Republic of the Philippines remedy at law.
The Government does, by section 139 and 140, take away the
SUPREME COURT
Manila
EN BANC
G.R. No. L-10572 December 21, 1915
FRANCIS A. CHURCHILL and STEWART TAIT, plaintiffs-appellees,
vs.
JAMES J. RAFFERTY, Collector of Internal Revenue, defendant-appellant.
Attorney-General Avancea for appellant.
Aitken and DeSelms for appellees.
TRENT, J.:
The judgment appealed from in this case perpetually restrains and prohibits the
defendant and his deputies from collecting and enforcing against the plaintiffs and their
property the annual tax mentioned and described in subsection (b) of section 100 of
Act No. 2339, effective July 1, 1914, and from destroying or removing any sign,
signboard, or billboard, the property of the plaintiffs, for the sole reason that such sign,
signboard, or billboard is, or may be, offensive to the sight; and decrees the
cancellation of the bond given by the plaintiffs to secure the issuance of the preliminary
injunction granted soon after the commencement of this action.
This case divides itself into two parts and gives rise to two main questions; (1) that
relating to the power of the court to restrain by injunction the collection of the tax
complained of, and (2) that relating to the validity of those provisions of subsection (b)
of section 100 of Act No. 2339, conferring power upon the Collector of Internal
Revenue to remove any sign, signboard, or billboard upon the ground that the same is
offensive to the sight or is otherwise a nuisance.
The first question is one of the jurisdiction and is of vital importance to the Government.
The sections of Act No. 2339, which bear directly upon the subject, are 139 and 140.
The first expressly forbids the use of an injunction to stay the collection of any internal
revenue tax; the second provides a remedy for any wrong in connection with such
taxes, and this remedy was intended to be exclusive, thereby precluding the remedy by
injunction, which remedy is claimed to be constitutional. The two sections, then, involve
the right of a dissatisfied taxpayers to use an exceptional remedy to test the validity of
any tax or to determine any other question connected therewith, and the question
whether the remedy by injunction is exceptional.
Preventive remedies of the courts are extraordinary and are not the usual remedies.
The origin and history of the writ of injunction show that it has always been regarded as
an extraordinary, preventive remedy, as distinguished from the common course of the
law to redress evils after they have been consummated. No injunction issues as of
course, but is granted only upon the oath of a party and when there is no adequate
preventive remedy of injunction, if it ever existed, and leaves the taxpayer, in a contest
with it, the same ordinary remedial actions which prevail between citizen and citizen.
The Attorney-General, on behalf of the defendant, contends that there is no provisions
of the paramount law which prohibits such a course. While, on the other hand, counsel
for plaintiffs urge that the two sections are unconstitutional because (a) they attempt to
deprive aggrieved taxpayers of all substantial remedy for the protection of their
property, thereby, in effect, depriving them of their property without due process of law,
and (b) they attempt to diminish the jurisdiction of the courts, as conferred upon them
by Acts Nos. 136 and 190, which jurisdiction was ratified and confirmed by the Act of
Congress of July 1, 1902.
In the first place, it has been suggested that section 139 does not apply to the tax in
question because the section, in speaking of a "tax," means only legal taxes; and that
an illegal tax (the one complained of) is not a tax, and, therefore, does not fall within
the inhibition of the section, and may be restrained by injunction. There is no force in
this suggestion. The inhibition applies to all internal revenue taxes imposes, or
authorized to be imposed, by Act No. 2339. (Snyder vs. Marks, 109 U.S., 189.) And,
furthermore, the mere fact that a tax is illegal, or that the law, by virtue of which it is
imposed, is unconstitutional, does not authorize a court of equity to restrain its
collection by injunction. There must be a further showing that there are special
circumstances which bring the case under some well recognized head of equity
jurisprudence, such as that irreparable injury, multiplicity of suits, or a cloud upon title
to real estate will result, and also that there is, as we have indicated, no adequate
remedy at law. This is the settled law in the United States, even in the absence of
statutory enactments such as sections 139 and 140. (Hannewinkle vs. Mayor, etc., of
Georgetown, 82 U.S., 547; Indiana Mfg. Co. vs. Koehne, 188 U.S., 681; Ohio Tax
cases, 232 U. S., 576, 587; Pittsburgh C. C. & St. L. R. Co. vs. Board of Public Works,
172 U. S., 32; Shelton vs. Plat, 139 U.S., 591; State Railroad Tax Cases, 92 U. S.,
575.) Therefore, this branch of the case must be controlled by sections 139 and 140,
unless the same be held unconstitutional, and consequently, null and void.
The right and power of judicial tribunals to declare whether enactments of the
legislature exceed the constitutional limitations and are invalid has always
been considered a grave responsibility, as well as a solemn duty. The courts
invariably give the most careful consideration to questions involving the
interpretation and application of the Constitution, and approach constitutional
questions with great deliberation, exercising their power in this respect with
the greatest possible caution and even reluctance; and they should never
declare a statute void, unless its invalidity is, in their judgment, beyond
reasonable doubt. To justify a court in pronouncing a legislative act
unconstitutional, or a provision of a state constitution to be in contravention of
the Constitution of the United States, the case must be so clear to be free
from doubt, and the conflict of the statute with the constitution must be
irreconcilable, because it is but a decent respect to the wisdom, the integrity,
and the patriotism of the legislative body by which any law is passed to
presume in favor of its validity until the contrary is shown beyond reasonable
doubt. Therefore, in no doubtful case will the judiciary pronounce a legislative
act to be contrary to the constitution. To doubt the constitutionality of a law is
to resolve the doubt in favor of its validity. (6 Ruling Case Law, secs. 71, 72,
and 73, and cases cited therein.)
It is also the settled law in the United States that "due process of law" does not always
require, in respect to the Government, the same process that is required between
citizens, though it generally implies and includes regular allegations, opportunity to
answer, and a trial according to some well settled course of judicial proceedings. The
case with which we are dealing is in point. A citizen's property, both real and personal,
may be taken, and usually is taken, by the government in payment of its taxes without
any judicial proceedings whatever. In this country, as well as in the United States, the
officer charged with the collection of taxes is authorized to seize and sell the property
of delinquent taxpayers without applying to the courts for assistance, and the
constitutionality of the law authorizing this procedure never has been seriously
questioned. (City of Philadelphia vs. [Diehl] The Collector, 5 Wall., 720;
Nicholl vs. U.S., 7 Wall., 122, and cases cited.) This must necessarily be the course,
because it is upon taxation that the Government chiefly relies to obtain the means to
carry on its operations, and it is of the utmost importance that the modes adopted to
enforce the collection of the taxes levied should be summary and interfered with as
little as possible. No government could exist if every litigious man were permitted to
delay the collection of its taxes. This principle of public policy must be constantly borne
in mind in determining cases such as the one under consideration.
With these principles to guide us, we will proceed to inquire whether there is any merit
in the two propositions insisted upon by counsel for the plaintiffs. Section 5 of the
Philippine Bill provides: "That no law shall be enacted in said Islands which shall
deprive any person of life, liberty, or property without due process of law, or deny to
any person therein the equal protection of the law."
The origin and history of these provisions are well-known. They are found in substance
in the Constitution of the United States and in that of ever state in the Union.
Section 3224 of the Revised Statutes of the United States, effective since 1867,
provides that: "No suit for the purpose of restraining the assessment or collection of
any tax shall be maintained in any court."
Section 139, with which we have been dealing, reads: "No court shall have authority to
grant an injunction to restrain the collection of any internal-revenue tax."
A comparison of these two sections show that they are essentially the same. Both
expressly prohibit the restraining of taxes by injunction. If the Supreme Court of the
United States has clearly and definitely held that the provisions of section 3224 do not
violate the "due process of law" and "equal protection of the law" clauses in the
Constitution, we would be going too far to hold that section 139 violates those same
provisions in the Philippine Bill. That the Supreme Court of the United States has so
held, cannot be doubted.
In Cheatham vs. United States (92 U.S., 85,89) which involved the validity of an
income tax levied by an act of Congress prior to the one in issue in the case of
Pollock vs. Farmers' Loan & Trust Co. (157 U.S., 429) the court, through Mr. Justice
Miller, said: "If there existed in the courts, state or National, any general power of
impeding or controlling the collection of taxes, or relieving the hardship incident to
taxation, the very existence of the government might be placed in the power of a
hostile judiciary. (Dows vs. The City of Chicago, 11 Wall., 108.) While a free course of
remonstrance and appeal is allowed within the departments before the money is finally
exacted, the General Government has wisely made the payment of the tax claimed,
whether of customs or of internal revenue, a condition precedent to a resort to the
courts by the party against whom the tax is assessed. In the internal revenue branch it
has further prescribed that no such suit shall be brought until the remedy by appeal has
been tried; and, if brought after this, it must be within six months after the decision on
the appeal. We regard this as a condition on which alone the government consents to
litigate the lawfulness of the original tax. It is not a hard condition. Few governments
have conceded such a right on any condition. If the compliance with this condition
requires the party aggrieved to pay the money, he must do it."
Again, in State Railroad Tax Cases (92 U.S., 575, 613), the court said: "That there
might be no misunderstanding of the universality of this principle, it was expressly
enacted, in 1867, that "no suit for the purpose of restraining the assessment or
collection of any tax shall be maintained in any court." (Rev, Stat., sec. 3224.) And
though this was intended to apply alone to taxes levied by the United States, it shows
the sense of Congress of the evils to be feared if courts of justice could, in any case,
interfere with the process of collecting taxes on which the government depends for its
continued existence. It is a wise policy. It is founded in the simple philosophy derived
from the experience of ages, that the payment of taxes has to be enforced by summary
and stringent means against a reluctant and often adverse sentiment; and to do this
successfully, other instrumentalities and other modes of procedure are necessary, than
those which belong to courts of justice."
And again, in Snyder vs. Marks (109 U.S., 189), the court said: "The remedy of a suit to
recover back the tax after it is paid is provided by statute, and a suit to restrain its
collection is forbidden. The remedy so given is exclusive, and no other remedy can be
substituted for it. Such has been the current of decisions in the Circuit Courts of the
United States, and we are satisfied it is a correct view of the law."itc-a1f
In the consideration of the plaintiffs' second proposition, we will attempt to show (1)
that the Philippine courts never have had, since the American occupation, the power to
restrain by injunction the collection of any tax imposed by the Insular Government for
its own purpose and benefit, and (2) that assuming that our courts had or have such
power, this power has not been diminished or curtailed by sections 139 and 140.
We will first review briefly the former and present systems of taxation. Upon the
American occupation of the Philippine, there was found a fairly complete system of
taxation. This system was continued in force by the military authorities, with but few
changes, until the Civil Government assumed charge of the subject. The principal
sources of revenue under the Spanish regime were derived from customs receipts, the
so-called industrial taxes, the urbana taxes, the stamp tax, the personal cedula tax,
and the sale of the public domain. The industrial and urbana taxes constituted
practically an income tax of some 5 per cent on the net income of persons engaged in
industrial and commercial pursuits and on the income of owners of improved city
property. The sale of stamped paper and adhesive stamp tax. The cedula tax was a
graduated tax, ranging from nothing up to P37.50. The revenue derived from the sale
of the public domain was not considered a tax. The American authorities at once
abolished the cedula tax, but later restored it in a modified form, charging for each
cedula twenty centavos, an amount which was supposed to be just sufficient to cover
the cost of issuance. The urbana tax was abolished by Act No. 223, effective
September 6, 1901.
The "Municipal Code" (Act No. 82) and the Provincial Government Act (No. 83), both
enacted in 1901, authorize municipal councils and provincial boards to impose an ad
valorem tax on real estate. The Municipal Code did not apply to the city of Manila. This
city was given a special charter (Act No. 183), effective August 30, 1901; Under this
charter the Municipal Board of Manila is authorized and empowered to impose taxes
upon real estate and, like municipal councils, to license and regulate certain
occupations. Customs matters were completely reorganized by Act No. 355, effective
at the port of Manila on February 7, 1902, and at other ports in the Philippine Islands
the day after the receipt of a certified copy of the Act. The Internal Revenue Law of
1904 (Act No. 1189), repealed all existing laws, ordinances, etc., imposing taxes upon
the persons, objects, or occupations taxed under that act, and all industrial taxes and
stamp taxes imposed under the Spanish regime were eliminated, but the industrial tax
was continued in force until January 1, 1905. This Internal Revenue Law did not take
away from municipal councils, provincial boards, and the Municipal Board of the city of
Manila the power to impose taxes upon real estate. This Act (No. 1189), with its
amendments, was repealed by Act No. 2339, an act "revising and consolidating the
laws relative to internal revenue."
Section 84 of Act No. 82 provides that "No court shall entertain any suit assailing the
validity of a tax assessed under this act until the taxpayer shall have paid, under
protest, the taxes assessed against him, . . . ."
This inhibition was inserted in section 17 of Act No. 83 and applies to taxes imposed by
provincial boards. The inhibition was not inserted in the Manila Charter until the
passage of Act No. 1793, effective October 12, 1907. Act No. 355 expressly makes the
payment of the exactions claimed a condition precedent to a resort to the courts by
dissatisfied importers. Section 52 of Act No. 1189 provides "That no courts shall have
authority to grant an injunction restraining the collection of any taxes imposed by virtue
of the provisions of this Act, but the remedy of the taxpayer who claims that he is
unjustly assessed or taxed shall be by payment under protest of the sum claimed from
him by the Collector of Internal Revenue and by action to recover back the sum
claimed to have been illegally collected."
Sections 139 and 140 of Act No. 2339 contain, as we have indicated, the same
prohibition and remedy. The result is that the courts have been expressly forbidden, in
every act creating or imposing taxes or imposts enacted by the legislative body of the
Philippines since the American occupation, to entertain any suit assailing the validity of
any tax or impost thus imposed until the tax shall have been paid under protest. The
only taxes which have not been brought within the express inhibition were those
included in that part of the old Spanish system which completely disappeared on or
before January 1, 1905, and possibly the old customs duties which disappeared in
February, 1902.
Section 56 of the Organic Act (No. 136), effective June 16, 1901, provides that "Courts
of First Instance shall have original jurisdiction:
xxx xxx xxx
2. In all civil actions which involve the ... legality of any tax, impost, or
assessment, . . . .
xxx xxx xxx
7. Said courts and their judges, or any of them, shall have power to issue
writs of injunction, mandamus, certiorari, prohibition, quo warranto,
and habeas corpus in their respective provinces and districts, in the manner
provided in the Code of Civil Procedure.
The provisions of the Code of Civil Procedure (Act No. 190), effective October 1, 1901,
which deals with the subject of injunctions, are sections 162 to 172, inclusive.
Injunctions, as here defined, are of two kinds; preliminary and final. The former may be
granted at any time after the commencement of the action and before final judgment,
and the latter at the termination of the trial as the relief or part of the relief prayed for
(sec. 162). Any judge of the Supreme Court may grant a preliminary injunction in any
action pending in that court or in any Court of First Instance. A preliminary injunction
may also be granted by a judge of the Court of First Instance in actions pending in his
district in which he has original jurisdiction (sec. 163). But such injunctions may be
granted only when the complaint shows facts entitling the plaintiff to the relief
demanded (sec. 166), and before a final or permanent injunction can be granted, it
must appear upon the trial of the action that the plaintiff is entitled to have commission
or continuance of the acts complained of perpetually restrained (sec. 171). These
provisions authorize the institution in Courts of First Instance of what are known as
"injunction suits," the sole object of which is to obtain the issuance of a final injunction.
They also authorize the granting of injunctions as aiders in ordinary civil actions. We
have defined in Davesa vs. Arbes (13 Phil. Rep., 273), an injunction to be "A "special
remedy" adopted in that code (Act 190) from American practice, and originally
borrowed from English legal procedure, which was there issued by the authority and
under the seal of a court of equity, and limited, as in other cases where equitable relief
is sought, to those cases where there is no "plain, adequate, and complete remedy at
law,"which will not be granted while the rights between the parties are undetermined,
except in extraordinary cases where material and irreparable injury will be done,"which
cannot be compensated in damages . . .
By paragraph 2 of section 56 of Act No. 136, supra, and the provisions of the various
subsequent Acts heretofore mentioned, the Insular Government has consented to
litigate with aggrieved persons the validity of any original tax or impost imposed by it on
condition that this be done in ordinary civil actions after the taxes or exactions shall
have been paid. But it is said that paragraph 2 confers original jurisdiction upon Courts
of First Instance to hear and determine "all civil actions" which involve the validity of
any tax, impost or assessment, and that if the all-inclusive words "all" and "any" be
given their natural and unrestricted meaning, no action wherein that question is
involved can arise over which such courts do not have jurisdiction.
(Barrameda vs. Moir, 25 Phil. Rep., 44.) This is true. But the term "civil actions" had its
well defined meaning at the time the paragraph was enacted. The same legislative
body which enacted paragraph 2 on June 16, 1901, had, just a few months prior to that
time, defined the only kind of action in which the legality of any tax imposed by it might
be assailed. (Sec. 84, Act 82, enacted January 31, 1901, and sec. 17, Act No. 83,
enacted February 6, 1901.) That kind of action being payment of the tax under protest
and an ordinary suit to recover and no other, there can be no doubt that Courts of First
Instance have jurisdiction over all such actions. The subsequent legislation on the
same subject shows clearly that the Commission, in enacting paragraph 2, supra, did
not intend to change or modify in any way section 84 of Act No. 82 and section 17 of
Act No. 83, but, on the contrary, it was intended that "civil actions," mentioned in said
paragraph, should be understood to mean, in so far as testing the legality of taxes were
concerned, only those of the kind and character provided for in the two sections above
mentioned. It is also urged that the power to restrain by injunction the collection of
taxes or imposts is conferred upon Courts of First Instance by paragraph 7 of section
56, supra. This paragraph does empower those courts to grant injunctions, both
preliminary and final, in any civil action pending in their districts, provided always, that
the complaint shows facts entitling the plaintiff to the relief demanded. Injunction suits,
such as the one at bar, are "civil actions," but of a special or extraordinary character. It
cannot be said that the Commission intended to give a broader or different meaning to
the word "action," used in Chapter 9 of the Code of Civil Procedure in connection with
injunctions, than it gave to the same word found in paragraph 2 of section 56 of the
Organic Act. The Insular Government, in exercising the power conferred upon it by the
Congress of the United States, has declared that the citizens and residents of this
country shall pay certain specified taxes and imposts. The power to tax necessarily
carries with it the power to collect the taxes. This being true, the weight of authority
supports the proposition that the Government may fix the conditions upon which it will
consent to litigate the validity of its original taxes. (Tennessee vs. Sneed, 96 U.S., 69.)
We must, therefore, conclude that paragraph 2 and 7 of section 56 of Act No. 136,
construed in the light of the prior and subsequent legislation to which we have referred,
and the legislative and judicial history of the same subject in the United States with
which the Commission was familiar, do not empower Courts of firs Instance to interfere
by injunction with the collection of the taxes in question in this case.1awphil.net
If we are in error as to the scope of paragraph 2 and 7, supra, and the Commission did
intend to confer the power upon the courts to restrain the collection of taxes, it does not
necessarily follow that this power or jurisdiction has been taken away by section 139 of
Act No. 2339, for the reason that all agree that an injunction will not issue in any case if
there is an adequate remedy at law. The very nature of the writ itself prevents its
issuance under such circumstances. Legislation forbidding the issuing of injunctions in
such cases is unnecessary. So the only question to be here determined is whether the
remedy provided for in section 140 of Act No. 2339 is adequate. If it is, the writs which
form the basis of this appeal should not have been issued. If this is the correct view,
the authority to issue injunctions will not have been taken away by section 139, but
rendered inoperative only by reason of an adequate remedy having been made
available.
The legislative body of the Philippine Islands has declared from the beginning (Act No.
82) that payment under protest and suit to recover is an adequate remedy to test the
legality of any tax or impost, and that this remedy is exclusive. Can we say that the
remedy is not adequate or that it is not exclusive, or both? The plaintiffs in the case at
bar are the first, in so far as we are aware, to question either the adequacy or
exclusiveness of this remedy. We will refer to a few cases in the United States where
statutes similar to sections 139 and 140 have been construed and applied.
In May, 1874, one Bloomstein presented a petition to the circuit court sitting in
Nashville, Tennessee, stating that his real and personal property had been assessed
for state taxes in the year 1872 to the amount of $132.60; that he tendered to the
collector this amount in "funds receivable by law for such purposes;" and that the
collector refused to receive the same. He prayed for an alternative writ of mandamus to
compel the collector to receive the bills in payment for such taxes, or to show cause to
the contrary. To this petition the collector, in his answer, set up the defense that the
petitioner's suit was expressly prohibited by the Act of the General Assembly of the
State of Tennessee, passed in 1873. The petition was dismissed and the relief prayed
for refused. An appeal to the supreme court of the State resulted in the affirmance of
the judgment of the lower court. The case was then carried to the Supreme Court of
the United States (Tennessee vs. Sneed, 96 U. S., 69), where the judgment was again
affirmed.
The two sections of the Act of [March 21,] 1873, drawn in question in that cases, read
as follows:
1. That in all cases in which an officer, charged by law with the collection of
revenue due the State, shall institute any proceeding, or take any steps for
the collection of the same, alleged or claimed to be due by said officer from
any citizen, the party against whom the proceeding or step is taken shall, if he
conceives the same to be unjust or illegal, or against any statute or clause of
the Constitution of the State, pay the same under protest; and, upon his
making said payment, the officer or collector shall pay such revenue into the
State Treasury, giving notice at the time of payment to the Comptroller that
the same was paid under protest; and the party paying said revenue may, at
any time within thirty days after making said payment, and not longer
thereafter, sue the said officer having collected said sum, for the recovery
thereof. And the same may be tried in any court having the jurisdiction of the
amount and parties; and, if it be determined that the same was wrongfully
collected, as not being due from said party to the State, for any reason going
to the merits of the same, then the court trying the case may certify of record
that the same was wrongfully paid and ought to be refunded; and thereupon
the Comptroller shall issue his warrant for the same, which shall be paid in
preference to other claims on the Treasury.
2. That there shall be no other remedy, in any case of the collection of
revenue, or attempt to collect revenue illegally, or attempt to collect revenue
in funds only receivable by said officer under the law, the same being other or
different funds than such as the tax payer may tender, or claim the right to
pay, than that above provided; and no writ for the prevention of the collection
of any revenue claimed, or to hinder or delay the collection of the same, shall
in anywise issue, either injunction, supersedeas, prohibition, or any other writ
or process whatever; but in all cases in which, for any reason, any person
shall claim that the tax so collected was wrongfully or illegally collected, the
remedy for said party shall be as above provided, and in no other manner."
In discussing the adequacy of the remedy provided by the Tennessee Legislature, as
above set forth, the Supreme Court of the United States, in the case just cited, said:
"This remedy is simple and effective. A suit at law to recover money unlawfully exacted
is as speedy, as easily tried, and less complicated than a proceeding by mandamus. ...
In revenue cases, whether arising upon its (United States) Internal Revenue Laws or
those providing for the collection of duties upon foreign imports, it (United States)
adopts the rule prescribed by the State of Tennessee. It requires the contestant to pay
the amount as fixed by the Government, and gives him power to sue the collector, and
in such suit to test the legality of the tax. There is nothing illegal or even harsh in this. It
is a wise and reasonable precaution for the security of the Government."
Thomas C. Platt commenced an action in the Circuit Court of the United States for the
Eastern District of Tennessee to restrain the collection of a license tax from the
company which he represented. The defense was that sections 1 and 2 of the Act of
1873, supra, prohibited the bringing of that suit. This case also reached the Supreme
Court of the United States. (Shelton vs. Platt, 139 U. 591.) In speaking of the inhibitory
provisions of sections 1 and 2 of the Act of 1873, the court said: "This Act has been
sanctioned and applied by the Courts of Tennessee. (Nashville vs. Smith, 86 Tenn.,
213; Louisville & N. R. Co. vs. State, 8 Heisk., 663, 804.) It is, as counsel observe,
similar to the Act of Congress forbidding suit for the purpose of restraining the
assessment or collection of taxes under the Internal Revenue Laws, in respect to which
this court held that the remedy by suit to recover back the tax after payment, provided
for by the Statute, was exclusive. (Snyder vs. Marks, of this character has been called
for by the embarrassments resulting from the improvident employment of the writ of
injunction in arresting the collection of the public revenue; and, even in its absence, the
strong arm of the court of chancery ought not to be interposed in that direction except
where resort to that court is grounded upon the settled principles which govern its
jurisdiction."
In Louisville & N.R. Co. vs. State (8 Heisk. [64 Tenn.], 663, 804), cited by the Supreme
Court of the United States in Shelton vs. Platt, supra, the court said: "It was urged that
this statute (sections 1 and 2 of the Act of 1873, supra) is unconstitutional and void, as
it deprives the citizen of the remedy by certiorari, guaranteed by the organic law."
By the 10th section of the sixth article of the Constitution, [Tennessee] it is provided
that: "The judges or justices of inferior courts of law and equity shall have power in all
civil cases to issue writs of certiorari, to remove any cause, or the transcript of the
record thereof, from any inferior jurisdiction into such court of law, on sufficient cause,
supported by oath or affirmation."
The court held the act valid as not being in conflict with these provisions of the State
constitution.
In Eddy vs. The Township of Lee (73 Mich., 123), the complainants sought to enjoin
the collection of certain taxes for the year 1886. The defendants, in support of their
demurrer, insisted that the remedy by injunction had been taken away by section 107
of the Act of 1885, which section reads as follows: "No injunction shall issue to stay
proceedings for the assessment or collection of taxes under this Act."
It was claimed by the complainants that the above quoted provisions of the Act of 1885
were unconstitutional and void as being in conflict with article 6, sec. 8, of the
Constitution, which provides that: "The circuit courts shall have original jurisdiction in all
matters, civil and criminal, not excepted in this Constitution, and not prohibited by law.
... They shall also have power to issue writs of habeas corpus, mandamus,
injunction, quo warranto, certiorari, and other writs necessary to carry into effect their
orders, judgments, and decrees."
Mr. Justice Champlin, speaking for the court, said: "I have no doubt that the Legislature
has the constitutional authority, where it has provided a plain, adequate, and complete
remedy at law to recover back taxes illegally assessed and collected, to take away the
remedy by injunction to restrain their collection."
Section 9 of the Philippine Bill reads in part as follows: "That the Supreme Court and
the Courts of First Instance of the Philippine Islands shall possess and exercise
jurisdiction as heretofore provided and such additional jurisdiction as shall hereafter be
prescribed by the Government of said Islands, subject to the power of said
Government to change the practice and method of procedure."
It will be seen that this section has not taken away from the Philippine Government the
power to change the practice and method of procedure. If sections 139 and 140,
considered together, and this must always be done, are nothing more than a mode of
procedure, then it would seem that the Legislature did not exceed its constitutional
authority in enacting them. Conceding for the moment that the duly authorized
procedure for the determination of the validity of any tax, impost, or assessment was
by injunction suits and that this method was available to aggrieved taxpayers prior to
the passage of Act No. 2339, may the Legislature change this method of procedure?
That the Legislature has the power to do this, there can be no doubt, provided some
other adequate remedy is substituted in lieu thereof. In speaking of the modes of
enforcing rights created by contracts, the Supreme Court of the United States, in
Tennessee vs. Sneed, supra, said: "The rule seems to be that in modes of proceedings
and of forms to enforce the contract the Legislature has the control, and may enlarge,
limit or alter them, provided that it does not deny a remedy, or so embarrass it with
conditions and restrictions as seriously to impair the value of the right."
In that case the petitioner urged that the Acts of 1873 were laws impairing the
obligation of the contract contained in the charter of the Bank of Tennessee, which
contract was entered into with the State in 1838. It was claimed that this was done by
placing such impediments and obstructions in the way of its enforcement, thereby so
impairing the remedies as practically to render the obligation of no value. In disposing
of this contention, the court said: "If we assume that prior to 1873 the relator had
authority to prosecute his claim against the State by mandamus, and that by the
statutes of that year the further use of that form was prohibited to him, the question
remains. whether an effectual remedy was left to him or provided for him. We think the
regulation of the statute gave him an abundant means of enforcing such right as he
possessed. It provided that he might pay his claim to the collector under protest, giving
notice thereof to the Comptroller of the Treasury; that at any time within thirty days
thereafter he might sue the officer making the collection; that the case should be tried
by any court having jurisdiction and, if found in favor of the plaintiff on the merits, the
court should certify that the same was wrongfully paid and ought to be refunded and
the Comptroller should thereupon issue his warrant therefor, which should be paid in
preference to other claim on the Treasury."
But great stress is laid upon the fact that the plaintiffs in the case under consideration
are unable to pay the taxes assessed against them and that if the law is enforced, they
will be compelled to suspend business. This point may be best answered by quoting
from the case of Youngblood vs. Sexton (32 Mich., 406), wherein Judge Cooley,
speaking for the court, said: "But if this consideration is sufficient to justify the transfer
of a controversy from a court of law to a court of equity, then every controversy where
money is demanded may be made the subject of equitable cognizance. To enforce
against a dealer a promissory note may in some cases as effectually break up his
business as to collect from him a tax of equal amount. This is not what is known to the
law as irreparable injury. The courts have never recognized the consequences of the
mere enforcement of a money demand as falling within that category."
Certain specified sections of Act No. 2339 were amended by Act No. 2432, enacted
December 23, 1914, effective January 1, 1915, by imposing increased and additional
taxes. Act No. 2432 was amended, were ratified by the Congress of the United States
on March 4, 1915. The opposition manifested against the taxes imposed by Acts Nos.
2339 and 2432 is a matter of local history. A great many business men thought the
taxes thus imposed were too high. If the collection of the new taxes on signs,
signboards, and billboards may be restrained, we see no well-founded reason why
injunctions cannot be granted restraining the collection of all or at least a number of the
other increased taxes. The fact that this may be done, shows the wisdom of the
Legislature in denying the use of the writ of injunction to restrain the collection of any
tax imposed by the Acts. When this was done, an equitable remedy was made
available to all dissatisfied taxpayers.
The question now arises whether, the case being one of which the court below had no
jurisdiction, this court, on appeal, shall proceed to express an opinion upon the validity
of provisions of subsection (b) of section 100 of Act No. 2339, imposing the taxes
complained of. As a general rule, an opinion on the merits of a controversy ought to be
declined when the court is powerless to give the relief demanded. But it is claimed that
this case is, in many particulars, exceptional. It is true that it has been argued on the
merits, and there is no reason for any suggestion or suspicion that it is not a bona fide
controversy. The legal points involved in the merits have been presented with force,
clearness, and great ability by the learned counsel of both sides. If the law assailed
were still in force, we would feel that an opinion on its validity would be justifiable, but,
as the amendment became effective on January 1, 1915, we think it advisable to
proceed no further with this branch of the case.
The next question arises in connection with the supplementary complaint, the object of
which is to enjoin the Collector of Internal Revenue from removing certain billboards,
the property of the plaintiffs located upon private lands in the Province of Rizal. The
plaintiffs allege that the billboards here in question "in no sense constitute a nuisance
and are not deleterious to the health, morals, or general welfare of the community, or of
any persons." The defendant denies these allegations in his answer and claims that
after due investigation made upon the complaints of the British and German Consuls,
he "decided that the billboard complained of was and still is offensive to the sight, and
is otherwise a nuisance." The plaintiffs proved by Mr. Churchill that the "billboards were
quite a distance from the road and that they were strongly built, not dangerous to the
safety of the people, and contained no advertising matter which is filthy, indecent, or
deleterious to the morals of the community." The defendant presented no testimony
upon this point. In the agreed statement of facts submitted by the parties, the plaintiffs
"admit that the billboards mentioned were and still are offensive to the sight."
The pertinent provisions of subsection (b) of section 100 of Act No. 2339 read: "If after
due investigation the Collector of Internal Revenue shall decide that any sign,
signboard, or billboard displayed or exposed to public view is offensive to the sight or is
otherwise a nuisance, he may by summary order direct the removal of such sign,
signboard, or billboard, and if same is not removed within ten days after he has issued
such order he my himself cause its removal, and the sign, signboard, or billboard shall
thereupon be forfeited to the Government, and the owner thereof charged with the
expenses of the removal so effected. When the sign, signboard, or billboard ordered to
be removed as herein provided shall not comply with the provisions of the general
regulations of the Collector of Internal Revenue, no rebate or refund shall be allowed
for any portion of a year for which the tax may have been paid. Otherwise, the
Collector of Internal Revenue may in his discretion make a proportionate refund of the
tax for the portion of the year remaining for which the taxes were paid. An appeal may
be had from the order of the Collector of Internal Revenue to the Secretary of Finance
and Justice whose decision thereon shall be final."
The Attorney-General, on behalf of the defendant, says: "The question which the case
presents under this head for determination, resolves itself into this inquiry: Is the
suppression of advertising signs displayed or exposed to public view, which are
admittedly offensive to the sight, conducive to the public interest?"
And cunsel for the plaintiffs states the question thus: "We contend that that portion of
section 100 of Act No. 2339, empowering the Collector of Internal Revenue to remove
billboards as nuisances, if objectionable to the sight, is unconstitutional, as constituting
a deprivation of property without due process of law."
From the position taken by counsel for both sides, it is clear that our inquiry is limited to
the question whether the enactment assailed by the plaintiffs was a legitimate exercise
of the police power of the Government; for all property is held subject to that power.
As a consequence of the foregoing, all discussion and authorities cited, which go to the
power of the state to authorize administrative officers to find, as a fact, that legitimate
trades, callings, and businesses are, under certain circumstances, statutory nuisances,
and whether the procedure prescribed for this purpose is due process of law, are
foreign to the issue here presented.
There can be no doubt that the exercise of the police power of the Philippine
Government belongs to the Legislature and that this power is limited only by the Acts of
Congress and those fundamentals principles which lie at the foundation of all
republican forms of government. An Act of the Legislature which is obviously and
undoubtedly foreign to any of the purposes of the police power and interferes with the
ordinary enjoyment of property would, without doubt, be held to be invalid. But where
the Act is reasonably within a proper consideration of and care for the public health,
safety, or comfort, it should not be disturbed by the courts. The courts cannot substitute
their own views for what is proper in the premises for those of the Legislature. In
Munn vs. Illinois (94 U.S., 113), the United States Supreme Court states the rule thus:
"If no state of circumstances could exist to justify such statute, then we may declare
this one void because in excess of the legislative power of this state; but if it could, we
must presume it did. Of the propriety of legislative interference, within the scope of the
legislative power, a legislature is the exclusive judge."
This rule very fully discussed and declared in Powell vs. Pennsylvania (127 U.S., 678)
"oleo-margarine" case. (See also Crowley vs. Christensen, 137 U.S., 86, 87;
Camfield vs. U.S., 167 U.S., 518.) While the state may interfere wherever the public
interests demand it, and in this particular a large discretion is necessarily vested in the
legislature to determine, not only what the interest of the public require, but what
measures are necessary for the protection of such interests; yet, its determination in
these matters is not final or conclusive, but is subject to the supervision of the courts.
(Lawton vs. Steele, 152 U.S., 133.) Can it be said judicially that signs, signboards, and
billboards, which are admittedly offensive to the sight, are not with the category of
things which interfere with the public safety, welfare, and comfort, and therefore
beyond the reach of the police power of the Philippine Government?
The numerous attempts which have been made to limit by definition the scope of the
police power are only interesting as illustrating its rapid extension within comparatively
recent years to points heretofore deemed entirely within the field of private liberty and
property rights. Blackstone's definition of the police power was as follows: "The due
regulation and domestic order of the kingdom, whereby the individuals of the state, like
members of a well governed family, are bound to conform their general behavior to the
rules of propriety, good neigborhood, and good manners, to be decent, industrious,
and inoffensive in their respective stations." (Commentaries, vol. 4, p. 162.)
Chanceller Kent considered the police power the authority of the state "to regulate
unwholesome trades, slaughter houses, operations offensive to the senses." Chief
Justice Shaw of Massachusetts defined it as follows: "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." (Com. vs. Alger, 7 Cush., 53.)
In the case of Butchers' Union Slaughter-house, etc. Co. vs. Crescent City Live Stock
Landing, etc. Co. (111 U.S., 746), it was suggested that the public health and public
morals are matters of legislative concern of which the legislature cannot divest itself.
(See State vs. Mountain Timber Co. [1913], 75 Wash., 581, where these definitions are
collated.)
In Champer vs. Greencastle (138 Ind., 339), it was said: "The police power of the
State, so far, has not received a full and complete definition. It may be said, however,
to be the right of the State, or state functionary, to prescribe regulations for the good
order, peace, health, protection, comfort, convenience and morals of the community,
which do not ... violate any of the provisions of the organic law." (Quoted with approval
in Hopkins vs. Richmond [Va., 1915], 86 S.E., 139.)
In Com. vs. Plymouth Coal Co. ([1911] 232 Pa., 141), it was said: "The police power of
the state is difficult of definition, but it has been held by the courts to be the right to
prescribe regulations for the good order, peace, health, protection, comfort,
convenience and morals of the community, which does not encroach on a like power
vested in congress or state legislatures by the federal constitution, or does not violate
the provisions of the organic law; and it has been expressly held that the fourteenth
amendment to the federal constitution was not designed to interfere with the exercise
of that power by the state."
In People vs. Brazee ([Mich., 1914], 149 N.W., 1053), it was said: "It [the police power]
has for its object the improvement of social and economic conditioned affecting the
community at large and collectively with a view to bring about "he greatest good of the
greatest number."Courts have consistently and wisely declined to set any fixed
limitations upon subjects calling for the exercise of this power. It is elastic and is
exercised from time to time as varying social conditions demand correction."
In 8 Cyc., 863, it is said: "Police power is the name given to that inherent sovereignty
which it is the right and duty of the government or its agents to exercise whenever
public policy, in a broad sense, demands, for the benefit of society at large, regulations
to guard its morals, safety, health, order or to insure in any respect such economic
conditions as an advancing civilization of a high complex character requires." (As
quoted with approval in Stettler vs. O'Hara [1914], 69 Ore, 519.)
Finally, the Supreme Court of the United States has said in Noble State
Bank vs. Haskell (219 U.S. [1911], 575: "It may be said in a general way that the police
power extends to all the great public needs. It may be put forth in aid of what is
sanctioned by usage, or held by the prevailing morality or strong and preponderant
opinion to be greatly and immediately necessary to the public welfare."
This statement, recent as it is, has been quoted with approval by several courts.
(Cunningham vs. Northwestern Imp. Co. [1911], 44 Mont., 180; State vs. Mountain
Timber Co. [1913], 75 Wash., 581; McDavid vs. Bank of Bay Minette [Ala., 1915], 69
Sou., 452; Hopkins vs. City of Richmond [Va., 1915], 86 S.E., 139; State vs. Philipps
[Miss. 1915], 67 Sou., 651.)
It was said in Com. vs. Alger (7 Cush., 53, 85), per Shaw, C.J., that: "It is much easier
to perceive and realize the existence and sources of this police power than to mark its
boundaries, or to prescribe limits to its exercise." In Stone vs. Mississippi (101 U.S.,
814), it was said: "Many attempts have been made in this court and elsewhere to
define the police power, but never with entire success. It is always easier to determine
whether a particular case comes within the general scope of the power, than to give an
abstract definition of the power itself, which will be in all respects accurate."
Other courts have held the same vow of efforts to evolve a satisfactory definition of the
police power. Manifestly, definitions which fail to anticipate cases properly within the
scope of the police power are deficient. It is necessary, therefore, to confine our
discussion to the principle involved and determine whether the cases as they come up
are within that principle. The basic idea of civil polity in the United States is that
government should interfere with individual effort only to the extent necessary to
preserve a healthy social and economic condition of the country. State interference
with the use of private property may be exercised in three ways. First, through the
power of taxation, second, through the power of eminent domain, and third, through the
police power. Buy the first method it is assumed that the individual receives the
equivalent of the tax in the form of protection and benefit he receives from the
government as such. By the second method he receives the market value of the
property taken from him. But under the third method the benefits he derived are only
such as may arise from the maintenance of a healthy economic standard of society
and is often referred to as damnum absque injuria. (Com. vs. Plymouth Coal Co. 232
Pa., 141; Bemis vs. Guirl Drainage Co., 182 Ind., 36.) There was a time when state
interference with the use of private property under the guise of the police power was
practically confined to the suppression of common nuisances. At the present day,
however, industry is organized along lines which make it possible for large
combinations of capital to profit at the expense of the socio-economic progress of the
nation by controlling prices and dictating to industrial workers wages and conditions of
labor. Not only this but the universal use of mechanical contrivances by producers and
common carriers has enormously increased the toll of human life and limb in the
production and distribution of consumption goods. To the extent that these businesses
affect not only the public health, safety, and morals, but also the general social and
economic life of the nation, it has been and will continue to be necessary for the state
to interfere by regulation. By so doing, it is true that the enjoyment of private property is
interfered with in no small degree and in ways that would have been considered
entirely unnecessary in years gone by. The regulation of rates charged by common
carriers, for instance, or the limitation of hours of work in industrial establishments have
only a very indirect bearing upon the public health, safety, and morals, but do bear
directly upon social and economic conditions. To permit each individual unit of society
to feel that his industry will bring a fair return; to see that his work shall be done under
conditions that will not either immediately or eventually ruin his health; to prevent the
artificial inflation of prices of the things which are necessary for his physical well being
are matters which the individual is no longer capable of attending to himself. It is within
the province of the police power to render assistance to the people to the extent that
may be necessary to safeguard these rights. Hence, laws providing for the regulation
of wages and hours of labor of coal miners (Rail & River Coal Co. vs. Taylor, 234 U.S.,
224); requiring payment of employees of railroads and other industrial concerns in legal
tender and requiring salaries to be paid semimonthly (Erie R.R. Co. vs. Williams, 233
U.S., 685); providing a maximum number of hours of labor for women
(Miller vs. Wilson, U.S. Sup. Ct. [Feb. 23, 1915], Adv. Opns., p. 342); prohibiting child
labor (Sturges & Burn vs. Beauchamp, 231 U.S., 320); restricting the hours of labor in
public laundries (In re Wong Wing, 167 Cal., 109); limiting hours of labor in industrial
establishment generally (State vs. Bunting, 71 Ore., 259); Sunday Closing Laws
(State vs. Nicholls [Ore., 1915], 151 Pac., 473; People vs. C. Klinck Packing Co. [N.Y.,
1915], 108 N. E., 278; Hiller vs. State [Md., 1914], 92 Atl., 842; State vs. Penny, 42
Mont., 118; City of Springfield vs. Richter, 257 Ill., 578, 580; State vs. Hondros [S.C.,
1915], 84 S.E., 781); have all been upheld as a valid exercise of the police power.
Again, workmen's compensation laws have been quite generally upheld. These
statutes discard the common law theory that employers are not liable for industrial
accidents and make them responsible for all accidents resulting from trade risks, it
being considered that such accidents are a legitimate charge against production and
that the employer by controlling the prices of his product may shift the burden to the
community. Laws requiring state banks to join in establishing a depositors' guarantee
fund have also been upheld by the Federal Supreme Court in Noble State
Bank vs. Haskell (219 U. S., 104), and Assaria State Bank vs. Dolley (219 U.S., 121).
Offensive noises and smells have been for a long time considered susceptible of
suppression in thickly populated districts. Barring livery stables from such locations
was approved of in Reinman vs. Little Rock (U.S. Sup. Ct. [Apr. 5, 1915], U.S. Adv.
Opns., p. 511). And a municipal ordinance was recently upheld (People vs. Ericsson,
263 Ill., 368), which prohibited the location of garages within two hundred feet of any
hospital, church, or school, or in any block used exclusively for residential purposes,
unless the consent of the majority of the property owners be obtained. Such statutes as
these are usually upheld on the theory of safeguarding the public health. But we
apprehend that in point of fact they have little bearing upon the health of the normal
person, but a great deal to do with his physical comfort and convenience and not a little
to do with his peace of mind. Without entering into the realm of psychology, we think it
quite demonstrable that sight is as valuable to a human being as any of his other
senses, and that the proper ministration to this sense conduces as much to his
contentment as the care bestowed upon the senses of hearing or smell, and probably
as much as both together. Objects may be offensive to the eye as well as to the nose
or ear. Man's esthetic feelings are constantly being appealed to through his sense of
sight. Large investments have been made in theaters and other forms of amusement,
in paintings and spectacular displays, the success of which depends in great part upon
the appeal made through the sense of sight. Moving picture shows could not possible
without the sense of sight. Governments have spent millions on parks and boulevards
and other forms of civic beauty, the first aim of which is to appeal to the sense of sight.
Why, then, should the Government not interpose to protect from annoyance this most
valuable of man's senses as readily as to protect him from offensive noises and
smells?
The advertising industry is a legitimate one. It is at the same time a cause and an effect
of the great industrial age through which the world is now passing. Millions are spent
each year in this manner to guide the consumer to the articles which he needs. The
sense of sight is the primary essential to advertising success. Billboard advertising, as
it is now conducted, is a comparatively recent form of advertising. It is conducted out of
doors and along the arteries of travel, and compels attention by the strategic locations
of the boards, which obstruct the range of vision at points where travelers are most
likely to direct their eyes. Beautiful landscapes are marred or may not be seen at all by
the traveler because of the gaudy array of posters announcing a particular kind of
breakfast food, or underwear, the coming of a circus, an incomparable soap, nostrums
or medicines for the curing of all the ills to which the flesh is heir, etc. It is quite natural
for people to protest against this indiscriminate and wholesale use of the landscape by
advertisers and the intrusion of tradesmen upon their hours of leisure and relaxation
from work. Outdoor life must lose much of its charm and pleasure if this form of
advertising is permitted to continue unhampered until it converts the streets and
highways into veritable canyons through which the world must travel in going to work or
in search of outdoor pleasure.
The success of billboard advertising depends not so much upon the use of private
property as it does upon the use of the channels of travel used by the general public.
Suppose that the owner of private property, who so vigorously objects to the restriction
of this form of advertising, should require the advertiser to paste his posters upon the
billboards so that they would face the interior of the property instead of the exterior.
Billboard advertising would die a natural death if this were done, and its real
dependency not upon the unrestricted use of private property but upon the unrestricted
use of the public highways is at once apparent. Ostensibly located on private property,
the real and sole value of the billboard is its proximity to the public thoroughfares.
Hence, we conceive that the regulation of billboards and their restriction is not so much
a regulation of private property as it is a regulation of the use of the streets and other
public thoroughfares.
We would not be understood as saying that billboard advertising is not a legitimate
business any more than we would say that a livery stable or an automobile garage is
not. Even a billboard is more sightly than piles of rubbish or an open sewer. But all
these businesses are offensive to the senses under certain conditions.
It has been urged against ministering to the sense of sight that tastes are so diversified
that there is no safe standard of legislation in this direction. We answer in the language
of the Supreme Court in Noble State Bank vs. Haskell (219 U.S., 104), and which has
already been adopted by several state courts (see supra), that "the prevailing morality
or strong and preponderating opinion" demands such legislation. The agitation against
the unrestrained development of the billboard business has produced results in nearly
all the countries of Europe. (Ency. Britannica, vol. 1, pp. 237-240.) Many drastic
ordinances and state laws have been passed in the United States seeking to make the
business amenable to regulation. But their regulation in the United states is hampered
by what we conceive an unwarranted restriction upon the scope of the police power by
the courts. If the police power may be exercised to encourage a healthy social and
economic condition in the country, and if the comfort and convenience of the people
are included within those subjects, everything which encroaches upon such territory is
amenable to the police power. A source of annoyance and irritation to the public does
not minister to the comfort and convenience of the public. And we are of the opinion
that the prevailing sentiment is manifestly against the erection of billboards which are
offensive to the sight.
We do not consider that we are in conflict with the decision in Eubank vs. Richmond
(226 U.S., 137), where a municipal ordinance establishing a building line to which
property owners must conform was held unconstitutional. As we have pointed out,
billboard advertising is not so much a use of private property as it is a use of the public
thoroughfares. It derives its value to the power solely because the posters are exposed
to the public gaze. It may well be that the state may not require private property owners
to conform to a building line, but may prescribe the conditions under which they shall
make use of the adjoining streets and highways. Nor is the law in question to be held
invalid as denying equal protection of the laws. In Keokee Coke Co. vs. Taylor (234
U.S., 224), it was said: "It is more pressed that the act discriminates unconstitutionally
against certain classes. But while there are differences of opinion as to the degree and
kind of discrimination permitted by the Fourteenth Amendment, it is established by
repeated decisions that a statute aimed at what is deemed an evil, and hitting it
presumably where experience shows it to be most felt, is not to be upset by thinking up
and enumerating other instances to which it might have been applied equally well, so
far as the court can see. That is for the legislature to judge unless the case is very
clear."
But we have not overlooked the fact that we are not in harmony with the highest courts
of a number of the states in the American Union upon this point. Those courts being of
the opinion that statutes which are prompted and inspired by esthetic considerations
merely, having for their sole purpose the promotion and gratification of the esthetic
sense, and not the promotion or protection of the public safety, the public peace and
good order of society, must be held invalid and contrary to constitutional provisions
holding inviolate the rights of private property. Or, in other words, the police power
cannot interfere with private property rights for purely esthetic purposes. The courts,
taking this view, rest their decisions upon the proposition that the esthetic sense is
disassociated entirely from any relation to the public health, morals, comfort, or general
welfare and is, therefore, beyond the police power of the state. But we are of the
opinion, as above indicated, that unsightly advertisements or signs, signboards, or
billboards which are offensive to the sight, are not disassociated from the general
welfare of the public. This is not establishing a new principle, but carrying a well
recognized principle to further application. (Fruend on Police Power, p. 166.)
For the foregoing reasons the judgment appealed from is hereby reversed and the
action dismissed upon the merits, with costs. So ordered.
Arellano, C.J., Torres, Carson, and Araullo, JJ., concur.
DECISION ON THE MOTION FOR A REHEARING, JANUARY 24, 1916.
TRENT, J.:
Counsel for the plaintiffs call our attention to the case of Ex parte Young (209 U.S.,
123); and say that they are of the opinion that this case "is the absolutely determinative
of the question of jurisdiction in injunctions of this kind." We did not refer to this case in
our former opinion because we were satisfied that the reasoning of the case is not
applicable to section 100 (b), 139 and 140 of Act No. 2339. The principles announced
in the Young case are stated as follows: "It may therefore be said that when the
penalties for disobedience are by fines so enormous and imprisonment so severe as to
intimidate the company and its officers from resorting to the courts to test the validity of
the legislation, the result is the same as if the law in terms prohibited the company from
seeking judicial construction of laws which deeply affect its rights.
It is urged that there is no principle upon which to base the claim that a
person is entitled to disobey a statute at least once, for the purpose of testing
its validity without subjecting himself to the penalties for disobedience
provided by the statute in case it is valid. This is not an accurate statement of
the case. Ordinarily a law creating offenses in the nature of misdemeanors or
felonies relates to a subject over which the jurisdiction of the legislature is
complete in any event. In these case, however, of the establishment of
certain rates without any hearing, the validity of such rates necessarily
depends upon whether they are high enough to permit at least some return
upon the investment (how much it is not now necessary to state), and an
inquiry as to that fact is a proper subject of judicial investigation. If it turns out
that the rates are too low for that purpose, then they are illegal. Now, to
impose upon a party interested the burden of obtaining a judicial decision of
such a question (no prior hearing having ever been given) only upon the
condition that, if unsuccessful, he must suffer imprisonment and pay fines as
provided in these acts, is, in effect, to close up all approaches to the courts,
and thus prevent any hearing upon the question whether the rates as
provided by the acts are not too low, and therefore invalid. The distinction is
obvious between a case where the validity of the acts depends upon the
existence of a fact which can be determined only after investigation of a very
complicated and technical character, and the ordinary case of a statute upon
a subject requiring no such investigation and over which the jurisdiction of the
legislature is complete in any event.
An examination of the sections of our Internal Revenue Law and of the circumstances
under which and the purposes for which they were enacted, will show that, unlike the
statutes under consideration in the above cited case, their enactment involved no
attempt on the part of the Legislature to prevent dissatisfied taxpayers "from resorting
to the courts to test the validity of the legislation;" no effort to prevent any inquiry as to
their validity. While section 139 does prevent the testing of the validity of subsection (b)
of section 100 in injunction suits instituted for the purpose of restraining the collection
of internal revenue taxes, section 140 provides a complete remedy for that purpose.
And furthermore, the validity of subsection (b) does not depend upon "the existence of
a fact which can be determined only after investigation of a very complicated and
technical character," but the jurisdiction of the Legislature over the subject with which
the subsection deals "is complete in any event." The judgment of the court in the
Young case rests upon the proposition that the aggrieved parties had no adequate
remedy at law.
Neither did we overlook the case of General Oil Co. vs. Crain (209 U.S., 211),
decided the same day and citing Ex parte Young, supra. In that case the
plaintiff was a Tennessee corporation, with its principal place of business in
Memphis, Tennessee. It was engaged in the manufacture and sale of coal oil,
etc. Its wells and plant were located in Pennsylvania and Ohio. Memphis was
not only its place of business, at which place it sold oil to the residents of
Tennessee, but also a distributing point to which oils were shipped from
Pennsylvania and Ohio and unloaded into various tanks for the purpose of
being forwarded to the Arkansas, Louisiana, and Mississippi customers.
Notwithstanding the fact that the company separated its oils, which were
designated to meet the requirements of the orders from those States, from
the oils for sale in Tennessee, the defendant insisted that he had a right,
under the Act of the Tennessee Legislature, approved April 21, 1899, to
inspect all the oils unlocated in Memphis, whether for sale in that State or not,
and charge and collect for such inspection a regular fee of twenty-five cents
per barrel. The company, being advised that the defendant had no such right,
instituted this action in the inferior States court for the purpose of enjoining
the defendant, upon the grounds stated in the bill, from inspecting or
attempting to inspect its oils. Upon trial, the preliminary injunction which had
been granted at the commencement of the action, was continued in force.
Upon appeal, the supreme court of the State of Tennessee decided that the
suit was one against the State and reversed the judgment of the Chancellor.
 In the Supreme Court of the United States, where the case was reviewed
upon a writ of error, the contentions of the parties were stated by the court as
follows: "It is contended by defendant in error that this court is without
jurisdiction because no matter sought to be litigated by plaintiff in error was
determined by the Supreme Court of Tennessee. The court simply held, it is
paid, that, under the laws of the State, it had no jurisdiction to entertain the
suit for any purpose. And it is insisted "hat this holding involved no Federal
question, but only the powers and jurisdiction of the courts of the State of
Tennessee, in respect to which the Supreme Court of Tennessee is the final
arbiter."
Opposing these contentions, plaintiff in error urges that whether a suit is one
against a State cannot depend upon the declaration of a statute, but depends
upon the essential nature ofthe suit, and that the Supreme Court recognized
that the statute "aded nothing to the axiomatic principle that the State, as a
sovereign, is not subject to suit save by its own consent."And it is hence
insisted that the court by dismissing the bill gave effect to the law which was
attacked. It is further insisted that the bill undoubtedly present rights under
the Constitution of the United States and conditions which entitle plaintiff in
error to an injunction for the protection of such rights, and that a statute of the
State which operates to deny such rights, or such relief, `is itself in conflict
with the Constitution of the United States."
That statute of Tennessee, which the supreme court of that State construed and held
to be prohibitory of the suit, was an act passed February 28, 1873, which provides:
"That no court in the State of Tennessee has, nor shall hereafter have, any power,
jurisdiction, or authority to entertain any suit against the State, or any officer acting by
the authority of the State, with a view to reach the State, its treasury, funds or property;
and all such suits now pending, or hereafter brought, shall be dismissed as to the
State, or such officer, on motion, plea or demurrer of the law officer of the State, or
counsel employed by the State."
The Supreme Court of the United States, after reviewing many cases, said:
"Necessarily, to give adequate protection to constitutional rights a distinction must be
made between valid and invalid state laws, as determining the character of the suit
against state officers. And the suit at bar illustrates the necessity. If a suit against state
officer is precluded in the national courts by the Eleventh Amendment to the
Constitution, and may be forbidden by a State to its courts, as it is contended in the
case at bar that it may be, without power of review by this court, it must be evident that
an easy way is open to prevent the enforcement of many provisions of the Constitution;
and the Fourteenth Amendment, which is directed at state action, could be nullified as
to much of its operation. ... It being then the right of a party to be protected against a
law which violates a constitutional right, whether by its terms or the manner of its
enforcement, it is manifest that a decision which denies such protection gives effect to
the law, and the decision is reviewable by this court."
The court then proceeded to consider whether the law of 1899 would, if administered
against the oils in question, violate any constitutional right of the plaintiff and after
finding and adjudging that the oils were not in movement through the States, that they
had reached the destination of their first shipment, and were held there, not in
necessary delay at means of transportation but for the business purposes and profit of
the company, and resting its judgment upon the taxing power of the State, affirmed the
decree of the supreme court of the State of Tennessee.
From the foregoing it will be seen that the Supreme Court of Tennessee dismissed the
case for want of jurisdiction because the suit was one against the State, which was
prohibited by the Tennessee Legislature. The Supreme Court of the United States took
jurisdiction of the controversy for the reasons above quoted and sustained the Act of
1899 as a revenue law.
The case of Tennessee vs. Sneed (96 U.S., 69), and Shelton vs. Platt (139 U.S., 591),
relied upon in our former opinion, were not cited in General Oil Co. vs. Crain, supra,
because the questions presented and the statutes under consideration were entirely
different. The Act approved March 31, 1873, expressly prohibits the courts from
restraining the collection of any tax, leaving the dissatisfied taxpayer to his exclusive
remedy payment under protest and suit to recover while the Act approved
February 28, 1873, prohibits suits against the State.
In upholding the statute which authorizes the removal of signboards or billboards upon
the sole ground that they are offensive to the sight, we recognized the fact that we are
not in harmony with various state courts in the American Union. We have just
examined the decision of the Supreme Court of the State of Illinois in the recent case
(October [December], 1914) of Thomas Cusack Co. vs. City of Chicago (267 Ill., 344),
wherein the court upheld the validity of a municipal ordinances, which reads as follows:
"707. Frontage consents required. It shall be unlawful for any person, firm or
corporation to erect or construct any bill-board or sign-board in any block on any public
street in which one-half of the buildings on both sides of the street are used exclusively
for residence purposes, without first obtaining the consent, in writing, of the owners or
duly authorized agents of said owners owning a majority of the frontage of the property,
on both sides of the street, in the block in which such bill-board or sign-board is to be
erected, constructed or located. Such written consent shall be filed with the
commissioner of buildings before a permit shall be issued for the erection, construction
or location of such bill-board or sign-board."
The evidence which the Illinois court relied upon was the danger of fires, the fact that
billboards promote the commission of various immoral and filthy acts by disorderly
persons, and the inadequate police protection furnished to residential districts. The last
objection has no virtue unless one or the other of the other objections are valid. If the
billboard industry does, in fact, promote such municipal evils to noticeable extent, it
seems a curious inconsistency that a majority of the property owners on a given block
may legalize the business. However, the decision is undoubtedly a considerable
advance over the views taken by other high courts in the United States and
distinguishes several Illinois decisions. It is an advance because it permits the
suppression of billboards where they are undesirable. The ordinance which the court
approved will no doubt cause the virtual suppression of the business in the residential
districts. Hence, it is recognized that under certain circumstances billboards may be
suppressed as an unlawful use of private property. Logically, it would seem that the
premise of fact relied upon is not very solid. Objections to the billboard upon police,
sanitary, and moral grounds have been, as pointed out by counsel for Churchill and
Tait, duly considered by numerous high courts in the United States, and, with one
exception, have been rejected as without foundation. The exception is the Supreme
Court of Missouri, which advances practically the same line of reasoning as has the
Illinois court in this recent case. (St. Louis Gunning Advt. Co. vs. City of St. Louis, 137
S. W., 929.) In fact, the Illinois court, in Haller Sign Works vs. Physical Culture Training
School (249 Ill., 436), "distinguished" in the recent case, said: "There is nothing
inherently dangerous to the health or safety of the public in structures that are properly
erected for advertising purposes."
If a billboard is so constructed as to offer no room for objections on sanitary or moral
grounds, it would seem that the ordinance above quoted would have to be sustained
upon the very grounds which we have advanced in sustaining our own statute.
It might be well to note that billboard legislation in the United States is attempting to
eradicate a business which has already been firmly established. This business was
allowed to expand unchecked until its very extent called attention to its objectionable
features. In the Philippine Islands such legislation has almost anticipated the business,
which is not yet of such proportions that it can be said to be fairly established. It may
be that the courts in the United States have committed themselves to a course of
decisions with respect to billboard advertising, the full consequences of which were not
perceived for the reason that the development of the business has been so recent that
the objectionable features of it did not present themselves clearly to the courts nor to
the people. We, in this country, have the benefit of the experience of the people of the
United States and may make our legislation preventive rather than corrective. There
are in this country, moreover, on every hand in those districts where Spanish
civilization has held sway for so many centuries, examples of architecture now
belonging to a past age, and which are attractive not only to the residents of the
country but to visitors. If the billboard industry is permitted without constraint or control
to hide these historic sites from the passerby, the country will be less attractive to the
tourist and the people will suffer a district economic loss.
The motion for a rehearing is therefore denied.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-5060 January 26, 1910
THE UNITED STATES, plaintiff-appellee,
vs.
LUIS TORIBIO, defendant-appellant.
Rodriguez & Del Rosario, for appellant.
Attorney-General Villamor, for appellee.
CARSON, J.:
The evidence of record fully sustains the findings of the trial court that the appellant
slaughtered or caused to be slaughtered for human consumption, the carabao
described in the information, without a permit from the municipal treasure of the
municipality wherein it was slaughtered, in violation of the provisions of sections 30 and
33 of Act No. 1147, an Act regulating the registration, branding, and slaughter of large
cattle.
It appears that in the town of Carmen, in the Province of Bohol, wherein the animal was
slaughtered there is no municipal slaughterhouse, and counsel for appellant contends
that under such circumstances the provisions of Act No. 1147 do not prohibit nor
penalize the slaughter of large cattle without a permit of the municipal treasure.
Sections 30, 31, 32, and 33 of the Act are as follows:
SEC. 30. No large cattle shall be slaughtered or killed for food at the municipal
slaughterhouse except upon permit secured from the municipal treasure. Before
issuing the permit for the slaughter of large cattle for human consumption, the
municipal treasurer shall require for branded cattle the production of the original
certificate of ownership and certificates of transfer showing title in the person applying
for the permit, and for unbranded cattle such evidence as may satisfy said treasurer as
to the ownership of the animals for which permit to slaughter has been requested.
SEC. 31. No permit to slaughter has been carabaos shall be granted by the municipal
treasurer unless such animals are unfit for agricultural work or for draft purposes, and
in no event shall a permit be given to slaughter for food any animal of any kind which is
not fit for human consumption.
SEC. 32. The municipal treasurer shall keep a record of all permits for slaughter issued
by him, and such record shall show the name and residence of the owner, and the
class, sex, age, brands, knots of radiated hair commonly know as remolinos or
cowlicks, and other marks of identification of the animal for the slaughter of which
permit is issued and the date on which such permit is issued. Names of owners shall
be alphabetically arranged in the record, together with date of permit.
A copy of the record of permits granted for slaughter shall be forwarded monthly to the
provincial treasurer, who shall file and properly index the same under the name of the
owner, together with date of permit.
SEC. 33. Any person slaughtering or causing to be slaughtered for human
consumption or killing for food at the municipal slaughterhouse any large cattle except
upon permit duly secured from the municipal treasurer, shall be punished by a fine of
not less than ten nor more than five hundred pesos, Philippine currency, or by
imprisonment for not less than one month nor more than six months, or by both such
fine and imprisonment, in the discretion of the court.
It is contended that the proper construction of the language of these provisions limits
the prohibition contained in section 30 and the penalty imposed in section 33 to cases
(1) of slaughter of large cattle for human consumption in a municipal slaughter without
a permit duly secured from the municipal treasurer, and (2) cases of killing of large
cattle for food in a municipal slaughterhouse without a permit duly secured from the
municipal treasurer; and it is urged that the municipality of Carmen not being provided
with a municipal slaughterhouse, neither the prohibition nor the penalty is applicable to
cases of slaughter of large cattle without a permit in that municipality.
We are of opinion, however, that the prohibition contained in section 30 refers (1) to the
slaughter of large cattle for human consumption, anywhere, without a permit duly
secured from the municipal treasurer, and (2) expressly and specifically to the killing for
food of large cattle at a municipal slaughterhouse without such permit; and that the
penalty provided in section 33 applies generally to the slaughter of large cattle for
human consumption, anywhere, without a permit duly secured from the municipal
treasurer, and specifically to the killing for food of large cattle at a municipal
slaughterhouse without such permit.
It may be admitted at once, that the pertinent language of those sections taken by itself
and examined apart from the context fairly admits of two constructions: one whereby
the phrase "at the municipal slaughterhouse" may be taken as limiting and restricting
both the word "slaughtered" and the words "killed for food" in section 30, and the words
"slaughtering or causing to be slaughtered for human consumption" and the words
"killing for food" in section 33; and the other whereby the phrase "at the municipal
slaughterhouse" may be taken as limiting and restricting merely the words "killed for
food" and "killing for food" as used in those sections. But upon a reading of the whole
Act, and keeping in mind the manifest and expressed purpose and object of its
enactment, it is very clear that the latter construction is that which should be adopted.
The Act primarily seeks to protect the "large cattle" of the Philippine Islands against
theft and to make easy the recovery and return of such cattle to their proper owners
when lost, strayed, or stolen. To this end it provides an elaborate and compulsory
system for the separate branding and registry of ownership of all such cattle throughout
the Islands, whereby owners are enabled readily and easily to establish their title; it
prohibits and invalidates all transfers of large cattle unaccompanied by certificates of
transfer issued by the proper officer in the municipality where the contract of sale is
made; and it provides also for the disposition of thieves or persons unlawfully in
possession, so as to protect the rights of the true owners. All this, manifestly, in order
to make it difficult for any one but the rightful owner of such cattle to retain them in his
possession or to dispose of them to others. But the usefulness of this elaborate and
compulsory system of identification, resting as it does on the official registry of the
brands and marks on each separate animal throughout the Islands, would be largely
impaired, if not totally destroyed, if such animals were requiring proof of ownership and
the production of certificates of registry by the person slaughtering or causing them to
be slaughtered, and this especially if the animals were slaughtered privately or in a
clandestine manner outside of a municipal slaughterhouse. Hence, as it would appear,
sections 30 and 33 prohibit and penalize the slaughter for human consumption or
killing for food at a municipal slaughterhouse of such animals without a permit issued
by the municipal treasurer, and section 32 provides for the keeping of detailed records
of all such permits in the office of the municipal and also of the provincial treasurer.
If, however, the construction be placed on these sections which is contended for by the
appellant, it will readily be seen that all these carefully worked out provisions for the
registry and record of the brands and marks of identification of all large cattle in the
Islands would prove in large part abortion, since thieves and persons unlawfully in
possession of such cattle, and naturally would, evade the provisions of the law by
slaughtering them outside of municipal slaughterhouses, and thus enjoy the fruits of
their wrongdoing without exposing themselves to the danger of detection incident to the
bringing of the animals to the public slaughterhouse, where the brands and other
identification marks might be scrutinized and proof of ownership required.
Where the language of a statute is fairly susceptible of two or more constructions, that
construction should be adopted which will most tend to give effect to the manifest intent
of the lawmaker and promote the object for which the statute was enacted, and a
construction should be rejected which would tend to render abortive other provisions of
the statute and to defeat the object which the legislator sought to attain by its
enactment. We are of opinion, therefore, that sections 30 and 33 of the Act prohibit and
penalize the slaughtering or causing to be slaughtered for human consumption of large
cattle at any place without the permit provided for in section 30.
It is not essential that an explanation be found for the express prohibition in these
sections of the "killing for food at a municipal slaughterhouse" of such animals, despite
the fact that this prohibition is clearly included in the general prohibition of the slaughter
of such animals for human consumption anywhere; but it is not improbable that the
requirement for the issue of a permit in such cases was expressly and specifically
mentioned out of superabundance of precaution, and to avoid all possibility of
misunderstanding in the event that some of the municipalities should be disposed to
modify or vary the general provisions of the law by the passage of local ordinances or
regulations for the control of municipal slaughterhouse.
Similar reasoning applied to the specific provisions of section 31 of the Act leads to the
same conclusion. One of the secondary purposes of the law, as set out in that section,
is to prevent the slaughter for food of carabaos fit for agricultural and draft purposes,
and of all animals unfit for human consumption. A construction which would limit the
prohibitions and penalties prescribed in the statute to the killing of such animals in
municipal slaughterhouses, leaving unprohibited and unpenalized their slaughter
outside of such establishments, so manifestly tends to defeat the purpose and object of
the legislator, that unless imperatively demanded by the language of the statute it
should be rejected; and, as we have already indicated, the language of the statute is
clearly susceptible of the construction which we have placed upon it, which tends to
make effective the provisions of this as well as all the other sections of the Act.
It appears that the defendant did in fact apply for a permit to slaughter his carabao, and
that it was denied him on the ground that the animal was not unfit "for agricultural work
or for draft purposes." Counsel for appellant contends that the statute, in so far as it
undertakes to penalize the slaughter of carabaos for human consumption as food,
without first obtaining a permit which can not be procured in the event that the animal is
not unfit "for agricultural work or draft purposes," is unconstitutional and in violation of
the terms of section 5 of the Philippine Bill (Act of Congress, July 1, 1902), which
provides that "no law shall be enacted which shall deprive any person of life, liberty, or
property without due process of law."
It is not quite clear from the argument of counsel whether his contention is that this
provision of the statute constitutes a taking of property for public use in the exercise of
the right of eminent domain without providing for the compensation of the owners, or
that it is an undue and unauthorized exercise of the police power of the State. But
whatever may be the basis of his contention, we are of opinion, appropriating, with
necessary modifications understood, the language of that great jurist, Chief Justice
Shaw (in the case of Com. vs. Tewksbury, 11 Met., 55, where the question involved
was the constitutionality of a statute prohibiting and penalizing the taking or carrying
away by any person, including the owner, of any stones, gravel, or sand, from any of
the beaches in the town of Chesea,) that the law in question "is not a taking of the
property for public use, within the meaning of the constitution, but is a just and
legitimate exercise of the power of the legislature to regulate and restrain such
particular use of the property as would be inconsistent with or injurious to the rights of
the public. All property is acquired and held under the tacit condition that it shall not be
so used as to injure the equal rights of others or greatly impair the public rights and
interest of the community."
It may be conceded that the benificial use and exclusive enjoyment of the property of
all carabao owners in these Islands is to a greater or less degree interfered with by the
provisions of the statute; and that, without inquiring what quantum of interest thus
passes from the owners of such cattle, it is an interest the deprivation of which detracts
from their right and authority, and in some degree interferes with their exclusive
possession and control of their property, so that if the regulations in question were
enacted for purely private purpose, the statute, in so far as these regulations are
concerned, would be a violation of the provisions of the Philippine Bill relied on be
appellant; but we are satisfied that it is not such a taking, such an interference with the
right and title of the owners, as is involved in the exercise by the State of the right of
eminent domain, so as to entitle these owners to compensation, and that it is no more
than "a just restrain of an injurious private use of the property, which the legislature had
authority to impose."
In the case of Com. vs. Alger (7 Cush., 53, 84), wherein the doctrine laid down in
Com. vs. Tewksbury (supra) was reviewed and affirmed, the same eminent jurist who
wrote the former opinion, in distinguishing the exercise of the right of eminent domain
from the exercise of the sovereign police powers of the State, said:
We think it is settled principle, growing out of the nature of well-ordered civil society,
that every holder of property, however absolute and unqualified may be his title, holds
it under the implied liability that his use of it may be so regulated that is shall not be
injurious to the equal enjoyment of others having an equal right to the enjoyment of
their property, nor injurious to the rights of the community. . . . Rights of property, like
all other social and conventional rights, are subject to such reasonable limitations in
their enjoyment as shall prevent them from being injurious, and to such reasonable
restrain and regulations establish by law, as the legislature, under the governing and
controlling power vested in them by the constitution, may think necessary and
expedient.
This is very different from the right of eminent domain, the right of a government to take
and appropriate private property to public use, whenever the public exigency requires
it; which can be done only on condition of providing a reasonable compensation
therefor. The power we allude to is rather the police power, 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.
It is much easier to perceive and realize the existence and sources of this power than
to mark its boundaries or prescribe limits to its exercise.
Applying these principles, we are opinion that the restrain placed by the law on the
slaughter for human consumption of carabaos fit for agricultural work and draft purpose
is not an appropriation of property interests to a "public use," and is not, therefore,
within the principle of the exercise by the State of the right of eminent domain. It is fact
a mere restriction or limitation upon a private use, which the legislature deemed to be
determental to the public welfare. And we think that an examination of the general
provisions of the statute in relation to the public interest which it seeks to safeguard
and the public necessities for which it provides, leaves no room for doubt that the
limitations and restraints imposed upon the exercise of rights of ownership by the
particular provisions of the statute under consideration were imposed not for private
purposes but, strictly, in the promotion of the "general welfare" and "the public interest"
in the exercise of the sovereign police power which every State possesses for the
general public welfare and which "reaches to every species of property within the
commonwealth."
For several years prior to the enactment of the statute a virulent contagious or
infectious disease had threatened the total extinction of carabaos in these Islands, in
many sections sweeping away seventy, eighty, and in some cases as much as ninety
and even one hundred per cent of these animals. Agriculture being the principal
occupation of the people, and the carabao being the work animal almost exclusively in
use in the fields as well as for draft purposes, the ravages of the disease with which
they were infected struck an almost vital blow at the material welfare of the country.
large areas of productive land lay waste for years, and the production of rice, the staple
food of the inhabitants of the Islands, fell off to such an extent that the impoverished
people were compelled to spend many millions of pesos in its importation,
notwithstanding the fact that with sufficient work animals to cultivate the fields the
arable rice lands of the country could easily be made to produce a supply more that
sufficient for its own needs. The drain upon the resources of the Islands was such that
famine soon began to make itself felt, hope sank in the breast of the people, and in
many provinces the energies of the breadwinners seemed to be paralyzed by the
apparently hopeless struggle for existence with which they were confronted.
To meet these conditions, large sums of money were expended by the Government in
relieving the immediate needs of the starving people, three millions of dollars were
voted by the Congress of the United States as a relief or famine fund, public works
were undertaken to furnish employment in the provinces where the need was most
pressing, and every effort made to alleviate the suffering incident to the widespread
failure of the crops throughout the Islands, due in large measure to the lack of animals
fit for agricultural work and draft purposes.
Such measures, however, could only temporarily relieve the situation, because in an
agricultural community material progress and permanent prosperity could hardly be
hoped for in the absence of the work animals upon which such a community must
necessarily rely for the cultivation of the fields and the transportation of the products of
the fields to market. Accordingly efforts were made by the Government to increase the
supply of these animals by importation, but, as appears from the official reports on this
subject, hope for the future depended largely on the conservation of those animals
which had been spared from the ravages of the diseased, and their redistribution
throughout the Islands where the need for them was greatest.
At large expense, the services of experts were employed, with a view to the discovery
and applications of preventive and curative remedies, and it is hoped that these
measures have proved in some degree successful in protecting the present inadequate
supply of large cattle, and that the gradual increase and redistribution of these animals
throughout the Archipelago, in response to the operation of the laws of supply and
demand, will ultimately results in practically relieving those sections which suffered
most by the loss of their work animals.
As was to be expected under such conditions, the price of carabaos rapidly increase
from the three to five fold or more, and it may fairly be presumed that even if the
conservative measures now adopted prove entirely successful, the scant supply will
keep the price of these animals at a high figure until the natural increase shall have
more nearly equalized the supply to the demand.
Coincident with and probably intimately connected with this sudden rise in the price of
cattle, the crime of cattle stealing became extremely prevalent throughout the Islands,
necessitating the enactment of a special law penalizing with the severest penalties the
theft of carabaos and other personal property by roving bands; and it must be assumed
from the legislative authority found that the general welfare of the Islands necessitated
the enactment of special and somewhat burdensome provisions for the branding and
registration of large cattle, and supervision and restriction of their slaughter for food. It
will hardly be questioned that the provisions of the statute touching the branding and
registration of such cattle, and prohibiting and penalizing the slaughter of diseased
cattle for food were enacted in the due and proper exercise of the police power of the
State; and we are of opinion that, under all the circumstances, the provision of the
statute prohibiting and penalizing the slaughter for human consumption of carabaos fit
for work were in like manner enacted in the due and proper exercise of that power,
justified by the exigent necessities of existing conditions, and the right of the State to
protect itself against the overwhelming disaster incident to the further reduction of the
supply of animals fit for agricultural work or draft purposes.
It is, we think, a fact of common knowledge in these Islands, and disclosed by the
official reports and records of the administrative and legislative departments of the
Government, that not merely the material welfare and future prosperity of this
agricultural community were threatened by the ravages of the disease which swept
away the work animals during the years prior to the enactment of the law under
consideration, but that the very life and existence of the inhabitants of these Islands as
a civilized people would be more or less imperiled by the continued destruction of large
cattle by disease or otherwise. Confronted by such conditions, there can be no doubt of
the right of the Legislature to adopt reasonable measures for the preservation of work
animals, even to the extent of prohibiting and penalizing what would, under ordinary
conditions, be a perfectly legitimate and proper exercise of rights of ownership and
control of the private property of the citizen. The police power rests upon necessity and
the right of self-protection and if ever the invasion of private property by police
regulation can be justified, we think that the reasonable restriction placed upon the use
of carabaos by the provision of the law under discussion must be held to be authorized
as a reasonable and proper exercise of that power.
As stated by Mr. Justice Brown in his opinion in the case of Lawton vs. Steele (152
U.S., 133, 136):
The extent and limits of what is known as the police power have been a fruitful subject
of discussion in the appellate courts of nearly every State in the Union. It is universally
conceded to include everything essential to the public safely, health, and morals, and
to justify the destruction or abatement, by summary proceedings, of whatever may be
regarded as a public nuisance. Under this power it has been held that the State may
order the destruction of a house falling to decay or otherwise endangering the lives of
passers-by; the demolition of such as are in the path of a conflagration; the slaughter of
diseased cattle; the destruction of decayed or unwholesome food; the prohibition of
wooden buildings in cities; the regulation of railways and other means of public
conveyance, and of interments in burial grounds; the restriction of objectionable trades
to certain localities; the compulsary vaccination of children; the confinement of the
insane or those afficted with contagious deceases; the restraint of vagrants, beggars,
and habitual drunkards; the suppression of obscene publications and houses of ill
fame; and the prohibition of gambling houses and places where intoxicating liquors are
sold. Beyond this, however, the State may interfere wherever the public interests
demand it, and in this particular a large discretion is necessarily vested in the
legislature to determine, not only what the interests of the public require, but what
measures are necessary for the protection of such interests. (Barbier vs. Connolly, 113
U. S., 27; Kidd vs. Pearson, 128 U. S., 1.) To justify the State in thus interposing its
authority in behalf of the public, it must appear, first, that the interests of the public
generally, as distinguished from those of a particular class, require such interference;
and, second, that the means are reasonably necessary for the accomplishment of the
purpose, and not unduly oppressive upon individuals. The legislature may not, under
the guise of protecting the public interests, arbitrarily interfere with private business, or
impose unusual and unnecessary restrictions upon lawful occupations. In other words,
its determination as to what is a proper exercise of its police powers is not final or
conclusive, but is subject to the supervision of the court.
From what has been said, we think it is clear that the enactment of the provisions of the
statute under consideration was required by "the interests of the public generally, as
distinguished from those of a particular class;" and that the prohibition of the slaughter
of carabaos for human consumption, so long as these animals are fit for agricultural
work or draft purposes was a "reasonably necessary" limitation on private ownership,
to protect the community from the loss of the services of such animals by their
slaughter by improvident owners, tempted either by greed of momentary gain, or by a
desire to enjoy the luxury of animal food, even when by so doing the productive power
of the community may be measurably and dangerously affected.
Chief Justice Redfield, in Thorpe vs. Rutland & Burlington R. R. Co. (27 Vt., 140), said
(p. 149) that by this "general police power of the State, persons and property are
subjected to all kinds of restraints and burdens, in order to secure the general comfort,
health, and prosperity of the State; of the perfect right in the legislature to do which no
question ever was, or, upon acknowledge and general principles, ever can be made,
so far as natural persons are concerned."
And Cooley in his "Constitutional Limitations" (6th ed., p. 738) says:
It would be quite impossible to enumerate all the instances in which the police power is
or may be exercised, because the various cases in which the exercise by one
individual of his rights may conflict with a similar exercise by others, or may be
detrimental to the public order or safety, are infinite in number and in variety. And there
are other cases where it becomes necessary for the public authorities to interfere with
the control by individuals of their property, and even to destroy it, where the owners
themselves have fully observed all their duties to their fellows and to the State, but
where, nevertheless, some controlling public necessity demands the interference or
destruction. A strong instance of this description is where it becomes necessary to
take, use, or destroy the private property of individuals to prevent the spreading of a
fire, the ravages of a pestilence, the advance of a hostile army, or any other great
public calamity. Here the individual is in no degree in fault, but his interest must yield to
that "necessity" which "knows no law." The establishment of limits within the denser
portions of cities and villages within which buildings constructed of inflammable
materials shall not be erected or repaired may also, in some cases, be equivalent to a
destruction of private property; but regulations for this purpose have been sustained
notwithstanding this result. Wharf lines may also be established for the general good,
even though they prevent the owners of water-fronts from building out on soil which
constitutes private property. And, whenever the legislature deem it necessary to the
protection of a harbor to forbid the removal of stones, gravel, or sand from the beach,
they may establish regulations to that effect under penalties, and make them applicable
to the owners of the soil equally with other persons. Such regulations are only "a just
restraint of an injurious use of property, which the legislature have authority" to impose.

