lotteries, etc. Therefore it contends
that the extent and nature of PAGCORs
franchise is so broad that literally all kinds
of sports and gaming pools, including jai-
alai, are covered therein. It concluded that
since under Section 11 of P.D. No. 1869,
games of skill like basketball and football
have been lumped together with the word
lotteries just before the word etc. and after
the words gaming pools, it may be deduced
from the wording of the law that when bets
or stakes are made in connection with the
games of skill, they may be classified as
games of chance under the coverage of
PAGCORs franchise.
The petitioner Del Mar filed a
Supplemental Petition for Certiorari
questioning the validity of said Agreement
on the ground that PAGCOR is without
jurisdiction, legislative franchise, authority
or power to enter into such Agreement for
the opening, establishment, operation,
control and management of jai-alai games
on the ground that the term jai-alai was
never used and is nowhere to be found in
the law. The conclusion that it is included
in the franchise granted to PAGCOR cannot
be based on a mere cursory perusal of and
a blind reliance on the ordinary and plain
meaning of the statutory terms used such
as gaming pools and lotteries.
Issue:
Whether or not PAGCOR is validly vested
with the authority to operate jai-alai?
Held:
No. PAGCOR is engaged in business
affected with public interest. The phrase
affected with public interest means that an
industry is subject to control for the public
good; it has been considered as the
equivalent of subject to the exercise of the
police power.
A legislative franchise to operate jai-alai is
imbued with public interest and involves
an exercise of police power. The familiar
rule is that laws which grant the right to
exercise a part of the police power of the
state are to be construed strictly and any
doubt must be resolved against the
grant. The legislature is regarded as the
guardian of society, and therefore is not
presumed to disable itself or abandon the
discharge of its duty. Thus, courts do not
assume that the legislature intended to part
away with its power to regulate public
morals.
The manner of granting the franchise, to
whom it may be granted must always
defined in a clear and unequivocal
language. In the absence of these defining
terms, any claim to a legislative franchise to
operate a game played for bets and
denounced as a menace to morality ought
to be rejected.
A statute which legalizes a gambling
activity or business should be strictly
construed and every reasonable doubt
must be resolved to limit the powers and
rights claimed under its authority.
PAGCOR's overarching claim should be
given the strictest scrutiny because it was
granted by one man who governed when
the country was under martial law and
whose governance was repudiated by our
people in EDSA 1986
ANGELES UNIVERSITY FOUNDATION
vs. CITY OF ANGELES
G.R. No. 189999 June 27, 2012
VILLARAMA, JR., J.
FACTS:
Petitioner Angeles University Foundation
(AUF) is an educational institution.
Petitioner filed with the Office of the City
Building Official an application for a
building permit for the construction of an
11-storey building of the Angeles
University Foundation Medical Center.
Said office issued a Building Permit Fee
Assessment in the amount of P126,839.20.
An Order of Payment was also issued by
the City Planning and Development Office,
Zoning Administration Unit requiring
petitioner to pay the sum of P238,741.64 as
Locational Clearance Fee. Petitioner
claimed that it is exempt from the payment
of the building permit and locational
clearance fees, citing legal opinions
rendered by the Department of Justice
(DOJ).
However, respondents refused to issue the
building permits for the construction of the
AUF Medical Center. Consequently,
petitioner paid under protest. Petitioner
filed a Complaint12 before the trial court
seeking the refund. Respondents asserted
that the claim of petitioner cannot be
granted because its structures are not
among those mentioned in Sec. 209 of the
National Building Code as exempted. The
trial court rendered judgment in favor of
the petitioner and against the respondents.
Respondents appealed to the CA which
reversed the trial court.
ISSUES: (1) whether petitioner is exempt
from the payment of building
permit and related fees
imposed under the National
Building Code; and
(2) whether the parcel of land
owned by petitioner which has
been assessed for real property
tax is likewise exempt.
RULING:
(1) No! Building permit fees refers to
the basic permit fee and other charges
imposed under the National Building
Code. Exempted from the payment of
building permit fees are: (1) public
buildings and (2) traditional indigenous
family dwellings. Not being expressly
included in the enumeration of structures
to which the building permit fees do not
apply, petitioner’s claim for exemption
rests solely on its interpretation of the
term "other charges imposed by the
National Government" in the tax
exemption clause of R.A. No. 6055.
R.A. No. 6055 granted tax exemptions to
educational institutions like petitioner
which converted to non-stock, non-profit
educational foundations. Section 8 of said
law provides:
SECTION 8. The Foundation shall be
exempt from the payment of all taxes,
import duties, assessments, and other
charges imposed by the Government
on all income derived from or
property, real or personal, used
exclusively for the educational
activities of the Foundation.
That a building permit fee is a regulatory
imposition is highlighted by the fact that in
processing an application for a building
permit, the Building Official shall see to it
that the applicant satisfies and conforms
with approved standard requirements on
zoning and land use xxxxx since building
permit fees are not charges on property,
they are not impositions from which
petitioner is exempt. A "charge" is broadly
defined as the "price of, or rate for,
something," while the word "fee" pertains
to a "charge fixed by law for services of
public officers or for use of a privilege
under control of government."
Petitioner failed to demonstrate that the
above bases of assessment were arbitrarily
determined or unrelated to the activity
being regulated. Neither has petitioner
adduced evidence to show that the rates of
building permit fees imposed and collected
by the respondents were unreasonable or in
excess of the cost of regulation and
inspection.
(2) No. Petitioner failed to discharge
its burden to prove that its real property is
actually, directly and exclusively used for
educational purposes. On petitioner’s
claim that it is exempted from the payment
of real property tax assessed against its real
property presently occupied by informal
settlers. Section 28(3), Article VI of the 1987
Constitution provides:
xxxx
Charitable institutions, churches and
parsonages or convents appurtenant
thereto, mosques, non-profit
cemeteries, and all lands, buildings,
and improvements, actually, directly
and exclusively used for religious,
charitable or educational purposes
shall be exempt from taxation.
Under the 1973 and 1987 Constitutions and
Rep. Act No. 7160 in order to be entitled to
the exemption, the petitioner is burdened
to prove, by clear and unequivocal proof,
that (a) it is a charitable institution; and (b)
its real properties are ACTUALLY,
DIRECTLY and EXCLUSIVELY used for
charitable purposes.
Petitioner failed to discharge its burden to
prove that its real property is actually,
directly and exclusively used for
educational purposes. While there is no
allegation or proof that petitioner leases the
land to its present occupants, still there is
no compliance with the constitutional and
statutory requirement that said real
property is actually, directly and
exclusively used for educational
purposes. The respondents correctly
assessed the land for real property taxes for
the taxable period during which the land is
not being devoted solely to petitioner’s
educational activities. Accordingly, the CA
did not err in ruling that petitioner is
likewise not entitled to a refund of the real
property tax it paid under protest.
-------------------------------------------------------
SOUTHERN LUZON DRUG
CORPORATION vs. THE
DEPARTMENT OF SOCIAL WELFARE
AND DEVELOPMENT, et al.
G.R. No. 199669, April 25, 2017
FACTS: The case at bar is a Petition for
Review on Certiorari assailing the Decision
of the Court of Appeals which dismissed
the petition for prohibition filed by
Southern Luzon Drug Corporation
(petitioner) against the Department of
Social Welfare and Development , the
National Council for the Welfare of
Disabled Persons (now National Council
on Disability Affairs or NCDA), the
Department of Finance and the Bureau of
Internal Revenue (collectively, the
respondents), which sought to prohibit the
implementation of Section 4(a) of Republic
Act (R.A.) No. 9257, otherwise known as
the "Expanded Senior Citizens Act of 2003"
and Section 32 of R.A. No. 9442, which
amends the "Magna Carta for Disabled
Persons," particularly the provisions
granting 20% discount on the purchase of
medicines by senior citizens and persons
with disability (PWD), insofar as these
provisions only allow tax deduction on the
gross income based on the net cost of goods
sold or services rendered as compensation
to private establishments.
Petitioner argues that the law is
confiscatory in the sense that the State takes
away a portion of its supposed profits and
such action of the State amounts to taking
for which it should be compensated.A tax
deduction does not offer full
reimbursement of the senior citizen
discount. As such, it would not meet the
definition of just compensation.
Issue: Whether the nature and effects of
the 20% discount constitute an exercise of
police power or eminent domain.
Held: It is in the exercise of its police
power that the Congress enacted R.A. Nos.
9257 and 9442, the laws mandating a 20%
discount on purchases of medicines made
by senior citizens and PWDs. It is also in
further exercise of this power that the
legislature opted that the said discount be
claimed as tax deduction, rather than tax
credit, by covered establishments.
The issue of just compensation finds no
relevance in the instant case as it had
already been made clear in Carlos
Superdrug that the power being exercised
by the State in the imposition of senior
citizen discount was its police power.
Unlike in the exercise of the power of
eminent domain, just compensation is not
required in wielding police power. This is
precisely because there is no taking
involved, but only an imposition of burden.
For the petitioner's clarification, the
presentation of the financial statement is
not of compelling significance in justifying
its claim for just compensation. What is
imperative is for it to establish that there
was taking in the constitutional sense or
that, in the imposition of the mandatory
discount, the power exercised by the state
was eminent domain.
According to Republic of the Philippines v.
Vda. deCastellvi,five circumstances must be
present in order to qualify "taking" as an
exercise of eminent domain. First, the
expropriator must enter a private
property. Second, the entrance into private
property must be for more than a
momentary period. Third, the entry into the
property should be under warrant or color
of legal authority. Fourth, the property
must be devoted to a public use or
otherwise informally appropriated or
injuriously affected. Fifth, the utilization of
the property for public use must be in such
a way as to oust the owner and deprive him
of all beneficial enjoyment of the property.
The first requirement speaks of entry into a
private property which clearly does not
obtain in this case. There is no private
property that is; invaded or appropriated
by the State. As it is, the petitioner
precipitately deemed future profits as
private property and then proceeded to
argue that the State took it away without
full compensation. This seemed
preposterous considering that the subject of
what the petitioner supposed as taking was
not even earned profits but merely an
expectation of profits, which may not even
occur. For obvious reasons, there cannot be
taking of a contingency or of a mere
possibility because it lacks physical
existence that is necessary before there
could be any taking. Further, it is
impossible to quantify the compensation
for the loss of supposed profits before it is
earned.
Republic v Salem Investments
Facts: On February 17, 1983, Batas
Pambansa Blg. 340 was passed authorizing
the expropriation of parcels of lands in the
names of defendants in this case, including
a portion of the land, consisting of 1,380
square meters, belonging to Milagros and
Inocentes De la Rama covered by TCT No.
16213.
On December 14, 1988, or five years
thereafter, Milagros and Inocentes De la
Rama entered into a contract with
intervenor Alfredo Guerrero whereby the
De la Ramas agreed to sell to Guerrero the
entire property covered by TCT No. 16213,
consisting of 4,075 square meters for the
amount of P11,800,000.00. The De la Ramas
received the sum of P2,200,000.00 as partial
payment of the purchase price, the balance
thereof to be paid upon release of the title
by the Philippine Veterans Bank.
On November 3, 1989, Guerrero filed in the
Regional Trial Court in Pasay City a
complaint for specific performance (Civil
Case No. 6974-P) to compel the De la Ramas
to proceed with the sale.
On July 10, 1990, while this case for specific
performance was pending, the Republic of
the Philippines filed the present case (Civil
Case No. 7327) for expropriation pursuant
to B.P. Blg. 340. Among the defendants
named in the complaint were Milagros and
Inocentes De la Rama as registered owners
of Lot 834, a portion of which (Lot 834-A)
was part of the expropriated property.
Upon the deposit of P12,970,350.00
representing 10 percent of the approximate
market value of the subject lands, a writ of
possession was issued on August 29, 1990
in favor of the government.
On May 2, 1991, Guerrero filed a motion for
intervention alleging that the De la Ramas
had agreed to sell to him the entire Lot 834
(TCT No. 16213) on December 14, 1988 and
that a case for specific performance had
been filed by him against the De la Ramas.
On September 9, 1991, based on the report
of the committee on appraisers appointed
by the court and the submissions of
defendants, the trial court approved
payment to the De la Ramas at the rate of
P23,976.00 per square meter for the taking
of 920 square meters out of the 1,380 square
meters to be expropriated under B.P. Blg.
340.
