1.Ortigas & Co. v. CA (G.R. No. 126102.

December 4, 2000)

18 Aug

FACTS:

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

ISSUE:

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

HELD:

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

RATIO:

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

2. LUCENA GRAND CENTRAL TERMINAL VS. JAC LINER, GR 148339, FEBRUARY 23, 2005

Facts:

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

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

Held:

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

The true role of Constitutional Law is to effect an equilibrium between authority and liberty so that
rights are exercised within the framework of the law and the laws are enacted with due deference to
rights. It is its reasonableness, not its effectiveness, which bears upon its constitutionality. If the
constitutionality of a law were measured by its effectiveness, then even tyrannical laws may be justified
whenever they happen to be effective.

3. CITY OF MANILA VS. JUDGE LAGUIO, GR 118127, APRIL 12, 2005

City of Manila vs. Judge Laguio (G.R. No. 118127)

Facts:

The private respondent, Malate Tourist Development Corporation (MTOC) is a corporation engaged in
the business of operating hotels, motels, hostels, and lodging houses. It built and opened Victoria Court
in Malate which was licensed as a motel although duly accredited with the Department of Tourism as a
hotel.

March 30, 1993 - City Mayor Alfredo S. Lim approved an ordinance enacted which prohibited certain
forms of amusement, entertainment, services and facilities where women are used as tools in
entertainment and which tend to disturb the community, annoy the inhabitants, and adversely affect
the social and moral welfare of the community. The Ordinance prohibited the establishment of sauna
parlors, massage parlors, karaoke bars, beerhouses, night clubs, day clubs, cabarets, motels, inns.
Owners and operators of the enumerated establishments are given three months to wind up business
operations or transfer to any place outside Ermita-Malate or convert said businesses to other kinds
allowable within the area. The Ordinance also provided that in case of violation and conviction, the
premises of the erring establishment shall be closed and padlocked permanently.

June 28, 1993 - MTOC filed a Petition with the lower court, praying that the Ordinance, insofar as it
included motels and inns as among its prohibited establishments, be declared invalid and
unconstitutional for several reasons but mainly because it is not a valid exercise of police power and it
constitutes a denial of equal protection under the law.

Judge Laguio ruled for the petitioners. The case was elevated to the Supreme Court.

Issue:

WON the Ordinance is constitutional.

Held:

SC held that the ordinance is unconstitutional for several reasons.

First, it did not meet the valid exercise of police power. To successfully invoke the exercise of police
power, not only must it appear that (1)the interest of the public generally, as distinguished from those
of a particular class, require an interference with private rights, but (2)the means employed must be
reasonably necessary for the accomplishment of the purpose and not unduly oppressive. The object of
the ordinance was the promotion and protection of the social and moral values of the community. The
closing down and transfer of businesses or their conversion into businesses allowed under the ordinance
have no reasonable relation to its purpose. Otherwise stated, the prohibition of the enumerated
establishments will not per se protect and promote social and moral welfare of the community. It will
not itself eradicate prostitution, adultery, fornication nor will it arrest the spread of sexual disease in
Manila.
Second. The modality employed constitutes unlawful taking. The ordinance is unreasonable and
oppressive as it substantially divests the respondent of the beneficial use of its property. The ordinance
forbids running of the enumerated businesses in Ermita-Malate area and instructs owners/operators to
wind up their business operations or to transfer outside the area or convert said business into allowed
business. 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. There are two
types of taking: A possessory taking and a regulatory taking. The latter occurs when the
governments regulation leaves no reasonable economically viable use of the property, as in this case.

Third. The ordinance violates the equal protection clause. Equal protection requires that all persons or
things similarly situated should be treated alike, both as to the rights conferred and responsibilities
imposed. Similar subjects, in other words, should not be treated differently, so as to give undue favor to
some. Legislative bodies are allowed to classify the subjects of legislation provided the classification is
reasonable. To be valid, it must conform to the following requirements: (1)It must be based on
substantial distinction; (2)It must be germane to the purpose of the law; (3)It must not be limited to
existing conditions only; and (4)It must apply equally to all members of the class. In the Courts view,
there are no substantial distinction between motels, inns, pension houses, hotels, lodging houses or
other similar establishments. By definition, all are commercial establishments providing lodging and
usually meals and other services for the public. No reason exists for prohibiting motels and inns but not
pension houses, hotels, lodging houses or other similar establishments. The Court likewise cannot see
the logic for prohibiting the business and operation of motels in the Ermita-Malate area but not outside
this area. A noxious establishment does not become any less noxious if located outside the area.