So a particular use of property may sometimes be forbidden, where, by a change of

circumstances, and without the fault of the power, that which was once lawful, proper,
and unobjectionable has now become a public nuisance, endangering the public health
or the public safety. Milldams are sometimes destroyed upon this grounds; and
churchyards which prove, in the advance of urban population, to be detrimental to the
public health, or in danger of becoming so, are liable to be closed against further use
for cemetery purposes.

These citations from some of the highest judicial and text-book authorities in the United
States clearly indicate the wide scope and extent which has there been given to the
doctrine us in our opinion that the provision of the statute in question being a proper
exercise of that power is not in violation of the terms of section 5 of the Philippine Bill,
which provide that "no law shall be enacted which shall deprive any person of life,
liberty, or property without due process of law," a provision which itself is adopted from
the Constitution of the United States, and is found in substance in the constitution of
most if not all of the States of the Union.

The judgment of conviction and the sentence imposed by the trial court should be
affirmed with the costs of this instance against the appellant. So ordered.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-12172 August 29, 1958
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
JUAN F. FAJARDO, ET AL., defendants-appellants.
Assistant Solicitor General Esmeraldo Umali and Higinio V. Catalan for appellee.
Prila, Pardalis and Pejo for appellants.
REYES, J. B. L., J.:
Appeal from the decision of the Court of First Instance of Camarines Sur convicting
defendants-appellants Juan F. Fajardo and Pedro Babilonia of a violation of Ordinance
No. 7, Series of 1950, of the Municipality of Baao, Camarines Sur, for having
constructed without a permit from the municipal mayor a building that destroys the view
of the public plaza.
It appears that on August 15, 1950, during the incumbency of defendant-appellant
Juan F. Fajardo as mayor of the municipality of Baao, Camarines Sur, the municipal
council passed the ordinance in question providing as follows:
SECTION 1. Any person or persons who will construct or repair a building should,
before constructing or repairing, obtain a written permit from the Municipal Mayor.
SEC. 2. A fee of not less than P2.00 should be charged for each building permit and
P1.00 for each repair permit issued.
SEC. 3. PENALTY Any violation of the provisions of the above, this ordinance, shall
make the violation liable to pay a fine of not less than P25 nor more than P50 or
imprisonment of not less than 12 days nor more than 24 days or both, at the discretion
of the court. If said building destroys the view of the Public Plaza or occupies any
public property, it shall be removed at the expense of the owner of the building or
house.
SEC. 4. EFFECTIVITY This ordinance shall take effect on its approval. (Orig. Recs.,
P. 3)
Four years later, after the term of appellant Fajardo as mayor had expired, he and his
son in-law, appellant Babilonia, filed a written request with the incumbent municipal
mayor for a permit to construct a building adjacent to their gasoline station on a parcel
of land registered in Fajardo's name, located along the national highway and separated
from the public plaza by a creek (Exh. D). On January 16, 1954, the request was
denied, for the reason among others that the proposed building would destroy the view
or beauty of the public plaza (Exh. E). On January 18, 1954, defendants reiterated their
request for a building permit (Exh. 3), but again the request was turned down by the
mayor. Whereupon, appellants proceeded with the construction of the building without
a permit, because they needed a place of residence very badly, their former house
having been destroyed by a typhoon and hitherto they had been living on leased
property.
On February 26, 1954, appellants were charged before and convicted by the justice of
the peace court of Baao, Camarines Sur, for violation of the ordinance in question.
Defendants appealed to the Court of First Instance, which affirmed the conviction, and
sentenced appellants to pay a fine of P35 each and the costs, as well as to demolish
the building in question because it destroys the view of the public plaza of Baao, in that
"it hinders the view of travelers from the National Highway to the said public plaza."
From this decision, the accused appealed to the Court of Appeals, but the latter
forwarded the records to us because the appeal attacks the constitutionality of the
ordinance in question.
We find that the appealed conviction can not stand.
A first objection to the validity of the ordinance in question is that under it the mayor
has absolute discretion to issue or deny a permit. The ordinance fails to state any
policy, or to set up any standard to guide or limit the mayor's action. No purpose to be
attained by requiring the permit is expressed; no conditions for its grant or refusal are
enumerated. It is not merely a case of deficient standards; standards are entirely
lacking. The ordinance thus confers upon the mayor arbitrary and unrestricted power to
grant or deny the issuance of building permits, and it is a settled rule that such an
undefined and unlimited delegation of power to allow or prevent an activity, per
se lawful, is invalid (People vs. Vera, 65 Phil., 56; Primicias vs. Fugoso, 80 Phil., 71;
Schloss Poster Adv. Co. vs. Rock Hill, 2 SE (2d) 392)
The ordinance in question in no way controls or guides the discretion vested thereby in
the respondents. It prescribes no uniform rule upon which the special permission of the
city is to be granted. Thus the city is clothed with the uncontrolled power to capriciously
grant the privilege to some and deny it others; to refuse the application of one
landowner or lessee and to grant that of another, when for all material purposes, the
two applying for precisely the same privileges under the same circumstances. The
danger of such an ordinance is that it makes possible arbitrary discriminations and
abuses in its execution, depending upon no conditions or qualifications whatever, other
than the unregulated arbitrary will of the city authorities as the touchstone by which its
validity is to be tested. Fundamental rights under our government do not depend for
their existence upon such a slender and uncertain thread. Ordinances which thus
invest a city council with a discretion which is purely arbitrary, and which may be
exercised in the interest of a favored few, are unreasonable and invalid. The ordinance
should have established a rule by which its impartial enforcement could be secured. All
of the authorities cited above sustain this conclusion.
As was said in City of Richmond vs. Dudley, 129 Ind. 112,28 N. E. 312, 314 13 L. R. A.
587, 28 Am. St. Rep. 180: "It seems from the foregoing authorities to be well
established that municipal ordinances placing restrictions upon lawful conduct or the
lawful use of property must, in order to be valid, specify the rules and conditions to be
observed in such conduct or business; and must admit of the exercise of the privilege
of all citizens alike who will comply with such rules and conditions; and must not admit
of the exercise, or of an opportunity for the exercise, of any arbitrary discrimination by
the municipal authorities between citizens who will so comply. (Schloss Poster Adv. SEC. 2243. Certain legislative powers of discretionary character. The municipal
Co., Inc. vs. City of Rock Hill, et al., 2 SE (2d), pp. 394-395). council shall have authority to exercise the following discretionary powers:

It is contended, on the other hand, that the mayor can refuse a permit solely in case
that the proposed building "destroys the view of the public plaza or occupies any public
property" (as stated in its section 3); and in fact, the refusal of the Mayor of Baao to
issue a building permit to the appellant was predicated on the ground that the proposed
building would "destroy the view of the public plaza" by preventing its being seen from
the public highway. Even thus interpreted, the ordinance is unreasonable and
oppressive, in that it operates to permanently deprive appellants of the right to use their
own property; hence, it oversteps the bounds of police power, and amounts to a taking
of appellants property without just compensation. We do not overlook that the modern
tendency is to regard the beautification of neighborhoods as conducive to the comfort
and happiness of residents. But while property may be regulated in the interest of the
general welfare, and in its pursuit, the State may prohibit structures offensive to the
sight (Churchill and Tait vs. Rafferty, 32 Phil. 580), the State may not, under the guise
of police power, permanently divest owners of the beneficial use of their property and
practically confiscate them solely to preserve or assure the aesthetic appearance of the
community. As the case now stands, every structure that may be erected on
appellants' land, regardless of its own beauty, stands condemned under the ordinance
in question, because it would interfere with the view of the public plaza from the
highway. The appellants would, in effect, be constrained to let their land remain idle
and unused for the obvious purpose for which it is best suited, being urban in
character. To legally achieve that result, the municipality must give appellants just
compensation and an opportunity to be heard.
An ordinance which permanently so restricts the use of property that it can not be used
for any reasonable purpose goes, it is plain, beyond regulation and must be recognized
as a taking of the property. The only substantial difference, in such case, between
restriction and actual taking, is that the restriction leaves the owner subject to the
burden of payment of taxation, while outright confiscation would relieve him of that
burden. (Arverne Bay Constr. Co. vs. Thatcher (N.Y.) 117 ALR. 1110, 1116).
xxx xxx xxx
(c) To establish fire limits in populous centers, prescribe the kinds of buildings that may
be constructed or repaired within them, and issue permits for the creation or repair
thereof, charging a fee which shall be determined by the municipal council and which
shall not be less than two pesos for each building permit and one peso for each repair
permit issued. The fees collected under the provisions of this subsection shall accrue
to the municipal school fund.
Under the provisions of the section above quoted, however, the power of the municipal
council to require the issuance of building permits rests upon its first establishing fire
limits in populous parts of the town and prescribing the kinds of buildings that may be
constructed or repaired within them. As there is absolutely no showing in this case that
the municipal council had either established fire limits within the municipality or set
standards for the kind or kinds of buildings to be constructed or repaired within them
before it passed the ordinance in question, it is clear that said ordinance was not
conceived and promulgated under the express authority of sec. 2243 (c) aforequoted.
We rule that the regulation in question, Municipal Ordinance No. 7, Series of 1950, of
the Municipality of Baao, Camarines Sur, was beyond the authority of said municipality
to enact, and is therefore null and void. Hence, the conviction of herein appellants is
reversed, and said accused are acquitted, with costs de oficio. So ordered.

A regulation which substantially deprives an owner of all beneficial use of his property
is confiscation and is a deprivation within the meaning of the 14th Amendment.
(Sundlum vs. Zoning Bd., 145 Atl. 451; also Eaton vs. Sweeny, 177 NE 412; Taylor vs.
Jacksonville, 133 So. 114).

Zoning which admittedly limits property to a use which can not reasonably be made of
it cannot be said to set aside such property to a use but constitutes the taking of such
property without just compensation. Use of property is an element of ownership
therein. Regardless of the opinion of zealots that property may properly, by zoning, be
utterly destroyed without compensation, such principle finds no support in the genius of
our government nor in the principles of justice as we known them. Such a doctrine
shocks the sense of justice. If it be of public benefit that property remain open and
unused, then certainly the public, and not the private individuals, should bear the cost
of reasonable compensation for such property under the rules of law governing the
condemnation of private property for public use. (Tews vs. Woolhiser (1933) 352 I11.
212, 185 N.E. 827) (Emphasis supplied.)

The validity of the ordinance in question was justified by the court below under section
2243, par. (c), of the Revised Administrative Code, as amended. This section provides:

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 74457 March 20, 1987
RESTITUTO YNOT, petitioner,
vs.
INTERMEDIATE APPELLATE COURT, THE STATION COMMANDER,
INTEGRATED NATIONAL POLICE, BAROTAC NUEVO, ILOILO and THE
REGIONAL DIRECTOR, BUREAU OF ANIMAL INDUSTRY, REGION IV, ILOILO
CITY, respondents.
Ramon A. Gonzales for petitioner.
CRUZ, J.:
The essence of due process is distilled in the immortal cry of Themistocles to
Alcibiades "Strike but hear me first!" It is this cry that the petitioner in effect repeats
here as he challenges the constitutionality of Executive Order No. 626-A.
The said executive order reads in full as follows:
WHEREAS, the President has given orders prohibiting the interprovincial movement of
carabaos and the slaughtering of carabaos not complying with the requirements of
Executive Order No. 626 particularly with respect to age;
WHEREAS, it has been observed that despite such orders the violators still manage to
circumvent the prohibition against inter-provincial movement of carabaos by
transporting carabeef instead; and
WHEREAS, in order to achieve the purposes and objectives of Executive Order No.
626 and the prohibition against interprovincial movement of carabaos, it is necessary to
strengthen the said Executive Order and provide for the disposition of the carabaos
and carabeef subject of the violation;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers vested in me by the Constitution, do hereby promulgate the
following:
SECTION 1. Executive Order No. 626 is hereby amended such that henceforth, no
carabao regardless of age, sex, physical condition or purpose and no carabeef shall be
transported from one province to another. The carabao or carabeef transported in
violation of this Executive Order as amended shall be subject to confiscation and
forfeiture by the government, to be distributed to charitable institutions and other similar
institutions as the Chairman of the National Meat Inspection Commission may ay see
fit, in the case of carabeef, and to deserving farmers through dispersal as the Director
of Animal Industry may see fit, in the case of carabaos.
SECTION 2. This Executive Order shall take effect immediately.
Done in the City of Manila, this 25th day of October, in the year of Our Lord, nineteen
hundred and eighty.
(SGD.) FERDINAND E. MARCOS
President
Republic of the Philippines
The petitioner had transported six carabaos in a pump boat from Masbate to Iloilo on
January 13, 1984, when they were confiscated by the police station commander of
Barotac Nuevo, Iloilo, for violation of the above measure. 1 The petitioner sued for
recovery, and the Regional Trial Court of Iloilo City issued a writ of replevin upon his
filing of a supersedeas bond of P12,000.00. After considering the merits of the case,
the court sustained the confiscation of the carabaos and, since they could no longer be
produced, ordered the confiscation of the bond. The court also declined to rule on the
constitutionality of the executive order, as raise by the petitioner, for lack of authority
and also for its presumed validity. 2
The petitioner appealed the decision to the Intermediate Appellate Court,* 3 which
upheld the trial court, ** and he has now come before us in this petition for review
on certiorari.
The thrust of his petition is that the executive order is unconstitutional insofar as it
authorizes outright confiscation of the carabao or carabeef being transported across
provincial boundaries. His claim is that the penalty is invalid because it is imposed
without according the owner a right to be heard before a competent and impartial court
as guaranteed by due process. He complains that the measure should not have been
presumed, and so sustained, as constitutional. There is also a challenge to the
improper exercise of the legislative power by the former President under Amendment
No. 6 of the 1973 Constitution. 4
While also involving the same executive order, the case of Pesigan v. Angeles 5 is not
applicable here. The question raised there was the necessity of the previous
publication of the measure in the Official Gazette before it could be considered
enforceable. We imposed the requirement then on the basis of due process of law. In
doing so, however, this Court did not, as contended by the Solicitor General, impliedly
affirm the constitutionality of Executive Order No. 626-A. That is an entirely different
matter.
This Court has declared that while lower courts should observe a becoming modesty in
examining constitutional questions, they are nonetheless not prevented from resolving
the same whenever warranted, subject only to review by the highest tribunal. 6 We
have jurisdiction under the Constitution to "review, revise, reverse, modify or affirm on
appeal or certiorari, as the law or rules of court may provide," final judgments and
orders of lower courts in, among others, all cases involving the constitutionality of
certain measures. 7 This simply means that the resolution of such cases may be made
in the first instance by these lower courts.
And while it is true that laws are presumed to be constitutional, that presumption is not
by any means conclusive and in fact may be rebutted. Indeed, if there be a clear
showing of their invalidity, and of the need to declare them so, then "will be the time to
make the hammer fall, and heavily," 8 to recall Justice Laurel's trenchant warning.
Stated otherwise, courts should not follow the path of least resistance by simply
presuming the constitutionality of a law when it is questioned. On the contrary, they
should probe the issue more deeply, to relieve the abscess, paraphrasing another
distinguished jurist, 9 and so heal the wound or excise the affliction.
Judicial power authorizes this; and when the exercise is demanded, there should be no
shirking of the task for fear of retaliation, or loss of favor, or popular censure, or any
other similar inhibition unworthy of the bench, especially this Court.
The challenged measure is denominated an executive order but it is really presidential
decree, promulgating a new rule instead of merely implementing an existing law. It was
issued by President Marcos not for the purpose of taking care that the laws were
faithfully executed but in the exercise of his legislative authority under Amendment No.
6. It was provided thereunder that whenever in his judgment there existed a grave
emergency or a threat or imminence thereof or whenever the legislature failed or was
unable to act adequately on any matter that in his judgment required immediate action,
he could, in order to meet the exigency, issue decrees, orders or letters of instruction
that were to have the force and effect of law. As there is no showing of any exigency to
justify the exercise of that extraordinary power then, the petitioner has reason, indeed,
to question the validity of the executive order. Nevertheless, since the determination of
the grounds was supposed to have been made by the President "in his judgment, " a
phrase that will lead to protracted discussion not really necessary at this time, we
reserve resolution of this matter until a more appropriate occasion. For the nonce, we
confine ourselves to the more fundamental question of due process.
It is part of the art of constitution-making that the provisions of the charter be cast in
precise and unmistakable language to avoid controversies that might arise on their
correct interpretation. That is the Ideal. In the case of the due process clause, however,
this rule was deliberately not followed and the wording was purposely kept ambiguous.
In fact, a proposal to delineate it more clearly was submitted in the Constitutional
Convention of 1934, but it was rejected by Delegate Jose P. Laurel, Chairman of the
Committee on the Bill of Rights, who forcefully argued against it. He was sustained by
the body. 10
The due process clause was kept intentionally vague so it would remain also
conveniently resilient. This was felt necessary because due process is not, like some
provisions of the fundamental law, an "iron rule" laying down an implacable and
immutable command for all seasons and all persons. Flexibility must be the best virtue
of the guaranty. The very elasticity of the due process clause was meant to make it
adapt easily to every situation, enlarging or constricting its protection as the changing
times and circumstances may require.
Aware of this, the courts have also hesitated to adopt their own specific description of
due process lest they confine themselves in a legal straitjacket that will deprive them of
the elbow room they may need to vary the meaning of the clause whenever indicated.
Instead, they have preferred to leave the import of the protection open-ended, as it
were, to be "gradually ascertained by the process of inclusion and exclusion in the
course of the decision of cases as they arise." 11 Thus, Justice Felix Frankfurter of the
U.S. Supreme Court, for example, would go no farther than to define due process
and in so doing sums it all up as nothing more and nothing less than "the
embodiment of the sporting Idea of fair play." 12
When the barons of England extracted from their sovereign liege the reluctant promise
that that Crown would thenceforth not proceed against the life liberty or property of any
of its subjects except by the lawful judgment of his peers or the law of the land, they
thereby won for themselves and their progeny that splendid guaranty of fairness that is
now the hallmark of the free society. The solemn vow that King John made at
Runnymede in 1215 has since then resounded through the ages, as a ringing reminder
to all rulers, benevolent or base, that every person, when confronted by the stern
visage of the law, is entitled to have his say in a fair and open hearing of his cause.
The closed mind has no place in the open society. It is part of the sporting Idea of fair
play to hear "the other side" before an opinion is formed or a decision is made by those
who sit in judgment. Obviously, one side is only one-half of the question; the other half
must also be considered if an impartial verdict is to be reached based on an informed
appreciation of the issues in contention. It is indispensable that the two sides
complement each other, as unto the bow the arrow, in leading to the correct ruling after
examination of the problem not from one or the other perspective only but in its totality.
A judgment based on less that this full appraisal, on the pretext that a hearing is
unnecessary or useless, is tainted with the vice of bias or intolerance or ignorance, or
worst of all, in repressive regimes, the insolence of power.
The minimum requirements of due process are notice and hearing 13 which, generally
speaking, may not be dispensed with because they are intended as a safeguard
against official arbitrariness. It is a gratifying commentary on our judicial system that
the jurisprudence of this country is rich with applications of this guaranty as proof of our
fealty to the rule of law and the ancient rudiments of fair play. We have consistently
declared that every person, faced by the awesome power of the State, is entitled to
"the law of the land," which Daniel Webster described almost two hundred years ago in
the famous Dartmouth College Case, 14 as "the law which hears before it condemns,
which proceeds upon inquiry and renders judgment only after trial." It has to be so if the
rights of every person are to be secured beyond the reach of officials who, out of
mistaken zeal or plain arrogance, would degrade the due process clause into a worn
and empty catchword.
This is not to say that notice and hearing are imperative in every case for, to be sure,
there are a number of admitted exceptions. The conclusive presumption, for example,
bars the admission of contrary evidence as long as such presumption is based on
human experience or there is a rational connection between the fact proved and the
fact ultimately presumed therefrom. 15 There are instances when the need for
expeditions action will justify omission of these requisites, as in the summary
abatement of a nuisance per se, like a mad dog on the loose, which may be killed on
sight because of the immediate danger it poses to the safety and lives of the people.
Pornographic materials, contaminated meat and narcotic drugs are inherently
pernicious and may be summarily destroyed. The passport of a person sought for a
criminal offense may be cancelled without hearing, to compel his return to the country
he has fled. 16 Filthy restaurants may be summarily padlocked in the interest of the
public health and bawdy houses to protect the public morals. 17 In such instances,
previous judicial hearing may be omitted without violation of due process in view of the
nature of the property involved or the urgency of the need to protect the general
welfare from a clear and present danger.
The protection of the general welfare is the particular function of the police power
which both restraints and is restrained by due process. The police power is simply
defined as the power inherent in the State to regulate liberty and property for the
promotion of the general welfare. 18 By reason of its function, it extends to all the great
public needs and is described as the most pervasive, the least limitable and the most
demanding of the three inherent powers of the State, far outpacing taxation and
eminent domain. The individual, as a member of society, is hemmed in by the police
power, which affects him even before he is born and follows him still after he is dead
from the womb to beyond the tomb in practically everything he does or owns. Its
reach is virtually limitless. It is a ubiquitous and often unwelcome intrusion. Even so, as
long as the activity or the property has some relevance to the public welfare, its
regulation under the police power is not only proper but necessary. And the justification
is found in the venerable Latin maxims, Salus populi est suprema lex and Sic utere tuo
ut alienum non laedas, which call for the subordination of individual interests to the
benefit of the greater number.
It is this power that is now invoked by the government to justify Executive Order No.
626-A, amending the basic rule in Executive Order No. 626, prohibiting the slaughter of
carabaos except under certain conditions. The original measure was issued for the
reason, as expressed in one of its Whereases, that "present conditions demand that
the carabaos and the buffaloes be conserved for the benefit of the small farmers who
rely on them for energy needs." We affirm at the outset the need for such a measure.
In the face of the worsening energy crisis and the increased dependence of our farms
on these traditional beasts of burden, the government would have been remiss, indeed,
if it had not taken steps to protect and preserve them.
A similar prohibition was challenged in United States v. Toribio, 19 where a law
regulating the registration, branding and slaughter of large cattle was claimed to be a
deprivation of property without due process of law. The defendant had been convicted
thereunder for having slaughtered his own carabao without the required permit, and he
appealed to the Supreme Court. The conviction was affirmed. The law was sustained
as a valid police measure to prevent the indiscriminate killing of carabaos, which were
then badly needed by farmers. An epidemic had stricken many of these animals and
the reduction of their number had resulted in an acute decline in agricultural output,
which in turn had caused an incipient famine. Furthermore, because of the scarcity of
the animals and the consequent increase in their price, cattle-rustling had spread
alarmingly, necessitating more effective measures for the registration and branding of
these animals. The Court held that the questioned statute was a valid exercise of the
police power and declared in part as follows:
To justify the State in thus interposing its authority in behalf of the public, it must
appear, first, that the interests of the public generally, as distinguished from those of a
particular class, require such interference; and second, that the means are reasonably
necessary for the accomplishment of the purpose, and not unduly oppressive upon
individuals. ...
From what has been said, we think it is clear that the enactment of the provisions of the
statute under consideration was required by "the interests of the public generally, as
distinguished from those of a particular class" and that the prohibition of the slaughter
of carabaos for human consumption, so long as these animals are fit for agricultural
work or draft purposes was a "reasonably necessary" limitation on private ownership,
to protect the community from the loss of the services of such animals by their
slaughter by improvident owners, tempted either by greed of momentary gain, or by a
desire to enjoy the luxury of animal food, even when by so doing the productive power
of the community may be measurably and dangerously affected.
In the light of the tests mentioned above, we hold with the Toribio Case that the
carabao, as the poor man's tractor, so to speak, has a direct relevance to the public
welfare and so is a lawful subject of Executive Order No. 626. The method chosen in
the basic measure is also reasonably necessary for the purpose sought to be achieved
and not unduly oppressive upon individuals, again following the above-cited doctrine.
There is no doubt that by banning the slaughter of these animals except where they
are at least seven years old if male and eleven years old if female upon issuance of the
necessary permit, the executive order will be conserving those still fit for farm work or
breeding and preventing their improvident depletion.
But while conceding that the amendatory measure has the same lawful subject as the
original executive order, we cannot say with equal certainty that it complies with the
second requirement, viz., that there be a lawful method. We note that to strengthen the
original measure, Executive Order No. 626-A imposes an absolute ban not on
the slaughter of the carabaos but on their movement, providing that "no carabao
regardless of age, sex, physical condition or purpose (sic) and no carabeef shall be
transported from one province to another." The object of the prohibition escapes us.
The reasonable connection between the means employed and the purpose sought to
be achieved by the questioned measure is missing
We do not see how the prohibition of the inter-provincial transport of carabaos can
prevent their indiscriminate slaughter, considering that they can be killed anywhere,
with no less difficulty in one province than in another. Obviously, retaining the carabaos
in one province will not prevent their slaughter there, any more than moving them to
another province will make it easier to kill them there. As for the carabeef, the
prohibition is made to apply to it as otherwise, so says executive order, it could be
easily circumvented by simply killing the animal. Perhaps so. However, if the
movement of the live animals for the purpose of preventing their slaughter cannot be
prohibited, it should follow that there is no reason either to prohibit their transfer as, not
to be flippant dead meat.
Even if a reasonable relation between the means and the end were to be assumed, we
would still have to reckon with the sanction that the measure applies for violation of the
prohibition. The penalty is outright confiscation of the carabao or carabeef being
transported, to be meted out by the executive authorities, usually the police only. In the
Toribio Case, the statute was sustained because the penalty prescribed was fine and
imprisonment, to be imposed by the court after trial and conviction of the accused.
Under the challenged measure, significantly, no such trial is prescribed, and the
property being transported is immediately impounded by the police and declared, by
the measure itself, as forfeited to the government.
In the instant case, the carabaos were arbitrarily confiscated by the police station
commander, were returned to the petitioner only after he had filed a complaint for
recovery and given a supersedeas bond of P12,000.00, which was ordered confiscated
upon his failure to produce the carabaos when ordered by the trial court. The executive
order defined the prohibition, convicted the petitioner and immediately imposed
punishment, which was carried out forthright. The measure struck at once and pounced
upon the petitioner without giving him a chance to be heard, thus denying him the
centuries-old guaranty of elementary fair play.
It has already been remarked that there are occasions when notice and hearing may
be validly dispensed with notwithstanding the usual requirement for these minimum
guarantees of due process. It is also conceded that summary action may be validly
taken in administrative proceedings as procedural due process is not necessarily
judicial only. 20 In the exceptional cases accepted, however. there is a justification for
the omission of the right to a previous hearing, to wit, the immediacy of the problem
sought to be corrected and the urgency of the need to correct it.
In the case before us, there was no such pressure of time or action calling for the
petitioner's peremptory treatment. The properties involved were not even inimical per
se as to require their instant destruction. There certainly was no reason why the
offense prohibited by the executive order should not have been proved first in a court
of justice, with the accused being accorded all the rights safeguarded to him under the
Constitution. Considering that, as we held in Pesigan v. Angeles, 21 Executive Order
No. 626-A is penal in nature, the violation thereof should have been pronounced not by
the police only but by a court of justice, which alone would have had the authority to
impose the prescribed penalty, and only after trial and conviction of the accused.
We also mark, on top of all this, the questionable manner of the disposition of the
confiscated property as prescribed in the questioned executive order. It is there
authorized that the seized property shall "be distributed to charitable institutions and
other similar institutions as the Chairman of the National Meat Inspection
Commission may see fit, in the case of carabeef, and to deserving farmers through
dispersal as the Director of Animal Industry may see fit, in the case of carabaos."
(Emphasis supplied.) The phrase "may see fit" is an extremely generous and
dangerous condition, if condition it is. It is laden with perilous opportunities for partiality
and abuse, and even corruption. One searches in vain for the usual standard and the
reasonable guidelines, or better still, the limitations that the said officers must observe
when they make their distribution. There is none. Their options are apparently
boundless. Who shall be the fortunate beneficiaries of their generosity and by what
criteria shall they be chosen? Only the officers named can supply the answer, they and
they alone may choose the grantee as they see fit, and in their own exclusive
discretion. Definitely, there is here a "roving commission," a wide and sweeping
authority that is not "canalized within banks that keep it from overflowing," in short, a
clearly profligate and therefore invalid delegation of legislative powers.
powers to the officers mentioned therein who are granted unlimited discretion in the
distribution of the properties arbitrarily taken. For these reasons, we hereby declare
Executive Order No. 626-A unconstitutional.
We agree with the respondent court, however, that the police station commander who
confiscated the petitioner's carabaos is not liable in damages for enforcing the
executive order in accordance with its mandate. The law was at that time
presumptively valid, and it was his obligation, as a member of the police, to enforce it.
It would have been impertinent of him, being a mere subordinate of the President, to
declare the executive order unconstitutional and, on his own responsibility alone,
refuse to execute it. Even the trial court, in fact, and the Court of Appeals itself did not
feel they had the competence, for all their superior authority, to question the order we
now annul.
The Court notes that if the petitioner had not seen fit to assert and protect his rights as
he saw them, this case would never have reached us and the taking of his property
under the challenged measure would have become a faitaccompli despite its invalidity.
We commend him for his spirit. Without the present challenge, the matter would have
ended in that pump boat in Masbate and another violation of the Constitution, for all its
obviousness, would have been perpetrated, allowed without protest, and soon
forgotten in the limbo of relinquished rights.
The strength of democracy lies not in the rights it guarantees but in the courage of the
people to invoke them whenever they are ignored or violated. Rights are but weapons
on the wall if, like expensive tapestry, all they do is embellish and impress. Rights, as
weapons, must be a promise of protection. They become truly meaningful, and fulfill
the role assigned to them in the free society, if they are kept bright and sharp with use
by those who are not afraid to assert them.
WHEREFORE, Executive Order No. 626-A is hereby declared unconstitutional. Except
as affirmed above, the decision of the Court of Appeals is reversed.
The supersedeas bond is cancelled and the amount thereof is ordered restored to the
petitioner. No costs.
SO ORDERED.