Meanwhile, on September 18, 1991, the trial
court rendered a decision in the case for
specific performance (Civil Case No. 6974-
P) upholding the validity of the contract to
sell and ordering the De la Ramas to
execute the corresponding deed of sale
covering the subject property in favor of
Guerrero. The De la Ramas appealed to the
Court of Appeals (CA-G.R. No. CV-35116)
but their petition was dismissed on July 28,
1992. They tried to appeal to this Court
(G.R. No. 106488) but again they failed in
their bid as their petition for review was
denied on December 7, 1992.
Meanwhile, on October 2, 1991, Guerrero
filed an Omnibus Motion praying that the
just compensation for the land be deposited
in court pursuant to Rule 67, 9 of the Rules
of Court. As his motion for intervention
and omnibus motion had not yet been
resolved, Guerrero filed with the Court of
Appeals a petition for mandamus,
certiorari, and injunction with temporary
restraining order (C.A.-G.R. SP No. 28311)
to enjoin the Republic from releasing or
paying to the De la Ramas any amount
corresponding to the payment of the
expropriated property and to compel the
trial court to resolve his two motions.
On January 12, 1993, the Court of Appeals
rendered a decision granting the writ of
mandamus.
Nonetheless, the De la Ramas filed on
March 17, 1993 a Motion for Authority to
Withdraw the deposit made by the
Republic in 1991. This motion was denied
as the trial court, on May 7, 1993, allowed
the intervention of Guerrero and ordered
the Republic to deposit the amount of just
compensation with the Clerk of Court of
RTC, Pasay City.
On June 16, 1993, the De la Ramas filed a
Motion for Execution again praying that
the courts order dated September 9, 1991,
approving the recommendation of the
appraisal committee, be enforced. This was
duly opposed by Guerrero.
On June 22, 1993, the trial court denied the
motion of the De la Ramas holding that
there had been a change in the situation of
the parties, therefore, making the execution
of the September 9, 1991 Order inequitable,
impossible, or unjust.
As if to further delay the proceedings of
this case, the De la Ramas then filed an
Omnibus Motion seeking clarification of
the September 18, 1991 decision of the trial
court in the case for specific performance,
upholding the validity of the contract to
sell, insofar as the area covered by the
contract was concerned, and asking that a
restraining order be issued until this
motion was granted.
In its order dated October 7, 1993, the trial
court clarified that the area of land covered
by the contract to sell included the portion
expropriated by the Republic.
Thereafter, the De la Ramas sought the
nullification of the June 22, 1993 order of
the trial court in this case, denying their
motion for execution of the order
approving the recommendation of the
appraisal committee, by filing a petition for
certiorari and mandamus in the Court of
Appeals. This petition was, however,
dismissed in a decision dated July 29, 1994
of the appellate court.
On April 5, 1995, the Pasay City Regional
Trial Court, Branch 111, declared Guerrero
the rightful owner of the 920-square meter
expropriated property and ordered
payment to him of just compensation for
the taking of the land.
This decision was subsequently affirmed
by the Court of Appeals. Hence, this
petition.
Issue: WON CA wrongly interpreted
B.P. No. 340 by holding that Batas
Pambansa Blg. 340 merely authorized the
expropriation of the lands of the
defendants, including that portion
belonging to the herein petitioners De La
Ramas covered by TCT No. 16213.
Ruling: The power of eminent domain is
an inherent power of the State. No
constitutional conferment is necessary to
vest it in the State. The constitutional
provision on eminent domain, Art. III, 9,
provides a limitation rather than a basis for
the exercise of such power by the
government. Thus, it states that "Private
property shall not be taken for public use
without just compensation."
Expropriation may be initiated by court
action or by legislation. In both instances,
just compensation is determined by the
courts.
The expropriation of lands consists of two
stages. As explained in Municipality of
Bian v. Garcia:
The first is concerned with the
determination of the authority of the
plaintiff to exercise the power of eminent
domain and the propriety of its exercise in
the context of the facts involved in the suit.
It ends with an order, if not of dismissal of
the action, "of condemnation declaring that
the plaintiff has a lawful right to take the
property sought to be condemned, for the
public use or purpose described in the
complaint, upon the payment of just
compensation to be determined as of the
date of the filing of the complaint". . . .
The second phase of the eminent domain
action is concerned with the determination
by the court of "the just compensation for
the property sought to be taken." This is
done by the court with the assistance of not
more than three (3) commissioners. . . .
It is only upon the completion of these two
stages that expropriation is said to have
been completed. Moreover, it is only upon
payment of just compensation that title
over the property passes to the
government. Therefore, until the action for
expropriation has been completed and
terminated, ownership over the property
being expropriated remains with the
registered owner. Consequently, the latter
can exercise all rights pertaining to an
owner, including the right to dispose of his
property, subject to the power of the State
ultimately to acquire it through
expropriation.
In the case at hand, the first stage of
expropriation was completed when B.P.
Blg. 340 was enacted providing for the
expropriation of 1,380 square meters of the
land in question. The constitutionality of
this law was upheld in the case of Republic
v. De Knecht. In 1990, the government
commenced the second stage of
expropriation through the filing of a
petition for the determination of just
compensation. This stage was not
completed, however, because of the
intervention of Guerrero which gave rise to
the question of ownership of the subject
land. Therefore, the title to the expropriated
property of the De la Ramas remained with
them and did not at that point pass to the
government.
The De la Ramas are mistaken in arguing
that the two stages of expropriation cited
above only apply to judicial, and not to
legislative, expropriation. Although
Congress has the power to determine what
land to take, it can not do so arbitrarily.
Judicial determination of the propriety of
the exercise of the power, for instance, in
view of allegations of partiality and
prejudice by those adversely affected, and
the just compensation for the subject
property is provided in our constitutional
system.
We see no point in distinguishing between
judicial and legislative expropriation as far
as the two stages mentioned above are
concerned. Both involve these stages and in
both the process is not completed until
payment of just compensation is made. The
Court of Appeals was correct in saying that
B.P. Blg. 340 did not effectively expropriate
the land of the De la Ramas. As a matter of
fact, it merely commenced the
expropriation of the subject property.Thus,
in 1988, the De la Ramas still had authority
to transfer ownership of their land and
convey all rights, including the right to
receive just compensation, to Guerrero.
-------------------------------------------------------
ESTATE OF SALUD JIMENEZ,
petitioner, vs. PHILIPPINE EXPORT
PROCESSING ZONE, respondent.
G.R. No. 137285. January 16, 2001
(Eminent Domain)
FACTS: In 1981, PEZA, initiate before the
RTC of Cavite expropriation proceedings
on three parcels of irrigated lands. One of
the lots, Lot 1406 (A and B) is registered in
the name of Salud Jimenez. More than ten
years later, the trial court upheld PEZA's
right to expropriate, among others, the lot
of petitioner. Petitioner sought
reconsideration alleging that the lot would
only be transferred to a private corporation,
and hence would not be utilized for a
public purpose. The trial court
reconsidered the order and released Lot
1406 A from expropriation while the
expropriation of Lot1406 B was maintained.
PEZA appealed the order to the CA. Later
on, the petitioner and PEZA entered into a
compromise agreement whereby (1) PEZA
agrees to withdraw its appeal while Salud
agrees to waive, quitclaim and forfeit its
claim for damages and loss of income
which it sustained by reason of the
possession of said lot by PEZA from 1981-
1993; and (2) the parties agree to swap Lot
1406B withLot434 and that instead of being
paid the just compensation for Lot1406B,
the estate of Salud shall be paid with
Lot434. The compromise agreement is
immediately final and executory. The CA
remanded the case to the trial court for the
approval of the said compromise
agreement. The trial court approved the
same. However, PEZA failed to transfer the
title of Lot434 inasmuch as it was not the
registered owner of the said lot. Petitioner
thereafter filed a motion to partially annul
the order. The trial court then annulled the
compromise agreement and ordered the
turnover of Lot1406B to petitioner. The CA
upheld the rescission of the compromise
agreement, however, set aside the order of
the trial court regarding the turnover of the
lot and ordered the trial judge to proceed
with the hearing of the expropriation
proceedings regarding the determination
of just compensation. This is in accordance
with Art 2041 of the Civil Code which states
that "if one of the parties fails or refuses to
abide by the compromise, the other party
may either enforce the compromise or
regard it as rescinded and insist upon his
original demand.
ISSUE:
Whether the phrase "original demand"
pertains to the return of Lot1406Bwhich is
sought to be expropriated or the
determination of just compensation for the
lot.
HELD:
Expropriation proceedings involve two (2)
phases. The first phase ends either with an
order of expropriation (where the right of
plaintiff to take the land and the public
purpose to which they are to be devoted are
upheld) or an order of dismissal. Either
order would be a final one since it finally
disposes of the case. The second phase
concerns the determination of just
compensation to be ascertained by three (3)
commissioners. It ends with an order fixing
the amount to be paid to the defendant.
Inasmuch as it leaves nothing more to be
done, this order finally disposes of the
second stage. To both orders the remedy
therefrom is an appeal. In the case at bar,
the first phase was terminated when the
July 11, 1991 order of expropriation became
final and the parties subsequently entered
into a compromise agreement regarding
the mode of payment of just compensation.
When respondent failed to abide by the
terms of the compromise agreement,
petitioner filed an action to partially
rescind the same. Obviously, the trial court
could only validly order the rescission of
the compromise agreement anent the
payment of just compensation inasmuch as
that was the subject of the compromise. It is
crystal clear from the contents of the
agreement that the parties limited the
compromise agreement to the matter of just
compensation to petitioner. Said
expropriation order is not closely
intertwined with the issue of payment such
that failure to pay by respondent will also
nullify the right of respondent to
expropriate. No statement to this effect was
mentioned in the agreement. The Order
was mentioned in the agreement only to
clarify what was subject to payment.
Hence, the "original demand" referred to
means the fixing of just compensation.
When PEZA failed to fulfill its obligation to
deliver Lot 434, petitioner can again
demand for the payment but not the return
of the expropriated Lot 1406-B.
-------------------------------------------------------
MACTAN CEBU INTERNATIONAL
AIRPORT AUTHORITY v. LOZADA, JR.
G.R. No. 176625; February 25, 2010
FACTS: The subject of this case is Lot No.
88-SWO-25042 located in Lahug, Cebu
City. Its original owner was
AnastacioDeiparine when the same was
subject to expropriation proceedings,
initiated by the Republic of the Philippines,
represented by the then Civil Aeronautics
Administration, for the expansion and
improvement of the Lahug Airport. The
case was filed with the then Court of First
Instance of Cebu, Third Branch, and
docketed as Civil Case No. R-1881. During
the pendency of the expropriation
proceedings, respondent Bernardo L.
Lozada, Sr. acquired Lot No. 88 from
Deiparine. On December 29, 1961, the trial
court rendered judgment in favor of the
Republic and ordered the latter to pay
Lozada the fair market value of Lot No. 88,
adjudged at P3.00 per square meter, with
consequential damages by way of legal
interest computed from November 16, 1947
the time when the lot was first occupied by
the airport. Lozada received the amount of
P3,018.00 by way of payment. Lozada, with
the other landowners, contacted then CAA
Director Vicente Rivera, Jr., requesting to
repurchase the lots, as per previous
agreement that expropriated lots would be
resold at the price they were expropriated
in the event that the Air Transportation
Office would abandon the Lahug Airport,
pursuant to an established policy involving
similar cases.
On November 29, 1989, then President
Corazon C. Aquino issued a Memorandum
to the Department of Transportation,
directing the transfer of general aviation
operations of the Lahug Airport to the
Mactan International Airport before the
end of 1990 and, upon such transfer, the
closure of the Lahug Airport. From the date
of the institution of the expropriation
proceedings up to the present, the public
purpose of the said expropriation
(expansion of the airport) was never
actually initiated, realized, or
implemented. Instead, the old airport was
converted into a commercial complex.
Thus, on June 4, 1996, petitioners initiated a
complaint for the recovery of possession
and reconveyance of ownership of Lot No.
88. On October 22, 1999, the RTC rendered
its Decision in favor of the plaintiffs
Lozada. Aggrieved, petitioner Mactan
Cebu interposed an appeal with CA. The
CA denied the petitioners appeal.
ISSUE: Whether the taking of private
property consequent to the MCIAA power
of eminent domain is validly exercise.