Fourth. The ordinance is repugnant to general laws, thus it is ultra vires. The ordinance is in
contravention of the Revised Administrative Code as the Code merely empowers the local government
units to regulate, and not prohibit, the establishments enumerated. Not only that, it likewise runs
counter to the provisions of P.D. 499. The P.D. Had already converted the residential Ermita-Malate area
into a commercial area. The decree allowed the establishment and operation of all kinds of commercial
establishments.

Wherefore, the petition was DENIED and the decision of the RTC was AFFIRMED.

4. CARLOS SUPERDRUG CORPORATION VS. DSWD, ET AL., GR 166494, JUNE 29, 20076

Facts: Petitioners are domestic corporations and proprietors operating drugstores in the Philippines.
Petitioners assail the constitutionality of Section 4(a) of RA 9257, otherwise known as the Expanded
Senior Citizens Act of 2003. Section 4(a) of RA 9257 grants twenty percent (20%) discount as privileges
for the Senior Citizens. Petitioner contends that said law is unconstitutional because it constitutes
deprivation of private property.
Issue: Whether or not RA 9257 is unconstitutional

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

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

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

5. SOCIAL JUSTICE SOCIETY VS. ALFREDO LIM, GR 187836, NOVEMBER 25, 2014

The Pandacan Oil Depot (Police Power vs Capital Power) [Second of 2 parts: Ordinance No. 8187 and
G.R. Nos. 187836 and 187916)

As we discussed in Part 1, the first challenged Ordinance (No. 8027) which reclassified the Pandacan
area from Industrial to Commercial and ordered industrial businesses like the oil industries maintaining
depots in the area to cease and desist from operating was held as constitutional by the SC.

In an about-face, Manila city hall then issued Ordinance No. 8187 for the purpose of reclassifying (again)
the Pandacan area by creating a Medium Industrial Zone and Heavy Industrial Zone thus allowing oil
depots to continue to exist in Pandacan.

If your first ordinance was upheld by the Supreme Court as a valid exercise of police power because it
aimed to safeguard the rights to life, security and safety of the inhabitants of Manila, why not issue
another ordinance to repeal it, completely contradict it and forget about that small concern regarding
the life, security and safety of the inhabitants of Manila.

Let us allow the SC to explain why

the position of the Sangguniang Panlungsod on the matter has thrice changed, largely depending on
the new composition of the council and/or political affiliations. The foregoing, thus, shows that its
determination of the general welfare of the city does not after all gear towards the protection of the
people in its true sense and meaning, but is, one way or another, dependent on the personal preference
of the members who sit in the council as to which particular sector among its constituents it wishes to
favor.

Mindful that the safety of the Manileos were still at risk, the SC continued -

Now that the City of Manila, through the mayor and the city councilors, has changed its view on the
matter, favoring the citys economic-related benefits, through the continued stay of the oil terminals,
over the protection of the very lives and safety of its constituents, it is imperative for this Court to make
a final determination on the basis of the facts on the table as to which specific right of the inhabitants of
Manila should prevail

Thus, the SC struck down Ordinance No 8187 as invalid and unconstitutional for the same reasons it
upheld the constitutionality of Ordinance No. 8027, further saying that -

The issue of whether or not the Pandacan Terminal is not a likely target of terrorist attacks has
already been passed upon in G. R. No. 156052. Based on the assessment of the Committee on
Housing, Resettlement and Urban Development of the City of Manila and the then position of the
Sangguniang Panlungsod, the Court was convinced that the threat of terrorism is imminent. It
remains so convinced.

the very nature of the depots where millions of liters of highly flammable and highly volatile products,
regardless of whether or not the composition may cause explosions, has no place in a densely populated
area. Surely, any untoward incident in the oil depots, be it related to terrorism of whatever origin or
otherwise, would definitely cause not only destruction to properties within and among the neighboring
communities but certainly mass deaths and injuries.

xxx

It is the removal of the danger to life not the mere subdual of risk of catastrophe, that we saw in and
made us favor Ordinance No. 8027. That reason, unaffected by Ordinance No. 8187, compels the
affirmance of our Decision in G.R. No. 156052.