To sum up then, we find that the challenged measure is an invalid exercise of the
police power because the method employed to conserve the carabaos is not
reasonably necessary to the purpose of the law and, worse, is unduly oppressive. Due
process is violated because the owner of the property confiscated is denied the right to
be heard in his defense and is immediately condemned and punished. The conferment
on the administrative authorities of the power to adjudge the guilt of the supposed
offender is a clear encroachment on judicial functions and militates against the doctrine
of separation of powers. There is, finally, also an invalid delegation of legislative
US v Causby there has been no taking within the meaning of the Fifth Amendment. This is because
of the modern nature of the airplane, and the desire to avoid confusion.
Brief Fact Summary. Respondents claim that their property was taken, within the
meaning of the Fifth Amendment, by the regular army and navy aircraft flights over
their house and chicken farm.

Synopsis of Rule of Law. The airspace is a public highway, but if the landowner is to
have the full enjoyment of his land, he must have exclusive control over the immediate
reaches of the enveloping atmosphere.

Facts. Respondents own 2.8 acres near an airport outside of Greensboro, North
Carolina. Respondents property contained a house and a chicken farm. The end of
one of the runways of the airport was 2,220 feet from Respondents property, and the
glide path passed over the property at 83 feet, which is 67 feet above the house, 63
feet above the barn, and 18 feet above the highest tree. The use by the United States
of this airport is pursuant to a lease beginning June 1, 1942, and ending June 30,
1942, with provisions for renewal until June 30, 1967, or six months after the end of the
national emergency, whichever is earlier. The United States four motored bombers
make loud noises when flying above the property, and have very bright lights.
Respondents chicken farm production had to stop, because 150 chickens were killed
by flying into walls from fright. In the Court of Claims, it was found that the United
States had taken an easement over the property on June 1, 1942, and that the val
ue of the property depreciation as the result of the easement was $2,000.00. The
United States petitioned for certiorari, which was granted.

Issue. Has the Respondents property been taken within the meaning of the Fifth
Amendment?

Held. Yes. But the case is remanded for a determination of the value of the easement
and whether the easement was permanent or

temporary.
The court noted the common law doctrine of ownership of land extending to the sky
above the land. However, the court notes that an act of Congress had given the United
States exclusive national sovereignty over the air space. The court noted that common
sense made the common law doctrine inapplicable.
However, the court found that the common law doctrine did not control the present
case. The United States had conceded in oral argument that if flights over the
Respondents property rendered it uninhabitable then there would be a taking
compensable under the Fifth Amendment. The measure of the value of the property
taken is the owners loss, not the takers gain.
The airspace is a public highway. But it is obvious that if the landowner is to have the
full enjoyment of his land, he must have exclusive control of the immediate reaches of
the enveloping atmosphere. If this were not true then landowners could not build
buildings, plant trees or run fences.
The airspace, apart from the immediate reaches above the land, is part of the public
domain. The court does not set the precise limits of the line of demarcation. Flights
over private land are not a taking, unless, like here, they are so low and frequent as to
be a direct and immediate interference with the enjoyment of the land. The Court of
Claims must, upon remand, determine the value of the easement and whether it is a
temporary or permanent easement.

Dissent. The dissent would reverse the decision of the Court of Claims and hold that

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-18841 January 27, 1969
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant,
vs.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, defendant-appellant.
Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Antonio A.
Torres and Solicitor Camilo D. Quiason for plaintiff-appellant.
Ponce Enrile, Siguion Reyna, Montecillo and Belo for defendant-appellant.
REYES, J.B.L., J.:
Direct appeals, upon a joint record on appeal, by both the plaintiff and the defendant
from the dismissal, after hearing, by the Court of First Instance of Manila, in its Civil
Case No. 35805, of their respective complaint and counterclaims, but making
permanent a preliminary mandatory injunction theretofore issued against the defendant
on the interconnection of telephone facilities owned and operated by said parties.
The plaintiff, Republic of the Philippines, is a political entity exercising governmental
powers through its branches and instrumentalities, one of which is the Bureau of
Telecommunications. That office was created on 1 July 1947, under Executive Order
No. 94, with the following powers and duties, in addition to certain powers and duties
formerly vested in the Director of Posts: 1awphil.t
SEC. 79. The Bureau of Telecommunications shall exercise the following powers and
duties:
(a) To operate and maintain existing wire-telegraph and radio-telegraph
offices, stations, and facilities, and those to be established to restore the pre-
war telecommunication service under the Bureau of Posts, as well as such
additional offices or stations as may hereafter be established to provide
telecommunication service in places requiring such service;
(b) To investigate, consolidate, negotiate for, operate and maintain wire-
telephone or radio telephone communication service throughout the
Philippines by utilizing such existing facilities in cities, towns, and provinces
as may be found feasible and under such terms and conditions or
arrangements with the present owners or operators thereof as may be agreed
upon to the satisfaction of all concerned;
(c) To prescribe, subject to approval by the Department Head, equitable rates
of charges for messages handled by the system and/or for time calls and
other services that may be rendered by said system;
(d) To establish and maintain coastal stations to serve ships at sea or
aircrafts and, when public interest so requires, to engage in the international
telecommunication service in agreement with other countries desiring to
establish such service with the Republic of the Philippines; and
(e) To abide by all existing rules and regulations prescribed by the
International Telecommunication Convention relative to the accounting,
disposition and exchange of messages handled in the international service,
and those that may hereafter be promulgated by said convention and
adhered to by the Government of the Republic of the Philippines. 1
The defendant, Philippine Long Distance Telephone Company (PLDT for short), is a
public service corporation holding a legislative franchise, Act 3426, as amended by
Commonwealth Act 407, to install, operate and maintain a telephone system
throughout the Philippines and to carry on the business of electrical transmission of
messages within the Philippines and between the Philippines and the telephone
systems of other countries. 2 The RCA Communications, Inc., (which is not a party to
the present case but has contractual relations with the parties) is an American
corporation authorized to transact business in the Philippines and is the grantee, by
assignment, of a legislative franchise to operate a domestic station for the reception
and transmission of long distance wireless messages (Act 2178) and to operate
broadcasting and radio-telephone and radio-telegraphic communications services (Act
3180). 3
Sometime in 1933, the defendant, PLDT, and the RCA Communications, Inc., entered
into an agreement whereby telephone messages, coming from the United States and
received by RCA's domestic station, could automatically be transferred to the lines of
PLDT; and vice-versa, for calls collected by the PLDT for transmission from the
Philippines to the United States. The contracting parties agreed to divide the tolls, as
follows: 25% to PLDT and 75% to RCA. The sharing was amended in 1941 to 30% for
PLDT and 70% for RCA, and again amended in 1947 to a 50-50 basis. The
arrangement was later extended to radio-telephone messages to and from European
and Asiatic countries. Their contract contained a stipulation that either party could
terminate it on a 24-month notice to the other.4 On 2 February 1956, PLDT gave notice
to RCA to terminate their contract on 2 February 1958. 5
Soon after its creation in 1947, the Bureau of Telecommunications set up its own
Government Telephone System by utilizing its own appropriation and equipment and
by renting trunk lines of the PLDT to enable government offices to call private
parties. 6 Its application for the use of these trunk lines was in the usual form of
applications for telephone service, containing a statement, above the signature of the
applicant, that the latter will abide by the rules and regulations of the PLDT which are
on file with the Public Service Commission. 7 One of the many rules prohibits the public
use of the service furnished the telephone subscriber for his private use. 8 The Bureau
has extended its services to the general public since 1948, 9 using the same trunk lines
owned by, and rented from, the PLDT, and prescribing its (the Bureau's) own schedule
of rates. 10 Through these trunk lines, a Government Telephone System (GTS)
subscriber could make a call to a PLDT subscriber in the same way that the latter could
make a call to the former.
On 5 March 1958, the plaintiff, through the Director of Telecommunications, entered
into an agreement with RCA Communications, Inc., for a joint overseas telephone
service whereby the Bureau would convey radio-telephone overseas calls received by
RCA's station to and from local residents. 11 Actually, they inaugurated this joint
operation on 2 February 1958, under a "provisional" agreement. 12
On 7 April 1958, the defendant Philippine Long Distance Telephone Company,
complained to the Bureau of Telecommunications that said bureau was violating the
conditions under which their Private Branch Exchange (PBX) is inter-connected with
the PLDT's facilities, referring to the rented trunk lines, for the Bureau had used the
trunk lines not only for the use of government offices but even to serve private persons
or the general public, in competition with the business of the PLDT; and gave notice
that if said violations were not stopped by midnight of 12 April 1958, the PLDT would
sever the telephone connections. 13 When the PLDT received no reply, it disconnected
the trunk lines being rented by the Bureau at midnight on 12 April 1958. 14 The result
was the isolation of the Philippines, on telephone services, from the rest of the world,
except the United States. 15
At that time, the Bureau was maintaining 5,000 telephones and had 5,000 pending
applications for telephone connection. 16 The PLDT was also maintaining 60,000
telephones and had also 20,000 pending applications. 17Through the years, neither of
them has been able to fill up the demand for telephone service.
The Bureau of Telecommunications had proposed to the PLDT on 8 January 1958
that both enter into an interconnecting agreement, with the government paying (on a
call basis) for all calls passing through the interconnecting facilities from the
Government Telephone System to the PLDT. 18 The PLDT replied that it was willing to
enter into an agreement on overseas telephone service to Europe and Asian countries
provided that the Bureau would submit to the jurisdiction and regulations of the Public
Service Commission and in consideration of 37 1/2% of the gross revenues. 19 In its
memorandum in lieu of oral argument in this Court dated 9 February 1964, on page 8,
the defendant reduced its offer to 33 1/3 % (1/3) as its share in the overseas telephone
service. The proposals were not accepted by either party.
On 12 April 1958, plaintiff Republic commenced suit against the defendant, Philippine
Long Distance Telephone Company, in the Court of First Instance of Manila (Civil Case
No. 35805), praying in its complaint for judgment commanding the PLDT to execute a
contract with plaintiff, through the Bureau, for the use of the facilities of defendant's
telephone system throughout the Philippines under such terms and conditions as the
court might consider reasonable, and for a writ of preliminary injunction against the
defendant company to restrain the severance of the existing telephone connections
and/or restore those severed.
Acting on the application of the plaintiff, and on the ground that the severance of
telephone connections by the defendant company would isolate the Philippines from
other countries, the court a quo, on 14 April 1958, issued an order for the defendant:
(1) to forthwith reconnect and restore the seventy-eight (78) trunk lines that it
has disconnected between the facilities of the Government Telephone
System, including its overseas telephone services, and the facilities of
defendant; (2) to refrain from carrying into effect its threat to sever the
existing telephone communication between the Bureau of
Telecommunications and defendant, and not to make connection over its
telephone system of telephone calls coming to the Philippines from foreign
countries through the said Bureau's telephone facilities and the radio facilities
of RCA Communications, Inc.; and (3) to accept and connect through its
telephone system all such telephone calls coming to the Philippines from
foreign countries until further order of this Court.
On 28 April 1958, the defendant company filed its answer, with counterclaims.
It denied any obligation on its part to execute a contrary of services with the Bureau of
Telecommunications; contested the jurisdiction of the Court of First Instance to compel
it to enter into interconnecting agreements, and averred that it was justified to
disconnect the trunk lines heretofore leased to the Bureau of Telecommunications
under the existing agreement because its facilities were being used in fraud of its
rights. PLDT further claimed that the Bureau was engaging in commercial telephone
operations in excess of authority, in competition with, and to the prejudice of, the
PLDT, using defendants own telephone poles, without proper accounting of revenues.
After trial, the lower court rendered judgment that it could not compel the PLDT to
enter into an agreement with the Bureau because the parties were not in agreement;
that under Executive Order 94, establishing the Bureau of Telecommunications, said
Bureau was not limited to servicing government offices alone, nor was there any in the
contract of lease of the trunk lines, since the PLDT knew, or ought to have known, at
the time that their use by the Bureau was to be public throughout the Islands, hence
the Bureau was neither guilty of fraud, abuse, or misuse of the poles of the PLDT; and,
in view of serious public prejudice that would result from the disconnection of the trunk
lines, declared the preliminary injunction permanent, although it dismissed both the
complaint and the counterclaims.
Both parties appealed.
Taking up first the appeal of the Republic, the latter complains of the action of the trial
court in dismissing the part of its complaint seeking to compel the defendant to enter
into an interconnecting contract with it, because the parties could not agree on the
terms and conditions of the interconnection, and of its refusal to fix the terms and
conditions therefor.
We agree with the court below that parties can not be coerced to enter into a contract
where no agreement is had between them as to the principal terms and conditions of
the contract. Freedom to stipulate such terms and conditions is of the essence of our
contractual system, and by express provision of the statute, a contract may be annulled
if tainted by violence, intimidation, or undue influence (Articles 1306, 1336, 1337, Civil
Code of the Philippines). But the court a quo has apparently overlooked that while the
Republic may not compel the PLDT to celebrate a contract with it, the Republic may, in
the exercise of the sovereign power of eminent domain, require the telephone
company to permit interconnection of the government telephone system and that of the
PLDT, as the needs of the government service may require, subject to the payment of
just compensation to be determined by the court. Nominally, of course, the power of
eminent domain results in the taking or appropriation of title to, and possession of, the
expropriated property; but no cogent reason appears why the said power may not be
availed of to impose only a burden upon the owner of condemned property, without
loss of title and possession. It is unquestionable that real property may, through
expropriation, be subjected to an easement of right of way. The use of the PLDT's lines
and services to allow inter-service connection between both telephone systems is not
much different. In either case private property is subjected to a burden for public use
and benefit. If, under section 6, Article XIII, of the Constitution, the State may, in the
interest of national welfare, transfer utilities to public ownership upon payment of just
compensation, there is no reason why the State may not require a public utility to
render services in the general interest, provided just compensation is paid therefor.
Ultimately, the beneficiary of the interconnecting service would be the users of both
telephone systems, so that the condemnation would be for public use.
The Bureau of Telecommunications, under section 78 (b) of Executive Order No. 94,
may operate and maintain wire telephone or radio telephone communications
throughout the Philippines by utilizing existing facilities in cities, towns, and provinces
under such terms and conditions or arrangement with present owners or operators as
may be agreed upon to the satisfaction of all concerned; but there is nothing in this
section that would exclude resort to condemnation proceedings where unreasonable or
unjust terms and conditions are exacted, to the extent of crippling or seriously
hampering the operations of said Bureau.
A perusal of the complaint shows that the Republic's cause of action is predicated
upon the radio telephonic isolation of the Bureau's facilities from the outside world if the
severance of interconnection were to be carried out by the PLDT, thereby preventing
the Bureau of Telecommunications from properly discharging its functions, to the
prejudice of the general public. Save for the prayer to compel the PLDT to enter into a
contract (and the prayer is no essential part of the pleading), the averments make out a
case for compulsory rendering of inter-connecting services by the telephone company
upon such terms and conditions as the court may determine to be just. And since the
lower court found that both parties "are practically at one that defendant (PLDT) is
entitled to reasonable compensation from plaintiff for the reasonable use of the
former's telephone facilities" (Decision, Record on Appeal, page 224), the lower court
should have proceeded to treat the case as one of condemnation of such services
independently of contract and proceeded to determine the just and reasonable
compensation for the same, instead of dismissing the petition.
This view we have taken of the true nature of the Republic's petition necessarily
results in overruling the plea of defendant-appellant PLDT that the court of first
instance had no jurisdiction to entertain the petition and that the proper forum for the
action was the Public Service Commission. That body, under the law, has no authority
to pass upon actions for the taking of private property under the sovereign right of
eminent domain. Furthermore, while the defendant telephone company is a public
utility corporation whose franchise, equipment and other properties are under the
jurisdiction, supervision and control of the Public Service Commission (Sec. 13, Public
Service Act), yet the plaintiff's telecommunications network is a public service owned
by the Republic and operated by an instrumentality of the National Government, hence
exempt, under Section 14 of the Public Service Act, from such jurisdiction, supervision
and control. The Bureau of Telecommunications was created in pursuance of a state
policy reorganizing the government offices
to meet the exigencies attendant upon the establishment of the free and
independent Government of the Republic of the Philippines, and for the
purpose of promoting simplicity, economy and efficiency in its operation
(Section 1, Republic Act No. 51)
and the determination of state policy is not vested in the Commission (Utilities Com.
vs. Bartonville Bus Line, 290 Ill. 574; 124 N.E. 373).
Defendant PLDT, as appellant, contends that the court below was in error in not
holding that the Bureau of Telecommunications was not empowered to engage in
commercial telephone business, and in ruling that said defendant was not justified in
disconnecting the telephone trunk lines it had previously leased to the Bureau. We find
that the court a quo ruled correctly in rejecting both assertions.
Executive Order No. 94, Series of 1947, reorganizing the Bureau of
Telecommunications, expressly empowered the latter in its Section 79, subsection (b),
to "negotiate for, operate and maintain wire telephone or radio telephone
communication service throughout the Philippines", and, in subsection (c), "to
prescribe, subject to approval by the Department Head, equitable rates of charges for
messages handled by the system and/or for time calls and other services that may be
rendered by the system". Nothing in these provisions limits the Bureau to non-
commercial activities or prevents it from serving the general public. It may be that in its
original prospectuses the Bureau officials had stated that the service would be limited
to government offices: but such limitations could not block future expansion of the
system, as authorized by the terms of the Executive Order, nor could the officials of the
Bureau bind the Government not to engage in services that are authorized by law. It is
a well-known rule that erroneous application and enforcement of the law by public
officers do not block subsequent correct application of the statute (PLDT vs. Collector
of Internal Revenue, 90 Phil. 676), and that the Government is never estopped by
mistake or error on the part of its agents (Pineda vs. Court of First Instance of
Tayabas, 52 Phil. 803, 807; Benguet Consolidated Mining Co. vs. Pineda, 98 Phil. 711,
724).
The theses that the Bureau's commercial services constituted unfair competition, and
that the Bureau was guilty of fraud and abuse under its contract, are, likewise,
untenable.
First, the competition is merely hypothetical, the demand for telephone service being
very much more than the supposed competitors can supply. As previously noted, the
PLDT had 20,000 pending applications at the time, and the Bureau had another 5,000.
The telephone company's inability to meet the demands for service are notorious even
now. Second, the charter of the defendant expressly provides:
SEC. 14. The rights herein granted shall not be exclusive, and the rights and
power to grant to any corporation, association or person other than the
grantee franchise for the telephone or electrical transmission of message or
signals shall not be impaired or affected by the granting of this franchise:
(Act 3436)
And third, as the trial court correctly stated, "when the Bureau of Telecommunications
subscribed to the trunk lines, defendant knew or should have known that their use by
the subscriber was more or less public and all embracing in nature, that is, throughout
the Philippines, if not abroad" (Decision, Record on Appeal, page 216).
The acceptance by the defendant of the payment of rentals, despite its knowledge
that the plaintiff had extended the use of the trunk lines to commercial purposes,
continuously since 1948, implies assent by the defendant to such extended use. Since
this relationship has been maintained for a long time and the public has patronized
both telephone systems, and their interconnection is to the public convenience, it is too
late for the defendant to claim misuse of its facilities, and it is not now at liberty to
unilaterally sever the physical connection of the trunk lines.
..., but there is high authority for the position that, when such physical
connection has been voluntarily made, under a fair and workable
arrangement and guaranteed by contract and the continuous line has come
to be patronized and established as a great public convenience, such
connection shall not in breach of the agreement be severed by one of the
parties. In that case, the public is held to have such an interest in the
arrangement that its rights must receive due consideration. This position finds
approval in State ex rel. vs. Cadwaller, 172 Ind. 619, 636, 87 N.E. 650, and is
stated in the elaborate and learned opinion of Chief Justice Myers as follows:
"Such physical connection cannot be required as of right, but if such
connection is voluntarily made by contract, as is here alleged to be the case,
so that the public acquires an interest in its continuance, the act of the parties
in making such connection is equivalent to a declaration of a purpose to
waive the primary right of independence, and it imposes upon the property
such a public status that it may not be disregarded" citing Mahan v. Mich.
Tel. Co., 132 Mich. 242, 93 N.W. 629, and the reasons upon which it is in part
made to rest are referred to in the same opinion, as follows: "Where private
property is by the consent of the owner invested with a public interest or
privilege for the benefit of the public, the owner can no longer deal with it as
private property only, but must hold it subject to the right of the public in the
exercise of that public interest or privilege conferred for their benefit." Allnut v.
Inglis (1810) 12 East, 527. The doctrine of this early case is the
acknowledged law. (Clinton-Dunn Tel. Co. v. Carolina Tel. & Tel. Co., 74 S.E.
636, 638).
It is clear that the main reason for the objection of the PLDT lies in the fact that said
appellant did not expect that the Bureau's telephone system would expand with such
rapidity as it has done; but this expansion is no ground for the discontinuance of the
service agreed upon.
As there is no proof that the telephone wires strain the poles of the PLDT more than
the telegraph wires, nor that they cause more damage than the wires of the telegraph
system, or that the Government has attached to the poles more than one ten-pin cross-
arm as permitted by the PLDT charter, we see no point in this assignment of error. So
long as the burden to be borne by the PLDT poles is not increased, we see no reason
why the reservation in favor of the telegraph wires of the government should not be
extended to its telephone lines, any time that the government decided to engage also
in this kind of communication.
In the ultimate analysis, the true objection of the PLDT to continue the link between its
network and that of the Government is that the latter competes "parasitically" (sic) with
its own telephone services. Considering, however, that the PLDT franchise is non-
exclusive; that it is well-known that defendant PLDT is unable to adequately cope with
the current demands for telephone service, as shown by the number of pending
applications therefor; and that the PLDT's right to just compensation for the services
rendered to the Government telephone system and its users is herein recognized and
preserved, the objections of defendant-appellant are without merit. To uphold the
PLDT's contention is to subordinate the needs of the general public to the right of the
PLDT to derive profit from the future expansion of its services under its non-exclusive
franchise.
WHEREFORE, the decision of the Court of First Instance, now under appeal, is
affirmed, except in so far as it dismisses the petition of the Republic of the Philippines
to compel the Philippine Long Distance Telephone Company to continue servicing the
Government telephone system upon such terms, and for a compensation, that the trial
court may determine to be just, including the period elapsed from the filing of the
original complaint or petition. And for this purpose, the records are ordered returned to
the court of origin for further hearings and other proceedings not inconsistent with this
opinion. No costs.

The last issue urged by the PLDT as appellant is its right to compensation for the use
of its poles for bearing telephone wires of the Bureau of Telecommunications.
Admitting that section 19 of the PLDT charter reserves to the Government

the privilege without compensation of using the poles of the grantee to

attach one ten-pin cross-arm, and to install, maintain and operate wires of its
telegraph system thereon; Provided, however, That the Bureau of Posts shall
have the right to place additional cross-arms and wires on the poles of the
grantee by paying a compensation, the rate of which is to be agreed upon by
the Director of Posts and the grantee;

the defendant counterclaimed for P8,772.00 for the use of its poles by the plaintiff,
contending that what was allowed free use, under the aforequoted provision, was one
ten-pin cross-arm attachment and only for plaintiff's telegraph system, not for its
telephone system; that said section could not refer to the plaintiff's telephone system,
because it did not have such telephone system when defendant acquired its franchise.
The implication of the argument is that plaintiff has to pay for the use of defendant's
poles if such use is for plaintiff's telephone system and has to pay also if it attaches
more than one (1) ten-pin cross-arm for telegraphic purposes.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-20620 August 15, 1974
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant,
vs.
CARMEN M. VDA. DE CASTELLVI, ET AL., defendants-appellees.
Office of the Solicitor General for plaintiff-appellant.
C.A. Mendoza & A. V. Raquiza and Alberto Cacnio & Associates for defendant-
appellees.
ZALDIVAR, J.:p
Appeal from the decision of the Court of First Instance of Pampanga in its Civil Case
No. 1623, an expropriation proceeding.
Plaintiff-appellant, the Republic of the Philippines, (hereinafter referred to as the
Republic) filed, on June 26, 1959, a complaint for eminent domain against defendant-
appellee, Carmen M. Vda. de Castellvi, judicial administratrix of the estate of the late
Alfonso de Castellvi (hereinafter referred to as Castellvi), over a parcel of land situated
in the barrio of San Jose, Floridablanca, Pampanga, described as follows:
A parcel of land, Lot No. 199-B Bureau of Lands Plan Swo 23666.
Bounded on the NE by Maria Nieves Toledo-Gozun; on the SE by
national road; on the SW by AFP reservation, and on the NW by
AFP reservation. Containing an area of 759,299 square meters,
more or less, and registered in the name of Alfonso Castellvi under
TCT No. 13631 of the Register of Pampanga ...;
and against defendant-appellee Maria Nieves Toledo Gozun (hereinafter referred to as
Toledo-Gozun over two parcels of land described as follows:
A parcel of land (Portion Lot Blk-1, Bureau of Lands Plan Psd,
26254. Bounded on the NE by Lot 3, on the SE by Lot 3; on the SW
by Lot 1-B, Blk. 2 (equivalent to Lot 199-B Swo 23666; on the NW
by AFP military reservation. Containing an area of 450,273 square
meters, more or less and registered in the name of Maria Nieves
Toledo-Gozun under TCT No. 8708 of the Register of Deeds of
Pampanga. ..., and
A parcel of land (Portion of lot 3, Blk-1, Bureau of Lands Plan Psd
26254. Bounded on the NE by Lot No. 3, on the SE by school lot
and national road, on the SW by Lot 1-B Blk 2 (equivalent to Lot
199-B Swo 23666), on the NW by Lot 1-B, Blk-1. Containing an
area of 88,772 square meters, more or less, and registered in the
name of Maria Nieves Toledo Gozun under TCT No. 8708 of the
Register of Deeds of Pampanga, ....
In its complaint, the Republic alleged, among other things, that the fair market value of
the above-mentioned lands, according to the Committee on Appraisal for the Province
of Pampanga, was not more than P2,000 per hectare, or a total market value of
P259,669.10; and prayed, that the provisional value of the lands be fixed at
P259.669.10, that the court authorizes plaintiff to take immediate possession of the
lands upon deposit of that amount with the Provincial Treasurer of Pampanga; that the
court appoints three commissioners to ascertain and report to the court the just
compensation for the property sought to be expropriated, and that the court issues
thereafter a final order of condemnation.
On June 29, 1959 the trial court issued an order fixing the provisional value of the
lands at P259,669.10.
In her "motion to dismiss" filed on July 14, 1959, Castellvi alleged, among other things,
that the land under her administration, being a residential land, had a fair market value
of P15.00 per square meter, so it had a total market value of P11,389,485.00; that the
Republic, through the Armed Forces of the Philippines, particularly the Philippine Air
Force, had been, despite repeated demands, illegally occupying her property since
July 1, 1956, thereby preventing her from using and disposing of it, thus causing her
damages by way of unrealized profits. This defendant prayed that the complaint be
dismissed, or that the Republic be ordered to pay her P15.00 per square meter, or a
total of P11,389,485.00, plus interest thereon at 6% per annum from July 1, 1956; that
the Republic be ordered to pay her P5,000,000.00 as unrealized profits, and the costs
of the suit.
By order of the trial court, dated August, 1959, Amparo C. Diaz, Dolores G. viuda de
Gil, Paloma Castellvi, Carmen Castellvi, Rafael Castellvi, Luis Castellvi, Natividad
Castellvi de Raquiza, Jose Castellvi and Consuelo Castellvi were allowed to intervene
as parties defendants. Subsequently, Joaquin V. Gozun, Jr., husband of defendant
Nieves Toledo Gozun, was also allowed by the court to intervene as a party defendant.
After the Republic had deposited with the Provincial Treasurer of Pampanga the
amount of P259,669.10, the trial court ordered that the Republic be placed in
possession of the lands. The Republic was actually placed in possession of the lands
on August 10,
1959. 1
In her "motion to dismiss", dated October 22, 1959, Toledo-Gozun alleged, among
other things, that her two parcels of land were residential lands, in fact a portion with an
area of 343,303 square meters had already been subdivided into different lots for sale
to the general public, and the remaining portion had already been set aside for
expansion sites of the already completed subdivisions; that the fair market value of
said lands was P15.00 per square meter, so they had a total market value of
P8,085,675.00; and she prayed that the complaint be dismissed, or that she be paid
the amount of P8,085,675.00, plus interest thereon at the rate of 6% per annum from
October 13, 1959, and attorney's fees in the amount of P50,000.00.
Intervenors Jose Castellvi and Consuelo Castellvi in their answer, filed on February 11,
1960, and also intervenor Joaquin Gozun, Jr., husband of defendant Maria Nieves
Toledo-Gozun, in his motion to dismiss, dated May 27, 1960, all alleged that the value
of the lands sought to be expropriated was at the rate of P15.00 per square meter.
On November 4, 1959, the trial court authorized the Provincial Treasurer of Pampanga
to pay defendant Toledo-Gozun the sum of P107,609.00 as provisional value of her
lands. 2 On May 16, 1960 the trial Court authorized the Provincial Treasurer of
Pampanga to pay defendant Castellvi the amount of P151,859.80 as provisional value
of the land under her administration, and ordered said defendant to deposit the amount
with the Philippine National Bank under the supervision of the Deputy Clerk of Court. In
another order of May 16, 1960 the trial Court entered an order of condemnation. 3
The trial Court appointed three commissioners: Atty. Amadeo Yuzon, Clerk of Court, as
commissioner for the court; Atty. Felicisimo G. Pamandanan, counsel of the Philippine
National Bank Branch at Floridablanca, for the plaintiff; and Atty. Leonardo F.
Lansangan, Filipino legal counsel at Clark Air Base, for the defendants. The
Commissioners, after having qualified themselves, proceeded to the performance of
their duties.
On March 15,1961 the Commissioners submitted their report and recommendation,
wherein, after having determined that the lands sought to be expropriated were
residential lands, they recommended unanimously that the lowest price that should be
paid was P10.00 per square meter, for both the lands of Castellvi and Toledo-Gozun;
that an additional P5,000.00 be paid to Toledo-Gozun for improvements found on her
land; that legal interest on the compensation, computed from August 10, 1959, be paid
after deducting the amounts already paid to the owners, and that no consequential
damages be awarded. 4 The Commissioners' report was objected to by all the parties in
the case by defendants Castellvi and Toledo-Gozun, who insisted that the fair
market value of their lands should be fixed at P15.00 per square meter; and by the
Republic, which insisted that the price to be paid for the lands should be fixed at P0.20
per square meter. 5
After the parties-defendants and intervenors had filed their respective memoranda, and
the Republic, after several extensions of time, had adopted as its memorandum its
objections to the report of the Commissioners, the trial court, on May 26, 1961,
rendered its decision 6 the dispositive portion of which reads as follows:
WHEREFORE, taking into account all the foregoing circumstances,
and that the lands are titled, ... the rising trend of land values ...,
and the lowered purchasing power of the Philippine peso, the court
finds that the unanimous recommendation of the commissioners of
ten (P10.00) pesos per square meter for the three lots of the
defendants subject of this action is fair and just.
xxx xxx xxx
The plaintiff will pay 6% interest per annum on the total value of the
lands of defendant Toledo-Gozun since (sic) the amount deposited
as provisional value from August 10, 1959 until full payment is
made to said defendant or deposit therefor is made in court.
In respect to the defendant Castellvi, interest at 6% per annum will
also be paid by the plaintiff to defendant Castellvi from July 1, 1956
when plaintiff commenced its illegal possession of the Castellvi land
when the instant action had not yet been commenced to July 10,
1959 when the provisional value thereof was actually deposited in
court, on the total value of the said (Castellvi) land as herein
adjudged. The same rate of interest shall be paid from July 11,
1959 on the total value of the land herein adjudged minus the
amount deposited as provisional value, or P151,859.80, such
interest to run until full payment is made to said defendant or
deposit therefor is made in court. All the intervenors having failed to
produce evidence in support of their respective interventions, said
interventions are ordered dismissed.
The costs shall be charged to the plaintiff.
On June 21, 1961 the Republic filed a motion for a new trial and/or reconsideration,
upon the grounds of newly-discovered evidence, that the decision was not supported
by the evidence, and that the decision was against the law, against which motion
defendants Castellvi and Toledo-Gozun filed their respective oppositions. On July 8,
1961 when the motion of the Republic for new trial and/or reconsideration was called
for hearing, the Republic filed a supplemental motion for new trial upon the ground of
additional newly-discovered evidence. This motion for new trial and/or reconsideration
was denied by the court on July 12, 1961.
On July 17, 1961 the Republic gave notice of its intention to appeal from the decision
of May 26, 1961 and the order of July 12, 1961. Defendant Castellvi also filed, on July
17, 1961, her notice of appeal from the decision of the trial court.
The Republic filed various ex-parte motions for extension of time within which to file its
record on appeal. The Republic's record on appeal was finally submitted on December
6, 1961.
Defendants Castellvi and Toledo-Gozun filed not only a joint opposition to the approval
of the Republic's record on appeal, but also a joint memorandum in support of their
opposition. The Republic also filed a memorandum in support of its prayer for the
approval of its record on appeal. On December 27, 1961 the trial court issued an order
declaring both the record on appeal filed by the Republic, and the record on appeal
filed by defendant Castellvi as having been filed out of time, thereby dismissing both
appeals.
On January 11, 1962 the Republic filed a "motion to strike out the order of December
27, 1961 and for reconsideration", and subsequently an amended record on appeal,
against which motion the defendants Castellvi and Toledo-Gozun filed their opposition.
On July 26, 1962 the trial court issued an order, stating that "in the interest of
expediency, the questions raised may be properly and finally determined by the
Supreme Court," and at the same time it ordered the Solicitor General to submit a
record on appeal containing copies of orders and pleadings specified therein. In an
order dated November 19, 1962, the trial court approved the Republic's record on
appeal as amended.
Defendant Castellvi did not insist on her appeal. Defendant Toledo-Gozun did not
appeal.
The motion to dismiss the Republic's appeal was reiterated by appellees Castellvi and
Toledo-Gozun before this Court, but this Court denied the motion.
In her motion of August 11, 1964, appellee Castellvi sought to increase the provisional
value of her land. The Republic, in its comment on Castellvi's motion, opposed the
same. This Court denied Castellvi's motion in a resolution dated October 2,1964.
The motion of appellees, Castellvi and Toledo-Gozun, dated October 6, 1969, praying
that they be authorized to mortgage the lands subject of expropriation, was denied by
this Court or October 14, 1969.
On February 14, 1972, Attys. Alberto Cacnio, and Associates, counsel for the estate of
the late Don Alfonso de Castellvi in the expropriation proceedings, filed a notice of
attorney's lien, stating that as per agreement with the administrator of the estate of Don
Alfonso de Castellvi they shall receive by way of attorney's fees, "the sum equivalent to
ten per centum of whatever the court may finally decide as the expropriated price of the
property subject matter of the case."
---------
Before this Court, the Republic contends that the lower court erred:
1. In finding the price of P10 per square meter of the lands subject
of the instant proceedings as just compensation;
2. In holding that the "taking" of the properties under expropriation
commenced with the filing of this action;
3. In ordering plaintiff-appellant to pay 6% interest on the adjudged
value of the Castellvi property to start from July of 1956;
4. In denying plaintiff-appellant's motion for new trial based on
newly discovered evidence.
In its brief, the Republic discusses the second error assigned as the first issue to be
considered. We shall follow the sequence of the Republic's discussion.
1. In support of the assigned error that the lower court erred in holding that the "taking"
of the properties under expropriation commenced with the filing of the complaint in this
case, the Republic argues that the "taking" should be reckoned from the year 1947
when by virtue of a special lease agreement between the Republic and appellee
Castellvi, the former was granted the "right and privilege" to buy the property should
the lessor wish to terminate the lease, and that in the event of such sale, it was
stipulated that the fair market value should be as of the time of occupancy; and that the
permanent improvements amounting to more that half a million pesos constructed
during a period of twelve years on the land, subject of expropriation, were indicative of
an agreed pattern of permanency and stability of occupancy by the Philippine Air Force
in the interest of national Security. 7
Appellee Castellvi, on the other hand, maintains that the "taking" of property under the
power of eminent domain requires two essential elements, to wit: (1) entrance and
occupation by condemn or upon the private property for more than a momentary or
limited period, and (2) devoting it to a public use in such a way as to oust the owner
and deprive him of all beneficial enjoyment of the property. This appellee argues that in
the instant case the first element is wanting, for the contract of lease relied upon
provides for a lease from year to year; that the second element is also wanting,
because the Republic was paying the lessor Castellvi a monthly rental of P445.58; and
that the contract of lease does not grant the Republic the "right and privilege" to buy
the premises "at the value at the time of occupancy." 8
Appellee Toledo-Gozun did not comment on the Republic's argument in support of the
second error assigned, because as far as she was concerned the Republic had not
taken possession of her lands prior to August 10, 1959. 9
In order to better comprehend the issues raised in the appeal, in so far as the Castellvi
property is concerned, it should be noted that the Castellvi property had been occupied
by the Philippine Air Force since 1947 under a contract of lease, typified by the
contract marked Exh. 4-Castellvi, the pertinent portions of which read:
CONTRACT OF LEASE
This AGREEMENT OF LEASE MADE AND ENTERED into by and
between INTESTATE ESTATE OF ALFONSO DE CASTELLVI,
represented by CARMEN M. DE CASTELLVI, Judicial
Administratrix ... hereinafter called the LESSOR and THE
REPUBLIC OF THE PHILIPPINES represented by MAJ. GEN.
CALIXTO DUQUE, Chief of Staff of the ARMED FORCES OF THE
PHILIPPINES, hereinafter called the LESSEE,
WITNESSETH:
1. For and in consideration of the rentals hereinafter reserved and
the mutual terms, covenants and conditions of the parties, the
LESSOR has, and by these presents does, lease and let unto the
LESSEE the following described land together with the
improvements thereon and appurtenances thereof, viz:
Un Terreno, Lote No. 27 del Plano de subdivision Psu 34752, parte
de la hacienda de Campauit, situado en el Barrio de San Jose,
Municipio de Floridablanca Pampanga. ... midiendo una extension
superficial de cuatro milliones once mil cuatro cientos trienta y cinco
(4,001,435) [sic] metros cuadrados, mas o menos.
 Out of the above described property, 75.93 hectares thereof are
actually occupied and covered by this contract. .
Above lot is more particularly described in TCT No. 1016, province
of
Pampanga ...
of which premises, the LESSOR warrants that he/she/they/is/are the registered
owner(s) and with full authority to execute a contract of this nature.
2. The term of this lease shall be for the period beginning July 1,
1952 the date the premises were occupied by the PHILIPPINE AIR
FORCE, AFP until June 30, 1953, subject to renewal for another
year at the option of the LESSEE or unless sooner terminated by
the LESSEE as hereinafter provided.
3. The LESSOR hereby warrants that the LESSEE shall have quiet,
peaceful and undisturbed possession of the demised premises
throughout the full term or period of this lease and the LESSOR
undertakes without cost to the LESSEE to eject all trespassers, but
should the LESSOR fail to do so, the LESSEE at its option may
proceed to do so at the expense of the LESSOR. The LESSOR
further agrees that should he/she/they sell or encumber all or any
part of the herein described premises during the period of this
lease, any conveyance will be conditioned on the right of the
LESSEE hereunder.
4. The LESSEE shall pay to the LESSOR as monthly rentals under
this lease the sum of FOUR HUNDRED FIFTY-FIVE PESOS &
58/100 (P455.58) ...
5. The LESSEE may, at any time prior to the termination of this
lease, use the property for any purpose or purposes and, at its own
costs and expense make alteration, install facilities and fixtures and
errect additions ... which facilities or fixtures ... so placed in, upon or
attached to the said premises shall be and remain property of the
LESSEE and may be removed therefrom by the LESSEE prior to
the termination of this lease. The LESSEE shall surrender
possession of the premises upon the expiration or termination of
this lease and if so required by the LESSOR, shall return the
premises in substantially the same condition as that existing at the
time same were first occupied by the AFP, reasonable and ordinary
wear and tear and damages by the elements or by circumstances
over which the LESSEE has no control excepted: PROVIDED, that
if the LESSOR so requires the return of the premises in such
condition, the LESSOR shall give written notice thereof to the
LESSEE at least twenty (20) days before the termination of the
lease and provided, further, that should the LESSOR give notice
within the time specified above, the LESSEE shall have the right
and privilege to compensate the LESSOR at the fair value or the
equivalent, in lieu of performance of its obligation, if any, to restore
the premises. Fair value is to be determined as the value at the time
of occupancy less fair wear and tear and depreciation during the
period of this lease.
6. The LESSEE may terminate this lease at any time during the
term hereof by giving written notice to the LESSOR at least thirty
(30) days in advance ...
7. The LESSEE should not be responsible, except under special
legislation for any damages to the premises by reason of combat
operations, acts of GOD, the elements or other acts and deeds not
due to the negligence on the part of the LESSEE.
8. This LEASE AGREEMENT supersedes and voids any and all
agreements and undertakings, oral or written, previously entered
into between the parties covering the property herein leased, the
same having been merged herein. This AGREEMENT may not be
modified or altered except by instrument in writing only duly signed
by the parties. 10
It was stipulated by the parties, that "the foregoing contract of lease (Exh. 4, Castellvi)
is 'similar in terms and conditions, including the date', with the annual contracts entered
into from year to year between defendant Castellvi and the Republic of the Philippines
(p. 17, t.s.n., Vol. III)". 11 It is undisputed, therefore, that the Republic occupied
Castellvi's land from July 1, 1947, by virtue of the above-mentioned contract, on a year
to year basis (from July 1 of each year to June 30 of the succeeding year) under the
terms and conditions therein stated.
Before the expiration of the contract of lease on June 30, 1956 the Republic sought to
renew the same but Castellvi refused. When the AFP refused to vacate the leased
premises after the termination of the contract, on July 11, 1956, Castellvi wrote to the
Chief of Staff, AFP, informing the latter that the heirs of the property had decided not to
continue leasing the property in question because they had decided to subdivide the
land for sale to the general public, demanding that the property be vacated within 30
days from receipt of the letter, and that the premises be returned in substantially the
same condition as before occupancy (Exh. 5 Castellvi). A follow-up letter was sent
on January 12, 1957, demanding the delivery and return of the property within one
month from said date (Exh. 6 Castellvi). On January 30, 1957, Lieutenant General
Alfonso Arellano, Chief of Staff, answered the letter of Castellvi, saying that it was
difficult for the army to vacate the premises in view of the permanent installations and
other facilities worth almost P500,000.00 that were erected and already established on
the property, and that, there being no other recourse, the acquisition of the property by
means of expropriation proceedings would be recommended to the President (Exhibit
"7" Castellvi).
Defendant Castellvi then brought suit in the Court of First Instance of Pampanga, in
Civil Case No. 1458, to eject the Philippine Air Force from the land. While this
ejectment case was pending, the Republic instituted these expropriation proceedings,
and, as stated earlier in this opinion, the Republic was placed in possession of the
lands on August 10, 1959, On November 21, 1959, the Court of First Instance of
Pampanga, dismissed Civil Case No. 1458, upon petition of the parties, in an order
which, in part, reads as follows:
 1. Plaintiff has agreed, as a matter of fact has already signed an
agreement with defendants, whereby she has agreed to receive the
rent of the lands, subject matter of the instant case from June 30,
1966 up to 1959 when the Philippine Air Force was placed in
possession by virtue of an order of the Court upon depositing the
provisional amount as fixed by the Provincial Appraisal Committee
with the Provincial Treasurer of Pampanga;
2. That because of the above-cited agreement wherein the
administratrix decided to get the rent corresponding to the rent from
1956 up to 1959 and considering that this action is one of illegal
detainer and/or to recover the possession of said land by virtue of
non-payment of rents, the instant case now has become moot and
academic and/or by virtue of the agreement signed by plaintiff, she
has waived her cause of action in the above-entitled case. 12
The Republic urges that the "taking " of Castellvi's property should be deemed as of
the year 1947 by virtue of afore-quoted lease agreement. In American Jurisprudence,
Vol. 26, 2nd edition, Section 157, on the subject of "Eminent Domain, we read the
definition of "taking" (in eminent domain) as follows:
Taking' under the power of eminent domain may be defined
generally as entering upon private property for more than a
momentary period, and, under the warrant or color of legal
authority, devoting it to a public use, or otherwise informally
appropriating or injuriously affecting it in such a way as substantially
to oust the owner and deprive him of all beneficial enjoyment
thereof. 13
Pursuant to the aforecited authority, a number of circumstances must be present in the
"taking" of property for purposes of eminent domain.
First, the expropriator must enter a private property. This circumstance is present in the
instant case, when by virtue of the lease agreement the Republic, through the AFP,
took possession of the property of Castellvi.
Second, the entrance into private property must be for more than a momentary period.
"Momentary" means, "lasting but a moment; of but a moment's duration" (The Oxford
English Dictionary, Volume VI, page 596); "lasting a very short time; transitory; having
a very brief life; operative or recurring at every moment" (Webster's Third International
Dictionary, 1963 edition.) The word "momentary" when applied to possession or
occupancy of (real) property should be construed to mean "a limited period" not
indefinite or permanent. The aforecited lease contract was for a period of one year,
renewable from year to year. The entry on the property, under the lease, is temporary,
and considered transitory. The fact that the Republic, through the AFP, constructed
some installations of a permanent nature does not alter the fact that the entry into the
land was transitory, or intended to last a year, although renewable from year to year by
consent of 'The owner of the land. By express provision of the lease agreement the
Republic, as lessee, undertook to return the premises in substantially the same
condition as at the time the property was first occupied by the AFP. It is claimed that
the intention of the lessee was to occupy the land permanently, as may be inferred
from the construction of permanent improvements. But this "intention" cannot prevail
over the clear and express terms of the lease contract. Intent is to be deduced from the
language employed by the parties, and the terms 'of the contract, when unambiguous,
as in the instant case, are conclusive in the absence of averment and proof of mistake
or fraud the question being not what the intention was, but what is expressed in the
language used. (City of Manila v. Rizal Park Co., Inc., 53 Phil. 515, 525); Magdalena
Estate, Inc. v. Myrick, 71 Phil. 344, 348). Moreover, in order to judge the intention of
the contracting parties, their contemporaneous and subsequent acts shall be principally
considered (Art. 1371, Civil Code). If the intention of the lessee (Republic) in 1947 was
really to occupy permanently Castellvi's property, why was the contract of lease
entered into on year to year basis? Why was the lease agreement renewed from year
to year? Why did not the Republic expropriate this land of Castellvi in 1949 when,
according to the Republic itself, it expropriated the other parcels of land that it occupied
at the same time as the Castellvi land, for the purpose of converting them into a jet air
base? 14 It might really have been the intention of the Republic to expropriate the lands
in question at some future time, but certainly mere notice - much less an implied notice
of such intention on the part of the Republic to expropriate the lands in the future did
not, and could not, bind the landowner, nor bind the land itself. The expropriation must
be actually commenced in court (Republic vs. Baylosis, et al., 96 Phil. 461, 484).
Third, the entry into the property should be under warrant or color of legal authority.
This circumstance in the "taking" may be considered as present in the instant case,
because the Republic entered the Castellvi property as lessee.
Fourth, the property must be devoted to a public use or otherwise informally
appropriated or injuriously affected. It may be conceded that the circumstance of the
property being devoted to public use is present because the property was used by the
air force of the AFP.
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. In the instant case,
the entry of the Republic into the property and its utilization of the same for public use
did not oust Castellvi and deprive her of all beneficial enjoyment of the property.
Castellvi remained as owner, and was continuously recognized as owner by the
Republic, as shown by the renewal of the lease contract from year to year, and by the
provision in the lease contract whereby the Republic undertook to return the property to
Castellvi when the lease was terminated. Neither was Castellvi deprived of all the
beneficial enjoyment of the property, because the Republic was bound to pay, and had
been paying, Castellvi the agreed monthly rentals until the time when it filed the
complaint for eminent domain on June 26, 1959.
It is clear, therefore, that the "taking" of Catellvi's property for purposes of eminent
domain cannot be considered to have taken place in 1947 when the Republic
commenced to occupy the property as lessee thereof. We find merit in the contention
of Castellvi that two essential elements in the "taking" of property under the power of
eminent domain, namely: (1) that the entrance and occupation by the condemnor must
be for a permanent, or indefinite period, and (2) that in devoting the property to public
use the owner was ousted from the property and deprived of its beneficial use, were
not present when the Republic entered and occupied the Castellvi property in 1947.
Untenable also is the Republic's contention that although the contract between the
parties was one of lease on a year to year basis, it was "in reality a more or less
permanent right to occupy the premises under the guise of lease with the 'right and
privilege' to buy the property should the lessor wish to terminate the lease," and "the
right to buy the property is merged as an integral part of the lease relationship ... so
much so that the fair market value has been agreed upon, not, as of the time of
purchase, but as of the time of occupancy" 15 We cannot accept the Republic's
contention that a lease on a year to year basis can give rise to a permanent right to
occupy, since by express legal provision a lease made for a determinate time, as was
the lease of Castellvi's land in the instant case, ceases upon the day fixed, without
need of a demand (Article 1669, Civil Code). Neither can it be said that the right of
eminent domain may be exercised by simply leasing the premises to be expropriated
(Rule 67, Section 1, Rules of Court). Nor can it be accepted that the Republic would
enter into a contract of lease where its real intention was to buy, or why the Republic
should enter into a simulated contract of lease ("under the guise of lease", as
expressed by counsel for the Republic) when all the time the Republic had the right of
eminent domain, and could expropriate Castellvi's land if it wanted to without resorting
to any guise whatsoever. Neither can we see how a right to buy could be merged in a
contract of lease in the absence of any agreement between the parties to that effect.
To sustain the contention of the Republic is to sanction a practice whereby in order to
secure a low price for a land which the government intends to expropriate (or would
eventually expropriate) it would first negotiate with the owner of the land to lease the
land (for say ten or twenty years) then expropriate the same when the lease is about to
terminate, then claim that the "taking" of the property for the purposes of the
expropriation be reckoned as of the date when the Government started to occupy the
property under the lease, and then assert that the value of the property being
expropriated be reckoned as of the start of the lease, in spite of the fact that the value
of the property, for many good reasons, had in the meantime increased during the
period of the lease. This would be sanctioning what obviously is a deceptive scheme,
which would have the effect of depriving the owner of the property of its true and fair
market value at the time when the expropriation proceedings were actually instituted in
court. The Republic's claim that it had the "right and privilege" to buy the property at the
value that it had at the time when it first occupied the property as lessee nowhere
appears in the lease contract. What was agreed expressly in paragraph No. 5 of the
lease agreement was that, should the lessor require the lessee to return the premises
in the same condition as at the time the same was first occupied by the AFP, the
lessee would have the "right and privilege" (or option) of paying the lessor what it
would fairly cost to put the premises in the same condition as it was at the
commencement of the lease, in lieu of the lessee's performance of the undertaking to
put the land in said condition. The "fair value" at the time of occupancy, mentioned in
the lease agreement, does not refer to the value of the property if bought by the lessee,
but refers to the cost of restoring the property in the same condition as of the time
when the lessee took possession of the property. Such fair value cannot refer to the
purchase price, for purchase was never intended by the parties to the lease contract. It
is a rule in the interpretation of contracts that "However general the terms of a contract
may be, they shall not be understood to comprehend things that are distinct and cases
that are different from those upon which the parties intended to agree" (Art. 1372, Civil
Code).
We hold, therefore, that the "taking" of the Castellvi property should not be reckoned as
of the year 1947 when the Republic first occupied the same pursuant to the contract of
lease, and that the just compensation to be paid for the Castellvi property should not
be determined on the basis of the value of the property as of that year. The lower court
did not commit an error when it held that the "taking" of the property under
expropriation commenced with the filing of the complaint in this case.
Under Section 4 of Rule 67 of the Rules of Court, 16 the "just compensation" is to be
determined as of the date of the filing of the complaint. This Court has ruled that when
the taking of the property sought to be expropriated coincides with the commencement
of the expropriation proceedings, or takes place subsequent to the filing of the
complaint for eminent domain, the just compensation should be determined as of the
date of the filing of the complaint. (Republic vs. Philippine National Bank, L-14158,
April 12, 1961, 1 SCRA 957, 961-962). In the instant case, it is undisputed that the
Republic was placed in possession of the Castellvi property, by authority of the court,
on August 10, 1959. The "taking" of the Castellvi property for the purposes of
determining the just compensation to be paid must, therefore, be reckoned as of June
26, 1959 when the complaint for eminent domain was filed.
Regarding the two parcels of land of Toledo-Gozun, also sought to be expropriated,
which had never been under lease to the Republic, the Republic was placed in
possession of said lands, also by authority of the court, on August 10, 1959, The taking
of those lands, therefore, must also be reckoned as of June 26, 1959, the date of the
filing of the complaint for eminent domain.
2. Regarding the first assigned error discussed as the second issue the Republic
maintains that, even assuming that the value of the expropriated lands is to be
determined as of June 26, 1959, the price of P10.00 per square meter fixed by the
lower court "is not only exhorbitant but also unconscionable, and almost fantastic". On
the other hand, both Castellvi and Toledo-Gozun maintain that their lands are
residential lands with a fair market value of not less than P15.00 per square meter.
The lower court found, and declared, that the lands of Castellvi and Toledo-Gozun are
residential lands. The finding of the lower court is in consonance with the unanimous
opinion of the three commissioners who, in their report to the court, declared that the
lands are residential lands.
The Republic assails the finding that the lands are residential, contending that the
plans of the appellees to convert the lands into subdivision for residential purposes
were only on paper, there being no overt acts on the part of the appellees which
indicated that the subdivision project had been commenced, so that any compensation
to be awarded on the basis of the plans would be speculative. The Republic's
contention is not well taken. We find evidence showing that the lands in question had
ceased to be devoted to the production of agricultural crops, that they had become
adaptable for residential purposes, and that the appellees had actually taken steps to
convert their lands into residential subdivisions even before the Republic filed the
complaint for eminent domain. In the case of City of Manila vs. Corrales (32 Phil. 82,
98) this Court laid down basic guidelines in determining the value of the property
expropriated for public purposes. This Court said:
In determining the value of land appropriated for public
purposes, the same consideration are to be regarded as in a sale of
property between private parties. The inquiry, in such cases, must
be what is the property worth in the market, viewed not merely with
reference to the uses to which it is at the time applied, but with
reference to the uses to which it is plainly adapted, that is to say,
What is it worth from its availability for valuable uses?
So many and varied are the circumstances to be taken into account
in determining the value of property condemned for public
purposes, that it is practically impossible to formulate a rule to
 govern its appraisement in all cases. Exceptional circumstances will
modify the most carefully guarded rule, but, as a general thing, we
should say that the compensation of the owner is to be estimated by
reference to the use for which the property is suitable, having
regard to the existing business or wants of the community, or such
as may be reasonably expected in the immediate future. (Miss. and
Rum River Boom Co. vs. Patterson, 98 U.S., 403).
In expropriation proceedings, therefore, the owner of the land has the right to its value
for the use for which it would bring the most in the market. 17 The owner may thus show
every advantage that his property possesses, present and prospective, in order that
the price it could be sold for in the market may be satisfactorily determined. 18 The
owner may also show that the property is suitable for division into village or town
lots. 19
The trial court, therefore, correctly considered, among other circumstances, the
proposed subdivision plans of the lands sought to be expropriated in finding that those
lands are residential lots. This finding of the lower court is supported not only by the
unanimous opinion of the commissioners, as embodied in their report, but also by the
Provincial Appraisal Committee of the province of Pampanga composed of the
Provincial Treasurer, the Provincial Auditor and the District Engineer. In the minutes of
the meeting of the Provincial Appraisal Committee, held on May 14, 1959 (Exh. 13-
Castellvi) We read in its Resolution No. 10 the following:
3. Since 1957 the land has been classified as residential in view of
its proximity to the air base and due to the fact that it was not being
devoted to agriculture. In fact, there is a plan to convert it into a
subdivision for residential purposes. The taxes due on the property
have been paid based on its classification as residential land;
The evidence shows that Castellvi broached the idea of subdividing her land into
residential lots as early as July 11, 1956 in her letter to the Chief of Staff of the Armed
Forces of the Philippines. (Exh. 5-Castellvi) As a matter of fact, the layout of the
subdivision plan was tentatively approved by the National Planning Commission on
September 7, 1956. (Exh. 8-Castellvi). The land of Castellvi had not been devoted to
agriculture since 1947 when it was leased to the Philippine Army. In 1957 said land
was classified as residential, and taxes based on its classification as residential had
been paid since then (Exh. 13-Castellvi). The location of the Castellvi land justifies its
suitability for a residential subdivision. As found by the trial court, "It is at the left side of
the entrance of the Basa Air Base and bounded on two sides by roads (Exh. 13-
Castellvi), paragraphs 1 and 2, Exh. 12-Castellvi), the poblacion, (of Floridablanca) the
municipal building, and the Pampanga Sugar Mills are closed by. The barrio
schoolhouse and chapel are also near (T.S.N. November 23,1960, p. 68)." 20
The lands of Toledo-Gozun (Lot 1-B and Lot 3) are practically of the same condition as
the land of Castellvi. The lands of Toledo-Gozun adjoin the land of Castellvi. They are
also contiguous to the Basa Air Base, and are along the road. These lands are near
the barrio schoolhouse, the barrio chapel, the Pampanga Sugar Mills, and the
poblacion of Floridablanca (Exhs. 1, 3 and 4-Toledo-Gozun). As a matter of fact,
regarding lot 1-B it had already been surveyed and subdivided, and its conversion into
a residential subdivision was tentatively approved by the National Planning
Commission on July 8, 1959 (Exhs. 5 and 6 Toledo-Gozun). As early as June, 1958,
no less than 32 man connected with the Philippine Air Force among them
commissioned officers, non-commission officers, and enlisted men had requested Mr.
and Mrs. Joaquin D. Gozun to open a subdivision on their lands in question (Exhs. 8,
8-A to 8-ZZ-Toledo-Gozun). 21
We agree with the findings, and the conclusions, of the lower court that the lands that
are the subject of expropriation in the present case, as of August 10, 1959 when the
same were taken possession of by the Republic, were residential lands and were
adaptable for use as residential subdivisions. Indeed, the owners of these lands have
the right to their value for the use for which they would bring the most in the market at
the time the same were taken from them. The most important issue to be resolved in
the present case relates to the question of what is the just compensation that should be
paid to the appellees.
The Republic asserts that the fair market value of the lands of the appellees is P.20 per
square meter. The Republic cites the case of Republic vs. Narciso, et al., L-6594,
which this Court decided on May 18, 1956. The Narciso case involved lands that
belonged to Castellvi and Toledo-Gozun, and to one Donata Montemayor, which were
expropriated by the Republic in 1949 and which are now the site of the Basa Air Base.
In the Narciso case this Court fixed the fair market value at P.20 per square meter. The
lands that are sought to be expropriated in the present case being contiguous to the
lands involved in the Narciso case, it is the stand of the Republic that the price that
should be fixed for the lands now in question should also be at P.20 per square meter.
We can not sustain the stand of the Republic. We find that the price of P.20 per square
meter, as fixed by this Court in the Narciso case, was based on the allegation of the
defendants (owners) in their answer to the complaint for eminent domain in that case
that the price of their lands was P2,000.00 per hectare and that was the price that they
asked the court to pay them. This Court said, then, that the owners of the land could
not be given more than what they had asked, notwithstanding the recommendation of
the majority of the Commission on Appraisal which was adopted by the trial court
that the fair market value of the lands was P3,000.00 per hectare. We also find that the
price of P.20 per square meter in the Narciso case was considered the fair market
value of the lands as of the year 1949 when the expropriation proceedings were
instituted, and at that time the lands were classified as sugar lands, and assessed for
taxation purposes at around P400.00 per hectare, or P.04 per square meter. 22 While
the lands involved in the present case, like the lands involved in the Narciso case,
might have a fair market value of P.20 per square meter in 1949, it can not be denied
that ten years later, in 1959, when the present proceedings were instituted, the value of
those lands had increased considerably. The evidence shows that since 1949 those
lands were no longer cultivated as sugar lands, and in 1959 those lands were already
classified, and assessed for taxation purposes, as residential lands. In 1959 the land of
Castellvi was assessed at P1.00 per square meter. 23
The Republic also points out that the Provincial Appraisal Committee of Pampanga, in
its resolution No. 5 of February 15, 1957 (Exhibit D), recommended the sum of P.20
per square meter as the fair valuation of the Castellvi property. We find that this
resolution was made by the Republic the basis in asking the court to fix the provisional
value of the lands sought to be expropriated at P259,669.10, which was approved by
the court. 24 It must be considered, however, that the amount fixed as the provisional
value of the lands that are being expropriated does not necessarily represent the true
and correct value of the land. The value is only "provisional" or "tentative", to serve as
the basis for the immediate occupancy of the property being expropriated by the
condemnor. The records show that this resolution No. 5 was repealed by the same
Provincial Committee on Appraisal in its resolution No. 10 of May 14, 1959 (Exhibit 13-
Castellvi). In that resolution No. 10, the appraisal committee stated that "The
Committee has observed that the value of the land in this locality has increased since
1957 ...", and recommended the price of P1.50 per square meter. It follows, therefore,
that, contrary to the stand of the Republic, that resolution No. 5 of the Provincial
Appraisal Committee can not be made the basis for fixing the fair market value of the
lands of Castellvi and Toledo-Gozun.
The Republic further relied on the certification of the Acting Assistant Provincial
Assessor of Pampanga, dated February 8, 1961 (Exhibit K), to the effect that in 1950
the lands of Toledo-Gozun were classified partly as sugar land and partly as urban
land, and that the sugar land was assessed at P.40 per square meter, while part of the
urban land was assessed at P.40 per square meter and part at P.20 per square meter;
and that in 1956 the Castellvi land was classified as sugar land and was assessed at
P450.00 per hectare, or P.045 per square meter. We can not also consider this
certification of the Acting Assistant Provincial Assessor as a basis for fixing the fair
market value of the lands of Castellvi and Toledo-Gozun because, as the evidence
shows, the lands in question, in 1957, were already classified and assessed for
taxation purposes as residential lands. The certification of the assessor refers to the
year 1950 as far as the lands of Toledo-Gozun are concerned, and to the year 1956 as
far as the land of Castellvi is concerned. Moreover, this Court has held that the
valuation fixed for the purposes of the assessment of the land for taxation purposes
can not bind the landowner where the latter did not intervene in fixing it. 25
On the other hand, the Commissioners, appointed by the court to appraise the lands
that were being expropriated, recommended to the court that the price of P10.00 per
square meter would be the fair market value of the lands. The commissioners made
their recommendation on the basis of their observation after several ocular inspections
of the lands, of their own personal knowledge of land values in the province of
Pampanga, of the testimonies of the owners of the land, and other witnesses, and of
documentary evidence presented by the appellees. Both Castellvi and Toledo-Gozun
testified that the fair market value of their respective land was at P15.00 per square
meter. The documentary evidence considered by the commissioners consisted of
deeds of sale of residential lands in the town of San Fernando and in Angeles City, in
the province of Pampanga, which were sold at prices ranging from P8.00 to P20.00 per
square meter (Exhibits 15, 16, 17, 18, 19, 20, 21, 22, 23-Castellvi). The commissioners
also considered the decision in Civil Case No. 1531 of the Court of First Instance of
Pampanga, entitled Republic vs. Sabina Tablante, which was expropriation case filed
on January 13, 1959, involving a parcel of land adjacent to the Clark Air Base in
Angeles City, where the court fixed the price at P18.00 per square meter (Exhibit 14-
Castellvi). In their report, the commissioners, among other things, said:
... This expropriation case is specially pointed out, because the
circumstances and factors involved therein are similar in many
respects to the defendants' lands in this case. The land in Civil
Case No. 1531 of this Court and the lands in the present case (Civil
Case No. 1623) are both near the air bases, the Clark Air Base and
the Basa Air Base respectively. There is a national road fronting
them and are situated in a first-class municipality. As added
advantage it may be said that the Basa Air Base land is very near
the sugar mill at Del Carmen, Floridablanca, Pampanga, owned by
the Pampanga Sugar Mills. Also just stone's throw away from the
same lands is a beautiful vacation spot at Palacol, a sitio of the
town of Floridablanca, which counts with a natural swimming pool
for vacationists on weekends. These advantages are not found in
the case of the Clark Air Base. The defendants' lands are nearer to
the poblacion of Floridablanca then Clark Air Base is nearer (sic) to
the poblacion of Angeles, Pampanga.
The deeds of absolute sale, according to the undersigned
commissioners, as well as the land in Civil Case No. 1531 are
competent evidence, because they were executed during the year
1959 and before August 10 of the same year. More specifically so
the land at Clark Air Base which coincidentally is the subject matter
in the complaint in said Civil Case No. 1531, it having been filed on
January 13, 1959 and the taking of the land involved therein was
ordered by the Court of First Instance of Pampanga on January 15,
1959, several months before the lands in this case were taken by
the plaintiffs ....
From the above and considering further that the lowest as well as
the highest price per square meter obtainable in the market of
Pampanga relative to subdivision lots within its jurisdiction in the
year 1959 is very well known by the Commissioners, the
Commission finds that the lowest price that can be awarded to the
lands in question is P10.00 per square meter. 26
The lower court did not altogether accept the findings of the Commissioners based on
the documentary evidence, but it considered the documentary evidence as basis for
comparison in determining land values. The lower court arrived at the conclusion that
"the unanimous recommendation of the commissioners of ten (P10.00) pesos per
square meter for the three lots of the defendants subject of this action is fair and
just". 27 In arriving at its conclusion, the lower court took into consideration, among
other circumstances, that the lands are titled, that there is a rising trend of land values,
and the lowered purchasing power of the Philippine peso.
In the case of Manila Railroad Co. vs. Caligsihan, 40 Phil. 326, 328, this Court said:
A court of first instance or, on appeal, the Supreme Court, may
change or modify the report of the commissioners by increasing or
reducing the amount of the award if the facts of the case so justify.
While great weight is attached to the report of the commissioners,
yet a court may substitute therefor its estimate of the value of the
property as gathered from the record in certain cases, as, where the
commissioners have applied illegal principles to the evidence
submitted to them, or where they have disregarded a clear
preponderance of evidence, or where the amount allowed is either
palpably inadequate or excessive. 28
The report of the commissioners of appraisal in condemnation proceedings are not
binding, but merely advisory in character, as far as the court is concerned. 29 In our
analysis of the report of the commissioners, We find points that merit serious
consideration in the determination of the just compensation that should be paid to
Castellvi and Toledo-Gozun for their lands. It should be noted that the commissioners
had made ocular inspections of the lands and had considered the nature and
similarities of said lands in relation to the lands in other places in the province of
Pampanga, like San Fernando and Angeles City. We cannot disregard the
observations of the commissioners regarding the circumstances that make the lands in
question suited for residential purposes their location near the Basa Air Base, just
like the lands in Angeles City that are near the Clark Air Base, and the facilities that
obtain because of their nearness to the big sugar central of the Pampanga Sugar mills,
and to the flourishing first class town of Floridablanca. It is true that the lands in
question are not in the territory of San Fernando and Angeles City, but, considering the
facilities of modern communications, the town of Floridablanca may be considered
practically adjacent to San Fernando and Angeles City. It is not out of place, therefore,
to compare the land values in Floridablanca to the land values in San Fernando and
Angeles City, and form an idea of the value of the lands in Floridablanca with reference
to the land values in those two other communities.
The important factor in expropriation proceeding is that the owner is awarded the just
compensation for his property. We have carefully studied the record, and the evidence,
in this case, and after considering the circumstances attending the lands in question
We have arrived at the conclusion that the price of P10.00 per square meter, as
recommended by the commissioners and adopted by the lower court, is quite high. It is
Our considered view that the price of P5.00 per square meter would be a fair valuation
of the lands in question and would constitute a just compensation to the owners
thereof. In arriving at this conclusion We have particularly taken into consideration the
resolution of the Provincial Committee on Appraisal of the province of Pampanga
informing, among others, that in the year 1959 the land of Castellvi could be sold for
from P3.00 to P4.00 per square meter, while the land of Toledo-Gozun could be sold
for from P2.50 to P3.00 per square meter. The Court has weighed all the
circumstances relating to this expropriations proceedings, and in fixing the price of the
lands that are being expropriated the Court arrived at a happy medium between the
price as recommended by the commissioners and approved by the court, and the price
advocated by the Republic. This Court has also taken judicial notice of the fact that the
value of the Philippine peso has considerably gone down since the year
1959. 30 Considering that the lands of Castellvi and Toledo-Gozun are adjoining each
other, and are of the same nature, the Court has deemed it proper to fix the same price
for all these lands.
3. The third issue raised by the Republic relates to the payment of
interest. The Republic maintains that the lower court erred when it
ordered the Republic to pay Castellvi interest at the rate of 6% per
annum on the total amount adjudged as the value of the land of
Castellvi, from July 1, 1956 to July 10, 1959. We find merit in this
assignment of error.
In ordering the Republic to pay 6% interest on the total value of the land of Castellvi
from July 1, 1956 to July 10, 1959, the lower court held that the Republic had illegally
possessed the land of Castellvi from July 1, 1956, after its lease of the land had
expired on June 30, 1956, until August 10, 1959 when the Republic was placed in
possession of the land pursuant to the writ of possession issued by the court. What
really happened was that the Republic continued to occupy the land of Castellvi after
the expiration of its lease on June 30, 1956, so much so that Castellvi filed an
ejectment case against the Republic in the Court of First Instance of
Pampanga. 31 However, while that ejectment case was pending, the Republic filed the
complaint for eminent domain in the present case and was placed in possession of the
land on August 10, 1959, and because of the institution of the expropriation
proceedings the ejectment case was later dismissed. In the order dismissing the
ejectment case, the Court of First Instance of Pampanga said:
Plaintiff has agreed, as a matter of fact has already signed an
agreement with defendants, whereby she had agreed to receive the
rent of the lands, subject matter of the instant case from June 30,
1956 up to 1959 when the Philippine Air Force was placed in
possession by virtue of an order of the Court upon depositing the
provisional amount as fixed by the Provincial Appraisal Committee
with the Provincial Treasurer of
Pampanga; ...
If Castellvi had agreed to receive the rentals from June 30, 1956 to August 10, 1959,
she should be considered as having allowed her land to be leased to the Republic until
August 10, 1959, and she could not at the same time be entitled to the payment of
interest during the same period on the amount awarded her as the just compensation
of her land. The Republic, therefore, should pay Castellvi interest at the rate of 6% per
annum on the value of her land, minus the provisional value that was deposited, only
from July 10, 1959 when it deposited in court the provisional value of the land.
4. The fourth error assigned by the Republic relates to the denial by the lower court of
its motion for a new trial based on nearly discovered evidence. We do not find merit in
this assignment of error.
After the lower court had decided this case on May 26, 1961, the Republic filed a
motion for a new trial, supplemented by another motion, both based upon the ground of
newly discovered evidence. The alleged newly discovered evidence in the motion filed
on June 21, 1961 was a deed of absolute sale-executed on January 25, 1961, showing
that a certain Serafin Francisco had sold to Pablo L. Narciso a parcel of sugar land
having an area of 100,000 square meters with a sugar quota of 100 piculs, covered by
P.A. No. 1701, situated in Barrio Fortuna, Floridablanca, for P14,000, or P.14 per
square meter.
In the supplemental motion, the alleged newly discovered evidence were: (1) a deed of
sale of some 35,000 square meters of land situated at Floridablanca for P7,500.00 (or
about P.21 per square meter) executed in July, 1959, by the spouses Evelyn D. Laird
and Cornelio G. Laird in favor of spouses Bienvenido S. Aguas and Josefina Q. Aguas;
and (2) a deed of absolute sale of a parcel of land having an area of 4,120,101 square
meters, including the sugar quota covered by Plantation Audit No. 161 1345, situated
at Floridablanca, Pampanga, for P860.00 per hectare (a little less than P.09 per square
meter) executed on October 22, 1957 by Jesus Toledo y Mendoza in favor of the Land
Tenure Administration.
We find that the lower court acted correctly when it denied the motions for a new trial.
To warrant the granting of a new trial based on the ground of newly discovered
evidence, it must appear that the evidence was discovered after the trial; that even with
the exercise of due diligence, the evidence could not have been discovered and
produced at the trial; and that the evidence is of such a nature as to alter the result of
the case if admitted. 32 The lower court correctly ruled that these requisites were not
complied with.
The lower court, in a well-reasoned order, found that the sales made by Serafin
Francisco to Pablo Narciso and that made by Jesus Toledo to the Land Tenure
Administration were immaterial and irrelevant, because those sales covered
sugarlands with sugar quotas, while the lands sought to be expropriated in the instant
case are residential lands. The lower court also concluded that the land sold by the
spouses Laird to the spouses Aguas was a sugar land.
We agree with the trial court. In eminent domain proceedings, in order that evidence as
to the sale price of other lands may be admitted in evidence to prove the fair market
value of the land sought to be expropriated, the lands must, among other things, be
shown to be similar.
But even assuming, gratia argumenti, that the lands mentioned in those deeds of sale
were residential, the evidence would still not warrant the grant of a new trial, for said
evidence could have been discovered and produced at the trial, and they cannot be
considered newly discovered evidence as contemplated in Section 1(b) of Rule 37 of
the Rules of Court. Regarding this point, the trial court said:
The Court will now show that there was no reasonable diligence
employed.
The land described in the deed of sale executed by Serafin
Francisco, copy of which is attached to the original motion, is
covered by a Certificate of Title issued by the Office of the Register
of Deeds of Pampanga. There is no question in the mind of the
court but this document passed through the Office of the Register of
Deeds for the purpose of transferring the title or annotating the sale
on the certificate of title. It is true that Fiscal Lagman went to the
Office of the Register of Deeds to check conveyances which may
be presented in the evidence in this case as it is now sought to be
done by virtue of the motions at bar, Fiscal Lagman, one of the
lawyers of the plaintiff, did not exercise reasonable diligence as
required by the rules. The assertion that he only went to the office of
the Register of Deeds 'now and then' to check the records in that
office only shows the half-hazard [sic] manner by which the plaintiff
looked for evidence to be presented during the hearing before the
Commissioners, if it is at all true that Fiscal Lagman did what he is
supposed to have done according to Solicitor Padua. It would have
been the easiest matter for plaintiff to move for the issuance of a
subpoena duces tecum directing the Register of Deeds of
Pampanga to come to testify and to bring with him all documents
found in his office pertaining to sales of land in Floridablanca
adjacent to or near the lands in question executed or recorded from
1958 to the present. Even this elementary precaution was not done
by plaintiff's numerous attorneys.
The same can be said of the deeds of sale attached to the
supplementary motion. They refer to lands covered by certificate of
title issued by the Register of Deeds of Pampanga. For the same
reason they could have been easily discovered if reasonable
diligence has been exerted by the numerous lawyers of the plaintiff
in this case. It is noteworthy that all these deeds of sale could be
found in several government offices, namely, in the Office of the
Register of Deeds of Pampanga, the Office of the Provincial
Assessor of Pampanga, the Office of the Clerk of Court as a part of
notarial reports of notaries public that acknowledged these
documents, or in the archives of the National Library. In respect to
Annex 'B' of the supplementary motion copy of the document could
also be found in the Office of the Land Tenure Administration,
another government entity. Any lawyer with a modicum of ability
handling this expropriation case would have right away though [sic]
of digging up documents diligently showing conveyances of lands
near or around the parcels of land sought to be expropriated in this
case in the offices that would have naturally come to his mind such
as the offices mentioned above, and had counsel for the movant
really exercised the reasonable diligence required by the Rule'
undoubtedly they would have been able to find these documents
and/or caused the issuance of subpoena duces tecum. ...
It is also recalled that during the hearing before the Court of the
Report and Recommendation of the Commissioners and objection
thereto, Solicitor Padua made the observation:
I understand, Your Honor, that there was a sale that took place in
this place of land recently where the land was sold for P0.20 which
is contiguous to this land.
The Court gave him permission to submit said document subject to
the approval of the Court. ... This was before the decision was
rendered, and later promulgated on May 26, 1961 or more than one
month after Solicitor Padua made the above observation. He could
have, therefore, checked up the alleged sale and moved for a
reopening to adduce further evidence. He did not do so. He forgot
to present the evidence at a more propitious time. Now, he seeks to
introduce said evidence under the guise of newly-discovered
evidence. Unfortunately the Court cannot classify it as newly-
discovered evidence, because tinder the circumstances, the correct
qualification that can be given is 'forgotten evidence'. Forgotten
however, is not newly-discovered
evidence. 33
The granting or denial of a motion for new trial is, as a general rule, discretionary with
the trial court, whose judgment should not be disturbed unless there is a clear showing
of abuse of discretion. 34 We do not see any abuse of discretion on the part of the lower
court when it denied the motions for a new trial.
WHEREFORE, the decision appealed from is modified, as follows:
(a) the lands of appellees Carmen Vda. de Castellvi and Maria
Nieves Toledo-Gozun, as described in the complaint, are declared
expropriated for public use;
(b) the fair market value of the lands of the appellees is fixed at
P5.00 per square meter;
 (c) the Republic must pay appellee Castellvi the sum of
P3,796,495.00 as just compensation for her one parcel of land that
has an area of 759,299 square meters, minus the sum of
P151,859.80 that she withdrew out of the amount that was
deposited in court as the provisional value of the land, with interest
at the rate of 6% per annum from July 10, 1959 until the day full
payment is made or deposited in court;