RULING: Governments power of eminent
domain is not validly exercise. The Court
held thatit is apparent that the acquisition
by the Republic of the expropriated lots
was subject to the condition that the Lahug
Airport would continue its operation. The
condition not having materialized because
the airport had been abandoned, the former
owner should then be allowed to reacquire
the expropriated property. It is well settled
that the taking of private property by the
Governments power of eminent domain is
subject to two mandatory requirements: (1)
that it is for a particular public purpose;
and (2) that just compensation be paid to
the property owner. These requirements
partake of the nature of implied conditions
that should be complied with to enable the
condemner to keep the property
expropriated. More particularly, with
respect to the element of public use, the
expropriator should commit to use the
property pursuant to the purpose stated in
the petition for expropriation filed, failing
which, it should file another petition for the
new purpose. If not, it is then incumbent
upon the expropriator to return the said
property to its private owner, if the latter
desires to reacquire the same. Otherwise,
the judgment of expropriation suffers an
intrinsic flaw, as it would lack one
indispensable element for the proper
exercise of the power of eminent domain,
namely, the particular public purpose for
which the property will be devoted.
Accordingly, the private property owner
would be denied due process of law, and
the judgment would violate the property
owners right to justice, fairness, and equity.
Besides, the Court expressly hold that the
taking of private property, consequent to
the Governments exercise of its power of
eminent domain, is always subject to the
condition that the property be devoted to
the specific public purpose for which it was
taken. If this particular purpose or intent is
not initiated or not at all pursued, and is
peremptorily abandoned, then the former
owners, if they so desire, may seek the
reversion of the property, subject to the
return of the amount of just compensation
received. In such a case, the exercise of the
power of eminent domain has become
improper for lack of the required factual
justification.
Furthermore, the right of respondents to
repurchase Lot No. 88 may be enforced
based on a constructive trust constituted on
the property held by the government in
favor of the former.
-------------------------------------------------------
REPUBLIC OF THE PH vs. LIM
FACTS: In 1938, the Republic instituted a
special civil action for expropriation of a
land in Lahug, Cebu City for the purpose of
establishing a military reservation for the
Philippine Army. The said lots were
registered in the name of Gervasia and
Eulalia Denzon. The Republic deposited
P9,500 in the PNB then took possession of
the lots. Thereafter, on May 1940, the CFI
rendered its Decision ordering the Republic
to pay the Denzons the sum of P4,062.10 as
just compensation. The Denzons appealed
to the CA but it was dismissed on March 11,
1948. An entry of judgment was made on
April 5, 1948.
In 1950, one of the heirs of the Denzons,
filed with the National Airports
Corporation a claim for rentals for the two
lots, but it "denied knowledge of the
matter." On September 6, 1961, Lt. Cabal
rejected the claim but expressed
willingness to pay the appraised value of
the lots within a reasonable time.
For failure of the Republic to pay for the
lots, on September 20, 1961, the Denzons·
successors-in-interest,Valdehueza and
Panerio, filed with the same CFI an action
for recovery of possession with damages
against the Republic and AFP officers in
possession of the property.
On November 1961, Titles of the said lots
were issued in the names of Valdehueza
and Panerio with the annotation "subject to
the priority of the National Airports
Corporation to acquire said parcels of land,
Lots 932 and939 upon previous payment of
a reasonable market value".
On July 1962, the CFI promulgated its
Decision in favor of Valdehueza and
Panerio, holding that they are the owners
and have retained their right as such over
lots because of the Republic·s failure to pay
the amount of P4,062.10,adjudged in the
expropriation proceedings. However, in
view of the annotation on their land titles,
they were ordered to execute a deed of sale
in favor of the Republic.
They appealed the CFI·s decision to the SC.
The latter held that Valdehueza and
Panerio are still the registered owners of
Lots 932 and 939, there having been no
payment of just compensation by the
Republic. SC still ruled that they are not
entitled to recover possession of the lots but
may only demand the payment of their fair
market value.
Meanwhile, in 1964, Valdehueza and
Panerio mortgaged Lot 932 to Vicente Lim,
herein respondent, as security for their
loans. For their failure to pay Lim despite
demand, he had the mortgage foreclosed in
1976. The lot title was issued in his name.
On 1992, respondent Lim filed a complaint
for quieting of title with the RTC against the
petitioners herein. On 2001, the RTC
rendered a decision in favor of Lim,
declaring that he is the absolute and
exclusive owner of the lot with all the rights
of an absolute owner including the right to
possession. Petitioners elevated the case to
the CA. In its Decision dated September 18,
2003, it sustained the RTC Decision saying:
´... This is contrary to the rules of fair play
because the concept of just compensation
embraces not only the correct
determination of the amount to be paid to
the owners of the land,but also the payment
for the land within a reasonable time from
its taking. Without prompt payment,
compensation cannot be considered
"just"...”
Petitioner, through the OSG, filed with the
SC a petition for review alleging that they
remain as the owner of Lot 932.
ISSUE: Whether the Republic has retained
ownership of Lot 932 despite its failure to
pay respondent’s predecessors-in-interest
the just compensation therefor pursuant to
the judgment of the CFI rendered as early
as May 14, 1940.
RULING: One of the basic principles
enshrined in our Constitution is that no
person shall be deprived of his private
property without due process of law; and
in expropriation cases, an essential element
of due process is that there must be just
compensation whenever private property
is taken for public use. Accordingly, Section
9, Article III, of our Constitution mandates:
"Private property shall not be taken for
public use without just compensation." The
Republic disregarded the foregoing
provision when it failed and refused to pay
respondent’s predecessors-in-interest the
just compensation for Lots 932 and 939.
The Court of Appeals is correct in saying
that Republic’s delay is contrary to the rules
of fair play. In jurisdictions similar to ours,
where an entry to the expropriated
property precedes the payment of
compensation, it has been held that if the
compensation is not paid in a reasonable
time, the party may be treated as a
trespasser ab initio.
As early as May 19, 1966, in Valdehueza,
this Court mandated the Republic to pay
respondent’s predecessors-in- interest the
sum of P16,248.40 as "reasonable market
value of the two lots in question."
Unfortunately, it did not comply
and allowed several decades to pass
without obeying this Court’s mandate. It is
tantamount to confiscation of private
property. While it is true that all private
properties are subject to the need of
government, and the government may take
them whenever the necessity or the
exigency of the occasion demands,
however from the taking of private
property by the government under the
power of eminent domain, there arises an
implied promise to compensate the owner
for his loss.
There is a recognized rule that title to the
property expropriated shall pass from the
owner to the expropriator only upon full
payment of the just compensation. So, how
could the Republic acquire ownership over
Lot 932 when it has not paid its owner the
just compensation, required by law, for
more than 50 years? Clearly, without full
payment of just compensation, there can be
no transfer of title from the landowner to
the expropriator.
SC ruled in earlier cases that expropriation
of lands consists of two stages. First is
concerned with the determination of the
authority of the plaintiff to exercise the
power of eminent domain and the
propriety of its exercise. The second is
concerned with the determination by the
court of "the just compensation for the
property sought to be taken." It is only
upon the completion of these two stages
that expropriation is said to have been
completed In Republic v. Salem Investment
Corporation, we ruled that, "the process is
not completed until payment of just
compensation." Thus, here, the failure of
the Republic to pay respondent and his
predecessors-in-interest for a period of 57
years rendered the expropriation process
incomplete.
Thus, SC ruled that the special
circumstances prevailing in this case entitle
respondent to recover possession of the
expropriated lot from the Republic.
While the prevailing doctrine is that "the
non-payment of just compensation does
not entitle the private landowner to recover
possession of the expropriated lots,
however, in cases where the government
failed to pay just compensation within five
(5) years from the finality of the judgment
in the expropriation proceedings, the
owners concerned shall have the right to
recover possession of their property. After
all, it is the duty of the government,
whenever it takes property from private
persons against their will, to facilitate the
payment of just compensation. In
Cosculluela v. Court of Appeals, we
defined just compensation as not only the
correct determination of the amount to be
paid to the property owner but also the
payment of the property within a
reasonable time. Without prompt payment,
compensation cannot be considered "just."
-------------------------------------------------------
HEIRS OF ALBERTO SUGUITAN vs.
CITY OF MANDALUYONG
Eminent domain is the right or power of a
sovereign state to appropriate private property
to particular uses to promote public welfare
Facts: The SangguniangPanlungsod of
Mandaluyong City issued Resolution,
authorizing then Mayor Benjamin B.
Abalos to institute expropriation
proceedings over the property of Alberto
Suguitan. The intended purpose of the
expropriation was the expansion of the
Mandaluyong Medical Center. The city of
Mandaluyong filed a complaint5 for
expropriation with the Regional Trial Court
of Pasig. However, Suguitan filed a motion
to dismiss.
The trial court issued an order allowing the
City of Mandaluyong to take immediate
possession of Suguitan's property upon the
deposit of P621,000 representing 15% of the
fair market value of the subject property
based upon the current tax declaration of
such property. The City of Mandaluyong
assumed possession of the subject property
by virtue of a writ of possession issued by
the trial court.
Petitioners assert that the city of
Mandaluyong may only exercise its
delegated power of eminent domain by
means of an ordinance as required by
section 19 of Republic Act (RA) No.
7160,9 and not by means of a mere
resolution. 10Respondent contends,
however, that it validly and legally
exercised its power of eminent domain; that
pursuant to article 36, Rule VI of the
Implementing Rules and Regulations (IRR)
of RA 7160, a resolution is a sufficient
antecedent for the filing of expropriation
proceedings with the Regional Trial Court.
Issue: Whether the City validly
exercised its power of eminent domain in
taking property without the required
ordinance.
Ruling: The petition is imbued with merit.
Eminent domain is the right or power of a
sovereign state to appropriate private
property to particular uses to promote
public welfare. 14 It is an indispensable
attribute of sovereignty; a power grounded
in the primary duty of government to serve
the common need and advance the general
welfare. 15 Thus, the right of eminent
domain appertains to every independent
government without the necessity for
constitutional recognition
The power of eminent domain is essentially
legislative in nature. It is firmly settled,
however, that such power may be validly
delegated to local government units, other
public entities and public utilities, although
the scope of this delegated legislative
power is necessarily narrower than that of
the delegating authority and may only be
exercised in strict compliance with the
terms of the delegating law.
Despite the existence of this legislative
grant in favor of local governments, it is still
the duty of the courts to determine whether
the power of eminent domain is being
exercised in accordance with the delegating
law. The courts have the obligation to
determine whether the following requisites
have been complied with by the local
government unit concerned:
1. An ordinance is enacted by the local
legislative council authorizing the local
chief executive, in behalf of the local
government unit, to exercise the power of
eminent domain or pursue expropriation
proceedings over a particular private
property.
2. The power of eminent domain is
exercised for public use, purpose or
welfare, or for the benefit of the poor and
the landless.
3. There is payment of just compensation,
as required under Section 9, Article III of
the Constitution, and other pertinent laws.
4. A valid and definite offer has been
previously made to the owner of the
property sought to be expropriated, but
said offer was not accepted.
-------------------------------------------------------
SMI DEVELOPMENT CORPORATION
VS. REPUBLIC
FACTS: The Republic of the Philippines
represented by the Department of Health
thru the National Children’s Hospital filed
a complaint for Eminent Domain against
SMI Development Corporation for the
purpose of expropriating three parcels of
land belonging to said corporation which
are adjacent to the premises of the hospital.
The plaintiff filed an Ex-Parte Motion for
the Issuance of Order and Writ of
Possession, after it deposited P3,126,000.00
representing “the aggregate assessed value
for taxation purposes of the said property.
"By Order of October 30, 1996, Branch 225
of the Quezon City RTC set the plaintiffs
motion for hearing on December 11, 1996.
"In November 1996, the defendant filed a
Motion to Dismiss and Opposition to the
plaintiffs Ex-Parte Motion for Issuance of
Order and Writ of Possession. In its
Motion to Dismiss, the defendant alleged
that the complaint lacked or had
insufficient cause of action; that the
taking of the property would not serve the
purpose for which it was intended; that
the plaintiff failed to negotiate with it for
the purchase of the property which
reflects against the urgency and necessity
of the plaintiffs need of the property and
implies lack of intention to pay its true and
fair market value; and that [the] necessity to
expropriate the property is negated by the
fact that less than a kilometer from the
plaintiffs premises was the Quezon
Institute which is presently not put to its
optimum use and is a better place for
putting up the frontline services for which
the property is needed with less costs and
less prejudice to private rights.
In its Opposition to the plaintiffs Motion for
Issuance of Order and Writ of Possession,
the defendant alleged that, among others
that,no urgency and necessity existed for
the plaintiff to take possession of the
property; that immediate possession upon
mere deposit of the amount purportedly
representing the aggregate assessed value
of the property, if authorized by P.D. 42, is
offensive to the due process clause of the
Constitution, hence, said decree is
unconstitutional.
ISSUE: WON prior unsuccesful
negotiation a condition sine qua non for
eminent domain?