And so, the SC finally set a definite period for the relocation of the oil depot -
The oil companies shall be given a fresh non-extendible period of forty-five (45) days from notice within
which to submit to the Regional Trial Court, Branch 39, Manila an updated comprehensive plan and
relocation schedule. The relocation, in turn, shall be completed not later than six months from the date
of their submission.

We expect this to be the last we hear of the continued stay of the depots even though there is a new
mayor in Manila, different from the mayor who signed Ordinance No. 8027 and different from that who
signed Ordinance No. 8187.It was the Supreme Court that had to remind local legislators that they are
supposed to have the welfare of the people foremost in mind.

6. MANILA MEMORIAL PARK VS. SECRETARY, DSWD, GR 175356, DECEMBER 3, 2013

Factual Antecedents

Before us is a Petition for Prohibition2 under Rule 65 of the Rules of Court filed by petitioners Manila
Memorial Park, Inc. and La Funeraria Paz-Sucat, Inc., domestic corporations engaged in the business of
providing funeral and burial services, against public respondents Secretaries of the Department of
Social Welfare and Development (DSWD) and the Department of Finance (DOF).

Petitioners assail the constitutionality of Section 4 of Republic Act (RA) No. 7432,3 as amended by RA
9257,4 and the implementing rules and regulations issued by the DSWD and DOF insofar as these
allow business establishments to claim the 20% discount given to senior citizens as a tax deduction.

On April 23, 1992, RA 7432 was passed into law, granting senior citizens the following privileges:

SECTION 4. Privileges for the Senior Citizens. The senior citizens shall be entitled to the following:

a) the grant of twenty percent (20%) discount from all establishments relative to utilization of
transportation services, hotels and similar lodging establishment[s], restaurants and recreation centers
and purchase of medicine anywhere in the country: Provided, That private establishments may claim the
cost as tax credit;

b) a minimum of twenty percent (20%) discount on admission fees charged by theaters, cinema houses
and concert halls, circuses, carnivals and other similar places of culture, leisure, and amusement;

c) exemption from the payment of individual income taxes: Provided, That their annual taxable income
does not exceed the property level as determined by the National Economic and Development Authority
(NEDA) for that year;

d) exemption from training fees for socioeconomic programs undertaken by the OSCA as part of its
work;
e) free medical and dental services in government establishment[s] anywhere in the country, subject to
guidelines to be issued by the Department of Health, the Government Service Insurance System and the
Social Security System;

f) to the extent practicable and feasible, the continuance of the same benefits and privileges given by
the Government Service Insurance System (GSIS), Social Security System (SSS) and PAG-IBIG, as the case
may be, as are enjoyed by those in actual service.

On August 23, 1993, Revenue Regulations (RR) No. 02-94 was issued to implement RA 7432. Sections 2(i)
and 4 of RR No. 02-94 provide:

The main issue in this case is the constitutionality of Section 4 of Republic Act No. 74321 (R.A. 7432),
as amended by Republic Act No. 92572 (R.A. 9257_, which states that establishments may claim the
20% mandatory discount to senior citizens as tax credit. Manila Memorial Park, Inc. and La Funeraria
Paz-Sucat, Inc. (petitioners) allege that the tax deduction scheme under R.A. 9257 violates Section 9,
Article III of the Constitution which provides that "[p]rivate property shall not be taken for public use
without just compensation."

Issues

Petitioners raise the following issues:

A.

WHETHER THE PETITION PRESENTS AN ACTUAL CASE OR CONTROVERSY.

B.

WHETHER SECTION 4 OF REPUBLIC ACT NO. 9257 AND X X X ITS IMPLEMENTING RULES AND
REGULATIONS, INSOFAR AS THEY PROVIDE THAT THE TWENTY PERCENT (20%) DISCOUNT TO SENIOR
CITIZENS MAY BE CLAIMED AS A TAX DEDUCTION BY THE PRIVATE ESTABLISHMENTS, ARE INVALID AND
UNCONSTITUTIONAL

Our Ruling

The Petition lacks merit.

There exists an actual case or controversy.