(d) the Republic must pay appellee Toledo-Gozun the sum of

P2,695,225.00 as the just compensation for her two parcels of land
that have a total area of 539,045 square meters, minus the sum of
P107,809.00 that she withdrew out of the amount that was
deposited in court as the provisional value of her lands, with interest
at the rate of 6%, per annum from July 10, 1959 until the day full
payment is made or deposited in court; (e) the attorney's lien of
Atty. Alberto Cacnio is enforced; and

(f) the costs should be paid by appellant Republic of the Philippines,

as provided in Section 12, Rule 67, and in Section 13, Rule 141, of
the Rules of Court.

IT IS SO ORDERED.
 G.R. No. L-74376:
Republic of the Philippines
SUPREME COURT Raul S. Sison Law Offices for petitioner.
Manila
Sergio L. Guadiz for private respondents.
EN BANC
G.R. No. L-76394:
G.R. No. 71169 December 22, 1988
Raul S. Sison Law Offices for petitioner.
JOSE D. SANGALANG and LUTGARDA D. SANGALANG, petitioners, FELIX C.
GASTON and DOLORES R. GASTON, JOSE V. BRIONES and ALICIA R.
Gruba, Tanlimco Lamso and Apuhin Law Offices for respondents.
BRIONES, and BEL-AIR VILLAGE ASSOCIATION, INC., intervenors-petitioners,
vs.
INTERMEDIATE APPELLATE COURT, and AYALA CORPORATION, respondents. G.R. No. L-78182:

G.R. No. 74376 December 22, 1988 Funk & Associates for petitioners.