RULING: In any event, we hold
that the Complaint stated a cause of action
for eminent domain. The necessity for
taking petitioner's property for public use
upon payment of just compensation was
alleged in the said Complaint. The
allegation stressing that the property
would be used to improve the delivery of
health services satisfied the requirements of
necessity and public use. Needless to state,
respondent has the burden of proving the
elements of eminent domain during the
continuation of the proceedings in the trial
court, and the petitioner the right to rebut
such proof.
Citing Iron and Steel Authority v. Court of
Appeals,[19] petitioner insists that before
eminent domain may be exercised by the
state, there must be a showing of prior
unsuccessful negotiation with the owner of
the property to be expropriated.
This contention is not correct. As pointed
out by the solicitor general, the current
effective law on delegated authority to
exercise the power of eminent domain is
found in Section 12, Book III of the Revised
Administrative Code, which provides:
"SEC. 12. Power of Eminent Domain -- The
President shall determine when it is
necessary or advantageous to exercise the
power of eminent domain in behalf of the
National Government, and direct the
Solicitor General, whenever he deems the
action advisable, to institute expropriation
proceedings in the proper court." Scmis
The foregoing provision does not require
prior unsuccessful negotiation as a
condition precedent for the exercise of
eminent domain. In Iron and Steel Authority
v. Court of Appeals, the President chose to
prescribe this condition as an additional
requirement instead. In the instant case,
however, no such voluntary restriction was
imposed.
PHILIPPINE PRESS INSTITUTE, INC.,
vs COMELEC GR L-119694 (En Banc) 22
May 1995
DOCTRINE: COMELEC is not granted
with the power of eminent domain. The
taking of private property for public use is,
while authorized by the Constitution, but
not without payment of "just
compensation" (Article III, Section 9).
FACTS: COMELEC issued resolution 2772
directing newspapers to provide free print
space of not less than one half (1/2) page
for use as “Comelec Space” which shall be
allocated by the Commission, free of
charge, among all candidates within the
area in which the newspaper, magazine or
periodical is circulated to enable the
candidates to make known their
qualifications, their stand on public issues
and their platforms and programs of
government.
Philippine Press Institute, a non-stock, non-
profit organization of newspaper and
magazine publishers asks the Court to
declare said resolution unconstitutional
and void on the ground that it violates the
prohibition imposed by the Constitution
upon the government, and any of its
agencies, against the taking of private
property for public use without just
compensation.
The Office of the Solicitor General, on
behalf of Comelec alleged that the
resolution does not impose upon the
publishers any obligation to provide free
print space in the newspapers. It merely
established guidelines to be followed in
connection with the procurement of
“Comelec space”. And if it is viewed as
mandatory, the same would nevertheless
be valid as an exercise of the police power
of the State- a permissible exercise of the
power of supervision or regulation of the
Comelec over the communication and
information operations of print media
enterprises during the election period to
safeguard and ensure a fair, impartial and
credible election.
ISSUE: Whether the resolution was a valid
exercise of the power of eminent domain?
HELD: No. The court held that the
resolution does not constitute a valid
exercise of the power of eminent domain.
To compel print media companies to
donate “Comelec-space” amounts to
“taking” of private personal property for
public use or purposes without the
requisite just compensation. The extent of
the taking or deprivation is not
insubstantial; this is not a case of a de
minimis temporary limitation or restraint
upon the use of private property. The
monetary value of the compulsory
“donation,” measured by the advertising
rates ordinarily charged by newspaper
publishers whether in cities or in non-
urban areas, may be very substantial
indeed.
The threshold requisites for a lawful taking
of private property for public use are the
necessity for the taking and the legal
authority to effect the taking. The element
of necessity for the taking has not been GMA Network, Inc., operates radio and
shown by respondent Comelec. It has not television broadcasting stations
been suggested that the members of PPI are throughout the Philippines under a
unwilling to sell print space at their normal franchise granted by Congress. Petitioners
rates to Comelec for election purposes. challenge the validity of §92 on the ground
Indeed, the unwillingness or reluctance of (1) that it takes property without due
process of law and without just
Comelec to buy print space lies at the heart
compensation; (2) that it denies radio and
of the problem. Similarly, it has not been
television broadcast companies the equal
suggested, let alone demonstrated, that
protection of the laws; and (3) that it is in
Comelec has been granted the power of
eminent domain either by the Constitution excess of the power given to the COMELEC
or by the legislative authority. A reasonable to supervise or regulate the operation of
relationship between that power and the media of communication or information
enforcement and administration of election during the period of election.
laws by Comelec must be shown; it is not
(Relevant provision cited in the case)
casually to be assumed.
As pointed out in our decision in Osmeña
The taking of private property for public
v. COMELEC, §11(b) of R.A. No. 6646 and
use is, of course, authorized by the
§90 and §92 of the B.P. Blg. 881 are part and
Constitution, but not without payment of
parcel of a regulatory scheme designed to
“just compensation” (Article III, Section 9).
equalize the opportunity of candidates in
And apparently the necessity of paying
an election in regard to the use of mass
compensation for “Comelec space” is
media for political campaigns. These
precisely what is sought to be avoided by
statutory provisions state in relevant parts:
respondent Commission.
R.A. No. 6646
-------------------------------------------------------
Sec. 11. Prohibited Forms of Election
TELECOMMUNICATIONS AND
Propaganda. — In addition to the forms of
BROADCAST ATTORNEYS OF THE
election propaganda prohibited under Section
PHILIPPINES, INC. and GMA
85 of Batas PambansaBlg. 881, it shall be
NETWORK, INC., v. THE COMMISSION
unlawful:
ON ELECTIONS
(b) for any newspapers, radio broadcasting or
FACTS: Petitioner Telecommunications
television station, or other mass media, or any
and Broadcast Attorneys of the Philippines,
person making use of the mass media to sell or
Inc. is an organization of lawyers of radio
to give free of charge print space or air time for
and television broadcasting companies.
campaign or other political purposes except to
They are suing as citizens, taxpayers, and
the Commission as provided under Section 90
registered voters. The other petitioner,
and 92 of Batas PambansaBlg. 881. Any mass
media columnist, commentator, announcer or
personality who is a candidate for any elective
public office shall take a leave of absence from
his work as such during the campaign period.
B.P. Blg. 881, (Omnibus Election Code)
Sec. 90. Comelec space. — The Commission
shall procure space in at least one newspaper of
general circulation in every province or
city; Provided, however, That in the absence of
said newspaper, publication shall be done in any
other magazine or periodical in said province or
city, which shall be known as "Comelec Space"
wherein candidates can announce their
candidacy. Said space shall be allocated, free of
charge, equally and impartially by the
Commission among all candidates within the
area in which the newspaper is circulated. (Sec.
45, 1978 EC).
Sec. 92. Comelec time. — The commission shall
procure radio and television time to be known as
"Comelec Time" which shall be allocated
equally and impartially among the candidates
within the area of coverage of all radio and
television stations. For this purpose, the
franchise of all radio broadcasting and television
stations are hereby amended so as to provide
radio or television time, free of charge, during
the period of the campaign. (Sec. 46, 1978 EC)
ISSUE(S): Whether or not Sec. 92
of BP Blg. 881 violates the due process
clause and the eminent domain provision
of the Constitution
RULING: The Court held that the
contention is without merit.
A franchise is thus a privilege
subject, among other things, to amended by
Congress in accordance with the
constitutional provision that "any such
franchise or right granted . . . shall be
subject to amendment, alteration or repeal
by the Congress when the common good so
requires.”
The idea that broadcast stations may be
required to provide COMELEC Time free
of charge is not new. The provision was
carried over with slight modification by the
1978 Election Code (P.D. No. 1296), which
provided:
Sec. 46. COMELEC Time. — The Commission
[on Elections] shall procure radio and television
time to be known as "COMELEC Time" which
shall be allocated equally and impartially among
the candidates within the area of coverage of said
radio and television stations. For this purpose,
the franchises of all radio broadcasting and
television stations are hereby amended so as to
require such stations to furnish the Commission
radio or television time, free of charge, during
the period of the campaign, at least once but not
oftener than every other day.
Substantially the same provision is now
embodied in §92 of B.P. Blg. 881. Provisions
for COMELEC Time have been made by
amendment of the franchises of radio and
television broadcast stations and, until the
present case was brought, such provisions
had not been thought of as taking property
without just compensation. Art. XII, Sec.11
of the Constitution authorizes the
amendment of franchises for "the common
good." What better measure can be
conceived for the common good than one
for free air time for the benefit not only of
candidates but even more of the public,
particularly the voters, so that they will be
fully informed of the issues in an election?
"[I]t is the right of the viewers and listeners,
not the right of the broadcasters, which is
paramount."
In truth, radio and television
broadcasting companies, which are given
franchises, do not own the airwaves and
frequencies through which they transmit
broadcast signals and images. They are
merely given the temporary privilege of
using them. Since a franchise is a mere
privilege, the exercise of the privilege may
reasonably be burdened with the
performance by the grantee of some form of
public service. In the granting of the
privilege to operate broadcast stations and
thereafter supervising radio and television
stations, the state spends considerable
public funds in licensing and supervising
such stations. It would be strange if it
cannot even require the licensees to render
public service by giving free air time.
Petition is dismissed
Heirs of Juancho Ardona vs Reyes
FACTS: The Philippine Tourism Authority
filed 4 complaints with the CFI of Cebu City
for the expropriation of 282 ha of rolling
land situated in barangays Malubog and
Babag, Cebu City for the development into
integrated resort complexes of selected and
well-defined geographic areas with
potential tourism value. The PTA will
construct a sports complex, club house, golf
course, playground and picnic area on said
land. An electric power grid will also be
established by NPC as well as deep well
and drainage system. Complimentary
support facilities (malls, coffee shops, etc)
will also be created. The defendants alleged
that the taking is allegedly not impressed
with public use under the Constitution.
Also, 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, that has
jurisdiction over the expropriation cases.
The Philippine Tourism Authority having
deposited with the PNB, an amount
equivalent to 10% of the value of the
properties pursuant to PD1533, the lower
court issued separate orders authorizing
PTA to take immediate possession of the
premises and directing the issuance of
writs of possession. The petitioners who are
occupants of the lands, filed a petition for
certiorari in the SC. They contended that (1)
the taking was not for public use; (2) the
land was covered by the land reform
program; and (3) expropriation would
impair the obligation of contracts.
ISSUE: WON the public use requirement
has been complied with.
HELD: Yes, There are three provisions of
the Constitution which directly provide for
the exercise of the power of eminent
domain. Sec 2, Article IV states that private
property shall not be taken for public use
without just compensation. Section 6,
Article XIV allows the State, in the interest
of national welfare or defense and upon
payment of just compensation to transfer to
public ownership, utilities and other
private enterprises to be operated by the
government. Section 13, Article XIV states
that the BatasangPambansa may authorize
upon payment of just compensation the
expropriation of private lands to be
subdivided into small lots and conveyed at
cost to deserving citizens. The concept of
public use is not limited to traditional
purposes for the construction of roads,
bridges, and the like. The idea that "public
use" means "use by the public" has been
discarded. As long as the purpose of the
taking is public, then the power of eminent
domain comes into play. It is accurate to
state then that at present whatever may be
beneficially employed for the general
welfare satisfies the requirement of public
use. The petitioners have not shown that
the area being developed is land reform
area and that the affected persons have
been given emancipation patents and
certificates of land transfer. The contract
clause has never been regarded as a barrier
to the exercise of the police power and
likewise eminent domain.
Ratio: While not directly mentioning the
expropriation of private properties upon
payment of just compensation, the
provisions on social justice and agrarian
reforms which allow the exercise of police
power together with the power of eminent
domain in the implementation of
constitutional objectives are even more far
reaching insofar as taxing of private
property is concerned. We cite all the above
provisions on the power to expropriate
because of the petitioners' insistence on a
restrictive view of the eminent domain
provision. The thrust of all constitutional
provisions on expropriation is in the
opposite direction. As early as 1919, this
Court in Visayan Refining Co. v. Samus
categorized the restrictive view as wholly
erroneous and based on a misconception of
fundamentals. The petitioners look for the
word "tourism" in the Constitution.
Understandably the search would be in
vain. To freeze specific programs like
tourism into express constitutional
provisions would make the Constitution
more prolix than a bulky code and require
of the framers a prescience beyond Delphic
proportions. In said case, this Court
emphasized that the power of eminent
domain is inseparable from sovereignty
being essential to the existence of the State
and inherent in government even in its
most primitive forms. The only purpose of
the provision in the Bill of Rights is to
provide some form of restraint on the
sovereign power. It is not a grant of
authority. The petitioners ask us to adopt a
strict construction and declare that "public
use" means literally use by the public and
that "public use" is not synonymous with
"public interest", "public benefit", or "public
welfare" and much less "public
convenience." The petitioners face two
major obstacles. First, their contention
which is rather sweeping in its call for a
retreat from the public welfare orientation
is unduly restrictive and outmoded.