We shall first resolve the procedural issue. When the constitutionality of a law is put in issue, judicial
review may be availed of only if the following requisites concur: "(1) the existence of an actual and
appropriate case; (2) the existence of personal and substantial interest on the part of the party raising
the [question of constitutionality]; (3) recourse to judicial review is made at the earliest opportunity;
and (4) the [question of constitutionality] is the lis mota of the case."32

In this case, petitioners are challenging the constitutionality of the tax deduction scheme provided in RA
9257 and the implementing rules and regulations issued by the DSWD and the DOF. Respondents,
however, oppose the Petition on the ground that there is no actual case or controversy. We do not
agree with respondents. An actual case or controversy exists when there is "a conflict of legal rights" or
"an assertion of opposite legal claims susceptible of judicial resolution."3

Jurisprudence on Power of Eminent Domain

Civil Law: Eminent Domain, Easement, Right of Way

7. Spouses Jesus L. Cabahug and Coronacion M. Cabahug, Petitioners, vs.

National Power Corporation, Respondent

G.R. No. 186069; January 30, 2013

Facts: Spouses Cabahug, being owners of two parcels of land which were subjected to expropriation
proceedings by the National Power Corporation (NPC). NPC electrical cables would be installed in the
portions of the province and would traverse the land owned by the petitioners. Cabahug, in
consideration of the easement fees, granted NPC a continuous easement right of way. Two years
thereafter, Cabahug filed a complaint before RTC for payment of just compensation after having learned
that the compensation given by NPC was very low compared to the appraisal made by the province of
Leyte. RTC rendered decision in favor of Cabahug. However, at the Court of Appeals, it was ruled that
vested right has already accrued in favour of NPC, and to allow spouses Cabahug to pursue the case
would be a violation of the contract and an unjust enrichment in favour of Cabahug.

Issue: Whether or not NPC may still be held liable to pay for the full market value of the affected
property despite the fact transfer of title thereto was not required by the easement.

Ruling: Yes. The power of Eminent Domain may be exercised although title is not transferred to
the expropriator in easement of right of way. Just compensation which should be neither more nor less
than the money equivalent of the property is, moreover, due where the nature and effect of the
easement is to impose limitations against the use of the land for an indefinite period and deprive the
landowner if ordinary use.
8. G.R. No. 178046 : June 13, 2012

LAND BANK OF THE PHILIPPINES, Petitioner, vs. MONTINOLA-ESCARILLA and CO., INC., Respondent.

PERLAS-BERNABE, J.:

FACTS:

Montinola-Escarilla and Co., Inc. (MECO) is the owner of a parcel of agricultural land situated in
Esperanza, Agusan del Sur out of which 159.0881 hectares were acquired by the government in 1995
under R.A. No. 6657 (Comprehensive Agrarian Reform Law of 1988).

Petitioner Land Bank of the Philippines (LBP) initially valued the subject land at P823,204.08 but
respondent rejected the valuation. Pending summary administrative proceedings for determination of
just compensation before the DAR, MECO filed a complaint for determination of just compensation
before the RTC, which constituted a four-member Board of Commissioners (Board of Commissioners) to
evaluate and appraise the just compensation for the subject property covering 4.4825 hectares of
rainfed rice land and 154.6056 hectares of idle land.Meanwhile, the DAR/RARAD rendered a Decision
dated December 29, 1998 fixing the just compensation at P823,204.08.

On the other hand, the Board of Commissioners was not able to come up with a unified valuation of the
subject property. One commissioner adopted the findings and recommendation of MECO's appraiser,
Asian Appraisal Co., Inc., while another commissioner adopted the valuation of petitioner LBP. The
remaining two commissioners submitted their Commissioners' Report recommending the amount of
P4,615,194.00.

On October 8, 2002, the RTC, rendered a Decision fixing the just compensation of the property
atP7,927,660.60. In the Decision dated August 18, 2006, the CA set aside the RTC's valuation for failure
to give due consideration to the factors enumerated in Section 17 of R.A. No. 6657. While it observed
that LBP considered some factors, not all the factors were taken into account and substantiated.

ISSUE: Whether or not the CA erred in adopting the valuation in the Commissioners' Report?

HELD: The decision of the Court of Appeals is set aside.