BEL-AIR VILLAGE ASSOCIATION, INC., petitioner, Tee Tomas & Associates for respondents.
vs.
THE INTERMEDIATE APPELLATE COURT, ROSARIO DE JESUS TENORIO, and G.R. No. L-82281:
CECILIA GONZALVEZ, respondents.
Funk & Associates for petitioner.
G.R. No. 76394 December 22,1988
Castillo, Laman, Tan & Associates for private respondents.
BEL-AIR VILLAGE ASSOCIATION, INC., petitioner,
vs.
THE COURT OF APPEALS, and EDUARDO and BUENA
ROMUALDEZ respondents.
SARMIENTO, J.:
G.R. No. 78182 December 22, 1988
Before the Court are five consolidated petitions, 1 docketed as G.R. Nos. 71169,
BEL-AIR VILLAGE ASSOCIATION, INC., petitioner, 74376, 76394, 78182, and 82281 hereof, in the nature of appeals (by certiorari under
vs. Rule 45 of the Rules of Court) from five decisions of the Court of Appeals, denying
COURT OF APPEALS, DOLORES FILLEY, and J. ROMERO & specific performance and damages.
ASSOCIATES, respondents.
The proceedings were commenced at the first instance by Jose Sangalang, joined by
G.R. No. 82281 December 22, 1988 his wife Lutgarda Sangalang, both residents of No. 110 Jupiter Street, Makati, Metro
Manila (G.R. No. 71169) to enforce by specific performance restrictive easement upon
property, specifically the Bel- Air Village subdivision in Makati, Metro Manila, pursuant
BEL-AIR VILLAGE ASSOCIATION, INC, petitioner, to stipulations embodied in the deeds of sale covering the subdivision, and for
vs. damages. Later, the Sangalangs were joined by Felix Gaston, a resident of No. 64
COURT OF APPEALS, VIOLETA MONCAL, and MAJAL DEVELOPMENT Jupiter Street of the same municipality, and by Mr. and Mrs. Jose and Alicia Briones,
CORPORATION, respondents. both of No. 66 Jupiter Street. Pending further proceedings, the Bel-Air Village
Association, Inc. (BAVA), an incorporated homeowners' association, entered its
Sangco, Anastacio, Castaneda & Duran Law Office for petitioners & private appearance as plaintiff-in-intervention.
intervenors- petitioners.
BAVA itself had brought its own complaints, four in number, likewise for specific
Raul S. Sison Law Offices for intervenor-petitioner Bel-Air Village Association, Inc. performance and damages to enforce the same 'deed restrictions.' (See G.R. Nos.
Renato L. Dela Fuente for respondent Ayala Corporation. 74376, 76394, 78182, and 82281.)
ANTECEDENTS FACTS
I. G.R. No. 71169
The facts are stated in the decision appealed from. We quote:
xxxxxxxxx
(1) Bel-Air Village is located north of Buendia Avenue extension
(now Sen. Gil J. Puyat Ave.) across a stretch of commercial block
from Reposo Street in the west up to Zodiac Street in the east,
When Bel-Air Village was planned, this block between Reposo and
Zodiac Streets adjoining Buendia Avenue in front of the village was
designated as a commercial block. (Copuyoc TSN, p. 10, Feb. 12,
1982).
(2) Bel-Air Village was owned and developed into a residential
subdivision in the 1950s by Makati Development Corporation
(hereinafter referred to as MDC), which in 1968 was merged with
appellant Ayala Corporation.
(3) Appellees-spouses Sangalang reside at No. 11O Jupiter Street
between Makati Avenue and Reposo Street; appellees-spouses
Gaston reside at No. 64 Jupiter Street between Makati Avenue and
Zodiac Street; appellees-spouses Briones reside at No. 66 Jupiter
Street also between Makati Avenue and Zodiac Street; while
appellee Bel-Air Village Association, Inc. (hereinafter referred to as
BAVA) is the homeowners' association in Bel-Air Village which
takes care of the sanitation, security, traffic regulations and general
welfare of the village.
(4) The lots which were acquired by appellees Sangalang and
spouse Gaston and spouse and Briones and spouse in 1960, 1957
and 1958, respectively, were all sold by MDC subject to certain
conditions and easements contained in Deed Restrictions which
formed a part of each deed of sale. The pertinent provisions in said
Deed Restrictions, which are common to all lot owners in Bel-Air
Village, are as follows:
I-BEL-AIR ASSOCIATION
The owner of this lot/s or his successors in interest is required to be
and is automatically a member of the Bel-Air Association and must
abide by such rules and regulations laid down by the Association in
the interest of the sanitation, security and the general welfare of the
community.
The association will also provide for and collect assessments, which
will constitute as a lien on the property junior only to liens of the
government for taxes and to voluntary mortgages for sufficient
consideration entered into in good faith.
II-USE OF LOTS
Subject to such amendments and additional restrictions,
reservations, servitudes, etc., as the Bel- Air Association may from
time to time adopt and prescribe, this lot is subject to the following
restrictions:
a. This lot/s shall not be subdivided. However, three or more lots
may be consolidated and subdivided into a lesser number of lots
provided that none of the resulting lots be smaller in area than the
smallest lot before the consolidation and that the consolidation and
subdivision plan be duly approved by the governing body of the Bel-
Air Association.
b. This lot/s shall only be used for residential purposes.
c. Only one single family house may be constructed on a single lot,
although separate servants' quarters or garage may be built.
d. Commercial or advertising signs shall not be placed, constructed,
or erected on this lot. Name plates and professional signs of
homeowners are permitted so long as they do not exceed 80 x 40
centimeters in size.
e. No cattle, pigs, sheep, goats, ducks, geese, roosters or rabbits
shall be maintained in the lot, except that pets may be maintained
but must be controlled in accordance with the rulings of the
Association. The term "pets' includes chickens not in commercial
quantities.
f. The property is subject to an easement of two (2) meters within
the lot and adjacent to the rear and sides thereof not fronting a
street for the purpose of drainage, sewage, water and other public
facilities as may be necessary and desirable; and the owner, lessee
or his representative shall permit access thereto by authorized
representatives of the Bel-Air Association or public utility entities for
the purposes for which the easement is created.
g. This lot shall not be used for any immoral or illegal trade or
activity.
h. The owner and/or lessee of this lot/s shall at all times keep the
grass cut and trimmed to reduce the fire hazard of the property.
xxx xxx xxx
VI-TERM OF RESTRICTIONS
The foregoing restrictions shall remain in force for fifty years from
January 15, 1957, unless sooner cancelled in its entirety by two
thirds vote of members in good standing of the Bel-Air Association.
However, the Association may, from time to time, add new ones,
amend or abolish particular restrictions or parts thereof by majority
rule.
VII--ENFORCEMENT OF RESTRICTIONS
The foregoing restrictions may be enjoined and/or enforced by court
action by the Bel-Air Association, or by the Makati Development
Corporation or its assigns, or by any registered owner of land within
the boundaries of the Bel-Air Subdivision (Sub-division plan PSD-
49226 and Lot 7-B, Psd-47848) or by any member in good standing
of the Bel-Air association." (Exh. 1 -b; Exh. 22, Annex "B").
(Appellant's Brief, pp. 4- 6)
(5) When MDC sold the above-mentioned lots to appellees'
predecessors-in-interest, the whole stretch of the commercial block
between Buendia Avenue and Jupiter Street, from Reposo Street in
the west to Zodiac Street in the east, was still undeveloped. Access,
therefore, to Bel-Air Village was opened to all kinds of people and
even animals. So in 1966, although it was not part of the original
plan, MDC constructed a fence or wall on the commercial block
along Jupiter Street. In 1970, the fence or wall was partly destroyed
by typhoon "Yoling." The destroyed portions were subsequently
rebuilt by the appellant. (Copuyoc TSN, pp. 31-34, Feb. 12, 1982).
When Jupiter Street was widened in 1972 by 3.5 meters, the fence
or wall had to be destroyed. Upon request of BAVA, the wall was
rebuilt inside the boundary of the commercial block. (Copuyoc TSN,
pp. 4447, Feb. 12,1982).
(6) When the appellant finally decided to subdivide and sell the lots
in the commercial block between Buendia and Jupiter, BAVA wrote
the appellant on May 9, 1972, requesting for confirmation on the
use of the commercial lots. The appellant replied on May 16, 1972,
informing BAVA of the restrictions intended to be imposed in the
sale and use of the lots. Among these restrictions are: that the
building shall have a set back of 19 meters; and that with respect to
vehicular traffic along Buendia Avenue, entrance only will be
allowed, and along Jupiter Street and side streets, both entrance
and exit will be allowed.
(7) On June 30, 1972, appellant informed BAVA that in a few
months it shall subdivide and sell the commercial lots bordering the
north side of Buendia Avenue Extension from Reposo Street up to
Zodiac Street. Appellant also informed BAVA that it had taken all
precautions and will impose upon the commercial lot owners deed
restrictions which will harmonize and blend with the development
and welfare of Bel-Air Village. Appellant further applied for special
membership in BAVA of the commercial lot owners. A copy of the
deed restrictions for the commercial lots was also enclosed. The
proposed deed restrictions shall include the 19 meter set back of
buildings from Jupiter Street, the requirement for parking space
within the lot of one (1) parking slot for every seventy five (75)
meters of office space in the building and the limitation of vehicular
traffic along Buendia to entrance only, but allowing both vehicular
entrance and vehicular exit through Jupiter Street and any side
street.
In its letter of July 10, 1972, BAVA acknowledged the above letter of
appellant and informed the latter that the application for special
membership of the commercial lot owners in BAVA would be
submitted to BAVA's board of governors for decision.
(8) On September 25, 1972, appellant notified BAVA that, after a
careful study, it was finally decided that the height limitation of
buildings on the commercial lots shall be increased from 12.5
meters to 15 meters. Appellant further informed BAVA that Jupiter
Street shall be widened by 3.5 meters to improve traffic flow in said
street. BAVA did not reply to said letter, but on January 22, 1973,
BAVA wrote a letter to the appellant informing the latter that the
Association had assessed the appellant, as special member of the
association, the amount of P40,795.00 (based on 81,590 square
meters at P.50 per square meter) representing the membership
dues to the commercial lot owners for the year 1973, and requested
the appellant to remit the amount which its board of governors had
already included in its current budget. In reply, appellant on January
31, 1973 informed BAVA that due to the widening of Jupiter Street,
the area of the lots which were accepted by the Association as
members was reduced to 76,726 square meters. Thus, the
corresponding dues at P.50 per square meter should be reduced to
P38,363.00. This amount, therefore, was remitted by the appellant
to BAVA. Since then, the latter has been collecting membership
dues from the owners of the commercial lots as special members of
the Association. As a matter of fact, the dues were increased
several times. In 1980, the commercial lot owners were already
being charged dues at the rate of P3.00 per square meter.
(Domingo, TSN, p. 36, March 19, 1980). At this rate, the total
membership dues of the commercial lot owners amount to
P230,178. 00 annually based on the total area of 76,726 square
meters of the commercial lots.
(9) Meantime, on April 4, 1975, the municipal council of Makati
enacted its ordinance No. 81, providing for the zonification of Makati
(Exh. 18). Under this Ordinance, Bel-Air Village was classified as a
Class A Residential Zone, with its boundary in the south extending
to the center line of Jupiter Street (Exh. 18-A).
Thus, Chapter III, Article 1, Section 3.03, par. F. of the Ordinance
provides:
F. Bel-Air Village area, as bounded on the N by Polaris and
Mercedes streets and on the NE by Estrella Street; on the SE by
Epifanio de los Santos Avenue and on the SW by the center line of
Jupiter Street. Then bounded on the N by the abandoned MRR
 Pasig Line; on the E by Makati Avenue; on the S by the center line
of Jupiter Street and on the W by the center line of Reposo Street."
(Exh. 18-A)
Similarly, the Buendia Avenue Extension area was classified as
Administrative Office Zone with its boundary in the North-North East
Extending also up to the center line of Jupiter Street (Exh. 18b).
Thus, Chapter III, Article I, Section 3.05, par. C. of the Ordinance provides:
C. The Buendia Avenue Extension areas, as bounded on the N-NE
by the center line of Jupiter Street, on the SE by Epifanio de los
Santos Avenue; on the SW by Buendia Avenue and on the NW by
the center line of Reposo Street, then on the NE by Malugay Street;
on the SE by Buendia Avenue and on the W by Ayala Avenue
Extension." (Exh. 18-B)
The Residential Zone and the Administrative Office Zone, therefore,
have a common boundary along the center line of Jupiter Street.
The above zoning under Ordinance No. 81 of Makati was later
followed under the Comprehensive Zoning Ordinance for the
National Capital Region adopted by the Metro Manila Commission
as Ordinance 81 -01 on March 14, 1981 (Exh. 19). However, under
this ordinance, Bel-Air Village is simply bounded in the South-
Southeast by Jupiter Street-not anymore up to the center line of
Jupiter Street (Exh. B). Likewise, the blockdeep strip along the
northwest side of Buendia Avenue Extension from Reposo to EDSA
was classified as a High Intensity Commercial Zone (Exh. 19-c).
Thus, the Zoning District Boundaries -Makati, in Annex B of the Ordinance provides:
R-I-Low Intensity Residential
xxxxxxxxx
4. Bel-Air 1, 3, 4
Bounded on the North -- J.P. Rizal and Amapola St.
South - Rockwell
Northwest - P. Burgos
Southeast - Jupiter
Southwest - Epifanio de los Santos Ave. (EDSA)
5. Bel-Air 2
Bounded on the Northwest - J.P. Rizal
Southwest - Makati Avenue
South --- Jupiter
Southeast -- Pasig Line
East - South Avenue" (Exh. 19-b)
xxxxxxxxx
C-3-High Intensity Commercial Zone
2. A block deep strip along the northwest side of Buendia Ave. Ext.
from Reposo to EDSA." (Exh, 19-c)
Under the above zoning classifications, Jupiter Street, therefore, is
a common boundary of Bel-Air Village and the commercial zone.
(10) Meanwhile, in 1972, BAVA had installed gates at strategic
locations across Jupiter Street which were manned and operated by
its own security guards who were employed to maintain, supervise
and enforce traffic regulations in the roads and streets of the village.
(Villavicencio, TSN, pp, 22-25, Oct. 30, 1980; BAVA Petition, par.
11, Exh. 17).
Then, on January 17, 1977, the Office of the Mayor of Makati wrote
BAVA directing that, in the interest of public welfare and for the
purpose of easing traffic congestion, the following streets in Bel-Air
Village should be opened for public use:
Amapola Street - from Estrella Street to Mercedes Street
Amapola Street -junction of Palma Street gate going to J. Villena
Street
Mercedes Street -- from EDSA to Imelda Avenue and Amapola
junction
Zodiac Street - from Mercedes Street to Buendia Avenue
Jupiter Street -- from Zodiac Street to Reposo Street connecting
Metropolitan Avenue to Pasong Tamo and V. Cruz Extension
intersection
Neptune Street - from Makati Avenue to Reposo Street Orbit Street
- from F. Zobel-Candelaria intersection to Jupiter Street
Paseo de Roxas - from Mercedes Street to Buendia Avenue (Exh.
17, Annex A, BAVA Petition)
On February 10, 1977, BAVA wrote the Mayor of Makati,
expressing the concern of the residents about the opening of the
streets to the general public, and requesting specifically the
indefinite postponement of the plan to open Jupiter Street to public
vehicles. (Exh. 17, Annex B, BAVA Petition).
However, BAVA voluntarily opened to the public Amapola,
Mercedes, Zodiac, Neptune and Paseo de Roxas streets. (Exh. 17-
A, Answer of Makati par. 3-7).
Later, on June 17,1977, the Barangay Captain of Bel-Air Village
was advised by the Office of the Mayor that, in accordance with the
agreement entered into during the meeting on January 28, 1 977,
the Municipal Engineer and the Station Commander of the Makati
Police were ordered to open for public use Jupiter Street from
Makati Avenue to Reposo Street. Accordingly, he was requested to
advise the village residents of the necessity of the opening of the
street in the interest of public welfare. (Exh. 17, Annex E, BAVA
Petition).
Then, on June 10, 1977, the Municipal Engineer of Makati in a letter
addressed to BAVA advised the latter to open for vehicular and
pedestrian traffic the entire portion of Jupiter Street from Makati
Avenue to Reposo Street (Exh. 17, BAVA Petition, par. 14).
Finally, on August 12, 1977, the municipal officials of Makati
concerned allegedly opened, destroyed and removed the gates
constructed/located at the corner of Reposo Street and Jupiter
Street as well as the gates/fences located/constructed at Jupiter
Street and Makati Avenue forcibly, and then opened the entire
length of Jupiter Street to public traffic. (Exh. 17, BAVA Petition,
pars. 16 and 17).
(11) Before the gates were-removed, there was no parking problem
or traffic problem in Jupiter Street, because Jupiter Street was not
allowed to be used by the general public (Villavicencio, TSN, pp.
24-25, Oct. 30, 1980). However, with the opening of Zodiac Street
from Estrella Street to Jupiter Street and also the opening to the
public of the entire length of Jupiter Street, there was a tremendous
increase in the volume of traffic passing along Jupiter Street coming
from EDSA to Estrella Street, then to Zodiac Street to Jupiter Street,
and along the entire length of Jupiter Street to its other end at
Reposo Street. (Villavicencio, TSN, pp. 30-32, Oct. 30, 1980).
In the meantime, the purchasers of the commercial lots between
Jupiter Street and Buendia Avenue extension had started
constructing their respective buildings in 1974-1975. They
demolished the portions of the fence or wall standing within the
boundary of their lots. Many of the owners constructed their own
fences or walls in lieu of the wall and they employed their own
security guards. (TSN, p. 83, Feb. 20,1981; TSN, pp. 53-54; 72-74,
March 20,1981; TSN, pp. 54-55, July 23, 1981).
(12) Then, on January 27, 1978, appellant donated the entire
Jupiter Street from Metropolitan Avenue to Zodiac Street to BAVA
(Exh. 7)- However, even before 1978, the Makati Police and the
security force of BAVA were already the ones regulating the traffic
along Jupiter Street after the gates were opened in 1977.
Sancianco TSN, pp. 26-30, Oct. 2,1981).
In October, 1979, the fence at the corner of Orbit and Neptune
Streets was opened and removed (BAVA Petition, par. 22, Exh. 17).
The opening of the whole stretch of Orbit Street from J.P. Rizal
Avenue up to Imelda Avenue and later to Jupiter Street was agreed
to at the conference attended by the President of BAVA in the office
of the Station Commander of Makati, subject to certain conditions,
to wit:
That, maintenance of Orbit St. up to Jupiter St. shall be shouldered
by the Municipality of Makati.
That, street lights will be installed and maintenance of the same
along Orbit St. from J.P. Rizal Ave. up to Jupiter St. shall be
undertaken by the Municipality.
That for the security of the residents of San Miguel Village and Bel-
Air Village, as a result of the opening of Orbit Street, police outposts
shall be constructed by the Municipality of Makati to be headed by
personnel of Station No. 4, in close coordination with the Security
Guards of San Miguel Village and Bel-Air Village." (CF. Exh. 3 to
Counter-Affidavit, of Station Commander, Ruperto Acle p. 253,
records)" (Order, Civil Case No. 34948, Exh. 17-c).
(13) Thus, with the opening of the entire length of Jupiter Street to
public traffic, the different residential lots located in the northern
side of Jupiter Street ceased to be used for purely residential
purposes. They became, for all purposes, commercial in character.
(14) Subsequently, on October 29, 1979, the plaintiffs-appellees
Jose D. Sangalang and Lutgarda D. Sangalang brought the present
action for damages against the defendant-appellant Ayala
Corporation predicated on both breach of contract and on tort or
quasi-delict A supplemental complaint was later filed by said
appellees seeking to augment the reliefs prayed for in the original
complaint because of alleged supervening events which occurred
during the trial of the case. Claiming to be similarly situated as the
plaintiffs-appellees, the spouses Felix C. Gaston and Dolores R.
Gaston, Jose V. Briones and Alicia R. Briones, and the
homeowners' association (BAVA) intervened in the case.
(15) After trial on the merits, the then Court of First Instance of
Rizal, Pasig, Metro Manila, rendered a decision in favor of the
appellees the dispositive portion of which is as follows:
WHEREFORE, judgment is hereby accordingly rendered as follows:
ON PLAINTIFFS' COMPLAINT:
Defendant is ordered to pay to the plaintiffs-spouses Sangalang the
following damages:
1. The sum of P500,000.00 as actual and consequential damages;
2. The sum of P2,000,000.00 as moral damages;
3. The sum of P500,000.00 as exemplary damages;
4. The sum of P100,000.00 as attorney's fees; and
5. The costs of suit.
ON INTERVENORS FELIX and DOLORES GASTON'S
COMPLAINT:
Defendant is ordered to pay to the spouses Felix and Dolores
Gaston, the following damages:
1 . The sum of P400,000.00 as consequential damages;
2 The sum of P500,000.00 as moral damages;
3 The sum of P500,000.00 as exemplary damages:
4 The sum of P50,000.00 as attorney's fees; and
5 The costs of suit.
ON INTERVENORS JOSE and ALICIA BRIONES' COMPLAINT:
Defendant is ordered to pay to the spouses Jose and Alicia Briones,
the following damages:
1 . The sum of P400,000.00 as consequential damages;
2 The sum of P500,000.00 as moral damages;
3 The sum of P500,000.00 as exemplary damages;
4 The sum of P50,000.00 as attorney's fees; and
5 The costs of suit.
ON INTERVENOR BAVA'S COMPLAINT:
Defendant is ordered to pay intervenor BAVA, the following
damages:
1. The sum of P400,000.00 as consequential damages;
2. The sum of P500,000.00 as exemplary damages;
3. The sum of P50,000.00 as attorney's fees; and
4. The costs of suit.
The above damages awarded to the plaintiffs and intervenors shall
bear legal interest from the filing of the complaint.
Defendant is further ordered to restore/reconstruct the perimeter
wall at its original position in 1966 from Reposo Street in the west to
Zodiac Street in the east, at its own expense, within SIX (6)
MONTHS from finality of judgment.
SO ORDERED.
(Record on Appeal, pp. 400-401) 2
xxxxxxxxx
On appeal, the Court of Appeals 3 rendered a reversal, and
disposed as follows:
ACCORDINGLY, finding the decision appealed from as not
supported by the facts and the law on the matter, the same is
hereby SET ASIDE and another one entered dismissing the case
for lack of a cause of action. Without pronouncement as to costs.
SO ORDERED. 4
II. G.R. No. 74376
This petition was similarly brought by BAVA to enforce the aforesaid restrictions
stipulated in the deeds of sale executed by the Ayala Corporation. The petitioner
originally brought the complaint in the Regional Trial Court of Makati, 5 principally for
specific performance, plaintiff [now, petitioner] alleging that the defendant [now, private
respondent] Tenorio allowed defendant [Tenorio's co-private respondent] Gonzalves to
occupy and convert the house at 50 Jupiter Street, Bel-Air Village, Makati, Metro
Manila, into a restaurant, without its knowledge and consent, and in violation of the
deed restrictions which provide that the lot and building thereon must be used only for
residential purposes upon which the prayed for main relief was for 'the defendants to
permanently refrain from using the premises as commercial and to comply with the
terms of the Deed Restrictions." 6 The trial court dismissed the complaint on a
procedural ground, i.e., pendency of an Identical action, Civil Case No. 32346, entitled
"Bel-Air Village Association, Inc. v. Jesus Tenorio." The Court of Appeals 7affirmed,
and held, in addition, that Jupiter Street "is classified as High density commercial (C-3)
zone as per Comprehensive Zoning Ordinance No. 81-01 for National Capital
Region," 8 following its own ruling in AC-G.R. No. 66649, entitled "Bel-Air Village
Association, Inc. vs. Hy-Land Realty & Development Corporation, et al."
III. G.R. No. 76394
xxxxxxxxx
Defendants-spouses Eduardo V. Romualdez, Jr. and Buena
Tioseco are the owners of a house and lot located at 108 Jupiter
St., Makati, Metro Manila as evidenced by Transfer Certificate of
Title No. 332394 of the Registry of Deeds of Rizal. The fact is
undisputed that at the time the defendants acquired the subject
house and lot, several restrictions were already annotated on the
reverse side of their title; however, for purposes of this appeal we
shall quote hereunder only the pertinent ones, to wit:
(b,) This lot/shall be used only for residential purposes.
xxxxxxxxx
IV. Term of Restriction
The foregoing restriction(s) shall remain in force for fifty years from
January 15, 1957, unless sooner cancelled in its entirety by two-
thirds vote of the members in good standing of the Bel-Air
Association. However, the Association may from time to time, add
new ones, amend or abolish particular restrictions or parts thereof
by majority rule.
During the early part of 1979, plaintiff noted that certain renovations
and constructions were being made by the defendants on the
subject premises, for which reason the defendants were advised to
inform the plaintiff of the kind of construction that was going on.
Because the defendants failed to comply with the request of the
plaintiff, the latter's chief security officer visited the subject premises
on March 23, 1979 and found out that the defendants were putting
up a bake and coffee shop, which fact was confirmed by defendant
Mrs. Romualdez herself. Thereafter, the plaintiff reminded
defendants that they were violating the deed restriction. Despite
said reminder, the defendants proceeded with the construction of
the bake shop. Consequently, plaintiff sent defendants a letter
dated April 30, 1979 warning them that if they will not desist from
using the premises in question for commercial purposes, they will
be sued for violations of the deed restrictions.
Despite the warning, the defendants proceeded with the
construction of their bake shop. 9
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The trial court 10 adjudged in favor of BAVA. On appeal, the Court of
Appeals 11 reversed, on the strength of its holding in AC-G.R. No. 66649 earlier
referred to.
BAVA then elevated the matter to the Court by a petition for review on certiorari. The
Court 12 initially denied the petition "for lack of merit, it appearing that the conclusions
of the respondent Court of Appeals that private respondents' bake and coffee shop lies
within a commercial zone and that said private respondents are released from their
obligations to maintain the lot known as 108 Jupiter Street for residential purposes by
virtue of Ordinance No. 81 of the Municipality of Makati and Comprehensive Zoning
Ordinance No. 81-01 of the Metropolitan Manila Commission, are in accord with law
and jurisprudence," 13 for which BAVA sought a reconsideration. Pending resolution,
the case was referred to the Second Division of this Court, 14 and thereafter, to the
Court En Banc en consulta. 15 Per our Resolution, dated April 29, 1988, we
consolidated this case with G.R. Nos. 74376 and 82281. 16
IV. G.R. No. 78182.
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The case stemmed from the leasing by defendant Dolores Filley of
her building and lot situated at No. 205 Reposo Street, Bel-Air
Village Makati, Metro Manila to her co-defendant, the advertising
firm J. Romero and Associates, in alleged violation of deed
restrictions which stipulated that Filley's lot could only be used for
residential purposes. Plaintiff sought judgment from the lower court
ordering the defendants to "permanently refrain" from using the
premises in question "as commercial" and to comply with the terms
of the deed restrictions.
After the proper proceedings, the court granted the plaintiff the
sought for relief with the additional imposition of exemplary
damages of P50,000.00 and attorney's fees of P10,000.00. The trial
court gave emphasis to the restrictive clauses contained in Filley's
deed of sale from the plaintiff, which made the conversion of the
building into a commercial one a violation.
Defendants now seek review and reversal on three (3) assignments of errors, namely:
I.
THE TRIAL COURT ERRED IN NOT FINDING THAT THE
REGULATIONS PROMULGATED BY THE MUNICIPAL
AUTHORITIES IN MAKATI AND THE MINISTRY OF HUMAN
SETTLEMENT'S CHANGING THE CHARACTER OF THE AREAS
IN QUESTION HAD RENDERED THE RESTRICTIVE EASEMENT
ON THE TITLE OF THE APPELLANTS VACATED.
II.
THE COURT ERRED IN NOT RULING THAT BECAUSE THE
APPELLEE(S) HAD ALLOWED THE USE OF THE PROPERTY
WITHIN THE VILLAGE FOR NON- RESIDENTIAL PURPOSES, IT
IS NOW ESTOPPED FROM ENFORCING THE RESTRICTIVE
PROHIBITIONS SUBJECT MATTER OF THIS CASE.
III.
THE COURT ERRED IN NOT FINDING THAT THERE EXISTED A
BILATERAL CONTRACT BETWEEN THE PARTIES AND THAT
SINCE APPELLEE HAD NOT PERFORMED ITS OBLIGATIONS
UNDER THIS ARRANGEMENT THE APPELLANT IN TURN WAS
UNDER NO OBLIGATION TO ANNOTATE THE RESTRICTIVE
PROHIBITIONS ON THE BACK OF THE TITLE.
Appellants anchor their appeal on the proposition that the Bel-Air
Village area, contrary to plaintiff- appellee's pretension of being a
strictly residential zone, is in fact commercial and characterize the
restrictions contained in appellant Filley's deed of sale from the
appellee as completely outmoded, which have lost all relevance to
the present-day realities in Makati, now the premier business hub of
the nation, where there is a proliferation of numerous commercial
enterprises established through the years, in fact even within the
heart of so-called "residential" villages. Thus, it may be said that
appellants base their position on the inexorable march of progress
which has rendered at naught the continued efficacy of the
restrictions. Appellant on the other hand, relies on a rigid
interpretation of the contractual stipulations agreed upon with
appellant Filley, in effect arguing that the restrictions are valid ad
infinitum.
The lower court quite properly found that other commercial
establishments exist in the same area (in fact, on the same street)
but ignored it just the same and said-
The fact that defendants were able to prove the existence of several
commercial establishments inside the village does not exempt them
from liability for violating some of the restrictions evidently choosing
to accord primacy to contractual stipulation. 17
xxxxxxxxx
The Court of Appeals 18 overturned the lower court, 19 likewise based on AC-G.R. No.
66649. The respondent Court observed also that J. Romero & Associates had been
given authority to open a commercial office by the Human Settlements Regulatory
Commission.
V. G.R. No. 82281
The facts of this case have been based on stipulation. We quote:
COMES NOW, the Parties, assisted by their respective counsel and
to this Honorable Court, respectfully enter into the following
stipulations of facts, to wit:
1. The parties admit the personal circumstances of each other as
well as their capacities to sue and be sued.
2. The parties admit that plaintiff BAVA for short) is the legally
constituted homeowners' association in Bel-Air Subdivision, Makati,
Metro Manila.
3. The parties admit that defendant Violets Moncal is the registered
owner of a parcel of land with a residential house constructed
thereon situated at No. 104 Jupiter Street, Bel-Air Village, Makati,
Metro Manila; that as such lot owner, she is a member of the
plaintiff association.
4. The parties admit that defendant Majal Development Corporation
(Majal for short) is the lessee of defendant Moncal's house and lot
located at No. 104 Jupiter Street.
5. The parties admit that a deed restrictions is annotated on the title
of defendant Moncal, which provides, among others, that the lot in
question must be used only for residential purposes;' that at time
Moncal purchased her aforesaid lot in 1959 said deed restrictions
was already annotated in the said title.
6. The parties admit that when Moncal leased her subject property
to Majal, she did not secure the consent of BAVA to lease the said
house and lot to the present lessee.
7. The parties admit that along Jupiter Street and on the same side
where Moncal's property is located, there are restaurants, clinics
placement or employment agencies and other commercial or
business establishments. These establishments, however, were
sued by BAVA in the proper court.
 8. The parties admit that at the time Moncal purchased the subject
property from the Makati Development Corporation, there was a
perimeter wall, running along Jupiter Street, which wall was
constructed by the subdivision owner; that at that time the gates of
the entrances to Jupiter Street were closed to public traffic. In short,
the entire length of Jupiter which was inside the perimeter wall was
not then open to public traffic
9. The parties admit that subsequent thereto, Ayala tore down the
perimeter wall to give way to the commercial building fronting
Buendia Avenue (now Gil J. Puyat Avenue).
10. The parties admit that on August 12, 1977, the Mayor of Makati
forcibly opened and removed the street gates constructed on
Jupiter Street and Reposo Street, thereby opening said streets to
the public.
11. The parties admit plaintiffs letters of October 10, 23 and 31,
1984; as well as defendants' letters-reply dated October 17 and 29,
1984. 20
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The trial court 21 dismissed the petitioner's complaint, a dismissal affirmed on
appeal, 22 According to the appellate court, the opening of Jupiter Street to human and
vehicular traffic, and the commercialization of the Municipality of Makati in general,
were circumstances that had made compliance by Moncal with the aforesaid "deed
restrictions" "extremely difficult and unreasonable," 23 a development that had excused
compliance altogether under Article 1267 of the Civil Code.
VI. The cases before the Court; the Court's decision.
In brief, G.R. Nos. 74376, 76394, 78182, and 82281 are efforts to enforce the "deed
restrictions" in question against specific residents (private respondents in the petitions)
of Jupiter Street and with respect to G.R. No. 78182, Reposo Street. The private
respondents are alleged to have converted their residences into commercial
establishments (a restaurant in G.R. No. 74376, a bakery and coffee shop in G.R. No.
76394, an advertising firm in G.R. No. 78182; and a construction company, apparently,
in G.R. No. 82281) in violation of the said restrictions. 24
Their mother case, G. R. No. 71169 is, on the other hand, a petition to hold the vendor
itself, Ayala Corporation (formerly Makati Development Corporation), liable for tearing
down the perimeter wall along Jupiter Street that had therefore closed its commercial
section from the residences of Bel-Air Village and ushering in, as a consequence, the
full "commercialization" of Jupiter Street, in violation of the very restrictions it had
authored.
As We indicated, the Court of Appeals dismissed all five appeals on the basis primarily
of its ruling in AC-G.R. No. 66649, "Bel-Air Village, Inc. v. Hy-Land Realty Development
Corporation, et al.," in which the appellate court explicitly rejected claims under the
same 'deed restrictions" as a result of Ordinance No. 81 enacted by the Government of
the Municipality of Makati, as well as Comprehensive Zoning Ordinance No. 8101
promulgated by the Metropolitan Manila Commission, which two ordinances allegedly
allowed the use of Jupiter Street both for residential and commercial purposes. It was
likewise held that these twin measures were valid as a legitimate exercise of police
power.
The Court of Appeals' reliance on Ordinance Nos. 81. and 8101 is now assailed in
these petitions, particularly the Sangalang, et al. petition.
Aside from this fundamental issue, the petitioners likewise raise procedural questions.
G.R. No. 71169, the mother case, begins with one.
1. G.R. No. 71169
In this petition, the following questions are specifically put to the Court:
May the Honorable Intermediate Appellate Court reverse the
decision of the trial court on issues which were neither raised by
AYALA in its Answers either to the Complaint or Supplemental
Complaint nor specifically assigned as one of the alleged errors on
appeal? 25
May the Honorable Intermediate Appellate Court arbitrarily ignore
the decisive findings of fact of the trial court, even if uncontradicted
and/or documented, and premised mainly on its own unsupported
conclusions totally reverse the trial court's decision? 26
May the Honorable Intermediate Appellate Court disregard the trial
court's documented findings that respondent Ayala for its own self-
interest and commercial purposes contrived in bad faith to do away
with the Jupiter Street perimeter wall it put up three times which wall
was really intended to separate the residential from the commercial
areas and thereby insure the privacy and security of Bel Air Village
pursuant to respondent Ayala's express continuing representation
and/or covenant to do so? 27
a.
The first question represents an attack on the appellate court's reliance on Ordinances
Nos. 81 and 81-01, a matter not supposedly taken up at the trial or assigned as an
error on appeal. As a rule, the Court of Appeals (then the Intermediate Appellate Court)
may determine only such questions as have been properly raised to it, yet, this is not
an inflexible rule of procedure. In Hernandez v. Andal, 28 it was stated that "an
unassigned error closely related to an error properly assigned, or upon which the
determination of the question raised by the error properly assigned is dependent, will
be considered by the appellate court notwithstanding the failure to assign it as error." 29
In Baquiran v. Court of Appeals, 30 we referred to the " modern trend of procedure . . .
according] the courts broad discretionary power" 31 and in which we allowed
consideration of matters "having some bearing on the issue submitted which the
parties failed to raise or the lower court ignore[d]. 32 And in Vda. de Javellana v. Court
of Appeals, 33 we permitted the consideration of a 'patent error' of the trial court by the
Court of Appeals under Section 7, of Rule 51, of the Rules of Court, 34although such an
error had not been raised in the brief. But what we note is the fact that the Ayala
Corporation did raise the zoning measures as affirmative defenses, first in its
answers 35 and second, in its brief, 36 and submitted at the trial as exhibits. 37 There is
accordingly no cause for complaint on the part of the petitioners for Ayala's violation of
the Rules. But while there was reason for the consideration, on appeal, of the said
zoning ordinances in question, this Court nevertheless finds as inaccurate the Court of
Appeals' holding that such measures, had "in effect, [made] Jupiter Street ... a street
which could be used not only for residential purposes," 38 and that "[It lost its character
as a street for the exclusive benefit of those residing in Bel-Air Village completely." 39
Among other things, there is a recognition under both Ordinances Nos. 81 and 8 1-01
that Jupiter Street lies as the boundary between Bel-Air Village and Ayala
Corporation's commercial section. And since 1957, it had been considered as a
boundary not as a part of either the residential or commercial zones of Ayala
Corporation's real estate development projects. Thus, the Bel-Air Village Association's
articles of incorporation state that Bel-Air Village is 'bounded on the NE., from Amapola
St., to de los Santos Ave., by Estrella St., on the SE from Extrella St., to Pedestrian
Lane by E. De los Santos Ave., on the SW., from Pedestrian Lane to Reposo St., by
Jupiter Street
. . . . 40 Hence, it cannot be said to have been "for the exclusive benefit" of Bel-Air
Village residents.
We come to the perimeter wall then standing on the commercial side of Jupiter Street
the destruction of which opened the street to the public. The petitioners contend that
the opening of the thoroughfare had opened, in turn, the floodgates to the
commercialization of Bel-Air Village. The wall, so they allege, was designed precisely
to protect the peace and privacy of Bel-Air Village residents from the din and uproar of
mercantile pursuits, and that the Ayala Corporation had committed itself to maintain it.
It was the opinion of the Court of Appeals, as we said, that Ayala's liability therefor, if
one existed, had been overtaken by the passage of Ordinances Nos. 81 and 82-01,
opening Jupiter Street to commerce.
It is our ruling, we reiterate, that Jupiter Street lies as a mere boundary, a fact
acknowledged by the authorities of Makati and the National Government and, as a
scrutiny of the records themselves reveals, by the petitioners themselves, as the
articles of incorporation of Bel-Air Village Association itself would confirm. As a
consequence, Jupiter Street was intended for the use by both -the commercial and
residential blocks. It was not originally constructed, therefore, for the exclusive use of
either block, least of all the residents of Bel-Air Village, but, we repeat, in favor of both,
as distinguished from the general public.
When the wall was erected in 1966 and rebuilt twice, in 1970 and 1972, it was not for
the purpose of physically separating the two blocks. According to Ayala Corporation, it
was put up to enable the Bel-Air Village Association "better control of the security in the
area, 41 and as the Ayala Corporation's "show of goodwill " 42 a view we find acceptable
in the premises. For it cannot be denied that at that time, the commercial area was
vacant, "open for [sic] animals and people to have access to Bel-Air Village." 43 There
was hence a necessity for a wall.
In any case, we find the petitioners' theory, that maintaining the wall was a matter of a
contractual obligation on the part of Ayala, to be pure conjecture. The records do not
establish the existence of such a purported commitment. For one, the subdivision plans
submitted did not mention anything about it. For another, there is nothing in the "deed
restrictions" that would point to any covenant regarding the construction of a wall.
There is no representation or promise whatsoever therein to that effect.
With the construction of the commercial buildings in 1974, the reason for which the wall
was built- to secure Bel-Air Village from interlopers had naturally ceased to exist. The
buildings themselves had provided formidable curtains of security for the residents. It
should be noted that the commercial lot buyers themselves were forced to demolish
parts of the wall to gain access to Jupiter Street, which they had after all equal right to
use.
In fine, we cannot hold the Ayala Corporation liable for damages for a commitment it
did not make, much less for alleged resort to machinations in evading it. The records,
on the contrary, will show that the Bel-Air Village Association had been informed, at the
very outset, about the impending use of Jupiter Street by commercial lot buyers. We
quote:
xxxxxxxxx
1. Exh. I of appellee, the memorandum of Mr. Carmelo Caluag,
President of BAVA, dated May 10, 1972, informing the BAVA Board
of Governors and Barrio Council members about the future use of
Jupiter Street by the lot owners fronting Buendia Avenue. The use
of Jupiter Street by the owners of the commercial lots would
necessarily require the demolition of the wall along the commercial
block adjoining Jupiter Street.
2. Exh. J of appellee, the minutes of the joint meeting of BAVA
Board of Governors and the Bel-Air Barrio Council where the matter
that "Buendia lot owners will have equal rights to use Jupiter
Street," and that Ayala's "plans about the sale of lots and use of
Jupiter Street" were precisely taken up. This confirms that from the
start BAVA was informed that the commercial lot owners will use
Jupiter Street and that necessarily the wall along Jupiter Street
would be demolished.
3. Exh. 10, the letter of Mr. Demetrio Copuyoc to the President of
BAVA, dated May 16, 1972, expressly stating that vehicular
entrance and exit to the commercial lots would be allowed along
Jupiter and side streets.
4. Exhs. 27, 27-A, 27-B, the letter of Atty. Salvador J. Lorayes dated
June 30, 1972, with enclosed copy of proposed restriction for the
commercial lots to BAVA. He proposed restriction again expressly
stated that "Vehicular entrances and exits are allowed thru Jupiter
and any side streets."
 5. Exh. L of appellee, the minutes of the meeting of the members of
BAVA, dated August 26, 1972, where it is stated "Recently, Ayala
Corporation informed the Board that the lots fronting Buendia
Avenue will soon be offered for sale, and that future lot owners will
be given equal rights to use Jupiter Street as well as members of
the Association."
6. Exh. 25, the letter of Atty. Lorayes dated September 25, 1972,
informing BAVA of the widening of Jupiter Street by 3.5 meters to
improve traffic flow in said street to benefit both the residents of Bel-
Air and the future owners of the commercial lots. 44
The petitioners cannot successfully rely on the alleged promise by Demetrio Copuyoc,
Ayala's manager, to build a "[f]ence along Jupiter with gate for entrance and/or
exit 45 as evidence of Ayala's alleged continuing obligation to maintain a wall between
the residential and commercial sections. It should be observed that the fence referred
to included a "gate for entrance and or exit" which would have defeated the purpose of
a wall, in the sense the petitioners would put in one, that is to say, an impenetrable
barrier. But as Ayala would point out subsequently, the proposed fence was not
constructed because it had become unnecessary when the commercial lot owners
commenced constructions thereon.
Be that as it may, the Court cannot visualize any purported obligation by Ayala
Corporation to keep the wall on the strength of this supposed promise alone. If truly
Ayala promised anything assuming that Capuyoc was authorized to bind the
corporation with a promise it would have been with respect to the fence. It would not
have established the pre-existing obligation alleged with respect to the wall.
Obligations arise, among other things, from contract. 46 If Ayala, then, were bound by
an obligation, it would have been pursuant to a contract. A contract, however, is
characterized by a "meeting of minds between two persons . 47 As a consensual
relation, it must be shown to exist as a fact, clearly and convincingly. But it cannot be
inferred from a mishmash of circumstances alone disclosing some kind of an
"understanding," when especially, those disparate circumstances are not themselves
incompatible with contentions that no accord had existed or had been reached. 48
The petitioners cannot simply assume that the wall was there for the purpose with
which they now give it, by the bare coincidence that it had divided the residential block
from the commercial section of Bel-Air. The burden of proof rests with them to show
that it had indeed been built precisely for that objective, a proof that must satisfy the
requirements of our rules of evidence. It cannot be made to stand on the strength of
plain inferences.
b.
This likewise answers the petitioners' second query, whether or not the Court of
Appeals had "arbitrarily ignore(d) the decisive findings of the trial court." 49 i.e., findings
pointing to alleged acts performed by the Ayala Corporation proving its commitment to
maintain the wall abovesaid. Specifically, the petitioners refer to, among other things:
(1) Ayala's alleged announcement to Bel- Air Village Association members that "[the
perimeter wall along Jupiter Street will not be demolished," 50 (2) Ayala's alleged
commitment "during the pendency of the case in the trial court" to restore the wall; (3)
alleged assurances by Copuyoc that the wall will not be removed; (4) alleged
contrivances by the corporation to make the association admit as members the
commercial lot buyers which provided them equal access to Jupiter Street; and (5)
Ayala's donation to the association of Jupiter Street for "private use" of Bel-Air
residents. 51
682 (1903), where it was held that "whether the plaintiffs services were solicited or
whether they were offered to the defendant for his assistance, inasmuch as these
services were accepted and made use of by the latter, we must consider that there was
a tacit and mutual consent as to the rendition of services." (At 686.) In that case, the
defendant had enormously benefitted from the services that entitled the plaintiff to
compensation on the theory that no one may unjustly enrich himself at the expense of
another (Solutio indebiti) The facts of this case differ.
As we stated, the Ayala Corporation's alleged conduct prior to or during the
proceedings below are not necessarily at war with claims that no commitment had
been in fact made.
With respect to Ayala's alleged announcement before the association, the Court does
not agree that Ayala had categorically assumed as an obligation to maintain the wall
"perpetually," i.e., until the year 2007 (the expiration date under the "deed restrictions.")
There is nothing in its statement that would bare any commitment. In connection with
the conference between the parties "during the pendency" of the trial, it is to be noted
that the Ayala Corporation denies having warranted the restoration of the said wall
therein. What, on the other hand, appears in the records is the fact that Ayala did make
that promise, but provided that the Mayor allowed it. It turned out, however, that the
Mayor balked at the Idea. 52 But assuming that Ayala did promise to rebuild the wall (in
that conference), it does not seem to us that it did consequently promise to maintain it
in perpetuity.
It is unfair to say, as the trial court did, that the Ayala had "contrived to make future
commercial lot owners special members of BAVA and thereby acquire equal right with
the regular members thereof to use Jupiter Street 53 since, as we stated, the
commercial lot buyers have the right, in any event, to make use of Jupiter Street,
whether or not they are members of the association. It is not their memberships that
give them the right to use it. They share that right with Bel-Air residents from the
outset.
The objective of making the commercial lot owners special members of the Bel-Air
Village Association was not to accord them equal access to Jupiter Street and
inferentially, to give them the right to knock down the perimeter wall. It was, rather, to
regulate the use of the street owing precisely to the "planned" nature of Ayala's
development project, and real estate development in general, and this could best be
done by placing the commercial lot owners under the association's jurisdiction.
Moreover, Ayala's overtures with the association concerning the membership of
commercial lot buyers therein have been shown to be neither perfidious nor unethical
nor devious (paraphrasing the lower court). We quote anew:
xxxxxxxxx
 (7) On June 30, 1972, appellant informed BAVA that in a few
months it shall subdivide and sell the commercial lots bordering the
north side of Buendia Avenue Extension from Reposo Street up to
Zodiac Street. Appellant also informed BAVA that it had taken all
precautions and will impose upon the commercial lot owners deed
restrictions which will harmonize and blend with the development
and welfare of Bel-Air Village. Appellant further applied for special
membership in BAVA of the commercial lot owners. A copy of the
deed restrictions for the commercial lots was also enclosed. The
proposed deed restrictions shall include the 19 meter set back of
buildings from Jupiter Street, the requirement for parking space
within the lot of one (1) parking slot for every seventy five (75)
meters of office space in the building and the limitation of vehicular
traffic along Buendia to entrance only, but allowing both vehicular
entrance and vehicular exit through Jupiter Street and any side
street.
In its letter of July 10, 1972, BAVA acknowledged the above letter of appellant and
informed the latter that the application for special membership of the commercial lot
owners in BAVA would be submitted to BAVA's board of governors for decision.
(8) On September 25,1972, appellant notified BAVA that, after a
careful study, it was finally decided that the height limitation of
buildings on the commercial lots shall be increased from 12.5
meters to 15 meters. Appellant further informed BAVA that Jupiter
Street shall be widened by 3.5 meters to improve traffic flow in said
street. BAVA did not reply to said letter, but on January 22, 1973,
BAVA wrote a letter to the appellant informing the latter that the
Association had assessed the appellant, as special member of the
association, the amount of P40,795.00 (based on 81,590 square
meters at P.50 per square meter) representing the membership
dues of the commercial lot owners for the year 1973, and requested
the appellant to remit the amount which its board of governors had
already included in its current budget. In reply, appellant on January
31, 1973 informed BAVA that due to the widening of Jupiter Street,
the area of the lots which were accepted by the Association as
members was reduced to 76,726 square meters. Thus, the
corresponding due at P.50 per square meter should be reduced to
P38,363.00. This amount, therefore, was remitted by the appellant
to BAVA. Since then, the latter has been collecting membership
dues from the owners of the commercial lots as special members of
the Association. As a matter of fact, the dues were increased
several times. In 1980, the commercial lot owners were already
being charged dues at the rate of P3.00 per square meter.
(Domingo, TSN, p. 36, March 19, 1980). At this rate, the total
membership dues of the commercial lot owners amount to
P230,178.00 annually based on the total area of 76,726 square
meters of the commercial lots. 54
xxxxxxxxx
The alleged undertaking, finally, by Ayala in the deed of donation (over Jupiter Street)
to leave Jupiter Street for the private use of Bel-Air residents is belied by the very
provisions of the deed. We quote:
xxxxxxxxx
IV. That the offer made by the DONOR had been accepted by the
DONEE subject to the condition that the property will be used as a
street for the use of the members of the DONEE, their families,
personnel, guests, domestic help and, under certain reasonable
conditions and restrictions, by the general public, and in the event
that said lots or parts thereof cease to be used as such, ownership
thereof shall automatically revert to the DONOR. The DONEE shall
always have Reposo Street, Makati Avenue, and Paseo de Roxas
open for the use of the general public. It is also understood that the
DONOR shall continue the maintenance of the street at its expense
for a period of three years from date hereof." (Deed of Donation, p.
6, Exh. 7) 55
xxxxxxxxx
The donation, on the contrary, gave the general public equal right to it.
The Court cannot then say, accepting the veracity of the petitioners' facts" enumerated
above, that the Ayala Corporation may be held liable for specific performance of a
demandable obligation, let alone damages.
The Court adds that Ayala can hardly be held responsible for the alleged deterioration
of "living and environmental conditions" 56 of the Bel-Air area, as a consequence of
"Ayala's authorized demolition of the Jupiter perimeter wall in 1974-1975. " 57 We agree
with Ayala that until 1976, "there was peace and quiet" at Jupiter Street, as the
petitioners' (Sangalang, Gaston, and Briones) complaints admit. Hence, the
degeneration of peace and order in Bel-Air cannot be ascribed to the destruction of the
wall in 1974 and 1975.
What Ayala submits as the real cause was the opening of Jupiter Street to vehicular
traffic in 1977., 58 But this was upon orders of the Mayor, and for which the
homeowners' association had precisely filed suit (Civil Case No. 34998) 59 to contest
the act of the Mayor.
c.
This likewise disposes of the third question presented. The petitioners' reliance on
Ayala's alleged conduct (proving its alleged commitment), so we have ruled, is not well-
taken. Ayala's alleged acts do not, by themselves, reflect a commitment to maintain the
wall in dispute. It cannot be therefore said that the Court of Appeals "arbitrarily
ignore(d]" 60 the lower court's findings. Precisely, it is the duty of the appellate court to
review the findings of the trial judge, be they of fact or law. 61 It is not bound by the
conclusions of the judge, for which reason it makes its own findings and arrives at its
own conclusions. Unless a grave abuse of discretion may be imputed to it, it may
accept or reject the lower tribunal's determinations and rely solely on the records.
Accordingly, the Court affirms the Court of Appeals' holding that the Ayala Corporation,
in its dealings with the petitioners, the Bel-Air Village Association in particular, had
"acted with justice, gave the appellees [petitioners] their due and observed honesty
and good faith." 62 "Therefore, under both Articles 19 and 21 of the Civil Code, the
appellant [Ayala] cannot be held liable for damages." 63
2. G.R. Nos. 74376, 76394, 78182, & 82281
Our decision also resolves, quite anticlimactically, these companion cases. But we do
so for various other reasons. In the Sangalang case, we absolve the Ayala Corporation
primarily owing to our finding that it is not liable for the opening of Jupiter Street to the
general public. Insofar as these petitions are concerned, we likewise exculpate the
private respondents, not only because of the fact that Jupiter Street is not covered by
the restrictive easements based on the "deed restrictions" but chiefly because the
National Government itself, through the Metro Manila Commission (MMC), had
reclassified Jupiter Street into high density commercial (C-3) zone, 64 pursuant to its
Ordinance No. 81-01. Hence, the petitioners have no cause of action on the strength
alone of the said "deed restrictions.
In view thereof, we find no need in resolving the questions raised as to procedure,
since this disposition is sufficient to resolve these cases.
It is not that we are saying that restrictive easements, especially the easements herein
in question, are invalid or ineffective. As far as the Bel-Air subdivision itself is
concerned, certainly, they are valid and enforceable. But they are, like all contracts,
subject to the overriding demands, needs, and interests of the greater number as the
State may determine in the legitimate exercise of police power. Our jurisdiction
guarantees sanctity of contract and is said to be the "law between the contracting
parties, 65 but while it is so, it cannot contravene 'law, morals, good customs, public
order, or public policy. 66 Above all, it cannot be raised as a deterrent to police power,
designed precisely to promote health, safety, peace, and enhance the common good,
at the expense of contractual rights, whenever necessary. In Ortigas & Co., Limited
Partnership v. Feati Bank and Trust Co., 67 we are told:
xxxxxxxxx
2. With regard to the contention that said resolution cannot nullify
the contractual obligations assumed by the defendant-appellee
referring to the restrictions incorporated in the deeds of sale and
later in the corresponding Transfer Certificates of Title issued to
defendant-appellee it should be stressed, that while non-impairment
of contracts is constitutionally guaranteed, the rule is not absolute,
since it has to be reconciled with the legitimate exercise of police
power, i.e., "the power to prescribe regulations to promote the
health, morals, peace, education, good order or safety and general
welfare of the people.' Invariably described as "the most essential,
insistent, and illimitable of powers" and "in a sense, the greatest
and most powerful attribute of government," the exercise of the
power may be judicially inquired into and corrected only if it is
capricious, whimsical, unjust or unreasonable, there having been a
denial of due process or a violation of any other applicable
constitutional guarantee. As this Court held through Justice Jose P.
Bengson in Philippine Long Distance Company vs. City of Davao, et
al. police power 'is elastic and must be responsive to various social
conditions; it is not confined within narrow circumscriptions of
precedents resting on past conditions; it must follow the legal
progress of a democratic way of life.' We were even more emphatic
in Vda. de Genuino vs. The Court of agrarian Relations, et al., when
We declared: "We do not see why public welfare when clashing with
the individual right to property should not be made to prevail
through the state's exercise of its police power."
Resolution No. 27, 1960 declaring the western part of High way 54,
now E. de los Santos Avenue (EDSA, for short) from Shaw
Boulevard to the Pasig River as an industrial and commercial zone,
was obviously passed by the Municipal Council of Mandaluyong,
Rizal in the exercise of police power to safeguard or promote the
health, safety, peace, good order and general welfare of the people
in the locality. Judicial notice may be taken of the conditions
prevailing in the area, especially where Lots Nos. 5 and 6 are
located. The lots themselves not only front the highway; industrial
and commercial complexes have flourished about the place. EDSA,
a main traffic artery which runs through several cities and
municipalities in the Metro Manila area, supports an endless stream
of traffic and the resulting activity, noise and pollution are hardly
conducive to the health, safety or welfare of the residents in its
route. Having been expressly granted the power to adopt zoning
and subdivision ordinances or regulations, the municipality of
Mandaluyong, through its Municipal Council, was reasonably, if not
perfectly, justified under the circumstances, in passing the subject
resolution. 68
xxxxxxxxx
Undoubtedly, the MMC Ordinance represents a legitimate exercise of police power.
The petitioners have not shown why we should hold otherwise other than for the
supposed "non-impairment" guaranty of the Constitution, which, as we have declared,
is secondary to the more compelling interests of general welfare. The Ordinance has
not been shown to be capricious or arbitrary or unreasonable to warrant the reversal of
the judgments so appealed. In that connection, we find no reversible error to have
been committed by the Court of Appeals.
WHEREFORE, premises considered, these petitions are DENIED No pronouncement
as to costs.
IT IS SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-59603 April 29, 1987
EXPORT PROCESSING ZONE AUTHORITY, petitioner,
vs.
HON. CEFERINO E. DULAY, in his capacity as the Presiding Judge, Court of First
Instance of Cebu, Branch XVI, Lapu-Lapu City, and SAN ANTONIO
DEVELOPMENT CORPORATION, respondents.
Elena M. Cuevas for respondents.
GUTIERREZ, JR., J.:
The question raised in this petition is whether or not Presidential Decrees Numbered
76, 464, 794 and 1533 have repealed and superseded Sections 5 to 8 of Rule 67 of the
Revised Rules of Court, such that in determining the just compensation of property in
an expropriation case, the only basis should be its market value as declared by the
owner or as determined by the assessor, whichever is lower.
On January 15, 1979, the President of the Philippines, issued Proclamation No. 1811,
reserving a certain parcel of land of the public domain situated in the City of Lapu-
Lapu, Island of Mactan, Cebu and covering a total area of 1,193,669 square meters,
more or less, for the establishment of an export processing zone by petitioner Export
Processing Zone Authority (EPZA).
Not all the reserved area, however, was public land. The proclamation included, among
others, four (4) parcels of land with an aggregate area of 22,328 square meters owned
and registered in the name of the private respondent. The petitioner, therefore, offered
to purchase the parcels of land from the respondent in acccordance with the valuation
set forth in Section 92, Presidential Decree (P.D.) No. 464, as amended. The parties
failed to reach an agreement regarding the sale of the property.
The petitioner filed with the then Court of First Instance of Cebu, Branch XVI, Lapu-
Lapu City, a complaint for expropriation with a prayer for the issuance of a writ of
possession against the private respondent, to expropriate the aforesaid parcels of land
pursuant to P.D. No. 66, as amended, which empowers the petitioner to acquire by
condemnation proceedings any property for the establishment of export processing
zones, in relation to Proclamation No. 1811, for the purpose of establishing the Mactan
Export Processing Zone.
On October 21, 1980, the respondent judge issued a writ of possession authorizing the
petitioner to take immediate possession of the premises. On December 23, 1980, the
private respondent flied its answer.
At the pre-trial conference on February 13, 1981, the respondent judge issued an order
stating that the parties have agreed that the only issue to be resolved is the just
compensation for the properties and that the pre-trial is thereby terminated and the
hearing on the merits is set on April 2, 1981.
On February 17, 1981, the respondent judge issued the order of condemnation
declaring the petitioner as having the lawful right to take the properties sought to be
condemned, upon the payment of just compensation to be determined as of the filing of
the complaint. The respondent judge also issued a second order, subject of this
petition, appointing certain persons as commissioners to ascertain and report to the
court the just compensation for the properties sought to be expropriated.
On June 19, 1981, the three commissioners submitted their consolidated report
recommending the amount of P15.00 per square meter as the fair and reasonable
value of just compensation for the properties.
On July 29, 1981, the petitioner Med a Motion for Reconsideration of the order of
February 19, 1981 and Objection to Commissioner's Report on the grounds that P.D.
No. 1533 has superseded Sections 5 to 8 of Rule 67 of the Rules of Court on the
ascertainment of just compensation through commissioners; and that the
compensation must not exceed the maximum amount set by P.D. No. 1533.
On November 14, 1981, the trial court denied the petitioner's motion for
reconsideration and gave the latter ten (10) days within which to file its objection to the
Commissioner's Report.
On February 9, 1982, the petitioner flied this present petition for certiorari and
mandamus with preliminary restraining order, enjoining the trial court from enforcing
the order dated February 17, 1981 and from further proceeding with the hearing of the
expropriation case.
The only issue raised in this petition is whether or not Sections 5 to 8, Rule 67 of the
Revised Rules of Court had been repealed or deemed amended by P.D. No. 1533
insofar as the appointment of commissioners to determine the just compensation is
concerned. Stated in another way, is the exclusive and mandatory mode of determining
just compensation in P.D. No. 1533 valid and constitutional?
The petitioner maintains that the respondent judge acted in excess of his jurisdiction
and with grave abuse of discretion in denying the petitioner's motion for
reconsideration and in setting the commissioner's report for hearing because under
P.D. No. 1533, which is the applicable law herein, the basis of just compensation shall
be the fair and current market value declared by the owner of the property sought to be
expropriated or such market value as determined by the assessor, whichever is lower.
Therefore, there is no more need to appoint commissioners as prescribed by Rule 67
of the Revised Rules of Court and for said commissioners to consider other highly
variable factors in order to determine just compensation. The petitioner further
maintains that P.D. No. 1533 has vested on the assessors and the property owners
themselves the power or duty to fix the market value of the properties and that said
property owners are given the full opportunity to be heard before the Local Board of
Assessment Appeals and the Central Board of Assessment Appeals. Thus, the vesting
on the assessor or the property owner of the right to determine the just compensation
in expropriation proceedings, with appropriate procedure for appeal to higher
administrative boards, is valid and constitutional.
Prior to the promulgation of P.D. Nos. 76, 464, 794 and 1533, this Court has
interpreted the eminent domain provisions of the Constitution and established the
meaning, under the fundametal law, of just compensation and who has the power to
determine it. Thus, in the following cases, wherein the filing of the expropriation
proceedings were all commenced prior to the promulgation of the aforementioned
decrees, we laid down the doctrine onjust compensation:
Municipality of Daet v. Court of Appeals (93 SCRA 503, 516),
xxx xxx xxx
"And in the case of J.M. Tuason & Co., Inc. v. Land Tenure Administration, 31 SCRA
413, the Court, speaking thru now Chief Justice Fernando, reiterated the 'well-settled
(rule) that just compensation means the equivalent for the value of the property at the
time of its taking. Anything beyond that is more and anything short of that is less, than
just compensation. It means a fair and full equivalent for the loss sustained, which is
the measure of the indemnity, not whatever gain would accrue to the expropriating
entity."
Garcia v. Court ofappeals (102 SCRA 597, 608),
xxx xxx xxx
"Hence, in estimating the market value, all the capabilities of the property and
all the uses to which it may be applied or for which it is adapted are to be
considered and not merely the condition it is in the time and the use to which
it is then applied by the owner. All the facts as to the condition of the property
and its surroundings, its improvements and capabilities may be shown and
considered in estimating its value."
Republic v. Santos (141 SCRA 30, 35-36),
"According to section 8 of Rule 67, the court is not bound by the
commissioners' report. It may make such order or render such judgment as
shall secure to the plaintiff the property essential to the exercise of his right of
condemnation, and to the defendant just compensation for the property
expropriated. This Court may substitute its own estimate of the value as
gathered from the record (Manila Railroad Company v. Velasquez, 32 Phil.
286)."
However, the promulgation of the aforementioned decrees practically set aside the
above and many other precedents hammered out in the course of evidence-laden, well
argued, fully heard, studiously deliberated, and judiciously considered court
proceedings. The decrees categorically and peremptorily limited the definition of just
compensation thus:
P.D. No. 76:
xxx xxx xxx
"For purposes of just compensation in cases of private property acquired by
the government for public use, the basis shall be the current and fair market
value declared by the owner or administrator, or such market value as
determined by the Assessor, whichever is lower."
P.D. No. 464:
"Section 92. Basis for payment of just compensation in expropriation
proceedings. In determining just compensation which private property is
acquired by the government for public use, the basis shall be the market
value declared by the owner or administrator or anyone having legal interest
in the property, or such market value as determined by the assessor,
whichever is lower."
P.D. No. 794:
"Section 92. Basis for payment of just compensation in expropriation
proceedings. In determining just compensation when private property is
acquired by the government for public use, the same shall not exceed the
market value declared by the owner or administrator or anyone having legal
interest in the property, or such market value as determined by the assessor,
whichever is lower."
P.D. No. 1533:
"Section 1. In determining just compensation for private property acquired
through eminent domain proceedings, the compensation to be paid shall not
exceed the value declared by the owner or administrator or anyone having
legal interest in the property or determined by the assessor, pursuant to the
Real Property Tax Code, whichever value is lower, prior to the
recommendation or decision of the appropriate Government office to acquire
the property."
We are constrained to declare the provisions of the Decrees on just compensation
unconstitutional and void and accordingly dismiss the instant petition for lack of merit.
The method of ascertaining just compensation under the aforecited decrees constitutes
impermissible encroachment on judicial prerogatives. It tends to render this Court
inutile in a matter which under the Constitution is reserved to it for final determination.
Thus, although in an expropriation proceeding the court technically would still have the
power to determine the just compensation for the property, following the applicable
decrees, its task would be relegated to simply stating the lower value of the property as
declared either by the owner or the assessor. As a necessary consequence, it would
be useless for the court to appoint commissioners under Rule 67 of the Rules of Court.
Moreover, the need to satisfy the due process clause in the taking of private property is
seemingly fulfilled since it cannot be said that a judicial proceeding was not had before
the actual taking. However, the strict application of the decrees during the proceedings
would be nothing short of a mere formality or charade as the court has only to choose
between the valuation of the owner and that of the assessor, and its choice is always
limited to the lower of the two. The court cannot exercise its discretion or independence
in determining what is just or fair. Even a grade school pupil could substitute for the
judge insofar as the determination of constitutional just compensation is concerned.
In the case of National Housing Authority v. Reyes (123 SCRA 245), this Court upheld
P.D. No. 464, as further amended by P.D. Nos. 794, 1224 and 1259. In this case, the
petitioner National Housing Authority contended that the owner's declaration at
P1,400.00 which happened to be lower than the assessor's assessment, is the just
compensation for the respondent's property under section 92 of P.D. No. 464. On the
other hand, the private respondent stressed that while there may be basis for the
allegation that the respondent judge did not follow the decree, the matter is still subject
to his final disposition, he having been vested with the original and competent authority
to exercise his judicial discretion in the light of the constitutional clauses on due
process and equal protection.
To these opposing arguments, this Court ruled ihat under the conceded facts, there
should be a recognition that the law as it stands must be applied; that the decree
having spoken so clearly and unequivocably calls for obedience; and that on a matter
where the applicable law speaks in no uncertain language, the Court has no choice
except to yield to its command. We further stated that "the courts should recognize that
the rule introduced by P.D. No. 76 and reiterated in subsequent decrees does not
upset the established concepts of justice or the constitutional provision on just
compensation for, precisely, the owner is allowed to make his own valuation of his
property."
While the Court yielded to executive prerogative exercised in the form of absolute law-
making power, its members, nonetheless, remained uncomfortable with the
implications of the decision and the abuse and unfairness which might follow in its
wake. For one thing, the President himself did not seem assured or confident with his
own enactment. It was not enough to lay down the law on determination of just
compensation in P.D. 76. It had to be repeated and reiterated in P.D. 464, P.D. 794,
and P.D. 1533. The provision is also found in P.D. 1224, P.D. 1259 and P.D. 1313.
Inspite of its effectivity as general law and the wide publicity given to it, the questioned
provision or an even stricter version had to be embodied in cases of specific
expropriations by decree as in P.D. 1669 expropriating the Tambunting Estate and
P.D. 1670 expropriating the Sunog Apog area in Tondo, Manila.
In the present petition, we are once again confronted with the same question of
whether the courts under P.D. 1533, which contains the same provision on just
compensation as its predecessor decrees, still have the power and authority to
determine just compensation, independent of what is stated by the decree and to this
effect, to appoint commissioners for such purpose.
This time, we answer in the affirmative.
In overruling the petitioner's motion for reconsideration and objection to the
commissioner's report, the trial court said:
"Another consideration why the Court is empowered to appoint
commissioners to assess the just compensation of these properties under
eminent domain proceedings, is the well-entrenched ruling that 'the owner of
property expropriated is entitled to recover from expropriating authority the
fair and full value of the lot, as of the time when possession thereof was
actually taken by the province, plus consequential damages including
attorney's fees from which the consequential benefits, if any should be
deducted, with interest at the legal rate, on the aggregate sum due to the
owner from and after the date of actual taking.' (Capitol Subdivision, Inc. v.
Province of Negros Occidental, 7 SCRA 60). In fine, the decree only
establishes a uniform basis for determining just compensation which the
Court may consider as one of the factors in arriving at 'just compensation,' as
envisage in the Constitution. In the words of Justice Barredo, "Respondent
court's invocation of General Order No. 3 of September 21, 1972 is nothing
short of an unwarranted abdication of judicial authority, which no judge duly
imbued with the implications of the paramount principle of independence of
the judiciary should ever think of doing." (Lina v. Purisima, 82 SCRA 344,
351; Cf. Prov. of Pangasinan v. CFI Judge of Pangasinan, Br. VIII, 80 SCRA
117) Indeed, where this Court simply follows PD 1533, thereby limiting the
determination of just compensation on the value declared by the owner or
administrator or as determined by the Assessor, whichever is lower, it may
result in the deprivation of the landowner's right of due process to enable it to
prove its claim to just compensation, as mandated by the Constitution. (Uy v.
Genato, 57 SCRA 123). The tax declaration under the Real Property Tax
Code is, undoubtedly, for purposes of taxation."
We are convinced and so rule that the trial court correctly stated that the valuation in
the decree may only serve as a guiding principle or one of the factors in determining
just compensation but it may not substitute the court's own judgment as to what
amount should be awarded and how to arrive at such amount. A return to the earlier
well-established doctrine, to our mind, is more in keeping with the principle that the
judiciary should live up to its mission "by vitalizing and not denigrating constitutional
rights." (See Salonga v. Cruz Pao, 134 SCRA 438, 462; citing Mercado v. Court of
First Instance of Rizal, 116 SCRA 93.) The doctrine we enunciated in National Housing
Authority v. Reyes, supra, therefore, must necessarily be abandoned if we are to
uphold this Court's role as the guardian of the fundamental rights guaranteed by the
due process and equal protection clauses and as the final arbiter over transgressions
committed against constitutional rights.
The basic unfairness of the decrees is readily apparent.
Just compensation means the value of the property at the time of the taking. It means
a fair and full equivalent for the loss sustained. All the facts as to the condition of the
property and its surroundings, its improvements and capabilities, should be considered.
In this particular case, the tax declarations presented by the petitioner as basis for just
compensation were made by the Lapu-Lapu municipal, later city assessor long before
martial law, when land was not only much cheaper but when assessed values of
properties were stated in figures constituting only a fraction of their true market value.
The private respondent was not even the owner of the properties at the time. It
purchased the lots for development purposes. To peg the value of the lots on the basis
of documents which are out of date and at prices below the acquisition cost of present
owners would be arbitrary and confiscatory.
Various factors can come into play in the valuation of specific properties singled out for
expropriation. The values given by provincial assessors are usually uniform for very
wide areas covering several barrios or even an entire town with the exception of the
poblacion. Individual differences are never taken into account. The value of land is
based on such generalities as its possible cultivation for rice, corn, coconuts, or other WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby DISMISSED.
crops. Very often land described as "cogonal" has been cultivated for generations. The temporary restraining order issued on February 16, 1982 is LIFTED and SET
Buildings are described in terms of only two or three classes of building materials and ASIDE.
estimates of areas are more often inaccurate than correct. Tax values can serve as
guides but cannot be absolute substitutes for just compensation. SO ORDERED.

To say that the owners are estopped to question the valuations made by assessors
since they had the opportunity to protest is illusory. The overwhelming mass of land
owners accept unquestioningly what is found in the tax declarations prepared by local
assessors or municipal clerks for them. They do not even look at, much less analyze,
the statements. The Idea of expropriation simply never occurs until a demand is made
or a case filed by an agency authorized to do so.

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

As was held in the case of Gideon v. Wainwright (93 ALR 2d,733,742):

"In the light of these and many other prior decisions of this Court, it is not surprising
that the Betts Court, when faced with the contention that 'one charged with crime, who
is unable to obtain counsel must be furnished counsel by the State,' conceded that
'[E]xpressions in the opinions of this court lend color to the argument. . .' 316 U.S., at
462, 463, 86 L ed. 1602, 62 S Ct. 1252. The fact is that in deciding as it did-that
"appointment of counsel is not a fundamental right, essential to a fair trial" the Court
in Betts v. Brady made an ubrupt brake with its own well-considered precedents. In
returning to these old precedents, sounder we believe than the new, we but restore
constitutional principles established to achieve a fair system of justice. . ."

We return to older and more sound precedents. This Court has the duty to formulate
guiding and controlling constitutional principles, precepts, doctrines, or rules. (See
Salonga v. Cruz Pano, supra).

The determination of "just compensation" in eminent domain cases is a judicial

function. The executive department or the legislature may make the initial
determinations but when a party claims a violation of the guarantee in the Bill of Rights
that private property may not be taken for public use without just compensation, no
statute, decree, or executive order can mandate that its own determination shall prevail
over the court's findings. Much less can the courts be precluded from looking into the
"just-ness" of the decreed compensation.

We, therefore, hold that P.D. No. 1533, which eliminates the court's discretion to
appoint commissioners pursuant to Rule 67 of the Rules of Court, is unconstitutional
and void. To hold otherwise would be to undermine the very purpose why this Court
exists in the first place.
 Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. Nos. 103442-45 May 21, 1993
NATIONAL POWER CORPORATION, ET AL., petitioners,
vs.
THE COURT OF APPEALS, GAUDENCIO C. RAYO, ET AL., respondents.
The Solicitor General for plaintiff-appellee.
Ponciano G. Hernandez for private respondents.
DAVIDE, JR., J.:
This is a petition for review on certiorari under Rule 45 of the Revised Rules of Court
urging this Court to set aside the 19 August 1991 consolidated Decision of the Court of
Appeals in CA.-G.R. CV Nos. 27290-93 1 which reversed the Decision of Branch 5 of
the then Court of First Instance (now Regional Trial Court) of Bulacan, and held
petitioners National Power Corporation (NPC) and Benjamin Chavez jointly and
severally liable to the private respondents for actual and moral damages, litigation
expenses and attorney's fees.
This present controversy traces its beginnings to four (4) separate complaints 2 for
damages filed against the NPC and Benjamin Chavez before the trial court. The
plaintiffs therein, now private respondents, sought to recover actual and other damages
for the loss of lives and the destruction to property caused by the inundation of the
town of Norzagaray, Bulacan on 26-27 October 1978. The flooding was purportedly
caused by the negligent release by the defendants of water through the spillways of the
Angat Dam (Hydroelectric Plant). In said complaints, the plaintiffs alleged, inter alia,
that: 1) defendant NPC operated and maintained a multi-purpose hydroelectric plant in
the Angat River at Hilltop, Norzagaray, Bulacan; 2) defendant Benjamin Chavez was
the plant supervisor at the time of the incident in question; 3) despite the defendants'
knowledge, as early as 24 October 1978, of the impending entry of typhoon "Kading,"
they failed to exercise due diligence in monitoring the water level at the dam; 4) when
the said water level went beyond the maximum allowable limit at the height of the
typhoon, the defendants suddenly, negligently and recklessly opened three (3) of the
dam's spillways, thereby releasing a large amount of water which inundated the banks
of the Angat River; and 5) as a consequence, members of the household of the
plaintiffs, together with their animals, drowned, and their properties were washed away
in the evening of 26 October and the early hours of 27 October 1978. 3
In their Answers, the defendants, now petitioners, alleged that: 1) the NPC exercised
due care, diligence and prudence in the operation and maintenance of the
hydroelectric plant; 2) the NPC exercised the diligence of a good father in the selection
of its employees; 3) written notices were sent to the different municipalities of Bulacan
warning the residents therein about the impending release of a large volume of water
with the onset of typhoon "Kading" and advise them to take the necessary precautions;
4) the water released during the typhoon was needed to prevent the collapse of the
dam and avoid greater damage to people and property; 5) in spite of the precautions
undertaken and the diligence exercised, they could still not contain or control the flood
that resulted and; 6) the damages incurred by the private respondents were caused by
a fortuitous event or force majeure and are in the nature and character of damnum
absque injuria. By way of special affirmative defense, the defendants averred that the
NPC cannot be sued because it performs a purely governmental function. 4
Upon motion of the defendants, a preliminary hearing on the special defense was
conducted. As a result thereof, the trial court dismissed the complaints as against the
NPC on the ground that the provision of its charter allowing it to sue and be sued does
not contemplate actions based on tort. The parties do not, however, dispute the fact
that this Court overruled the trial court and ordered the reinstatement of the complaints
as against the NPC. 5
Being closely interrelated, the cases were consolidated and trial thereafter ensued.
The lower court rendered its decision on 30 April 1990 dismissing the complaints "for
lack of sufficient and credible evidence." 6 Consequently, the private respondents
seasonably appealed therefrom to the respondent Court which then docketed the
cases as CA-G.R. CV Nos. 27290-93.
In its joint decision promulgated on 19 August 1991, the Court of Appeals reversed the
appealed decision and awarded damages in favor of the private respondents. The
dispositive portion of the decision reads:
CONFORMABLY TO THE FOREGOING, the joint decision
appealed from is hereby REVERSED and SET ASIDE, and a new
one is hereby rendered:
1. In Civil Case No. SM-950, ordering defendants-appellees to pay,
jointly and severally, plaintiffs-appellants, with legal interest from the
date when this decision shall become final and executory, the
following:
A. Actual damages, to wit:
1) Gaudencio C. Rayo, Two Hundred Thirty One
Thousand Two Hundred Sixty Pesos
(P231,260.00);
2) Bienvenido P. Pascual, Two Hundred Four
Thousand Five Hundred Pesos (P204.500.00);
 3) Tomas Manuel, One Hundred Fifty Five
Thousand Pesos (P155,000.00);
4) Pedro C. Bartolome, One Hundred Forty
Seven Thousand Pesos (P147,000.00);.
5) Bernardino Cruz, One Hundred Forty Three
Thousand Five Hundred Fifty Two Pesos and
Fifty Centavos (P143,552.50);
6) Jose Palad, Fifty Seven Thousand Five
Hundred Pesos (P57,500.00);
7) Mariano S. Cruz, Forty Thousand Pesos
(P40,000.00);
8) Lucio Fajardo, Twenty nine Thousand Eighty
Pesos (P29,080.00); and
B. Litigation expenses of Ten Thousand Pesos (P10,000.00);
2. In Civil case No. SM-951, ordering defendants-appellees to pay
jointly and severally, plaintiff-appellant, with legal interest from the
date when this decision shall have become final and executory, the
following :
A. Actual damages of Five Hundred Twenty
Thousand Pesos (P520,000.00);.
B. Moral damages of five hundred Thousand
Pesos (P500,000.00); and.
C. Litigation expenses of Ten Thousand Pesos
(P10,000.00);.
3. In Civil Case No. SM-953, ordering defendants-appellees to pay,
jointly and severally, with legal interest from the date when this
decision shall have become final and executory;
A. Plaintiff-appellant Angel C. Torres:
1) Actual damages of One Hundred Ninety Nine Thousand One
Hundred Twenty Pesos (P199,120.00);
2) Moral Damages of One Hundred Fifty Thousand Pesos
(P150,000.00);
B. Plaintiff-appellant Norberto Torres:
1) Actual damages of Fifty Thousand Pesos (P50,000.00);
2) Moral damages of Fifty Thousand Pesos (P50,000.00);
C. Plaintiff-appellant Rodelio Joaquin:
1) Actual damages of One Hundred Thousand
Pesos (P100,000.00);
2) Moral damages of One Hundred Thousand
Pesos (P100,000.00); and
D. Plaintifsf-appellants litigation expenses of Ten Thousand Pesos
(P10,000.00);
4. In Civil case No. SM-1247, ordering defendants-appellees to pay,
jointly and severally, with legal interest from the date when this
decision shall have become final and executory :
A. Plaintiffs-appellants Presentacion Lorenzo and Clodualdo
Lorenzo:
1) Actual damages of Two Hundred Fifty Six
Thousand Six Hundred Pesos (P256,600.00);
2) Moral damages of Fifty Thousand Pesos
(P50,000.00);
B. Plaintiff-appellant Consolacion Guzman :
1) Actual damages of One Hundred forty
Thousand Pesos (P140,000.00);
2) Moral damages of Fifty Thousand Pesos
(P50,000.00);
C. Plaintiff-appellant Virginia Guzman :
1) Actual damages of Two Hundred Five
Hundred Twenty Pesos (205,520.00); and
D. Plaintiffs-appellants litigation expenses of Ten Thousand Pesos
(10,000.00).
In addition, in all the four (4) instant cases, ordering defendants-
appellees to pay, jointly and severally, plaintiffs-appellants attorney
fees in an amount equivalent to 15% of the total amount awarded.
 No pronouncement as to costs. 7
The foregoing judgment is based on the public respondent's conclusion that the
petitioners were guilty of:
. . . a patent gross and evident lack of foresight, imprudence and
negligence . . . in the management and operation of Angat Dam.
The unholiness of the hour, the extent of the opening of the
spillways, And the magnitude of the water released, are all but
products of defendants-appellees' headlessness, slovenliness, and
carelessness. The resulting flash flood and inundation of even
areas (sic) one (1) kilometer away from the Angat River bank would
have been avoided had defendants-appellees prepared the Angat
Dam by maintaining in the first place, a water elevation which would
allow room for the expected torrential rains. 8
This conclusion, in turn, is anchored on its findings of fact, to wit:
As early as October 21, 1978, defendants-appellees knew of the
impending onslaught of and imminent danger posed by typhoon
"Kading". For as alleged by defendants-appellees themselves, the
coming of said super typhoon was bannered by Bulletin Today, a
newspaper of national circulation, on October 25, 1978, as "Super
Howler to hit R.P." The next day, October 26, 1978, said typhoon
once again merited a headline in said newspaper as "Kading's Big
Blow expected this afternoon" (Appellee's Brief, p. 6). Apart from
the newspapers, defendants-appellees learned of typhoon "Kading'
through radio announcements (Civil Case No. SM-950, TSN,
Benjamin Chavez, December 4, 1984, pp. 7-9).
Defendants-appellees doubly knew that the Angat Dam can safely
hold a normal maximum headwater elevation of 217 meters
(Appellee's brief, p. 12; Civil Case No. SM-951, Exhibit "I-6"; Civil
Case No. SM-953, Exhibit "J-6"; Civil Case No. SM-1247, Exhibit
"G-6").
Yet, despite such knowledge, defendants-appellees maintained a
reservoir water elevation even beyond its maximum and safe level,
thereby giving no sufficient allowance for the reservoir to contain the
rain water that will inevitably be brought by the coming typhoon.
On October 24, 1978, before typhoon "Kading" entered the
Philippine area of responsibility, water elevation ranged from 217.61
to 217.53, with very little opening of the spillways, ranging from 1/2
to 1 meter. On October 25, 1978, when typhoon "Kading" entered
the Philippine area of responsibility, and public storm signal number
one was hoisted over Bulacan at 10:45 a.m., later raised to number
two at 4:45 p.m., and then to number three at 10:45 p.m., water
elevation ranged from 217.47 to 217.57, with very little opening of
the spillways, ranging from 1/2 to 1 meter. On October 26, 1978,
when public storm signal number three remained hoisted over
Bulacan, the water elevation still remained at its maximum level of
217.00 to 218.00 with very little opening of the spillways ranging
from 1/2 to 2 meters, until at or about midnight, the spillways were
suddenly opened at 5 meters, then increasing swiftly to 8, 10, 12,
12.5, 13, 13.5, 14, 14.5 in the early morning hours of October 27,
1978, releasing water at the rate of 4,500 cubic meters per second,
more or less. On October 27, 1978, water elevation remained at a
range of 218.30 to 217.05 (Civil Case No. SM-950, Exhibits "D" and
series, "L", "M", "N", and "O" and Exhibits "3" and "4"; Civil Case
No. SM-951, Exhibits "H" and "H-1"; Civil Case No. SM-953,
Exhibits "I" and "I-1"; Civil Case No. SM 1247, Exhibits "F" and "F-
1").
xxx xxx xxx
From the mass of evidence extant in the record, We are convinced,
and so hold that the flash flood on October 27, 1978, was caused
not by rain waters (sic), but by stored waters (sic) suddenly and
simultaneously released from the Angat Dam by defendants-
appellees, particularly from midnight of October 26, 1978 up to the
morning hours of October 27,
1978. 9
The appellate court rejected the petitioners' defense that they had sent "early warning
written notices" to the towns of Norzagaray, Angat, Bustos, Plaridel, Baliwag and
Calumpit dated 24 October 1978 which read:
TO ALL CONCERN (sic):
Please be informed that at present our reservoir (dam) is full and
that we have been releasing water intermittently for the past several
days.
With the coming of typhoon "Rita" (Kading) we expect to release
greater (sic) volume of water, if it pass (sic) over our place.
In view of this kindly advise people residing along Angat River to
keep alert and stay in safe places. because
Said notice was delivered to the "towns of Bulacan" on October 26,
1978 by defendants-appellees driver, Leonardo Nepomuceno (Civil
Case No. SM-950, TSN, Benjamin Chavez, December 4, 1984, pp.
7-11 and TSN, Leonardo Nepomuceno, March 7, 1985, pp. 10-12).
Said notice is ineffectual, insufficient and inadequate for purposes
of the opening of the spillway gates at midnight of October 26, 1978
and on October 27, 1978. It did not prepare or warn the persons so
served, for the volume of water to be released, which turned out to
be of such magnitude, that residents near or along the Angat River,
even those one (1) kilometer away, should have been advised to
evacuate. Said notice, addressed "TO ALL CONCERN (sic)," was
delivered to a policeman (Civil Case No. SM-950, pp. 10-12 and
 Exhibit "2-A") for the municipality of Norzagaray. Said notice was
not thus addressed and delivered to the proper and responsible
officials who could have disseminated the warning to the residents
directly affected. As for the municipality of Sta. Maria, where
plaintiffs-appellants in Civil Case No. SM-1246 reside, said notice
does not appear to have been served. 11
Relying on Juan F. Nakpil & Sons vs. Court of Appeals, 12 public respondent rejected
the petitioners' plea that the incident in question was caused by force majeure and that
they are, therefore, not liable to the private respondents for any kind of damage
such damage being in the nature of damnum absque injuria.
The motion for reconsideration filed by the petitioners, as well as the motion to modify
judgment filed by the public respondents, 13 were denied by the public respondent in its
Resolution of 27 December 1991. 14
Petitioners thus filed the instant petition on 21 February 1992.
After the Comment to the petition was filed by the private respondents and the Reply
thereto was filed by the petitioners, We gave due course to the petition on 17 June
1992 and directed the parties to submit their respective Memoranda, 15 which they
subsequently complied with.
The petitioners raised the following errors allegedly committed by the respondent Court
: v. Court of Appeals, 138 SCRA 553; Estrada v. Consolacion, 71
I. THE COURT OF APPEALS ERRED IN APPLYING THE RULING
OF NAKPIL & SONS V. COURT OF APPEALS AND HOLDING
THAT PETITIONERS WERE GUILTY OF NEGLIGENCE.
II. THE COURT OF APPEALS ERRED IN HOLDING THAT THE
WRITTEN NOTICES OF WARNING ISSUED BY PETITIONERS
WERE INSUFFICIENT.
III. THE COURT OF APPEALS ERRED IN HOLDING THAT THE
DAMAGE SUFFERED BY PRIVATE RESPONDENTS WAS
NOT DAMNUM ABSQUE INJURIA.
IV. THE COURT OF APPEALS ERRED IN NOT AWARDING THE
COUNTERCLAIM OF PETITIONERS FOR ATTORNEY'S FEES
AND EXPENSES OF LITIGATION. 16
These same errors were raised by herein petitioners in G.R. No. 96410,
entitled National Power Corporation, et al., vs. Court of Appeals, et al., 17 which this
Court decided on 3 July 1992. The said case involved the very same incident subject of
the instant petition. In no uncertain terms, We declared therein that the proximate
cause of the loss and damage sustained by the plaintiffs therein who were similarly
situated as the private respondents herein was the negligence of the petitioners,
and that the 24 October 1978 "early warning notice" supposedly sent to the affected
municipalities, the same notice involved in the case at bar, was insufficient. We thus
cannot now rule otherwise not only because such a decision binds this Court with
respect to the cause of the inundation of the town of Norzagaray, Bulacan on 26-27
October 1978 which resulted in the loss of lives and the destruction to property in both
cases, but also because of the fact that on the basis of its meticulous analysis and
evaluation of the evidence adduced by the parties in the cases subject of CA-G.R. CV
Nos. 27290-93, public respondent found as conclusively established that indeed, the
petitioners were guilty of "patent gross and evident lack of foresight, imprudence and
negligence in the management and operation of Angat Dam," and that "the extent of
the opening of the spillways, and the magnitude of the water released, are all but
products of defendants-appellees' headlessness, slovenliness, and carelessness." 18 Its
findings and conclusions are biding upon Us, there being no showing of the existence
of any of the exceptions to the general rule that findings of fact of the Court of Appeals
are conclusive upon this Court. 19 Elsewise stated, the challenged decision can stand
on its own merits independently of Our decision in G.R. No. 96410. In any event, We
reiterate here in Our pronouncement in the latter case that Juan F. Nakpil & Sons vs.
Court of Appeals 20 is still good law as far as the concurrent liability of an obligor in the
case of force majeure is concerned. In the Nakpil case, We held:
To exempt the obligor from liability under Article 1174 of the Civil
Code, for a breach of an obligation due to an "act of God," the
following must concur: (a) the cause of the breach of the obligation
must be independent of the will of the debtor; (b) the event must be
either unforseeable or unavoidable; (c) the event must be such as
to render it impossible for the debtor to fulfill his obligation in a
moral manner; and (d) the debtor must be free from any
participation in, or aggravation of the injury to the creditor. (Vasquez
SCRA 423; Austria v. Court of Appeals, 39 SCRA 527; Republic of
the Phil. v. Luzon Stevedoring Corp., 21 SCRA 279; Lasam v.
Smith, 45 Phil. 657).
Thus, if upon the happening of a fortuitous event or an act of God,
there concurs a corresponding fraud, negligence, delay or violation
or contravention in any manner of the tenor of the obligation as
provided for in Article 1170 of the Civil Code, which results in loss or
damage, the obligor cannot escape liability.
The principle embodied in the act of God doctrine strictly requires
that the act must be one occasioned exclusively by the violence of
nature and all human agencies are to be excluded from creating or
entering into the cause of the mischief. When the effect, the cause
of which is to be considered, is found to be in part the result of the
participation of man, whether it be from active intervention or
neglect, or failure to act, the whole occurrence is thereby
humanized, as it were, and removed from the rules applicable to the
acts of God. (1 Corpus Juris, pp. 1174-1175).
Thus it has been held that when the negligence of a person concurs
with an act of God in producing a loss, such person is not exempt
from liability by showing that the immediate cause of the damage
was the act of God. To be exempt from liability for loss because of
an act of God, he must be free from any previous negligence or
misconduct by which that loss or damage may have been
 occasioned. (Fish & Elective Co. v. Phil. Motors, 55 Phil. 129;
Tucker v. Milan, 49 O.G. 4379; Limpangco & Sons v. Yangco
21
Steamship Co., 34 Phil. 594, 604; Lasam v. Smith, 45 Phil. 657).