Second, no less than the lawmaker has
made a policy determination that the
power of eminent domain may be exercised
in the promotion and development of
Philippine tourism. The restrictive view of
public use may be appropriate for a nation
which circumscribes the scope of
government activities and public concerns
and which possesses big and correctly
located public lands that obviate the need
to take private property for public
purposes. Neither circumstance applies to
the Philippines. We have never been a
laissez faire State. And the necessities
which impel the exertion of sovereign
power are all too often found in areas of
scarce public land or limited government
resources. There can be no doubt that
expropriation for such traditional purposes
as the construction of roads, bridges, ports,
waterworks, schools, electric and
telecommunications systems, hydroelectric
power plants, markets and
slaughterhouses, parks, hospitals,
government office buildings, and flood
control systems is valid. However, the
concept of public use is not limited to
traditional purposes. Here as elsewhere the
idea that "public use" is strictly limited to
clear cases of "use by the public" has been
discarded. In the Philippines, Chief Justice
Enrique M. Fernando has aptly
summarized the statutory and judicial
trend as follows: "The taking to be valid
must be for public use. There was a time
when it was felt that a literal meaning
should be attached to such a requirement.
Whatever project is undertaken must be for
the public to enjoy, as in the case of streets
or parks. Otherwise, expropriation is not
allowable. It is not any more. As long as the
purpose of the taking is public, then the
power of eminent domain comes into play.
As just noted, the constitution in at least
two cases, to remove any doubt,
determines what is public use. One is the
expropriation of lands to be subdivided
into small lots for resale at cost to
individuals. The other is in the transfer,
through the exercise of this power, of
utilities and other private enterprise to the
government. It is accurate to state then that
at present whatever may be beneficially
employed for the general welfare satisfies
the requirement of public use." The
petitioners' contention that the promotion
of tourism is not "public use" because
private concessioners would be allowed to
maintain various facilities such as
restaurants, hotels, stores, etc. inside the
tourist complex is impressed with even less
merit. Private bus firms, taxicab fleets,
roadside restaurants, and other private
businesses using public streets and
highways do not diminish in the least bit
the public character of expropriations for
roads and streets. The lease of store spaces
in underpasses of streets built on
expropriated land does not make the taking
for a private purpose. Airports and piers
catering exclusively to private airlines and
shipping companies are still for public use.
The expropriation of private land 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 petitioners have also failed to
overcome the deference that is
appropriately accorded to formulations of
national policy expressed in legislation.
The rule in Berman v. Parker (supra) of
deference to legislative policy even if such
policy might mean taking from one private
person and conferring on another private
person applies as well as in the Philippines.
An examination of the language in the 1919
cases of City of Manila v. Chinese
Community of Manila and Visayan
Refining Co. v. Camus, earlier cited, shows
that from the very start of constitutional
government in our country judicial
deference to legislative policy has been
clear and manifest in eminent domain
proceedings. The expressions of national
policy are found in the revised charter of
the Philippine Tourism Authority, PD 564.
(Disregard of Land Reform Nature)
According to them, assuming that PTA has
the right to expropriate, the properties
subject of expropriation may not be taken
for the purposes intended since they are
within the coverage of "operation land
transfer" under the land reform program;
that the agrarian reform program occupies
a higher level in the order of priorities than
other State policies like those relating to the
health and physical well-being of the
people; and that property already taken for
public use may not be taken for another
public use. The petitioners, however, have
failed to show that the area being
developed is indeed a land reform area and
that the affected persons have
emancipation patents and certificates of
land transfer. The records show that the
area being developed into a tourism
complex consists of more than 808 hectares,
almost all of which is not affected by the
land reform program. The portion being
expropriated is 282 hectares of hilly and
unproductive land where even subsistence
farming of crops other than rice and corn
can hardly survive. And of the 282 disputed
hectares, only 8,970 square meters - less
than one hectare - is affected by Operation
Land Transfer. Of the 40 defendants, only
two have emancipation patents for the less
than one hectare of land affected. (Non
Impairment Clause) The nonimpairment
clause has never been a barrier to the
exercise of police power and likewise
eminent domain. As stated in Manigault v.
Springs "parties by entering into contracts
may not estop the legislature from enacting
laws intended for the public good." The
applicable doctrine is expressed in Arce v.
Genato which involved the expropriation
of land for a public plaza. The issue of
prematurity is also raised by the
petitioners. They claim that since the
necessity for the taking has not been
previously established, the issuance of the
orders authorizing the PTA to take
immediate possession of the premises, as
well as the corresponding writs of
possession was premature. Under
Presidential Decree No. 42, as amended by
Presidential Decree No. 1533, the
government, its agency or instrumentality,
as plaintiff in an expropriation proceedings
is authorized to take immediate possession,
control and disposition of the property and
the improvements, with power of
demolition, notwithstanding the pendency
of the issues before the court, upon deposit
with the Philippine National Bank of an
amount equivalent to 10% of the value of
the property expropriated. The issue of
immediate possession has been settled in
Arce v. Genato. In answer to the issue: ". . .
condemnation or expropriation
proceedings is in the nature of one that is
quasi-in-rem, wherein the fact that the
owner of the property is made a party is not
essentially indispensable insofar at least as
it concerns the immediate taking of
possession of the property and the
preliminary determination of its value,
including the amount to be deposited."
Makasiar: It appearing that the petitioners
are not tenants of the parcels of land in
question and therefore do not fall within
the purview of the Land Reform Code, the
petition should be dismissed on that score
alone. There is no need to decide whether
the power of the PTA to expropriate the
land in question predicated on the police
power of the State shall take precedence
over the social justice guarantee in favor of
tenants and the landless. The welfare of the
landless and small land owners should
prevail over the right of the PTA to
expropriate the lands just to develop
tourism industry, which benefit the
wealthy only. Such a position would
increase the disenchanted citizens and
drive them to dissidence. The government
is instituted primarily for the welfare of the
governed and there are more poor people
in this country than the rich. The tourism
industry is not essential to the existence of
the government, but the citizens are, and
their right to live in dignity should take
precedence over the development of the
tourism industr
THE OFFICE OF THE SOLICITOR
GENERAL vs AYALA LAND
INCORPORATED, ROBINSONS LAND
CORPORATION, SHANGRI-LA PLAZA
CORPORATION and SM PRIME
HOLDINGS, INC (to be referred to as
Ayala Land et al)
FACTS: Respondents Ayala Land et al.
maintain and operate shopping malls in
various locations in Metro Manila.
Respondent SM Prime constructs, operates,
and leases out commercial buildings and
other structures.
The shopping malls operated or leased out
by respondents have parking facilities for
all kinds of motor vehicles, either by way
of parking spaces inside the mall
buildings or in separate buildings and/or
adjacent lots that are solely devoted for
use as parking spaces.
In 1999, the Senate Committees on Trade
and Commerce and on Justice and Human
Rights conducted a joint investigation to
inquire into the legality of the prevalent
practice of shopping malls of charging
parking fees among others.
The Committees found that the collection
of parking fees by shopping malls is
contrary to the National Building Code
and is therefor [sic] illegal. While it is true
that the Code merely requires malls to
provide parking spaces, without...
specifying whether it is free or not, both
Committees believe that the reasonable and
logical interpretation of the Code is that the
parking spaces are for free.
Respondent SM Prime thereafter received
information that, pursuant to Senate
Committee Report No. 225, the DPWH
Secretary and the local building officials of
Manila, Quezon City, and Las Piñas
intended to institute, through the OSG, an
action to enjoin respondent SM Prime
and... similar establishments from
collecting parking fees, and to impose
upon said establishments penal sanctions
under Presidential Decree No. 1096,
otherwise known as the National Building
Code of the Philippines (National Building
Code and its (IRR).
The RTC finally decreed in the declaratory
relief case filed by Ayala et. Al that Ayala
Land et al are not obligated to provide
parking spaces in their malls for the use of
their patrons or public in general, free of
charge.
CA DENIED the appeal AFFIRMED the
same in toto.
ISSUE: THE COURT OF APPEALS
SERIOUSLY ERRED IN AFFIRMING
THE RULING OF THE LOWER COURT
THAT RESPONDENTS ARE NOT
OBLIGED TO PROVIDE FREE
PARKING SPACES TO THEIR
CUSTOMERS OR THE PUBLIC.
DOCTRINE: Police power is the power of
promoting the public welfare by
restraining and regulating the use of liberty
and property. It is usually exerted in order
to merely regulate the use and enjoyment
of the property of the owner. The power to
regulate, however, does not include the...
power to prohibit.
Police power does not involve the taking or
confiscation of property, with the exception
of a few cases where there is a necessity to
confiscate private property in order to...
destroy it for the purpose of protecting
peace and order and of promoting the
general welfare; for instance, the
confiscation of an illegally possessed
article, such as opium and firearms.
RULING: The Court finds no merit in the
present Petition.
The term "parking fees" cannot even be
found at all in the entire National Building
Code and its IRR.
Without using the term outright, the OSG
is actually invoking police power to justify
the regulation by the State, through the
DPWH Secretary and local building
officials, of privately owned parking
facilities, including the collection by the
owners/operators of such facilities... of
parking fees from the public for the use
thereof.
When there is a taking or confiscation of
private property for public use, the State
is no longer exercising police power, but
another of its inherent powers, namely,
eminent domain. Eminent domain
enables the State to forcibly acquire
private lands intended for public use
upon... payment of just compensation to
the owner.
Although in the present case, title to
and/or possession of the parking facilities
remain/s with respondents, the prohibition
against their collection of parking fees from
the public, for the use of said facilities, is
already tantamount to a taking or
confiscation of their... properties.
The State is not only requiring that
respondents devote a portion of the latter's
properties for use as parking spaces, but is
also mandating that they give the public
access to said parking spaces for free.
In conclusion, the total prohibition
against the collection by respondents of
parking fees from persons who use the
mall parking facilities has no basis in the
National Building Code or its IRR. The
State also cannot impose the same
prohibition by generally invoking police...
power, since said prohibition amounts to a
taking of respondents' property without
payment of just compensation.
Mosqueda vs Pilipino Banana
Facts: Davao City enacted ordinance
Ordinance No. 0309-07 which banned
against aerial spraying as an agricultural
practice by all agricultural entities. The
Pilipino Banana Growers and Exporters
Association, Inc. (PBGEA) then filed a
petition to challenge the constitutionality of
the ordinance. They alleged that the
ordinance exemplified the unreasonable
exercise of police power; violated the equal
protection clause; amounted to the
confiscation of property without due
process of law. The petition argues that the
total ban against aerial spraying, coupled
with the inadequate time to shift to truck-
mounted boom spraying, effectively
deprives the farmers with an efficient
means to control the spread of diseases that
threatens the banana plantations. As such,
the ordinance is unreasonable, unfair,
oppressive, and tantamount to a restriction
or prohibition of trade. The petition also
submits that the maintenance of the 30-
meter buffer zone under Section 5 of the
ordinance constitutes an improper exercise
of police power; that the ordinance will
require all landholdings to maintain the
buffer zone, thereby diminishing to a mere
1,600 square meters of usable and
productive land for every hectare of the
plantation bounding residential areas, with
the zone being reserved for planting
"diversified trees;" that this requirement
amounts to taking without just
compensation or due process; and that the
imposition of the buffer zone unduly
deprives all landowners within the City of
Davao the beneficial use of their property
(Main Issue)
Issue Whether the City of Davao acted
outside of the limits of its corporate powers
in enacting Ordinance No. 0309-07 thereby
violated the due process clause and
resulting in an invalid exercise of police
power ( Not issue in topic)
Whether the requirement of maintaining a
buffer zone under Section 6 of the
ordinance unduly deprives all agricultural
landowners within Davao City of the
beneficial use of their property that
amounts to taking without just
compensation. (Issue in topic)
Ruling: The ordinance does not unduly
deprive the agricultural landowners of the
beneficial use of their property that
amounts to taking without just
compensation (Issue in topic)
An ordinance which permanently restricts
the use of property that it cannot be used
for any reasonable purpose goes beyond
regulation and must be recognized as a
taking of the property without just
compensation. It is intrusive and violative
of the private property rights of
individuals.
A "possessory" taking occurs when the
government confiscates or physically
occupies property. A "regulatory" taking
occurs when the government's regulation
leaves no reasonable economically viable
use of the property.