For purposes of determining just compensation, the fair market value of an expropriated property is
determined by its character and price at the time of taking. In the implementation of R.A. No. 6657,
Section 17 provides the manner by which just compensation is determined, thus:

Section 17. Determination of Just Compensation. In determining just compensation, the cost of
acquisition of the land, the current value of like properties, its nature, actual use and income, the sworn
valuation by the owner, the tax declarations, and the assessment made by government assessors shall
be considered. The social and economic benefits contributed by the farmers and the farmworkers and
by the Government to the property as well as the non-payment of taxes or loans secured from any
government financing institution on the said land shall be considered as additional factors to determine
its valuation.

The potential use of the expropriated property is only considered in cases where there is a great
improvement in the general vicinity of the expropriated property, but should never control the
determination of just compensation.

In the present case, Investigation Report dated September 28, 1994, both the RTC and the CA
considered the subject property actual use at the time of appraisal, and reclassified the property, as
follows: 143.5528 hectares of 3rd class cornland and 15.4305 hectares of 3rd class cocoland. The RTC
and the CA ignored the fact that, at the time of the ocular inspection in September 1994, a substantial
portion of the subject property was idle and abandoned, but the farmer-beneficiaries "were already
starting to cultivate their designated area of occupancy as evidenced by the cutting of trees and some
has (sic) already started to plant corn, bananas and other crops." Under DAR A.O. No. 11, Series of 1994,
"(t)he landowner shall not be compensated or paid for improvements introduced by third parties such
as the government, farmer-beneficiaries or others." Hence, it was erroneous to reclassify the acquired
property into cornland and cocoland "based on plaintiff's (MECO) evidence" considering that the
improvements were introduced by the farmer-beneficiaries. At most, they may be considered only as
economic benefits contributed by the farmers and farmworkers to the property in determining its
valuation pursuant to Section 17 of R.A. No. 6657.

The records of the case are REMANDED to the court a quo for determination of just compensation.

9. REYES VS. NATIONAL HOUSING AUTHORITY, GR 147511, JANUARY 20, 2003

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

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

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

The Court of Appeals affirmed the decision.

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

Held: The decision appealed is modified.

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

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

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

Expropriation of private lands for slum clearance and urban development is for a public purpose even if
the developed area is later sold to private homeowners, commercial firms, entertainment and service
companies and other private concerns.
The expropriation of private property for the purpose of socialized housing for the marginalized sector is
in furtherance of the social justice provision under Section 1, Article XIII of the Constitution.

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

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

CONSUMERS NETWORK, INC. (ECN), Petitioners vs.DEPARTMENT OF ENERGY (DOE), ENERGY

REGULATORY COMMISSION (ERC),

NATIONAL POWER CORPORATION (NPC), POWER SECTOR ASSETS AND

LIABILITIES MANAGEMENT GROUP (PSALM Corp.), STRATEGIC POWER

UTILITIES GROUP (SPUG), and PANAY ELECTRIC COMPANY INC. (PECO),

Respondents

G.R. No. 159796, July 17, 2007

Facts:

RA 9136, otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA), which

sought to impose a universal charge on all end-users of electricity for the purpose of funding

NAPOCORs projects, was enacted and took effect in 2001.

Petitioners contest the constitutionality of the EPIRA, stating that the imposition of the universal

charge on all end-users is oppressive and confiscatory and amounts to taxation without

representation for not giving the consumers a chance to be heard and be represented.

Issue:W/N the universal charge is a tax

Ruling:

NO. The assailed universal charge is not a tax, but an exaction in the exercise of the States police

power. That public welfare is promoted may be gleaned from Sec. 2 of the EPIRA, which

enumerates the policies of the State regarding electrification. Moreover, the Special Trust Fund

feature of the universal charge reasonably serves and assures the attainment and perpetuity of the

purposes for which the universal charge is imposed (e.g. to ensure the viability of the countrys

electric power industry), further boosting the position that the same is an exaction primarily in

pursuit of the States police objectives.If generation of revenue is the primary purpose and regulation is
merely incidental, the imposition is a tax; but if regulation is the primary purpose, the fact that revenue
is incidentally raised does not make the imposition a tax.

The taxing power may be used as an implement of police power.

The theory behind the exercise of the power to tax emanates from necessity; without taxes,

government cannot fulfill its mandate of promoting the general welfare and well-being of the

people.