Accordingly, petitioners cannot be heard to invoke the act of God or force majeure to
escape liability for the loss or damage sustained by private respondents since they, the
petitioners, were guilty of negligence. The event then was not occasioned exclusively
by an act of God or force majeure; a human factor negligence or imprudence had
intervened. The effect then of the force majeure in question may be deemed to have,
even if only partly, resulted from the participation of man. Thus, the whole occurrence
was thereby humanized, as it were, and removed from the laws applicable to acts of
God.

WHEREFORE, for want of merit, the instant petition is hereby DISMISSED and the
Consolidated Decision of the Court of Appeals in CA-G.R. CV Nos. 27290-93 is
AFFIRMED, with costs against the petitioners.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-51078 October 30, 1980
CRISTINA DE KNECHT, petitioner,
vs.
HON. PEDRO JL. BAUTISTA, as Judge presiding over Branch III of the Court of
First Instance (Pasay City) and the REPUBLIC OF THE PHILIPPINES, respondents.
FERNANDEZ, J.:
This is a petition for certiorari and prohibition filed by Cristina de Knecht against the
Honorable Pedro JL. Bautista, as Judge presiding over Branch III of the Court of First
Instance of Rizal (Pasay City), and the Republic of the Philippines pines seeking the
following relief:
WHEREFORE, petitioner respectfully prays that judgment be
rendered annulling the order for immediate possession issued by
respondent court in the expropriation proceedings and commanding
respondents to desist from further proceedings in the expropriation
action or the order for immediate possession issued in said action,
with costs.
Petitioner prays that a restraint order or writ of preliminary injunction
be issued ex-parte enjoining respondents, their representative
representative and agents from enforcing the here questioned order
for mediate posession petitioner offering to post a bond executed to
the parties enjoined in an amount to be fixed by the Court to the
effect that she will pay to such parties all damages which they may
sustain by reason of the injunction if the Court should finally decide
she is not entitled there
She prays for such other remedy as the Court may deem just and
equitable in the premises.
Quezon City for July 1979. 1
The petitioner alleges that than ten (10) years ago, the government through the
Department of Public Workmen's and Communication (now MPH) prepared a to
Epifanio de los Santos Avenue (EDSA) to Roxas Boulevard; that the proposed
extension, an adjunct of building program, the Manila Cavite Coastal Read Project,
would pass through Cuneta Avenue up to Roxas Boulevard that this route would be a
straight one taking into account the direction of EDSA; that preparation to the
implementation of the aforesaid plan, or on December 13, 1974, then Secretary
Baltazar Aquino of the Department of Public Highways directed the City Engineer of
Pasay City not to issue temporary or permanent permits for the construction and/or
improvement of buildings and other structures located within the proposed extension
through Cuneta Avenue that shortly thereafter the Department of Public Highways
decided to make the proposed extension go through Fernando Rein and Del Pan
Streets which are lined with old substantial houses; that upon learning of the changed
the owners of the residential houses that would be affected, the herein petitioner being
one of them, filed on April 15, 1977 a formal petition to President Ferdinand E. Marcos
asking him to order the Ministry of Public Highways to adoption, the original plan of
making the extension of EDSA through Araneta Avenue instead of the new plan going
through Fernando Rein and Del Pan Streets; that President Marcos directed then
Minister Baltazar Aquino to explain within twenty-four (24) hours why the proposed
project should not be suspended; that on April 21, 1977 then Minister Aquino submitted
his explanation defending the new proposed route; that the President then referred the
matter to the Human Settlements Commission for investigation and recommendation;
that after formal hearings to which all the parties proponents and oppositors were given
full opportunity to ventilate their views and to present their evidence, the Settlements
Commission submitted a report recommending the reversion of the extension of EDSA
to the original plan passing through Cuneta Avenue; and that notwithstanding the said
report and recommendation, the Ministry of Public Highways insisted on implementing
the plan to make the extension of EDSA go through Fernando Rein and Del Pan
Streets. 2
In February 1979, the government filed in the Court of First Instance of Rizal, Branch
III, Pascual City presided by the respondent Judge, a complaint for expropriation
against the owners of the houses standing along Fernando Rein and Del Pan Streets,
among them the herein petitioner. The complaint was docketed as Civil Case No.
7001-P and entitled "Republic of the Philippines vs. Concepcion Cabarrus Vda. de
Santos, etc."
The herein petitioner filed a motion to dismiss dated March 19, 1979 on the following
grounds:
(a) court had no jurisdiction over the subject matter of the action because the complaint
failed to allege that the instant project for expropriation bore the approval of the
Ministry of Human Settlements and the Metro Manila Government nor pursuant to
Presidential Decrees Nos. 824, 1396 and 1517;
(b) The choice of properties to be expropriated made by the Ministry of Public
Highways was arbitrary and erroneous;
(c) The complaint was premature as the plaintiff never really had gone through serious
negotiations with the defendant for the purchase of her property; and
(d) The complaint relied on an arbitrary and erroneous valuation of properties and
disregarded consequential damages.
An urgent motion dated March 28, 1979 for preliminary junction was also filed.
In June 1979 the Republic of the Philippines filed a motion for the issuance of a writ of
possession of the property sought to be expropriated on the ground that said Republic
had made the required deposit with the Philippine National Bank.
The respondent judge issued a writ of possession dated June 14, 1979 authorizing the
Republic of the Philippines to take and enter upon the possession of the properties
sought be condemned. 3
The petitioner contends that "Respondent court lacked or exceeded its jurisdiction or
gravely abused its discretion in issuing the order to take over and enter upon the
possession of the properties sought to be expropriated-petitioner having raised a
constitutional question which respondent court must resolve before it can issue an
order to take or enter upon the possession of properties sought to be expropriated." 4
The petitioner assails the choice of the Fernando Rein and Del Pan Streets route on
the following grounds:
The choice of property to be expropriated cannot be without rhyme
or reason. The condemnor may not choose any property it wants.
Where the legislature has delegated a power of eminent do-main,
the question of the necessity for taking a particular fine for the
intended improvement rests in the discretion of the grantee power
subject however to review by the courts in case of fraud, bad faith
or gross abuse of discretion. The choice of property must be
examined for bad faith, arbitrariness or capriciousness and due
process determination as to whether or not the proposed location
was proper in terms of the public interests. Even the claim of
respondent's Secretary Baltazar Aquino that there would be a
saving of P2 million under his new plan must be reviewed for it
bears no relation to the site of the proposed EDSA extension As
envisioned by the government, the EDSA extension would be linked
to the Cavite Expressway. Logically then, the proposed extension
must point to the south and not detour to the north.
Also, the equal protection of the law must be accorded, not on to
the motel owners along Cuneta (Fisher) Avenue, but also to the
owners of solid and substantial homes and quality residential lands
occupied for generations. 5
The respondents maintain that the respondent court did not act without jurisdiction or
exceed its jurisdiction or gravel abuse its discretion in issuing the order dated June 14,
1979 authorizing the Republic of the Philippines to take over and enter the possession
of the properties sought to be appropriated because the Republic has complied with all
the statutory requirements which entitled it to have immediate possession of the
properties involved. 6
Defending the change of the EDSA extension to pass through Fernando Rein Del
Pan Streets, the respondents aver:
'There was no sudden change of plan in the selection of the site of
the EDSA Extension to Roxas Blvd. As a matter of fact, when the
Ministry of Public Highways decided to change the site of EDSA Ex-
tension to Roxas Boulevard from Cuneta Avenue to the Del Pan
Fernando Item Streets the residents of Del Pan and Fernando Rein
Streets who were to be adversely affected by the construction of ED
SA Extension to Roxas Boulevard along Del Pan - Fernando
Rein Streets were duly notified of such proposed project. Petitioner
herein was one of those notified Annex 1). It be conceded that the
Cuneta Avenue line goes southward and outward (from the city
center while the Del Pan Fernando Rein Streets line follows
northward and inward direction. It must be stated that both lines,
Cuneta Avenue and Del Pan Fernando Rein Streets lines, meet
satisfactorily planning and design criteria and therefore are both
acceptable. In selecting the Del Pan Fernando Rein Streets line
the Government did not do so because it wanted to save the motel
located along Cuneta Avenue but because it wanted to minimize
the social impact factor or problem involved. 7
There is no question as to the right of the Republic of the Philippines to take private
property for public use upon the payment of just compensation. Section 2, Article IV of
the Constitution of the Philippines provides: "Private property shall not be taken for
public use without just compensation."
It is recognized, was, that the government may not capriciously or arbitrarily' choose
what private property should be taken. In J. M. Tuazon & Co., Inc. vs. Land
Tenure administration 31 SCRA, 413, 433, the Supreme Court said:
For the purpose of obtaining a judicial declaration of nullity, it is
enough if the respondents or defendants named be the government
officials who would give operation and effect to official action
allegedly tainted with unconstitutionality. Thus, where the statute
assailed was sought to be enforced by the Land Tenure
Administrative and the Solicitor General, the two officials may be
made respondents in the action without need of including the
Executive Secretary as a party in the action
The failure to meet tile exacting standard of due process would
likewise constitute a valid objection to the exercise of this
congressional power. That was so intimated in the above leading
Guido Case. There was an earlier pronouncement to that effect in a
decision rendered long before the adoption of the Constitution
under the previous organic law then in force, while the Philippines
was still an unincorporated territory of the United States.
It is obvious then that a landowner is covered by the mantle of
protection due process affords. It is a mandate of reason. It frowns
on arbitrariness, it is the antithesis of any governmental act that
smacks of whim or caprice. It negates state power to act in an
impressive manner. It is, as had been stressed so often, the
embodiment of the sporting Idea of fair play. In that sense, it stands
as a guaranty of justice. That is the standard that must be met by
any government talk agency in the exercise of whatever
competence is entrusted to it. As was so emphatically stressed by
 the present Chief Justice, 'Acts of Congress, as well as those of the
Executive, can deny due process only under pain of nullity, ...
In the same case the Supreme Court concluded:
With due recognition then of the power of Congress to designate
the particular property to be taken and how much thereof may be
condemned in the exercise of the power of expropriation, it is still a
judicial question whether in the exercise of such competence, the
party adversely affected is the victim of partiality and prejudice. That
the equal protection clause will not allow. (p. 436)
In the instant case, it is a fact that the Department of Public Highways originally
establish the extension of EDSA along Cuneta Avenue. It is to be presumed that the
Department of Public Highways made studies before deciding on Cuneta Avenue. It is
indeed odd why suddenly the proposed extension of EDSA to Roxas Boulevard was
changed to go through Fernando Rein-Del Pan Streets which the Solicitor General
con- cedes "... the Del Pan Fernando Rein Streets line follows northward and inward
direction. While admit "that both lines, Cuneta Avenue and Del Pan Fernando Rein
Streets lines, meet satisfactorily planning and design criteria and therefore are both
acceptable ... the Solicitor General justifies the change to Del Pan Fernando Rein
Streets on the ground that the government "wanted to the social impact factor or
problem involved." 8
It is doubtful whether the extension of EDSA along Cuneta Avenue can be objected to
on the ground of social impact. The improvements and buildings along Cuneta Avenue
to be affected by the extension are mostly motels. Even granting, arguendo, that more
people be affected, the Human Setlements Commission has suggested coordinative
efforts of said Commission with the National Housing Authority and other government
agencies in the relocation and resettlement of those adversely affected. 9
The Human Settlements Commission considered conditionality social impact and cost.
The pertinent portion of its report reads:
Comparison of Alignment 1 (Cuneta Fisher) and Alignment 2 (Del
Pan Fernando Rein) based on the criteria of functionality, social
impact and cost
A. Functionality
This issue has to do with the physical design of a highway, inclusive
of engineering factors and management consideration
From both engineering and traffic management viewpoints, it is
incontestable that the straighter and shorter alignment is preferable
to one which is not. Systematically and diagramatically, alignment 1
is straighter than alignment 2. In fact, Director Antonio Goco of the
Department of Public Highways admitted that alignment 2 is three
(3) meters longer than alignment 1. Furthermore, alignment 1 is
definitely the contour conforming alignment to EDSA whereas
alignment 2 affords a greater radius of unnatural curvature as it
hooks slightly northward before finally joining with Roxas Boulevard.
Besides, whichever alignment is adopted, there will be a need for a
grade separator or interchange at the Roxas Boulevard junction.
From the of highway design, it is imperative to have interchanges as
far apart as possible to avoid traffic from slow down in negotiating
the slope on the interchanges. Up north would be the future
Buendia Avenue- Roxas Boulevard Interchange. Consequently,
alignment 1 which is farther away from Buendia Avenue than
alignment 2 is the better alignment from the viewpoint of the
construction of the grade separator or interchange, a necessary
corollary to the extension project. Finally, the choice of alignment 2
which is longer by three (3) meters than alignment 1 could have
serious repercussions on our energy conservation drive and from
the larger perspective of the national economy, considering that, by
ad- statistical data, no less than fifty thousand (50,000) vehicles a
day will have to traverse an extra three (3) meters.
B. Social Impact
The following factual data which have a direct bearing on the issue
of social impact were culled from the records of the case and the
evidence presented during the public hearings:
(1) Number of property owners:
Alignment 1 73
Alignment 2 49
(2) Incidence of non-resident owner:
Alignment 1 25 (34.3%)
Alignment 2 31 (63.3%)
(3) Number of actually affected residents:
Alignment 1 547
Alignment 2 290 (estimated)
(4) Average income of residents:
Alignment 2:
Below P350 P350 P500 P 500 P 800 P800 Pl000 Over P1000
16 (28%) 24 (42%) 0 (14%) 5 (9%) 4 (7%)
Alignment 2: Figures not available. P269,196 and not P2M as alleged by the Department of Public
Highways and P1.2M as claimed by the oppositors. Consequently,
It is evident from the foregoing figures that social impact is greater the cost difference factor between the two alignments is so minimal
as to be practically nil in the consideration of the issues involved in
on the residents of alignment 1.
this case. 10

C. Cost
After considering all the issues and factors, the Human Setlements Commission made
the following recommendations:
The resolution of the issue of right-of-way acquisition cost depends
to a large extend on the nature of the properties to be affected and
Weighing in the balance the issues and factors of necessity,
the relative value thereof. A comparison of alignment 1 and
alignment 2 on these two points has produced the following results: functionality, impact, cost and property valuation as basis for
scheme of compensation to be adopted in the instant case, the
Hearing Board takes cognizance of the following points:
(1) Nature and number of properties involved:
1. The EDSA extension to Roxas Boulevard is necessary and
Line I Line 2 desirable from the strictly technical viewpoint and the overall
perspective of the Metro Manila transport system.

Lots Lots Improvement Lotsright-of-way acquisition Improvements

2. The cost difference factor is so minimal
as to influence in any way the choice of either alignment as the
Residential 41 46 extension
38 of EDSA to Roxas Boulevard.
34

Commercial 25 24 3. The
11 negotiated sale approach13to compensation as proposed
should apply to a whichever alignment is selected.
Industrial 5 3 1 1
4. The factor of functionality states strongly against the selection of
alignment 2 while the factor of great social and economic impact
Church 1 1 1 1
bears grieviously on the residents of alignment 1.

Educational _ _ _ _
The course of the decision in this case consequently boils down to
the soul-searching and heart-rending choice between people on
TOTAL 72 75 one51 49
hand and progress and development on the other. In deciding
in favor of the latter, the Hearing Board is not unmindful that
progress and development are carried out by the State precisely
(2) Relative value of properties affected: and ultimately for the benefit of its people and therefore,
recommends the reverend of the extension project to alignment 1.
However, before the Government, through its implementing
Lots Improvements Total agencies, particularly the Department of Public Highways,
undertakes the actual step of appropriating properties on alignment
I to pave the way for the extension the hearing Board recommends
Alignment P9,300,136 P5,928,680 P15,228,816
the following as absolute. binding and imperative preconditions:
1

1. The preparation, and ignore importantly, the execution of a

Alignment 8,314,890 6,644,130 14,959,020
comprehensive and detailed plan for the relocation and
2 resettlement of the adversely and genuinely affected residents of
alignment I which will necessitate the coordinative efforts of such
Difference agencies as the Human Settlements Commission, the National
P269,796
Housing Authority and other such governmental agencies. To be
concrete, a self sufficient community or human settlement complete
It is obvious from the immediately table that the right- of-way with infrastructure capture market, school, church and industries for
acquisition cost difference factor of the two alignment is only
 employment should be set up to enable the affected residents of
alignment 1 to maintain, their present social and economic standing.

2. The prompt payment of fair and just compensation through the

negotiated sale approach.

Finally, the Hearing Board recommends that the Department of

Public Highways conduct public hearings before undertaking on
future expropriations of private properties for public use.

Respectfully submitted to the Human Settlements Commission

Commissioners for consideration, final disposition and endorsement
thereof to His Excellency, the President of the Philippines.

11
Makati, Metro Manila, July 4, 1977.

... From all the foregoing, the facts of record and recommendations of the Human
Settlements Commission, it is clear that the choice of Fernando Rein Del Pan
Streets as the line through which the Epifanio de los Santos Avenue should be
extended to Roxas Boulevard is arbitrary and should not receive judicial approval. The
respondent judge committed a grave abuse of discretion in allowing the Republic of the
Philippines to take immediate possession of the properties sought to be expropriated.

WHEREFORE, the petition for certiorari and prohibition is hereby granted. The order of
June 14, 1979 authorizing the Republic of the Philippines to take or enter upon the
possession of the properties sought to be condemned is set aside and the respondent
Judge is permanently enjoined from taking any further action on Civil Case No. 7001-P,
entitled "Republic of the Philippines vs. Concepcion Cabarrus Vda. de Santos,
etc." except to dismiss said case.

SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 87335 February 12, 1990
REPUBLIC OF THE PHILIPPINES, petitioner,
vs.
CRISTINA DE KNECHT AND THE COURT OF APPEALS, respondents.
Villanueva, Talamayan, Nieva, Elegado, and Ante Law Offices for respondent Cristina
de Knecht.
GANCAYCO, J.:
The issue posed in this case is whether an expropriation proceeding that was
determined by a final judgment of this Court may be the subject of a subsequent
legislation for expropriation.
On February 20, 1979 the Republic of the Philippines filed in the Court of First Instance
(CFI) of Rizal in Pasay City an expropriation proceedings against the owners of the
houses standing along Fernando Rein-Del Pan streets among them Cristina De Knecht
(de Knecht for short) together with Concepcion Cabarrus, and some fifteen other
defendants, docketed as Civil Case No. 7001-P.
On March 19, 1979 de Knecht filed a motion to dismiss alleging lack of jurisdiction,
pendency of appeal with the President of the Philippines, prematureness of complaint
and arbitrary and erroneous valuation of the properties. On March 29, 1979 de Knecht
filed an ex parte urgent motion for the issuance by the trial court of a restraining order
to restrain the Republic from proceeding with the taking of immediate possession and
control of the property sought to be condemned. In June, 1979 the Republic filed a
motion for the issuance of a writ of possession of the property to be expropriated on
the ground that it had made the required deposit with the Philippine National Bank
(PNB) of 10% of the amount of compensation stated in the complaint. In an order dated
June 14, 1979 the lower court issued a writ of possession authorizing the Republic to
enter into and take possession of the properties sought to be condemned, and created
a Committee of three to determine the just compensation for the lands involved in the
proceedings.
On July 16, 1979 de Knecht filed with this Court a petition for certiorari and prohibition
docketed as G.R. No. L-51078 and directed against the order of the lower court dated
June 14, 1979 praying that the respondent be commanded to desist from further
proceeding in the expropriation action and from implementing said order. On October
30, 1980 this Court rendered a decision, the dispositive part of which reads as follows:
WHEREFORE, the petition for certiorari and prohibition is hereby
granted. The order of June 14, 1979 authorizing the Republic of the
Philippines to take c enter upon the possession of the properties
sought to be condemned is set aside and the respondent Judge is
permanently enjoined from taking any further action on Civil Case
No. 7001-P, entitled 'Republic of the Philippines vs. Concepcion
Cabarrus Vda. de Santos, et al.' except to dismiss said case. 1
On August 8, 1981 defendants Maria Del Carmen Roxas Vda. de Elizalde, Francisco
Elizalde and Antonio Roxas moved to dismiss the expropriation action in compliance
with the dispositive portion of the aforesaid decision of this Court which had become
final and in order to avoid further damage to same defendants who were denied
possession of their properties. The Republic filed a manifestation on September 7,
1981 stating, among others, that it had no objection to the said motion to dismiss as it
was in accordance with the aforestated decision.
On September 2, 1983, the Republic filed a motion to dismiss said case due to the
enactment of the Batas Pambansa Blg. 340 expropriating the same properties and for
the same purpose. The lower court in an order of September 2, 1983 dismissed the
case by reason of the enactment of the said law. The motion for reconsideration
thereof was denied in the order of the lower court dated December 18, 1986.
De Knecht appealed from said order to the Court of Appeals wherein in due course a
decision was rendered on December 28, 1988, 2 the dispositive part of which reads as
follows:
PREMISES CONSIDERED, the order appealed from is hereby SET
ASIDE. As prayed for in the appellant's brief another Order is
hereby issued dismissing the expropriation proceedings (Civil Case
No. 51078) before the lower court on the ground that the choice of
Fernando Rein-Del Pan Streets as the line through which the
Epifanio de los Santos Avenue should be extended is arbitrary and
should not receive judicial approval.
No pronouncement as to Costs. 3
Hence the Republic filed that herein petition for review of the A aforestated decision
whereby the following issues were raised:
I
WHETHER OR NOT THE ENACTMENT OF BATAS PAMBANSA
BLG. 340 IS THE PROPER GROUND FOR THE DISMISSAL OF
THE EXPROPRIATION CASE. (PROPERLY PUT, WHETHER OR
NOT THE LOWER COURT COMMITTED GRAVE ABUSE OF DIS
CRETION IN DISMISSING CIVIL CASE NO. 7001-P UPON
JUDICIAL NOTICE OF B.P. BLG. 340).
II
 WHETHER OR NOT THE DPWH'S "CHOICE" OF LAND TO BE
EXPROPRIATED IS STILL AN ISSUE UNDER THE
CIRCUMSTANCES, SAID "CHOICE" HAVING BEEN
SUPPLANTED BY THE LEGISLATURE'S CHOICE.
III
WHETHER OR NOT THE LAW OF THE CASE THEORY SHOULD
BE APPLIED TO THE CASE AT BAR. 4
The petition is impressed with merit. There is no question that as early as 1977,
pursuant to the Revised Administrative Code, the national government, through the
Department of Public Works and Highways began work on what was to be the
westward extension of Epifanio de los Santos Avenue (EDSA) outfall (or outlet) of the
Manila and suburbs flood control and drainage project and the Estero Tripa de Gallina.
These projects were aimed at: (1) easing traffic congestion in the Baclaran and outlying
areas; (2) controlling flood by the construction of the outlet for the Estero Tripa de
Gallina (which drains the area of Marikina, Pasay, Manila and Paranaque); and (3) thus
completing the Manila Flood and Control and Drainage Project.
So the petitioner acquired the needed properties through negotiated purchase starting
with the lands from Taft Avenue up to Roxas Boulevard including the lands in
Fernando Rein-Del Pan streets. It acquired through negotiated purchases about 80 to
85 percent of the lands involved in the project whose owners did not raise any
objection as to arbitrariness on the choice of the project and of the route. It is only with
respect to the remaining 10 to 15 percent along the route that the petitioner cannot
negotiate through a sales agreement with a few land owners, including de Knecht
whose holding is hardly 5% of the whole route area. Thus, as above related on
February 20, 1979 the petitioner filed the expropriation proceedings in the Court of First
Instance.
There is no question that in the decision of this Court dated October 30, 1980 in De
Knecht vs. Bautista, G.R. No. L-51078, this Court held that the "choice of the Fernando
Rein-Del Pan streets as the line through which the EDSA should be extended to Roxas
Boulevard is arbitrary and should not receive judicial approval." 5 It is based on the
recommendation of the Human Settlements Commission that the choice of Cuneta
street as the line of the extension will minimize the social impact factor as the buildings
and improvement therein are mostly motels. 6
In view of the said finding, this Court set aside the order of the trial court dated June
14, 1979 authorizing the Republic of the Philippines to take possession of the
properties sought to be condemned and enjoined the respondent judge from taking any
further action in the case except to dismiss the same.
Said decision having become final no action was taken by the lower court on the said
directive of this Court to dismiss the case. Subsequently B.P. Blg. 340 was enacted by
the Batasang Pambansa on February 17, 1983. On the basis of said law petitioner filed
a motion to dismiss the case before the trial court and this was granted.
On appeal by de Knecht to the Court of Appeals the appellate court held that the
decision of the Supreme Court having become final, the petitioner's right as determined
therein should no longer be disturbed and that the same has become the law of the
case between the parties involved. Thus, the appellate court set aside the questioned
order of the trial court and issued another order dismissing the expropriation
proceedings before the lower court pursuant to the ruling in De Knecht case.
While it is true that said final judgment of this Court on the subject becomes the law of
the case between the parties, it is equally true that the right of the petitioner to take
private properties for public use upon the payment of the just compensation is so
provided in the Constitution and our laws. 7 Such expropriation proceedings may be
undertaken by the petitioner not only by voluntary negotiation with the land owners but
also by taking appropriate court action or by legislation. 8
When on February 17, 1983 the Batasang Pambansa passed B.P. Blg. 340
expropriating the very properties subject of the present proceedings, and for the same
purpose, it appears that it was based on supervening events that occurred after the
decision of this Court was rendered in De Knecht in 1980 justifying the expropriation
through the Fernando Rein-Del Pan Streets.
The social impact factor which persuaded the Court to consider this extension to be
arbitrary had disappeared. All residents in the area have been relocated and duly
compensated. Eighty percent of the EDSA outfall and 30% of the EDSA extension had
been completed. Only private respondent remains as the solitary obstacle to this
project that will solve not only the drainage and flood control problem but also minimize
the traffic bottleneck in the area.
The Solicitor General summarizing the situation said
The construction and completion of the Metro Manila Flood Control
and Drainage Project and the EDSA extension are essential to
alleviate the worsening traffic problem in the Baclaran and Pasay
City areas and the perennial flood problems. Judicial notice may be
taken that these problems bedevil life and property not only in the
areas directly affected but also in areas much beyond. Batas
Pambansa Blg. 340 was enacted to hasten 'The Project' and thus
solve these problems, and its implementation has resulted so far in
an 80% completion of the EDSA outfall and a 30% completion of
the EDSA extension, all part of 'The Project'.
This instant case stands in the way of the final solution of the
above-mentioned problems, solely because the single piece of
property I occupied' by De Knecht, although already expropriated
under B.P. Blg. 340, is the only parcel of land where Government
engineers could not enter due to the 'armed' resistance offered by
De Knecht, guarded and surrounded as the lot is perennially by De
Knecht's fierce private security guards. It may thus be said that De
Knecht, without any more legal interest in the land, single-handedly
stands in the way of the completion of 'The Project' essential to the
progress of Metro Manila and surrounding areas. Without the
property she persists in occupying and without any bloodletting, the
EDSA outfall construction on both sides of the said property cannot
be joined together, and the flood waters of Pasay, Paraaque and
Marikina which flow through the Estero Tripa de Gallina
 will continue to have no way or outlet that could drain into Manila
Bay. Without said property, the EDSA extension, already 30%
completed, can in no way be finished, and traffic will continue to
clog and jam the intersections of EDSA and Taft Avenue in
Baclaran and pile up along the airport roads.

In sum, even in the face of BP340, De Knecht holds the Legislative

sovereign will and choice inutile. 9

The Court finds justification in proceeding with the said expropriation proceedings
through the Fernando Rein-Del Pan streets from ESDA to Roxas Boulevard due to the
aforestated supervening events after the rendition of the decision of this Court in De
Knecht.

B.P. Blg. 340 therefore effectively superseded the aforesaid final and executory
decision of this Court. And the trial court committed no grave abuse of discretion in
dismissing the case pending before it on the ground of the enactment of B.P. Blg. 340.

Moreover, the said decision, is no obstacle to the legislative arm of the Government in
thereafter (over two years later in this case) making its own independent assessment
of the circumstances then prevailing as to the propriety of undertaking the expropriation
of the properties in question and thereafter by enacting the corresponding legislation as
it did in this case. The Court agrees in the wisdom and necessity of enacting B.P. Blg.
340. Thus the anterior decision of this Court must yield to this subsequent legislative
flat.

WHEREFORE, the petition is hereby GRANTED and the questioned decision of the
Court of Appeals dated December 28, 1988 and its resolution dated March 9, 1989 are
hereby REVERSED and SET ASIDE and the order of Branch III of the then Court of
First Instance of Rizal in Pasay City in Civil Case No. 7001-P dated September 2, 1983
is hereby reinstated without pronouncement as to costs.

SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-55166 May 2l, 1987
TIONGSON, married to CAYETANO TIONGSON, PACITA L. GO married to
EDUARDO GO, ROBERTO LAPERAL III, MIGUEL SISON, PHILIP L. MANOTOK,
MARIA TERESA L. MANOTOK, JOSE CLEMENTE MANOTOK, RAMON SEVERINO
MANOTOK, JOSE MARIA MANOTOK and JESUS JUDE MANOTOK, JR., assisted by
their father and judicial guardian, JESUS MANOTOK, MILAGROS V. MANOTOK,
IGNACIO V. MANOTOK, JR., FELISA V. MANOTOK, MARY-ANN V. MANOTOK,
MICHAEL V. MANOTOK, FAUSTO C. MANOTOK, SEVERINO MANOTOK III, and
JESUS MANOTOK, petitioners,
vs.
NATIONAL HOUSING AUTHORITY and the REPUBLIC OF THE
PHILIPPINES, respondents.
No. L-55167 May 21,1987
PATRICIA L. TIONGSON, PATRICIA L. GO, assisted by her husband EDWARD GO,
ROBERTO LAPERAL III, ELISA R. MANOTOK, JESUS R. MANOTOK, MIGUEL A. B.
SISON, SEVERINO MANOTOK III, JOSE MARIA MANOTOK and JESUS MANOTOK,
represented herein by their father and judicial guardian JESUS MANOTOK, JR.,
IGNACIO R. MANOTOK., and FAUSTO C. MANOTOK, petitioners,
vs.
NATIONAL HOUSING AUTHORITY and the REPUBLIC OF THE PHILIPPINES,
respondents
GUTIERREZ, JR., J.:
Before us are two petitions. The first one challenges the constitutionality of Presidential
Decree No. 1669 which provides for the expropriation of the property known as the
"Tambunting Estate" and the second challenges the constitutionality of Presidential
Decree No.1670 which provides for the expropriation of the property along the Estero
de Sunog-Apog. In both cases, the petitioners maintain that the two decrees are
unconstitutional and should be declared null and void because:
(1) They deprived the petitioners of their properties without due
process of law.
(2) The petitioners were denied to their right to just compensation
(3) The petitioners' right to equal protection of the law was violated.
(4) The decrees are vague, defective, and patently erroneous.
(5) The petitioners' properties are not proper subjects for
expropriation considering their location and other relevant
circumstances.
On June 11, 1977, the President of the Philippines issued Letter of Instruction (LOI)
No. 555 instituting a nationwide slum improvement and resettlement program (SIR). On
the same date, the President also issued LOI No. 557, adopting slum improvement as
a national housing policy.
In compliance with LOI No. 555, the Governor of Metro Manila issued, on July 21,
1977, Executive Order No.6-77 adopting the Metropolitan Manila Zonal Improvement
Program which included the properties known as the Tambunting Estate and the
Sunog-Apog area in its priority list for a zonal improvement program (ZIP) because the
findings of the representative of the City of Manila and the National Housing Authority
(NHA) described these as blighted communities.
On March 18, 1978, a fire razed almost the entire Tambunting Estate. Following this
calamity, the President and the Metro Manila Governor made public announcement
that the national government would acquire the property for the fire victims. The
President also designated the NHA to negotiate with the owners of the property for the
acquisition of the same. This, however, did not materialize as the negotiations for the
purchase of the property failed.
On December 22, 1978, the President issued Proclamation No. 1810 declaring all sites
Identified by the Metro Manila local governments and approved by the Ministry of
Human Settlements to be included in the ZIP upon proclamation of the President. The
Tambunting Estate and the Sunog-Apog area were among the sites included.
On January 28, 1980, the President issued the challenged Presidential Decrees Nos.
1669 and 1670 which respectively declared the Tambunting Estate and the Sunog-
Apog area expropriated.
Presidential Decree No. 1669, provides, among others:
Section 1. The real properties known as the "Tambunting Estate"
and covered by TCT Nos. 119059, 122450, 122459, 122452 and
Lots Nos. 1- A, 1-C, 1-D, l-E, 1-F and 1-H of (LRC) Psd-230517
(Previously covered by TCT No. 119058) of the Register of Deeds
of Manila with an area of 52,688.70 square meters, more or less are
hereby declared expropriated. The National Housing Authority
hereinafter referred to as the "Authority" is designated administrator
of the National Government with authority to immediately take
possession, control, disposition, with the power of demolition of the
expropriated properties and their improvements and shall evolve
and implement a comprehensive development plan for the
condemned properties.
xxx xxx xxx
 Section 6. Notwithstanding any provision of law or decree to the
contrary and for the purpose of expropriating this property pegged
at the -.market value determined by the City Assessor pursuant to
Presidential Decree No. 76, as amended, particularly by
Presidential Decree No. 1533 which is in force and in effect at the
time of the issuance of this decree. In assessing the market value,
the City Assessor pursuant consider existing conditions in the area
notably, that no improvement has been undertaken on the land and
that the land is squatted upon by resident families which should
considerably depress the expropriation cost. Subject to the
foregoing, the just compensation for the above property should not
exceed a maximum of SEVENTEEN MILLION PESOS
(Pl7,000,000.00) which shall be payable to the owners within a
period of five (5) years in five (5) equal installments.
Presidential Decree No. 1670, on the other hand, provides:
Section 1. The real property along the Estero de Sunog-Apog in
Tondo, Manila formerly consisting of Lots Nos 55-A, 55-B and 55-C,
Block 2918 of the subdivision plan Psd-1 1746, covered by TCT
Nos. 49286, 49287 and 49288, respectively, of the Registry of
Deeds of Manila, and formerly owned by the Manotok Realty, Inc.,
with an area of 72,428.6 square meters, more or less, is hereby
declared expropriated. The National Housing Authority hereinafter
referred to as the 'Authority' is designated administrator of the
National Government with authority to immediately take possession,
control and disposition, with the power of demolition of the
expropriated properties and their improvements and shall evolve
and imagine implement a comprehensive development plan for the
condemned properties.
xxx xxx xxx
Section 6. Notwithstanding any provision of law or decree to the
contrary and for the purpose of expropriating this property pegged
at the market value determined by the City Assessor pursuant to
Presidential Decree No. 76, as amended, particularly by
Presidential Decree No. 1533 which is in force and in effect at the
time of the issuance of this decree. In assessing the market value,
the City Assessor shall consider existing conditions in the area
notably, that no improvement has been undertaken on the land and
that the land is squatted upon by resident families which should
considerably depress the expropriation cost. Subject to the
foregoing, the just compensation for the above property should not
exceed a maximum of EIGHT MILLION PESOS (P8,000,000.00),
which shall be payable to the owners within a period of five (5)
years in five equal installment.
On April 4, 1980, the National Housing Authority, through its general-manager, wrote
the Register of Deeds of Manila, furnishing it with a certified copy of P.D. Nos. 1669
and 1670 for registration, with the request that the certificates of title covering the
properties in question be cancelled and new certificates of title be issued in the name
of the Republic of the Philippines.
However, the Register of Deeds in her letter to NHA's general-manager, requested the
submission of the owner's copy of the certificates of title of the properties in question to
enable her to implement the aforementioned decrees.
Subsequently, petitioner Elisa R. Manotok, one of the owners of the properties to be
expropriated, received from the NHA a letter informing her that the latter had
deposited, on July 16, 1980, with the Philippine National Bank the total amount of
P5,000,000.00 which included the amount of P3,400,000.00 representing the first
annual installment for the Tambunting Estate pursuant to P.D. No. 1669; and another
P5,000,000.00 which also included the amount of P1,600,000.00 representing the first
annual installment for the Sunog-Apog area under P.D. No. 1670. The petitioner was
also informed that she was free to withdraw her share in the properties upon surrender
by her of the titles pertaining to said properties and that if petitioner failed to avail
herself of the said offer, the NHA would be constrained to take the necessary legal
steps to implement the decrees.
On August 19, 1980, petitioner Elisa R. Manotok wrote a letter to the NHA alleging,
inter alia, that the amounts of compensation for the expropriation of the properties of
the petitioners as fixed in the decrees do not constitute the "just compensation"
envisioned in the Constitution. She expressed veritable doubts about the
constitutionality of the said decrees and informed the NHA that she did not believe that
she was obliged to withdraw the amount of P5,000,000.00 or surrender her titles over
the properties.
In the meantime, some officials of the NHA circulated instructions to the tenants-
occupants of the properties in dispute not to pay their rentals to the petitioners for their
lease-occupancy of the properties in view of the passage of P.D. Nos. 1669 and 1670.
Hence, the owners of the Tambunting Estate filed a petition to declare P.D. No. 1669
unconstitutional. The owners of the Sunog-Apog area also filed a similar petition
attacking the constitutionality of P.D. No. 1670.
On September 27, 1982, the lessees of the Tambunting Estate and the Sunog-Apog
area filed a motion for leave to intervene together with their petition for intervention
alleging that they are themselves owners of the buildings and houses built on the
properties to be expropriated and as such, they are real parties-in-interest to the
present petitions.
The petitioners maintain that the Presidential Decrees providing for the direct
expropriation of the properties in question violate their constitutional right to due
process and equal protection of the law because by the mere passage of the said
decrees their properties were automatically expropriated and they were immediately
deprived of the ownership and possession thereof without being given the chance to
oppose such expropriation or to contest the just compensation to which they are
entitled.
The petitioners argue that the government must first have filed a complaint with the
proper court under Rule 67 of the Revised Rules of Court in order to fulfill the
requirements of due process. 'They contend that the determination of just
compensation should not have been vested solely with the City Assessor and that a
maximum or fixed amount of compensation should not have been imposed by the said
decrees. Petitioners likewise state that by providing for the maximum amount of just
compensation and by directing the City Assessor to take into consideration the alleged
existing conditions of the properties in question, namely: that no "improvement has
been undertaken on the land and that the land is squatted upon by resident families
which should considerably depress the expropriation costs," the City Assessor is forced
to accept, as actual and existing conditions of the property, the foregoing statements in
the decrees when in fact the Sunog-Apog area has been subdivided into subdivision
lots and leased to the occupants thereof under contracts of lease, making them
lessees and not squatters as assumed by Presidential Decree No. 1670. Moreover,
each subdivision lot is surrounded by adobe walls constructed by the particular owner
of the property: the houses were required to have septic tanks by the City Hall and the,
owners themselves: there is a drainage system; and there are adequate water
facilities.
As far as the Tambunting Estate is concerned, the petitioners maintain that aside from
the residential houses in the area, there are buildings and structures of strong
materials on the lots fronting Rizal Avenue Extension, most of which are leased to
proprietors of business establishments under long term contracts of lease which use
the same for their furniture business from which they secure substantial income.
The Government as represented by the Solicitor-General and the NHA, on the other
hand, contends that the power of eminent domain is inherent in the State and when the
legislature itself or the President through his law-making prerogatives exercises this
power, the public use and public necessity of the expropriation, and the fixing of the
just compensation become political in nature, and the courts must respect the decision
of the law-making body, unless the legislative decision is clearly and evidently arbitrary,
unreasonable, and devoid of logic and reason; and that all that is required is that just
compensation be determined with due process of law which does not necessarily entail
judicial process.
The public respondents, further argue that since the Constitution lays down no
procedure by which the authority to expropriate may be carried into effect, Rule 67 of
the Revised Rules of Court which is invoked by the petitioners may be said to have
been superseded by the challenged decrees insofar as they are applicable to the
properties in question and, therefore, there is no need to follow the said rule for due
process to be observed. Moreover, the public respondents maintain that it cannot be
fairly said that the petitioners' valuations were ignored in fixing the ceiling amount of
the properties in question because the only reason why the determination appeared
unilateral was because said petitioners did not actually state any valuation in their
sworn declaration of true market value of their respective properties, and as far as
payment in installments is concerned, the same can be justified by the fact that the
properties in question are only two of the four hundred and fifteen (415) slums and
blighted areas in Metro Manila and two of the two hundred and fifty one (251) sites for
ungrading under the ZIP and that to immediately acquire and upgrade all those sites
would obviously entail millions and millions of pesos. The financial constraints,
therefore, require a system of payment of just compensation. Thus, the respondent
states that the payment of just compensation in installments did not arise out of ill will
or the desire to discriminate.
We start with fundamentals.
The power of eminent domain is inherent in every state and the provisions in the
Constitution pertaining to such power only serve to limit its exercise in order to protect
the individual against whose property the power is sought to be enforced. We pointed
out the constitutional limitations in the case of Republic vs. Juan (92 SCRA 26, 40):
To begin with, it must be emphasized that plaintiff-appellee in this
instant case is the Republic of the Philippines which is exercising its
right of eminent domain inherent in it as a body sovereign. In the
exercise of its sovereign right the State is not subject to any
limitation other than those imposed by the Constitution which are:
first, the taking must be for a public use; secondly, the payment of
just compensation must be made: and thirdly, due process must be
observed in the taking...
The challenged decrees are uniquely unfair in the procedures adopted and the powers
given to the respondent NHA.
The Tambunting subdivision is summarily proclaimed a blighted area and directly
expropriated by decree without the slightest semblance of a hearing or any proceeding
whatsoever. The expropriation is instant and automatic to take effect immediately upon
the signing of the decree. No deposit before taking is required under the decree. The
P3,400,000.00 appropriated from the general fund is not a deposit but constitutes an
installment payment for the property, the maximum price of which is fixed so as not to
exceed P17,000,000.00. There is no provision for any interests to be paid on the
unpaid installments spread out over a period of five years. Not only are the owners
given absolutely no opportunity to contest the expropriation, plead their side, or
question the amount of payments fixed by decree, but the decisions, rulings, orders, or
resolutions of the NHA are expressly declared as beyond the reach of judicial review.
An appeal may be made to the Office of the President but the courts are completely
enjoined from any inquiry or participation whatsoever in the expropriation of the
subdivision or its incidents.
In some decisions promulgated before the February, 1986 political upheaval, this Court
presumed the validity of the beautiful "whereases" in presidential decrees governing
expropriations and legitimated takings of private property which, in normal times, would
have been constitutionally suspect. There were then the avowed twin purposes of
martial law to first quell the Communist rebellion and second to reform society. Thus,
in Haguisan v. Emilia (131 SCRA 517) the Court sustained the contention that prior
hearing is no longer necessary under P.D. No. 42 in ascertaining the value of the
property to be expropriated and before the government may take possession. There
was a disregard in the decree for Section 2 of Rule 67 which requires the court having
jurisdiction over the proceedings to promptly ascertain and fix the provisional value of
the property for purposes of the initial taking or entry by the Government into the
premises. In National Housing Authority v. Reyes (123 SCRA 245) the Court upheld
the decrees which state that the basis for just compensation shall be the market value
declared by the owner for tax purposes or such market value as determined by the
government assessor, whichever is lower.
Subsequent developments have shown that a disregard for basic liberties and the
shortcut methods embodied in the decrees on expropriation do not achieve the desired
results. Far from disappearing, squatter colonies and blighted areas have multiplied
and proliferated. It appears that constitutionally suspect methods or authoritarian
procedures cannot, be the basis for social justice. A program to alleviate problems of
the urban poor which is well studied, adequately funded, genuinely sincere, and more
solidly grounded on basic rights and democratic procedures is needed.
We re-examine the decisions validating expropriations under martial law and apply
established principles of justice and fairness which have been with us since the advent
of constitutional government. We return to older and more sound precedents.
The due process clause cannot be rendered nugatory everytime a specific decree or
law orders the expropriation of somebody's property and provides its own peculiar
manner of taking the same. Neither should the courts adopt a hands-off policy just
because the public use has been ordained as existing by the decree or the just
compensation has been fixed and determined beforehand by a statute.
The case of Dohany v. Rogers, (74 L.ed. 904.'912, 281. U.S. 362-370) underscores the
extent by which the due process clause guarantees protection from arbitrary exercise
of the power of eminent domain.
The due process clause does not guarantee to the citizen of a state
any particular form or method of state procedure. Under it he may
neither claim a right to trial by jury nor a right of appeal. Its
requirements are satisfied if he has reasonable opportunity to be
heard and to present his claim or defense, due regard being had to
the nature of the proceeding and the character of the rights which
may be affected by it. Reetz v. Michigan, 188 U.S. 505, 508, 47
L.ed. 563, 566, 23 Sup. Ct. Rep. 390; Missouri ex rel. Hurwitz v.
North, 271 U.S. 40, 70 L.ed. 818, 46 Sup. Ct. Rep. 384: Bauman v.
Ross, 167 U.S. 548, 593, 42 L.ed. 270, 289, 17 Sup. Ct. Rep. 966;
A. Backus Jr. & Sons v. Fort Street Union Depot Co. 169 U.S. 569,
42 L. ed. 859, 18 Sup. Ct. Rep. 445.
In other words, although due process does not always necessarily demand that a
proceeding be had before a court of law, it still mandates some form of proceeding
wherein notice and reasonable opportunity to be heard are given to the owner to
protect his property rights. We agree with the public respondents that there are
exceptional situations when, in the exercise of the power of eminent domain, the
requirement of due process may not necessarily entail judicial process. But where it is
alleged that in the taking of a person's property, his right to due process of law has
been violated, the courts will have to step in and probe into such an alleged violation.
Thus, certain portions of the decision in De Knecht v. Bautista, (100 SCRA 660, 666-
667) state:
There is no question as to the right of the Republic of the
Philippines to take private property for public use upon the payment
of just compensation. Section 2, Article IV of the Constitution of the
Philippines provides: 'Private property shall not be taken for public
use without just compensation.
It is recognized, however, that the government may not capriciously
or arbitrarily choose what private property should be taken. In J.M.
Tuazon & Co., Inc. v. Land tenure Administration, 31 SCRA 413,
433, the Supreme Court said:
xxx xxx xxx
It is obvious then that a land-owner is covered by the mantle of
protection due process affords. It is a mandate of reason. It frowns
on arbitrariness, it is the antithesis of any governmental act that
smacks of whim or caprice. It negates state power to act in an
oppressive manner. It is, as had been stressed so often, the
embodiment of the sporting Idea of fair play. In that sense, it stands
as a guaranty of justice. 'That is the standard that must be met by
any governmental agency in the exercise of whatever competence
is entrusted to it As was so emphatically stressed by the present
Chief Justice, 'Acts of Congress, as well as those of the Executive,
can deny due process only under pain of nullity...
In the same case the Supreme Court concluded:
With due recognition then of the power of Congress to designate
the particular property to be taken and how much thereof may be
condemned in the exercise of the power of expropriation, it is still a
judicial question whether in the exercise of such competence, the
party adversely affected is the victim of partiality and prejudice, That
the equal protection clause will not allow. (p. 436)
The basis for the exercise of the power of eminent domain is necessity. This Court
stated in City of Manila v. Chinese Community of Manila (40 Phil. 349) that "(t)he very
foundation of the right to exercise eminent domain is a genuine necessity and that
necessity must be of a public character.
In City of Manila v. Arellano Law Colleges (85 Phil. 663), we reiterated that a necessity
must exist for the taking of private property for the proposed uses and purposes but
accepted the fact that modern decisions do not call for absolute necessity. It is enough
if the condemnor can show a reasonable or practical necessity, which of course, varies
with the time and peculiar circumstances of each case.
In the instant petitions, there is no showing whatsoever as to why the properties
involved were singled out for expropriation through decrees or what necessity impelled
the particular choices or selections. In expropriations through legislation, there are, at
least, debates in Congress open to the public, scrutiny by individual members of the
legislature, and very often, public hearings before the statute is enacted. Congressional
records can be examined. In these petitions, the decrees show no reasons whatsoever
for the choice of the properties as housing projects. The anonymous adviser who
drafted the decrees for the President's signature cannot be questioned as to any
possible error or partiality, act of vengeance, or other personal motivations which may
have led him to propose the direct expropriation with its onerous provisions.
The Tambunting estate or at least the western half of the subdivision fronting Rizal
Avenue Extension is valuable commercial property. It is located at the junction where
three main city streets converge Rizal Avenue from downtown Manila, Jose Abad
Santos Street from Binondo, and Aurora Boulevard leading to Retiro Street and other
points in Quezon City. The Libiran Furniture Company, alone, which fronts the
entrance to Jose Abad Santos Street is clearly a multi-million peso enterprise. It is a
foregone conclusion that the favored squatters allowed to buy these choice lots would
lose no time, once it is possible to do so, to either lease out or sell their lots to wealthy
merchants even as they seek other places where they can set up new squatter
colonies. The public use and social justice ends stated in the whereas clauses of P.D.
1669 and P.D. 1670 would not be served thereby.
The provision of P.D. 1669 which allows NHA, at its sole option, to put portions of the
expropriated area to commercial use in order to defray the development costs of its
housing projects cannot stand constitutional scrutiny. The Government, for instance,
cannot expropriate the flourishing Makati commercial area in order to earn money that
would finance housing projects all over the country. The leading case of Guido v. Rural
Progress Administration (84 Phil. 847) may have been modified in some ways by the
provisions of the new Constitution on agrarian and urban land reform and on housing.
The principle of non-appropriation of private property for private purposes, however,
remains. The legislature, according to the Guido case, may not take the property of
one citizen and transfer it to another, even for a full compensation, when the public
interest is not thereby promoted. The Government still has to prove that expropriation
of commercial properties in order to lease them out also for commercial purposes
would be "public use" under the Constitution.
P.D. No. 1670 suffers from a similar infirmity. There is no showing how the President
arrived at the conclusion that the Sunog-Apog area is a blighted community. The many
pictures submitted as exhibits by the petitioners show a well-developed area
subdivided into residential lots with either middle-income or upper class homes. There
are no squatters. The provisions of the decree on the relocation of qualified squatter
families and on the re-blocking and re-alignment of existing structures to allow the
introduction of basic facilities and services have no basis in fact The area is well-
developed with roads, drainage and sewer facilities, water connection to the
Metropolitan Waterworks and Sewerage System electric connections to Manila Electric
Company, and telephone connections to the Philippine Long Distance Telephone
Company. There are many squatter colonies in Metro Manila in need of upgrading. The
Government should have attended to them first. There is no showing for a need to
demolish the existing valuable improvements in order to upgrade Sunog-Apog.
After a careful examination of the questioned decrees, we find P.D. Nos. 1669 and
1670 to be violative of the petitioners' right to due process of law and, therefore, they
must fail the test of constitutionality.
The decrees, do not by themselves, provide for any form of hearing or procedure by
which the petitioners can question the propriety of the expropriation of their properties
or the reasonableness of the just compensation. Having failed to provide for a hearing,
the Government should have filed an expropriation case under Rule 67 of the Revised
Rules of Court but it did not do so. Obviously, it did not deem it necessary because of
the enactment of the questioned decrees which rendered, by their very passage, any
questions with regard to the expropriation of the properties, moot and academic. In
effect, the properties, under the decrees were "automatically expropriated." This
became more evident when the NHA wrote the Register of Deeds and requested her to
cancel the certificate of titles of the petitioners, furnishing said Register of Deeds only
with copies of the decrees to support its request.
This is hardly the due process of law which the state is expected to observe when it
exercises the power of eminent domain.
The government states that there is no arbitrary determination of the fair market value
of the property by the government assessors because if the owner is not satisfied with
the assessor's action, he may within sixty (60) days appeal to the Board of Assessment
Appeals of the province or city as the case may be and if said owner is still unsatisfied,
he may appeal further to the Central Board of Assessment Appeals pursuant to P.D.
No. 464. The Government argues that with this procedure, the due process
requirement is fulfilled.
We cannot sustain this argument.
Presidential Decree No. 464, as amended, otherwise known as the Real Property Tax
Code, provides for the procedure on how to contest assessments but does not deal
with questions as to the propriety of the expropriation and the manner of payment of
just compensation in the exercise of the power of eminent domain. We find this wholly
unsatisfactory. It cannot in anyway substitute for the expropriation proceeding under
Rule 67 of the Revised Rules of Court.
Another infirmity from which the questioned decrees suffer is the determination of just
compensation.
Pursuant to P.D. 1533, the basis of the just compensation is the market value of the
property "prior to the recommendation or decision of the appropriate Government
Office to acquire the property." (see also Republic v. Santos, (1 41 SCRA 30, 35).
In these petitions, a maximum amount of compensation was imposed by the decrees
and these amounts were only a little more than the assessed value of the properties in
1978 when, according to the government, it decided to acquire said properties.
The fixing of the maximum amounts of compensation and the bases thereof which are
the assessed values of the properties in 1978 deprive the petitioner of the opportunity
to prove a higher value because, the actual or symbolic taking of such properties
occurred only in 1980 when the questioned decrees were promulgated.
According to the government, the cut-off year must be 1978 because it was in this year
that the government decided to acquire the properties and in the case of the
Tambunting Estate, the President even made a public announcement that the
government shall acquire the estate for the fire victims.
The decision of the government to acquire a property through eminent domain should
be made known to the property owner through a formal notice wherein a hearing or a
judicial proceeding is contemplated as provided for in Rule 67 of the Rules of Court.
This shall be the time of reckoning the value of the property for the purpose of just
compensation. A television or news announcement or the mere fact of the property's
inclusion in the Zonal Improvement Program (ZIP) cannot suffice because for the
compensation to be just, it must approximate the value of the property at the time of its
taking and the government can be said to have decided to acquire or take the property
only after it has, at the least, commenced a proceeding, judicial or otherwise, for this
purpose.
In the following cases, we have upheld the determination of just compensation and the
rationale behind it either at the time of the actual taking of the government or at the
time of the judgment by the court, whichever came first.
Municipality of Daet v. Court of Appeals, (93 SCRA 503, 506, 519):
...And in the case of J.M. Tuason & Co., Inc. v. Land Tenure
Administration, 31 SCRA 413, the Court, speaking thru now Chief
Justice Fernando, reiterated the 'wen-settled (rule) that just
compensation means the equivalent for the value of the property at
the time of its taking. Anything beyond that is more and anything
short of that is less, than just compensation. It means a fair and full
equivalent for the loss sustained, which is the measure of the
indemnity, not whatever gain would accrue to the expropriating
entity.
xxx xxx xxx
We hold that the decision of the Court of Appeals fixing the market
value of the property to be that obtaining, at least, as of the date of
the rendition of the judgment on December 2, 1969 as prayed by
private respondent, which the Court fixed at P200.00 per square
meter is in conformity with doctrinal rulings hereinabove cited that
the value should be fixed as of the time of the taking of the
possession of the property because firstly, at the time judgment was
rendered on December 2, 1969, petitioner had not actually taken
possession of the property sought to be expropriated and secondly,
We find the valuation determined by the Court of Appeals to be just,
fair and reasonable.
National Power Corporation v. Court of Appeals, (1 29 SCRA 665, 673):
xxx xxx xxx
(5) And most importantly,on the issue of just compensation, it is
now settled doctrine, following the leading case of Alfonso v. Pasay
City, (1,06 PhiL 1017 (1960)), that no determine due compensation
for lands appropriated by the Government, the basis should be the
price or value at the time it was taken from the owner and
appropriated by the Government.
The owner of property expropriated by the State is entitled to how
much it was worth at the time of the taking. This has been clarified
in Republic v. PNB (1 SCRA 957) thus: 'It is apparent from the
foregoing that, when plaintiff takes possession before the institution
of the condemnation proceedings, the value should be fixed as of
the time of the taking of said possession, not of filing of the
complainant, and that the latter should be the basis for the
determination of the value, when the of the property involved
coincides with or is subsequent to, the commencement of the
proceedings. Indeed, otherwise, the provision of Rule 619, section
3, directing that compensation "be determined as of the date of the
filing of the complaints" would never be operative. municipality of La
Carlota v. The Spouses Baltazar, et al., 45 SCRA 235 (1972)).
Furthermore, the so-called "conditions" of the properties should not be determined
through a decree but must be shown in an appropriate proceeding in order to arrive at
a just valuation of the property. In the case of Garcia v. Court of Appeals, (102 SCRA
597, 608) we ruled:
...Hence, in estimating the market value, all the capabilities of the
property and all the uses to which it may be applied or for which it is
adapted are to be considered and not merely the condition it is in at
the time and the use to which it is then applied by the owner. All the
facts as to the condition of the property and its surroundings, its
improvements and capabilities may be shown and considered in
estimating its value.
In P.D. No. 76, P.D. No. 464, P.D. No. 794, and P.D. No. 1533, the basis for
determining just compensation was fixed at the market value declared by the owner or
the market value determined by the assessor, whichever is lower.
P.D.s 1669 and 1670 go further. There is no mention of any market value declared by
the owner. Sections 6 of the two decrees peg just compensation at the market value
determined by the City Assessor. The City Assessor is warned by the decrees to
"consider existing conditions in the area notably, that no improvement has been
undertaken on the land and that the land is squatted upon by resident families which
should considerably depress the expropriation costs."
In other cases involving expropriations under P.D. Nos. 76, 464, 794, and 1533, this
Court has decided to invalidate the mode of fixing just compensation under said
decrees. (See Export Processing Zone Authority v. Hon. Ceferino E. Dulay, et al. G.R.
No. 59603) With more reason should the method in P.D.s 1669 and 1670 be declared
infirm.
The market value stated by the city assessor alone cannot substitute for the court's
judgment in expropriation proceedings. It is violative of the due process and the
eminent domain provisions of the Constitution to deny to a property owner the
opportunity to prove that the valuation made by a local assessor is wrong or
prejudiced. The statements made in tax documents by the assessor may serve as one
of the factors to be considered but they cannot exclude or prevail over a court
determination made after expert commissioners have examined the property and all
pertinent circumstances are taken into account and after the parties have had the
opportunity to fully plead their cases before a competent and unbiased tribunal. To
enjoin this Court by decree from looking into alleged violations of the due process,
equal protection, and eminent domain clauses of the Constitution is impermissible
encroachment on its independence and prerogatives.
The maximum amounts, therefore, which were provided for in the questioned decrees
cannot adequately reflect the value of the property and, in any case, should not be
binding on the property owners for, as stated in the above cases, there are other
factors to be taken into consideration. We, thus, find the questioned decrees to likewise
transgress the petitioners' right to just compensation. Having violated the due process
and just compensation guarantees, P. D. Nos. 1669 and 1670 are unconstitutional and
void.
WHEREFORE, the petitions in G.R. No. 55166 and G.R. No. 55167 are hereby
GRANTED. Presidential Decree Numbers 1669 and 1670 which respectively
proclaimed the Tambunting Estate and the Estero de Sunog-Apog area expropriated,
are declared unconstitutional and, therefore, null and void ab initio.

SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-24693 July 31, 1967
ERMITA-MALATE HOTEL AND MOTEL OPERATORS ASSOCIATION, INC., HOTEL
DEL MAR INC. and GO CHIU, petitioners-appellees,
vs.
THE HONORABLE CITY MAYOR OF MANILA, respondent-appellant.
VICTOR ALABANZA, intervenor-appellee.
Panganiban, Abad and Associates Law Office for respondent-appellant.
J. M. Aruego, Tenchavez and Associates for intervenor-appellee.
FERNANDO, J.:
The principal question in this appeal from a judgment of the lower court in an action for
prohibition is whether Ordinance No. 4760 of the City of Manila is violative of the due
process clause. The lower court held that it is and adjudged it "unconstitutional, and,
therefore, null and void." For reasons to be more specifically set forth, such judgment
must be reversed, there being a failure of the requisite showing to sustain an attack
against its validity.
The petition for prohibition against Ordinance No. 4760 was filed on July 5, 1963 by the
petitioners, Ermita-Malate Hotel and Motel Operators Association, one of its members,
Hotel del Mar Inc., and a certain Go Chiu, who is "the president and general manager
of the second petitioner" against the respondent Mayor of the City of Manila who was
sued in his capacity as such "charged with the general power and duty to enforce
ordinances of the City of Manila and to give the necessary orders for the faithful
execution and enforcement of such ordinances." (par. 1). It was alleged that the
petitioner non-stock corporation is dedicated to the promotion and protection of the
interest of its eighteen (18) members "operating hotels and motels, characterized as
legitimate businesses duly licensed by both national and city authorities, regularly
paying taxes, employing and giving livelihood to not less than 2,500 person and
representing an investment of more than P3 million."1 (par. 2). It was then alleged that
on June 13, 1963, the Municipal Board of the City of Manila enacted Ordinance No.
4760, approved on June 14, 1963 by the then Vice-Mayor Herminio Astorga, who was
at the time acting as Mayor of the City of Manila. (par. 3).
After which the alleged grievances against the ordinance were set forth in detail. There
was the assertion of its being beyond the powers of the Municipal Board of the City of
Manila to enact insofar as it would regulate motels, on the ground that in the revised
charter of the City of Manila or in any other law, no reference is made to motels; that
Section 1 of the challenged ordinance is unconstitutional and void for being
unreasonable and violative of due process insofar as it would impose P6,000.00 fee
per annum for first class motels and P4,500.00 for second class motels; that the
provision in the same section which would require the owner, manager, keeper or duly
authorized representative of a hotel, motel, or lodging house to refrain from
entertaining or accepting any guest or customer or letting any room or other quarter to
any person or persons without his filling up the prescribed form in a lobby open to
public view at all times and in his presence, wherein the surname, given name and
middle name, the date of birth, the address, the occupation, the sex, the nationality, the
length of stay and the number of companions in the room, if any, with the name,
relationship, age and sex would be specified, with data furnished as to his residence
certificate as well as his passport number, if any, coupled with a certification that a
person signing such form has personally filled it up and affixed his signature in the
presence of such owner, manager, keeper or duly authorized representative, with such
registration forms and records kept and bound together, it also being provided that the
premises and facilities of such hotels, motels and lodging houses would be open for
inspection either by the City Mayor, or the Chief of Police, or their duly authorized
representatives is unconstitutional and void again on due process grounds, not only for
being arbitrary, unreasonable or oppressive but also for being vague, indefinite and
uncertain, and likewise for the alleged invasion of the right to privacy and the guaranty
against self-incrimination; that Section 2 of the challenged ordinance classifying motels
into two classes and requiring the maintenance of certain minimum facilities in first
class motels such as a telephone in each room, a dining room or, restaurant and
laundry similarly offends against the due process clause for being arbitrary,
unreasonable and oppressive, a conclusion which applies to the portion of the
ordinance requiring second class motels to have a dining room; that the provision of
Section 2 of the challenged ordinance prohibiting a person less than 18 years old from
being accepted in such hotels, motels, lodging houses, tavern or common inn unless
accompanied by parents or a lawful guardian and making it unlawful for the owner,
manager, keeper or duly authorized representative of such establishments to lease any
room or portion thereof more than twice every 24 hours, runs counter to the due
process guaranty for lack of certainty and for its unreasonable, arbitrary and
oppressive character; and that insofar as the penalty provided for in Section 4 of the
challenged ordinance for a subsequent conviction would, cause the automatic
cancellation of the license of the offended party, in effect causing the destruction of the
business and loss of its investments, there is once again a transgression of the due
process clause.
There was a plea for the issuance of preliminary injunction and for a final judgment
declaring the above ordinance null and void and unenforceable. The lower court on
July 6, 1963 issued a writ of preliminary injunction ordering respondent Mayor to refrain
from enforcing said Ordinance No. 4760 from and after July 8, 1963.
In the a answer filed on August 3, 1963, there was an admission of the personal
circumstances regarding the respondent Mayor and of the fact that petitioners are
licensed to engage in the hotel or motel business in the City of Manila, of the provisions
of the cited Ordinance but a denial of its alleged nullity, whether on statutory or
constitutional grounds. After setting forth that the petition did fail to state a cause of
action and that the challenged ordinance bears a reasonable relation, to a proper
purpose, which is to curb immorality, a valid and proper exercise of the police power
and that only the guests or customers not before the court could complain of the
alleged invasion of the right to privacy and the guaranty against self incrimination, with
the assertion that the issuance of the preliminary injunction ex parte was contrary to
law, respondent Mayor prayed for, its dissolution and the dismissal of the petition.
Instead of evidence being offered by both parties, there was submitted a stipulation of
facts dated September 28, 1964, which reads:
 1. That the petitioners Ermita-Malate Hotel and Motel Operators Association,
Inc. and Hotel del Mar Inc. are duly organized and existing under the laws of
the Philippines, both with offices in the City of Manila, while the petitioner Go
Chin is the president and general manager of Hotel del Mar Inc., and the
intervenor Victor Alabanza is a resident of Baguio City, all having the capacity
to sue and be sued;
2. That the respondent Mayor is the duly elected and incumbent City Mayor
and chief executive of the City of Manila charged with the general power and
duty to enforce ordinances of the City of Manila and to give the necessary
orders for the faithful execution and enforcement of such ordinances;
3. That the petitioners are duly licensed to engage in the business of
operating hotels and motels in Malate and Ermita districts in Manila;
4. That on June 13, 1963, the Municipal Board of the City of Manila enacted
Ordinance No. 4760, which was approved on June 14, 1963, by Vice-Mayor
Herminio Astorga, then the acting City Mayor of Manila, in the absence of the
respondent regular City Mayor, amending sections 661, 662, 668-a, 668-b
and 669 of the compilation of the ordinances of the City of Manila besides
inserting therein three new sections. This ordinance is similar to the one
vetoed by the respondent Mayor (Annex A) for the reasons stated in its 4th
Indorsement dated February 15, 1963 (Annex B);
5. That the explanatory note signed by then Councilor Herminio Astorga was
submitted with the proposed ordinance (now Ordinance 4760) to the
Municipal Board, copy of which is attached hereto as Annex C;
6. That the City of Manila derived in 1963 an annual income of P101,904.05
from license fees paid by the 105 hotels and motels (including herein
petitioners) operating in the City of Manila.1wph1.t plaintiff of due process of law. As underlying questions of fact may condition the
Thereafter came a memorandum for respondent on January 22, 1965, wherein stress
was laid on the presumption of the validity of the challenged ordinance, the burden of
showing its lack of conformity to the Constitution resting on the party who assails it,
citing not only U.S. v. Salaveria, but likewise applicable American authorities. Such a
memorandum likewise refuted point by point the arguments advanced by petitioners
against its validity. Then barely two weeks later, on February 4, 1965, the
memorandum for petitioners was filed reiterating in detail what was set forth in the
petition, with citations of what they considered to be applicable American authorities
and praying for a judgment declaring the challenged ordinance "null and void and
unenforceable" and making permanent the writ of preliminary injunction issued.
After referring to the motels and hotels, which are members of the petitioners
association, and referring to the alleged constitutional questions raised by the party,
the lower court observed: "The only remaining issue here being purely a question of
law, the parties, with the nod of the Court, agreed to file memoranda and thereafter, to
submit the case for decision of the Court." It does appear obvious then that without any
evidence submitted by the parties, the decision passed upon the alleged infirmity on
constitutional grounds of the challenged ordinance, dismissing as is undoubtedly right
and proper the untenable objection on the alleged lack of authority of the City of Manila
to regulate motels, and came to the conclusion that "the challenged Ordinance No.
4760 of the City of Manila, would be unconstitutional and, therefore, null and void." It
made permanent the preliminary injunction issued against respondent Mayor and his
agents "to restrain him from enforcing the ordinance in question." Hence this appeal.
As noted at the outset, the judgment must be reversed. A decent regard for
constitutional doctrines of a fundamental character ought to have admonished the
lower court against such a sweeping condemnation of the challenged ordinance. Its
decision cannot be allowed to stand, consistently with what has hitherto been the
accepted standards of constitutional adjudication, in both procedural and substantive
aspects.
Primarily what calls for a reversal of such a decision is the absence of any evidence to
offset the presumption of validity that attaches to a challenged statute or ordinance. As
was expressed categorically by Justice Malcolm: "The presumption is all in favor of
validity x x x . The action of the elected representatives of the people cannot be lightly
set aside. The councilors must, in the very nature of things, be familiar with the
necessities of their particular municipality and with all the facts and circumstances
which surround the subject and necessitate action. The local legislative body, by
enacting the ordinance, has in effect given notice that the regulations are essential to
the well being of the people x x x . The Judiciary should not lightly set aside legislative
action when there is not a clear invasion of personal or property rights under the guise
of police regulation.2
It admits of no doubt therefore that there being a presumption of validity, the necessity
for evidence to rebut it is unavoidable, unless the statute or ordinance is void on its
face which is not the case here. The principle has been nowhere better expressed than
in the leading case of O'Gorman & Young v. Hartford Fire Insurance Co.,3 where the
American Supreme Court through Justice Brandeis tersely and succinctly summed up
the matter thus: The statute here questioned deals with a subject clearly within the
scope of the police power. We are asked to declare it void on the ground that the
specific method of regulation prescribed is unreasonable and hence deprives the
constitutionality of legislation of this character, the resumption of constitutionality must
prevail in the absence of some factual foundation of record for overthrowing the
statute." No such factual foundation being laid in the present case, the lower court
deciding the matter on the pleadings and the stipulation of facts, the presumption of
validity must prevail and the judgment against the ordinance set aside.
Nor may petitioners assert with plausibility that on its face the ordinance is fatally
defective as being repugnant to the due process clause of the Constitution. The mantle
of protection associated with the due process guaranty does not cover petitioners. This
particular manifestation of a police power measure being specifically aimed to
safeguard public morals is immune from such imputation of nullity resting purely on
conjecture and unsupported by anything of substance. To hold otherwise would be to
unduly restrict and narrow the scope of police power which has been properly
characterized as the most essential, insistent and the least limitable of
powers,4 extending as it does "to all the great public needs." 5 It would be, to
paraphrase another leading decision, to destroy the very purpose of the state if it could
be deprived or allowed itself to be deprived of its competence to promote public health,
public morals, public safety and the genera welfare. 6 Negatively put, police power is
"that inherent and plenary power in the State which enables it to prohibit all that is hurt
full to the comfort, safety, and welfare of society.7
There is no question but that the challenged ordinance was precisely enacted to
minimize certain practices hurtful to public morals. The explanatory note of the
Councilor Herminio Astorga included as annex to the stipulation of facts, speaks of the
alarming increase in the rate of prostitution, adultery and fornication in Manila traceable
in great part to the existence of motels, which "provide a necessary atmosphere for
clandestine entry, presence and exit" and thus become the "ideal haven for prostitutes
and thrill-seekers." The challenged ordinance then proposes to check the clandestine
harboring of transients and guests of these establishments by requiring these
transients and guests to fill up a registration form, prepared for the purpose, in a lobby
open to public view at all times, and by introducing several other amendatory
provisions calculated to shatter the privacy that characterizes the registration of
transients and guests." Moreover, the increase in the licensed fees was intended to
discourage "establishments of the kind from operating for purpose other than legal"
and at the same time, to increase "the income of the city government." It would appear
therefore that the stipulation of facts, far from sustaining any attack against the validity
of the ordinance, argues eloquently for it.
It is a fact worth noting that this Court has invariably stamped with the seal of its
approval, ordinances punishing vagrancy and classifying a pimp or procurer as a
vagrant;8 provide a license tax for and regulating the maintenance or operation of
public dance halls;9 prohibiting gambling;10 prohibiting jueteng;11 and
monte;12 prohibiting playing of panguingui on days other than Sundays or legal
holidays;13 prohibiting the operation of pinball machines; 14 and prohibiting any person
from keeping, conducting or maintaining an opium joint or visiting a place where opium
is smoked or otherwise used,15 all of which are intended to protect public morals.
On the legislative organs of the government, whether national or local, primarily rest
the exercise of the police power, which, it cannot be too often emphasized, is the
power to prescribe regulations to promote the health, morals, peace, good order, safety
and general welfare of the people. In view of the requirements of due process, equal
protection and other applicable constitutional guaranties however, the exercise of such
police power insofar as it may affect the life, liberty or property of any person is subject
to judicial inquiry. Where such exercise of police power may be considered as either
capricious, whimsical, unjust or unreasonable, a denial of due process or a violation of
any other applicable constitutional guaranty may call for correction by the courts.
We are thus led to considering the insistent, almost shrill tone, in which the objection is
raised to the question of due process.16 There is no controlling and precise definition of
due process. It furnishes though a standard to which the governmental action should
conform in order that deprivation of life, liberty or property, in each appropriate case, be
valid. What then is the standard of due process which must exist both as a procedural
and a substantive requisite to free the challenged ordinance, or any governmental
action for that matter, from the imputation of legal infirmity sufficient to spell its doom?
It is responsiveness to the supremacy of reason, obedience to the dictates of justice.
Negatively put, arbitrariness is ruled out and unfairness avoided. To satisfy the due
process requirement, official action, to paraphrase Cardozo, must not outrun the
bounds of reason and result in sheer oppression. Due process is thus hostile to any
official action marred by lack of reasonableness. Correctly it has been identified as
freedom from arbitrariness. It is the embodiment of the sporting idea of fair play. 17 It
exacts fealty "to those strivings for justice" and judges the act of officialdom of
whatever branch "in the light of reason drawn from considerations of fairness that
reflect [democratic] traditions of legal and political thought." 18 It is not a narrow or
"technical conception with fixed content unrelated to time, place and
circumstances,"19 decisions based on such a clause requiring a "close and perceptive
inquiry into fundamental principles of our society." 20 Questions of due process are not
to be treated narrowly or pedantically in slavery to form or phrases. 21
It would thus be an affront to reason to stigmatize an ordinance enacted precisely to
meet what a municipal lawmaking body considers an evil of rather serious proportion
an arbitrary and capricious exercise of authority. It would seem that what should be
deemed unreasonable and what would amount to an abdication of the power to govern
is inaction in the face of an admitted deterioration of the state of public morals. To be
more specific, the Municipal Board of the City of Manila felt the need for a remedial
measure. It provided it with the enactment of the challenged ordinance. A strong case
must be found in the records, and, as has been set forth, none is even attempted here
to attach to an ordinance of such character the taint of nullity for an alleged failure to
meet the due process requirement. Nor does it lend any semblance even of deceptive
plausibility to petitioners' indictment of Ordinance No. 4760 on due process grounds to
single out such features as the increased fees for motels and hotels, the curtailment of
the area of freedom to contract, and, in certain particulars, its alleged vagueness.
Admittedly there was a decided increase of the annual license fees provided for by the
challenged ordinance for hotels and motels, 150% for the former and over 200% for the
latter, first-class motels being required to pay a P6,000 annual fee and second-class
motels, P4,500 yearly. It has been the settled law however, as far back as 1922 that
municipal license fees could be classified into those imposed for regulating
occupations or regular enterprises, for the regulation or restriction of non-useful
occupations or enterprises and for revenue purposes only. 22 As was explained more in
detail in the above Cu Unjieng case: (2) Licenses for non-useful occupations are also
incidental to the police power and the right to exact a fee may be implied from the
power to license and regulate, but in fixing amount of the license fees the municipal
corporations are allowed a much wider discretion in this class of cases than in the
former, and aside from applying the well-known legal principle that municipal
ordinances must not be unreasonable, oppressive, or tyrannical, courts have, as a
general rule, declined to interfere with such discretion. The desirability of imposing
restraint upon the number of persons who might otherwise engage in non-useful
enterprises is, of course, generally an important factor in the determination of the
amount of this kind of license fee. Hence license fees clearly in the nature of privilege
taxes for revenue have frequently been upheld, especially in of licenses for the sale of
liquors. In fact, in the latter cases the fees have rarely been declared unreasonable. 23
Moreover in the equally leading case of Lutz v. Araneta24 this Court affirmed the
doctrine earlier announced by the American Supreme Court that taxation may be made
to implement the state's police power. Only the other day, this Court had occasion to
affirm that the broad taxing authority conferred by the Local Autonomy Act of 1959 to
cities and municipalities is sufficiently plenary to cover a wide range of subjects with
the only limitation that the tax so levied is for public purposes, just and uniform. 25
As a matter of fact, even without reference to the wide latitude enjoyed by the City of
Manila in imposing licenses for revenue, it has been explicitly held in one case that
"much discretion is given to municipal corporations in determining the amount," here
the license fee of the operator of a massage clinic, even if it were viewed purely as a
police power measure.26 The discussion of this particular matter may fitly close with
this pertinent citation from another decision of significance: "It is urged on behalf of the
plaintiffs-appellees that the enforcement of the ordinance could deprive them of their
lawful occupation and means of livelihood because they can not rent stalls in the public
markets. But it appears that plaintiffs are also dealers in refrigerated or cold storage
meat, the sale of which outside the city markets under certain conditions is permitted x
x x . And surely, the mere fact, that some individuals in the community may be
deprived of their present business or a particular mode of earning a living cannot
prevent the exercise of the police power. As was said in a case, persons licensed to
pursue occupations which may in the public need and interest be affected by the
exercise of the police power embark in these occupations subject to the disadvantages
which may result from the legal exercise of that power." 27
Nor does the restriction on the freedom to contract, insofar as the challenged
ordinance makes it unlawful for the owner, manager, keeper or duly authorized
representative of any hotel, motel, lodging house, tavern, common inn or the like, to
lease or rent room or portion thereof more than twice every 24 hours, with a proviso
that in all cases full payment shall be charged, call for a different conclusion. Again,
such a limitation cannot be viewed as a transgression against the command of due
process. It is neither unreasonable nor arbitrary. Precisely it was intended to curb the
opportunity for the immoral or illegitimate use to which such premises could be, and,
according to the explanatory note, are being devoted. How could it then be arbitrary or
oppressive when there appears a correspondence between the undeniable existence
of an undesirable situation and the legislative attempt at correction. Moreover,
petitioners cannot be unaware that every regulation of conduct amounts to curtailment
of liberty which as pointed out by Justice Malcolm cannot be absolute. Thus: "One
thought which runs through all these different conceptions of liberty is plainly apparent.
It is this: 'Liberty' as understood in democracies, is not license; it is 'liberty regulated by
law.' Implied in the term is restraint by law for the good of the individual and for the
greater good of the peace and order of society and the general well-being. No man can
do exactly as he pleases. Every man must renounce unbridled license. The right of the
individual is necessarily subject to reasonable restraint by general law for the common
good x x x The liberty of the citizen may be restrained in the interest of the public
health, or of the public order and safety, or otherwise within the proper scope of the
police power."28
A similar observation was made by Justice Laurel: "Public welfare, then, lies at the
bottom of the enactment of said law, and the state in order to promote the general
welfare may interfere with personal liberty, with property, and with business and
occupations. Persons and property may be subjected to all kinds of restraints and
burdens, in order to secure the general comfort, health, and prosperity of the state x x x
To this fundamental aim of our Government the rights of the individual are
subordinated. Liberty is a blessing without which life is a misery, but liberty should not
be made to prevail over authority because then society will fall into anarchy. Neither
should authority be made to prevail over liberty because then the individual will fall into
slavery. The citizen should achieve the required balance of liberty and authority in his
mind through education and personal discipline, so that there may be established the
resultant equilibrium, which means peace and order and happiness for all. 29
affects at the most rights of property, the permissible scope of regulatory measure is
wider.32 How justify then the allegation of a denial of due process?
Lastly, there is the attempt to impugn the ordinance on another due process ground by
invoking the principles of vagueness or uncertainty. It would appear from a recital in the
petition itself that what seems to be the gravamen of the alleged grievance is that the
provisions are too detailed and specific rather than vague or uncertain. Petitioners,
however, point to the requirement that a guest should give the name, relationship, age
and sex of the companion or companions as indefinite and uncertain in view of the
necessity for determining whether the companion or companions referred to are those
arriving with the customer or guest at the time of the registry or entering the room With
him at about the same time or coming at any indefinite time later to join him; a proviso
in one of its sections which cast doubt as to whether the maintenance of a restaurant in
a motel is dependent upon the discretion of its owners or operators; another proviso
which from their standpoint would require a guess as to whether the "full rate of
payment" to be charged for every such lease thereof means a full day's or merely a
half-day's rate. It may be asked, do these allegations suffice to render the ordinance
void on its face for alleged vagueness or uncertainty? To ask the question is to answer
it. From Connally v. General Construction Co.33 to Adderley v. Florida,34 the principle
has been consistently upheld that what makes a statute susceptible to such a charge is
an enactment either forbidding or requiring the doing of an act that men of common
intelligence must necessarily guess at its meaning and differ as to its application. Is this
the situation before us? A citation from Justice Holmes would prove illuminating: "We
agree to all the generalities about not supplying criminal laws with what they omit but
there is no canon against using common sense in construing laws as saying what they
obviously mean."35
That is all then that this case presents. As it stands, with all due allowance for the
arguments pressed with such vigor and determination, the attack against the validity of
the challenged ordinance cannot be considered a success. Far from it. Respect for
constitutional law principles so uniformly held and so uninterruptedly adhered to by this
Court compels a reversal of the appealed decision.
Wherefore, the judgment of the lower court is reversed and the injunction issued lifted
forthwith. With costs.