What is crucial in judicial consideration of
regulatory takings is that government
regulation is a taking if it leaves no
reasonable economically viable use of
property in a manner that interferes with
reasonable expectations for use. A
regulation that permanently denies all
economically beneficial or productive use
of land is, from the owner's point of view,
equivalent to a "taking" unless principles of
nuisance or property law that existed when
the owner acquired the land make the use
prohibitable. When the owner of real
property has been called upon to sacrifice
all economically beneficial uses in the name
of the common good, that is, to leave his
property economically idle, he has suffered
a taking
The establishment of the buffer zone is
required for the purpose of minimizing the
effects of aerial spraying within and near
the plantations. Although Section 3(e) of
the ordinance requires the planting of
diversified trees within the identified
buffer zone, the requirement cannot be
construed and deemed as confiscatory
requiring payment of just compensation. A
landowner may only be entitled to
compensation if the taking amounts to a
permanent denial of all economically
beneficial or productive uses of the land.
The respondents cannot be said to be
permanently and completely deprived of
their landholdings because they can still
cultivate or make other productive uses of
the areas to be identified as the buffer
zones.
There Ordinance is an invalid exercise of
police power by Davao City. (other issue)
The General Welfare Clause in Section 16 of
the Local Government Code embodies the
legislative grant that enables the local
government unit to effectively accomplish
and carry out the declared objects of such
Local Government
A valid ordinance must not only be enacted
within the corporate powers of the local
government and passed according to the
procedure prescribed by law.108 In order
to declare it as a valid piece of local
legislation, it must also comply with the
following substantive requirements,
namely: (1) it must not contravene the
Constitution or any statute; (2) it must be
fair, not oppressive; (3) it must not be
partial or discriminatory; (4) it must not
prohibit but may regulate trade; (5) it must
be general and consistent with public
policy; and (6) it must not be unreasonable
The required civil works for the conversion
to truck-mounted boom spraying alone will
consume considerable time and financial
resources given the topography and
geographical features of the plantations,
the conversion could not be completed
within the short timeframe of three months.
Requiring the respondents and other
affected individuals to comply with the
consequences of the ban within the three-
month period under pain of penalty like
fine, imprisonment and even cancellation
of business permits would definitely be
oppressive as to constitute abuse of police
power
DPWH vs. Sps. Tecson
Facts: In 1940, the Department of Public
Works and Highways (DPWH) took
respondents-movants' subject property
without the benefit of expropriation
proceedings for the construction of the
MacArthur Highway. In a letter dated
December 15, 1994, respondents-movants
demanded the payment of the fair market
value of the subject parcel of land. DPWH,
offered to pay for the subject land at the rate
of Seventy Centavos (P0.70) per square
meter.
On March 22, 2002, the RTC rendered a
Decision directing DPWH to pay the
amount of P1,500.00 per square meter as the
just compensation
The CA modified the decision, that the just
compensation should earn interest of six
percent (6%) per annum computed from
the filing of the action on March 17, 1995
until full payment.
Petitioners thus elevated the matter via
petition for review on certiorari.
Issue: Whether the compensation (as
well as interest) for respondents should
accrue from 1940 or 2002 (0.70 centavo or
P1,500)?
Ruling: The Court ruled that the purpose
of just compensation is not to reward the
owner for the property taken but to
compensate him for the loss thereof. As
such, the true measure of the property, as
upheld by a plethora of cases, is the market
value at the time of the taking, when the
loss resulted.
"just compensation" is the sum equivalent
to the market value of the property, broadly
described as the price fixed by the seller in
open market in the usual and ordinary
course of legal action and competition, or
the fair value of the property as between
the one who receives and the one who
desires to sell, it being fixed at the time of
the actual taking by the government. Just
compensation is defined as the full and fair
equivalent of the property taken from its
owner by the expropriator.
Just compensation due respondents-
movants in this case should, therefore, be
fixed not as of the time of payment but at
the time of taking in 1940 which is Seventy
Centavos (P0.70) per square meter, and not
One Thousand Five Hundred Pesos
(₱1,500.00) per square meter, as valued by
the RTC and CA.
NAPOCOR VS HEIRS OF SANGKAY
FACTS: NPC undertook the Agus River
Hydroelectric Power Plant Project in the
1970s to generate electricity for Mindanao.
The project included the construction of
several underground tunnels to be used in
diverting the water flow from the Agus
River to the hydroelectric plants. On
November 21, 1997, the respondents, the
heirs of MacabangkitSangkay, as the
owners of land with an area of 221,573
square meters situated in Ditucalan, Iligan
City, sued NPC in the RTC for the recovery
of damages and of the property, with the
alternative prayer for the payment of just
compensation.
They alleged that they had belatedly
discovered that one of the underground
tunnels of NPC that diverted the water flow
of the Agus River for the operation of the
Hydroelectric Project in Agus V, Agus VI
and Agus VII traversed their land; that
their discovery had occurred in 1995 after
Atty. Saidali C. Gandamra, President of the
Federation of Arabic Madaris School, had
rejected their offer to sell the land because
of the danger the underground tunnel
might pose to the proposed Arabic
Language Training Center and Muslims
Skills Development Center; that such
rejection had been followed by the
withdrawal by Global Asia Management
and Resource Corporation from
developing the land into a housing project
for the same reason; that Al-Amanah
Islamic Investment Bank of the Philippines
had also refused to accept their land as
collateral because of the presence of the
underground tunnel; that the underground
tunnel had been constructed without their
knowledge and consent; that the presence
of the tunnel deprived them of the
agricultural, commercial, industrial and
residential value of their land.
In its answer with counterclaim NPC
countered that the Heirs of Macabangkit
had no right to compensation under section
3(f) of Republic Act No. 6395, under which
a mere legal easement on their land was
established; that their cause of action,
should they be entitled to compensation,
already prescribed due to the tunnel having
been constructed in 1979; and that by
reason of the tunnel being an apparent and
continuous easement, any action arising
from such easement prescribed in five
years.
~RTC RULING
RTC ruled in favor of the Petitioners. The
RTC found that NPC had concealed the
construction of the tunnel in 1979 from the
Heirs of Macabangkit, and had since
continuously denied its existence; that NPC
had acted in bad faith by taking possession
of the subterranean portion of their land to
construct the tunnel without their
knowledge and prior consent; that the
existence of the tunnel had affected the
entire expanse of the land, and had
restricted their right to excavate or to
construct a motorized deep well; and that
they, as owners, had lost the agricultural,
commercial, industrial and residential
value of the land.
~CA RULING
On October 5, 2004, the CA affirmed the
decision of the RTC, holding that the
testimonies of NPCs witness Gregorio
Enterone and of the respondents witness
Engr. Pete Sacedon, the topographic survey
map, the sketch map, and the ocular
inspection report sufficiently established
the existence of the underground tunnel
traversing the land of the Heirs of
Macabangkit; that NPC did not
substantiate its defense that prescription
already barred the claim of the Heirs of
Macabangkit; and that Section 3(i) of R.A.
No. 6395, being silent about tunnels, did
not apply, viz:
As regard Section 3(i) of R.A. No. 6395 (An
Act Revising the Charter of the National
Power Corporation), it is submitted that the
same provision is not applicable. There is
nothing in Section 3(i) of said law
governing claims involving tunnels. The
same provision is applicable to those
projects or facilities on the surface of the
land, that can easily be discovered, without
any mention about the claims involving
tunnels, particularly those surreptitiously
constructed beneath the surface of the land,
as in the instant case.
Hence this Petition for Certiorari.
ISSUE: Whether the Heirs of
Macabangkits right to claim just
compensation had prescribed under
section 3(i) of Republic Act No. 6395, or,
alternatively, under Article 620 and Article
646 of the Civil Code.
HELD: Five-year prescriptive period under
Section 3(i) of Republic Act No. 6395 does not
apply to claims for just compensation.
We rule that the prescriptive period
provided under Section 3(i) of Republic Act
No. 6395 is applicable only to an action for
damages, and does not extend to an action
to recover just compensation like this case.
Consequently, NPC cannot thereby bar the
right of the Heirs of Macabangkit to recover
just compensation for their land.
The action to recover just compensation
from the State or its expropriating agency
differs from the action for damages. The
former, also known as inverse condemnation,
has the objective to recover the value of
property taken in fact by the governmental
defendant, even though no formal exercise
of the power of eminent domain has been
attempted by the taking agency. Just
compensation is the full and fair equivalent
of the property taken from its owner by the
expropriator. The measure is not the takers
gain, but the owners’ loss. The word just is
used to intensify the meaning of the
word compensation in order to convey the
idea that the equivalent to be rendered for
the property to be taken shall be real,
substantial, full, and ample. On the other
hand, the latter action seeks to vindicate a
legal wrong through damages, which may
be actual, moral, nominal, temperate,
liquidated, or exemplary. When a right is
exercised in a manner not conformable
with the norms enshrined in Article 19 and
like provisions on human relations in
the Civil Code, and the exercise results to
the damage of another, a legal wrong is
committed and the wrongdoer is held
responsible.
The two actions are radically different in
nature and purpose. The action to recover
just compensation is based on the
Constitution while the action for damages
is predicated on statutory enactments.
Indeed, the former arises from the exercise
by the State of its power of eminent domain
against private property for public use, but
the latter emanates from the transgression
of a right. The fact that the owner rather
than the expropriator brings the former
does not change the essential nature of the
suit as an inverse condemnation, for the
suit is not based on tort, but on the
constitutional prohibition against the
taking of property without just
compensation. It would very well be
contrary to the clear language of the
Constitution to bar the recovery of just
compensation for private property taken
for a public use solely on the basis of
statutory prescription.
CA ruling is AFFIRMED with
Modifications.
EXPORT PROCESSING ZONE
AUTHORITY (NOW PHILIPPINE
EXPORT ZONE AUTHORITY), v. JOSE
PULIDO, et al.
G.R. No. 188995, August 24, 2011
FACTS: In May 1981 petitioner
commenced an action in the CFI of Cavite
for the expropriation of three (3) parcels of
irrigated Riceland situated in Rosario,
Cavite.
In 1991 the trial court sustained the right of
petitioner to expropriate the said parcels of
land, but partly reconsidered Lot 1406-A
from expropriation. Petitioner appealed to
the CA.
In January 1993 the petitioner and the
Estate of Salud Jimenez entered into a
Compromise Agreement wherein the
petitioner agreed to: withdraw its appeal
while the Estate of Jimenez agreed to waive
its claim for damages and loss of income
sustained by reason of possession of the
subject parcel of land by EPZA; and that the
Estate will transfer Lot 1406-B to petitioner
in exchange for another parcel of land (Lot
434) in Cavite as payment.
In due time, the CA remanded the case to
the RTC for approval of the Compromise
Agreement.
In August 1993 the RTC approved the
Compromise Agreement.
However, petitioner failed to transfer the
title of Lot 434 as the registered owner was
Progressive Realty Estate, Inc. As a result,
on March 13, 1997, the Estate of Salud
Jimenez filed a Motion to Partially Annul
the Order dated August 23, 1993. In August
97, the RTC annulled the Compromise
Agreement and directed the petitioner to
peacefully return Lot 1406-B to the Estate of
Salud Jimenez.
The petitioner filed a petition for certiorari
and prohibition to nullify the order with
the CA, which partly granted the petition
and set aside the order, directing the RTC
to determine the just compensation for Lot
1406-B. The CA denied the motion for
reconsideration.
The Supreme Court denied the petition,
explaining that the Estate of Salud Jimenez
had already acknowledged the propriety of
the expropriation of Lot 1406-B by entering
into the Compromise Agreement.
As the decision in G.R. No. 137285 became
final and executory, the RTC conducted
proceedings to determine just
compensation. During the trial, however,
petitioner raised the issue of whether the
just compensation should be based on the
value or assessment rate prevailing in 1981
or 1993, insisting that just compensation
should be equivalent to its fair market
value in 1981, the time of the filing of its
expropriation complaint, which was the
time of the taking.
The RTC resolved that just compensation
should be based on the value or assessment
rate prevalent in 1993, the year the parties
entered into the Compromise Agreement.
On appeal, the CA affirmed the RTC.
Hence, this petition.
ISSUE: Whether just compensation should
be computed based on the value or
assessment rate prevalent in 1981 or in
1993.
HELD: Just compensation for Lot 1406-B
must be based on value of property
prevailing in 1993.
A reading of the decision in G.R. No.
137285 exposes the interposition as nothing
more than an insincere attempt of the
petitioner to delay the inevitable
performance of its obligation to pay just
compensation for Lot 1406-B. Indeed, the
Court pronounced there that "the
compromise agreement was only about the
mode of payment by swapping of lots xxx,
only the originally agreed form of
compensation that is by [lot12 ] payment,
was rescinded."
Accordingly, we completely agree with the
RTC's observation that "when the parties
signed the compromise agreement and the
same was approved, they had in fact settled
between themselves the question of what is
just compensation and that both of them
had intended that defendant would be
compensated on the basis of prevailing
values at the time of the agreement." We
further completely agree with the CA's
conclusion that "by agreeing to a land swap
in 1993 in the ill-fated compromise
agreement, [PEZA] had impliedly agreed
to paying just compensation using the
market values in 1993."
With the annulment of the Compromise
Agreement, the payment of just
compensation for Lot 1406-B now has to be
made in cash. In that regard, the order of
the Court to remand to the RTC for the
determination of just compensation was
indubitably for the sole objective of
ascertaining the equivalent monetary value
in 1993 of Lot 1406-B or Lot 434.
The uniform findings of fact upon the
question of just compensation reached by
the CA and the RTC are entitled to the
greatest respect. They are conclusive on the
Court in the absence of a strong showing by
the petitioner that the CA and the RTC
erred in appreciating the established facts
and in drawing inferences from such facts.
We concur with the findings.
The power of eminent domain is not an
unlimited power. Section 9, Article III of the
1987 Constitution sets down the essential
limitations upon this inherent right of the
State to take private property, namely: (a)
that the taking must be for a public
purpose; and (b) that just compensation
must be paid to the owner. The State must
first establish that the exercise of eminent
domain is for a public purpose, which,
here, is already settled. What remains to be
determined is the just compensation. In
Apo Fruits Corporation v. Land Bank, the
Court has held that compensation cannot
be just to the owner in the case of property
that is immediately taken unless there is
prompt payment, considering that the
owner thereby immediately suffers not
only the loss of his property but also the
loss of its fruits or income. Thus, in
addition, the owner is entitled to legal
interest from the time of the taking of the
property until the actual payment in order
to place the owner in a position as good as,
but not better than, the position he was in
before the taking occurred.
It is undeniable that just compensation was
not promptly made to the Estate of Salud
Jimenez for the taking of Lot 1406-B by the
petitionerThe move to compensate through
the swap arrangement under the
Compromise Agreement was aborted or
amounted to nothing through no fault of
the Estate of Salud Jimenez. The petitioner,
which should have known about the
inefficacy of the swapping of Lot 434 for Lot
1406-B, could even be said to have resorted
to the swapping for the purpose of delaying
the payment. Thus, it was solely
responsible for the delay. In fact, the Estate
of Salud Jimenez was compelled to seek the
rescission of the Compromise Agreement, a
process that prolonged even more the delay
in the payment of just compensation. . In
view of this, the CA's fixing of legal interest
at only 6% per annum cannot be upheld
and must be corrected, for that rate would
not ensure that compensation was just in
the face of the long delay in payment.
Already in G.R. No. 137285, the Court
noted the long delay in payment and was
naturally prompted to strongly condemn
"the cavalier attitude of government
officials who adopt such a despotic and
irresponsible stance," quoting from
Cosculluela v. Court of Appeals, that:
[I]t is high time that the petitioner be paid
what was due him eleven years ago. It is
arbitrary and capricious for a government
agency to initiate expropriation
proceedings, seize a person's property,
allow a judgment of the court to become
final and executory and then refuse to pay
on the ground that there are no
appropriations for the property earlier
taken and profitably used. We condemn in
the strongest possible terms the cavalier
attitude of government officials who adopt
such a despotic and irresponsible stance.
WHERE OTHER METHODS OF
VALUATION IS ALLOWED
REPUBLIC OF THE PHILIPPINES,
represented by Executive Secretary
Eduardo R. Ermita, the DEPARTMENT
OF TRANSPORTATION AND
COMMUNICATIONS, AND MANILA
INTERNATIONAL AIRPORT
AUTHORITY, Petitioners, vs. HON.
JESUS M. MUPAS, in his capacity as
Acting Presiding Judge of the Regional
Trial Court, National Capital Judicial
Region, Branch 117, Pasay City, AND
PHILIPPINE INTERNATIONAL AIR
TERMINALS CO., INC., Respondents.
G.R. NO. 181892. September 8, 2015.
BRION, J.,
FACTS:
1. The concession agreement
between the Republic and
PIATCO; PIATCO’s subcontract
agreements with Takenaka and
Asahikosan:
In 1997, the Republic entered into a
concession agreement with PIATCO for the
construction, development, and operation
of NAIA-IPT III.
In 2000, PIATCO engaged the services of
Takenaka for the construction of the NAIA-
IPT III under an Onshore Construction
Contract. On the same date, PIATCO
entered into an Offshore Procurement
Contract with Asahikosan for the design,
manufacture, purchase, test and delivery of
the Plant in the NAIA-IPT III. PIATCO
failed to pay for the services rendered by
Takenaka and Asahikosan.
 2. The Agan vs. PIATCO case: The
nullification of PIATCO
Contracts:
In 2003, the Court nullified the PIATCO
contracts in Agan V. PIATCO on the
ground that 1) the Paircargo Consortium
was not a duly pre-qualified bidder; and 2)
the PIATCO contracts contained provisinos
that substantially departed from draft
Concessino Agreement.
The court ordered a resolution denying
PIATCO’s Mr. stating that the Republic
should first pay PIATCO before it could
take over the NAIA IPT III, and that the
compensation must be just and in
accordance with the law and equity for the
Republic cannot unjustly enrich itself at the
expense of PIATCO and its investors.
3. The Expropriation Case before the
RTC:
On 2004, the Republic filed a complaint for
expropriation of the NAIA IPT III before
the RTC of Pasay, Branch 117. Notably, the
property to be expropriated did not include
the land which the Republic already owns
– only the NAIA-IPT structures therein.
RTC issued a writ of possession in favor of
the Republic pursuant to the Rule 67 of
Rules of Court. The writ is based on the
Republic’s manifestation tha tit had
depostieed with the LBP the amount of 3B
pesos, representing NAIA-IPT III’s
assessed value.
Meanwhile, the RTC supplemented tis
previous order, applying RA 8974 instead
of Rule 67 as basis for the effectivity of the
WOP. The RTC ruled among others, that
the LBO should immediately release to
PIATCO the amount of USD62M, to be
deducted from the just compensation.
In the course of the RTC expropriation
proceedings, the RTC allowed Takenaka
and Asahikosan to intervene in the case.
Takenaka and Asahikosan based their
intervention on the foreign judgments
issued in their favor in the two collection
cases that they filed against PIATCO
(London awards). Takenaka and
Asahikosan asked the RTC to: (a) hold in
abeyance the release of just compensation
to PIATCO until the London awards are
recognized and enforced in the Philippines;
and (b) order that the just compensation be
deposited with the RTC for the benefit of
PIATCO's creditors
The Republic questioned the previous RTC
order and the two other RTC orders before
the SC in the case entitled Republic v.
Gingoyon.
The SC issued a TRO and Preliminary
Injunction against the implementation of
the assailed RTC orders.
4. Developments pending the
expropriation case: the Republic
v. Gingoyon:
In this case, the SC partly granted in ruling
that the Republic is barredfrom taking over
the NAIA-IPT III until just compensation is
paid to PIATCO as the builder and owner
of the structure.
It also ruled that RA 8974 applies insofar as
it 1) provides valuation standards in
determining the amount of just
compensation; and 2) required the
Republic to immediately pay PIATCO at
least the proffered value of the NAIA-IPT
III for purposes of determining the
effectivity of the WOP.
Applying RA 8974, the SC held in abeyance
the implementation of WOP until the
Republic directly pays PIATCO the
proffered value of 3B pesos.
For purposes of computing just
compensation, the SC held that PIATCO
should only be paid the value of the
improvements and/or structures using
the replacement cost method under Section
10 of RA 8974 IRR. The SC added, however,
that the replacement cost method is only
one of the factors to be considered in
determining just
compensation; equity should also be
considered.
The Republic’s partial MR was denied.
5. The continuation of the
expropriation proceedings after
the finality of the Gingoyon case;
the present cases before the Court:
In compliance with the RTC’s order in 2010,
the. Parties and the BOC submitted their
appraisal reports on NAIA-IPT III, as
follows: 1) The Republic’s appraisal was
USD149M; 2) PIATCO’s appraisal was
USD360M; and the BOC’s appraisal was
USD376M, plus interst and commissioner’s
fees.
RTC rendered a computation of just
compensation at USD116M, and further
directed the Republic and the team of
Takenaka and Asahikosan to pay their
respective shares in the BOC expenses.
On appeal, the CA ordered the Republic of
the Philippines to pay the PIATCO the
amount of USD371M with interest at 6%
annum as just compensation for the
expropriation of the NAIA-IPT III. MR was
denied. Hence, this petition.
ISSUES WON the CA legally erred in
computing just compensation in the
expropriation of the NAIA-IPT III;
a. WON the “fair market value”
and the “replacement cost”
are similar eminent domain
standards of property
valuation;
b. WON the depreciated
replacement cost approach or
the new replacement cost
approach shall be used in the
appraisal of the NAIA-IPT III.
RULING In 2015 decision, the SC
applied the standards laid down under
Section 7, RA 8974 and Section 10 of RA
8974 IRR. SC likewise applied equity
pursuant to Gingoyon.
SC ruled that PIATCO is the sole recipient
of the just compensation even though
Takenaka and Asahikosan actually built
the NAIA-IPT III.
SC ruled that the Republic shall only have
ownership of the NAIA-IPT III after it fully
pays PIATCO the just compensation due.
In computing the just compensation, the
SC applied the depreciated replacement
cost method consistent with Section 10 of
RA 8974 IRR and the principle that the
property owner of the expropriated
property shall be compensated for
his actual loss. SC therefore agreed with
the Gleeds' deduction of depreciation and
deterioration from the construction cost.
The power of eminent domain is a
fundamental state power that is
inseparable from sovereignty.
Eminent domain is a fundamental state
power that is inseparable from sovereignty.
It is the power of a sovereign state to
appropriate private property within its
territorial sovereignty to promote public
welfare. The exercise of this power is based
on the State's primary duty to serve the
common need and advance the general
welfare. It is an inherent power and is not
conferred by the Constitution. It is
inalienable and no legislative act or
agreement can serve to abrogate the power
of eminent domain when public necessity
and convenience require its exercise.
The decision to exercise the power of
eminent domain rests with the legislature
which has the exclusive power to prescribe
how and by whom the power of eminent
domain is to be exercised. Thus, the
Executive Department cannot condemn
properties for its own use without direct
authority from the Congress.
The exercise of eminent domain necessarily
derogates against private rights which
must yield to demand of the public good
and the common welfare. However, it does
not confer on the State the authority to
wantonly disregard and violate the
individual's fundamental rights.
Fair market value is the general standard
of value in determining just compensation.
Jurisprudence broadly defines "fair market
value" as the sum of money that a person
desirous but not compelled to buy, and an
owner willing but not compelled to sell,
would agree on as a price to be given and
received for a property.
Fair market value is not limited to the
assessed value of the property or to the
schedule of market values determined by
the provincial or city appraisal committee.
However, these values may serve as factors
to be considered in the judicial valuation of
the property.
Among the factors to be considered in
arriving at the fair market value of the
property are the cost of acquisition, the
current value of like properties, its actual or
potential uses, and in the particular case of
lands, their size, shape, location, and the tax
declarations. The measure is not the taker's
gain but the owner's loss. To be just, the
compensation must be fair not only to the
owner but also to the taker.
In cases where the fair market value of the
property is difficult to ascertain, the court
may use other just and equitable market
methods of valuation in order to estimate
the fair market value of a property.
In the United States, the methods employed
include: (1) the cost of replacing the
condemned property, less depreciation; (2)
capitalization of the income the property
might reasonably have produced; (3) the
fair rental value of the property during a
temporary taking; (4) the gross rental value
of an item over its depreciable lifetime; (5)
the value which the owner's equity could
have returned, had the owner invested in
monetary instruments; (6) the cost of repair
or the capitalized cost of inconvenience,
whichever is less; and (7) the loss of
investment expenses actually incurred. The
primary consideration, however, remains
the same - to determine the compensation
that is just, both to the owner whose
property is taken and to the public that will
shoulder the cost of expropriation.
Replacement cost is a different standard of
value from fair market value.
Replacement cost is a different standard of
valuation from the fair market value. As we
previously stated, fair market value is the
price at which a property may be sold by a
seller who is not compelled to sell and
bought by a buyer who is not compelled to
buy. In contrast, replacement cost is "the
amount necessary to replace the
improvements/structures, based on the
current market prices for materials,
equipment, labor, contractor's profit and
overhead, and all other attendant costs
associated with the acquisition and
installation in place of the affected
improvements/structures."196We use the
replacement cost method to determine just
compensation if the expropriated property
has no market based evidence of its value.
Replacement cost is only one of the
standards that the Court shall consider in
appraising the NAIA-IPT III.
In using the replacement cost method to
ascertain the value of improvements that
shall be expropriated for purposes of
implementing national infrastructure
projects, Section 10 of RA 8974 IRR requires
the implementing agency to consider the
kinds and quantities of
materials/equipment used, the location,
configuration and other physical features
of the properties, and the prevailing
construction prices, among other things.
The Court explained in Agan and
Gingoyon that the replacement cost
method is only one of the factors to be
considered in determining the just
compensation of the NAIA-IPT III. The
Court added that the payment of just
compensation should be in accordance
with equity as well.
The use of depreciated replacement cost
method is consistent with the principle
that the property owner shall be
compensated for his actual loss.
The replacement cost method is a cost
approach in appraising real estate for
purposes of expropriation. This approach is
premised on the principle of substitution
which means that "all things being equal, a
rational, informed purchaser would pay no
more for a property than the cost of
building an acceptable substitute with like
utility."
There are various methods of appraising a
property using the cost approach.
Among them are the reproduction cost, the
replacement cost new, and the depreciated
replacement cost. Reproduction cost is the
"estimated current cost to construct an
exact replica of the subject building, using
the same materials, construction standards,
design, layout, and quality of
workmanship; and incorporating all the
deficiencies, superadequacies, and
obsolescence of the subject building." It is
the cost of duplicating the subject property
at current price or the current cost of
reproducing a new replica of the property
being appraised using the same, or closely
similar, materials.
Replacement cost new is "the estimated cost
to construct a building with utility
equivalent to the appraised building using
modern materials and current standards,
design, and layout"
Depreciated replacement cost approach is
the "method of valuation which provides
the current cost of replacing an asset with
its modern equivalent asset less deductions
for all physical deterioration and all
relevant forms of obsolescence and
optimisation."
Under this method, the appraiser assesses
the current gross replacement of the assets,
usually comprised of the land and the
building. If the asset is an improvement, the
appraiser assesses the cost of its
replacement with a modern equivalent and
deducts depreciation to reflect the
differences between the hypothetical
modern equivalent and the actual asset.
The appraiser has to "establish the size and
specification that the hypothetical buyer
ideally requires at the date of valuation in
order to provide the same level of
productive output or an equivalent
service."
Construction costs are "the costs that are
normally and directly incurred in the
purchase and installation of an asset, or
group of assets, into functional use." On the
other hand, attendant costs are "the costs
that are normally required to purchase and
install a property but that are not usually
included in the vendor invoice."
In these consolidated cases, we rule that the
depreciated replacement cost method,
rather than the new replacement cost
method, is the more appropriate method to
use in appraising NAIA-IPT III.
Injustice would result if we award PIATCO
just compensation based on the new
replacement cost of the NAIA-IPT III, and
disregard the fact that the Government
expropriated a terminal that is not brand
new; the NAIAIPT III simply does not have
the full economic and functional utility of a
brand new airport.
Adjustments for depreciation should be
made to reflect the differences between the
modern equivalent asset and the actual
asset or the NAIA-IPT III. The reason is that
depreciation involves the loss of value
caused by the property's reduced utility as
a result of damage, advancement of
technology, current trends and tastes, or
environmental changes.
Just compensation must not extend beyond
the property owner's loss or injury. This is
the only way for the compensation paid to
be truly just, not only to the individual
whose property is taken, but also to the
public who will shoulder the cost of
expropriation.
In summary, SC computed the just
compensation as of December 21, 2004 at
US$326,932,221.26. We deducted from this
sum the proffered value of
US$59,438,604.00. It also ruled that the
resulting difference of US$267,493,617.26
shall earn a straight interest of 12% per
annum from September 11, 2006 until June
30, 2013, and a straight interest of 6% per
annum from July 1, 2013, until full
payment.
(Determination of Just Compensation a
Judicial Function)
LBP vs DALAUTA
FACTS: Eugenio Dalauta was the
registered owner of a 25.2160-hectare
agricultural land in Butuan City, which was
placed by DAR under compulsory
acquisition of CARP. LBP offered
₱192,782.59 as compensation for the land,
but Dalauta rejected such valuation for
being too low.
The case was referred to the DAR
Adjudication Board (DARAB) through the
Provincial Agrarian Reform
Adjudicator (PARAD) of Butuan City,
which affirmed the valuation made by LBP
after a summary administrative proceeding
was conducted.
Dalauta filed a petition for
determination of just compensation with
the RTC, sitting as SAC, alleging that LBP’s
valuation of the land was inconsistent with
DAR Administrative Order (A.O.) No. 06,
series of 1992 for determining the just
compensation of lands covered by CARP’s
compulsory acquisition scheme.
Giving weight to the report of the
board of commissioners, SAC ruled in
favor of Dalauta, ordering DAR and LBP to
pay Dalauta ₱2,639,557.00. LBP moved for
reconsideration but was denied SAC.
Hence, LBP elevated the case to the CA,
arguing that SAC erred in fixing the just
compensation and in taking cognizance of
the case since the DARAB decision already
attained finality.
However, the CA ruled that the
SAC correctly took cognizance of the case
and reiterated that the SAC had original
and exclusive jurisdiction over all petitions
for the determination of just compensation.
The appellate court stated that the original
and exclusive jurisdiction of the SAC
would be undermined if the DAR would
vest in administrative officials the original
jurisdiction in compensation cases and
make the SAC an appellate court for the
review of administrative decisions.
ISSUE: Whether or not the determination
of just compensation is a judicial function
RULING: Yes. The Court declared
that the final determination of just
compensation is a judicial function; that the
jurisdiction of the Regional Trial Court,
sitting as Special Agrarian Court, is original
and exclusive, not appellate.
The Court stated that in agrarian
reform cases, primary jurisdiction is vested
in the DAR, more specifically, in the
DARAB as provided for in Section 50 of
R.A. No. 6657. On the other hand, the SACs
are the Regional Trial Courts expressly
granted by law with original and exclusive
jurisdiction over all petitions for the
determination of just compensation to
landowners.
Citing the case of LBP v. Heirs of
vda.de Arieta, the Court held that DAR-
awarded compensation, LBP's valuation of
lands covered by CARL is considered only
as an initial determination, which is not
conclusive, as it is the RTC, sitting as a
Special Agrarian Court, which should
make the final determination of just
compensation.
In maintaining the original and
exclusive jurisdiction of SAC on the final
determination of just compensation on
landowners, the Court ruled that the
valuation of property in eminent domain is
essentially a judicial function which cannot
be vested in administrative agencies.
The Court also added that
Congress expressly granted the RTC, acting
as SAC, the original and exclusive
jurisdiction over all petitions for the
determination of just compensation to
landowners. Only the legislature can recall
that power. The DAR has no authority to
qualify or undo that.
However, the Court set aside the
CA’s order to pay Dalauta ₱2,639,557.00
and remanded the case to SAC for the
computation of just compensation.
Judicial Determination of Just
Compensation
ALFONSO vs. LANDBANK and DAR
FACTS: Cynthia Palomar was the
registered owner of two (2) parcels of land
located in Sorsogon City, with an area of
1.6530 and the other in Bibincahan,
Sorsogon City, with an area of 26.2284
hectares. Upon the effectivity of RA 6657,
the DAR sought to acquire Palomar’s San
Juan and Bibincahan properties at a
valuation of P36,066.27 and P792,869.06,8
respectively. Palomar, however, rejected
the valuations.
Land Valuation Case Nos. 68-01 and 70-01
were consequently filed before the DAR
Provincial Adjudication Board (Board) for
summary determination of just
compensation. In the meantime, or on April
16, 2001, Palomar sold her rights over the
two properties to petitioner Ramon M.
Alfonso. No agreement has been reached
until the case reached the Special Agrarian
Court.
ISSUE: The main issue presented in this
case concerns the legal duty of the courts,
in the determination of just compensation
under Republic Act No. 66571 (RA 6657), in
relation to Section 17 of RA 6657 and the
implementing formulas of the Department
of Agrarian Reform (DAR).
RULE: The Court En Banc reaffirms the
established jurisprudential rule, that is:
until and unless declared invalid in a
proper case, courts have the positive legal
duty to consider the use and application of
Section 17 and the DAR basic formulas in
determining just compensation for
properties covered by RA 6657. When
courts, in the exercise of its discretion, find
that deviation from the law and
implementing formulas is warranted, it
must clearly provide its reasons therefor.
Until and unless declared invalid in a
proper case, the DAR formulas partake of
the nature of statutes, which under the 2009
amendment became law itself, and thus
have in their favor the presumption of
legality, such that courts shall consider, and
not disregard, these formulas in the
determination of just compensation for
properties covered by the CARP.
The factors listed under Section 17 of RA
6657 and its resulting formulas provide a
uniform framework or structure for the
computation of just compensation which
ensures that the amounts to be paid to
affected landowners are not arbitrary,
absurd or even contradictory to the
objectives of agrarian reform.
The right of a landowner to just
compensation for the taking of his or her
private property is a legally demandable
and enforceable right guaranteed by no less
than the Bill of Rights, under Section 9,
Article III of the Constitution. The
determination of just compensation in cases
of eminent domain is thus an actual
controversy that calls for the exercise of
judicial power by the courts. This is what
the Court means when it said that “[t]he
determination of ‘just compensation’ in
eminent domain cases is a judicial function.
When faced with situations which do not
warrant the formula’s strict application,
courts may, in the exercise of their judicial
discretion, relax the formula’s application
to fit the factual situations before them,
subject only to the condition that they
clearly explain in their Decision their
reasons (as borne by the evidence on
record) for the deviation undertaken. It is
thus entirely allowable for a court to allow
a landowner’s claim for an amount higher
than what would otherwise have been
offered (based on an application of the
formula) for as long as there is evidence on
record sufficient to support the award.
The statement that the government’s
valuation is “unrealistically low,” without
more, is insufficient to justify its deviation
from Section 17 and the implementing DAR
formula. There is nothing in the SAC’s
Decision to show why it found
Commissioner Chua’s method more
appropriate for purposes of appraising the
subject properties, apart from the fact that
his method yields a much higher (thus, in
its view, “more realistic”) result.
Allowing the SAC to arrive at a
determination of just compensation based
on open-ended standards like “more
realistic” and “ridiculously low” bodes ill
for the future of land reform
implementation. One can only imagine the
havoc such a ruling, made in the name of
ensuring absolute freedom of judicial
discretion, would have on the
government’s agrarian reform program
and the social justice ends it seeks to
further.
To claim that the courts should apply the
DAR formula and should rely on the
administrative agency tasked to implement
the CARL is to undermine the judicial
power of the courts. It is incorrect to claim
that the SACs do not have the same
expertise the DAR has when it comes to
calculating just compensation for
agricultural lands. For if an agricultural
land is expropriated under Rule 67 of the
Rules of Court instead of the CARL, the
courts could still compute the just
compensation the landowner is entitled to
and need not refer the issue to the DAR.
The clear intention of the lawmakers was
then to grant the courts discretion to
determine for itself the final amount of just
compensation, taking into account the government, as buyer, will pay without
factors enumerated under Sec. 17. As the coercion, and the landowner, as seller, will
lawmakers admitted, the 70% zonal value accept without compulsion.
to be included in the valuation is actually
an arbitrary figure, which is not a cause for
alarm since, in any case, the courts can
modify the valuation afterwards, consistent
with their best discretion.
The determination of just compensation is,
as it always has been, a judicial function.
Ergo, if the parties to the expropriation do
not agree on the amount of just
compensation, it shall be subject to the final
determination of the courts as provided
under Sec. 18 of RA 6657.
It is not mandatory but discretionary on the
SAC to apply the DAR formula in
determining the amount of just
compensation. While the SAC shall
consider applying the DAR-crafted
formula, it may, nevertheless, disregard the
same with reasons and proceed with its
own determination of just compensation
and make use of any accepted valuation
method, a variation of the DAR formula, or
a combination thereof in assigning weights
to the factors enumerated under Sec. 17 of
the CARL.
The judicial determination of just
compensation is there to break bargaining
deadlocks between buyer and seller when
these administrative formulations cannot
be modified fast enough to accommodate
the exigencies of the situation. Judicial
determination will provide more flexibility
in order to achieve the ideal where