It is noteworthy that the only decision of this Court nullifying legislation because of
undue deprivation of freedom to contract, People v. Pomar,30 no longer "retains its
virtuality as a living principle. The policy of laissez faire has to some extent given way
to the assumption by the government of the right of intervention even in contractual
relations affected with public interest. 31 What may be stressed sufficiently is that if the
liberty involved were freedom of the mind or the person, the standard for the validity of
governmental acts is much more rigorous and exacting, but where the liberty curtailed
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 78742 July 14, 1989
ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO
D. GOMEZ, GERARDO B. ALARCIO, FELIPE A. GUICO, JR., BERNARDO M.
ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO, FELISA I. LLAMIDO,
FAUSTO J. SALVA, REYNALDO G. ESTRADA, FELISA C. BAUTISTA, ESMENIA J.
CABE, TEODORO B. MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA,
FELICISIMA C. ARRESTO, CONSUELO M. MORALES, BENJAMIN R.
SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S. FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.
G.R. No. 79310 July 14, 1989
ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS
JEREZA, HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO and PLANTERS'
COMMITTEE, INC., Victorias Mill District, Victorias, Negros
Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM
COUNCIL, respondents.
G.R. No. 79744 July 14, 1989
INOCENTES PABICO, petitioner,
vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN
REFORM, HON. JOKER ARROYO, EXECUTIVE SECRETARY OF THE OFFICE OF
THE PRESIDENT, and Messrs. SALVADOR TALENTO, JAIME ABOGADO,
CONRADO AVANCENA and ROBERTO TAAY, respondents.
G.R. No. 79777 July 14, 1989
NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,
vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF
THE PHILIPPINES, respondents.
CRUZ, J.:
In ancient mythology, Antaeus was a terrible giant who blocked and challenged
Hercules for his life on his way to Mycenae after performing his eleventh labor. The two
wrestled mightily and Hercules flung his adversary to the ground thinking him dead, but
Antaeus rose even stronger to resume their struggle. This happened several times to
Hercules' increasing amazement. Finally, as they continued grappling, it dawned on
Hercules that Antaeus was the son of Gaea and could never die as long as any part of
his body was touching his Mother Earth. Thus forewarned, Hercules then held Antaeus
up in the air, beyond the reach of the sustaining soil, and crushed him to death.
Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch
even the powerful Antaeus weakened and died.
The cases before us are not as fanciful as the foregoing tale. But they also tell of the
elemental forces of life and death, of men and women who, like Antaeus need the
sustaining strength of the precious earth to stay alive.
"Land for the Landless" is a slogan that underscores the acute imbalance in the
distribution of this precious resource among our people. But it is more than a slogan.
Through the brooding centuries, it has become a battle-cry dramatizing the increasingly
urgent demand of the dispossessed among us for a plot of earth as their place in the
sun.
Recognizing this need, the Constitution in 1935 mandated the policy of social justice to
"insure the well-being and economic security of all the people," 1 especially the less
privileged. In 1973, the new Constitution affirmed this goal adding specifically that "the
State shall regulate the acquisition, ownership, use, enjoyment and disposition of
private property and equitably diffuse property ownership and profits." 2 Significantly,
there was also the specific injunction to "formulate and implement an agrarian reform
program aimed at emancipating the tenant from the bondage of the soil." 3
The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it
also adopted one whole and separate Article XIII on Social Justice and Human Rights,
containing grandiose but undoubtedly sincere provisions for the uplift of the common
people. These include a call in the following words for the adoption by the State of an
agrarian reform program:
SEC. 4. The State shall, by law, undertake an agrarian reform
program founded on the right of farmers and regular farmworkers,
who are landless, to own directly or collectively the lands they till or,
in the case of other farmworkers, to receive a just share of the fruits
thereof. To this end, the State shall encourage and undertake the
just distribution of all agricultural lands, subject to such priorities and
reasonable retention limits as the Congress may prescribe, taking
into account ecological, developmental, or equity considerations
and subject to the payment of just compensation. In determining
retention limits, the State shall respect the right of small
landowners. The State shall further provide incentives for voluntary
land-sharing.
Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code,
had already been enacted by the Congress of the Philippines on August 8, 1963, in line
with the above-stated principles. This was substantially superseded almost a decade
later by P.D. No. 27, which was promulgated on October 21, 1972, along with martial
law, to provide for the compulsory acquisition of private lands for distribution among
tenant-farmers and to specify maximum retention limits for landowners.
The people power revolution of 1986 did not change and indeed even energized the
thrust for agrarian reform. Thus, on July 17, 1987, President Corazon C. Aquino issued
E.O. No. 228, declaring full land ownership in favor of the beneficiaries of P.D. No. 27
and providing for the valuation of still unvalued lands covered by the decree as well as
the manner of their payment. This was followed on July 22, 1987 by Presidential
Proclamation No. 131, instituting a comprehensive agrarian reform program (CARP),
and E.O. No. 229, providing the mechanics for its implementation.
Subsequently, with its formal organization, the revived Congress of the Philippines took
over legislative power from the President and started its own deliberations, including
extensive public hearings, on the improvement of the interests of farmers. The result,
after almost a year of spirited debate, was the enactment of R.A. No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law of 1988, which President Aquino
signed on June 10, 1988. This law, while considerably changing the earlier mentioned
enactments, nevertheless gives them suppletory effect insofar as they are not
inconsistent with its provisions. 4
The above-captioned cases have been consolidated because they involve common
legal questions, including serious challenges to the constitutionality of the several
measures mentioned above. They will be the subject of one common discussion and
resolution, The different antecedents of each case will require separate treatment,
however, and will first be explained hereunder.
G.R. No. 79777
Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and
229, and R.A. No. 6657.
The subjects of this petition are a 9-hectare riceland worked by four tenants and owned
by petitioner Nicolas Manaay and his wife and a 5-hectare riceland worked by four
tenants and owned by petitioner Augustin Hermano, Jr. The tenants were declared full
owners of these lands by E.O. No. 228 as qualified farmers under P.D. No. 27.
The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds
inter alia of separation of powers, due process, equal protection and the constitutional
limitation that no private property shall be taken for public use without just
compensation.
They contend that President Aquino usurped legislative power when she promulgated
E.O. No. 228. The said measure is invalid also for violation of Article XIII, Section 4, of
the Constitution, for failure to provide for retention limits for small landowners.
Moreover, it does not conform to Article VI, Section 25(4) and the other requisites of a
valid appropriation.
In connection with the determination of just compensation, the petitioners argue that
the same may be made only by a court of justice and not by the President of the
Philippines. They invoke the recent cases of EPZA v. Dulay 5 and Manotok v. National
Food Authority. 6 Moreover, the just compensation contemplated by the Bill of Rights is
payable in money or in cash and not in the form of bonds or other things of value.
In considering the rentals as advance payment on the land, the executive order also
deprives the petitioners of their property rights as protected by due process. The equal
protection clause is also violated because the order places the burden of solving the
agrarian problems on the owners only of agricultural lands. No similar obligation is
imposed on the owners of other properties.
The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be
the owners of the lands occupied by them, E.O. No. 228 ignored judicial prerogatives
and so violated due process. Worse, the measure would not solve the agrarian
problem because even the small farmers are deprived of their lands and the retention
rights guaranteed by the Constitution.
In his Comment, the Solicitor General stresses that P.D. No. 27 has already been
upheld in the earlier cases of Chavez v. Zobel, 7 Gonzales v. Estrella, 8 and
Association of Rice and Corn Producers of the Philippines, Inc. v. The National Land
Reform Council. 9 The determination of just compensation by the executive authorities
conformably to the formula prescribed under the questioned order is at best initial or
preliminary only. It does not foreclose judicial intervention whenever sought or
warranted. At any rate, the challenge to the order is premature because no valuation of
their property has as yet been made by the Department of Agrarian Reform. The
petitioners are also not proper parties because the lands owned by them do not exceed
the maximum retention limit of 7 hectares.
Replying, the petitioners insist they are proper parties because P.D. No. 27 does not
provide for retention limits on tenanted lands and that in any event their petition is a
class suit brought in behalf of landowners with landholdings below 24 hectares. They
maintain that the determination of just compensation by the administrative authorities is
a final ascertainment. As for the cases invoked by the public respondent, the
constitutionality of P.D. No. 27 was merely assumed in Chavez, while what was
decided in Gonzales was the validity of the imposition of martial law.
In the amended petition dated November 22, 1588, it is contended that P.D. No. 27,
E.O. Nos. 228 and 229 (except Sections 20 and 21) have been impliedly repealed by
R.A. No. 6657. Nevertheless, this statute should itself also be declared unconstitutional
because it suffers from substantially the same infirmities as the earlier measures.
A petition for intervention was filed with leave of court on June 1, 1988 by Vicente
Cruz, owner of a 1. 83- hectare land, who complained that the DAR was insisting on
the implementation of P.D. No. 27 and E.O. No. 228 despite a compromise agreement
he had reached with his tenant on the payment of rentals. In a subsequent motion
dated April 10, 1989, he adopted the allegations in the basic amended petition that the
above- mentioned enactments have been impliedly repealed by R.A. No. 6657.
G.R. No. 79310
The petitioners herein are landowners and sugar planters in the Victorias Mill District,
Victorias, Negros Occidental. Co-petitioner Planters' Committee, Inc. is an organization
composed of 1,400 planter-members. This petition seeks to prohibit the implementation
of Proc. No. 131 and E.O. No. 229.
The petitioners claim that the power to provide for a Comprehensive Agrarian Reform
Program as decreed by the Constitution belongs to Congress and not the President.
Although they agree that the President could exercise legislative power until the
Congress was convened, she could do so only to enact emergency measures during
the transition period. At that, even assuming that the interim legislative power of the
President was properly exercised, Proc. No. 131 and E.O. No. 229 would still have to
be annulled for violating the constitutional provisions on just compensation, due
process, and equal protection.
They also argue that under Section 2 of Proc. No. 131 which provides:
Agrarian Reform Fund.-There is hereby created a special fund, to be known as the
Agrarian Reform Fund, an initial amount of FIFTY BILLION PESOS
(P50,000,000,000.00) to cover the estimated cost of the Comprehensive Agrarian
Reform Program from 1987 to 1992 which shall be sourced from the receipts of the
sale of the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten
wealth received through the Presidential Commission on Good Government and such
other sources as government may deem appropriate. The amounts collected and
accruing to this special fund shall be considered automatically appropriated for the
purpose authorized in this Proclamation the amount appropriated is in futuro, not in
esse. The money needed to cover the cost of the contemplated expropriation has yet
to be raised and cannot be appropriated at this time.
Furthermore, they contend that taking must be simultaneous with payment of just
compensation as it is traditionally understood, i.e., with money and in full, but no such
payment is contemplated in Section 5 of the E.O. No. 229. On the contrary, Section 6,
thereof provides that the Land Bank of the Philippines "shall compensate the
landowner in an amount to be established by the government, which shall be based on
the owner's declaration of current fair market value as provided in Section 4 hereof, but
subject to certain controls to be defined and promulgated by the Presidential Agrarian
Reform Council." This compensation may not be paid fully in money but in any of
several modes that may consist of part cash and part bond, with interest, maturing
periodically, or direct payment in cash or bond as may be mutually agreed upon by the
beneficiary and the landowner or as may be prescribed or approved by the PARC.
The petitioners also argue that in the issuance of the two measures, no effort was
made to make a careful study of the sugar planters' situation. There is no tenancy
problem in the sugar areas that can justify the application of the CARP to them. To the
extent that the sugar planters have been lumped in the same legislation with other
farmers, although they are a separate group with problems exclusively their own, their
right to equal protection has been violated.
A motion for intervention was filed on August 27,1987 by the National Federation of
Sugarcane Planters (NASP) which claims a membership of at least 20,000 individual
sugar planters all over the country. On September 10, 1987, another motion for
intervention was filed, this time by Manuel Barcelona, et al., representing coconut and
riceland owners. Both motions were granted by the Court.
NASP alleges that President Aquino had no authority to fund the Agrarian Reform
Program and that, in any event, the appropriation is invalid because of uncertainty in
the amount appropriated. Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O.
No. 229 provide for an initial appropriation of fifty billion pesos and thus specifies the
minimum rather than the maximum authorized amount. This is not allowed.
Furthermore, the stated initial amount has not been certified to by the National
Treasurer as actually available.
Two additional arguments are made by Barcelona, to wit, the failure to establish by
clear and convincing evidence the necessity for the exercise of the powers of eminent
domain, and the violation of the fundamental right to own property.
The petitioners also decry the penalty for non-registration of the lands, which is the
expropriation of the said land for an amount equal to the government assessor's
valuation of the land for tax purposes. On the other hand, if the landowner declares his
own valuation he is unjustly required to immediately pay the corresponding taxes on
the land, in violation of the uniformity rule.
In his consolidated Comment, the Solicitor General first invokes the presumption of
constitutionality in favor of Proc. No. 131 and E.O. No. 229. He also justifies the
necessity for the expropriation as explained in the "whereas" clauses of the
Proclamation and submits that, contrary to the petitioner's contention, a pilot project to
determine the feasibility of CARP and a general survey on the people's opinion thereon
are not indispensable prerequisites to its promulgation.
On the alleged violation of the equal protection clause, the sugar planters have failed to
show that they belong to a different class and should be differently treated. The
Comment also suggests the possibility of Congress first distributing public agricultural
lands and scheduling the expropriation of private agricultural lands later. From this
viewpoint, the petition for prohibition would be premature.
The public respondent also points out that the constitutional prohibition is against the
payment of public money without the corresponding appropriation. There is no rule that
only money already in existence can be the subject of an appropriation law. Finally, the
earmarking of fifty billion pesos as Agrarian Reform Fund, although denominated as an
initial amount, is actually the maximum sum appropriated. The word "initial" simply
means that additional amounts may be appropriated later when necessary.
On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own
behalf, assailing the constitutionality of E.O. No. 229. In addition to the arguments
already raised, Serrano contends that the measure is unconstitutional because:
(1) Only public lands should be included in the CARP;
(2) E.O. No. 229 embraces more than one subject which is not
expressed in the title;
(3) The power of the President to legislate was terminated on July
2, 1987; and
 (4) The appropriation of a P50 billion special fund from the National
Treasury did not originate from the House of Representatives.
G.R. No. 79744
The petitioner alleges that the then Secretary of Department of Agrarian Reform, in
violation of due process and the requirement for just compensation, placed his
landholding under the coverage of Operation Land Transfer. Certificates of Land
Transfer were subsequently issued to the private respondents, who then refused
payment of lease rentals to him.
On September 3, 1986, the petitioner protested the erroneous inclusion of his small
landholding under Operation Land transfer and asked for the recall and cancellation of
the Certificates of Land Transfer in the name of the private respondents. He claims that
on December 24, 1986, his petition was denied without hearing. On February 17, 1987,
he filed a motion for reconsideration, which had not been acted upon when E.O. Nos.
228 and 229 were issued. These orders rendered his motion moot and academic
because they directly effected the transfer of his land to the private respondents.
The petitioner now argues that:
(1) E.O. Nos. 228 and 229 were invalidly issued by the President of
the Philippines.
(2) The said executive orders are violative of the constitutional
provision that no private property shall be taken without due
process or just compensation.
(3) The petitioner is denied the right of maximum retention provided
for under the 1987 Constitution.
The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before
Congress convened is anomalous and arbitrary, besides violating the doctrine of
separation of powers. The legislative power granted to the President under the
Transitory Provisions refers only to emergency measures that may be promulgated in
the proper exercise of the police power.
The petitioner also invokes his rights not to be deprived of his property without due
process of law and to the retention of his small parcels of riceholding as guaranteed
under Article XIII, Section 4 of the Constitution. He likewise argues that, besides
denying him just compensation for his land, the provisions of E.O. No. 228 declaring
that:
Lease rentals paid to the landowner by the farmer-beneficiary after
October 21, 1972 shall be considered as advance payment for the
land.
is an unconstitutional taking of a vested property right. It is also his contention that the
inclusion of even small landowners in the program along with other landowners with
lands consisting of seven hectares or more is undemocratic.
In his Comment, the Solicitor General submits that the petition is premature because
the motion for reconsideration filed with the Minister of Agrarian Reform is still
unresolved. As for the validity of the issuance of E.O. Nos. 228 and 229, he argues that
they were enacted pursuant to Section 6, Article XVIII of the Transitory Provisions of
the 1987 Constitution which reads:
The incumbent president shall continue to exercise legislative powers until the first
Congress is convened.
On the issue of just compensation, his position is that when P.D. No. 27 was
promulgated on October 21. 1972, the tenant-farmer of agricultural land was deemed
the owner of the land he was tilling. The leasehold rentals paid after that date should
therefore be considered amortization payments.
In his Reply to the public respondents, the petitioner maintains that the motion he filed
was resolved on December 14, 1987. An appeal to the Office of the President would be
useless with the promulgation of E.O. Nos. 228 and 229, which in effect sanctioned the
validity of the public respondent's acts.
G.R. No. 78742
The petitioners in this case invoke the right of retention granted by P.D. No. 27 to
owners of rice and corn lands not exceeding seven hectares as long as they are
cultivating or intend to cultivate the same. Their respective lands do not exceed the
statutory limit but are occupied by tenants who are actually cultivating such lands.
According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:
No tenant-farmer in agricultural lands primarily devoted to rice and
corn shall be ejected or removed from his farmholding until such
time as the respective rights of the tenant- farmers and the
landowner shall have been determined in accordance with the rules
and regulations implementing P.D. No. 27.
The petitioners claim they cannot eject their tenants and so are unable to enjoy their
right of retention because the Department of Agrarian Reform has so far not issued the
implementing rules required under the above-quoted decree. They therefore ask the
Court for a writ of mandamus to compel the respondent to issue the said rules.
In his Comment, the public respondent argues that P.D. No. 27 has been amended by
LOI 474 removing any right of retention from persons who own other agricultural lands
of more than 7 hectares in aggregate area or lands used for residential, commercial,
industrial or other purposes from which they derive adequate income for their family.
And even assuming that the petitioners do not fall under its terms, the regulations
implementing P.D. No. 27 have already been issued, to wit, the Memorandum dated
July 10, 1975 (Interim Guidelines on Retention by Small Landowners, with an
accompanying Retention Guide Table), Memorandum Circular No. 11 dated April 21,
1978, (Implementation Guidelines of LOI No. 474), Memorandum Circular No. 18-81
dated December 29,1981 (Clarificatory Guidelines on Coverage of P.D. No. 27 and
Retention by Small Landowners), and DAR Administrative Order No. 1, series of 1985
(Providing for a Cut-off Date for Landowners to Apply for Retention and/or to Protest
the Coverage of their Landholdings under Operation Land Transfer pursuant to P.D.
No. 27). For failure to file the corresponding applications for retention under these
measures, the petitioners are now barred from invoking this right.
The public respondent also stresses that the petitioners have prematurely initiated this
case notwithstanding the pendency of their appeal to the President of the Philippines.
Moreover, the issuance of the implementing rules, assuming this has not yet been
done, involves the exercise of discretion which cannot be controlled through the writ
of mandamus. This is especially true if this function is entrusted, as in this case, to a
separate department of the government.
In their Reply, the petitioners insist that the above-cited measures are not applicable to
them because they do not own more than seven hectares of agricultural land.
Moreover, assuming arguendo that the rules were intended to cover them also, the
said measures are nevertheless not in force because they have not been published as
required by law and the ruling of this Court in Tanada v. Tuvera. 10 As for LOI 474, the
same is ineffective for the additional reason that a mere letter of instruction could not
have repealed the presidential decree.
I hesitate to "make the hammer fall, and heavily," to use Justice Laurel's pithy language,
Although holding neither purse nor sword and so regarded as the weakest of the three
departments of the government, the judiciary is nonetheless vested with the power to
annul the acts of either the legislative or the executive or of both when not conformable
to the fundamental law. This is the reason for what some quarters call the doctrine of
judicial supremacy. Even so, this power is not lightly assumed or readily exercised. The
doctrine of separation of powers imposes upon the courts a proper restraint, born of
the nature of their functions and of their respect for the other departments, in striking
down the acts of the legislative and the executive as unconstitutional. The policy,
indeed, is a blend of courtesy and caution. To doubt is to sustain. The theory is that
before the act was done or the law was enacted, earnest studies were made by
Congress or the President, or both, to insure that the Constitution would not be
breached.
In addition, the Constitution itself lays down stringent conditions for a declaration of
unconstitutionality, requiring therefor the concurrence of a majority of the members of
the Supreme Court who took part in the deliberations and voted on the issue during
their session en banc. 11 And as established by judge made doctrine, the Court will
assume jurisdiction over a constitutional question only if it is shown that the essential
requisites of a judicial inquiry into such a question are first satisfied. Thus, there must
be an actual case or controversy involving a conflict of legal rights susceptible of
judicial determination, the constitutional question must have been opportunely raised
by the proper party, and the resolution of the question is unavoidably necessary to the
decision of the case itself. 12
With particular regard to the requirement of proper party as applied in the cases before
us, we hold that the same is satisfied by the petitioners and intervenors because each
of them has sustained or is in danger of sustaining an immediate injury as a result of
the acts or measures complained of. 13 And even if, strictly speaking, they are not
covered by the definition, it is still within the wide discretion of the Court to waive the
requirement and so remove the impediment to its addressing and resolving the serious
constitutional questions raised.
In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed
to question the constitutionality of several executive orders issued by President Quirino
although they were invoking only an indirect and general interest shared in common
with the public. The Court dismissed the objection that they were not proper parties
and ruled that "the transcendental importance to the public of these cases demands
that they be settled promptly and definitely, brushing aside, if we must, technicalities of
procedure." We have since then applied this exception in many other cases. 15
The other above-mentioned requisites have also been met in the present petitions.
In must be stressed that despite the inhibitions pressing upon the Court when
confronted with constitutional issues like the ones now before it, it will not hesitate to
declare a law or act invalid when it is convinced that this must be done. In arriving at
this conclusion, its only criterion will be the Constitution as God and its conscience give
it the light to probe its meaning and discover its purpose. Personal motives and political
considerations are irrelevancies that cannot influence its decision. Blandishment is as
ineffectual as intimidation.
For all the awesome power of the Congress and the Executive, the Court will not
where the acts of these departments, or of any public official, betray the people's will
as expressed in the Constitution.
It need only be added, to borrow again the words of Justice Laurel, that
... when the judiciary mediates to allocate constitutional boundaries,
it does not assert any superiority over the other departments; it
does not in reality nullify or invalidate an act of the Legislature, but
only asserts the solemn and sacred obligation assigned to it by the
Constitution to determine conflicting claims of authority under the
Constitution and to establish for the parties in an actual controversy
the rights which that instrument secures and guarantees to them.
This is in truth all that is involved in what is termed "judicial
supremacy" which properly is the power of judicial review under the
Constitution. 16
The cases before us categorically raise constitutional questions that this Court must
categorically resolve. And so we shall.
II
We proceed first to the examination of the preliminary issues before resolving the more
serious challenges to the constitutionality of the several measures involved in these
petitions.
The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers
under martial law has already been sustained in Gonzales v. Estrella and we find no
reason to modify or reverse it on that issue. As for the power of President Aquino to
promulgate Proc. No. 131 and E.O. Nos. 228 and 229, the same was authorized under
Section 6 of the Transitory Provisions of the 1987 Constitution, quoted above.
The said measures were issued by President Aquino before July 27, 1987, when the
Congress of the Philippines was formally convened and took over legislative power
from her. They are not "midnight" enactments intended to pre-empt the legislature
because E.O. No. 228 was issued on July 17, 1987, and the other measures, i.e., Proc.
No. 131 and E.O. No. 229, were both issued on July 22, 1987. Neither is it correct to
say that these measures ceased to be valid when she lost her legislative power for, like
any statute, they continue to be in force unless modified or repealed by subsequent law
or declared invalid by the courts. A statute does not ipso facto become inoperative
simply because of the dissolution of the legislature that enacted it. By the same token,
President Aquino's loss of legislative power did not have the effect of invalidating all
the measures enacted by her when and as long as she possessed it.
Significantly, the Congress she is alleged to have undercut has not rejected but in fact
substantially affirmed the challenged measures and has specifically provided that they
shall be suppletory to R.A. No. 6657 whenever not inconsistent with its
provisions. 17 Indeed, some portions of the said measures, like the creation of the P50
billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of E.O. No. 229,
have been incorporated by reference in the CARP Law. 18
That fund, as earlier noted, is itself being questioned on the ground that it does not
conform to the requirements of a valid appropriation as specified in the Constitution.
Clearly, however, Proc. No. 131 is not an appropriation measure even if it does provide
for the creation of said fund, for that is not its principal purpose. An appropriation law is
one the primary and specific purpose of which is to authorize the release of public
funds from the treasury. 19 The creation of the fund is only incidental to the main
objective of the proclamation, which is agrarian reform.
It should follow that the specific constitutional provisions invoked, to wit, Section 24 and
Section 25(4) of Article VI, are not applicable. With particular reference to Section 24,
this obviously could not have been complied with for the simple reason that the House
of Representatives, which now has the exclusive power to initiate appropriation
measures, had not yet been convened when the proclamation was issued. The
legislative power was then solely vested in the President of the Philippines, who
embodied, as it were, both houses of Congress.
The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should
be invalidated because they do not provide for retention limits as required by Article
XIII, Section 4 of the Constitution is no longer tenable. R.A. No. 6657 does provide for
such limits now in Section 6 of the law, which in fact is one of its most controversial
provisions. This section declares:
Retention Limits. Except as otherwise provided in this Act, no
person may own or retain, directly or indirectly, any public or private
agricultural land, the size of which shall vary according to factors
governing a viable family-sized farm, such as commodity produced,
terrain, infrastructure, and soil fertility as determined by the
Presidential Agrarian Reform Council (PARC) created hereunder,
but in no case shall retention by the landowner exceed five (5)
hectares. Three (3) hectares may be awarded to each child of the
landowner, subject to the following qualifications: (1) that he is at
least fifteen (15) years of age; and (2) that he is actually tilling the
land or directly managing the farm; Provided, That landowners
whose lands have been covered by Presidential Decree No. 27
shall be allowed to keep the area originally retained by them
thereunder, further, That original homestead grantees or direct
compulsory heirs who still own the original homestead at the time of
the approval of this Act shall retain the same areas as long as they
continue to cultivate said homestead.
The argument that E.O. No. 229 violates the constitutional requirement that a bill shall
have only one subject, to be expressed in its title, deserves only short attention. It is
settled that the title of the bill does not have to be a catalogue of its contents and will
suffice if the matters embodied in the text are relevant to each other and may be
inferred from the title. 20
The Court wryly observes that during the past dictatorship, every presidential issuance,
by whatever name it was called, had the force and effect of law because it came from
President Marcos. Such are the ways of despots. Hence, it is futile to argue, as the
petitioners do in G.R. No. 79744, that LOI 474 could not have repealed P.D. No. 27
because the former was only a letter of instruction. The important thing is that it was
issued by President Marcos, whose word was law during that time.
But for all their peremptoriness, these issuances from the President Marcos still had to
comply with the requirement for publication as this Court held in Tanada v.
Tuvera. 21 Hence, unless published in the Official Gazette in accordance with Article 2
of the Civil Code, they could not have any force and effect if they were among those
enactments successfully challenged in that case. LOI 474 was published, though, in
the Official Gazette dated November 29,1976.)
Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ
of mandamus cannot issue to compel the performance of a discretionary act, especially
by a specific department of the government. That is true as a general proposition but is
subject to one important qualification. Correctly and categorically stated, the rule is that
mandamus will lie to compel the discharge of the discretionary duty itself but not to
control the discretion to be exercised. In other words, mandamus can issue to require
action only but not specific action.
Whenever a duty is imposed upon a public official and an
unnecessary and unreasonable delay in the exercise of such duty
occurs, if it is a clear duty imposed by law, the courts will intervene
by the extraordinary legal remedy of mandamus to compel action. If
the duty is purely ministerial, the courts will require specific action. If
the duty is purely discretionary, the courts by mandamus will require
action only. For example, if an inferior court, public official, or board
should, for an unreasonable length of time, fail to decide a particular
question to the great detriment of all parties concerned, or a court
should refuse to take jurisdiction of a cause when the law clearly
gave it jurisdiction mandamus will issue, in the first case to require a
decision, and in the second to require that jurisdiction be taken of
the cause. 22
And while it is true that as a rule the writ will not be proper as long as there is still a
plain, speedy and adequate remedy available from the administrative authorities, resort
to the courts may still be permitted if the issue raised is a question of law. 23
III
There are traditional distinctions between the police power and the power of eminent
domain that logically preclude the application of both powers at the same time on the
same subject. In the case of City of Baguio v. NAWASA, 24for example, where a law
required the transfer of all municipal waterworks systems to the NAWASA in exchange
for its assets of equivalent value, the Court held that the power being exercised was
eminent domain because the property involved was wholesome and intended for a
public use. Property condemned under the police power is noxious or intended for a
noxious purpose, such as a building on the verge of collapse, which should be
demolished for the public safety, or obscene materials, which should be destroyed in
the interest of public morals. The confiscation of such property is not compensable,
unlike the taking of property under the power of expropriation, which requires the
payment of just compensation to the owner.
In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits
of the police power in a famous aphorism: "The general rule at least is that while
property may be regulated to a certain extent, if regulation goes too far it will be
recognized as a taking." The regulation that went "too far" was a law prohibiting mining
which might cause the subsidence of structures for human habitation constructed on
the land surface. This was resisted by a coal company which had earlier granted a
deed to the land over its mine but reserved all mining rights thereunder, with the
grantee assuming all risks and waiving any damage claim. The Court held the law
could not be sustained without compensating the grantor. Justice Brandeis filed a lone
dissent in which he argued that there was a valid exercise of the police power. He said:
Every restriction upon the use of property imposed in the exercise
of the police power deprives the owner of some right theretofore
enjoyed, and is, in that sense, an abridgment by the State of rights
in property without making compensation. But restriction imposed to
protect the public health, safety or morals from dangers threatened
is not a taking. The restriction here in question is merely the
prohibition of a noxious use. The property so restricted remains in
the possession of its owner. The state does not appropriate it or
make any use of it. The state merely prevents the owner from
making a use which interferes with paramount rights of the public.
Whenever the use prohibited ceases to be noxious as it may
because of further changes in local or social conditions the
restriction will have to be removed and the owner will again be free
to enjoy his property as heretofore.
Recent trends, however, would indicate not a polarization but a mingling of the police
power and the power of eminent domain, with the latter being used as an implement of
the former like the power of taxation. The employment of the taxing power to achieve a
police purpose has long been accepted. 26 As for the power of expropriation, Prof. John
J. Costonis of the University of Illinois College of Law (referring to the earlier case of
Euclid v. Ambler Realty Co., 272 US 365, which sustained a zoning law under the
police power) makes the following significant remarks:
Euclid, moreover, was decided in an era when judges located the
Police and eminent domain powers on different planets. Generally
speaking, they viewed eminent domain as encompassing public
acquisition of private property for improvements that would be
available for public use," literally construed. To the police power, on
the other hand, they assigned the less intrusive task of preventing
harmful externalities a point reflected in the Euclid opinion's reliance
on an analogy to nuisance law to bolster its support of zoning. So
long as suppression of a privately authored harm bore a plausible
relation to some legitimate "public purpose," the pertinent measure
need have afforded no compensation whatever. With the
progressive growth of government's involvement in land use, the
distance between the two powers has contracted considerably.
Today government often employs eminent domain interchangeably
with or as a useful complement to the police power-- a trend
expressly approved in the Supreme Court's 1954 decision in
Berman v. Parker, which broadened the reach of eminent domain's
"public use" test to match that of the police power's standard of
"public purpose." 27
The Berman case sustained a redevelopment project and the improvement of blighted
areas in the District of Columbia as a proper exercise of the police power. On the role
of eminent domain in the attainment of this purpose, Justice Douglas declared:
If those who govern the District of Columbia decide that the Nation's
Capital should be beautiful as well as sanitary, there is nothing in
the Fifth Amendment that stands in the way.
Once the object is within the authority of Congress, the right to
realize it through the exercise of eminent domain is clear.
For the power of eminent domain is merely the means to the end. 28
In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in 1978,
the U.S Supreme Court sustained the respondent's Landmarks Preservation Law
under which the owners of the Grand Central Terminal had not been allowed to
construct a multi-story office building over the Terminal, which had been designated a
historic landmark. Preservation of the landmark was held to be a valid objective of the
police power. The problem, however, was that the owners of the Terminal would be
deprived of the right to use the airspace above it although other landowners in the area
could do so over their respective properties. While insisting that there was here no
taking, the Court nonetheless recognized certain compensatory rights accruing to
Grand Central Terminal which it said would "undoubtedly mitigate" the loss caused by
the regulation. This "fair compensation," as he called it, was explained by Prof.
Costonis in this wise:
In return for retaining the Terminal site in its pristine landmark status, Penn Central was
authorized to transfer to neighboring properties the authorized but unused rights
accruing to the site prior to the Terminal's designation as a landmark the rights
which would have been exhausted by the 59-story building that the city refused to
countenance atop the Terminal. Prevailing bulk restrictions on neighboring sites were
proportionately relaxed, theoretically enabling Penn Central to recoup its losses at the
Terminal site by constructing or selling to others the right to construct larger, hence
more profitable buildings on the transferee sites. 30
The cases before us present no knotty complication insofar as the question of
compensable taking is concerned. To the extent that the measures under challenge
merely prescribe retention limits for landowners, there is an exercise of the police
power for the regulation of private property in accordance with the Constitution. But
where, to carry out such regulation, it becomes necessary to deprive such owners of
whatever lands they may own in excess of the maximum area allowed, there is
definitely a taking under the power of eminent domain for which payment of just
compensation is imperative. The taking contemplated is not a mere limitation of the use
of the land. What is required is the surrender of the title to and the physical possession
of the said excess and all beneficial rights accruing to the owner in favor of the farmer-
beneficiary. This is definitely an exercise not of the police power but of the power of
eminent domain.
Whether as an exercise of the police power or of the power of eminent domain, the
several measures before us are challenged as violative of the due process and equal
protection clauses.
The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no
retention limits are prescribed has already been discussed and dismissed. It is noted
that although they excited many bitter exchanges during the deliberation of the CARP
Law in Congress, the retention limits finally agreed upon are, curiously enough, not
being questioned in these petitions. We therefore do not discuss them here. The Court
will come to the other claimed violations of due process in connection with our
examination of the adequacy of just compensation as required under the power of
expropriation.
The argument of the small farmers that they have been denied equal protection
because of the absence of retention limits has also become academic under Section 6
of R.A. No. 6657. Significantly, they too have not questioned the area of such limits.
There is also the complaint that they should not be made to share the burden of
agrarian reform, an objection also made by the sugar planters on the ground that they
belong to a particular class with particular interests of their own. However, no evidence
has been submitted to the Court that the requisites of a valid classification have been
violated.
Classification has been defined as the grouping of persons or things similar to each
other in certain particulars and different from each other in these same
particulars. 31 To be valid, it must conform to the following requirements: (1) it must be
based on substantial distinctions; (2) it must be germane to the purposes of the law; (3)
it must not be limited to existing conditions only; and (4) it must apply equally to all the
members of the class. 32 The Court finds that all these requisites have been met by the
measures here challenged as arbitrary and discriminatory.
Equal protection simply means that all persons or things similarly situated must be
treated alike both as to the rights conferred and the liabilities imposed. 33 The
petitioners have not shown that they belong to a different class and entitled to a
different treatment. The argument that not only landowners but also owners of other
properties must be made to share the burden of implementing land reform must be
rejected. There is a substantial distinction between these two classes of owners that is
clearly visible except to those who will not see. There is no need to elaborate on this
matter. In any event, the Congress is allowed a wide leeway in providing for a valid
classification. Its decision is accorded recognition and respect by the courts of justice
except only where its discretion is abused to the detriment of the Bill of Rights.
It is worth remarking at this juncture that a statute may be sustained under the police
power only if there is a concurrence of the lawful subject and the lawful method. Put
otherwise, the interests of the public generally as distinguished from those of a
particular class require the interference of the State and, no less important, the means
employed are reasonably necessary for the attainment of the purpose sought to be
achieved and not unduly oppressive upon individuals. 34 As the subject and purpose of
agrarian reform have been laid down by the Constitution itself, we may say that the first
requirement has been satisfied. What remains to be examined is the validity of the
method employed to achieve the constitutional goal.
One of the basic principles of the democratic system is that where the rights of the
individual are concerned, the end does not justify the means. It is not enough that there
be a valid objective; it is also necessary that the means employed to pursue it be in
keeping with the Constitution. Mere expediency will not excuse constitutional shortcuts.
There is no question that not even the strongest moral conviction or the most urgent
public need, subject only to a few notable exceptions, will excuse the bypassing of an
individual's rights. It is no exaggeration to say that a, person invoking a right
guaranteed under Article III of the Constitution is a majority of one even as against the
rest of the nation who would deny him that right.
That right covers the person's life, his liberty and his property under Section 1 of Article
III of the Constitution. With regard to his property, the owner enjoys the added
protection of Section 9, which reaffirms the familiar rule that private property shall not
be taken for public use without just compensation.
This brings us now to the power of eminent domain.
IV
Eminent domain is an inherent power of the State that enables it to
forcibly acquire private lands intended for public use upon payment
of just compensation to the owner. Obviously, there is no need to
expropriate where the owner is willing to sell under terms also
acceptable to the purchaser, in which case an ordinary deed of sale
may be agreed upon by the parties. 35 It is only where the owner is
unwilling to sell, or cannot accept the price or other conditions
offered by the vendee, that the power of eminent domain will come
into play to assert the paramount authority of the State over the
interests of the property owner. Private rights must then yield to the
irresistible demands of the public interest on the time-honored
justification, as in the case of the police power, that the welfare of
the people is the supreme law.
But for all its primacy and urgency, the power of expropriation is by no means absolute
(as indeed no power is absolute). The limitation is found in the constitutional injunction
that "private property shall not be taken for public use without just compensation" and
in the abundant jurisprudence that has evolved from the interpretation of this principle.
Basically, the requirements for a proper exercise of the power are: (1) public use and
(2) just compensation.
Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the
State should first distribute public agricultural lands in the pursuit of agrarian reform
instead of immediately disturbing property rights by forcibly acquiring private
agricultural lands. Parenthetically, it is not correct to say that only public agricultural
lands may be covered by the CARP as the Constitution calls for "the just distribution of
all agricultural lands." In any event, the decision to redistribute private agricultural lands
in the manner prescribed by the CARP was made by the legislative and executive
departments in the exercise of their discretion. We are not justified in reviewing that
discretion in the absence of a clear showing that it has been abused.
A becoming courtesy admonishes us to respect the decisions of the political
departments when they decide what is known as the political question. As explained by
Chief Justice Concepcion in the case of Taada v. Cuenco: 36
The term "political question" connotes what it means in ordinary
parlance, namely, a question of policy. It refers to "those questions
which, under the Constitution, are to be decided by the people in
their sovereign capacity; or in regard to which full discretionary
authority has been delegated to the legislative or executive branch
of the government." It is concerned with issues dependent upon the
wisdom, not legality, of a particular measure.
It is true that the concept of the political question has been constricted with the
enlargement of judicial power, which now includes the authority of the courts "to
determine whether or not there has been a grave abuse of discretion amounting to lack
or excess of jurisdiction on the part of any branch or instrumentality of the
Government." 37 Even so, this should not be construed as a license for us to reverse
the other departments simply because their views may not coincide with ours.
The legislature and the executive have been seen fit, in their wisdom, to include in the
CARP the redistribution of private landholdings (even as the distribution of public
agricultural lands is first provided for, while also continuing apace under the Public
Land Act and other cognate laws). The Court sees no justification to interpose its
authority, which we may assert only if we believe that the political decision is not
unwise, but illegal. We do not find it to be so.
In U.S. v. Chandler-Dunbar Water Power Company, 38 it was held:
Congress having determined, as it did by the Act of March 3,1909
that the entire St. Mary's river between the American bank and the
international line, as well as all of the upland north of the present
ship canal, throughout its entire length, was "necessary for the
purpose of navigation of said waters, and the waters connected
therewith," that determination is conclusive in condemnation
proceedings instituted by the United States under that Act, and
there is no room for judicial review of the judgment of Congress ... .
As earlier observed, the requirement for public use has already been settled for us by
the Constitution itself No less than the 1987 Charter calls for agrarian reform, which is
the reason why private agricultural lands are to be taken from their owners, subject to
the prescribed maximum retention limits. The purposes specified in P.D. No. 27, Proc.
No. 131 and R.A. No. 6657 are only an elaboration of the constitutional injunction that
the State adopt the necessary measures "to encourage and undertake the just
distribution of all agricultural lands to enable farmers who are landless to own directly
or collectively the lands they till." That public use, as pronounced by the fundamental
law itself, must be binding on us.
The second requirement, i.e., the payment of just compensation, needs a longer and
more thoughtful examination.
Just compensation is defined as the full and fair equivalent of the property taken from
its owner by the expropriator. 39 It has been repeatedly stressed by this Court that the
measure is not the taker's gain but the owner's loss. 40 The word "just" is used to
intensify the meaning of the word "compensation" to convey the idea that the
equivalent to be rendered for the property to be taken shall be real, substantial, full,
ample. 41
It bears repeating that the measures challenged in these petitions contemplate more
than a mere regulation of the use of private lands under the police power. We deal
here with an actual taking of private agricultural lands that has dispossessed the
owners of their property and deprived them of all its beneficial use and enjoyment, to
entitle them to the just compensation mandated by the Constitution.
As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when
the following conditions concur: (1) the expropriator must enter a private property; (2)
the entry must be for more than a momentary period; (3) the entry must be under
warrant or color of legal authority; (4) the property must be devoted to public use or
otherwise informally appropriated or injuriously affected; and (5) the utilization of the
property for public use must be in such a way as to oust the owner and deprive him of
beneficial enjoyment of the property. All these requisites are envisioned in the
measures before us.
Where the State itself is the expropriator, it is not necessary for it to make a deposit
upon its taking possession of the condemned property, as "the compensation is a
public charge, the good faith of the public is pledged for its payment, and all the
resources of taxation may be employed in raising the amount." 43 Nevertheless,
Section 16(e) of the CARP Law provides that:
Upon receipt by the landowner of the corresponding payment or, in
case of rejection or no response from the landowner, upon the
deposit with an accessible bank designated by the DAR of the
compensation in cash or in LBP bonds in accordance with this Act,
the DAR shall take immediate possession of the land and shall
request the proper Register of Deeds to issue a Transfer Certificate
of Title (TCT) in the name of the Republic of the Philippines. The
DAR shall thereafter proceed with the redistribution of the land to
the qualified beneficiaries.
Objection is raised, however, to the manner of fixing the just compensation, which it is
claimed is entrusted to the administrative authorities in violation of judicial prerogatives.
Specific reference is made to Section 16(d), which provides that in case of the rejection
or disregard by the owner of the offer of the government to buy his land-
... the DAR shall conduct summary administrative proceedings to
determine the compensation for the land by requiring the
 landowner, the LBP and other interested parties to submit evidence
as to the just compensation for the land, within fifteen (15) days
from the receipt of the notice. After the expiration of the above
period, the matter is deemed submitted for decision. The DAR shall
decide the case within thirty (30) days after it is submitted for
decision.
To be sure, the determination of just compensation is a function addressed to the
courts of justice and may not be usurped by any other branch or official of the
government. EPZA v. Dulay 44 resolved a challenge to several decrees promulgated by
President Marcos providing that the just compensation for property under expropriation
should be either the assessment of the property by the government or the sworn
valuation thereof by the owner, whichever was lower. In declaring these decrees
unconstitutional, the Court held through Mr. Justice Hugo E. Gutierrez, Jr.:
The method of ascertaining just compensation under the aforecited
decrees constitutes impermissible encroachment on judicial
prerogatives. It tends to render this Court inutile in a matter which
under this Constitution is reserved to it for final determination.
Thus, although in an expropriation proceeding the court technically
would still have the power to determine the just compensation for
the property, following the applicable decrees, its task would be
relegated to simply stating the lower value of the property as
declared either by the owner or the assessor. As a necessary
consequence, it would be useless for the court to appoint
commissioners under Rule 67 of the Rules of Court. Moreover, the
need to satisfy the due process clause in the taking of private
property is seemingly fulfilled since it cannot be said that a judicial
proceeding was not had before the actual taking. However, the strict
application of the decrees during the proceedings would be nothing
short of a mere formality or charade as the court has only to choose
between the valuation of the owner and that of the assessor, and its
choice is always limited to the lower of the two. The court cannot
exercise its discretion or independence in determining what is just
or fair. Even a grade school pupil could substitute for the judge
insofar as the determination of constitutional just compensation is
concerned.
xxx
In the present petition, we are once again confronted with the same
question of whether the courts under P.D. No. 1533, which contains
the same provision on just compensation as its predecessor
decrees, still have the power and authority to determine just
compensation, independent of what is stated by the decree and to
this effect, to appoint commissioners for such purpose.
This time, we answer in the affirmative.
xxx
It is violative of due process to deny the owner the opportunity to
prove that the valuation in the tax documents is unfair or wrong.
And it is repulsive to the basic concepts of justice and fairness to
allow the haphazard work of a minor bureaucrat or clerk to
absolutely prevail over the judgment of a court promulgated only
after expert commissioners have actually viewed the property, after
evidence and arguments pro and con have been presented, and
after all factors and considerations essential to a fair and just
determination have been judiciously evaluated.
A reading of the aforecited Section 16(d) will readily show that it does not suffer from
the arbitrariness that rendered the challenged decrees constitutionally objectionable.
Although the proceedings are described as summary, the landowner and other
interested parties are nevertheless allowed an opportunity to submit evidence on the
real value of the property. But more importantly, the determination of the just
compensation by the DAR is not by any means final and conclusive upon the
landowner or any other interested party, for Section 16(f) clearly provides:
Any party who disagrees with the decision may bring the matter to
the court of proper jurisdiction for final determination of just
compensation.
The determination made by the DAR is only preliminary unless accepted by all parties
concerned. Otherwise, the courts of justice will still have the right to review with finality
the said determination in the exercise of what is admittedly a judicial function.
The second and more serious objection to the provisions on just compensation is not
as easily resolved.
This refers to Section 18 of the CARP Law providing in full as follows:
SEC. 18. Valuation and Mode of Compensation. The LBP shall
compensate the landowner in such amount as may be agreed upon
by the landowner and the DAR and the LBP, in accordance with the
criteria provided for in Sections 16 and 17, and other pertinent
provisions hereof, or as may be finally determined by the court, as
the just compensation for the land.
The compensation shall be paid in one of the following modes, at
the option of the landowner:
(1) Cash payment, under the following terms and conditions:
(a) For lands above fifty (50)
hectares, insofar as the
excess hectarage is
concerned Twenty-five
percent (25%) cash, the
balance to be paid in
government financial
 instruments negotiable at any
time.
(b) For lands above twenty-
four (24) hectares and up to
fifty (50) hectares Thirty
percent (30%) cash, the
balance to be paid in
government financial
instruments negotiable at any
time.
(c) For lands twenty-four (24)
hectares and below Thirty-
five percent (35%) cash, the
balance to be paid in
government financial
instruments negotiable at any
time.
(2) Shares of stock in government-owned or controlled corporations,
LBP preferred shares, physical assets or other qualified
investments in accordance with guidelines set by the PARC;
(3) Tax credits which can be used against any tax liability;
(4) LBP bonds, which shall have the following features:
(a) Market interest rates
aligned with 91-day treasury
bill rates. Ten percent (10%)
of the face value of the bonds
shall mature every year from
the date of issuance until the
tenth (10th) year: Provided,
That should the landowner
choose to forego the cash
portion, whether in full or in
part, he shall be paid
correspondingly in LBP
bonds;
(b) Transferability and
negotiability. Such LBP
bonds may be used by the
landowner, his successors-in-
interest or his assigns, up to
the amount of their face
value, for any of the
following:
(i) Acquisition of land or other
real properties of the
government, including assets
under the Asset Privatization
Program and other assets
foreclosed by government
financial institutions in the
same province or region
where the lands for which the
bonds were paid are situated;
(ii) Acquisition of shares of
stock of government-owned
or controlled corporations or
shares of stock owned by the
government in private
corporations;
(iii) Substitution for surety or
bail bonds for the provisional
release of accused persons,
or for performance bonds;
(iv) Security for loans with
any government financial
institution, provided the
proceeds of the loans shall
be invested in an economic
enterprise, preferably in a
small and medium- scale
industry, in the same
province or region as the land
for which the bonds are paid;
(v) Payment for various taxes
and fees to government:
Provided, That the use of
these bonds for these
purposes will be limited to a
certain percentage of the
outstanding balance of the
financial instruments;
Provided, further, That the
PARC shall determine the
percentages mentioned
above;
(vi) Payment for tuition fees
of the immediate family of the
original bondholder in
government universities,
colleges, trade schools, and
other institutions;
 (vii) Payment for fees of the
immediate family of the
original bondholder in
government hospitals; and
(viii) Such other uses as the
PARC may from time to time
allow.
The contention of the petitioners in G.R. No. 79777 is that the above provision is
unconstitutional insofar as it requires the owners of the expropriated properties to
accept just compensation therefor in less than money, which is the only medium of
payment allowed. In support of this contention, they cite jurisprudence holding that:
The fundamental rule in expropriation matters is that the owner of
the property expropriated is entitled to a just compensation, which
should be neither more nor less, whenever it is possible to make the
assessment, than the money equivalent of said property. Just
compensation has always been understood to be the just and
complete equivalent of the loss which the owner of the thing
expropriated has to suffer by reason of the expropriation
. 45 (Emphasis supplied.)
46
In J.M. Tuazon Co. v. Land Tenure Administration, this Court held:
It is well-settled that just compensation means the equivalent for the
value of the property at the time of its taking. Anything beyond that
is more, and anything short of that is less, than just compensation. It
means a fair and full equivalent for the loss sustained, which is the
measure of the indemnity, not whatever gain would accrue to the
expropriating entity. The market value of the land taken is the just
compensation to which the owner of condemned property is
entitled, the market value being that sum of money which a person
desirous, but not compelled to buy, and an owner, willing, but not
compelled to sell, would agree on as a price to be given and
received for such property. (Emphasis supplied.)
In the United States, where much of our jurisprudence on the subject has been
derived, the weight of authority is also to the effect that just compensation for property
expropriated is payable only in money and not otherwise. Thus
The medium of payment of compensation is ready money or cash.
The condemnor cannot compel the owner to accept anything but
money, nor can the owner compel or require the condemnor to pay
him on any other basis than the value of the property in money at
the time and in the manner prescribed by the Constitution and the
statutes. When the power of eminent domain is resorted to, there
must be a standard medium of payment, binding upon both parties,
and the law has fixed that standard as money in cash. 47 (Emphasis
supplied.)
Part cash and deferred payments are not and cannot, in the nature
of things, be regarded as a reliable and constant standard of
compensation. 48
"Just compensation" for property taken by condemnation means a
fair equivalent in money, which must be paid at least within a
reasonable time after the taking, and it is not within the power of the
Legislature to substitute for such payment future obligations, bonds,
or other valuable advantage. 49 (Emphasis supplied.)
It cannot be denied from these cases that the traditional medium for the payment of
just compensation is money and no other. And so, conformably, has just compensation
been paid in the past solely in that medium. However, we do not deal here with the
traditional excercise of the power of eminent domain. This is not an ordinary
expropriation where only a specific property of relatively limited area is sought to be
taken by the State from its owner for a specific and perhaps local purpose.
What we deal with here is a revolutionary kind of expropriation.
The expropriation before us affects all private agricultural lands whenever found and of
whatever kind as long as they are in excess of the maximum retention limits allowed
their owners. This kind of expropriation is intended for the benefit not only of a
particular community or of a small segment of the population but of the entire Filipino
nation, from all levels of our society, from the impoverished farmer to the land-glutted
owner. Its purpose does not cover only the whole territory of this country but goes
beyond in time to the foreseeable future, which it hopes to secure and edify with the
vision and the sacrifice of the present generation of Filipinos. Generations yet to come
are as involved in this program as we are today, although hopefully only as
beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow
through our thoughtfulness today. And, finally, let it not be forgotten that it is no less
than the Constitution itself that has ordained this revolution in the farms, calling for "a
just distribution" among the farmers of lands that have heretofore been the prison of
their dreams but can now become the key at least to their deliverance.
Such a program will involve not mere millions of pesos. The cost will be tremendous.
Considering the vast areas of land subject to expropriation under the laws before us,
we estimate that hundreds of billions of pesos will be needed, far more indeed than the
amount of P50 billion initially appropriated, which is already staggering as it is by our
present standards. Such amount is in fact not even fully available at this time.
We assume that the framers of the Constitution were aware of this difficulty when they
called for agrarian reform as a top priority project of the government. It is a part of this
assumption that when they envisioned the expropriation that would be needed, they
also intended that the just compensation would have to be paid not in the orthodox way
but a less conventional if more practical method. There can be no doubt that they were
aware of the financial limitations of the government and had no illusions that there
would be enough money to pay in cash and in full for the lands they wanted to be
distributed among the farmers. We may therefore assume that their intention was to
allow such manner of payment as is now provided for by the CARP Law, particularly
the payment of the balance (if the owner cannot be paid fully with money), or indeed of
the entire amount of the just compensation, with other things of value. We may also
suppose that what they had in mind was a similar scheme of payment as that
prescribed in P.D. No. 27, which was the law in force at the time they deliberated on
the new Charter and with which they presumably agreed in principle.
The Court has not found in the records of the Constitutional Commission any
categorical agreement among the members regarding the meaning to be given the
concept of just compensation as applied to the comprehensive agrarian reform
program being contemplated. There was the suggestion to "fine tune" the requirement
to suit the demands of the project even as it was also felt that they should "leave it to
Congress" to determine how payment should be made to the landowner and
reimbursement required from the farmer-beneficiaries. Such innovations as
"progressive compensation" and "State-subsidized compensation" were also proposed.
In the end, however, no special definition of the just compensation for the lands to be
expropriated was reached by the Commission. 50
On the other hand, there is nothing in the records either that militates against the
assumptions we are making of the general sentiments and intention of the members on
the content and manner of the payment to be made to the landowner in the light of the
magnitude of the expenditure and the limitations of the expropriator.
With these assumptions, the Court hereby declares that the content and manner of the
just compensation provided for in the afore- quoted Section 18 of the CARP Law is not
violative of the Constitution. We do not mind admitting that a certain degree of
pragmatism has influenced our decision on this issue, but after all this Court is not a
cloistered institution removed from the realities and demands of society or oblivious to
the need for its enhancement. The Court is as acutely anxious as the rest of our people
to see the goal of agrarian reform achieved at last after the frustrations and
deprivations of our peasant masses during all these disappointing decades. We are
aware that invalidation of the said section will result in the nullification of the entire
program, killing the farmer's hopes even as they approach realization and resurrecting
the spectre of discontent and dissent in the restless countryside. That is not in our view
the intention of the Constitution, and that is not what we shall decree today.
Accepting the theory that payment of the just compensation is not always required to
be made fully in money, we find further that the proportion of cash payment to the other
things of value constituting the total payment, as determined on the basis of the areas
of the lands expropriated, is not unduly oppressive upon the landowner. It is noted that
the smaller the land, the bigger the payment in money, primarily because the small
landowner will be needing it more than the big landowners, who can afford a bigger
balance in bonds and other things of value. No less importantly, the government
financial instruments making up the balance of the payment are "negotiable at any
time." The other modes, which are likewise available to the landowner at his option, are
also not unreasonable because payment is made in shares of stock, LBP bonds, other
properties or assets, tax credits, and other things of value equivalent to the amount of
just compensation.
Admittedly, the compensation contemplated in the law will cause the landowners, big
and small, not a little inconvenience. As already remarked, this cannot be avoided.
Nevertheless, it is devoutly hoped that these countrymen of ours, conscious as we
know they are of the need for their forebearance and even sacrifice, will not begrudge
us their indispensable share in the attainment of the ideal of agrarian reform.
Otherwise, our pursuit of this elusive goal will be like the quest for the Holy Grail.
The complaint against the effects of non-registration of the land under E.O. No. 229
does not seem to be viable any more as it appears that Section 4 of the said Order has
been superseded by Section 14 of the CARP Law. This repeats the requisites of
registration as embodied in the earlier measure but does not provide, as the latter did,
that in case of failure or refusal to register the land, the valuation thereof shall be that
given by the provincial or city assessor for tax purposes. On the contrary, the CARP
Law says that the just compensation shall be ascertained on the basis of the factors
mentioned in its Section 17 and in the manner provided for in Section 16.
The last major challenge to CARP is that the landowner is divested of his property
even before actual payment to him in full of just compensation, in contravention of a
well- accepted principle of eminent domain.
The recognized rule, indeed, is that title to the property expropriated shall pass from
the owner to the expropriator only upon full payment of the just compensation.
Jurisprudence on this settled principle is consistent both here and in other democratic
jurisdictions. Thus:
Title to property which is the subject of condemnation proceedings does not vest the
condemnor until the judgment fixing just compensation is entered and paid, but the
condemnor's title relates back to the date on which the petition under the Eminent
Domain Act, or the commissioner's report under the Local Improvement Act, is filed. 51
... although the right to appropriate and use land taken for a canal is complete at the
time of entry, title to the property taken remains in the owner until payment is actually
made. 52 (Emphasis supplied.)
In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that
title to property does not pass to the condemnor until just compensation had actually
been made. In fact, the decisions appear to be uniformly to this effect. As early as
1838, in Rubottom v. McLure, 54 it was held that "actual payment to the owner of the
condemned property was a condition precedent to the investment of the title to the
property in the State" albeit "not to the appropriation of it to public use." In Rexford v.
Knight, 55 the Court of Appeals of New York said that the construction upon the statutes
was that the fee did not vest in the State until the payment of the compensation
although the authority to enter upon and appropriate the land was complete prior to the
payment. Kennedy further said that "both on principle and authority the rule is ... that
the right to enter on and use the property is complete, as soon as the property is
actually appropriated under the authority of law for a public use, but that the title does
not pass from the owner without his consent, until just compensation has been made to
him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and
Paredes, 56 that:
If the laws which we have exhibited or cited in the preceding
discussion are attentively examined it will be apparent that the
method of expropriation adopted in this jurisdiction is such as to
afford absolute reassurance that no piece of land can be finally and
irrevocably taken from an unwilling owner until compensation is paid
... . (Emphasis supplied.)
It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as
October 21, 1972 and declared that he shall "be deemed the owner" of a portion of
land consisting of a family-sized farm except that "no title to the land owned by him was
to be actually issued to him unless and until he had become a full-fledged member of a
duly recognized farmers' cooperative." It was understood, however, that full payment of
the just compensation also had to be made first, conformably to the constitutional
requirement.
When E.O. No. 228, categorically stated in its Section 1 that:
All qualified farmer-beneficiaries are now deemed full owners as of
October 21, 1972 of the land they acquired by virtue of Presidential
Decree No. 27. (Emphasis supplied.)
it was obviously referring to lands already validly acquired under the said decree, after
proof of full-fledged membership in the farmers' cooperatives and full payment of just
compensation. Hence, it was also perfectly proper for the Order to also provide in its
Section 2 that the "lease rentals paid to the landowner by the farmer- beneficiary after
October 21, 1972 (pending transfer of ownership after full payment of just
compensation), shall be considered as advance payment for the land."
The CARP Law, for its part, conditions the transfer of possession and ownership of the
land to the government on receipt by the landowner of the corresponding payment or
the deposit by the DAR of the compensation in cash or LBP bonds with an accessible
bank. Until then, title also remains with the landowner. 57 No outright change of
ownership is contemplated either.
Hence, the argument that the assailed measures violate due process by arbitrarily
transferring title before the land is fully paid for must also be rejected.
It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D.
No. 27, as recognized under E.O. No. 228, are retained by him even now under R.A.
No. 6657. This should counter-balance the express provision in Section 6 of the said
law that "the landowners whose lands have been covered by Presidential Decree No.
27 shall be allowed to keep the area originally retained by them thereunder, further,
That original homestead grantees or direct compulsory heirs who still own the original
homestead at the time of the approval of this Act shall retain the same areas as long as
they continue to cultivate said homestead."
In connection with these retained rights, it does not appear in G.R. No. 78742 that the
appeal filed by the petitioners with the Office of the President has already been
resolved. Although we have said that the doctrine of exhaustion of administrative
remedies need not preclude immediate resort to judicial action, there are factual issues
that have yet to be examined on the administrative level, especially the claim that the
petitioners are not covered by LOI 474 because they do not own other agricultural
lands than the subjects of their petition.
Obviously, the Court cannot resolve these issues. In any event, assuming that the
petitioners have not yet exercised their retention rights, if any, under P.D. No. 27, the
Court holds that they are entitled to the new retention rights provided for by R.A. No.
6657, which in fact are on the whole more liberal than those granted by the decree.
V
The CARP Law and the other enactments also involved in these cases have been the
subject of bitter attack from those who point to the shortcomings of these measures
and ask that they be scrapped entirely. To be sure, these enactments are less than
perfect; indeed, they should be continuously re-examined and rehoned, that they may
be sharper instruments for the better protection of the farmer's rights. But we have to
start somewhere. In the pursuit of agrarian reform, we do not tread on familiar ground
but grope on terrain fraught with pitfalls and expected difficulties. This is inevitable. The
CARP Law is not a tried and tested project. On the contrary, to use Justice Holmes's
words, "it is an experiment, as all life is an experiment," and so we learn as we venture
forward, and, if necessary, by our own mistakes. We cannot expect perfection although
we should strive for it by all means. Meantime, we struggle as best we can in freeing
the farmer from the iron shackles that have unconscionably, and for so long, fettered
his soul to the soil.
By the decision we reach today, all major legal obstacles to the comprehensive
agrarian reform program are removed, to clear the way for the true freedom of the
farmer. We may now glimpse the day he will be released not only from want but also
from the exploitation and disdain of the past and from his own feelings of inadequacy
and helplessness. At last his servitude will be ended forever. At last the farm on which
he toils will be his farm. It will be his portion of the Mother Earth that will give him not
only the staff of life but also the joy of living. And where once it bred for him only deep
despair, now can he see in it the fruition of his hopes for a more fulfilling future. Now at
last can he banish from his small plot of earth his insecurities and dark resentments
and "rebuild in it the music and the dream."
WHEREFORE, the Court holds as follows:
1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228
and 229 are SUSTAINED against all the constitutional objections
raised in the herein petitions.
2. Title to all expropriated properties shall be transferred to the
State only upon full payment of compensation to their respective
owners.
3. All rights previously acquired by the tenant- farmers under P.D.
No. 27 are retained and recognized.
4. Landowners who were unable to exercise their rights of retention
under P.D. No. 27 shall enjoy the retention rights granted by R.A.
No. 6657 under the conditions therein prescribed.
5. Subject to the above-mentioned rulings all the petitions are
DISMISSED, without pronouncement as to costs.
SO ORDERED.
EN BANC
[G.R. No. 86889 : December 4, 1990.]
192 SCRA 51
LUZ FARMS, Petitioner, vs. THE HONORABLE SECRETARY OF THE
DEPARTMENT OF AGRARIAN REFORM, Respondent.
DECISION
PARAS, J.:
This is a petition for prohibition with prayer for restraining order and/or preliminary and
permanent injunction against the Honorable Secretary of the Department of Agrarian
Reform for acting without jurisdiction in enforcing the assailed provisions of R.A. No.
6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988 and in
promulgating the Guidelines and Procedure Implementing Production and Profit
Sharing under R.A. No. 6657, insofar as the same apply to herein petitioner, and
further from performing an act in violation of the constitutional rights of the petitioner.
As gathered from the records, the factual background of this case, is as follows:
On June 10, 1988, the President of the Philippines approved R.A. No. 6657, which
includes the raising of livestock, poultry and swine in its coverage (Rollo, p. 80).
On January 2, 1989, the Secretary of Agrarian Reform promulgated the Guidelines and
Procedures Implementing Production and Profit Sharing as embodied in Sections 13
and 32 of R.A. No. 6657 (Rollo, p. 80).
On January 9, 1989, the Secretary of Agrarian Reform promulgated its Rules and
Regulations implementing Section 11 of R.A. No. 6657 (Commercial Farms). (Rollo, p.
81).
Luz Farms, petitioner in this case, is a corporation engaged in the livestock and poultry
business and together with others in the same business allegedly stands to be
adversely affected by the enforcement of Section 3(b), Section 11, Section 13, Section
16(d) and 17 and Section 32 of R.A. No. 6657 otherwise known as Comprehensive
Agrarian Reform Law and of the Guidelines and Procedures Implementing Production
and Profit Sharing under R.A. No. 6657 promulgated on January 2, 1989 and the Rules
and Regulations Implementing Section 11 thereof as promulgated by the DAR on
January 9, 1989 (Rollo, pp. 2-36).: rd
Hence, this petition praying that aforesaid laws, guidelines and rules be declared
unconstitutional. Meanwhile, it is also prayed that a writ of preliminary injunction or
restraining order be issued enjoining public respondents from enforcing the same,
insofar as they are made to apply to Luz Farms and other livestock and poultry raisers.
This Court in its Resolution dated July 4, 1939 resolved to deny, among others, Luz
Farms' prayer for the issuance of a preliminary injunction in its Manifestation dated May
26, and 31, 1989. (Rollo, p. 98).
Later, however, this Court in its Resolution dated August 24, 1989 resolved to grant
said Motion for Reconsideration regarding the injunctive relief, after the filing and
approval by this Court of an injunction bond in the amount of P100,000.00. This Court
also gave due course to the petition and required the parties to file their respective
memoranda (Rollo, p. 119).
The petitioner filed its Memorandum on September 6, 1989 (Rollo, pp. 131-168).
On December 22, 1989, the Solicitor General adopted his Comment to the petition as
his Memorandum (Rollo, pp. 186-187).
Luz Farms questions the following provisions of R.A. 6657, insofar as they are made to
apply to it:
(a) Section 3(b) which includes the "raising of livestock (and poultry)" in the definition of
"Agricultural, Agricultural Enterprise or Agricultural Activity."
(b) Section 11 which defines "commercial farms" as "private agricultural lands devoted
to commercial, livestock, poultry and swine raising . . ."
(c) Section 13 which calls upon petitioner to execute a production-sharing plan.
(d) Section 16(d) and 17 which vest on the Department of Agrarian Reform the
authority to summarily determine the just compensation to be paid for lands covered by
the Comprehensive Agrarian Reform Law.
(e) Section 32 which spells out the production-sharing plan mentioned in Section 13
". . . (W)hereby three percent (3%) of the gross sales from the production of such lands
are distributed within sixty (60) days of the end of the fiscal year as compensation to
regular and other farmworkers in such lands over and above the compensation they
currently receive: Provided, That these individuals or entities realize gross sales in
excess of five million pesos per annum unless the DAR, upon proper application,
determine a lower ceiling.
In the event that the individual or entity realizes a profit, an additional ten (10%) of the
net profit after tax shall be distributed to said regular and other farmworkers within
ninety (90) days of the end of the fiscal year . . ."
The main issue in this petition is the constitutionality of Sections 3(b), 11, 13 and 32 of
R.A. No. 6657 (the Comprehensive Agrarian Reform Law of 1988), insofar as the said
law includes the raising of livestock, poultry and swine in its coverage as well as the
Implementing Rules and Guidelines promulgated in accordance therewith.:-cralaw
The constitutional provision under consideration reads as follows:
ARTICLE XIII
x x x
AGRARIAN AND NATURAL RESOURCES REFORM
Section 4. The State shall, by law, undertake an agrarian reform program founded on
the right of farmers and regular farmworkers, who are landless, to own directly or
collectively the lands they till or, in the case of other farmworkers, to receive a just
share of the fruits thereof. To this end, the State shall encourage and undertake the
just distribution of all agricultural lands, subject to such priorities and reasonable
retention limits as the Congress may prescribe, taking into account ecological,
developmental, or equity considerations, and subject to the payment of just
compensation. In determining retention limits, the State shall respect the rights of small
landowners. The State shall further provide incentives for voluntary land-sharing.
x x x"
Luz Farms contended that it does not seek the nullification of R.A. 6657 in its entirety.
In fact, it acknowledges the correctness of the decision of this Court in the case of the
Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian
Reform (G.R. 78742, 14 July 1989) affirming the constitutionality of the Comprehensive
Agrarian Reform Law. It, however, argued that Congress in enacting the said law has
transcended the mandate of the Constitution, in including land devoted to the raising of
livestock, poultry and swine in its coverage (Rollo, p. 131). Livestock or poultry raising
is not similar to crop or tree farming. Land is not the primary resource in this
undertaking and represents no more than five percent (5%) of the total investment of
commercial livestock and poultry raisers. Indeed, there are many owners of residential
lands all over the country who use available space in their residence for commercial
livestock and raising purposes, under "contract-growing arrangements," whereby
processing corporations and other commercial livestock and poultry raisers (Rollo, p.
10). Lands support the buildings and other amenities attendant to the raising of animals
and birds. The use of land is incidental to but not the principal factor or consideration in
productivity in this industry. Including backyard raisers, about 80% of those in
commercial livestock and poultry production occupy five hectares or less. The
remaining 20% are mostly corporate farms (Rollo, p. 11).
On the other hand, the public respondent argued that livestock and poultry raising is
embraced in the term "agriculture" and the inclusion of such enterprise under Section
3(b) of R.A. 6657 is proper. He cited that Webster's International Dictionary, Second
Edition (1954), defines the following words:
"Agriculture the art or science of cultivating the ground and raising and harvesting
crops, often, including also, feeding, breeding and management of livestock, tillage,
husbandry, farming.
It includes farming, horticulture, forestry, dairying, sugarmaking . . .
Livestock domestic animals used or raised on a farm, especially for profit.
Farm a plot or tract of land devoted to the raising of domestic or other animals."
(Rollo, pp. 82-83).
The petition is impressed with merit.
The question raised is one of constitutional construction. The primary task in
constitutional construction is to ascertain and thereafter assure the realization of the
purpose of the framers in the adoption of the Constitution (J.M. Tuazon & Co. vs. Land
Tenure Administration, 31 SCRA 413 [1970]).: rd
Ascertainment of the meaning of the provision of Constitution begins with the language
of the document itself. The words used in the Constitution are to be given their ordinary
meaning except where technical terms are employed in which case the significance
thus attached to them prevails (J.M. Tuazon & Co. vs. Land Tenure Administration, 31
SCRA 413 [1970]).
It is generally held that, in construing constitutional provisions which are ambiguous or
of doubtful meaning, the courts may consider the debates in the constitutional
convention as throwing light on the intent of the framers of the Constitution. It is true
that the intent of the convention is not controlling by itself, but as its proceeding was
preliminary to the adoption by the people of the Constitution the understanding of the
convention as to what was meant by the terms of the constitutional provision which
was the subject of the deliberation, goes a long way toward explaining the
understanding of the people when they ratified it (Aquino, Jr. v. Enrile, 59 SCRA 183
[1974]).
The transcripts of the deliberations of the Constitutional Commission of 1986 on the
meaning of the word "agricultural," clearly show that it was never the intention of the
framers of the Constitution to include livestock and poultry industry in the coverage of
the constitutionally-mandated agrarian reform program of the Government.
The Committee adopted the definition of "agricultural land" as defined under Section
166 of R.A. 3844, as laud devoted to any growth, including but not limited to crop
lands, saltbeds, fishponds, idle and abandoned land (Record, CONCOM, August 7,
1986, Vol. III, p. 11).
The intention of the Committee is to limit the application of the word "agriculture."
Commissioner Jamir proposed to insert the word "ARABLE" to distinguish this kind of
agricultural land from such lands as commercial and industrial lands and residential
properties because all of them fall under the general classification of the word
"agricultural". This proposal, however, was not considered because the Committee
contemplated that agricultural lands are limited to arable and suitable agricultural lands
and therefore, do not include commercial, industrial and residential lands (Record,
CONCOM, August 7, 1986, Vol. III, p. 30).
In the interpellation, then Commissioner Regalado (now a Supreme Court Justice),
posed several questions, among others, quoted as follows:
x x x
"Line 19 refers to genuine reform program founded on the primary right of farmers and
farmworkers. I wonder if it means that leasehold tenancy is thereby proscribed under
this provision because it speaks of the primary right of farmers and farmworkers to own
directly or collectively the lands they till. As also mentioned by Commissioner Tadeo,
farmworkers include those who work in piggeries and poultry projects.
I was wondering whether I am wrong in my appreciation that if somebody puts up a
piggery or a poultry project and for that purpose hires farmworkers therein, these
farmworkers will automatically have the right to own eventually, directly or ultimately or
collectively, the land on which the piggeries and poultry projects were constructed.
(Record, CONCOM, August 2, 1986, p. 618).
x x x
The questions were answered and explained in the statement of then Commissioner
Tadeo, quoted as follows:
x x x
"Sa pangalawang katanungan ng Ginoo ay medyo hindi kami nagkaunawaan.
Ipinaaalam ko kay Commissioner Regalado na hindi namin inilagay ang agricultural
worker sa kadahilanang kasama rito ang piggery, poultry at livestock workers. Ang
inilagay namin dito ay farm worker kaya hindi kasama ang piggery, poultry at livestock
workers (Record, CONCOM, August 2, 1986, Vol. II, p. 621).
It is evident from the foregoing discussion that Section II of R.A. 6657 which includes
"private agricultural lands devoted to commercial livestock, poultry and swine raising"
in the definition of "commercial farms" is invalid, to the extent that the aforecited agro-
industrial activities are made to be covered by the agrarian reform program of the
State. There is simply no reason to include livestock and poultry lands in the coverage
of agrarian reform. (Rollo, p. 21).
Hence, there is merit in Luz Farms' argument that the requirement in Sections 13 and
32 of R.A. 6657 directing "corporate farms" which include livestock and poultry raisers
to execute and implement "production-sharing plans" (pending final redistribution of
their landholdings) whereby they are called upon to distribute from three percent (3%)
of their gross sales and ten percent (10%) of their net profits to their workers as
additional compensation is unreasonable for being confiscatory, and therefore violative
of due process (Rollo, p. 21).:-cralaw
It has been established that this Court will assume jurisdiction over a constitutional
question only if it is shown that the essential requisites of a judicial inquiry into such a
question are first satisfied. Thus, there must be an actual case or controversy involving
a conflict of legal rights susceptible of judicial determination, the constitutional question
must have been opportunely raised by the proper party, and the resolution of the
question is unavoidably necessary to the decision of the case itself (Association of
Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742;
Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R.
79777, 14 July 1989, 175 SCRA 343).
However, despite the inhibitions pressing upon the Court when confronted with
constitutional issues, it will not hesitate to declare a law or act invalid when it is
convinced that this must be done. In arriving at this conclusion, its only criterion will be
the Constitution and God as its conscience gives it in the light to probe its meaning and
discover its purpose. Personal motives and political considerations are irrelevancies
that cannot influence its decisions. Blandishment is as ineffectual as intimidation, for all
the awesome power of the Congress and Executive, the Court will not hesitate "to
make the hammer fall heavily," where the acts of these departments, or of any official,
betray the people's will as expressed in the Constitution (Association of Small
Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. 78742;
Acuna v. Arroyo, G.R. 79310; Pabico v. Juico, G.R. 79744; Manaay v. Juico, G.R.
79777, 14 July 1989).
Thus, where the legislature or the executive acts beyond the scope of its constitutional
powers, it becomes the duty of the judiciary to declare what the other branches of the
government had assumed to do, as void. This is the essence of judicial power
conferred by the Constitution "(I)n one Supreme Court and in such lower courts as may
be established by law" (Art. VIII, Section 1 of the 1935 Constitution; Article X, Section I
of the 1973 Constitution and which was adopted as part of the Freedom Constitution,
and Article VIII, Section 1 of the 1987 Constitution) and which power this Court has
exercised in many instances (Demetria v. Alba, 148 SCRA 208 [1987]).
PREMISES CONSIDERED, the instant petition is hereby GRANTED. Sections 3(b),
11, 13 and 32 of R.A. No. 6657 insofar as the inclusion of the raising of livestock,
poultry and swine in its coverage as well as the Implementing Rules and Guidelines
promulgated in accordance therewith, are hereby DECLARED null and void for being
unconstitutional and the writ of preliminary injunction issued is hereby MADE
permanent.
SO ORDERED.

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 83358 August 2, 1989
CARIDAY INVESTMENT CORPORATION, petitioner,
vs.
COURT OF APPEALS & FORBES PARK ASSOCIATION, INC., respondents.
F.B. Santiago, Calabio, Nalus & Associates for petitioner.
Siguion Reyna, Montecillo & Ongsiako for private respondent.
GRI;O-AQUINO, J.:
The central issue in this case is the proper interpretation of a provision in the Deed of
Restrictions on the title of a lot in the Forbes Park Subdivision which binds the owner to
use his lot "for residential purposes and not more than one single family residential
building will be constructed thereon" (p. 35, Rollo) a restriction that generally
encumbers lots in the so-called "plush" residential subdivisions.
Forbes Park Association (hereinafter referred to as "FPA") is a non-profit and non-
stock corporation organized for the purpose of promoting and safeguarding the
interests of the residents and lot owners in that subdivision who automatically become
members of the association and are bound by its rules and regulations stipulated in the
Deed of Restrictions annotated on the back of their certificates of title.
Cariday Investment Corporation (CARIDAY for brevity) is the owner of a residential
building in the Forbes Park Subdivision, hence, a member of the FPA. On the back of
its certificate of title, TCT No. S-91329 (Annex A, p. 56, Rollo), is annotated a "Deed of
Restrictions" whose pertinent provisions are as follows:
RESTRICTIONS
1. The Property is subject to an easement of two meters within the
lot and adjacent to the rear and two sides thereof for the purpose of
drainage, sewerage water and other public facilities as may be
necessary and desirable.
2. Subject to such amendments and additional restrictions, res
reservations, servitudes as the Forbes Park Association may from
time to time adopt and prescribe the land described in this
certificate of title is for a period of fifty (60) years from January 1,
1949 subject to the restrictions enumerated in Annex A of the Deed
of Sale executed by Ayala Securities Corporation in favor of the
registered owner among which are the following:
Lots may be only used for residential purposes and not more than
one single family residential building will be constructed thereon
except that separate servant's quarters may be built.
... (Emphasis supplied; p. 35, Rollo.)
The same restrictions are found in Section l(b), Article IV of the association's rules and
regulations (pp. 170-185, Rollo) and are hereunder quoted:
ART. VI. BUILDING RULES AND REGULATIONS
Sec. 1. LOTS
xxx xxx xxx
b. One residential building per lot. Lots may be used only for
residential purposes, and not more than one single-family
residential building will be constructed on one lot, except that
separate garage and servants' quarters and bathhouses for
swimming pools may be built. Should any member owning two (2)
or more lots submit a plan of a residence astride two (2) or more
lots owned by him, his property will be considered as one parcel for
the purpose of application of the setback line restriction so that this
limitation shall be considered applicable only to the exterior
boundaries of the property as though the lots were consolidated into
one parcel. However, if later on his house is destroyed or removed
then the 2-meter set back the restriction shall be considered as
restored to the boundaries of each lot of the subdivision plan.
c. Use and occupancy of a house. The use and occupancy of
houses and other improvements inside Forbes Park shall
be exclusively for residence only of the owners and bona fide
residents, their families, house guests, staff and domestics but
never for commercial, business or office purposes, such as, but not
limited to, hotels, restaurants, resorts, motels, condominiums,
stores, clubs, schools, studios or any kind of office whatsoever.
In case of violation hereof, the Board of Governors shall, after at
least 10 days previous notice in writing to the member resident
concerned, order the disconnection of the water service supplied to
the latter by the Association's deep-well pumps; Provided, however,
that reconnection thereof shall only be made upon satisfactory
showing that violation of this rule no longer exists and that the
requisite actual cost of reconnection as estimated by the
Association is duly deposited before such reconnection is made.
(Emphasis supplied; pp. 36-37, Rollo.)
In June 1986, Cariday, with notice to the FPA, "repaired" its building (p. 42, Rollo).
After inspection of the "repairs," the FPA's retained civil engineer reported that
"additions or deletions were made in the existing residence." A second inspection in
May 1987 disclosed more violations of the restrictions. He observed that the
building "can be used by more than one family." (p. 78, Rollo.)
Cariday admitted that its building has the exterior appearance of a single family
residence but it is designed inside to allow occupancy by two families.
The FPA demanded that corrections be made in the structure to conform with the
restrictions.
Without making the corrections, Cariday, on July 1, 1987, leased one portion of the
house to an Englishman, James Duvivier who occupied the same on July 5, 1987. On
August 1, 1987, Cariday leased the other half of the building to Procter and Gamble for
the use of one of its American executives, Robert Haden, who notified the FPA that he
would move in on September 2, 1987 (p. 74, Rollo).lwph1.t
In a letter dated September 7, 1987, Cariday also notified the FPA that Haden would
be moving in with his furniture and household appliances and requested that the
necessary clearance be issued for presentation to the subdivision's security guards (p.
67, Rollo).
When Haden tried to move in on September 18,1987, he was stopped by the security
guards. In a letter dated September 19, 1987 and received by Cariday on September
21, 1987, the FPA advised Cariday that it would not allow Cariday to lease its house to
more than one tenant as this would violate the rule regarding "one single-family
residential restriction" (p. 68, Rollo). Because of the alleged "building violations," the
FPA threatened to disconnect the water service (which it supplies to the residents from
its deep-well pumps) to Cariday's property (p. 68, Rollo).
On September 28, 1987, Cariday filed in the Regional Trial Court of Makati, a
complaint (p. 42, Rollo) for injunction and damages (Civil Case No. 17933). It prayed
that, pending the trial of the case, a writ of preliminary injunction be issued ordering the
FPA to desist from cutting-off the water supply to its building, or to reconnect the
service if it has been cut off, and, further, to desist from preventing its tenants' ingress
into and egress from its aforementioned building. Cariday alleged that if the FPA was
not restrained, Cariday would not only lose its tenants but their health would be
seriously endangered. As a matter of fact, on October 6, 1987, Procter and Gamble
rescinded its lease contract with Cariday (p. 69, Rollo).
The FPA answered Cariday's complaint and opposed the application for preliminary
injunction. It alleged that under its rules and regulations, it is empowered to disconnect
water services whenever there is a deviation from previously approved plans and
specifications of buildings and for violation of the "single-family residential building
restriction" (p. 94, Rollo).
On October 21, 1987, the trial court issued a writ of preliminary injunction upon
Cariday's filing of a P50,000 bond (pp. 105-106, Rollo). The FPA filed a motion for
reconsideration which was denied by the court (p. 119, Rollo). In due time, it sought
relief in the Court of Appeals (CA-G.R. SP No. 13965) alleging grave abuse of
discretion on the part of the trial court in issuing the writ of preliminary injunction.
The Court of Appeals, after hearing the parties, annulled the writ of injunction. It held:
... The construction of a residential house as a single family dwelling
unit defines its use by a single family, in the same way that its
construction as a duplex house defines its use by two families.
Indeed, by prohibiting the use of houses within the subdivision as
hotels, motels, condominiums and the like, sec. 1(c) makes clear
that the requirement in sec. l(b), that only one single-family
residential building may be constructed on a lot, is intended to limit
its use and occupancy by one family. The use of a house as hotel,
motel or condominium violates the concept of "one single-family"
residential house per lot, as much as the construction of more than
one building on one lot.
... The "one single-family" residential house per lot rule is violated
not only when one house is used by more than one family but also
when several buildings, each one of which is used by one or more
families, are built on one lot. (pp. 37 38, Rollo.)
The Court of Appeals upheld the right of the FPA to prohibit the entry of additional
tenants into Cariday's building and to disconnect the water service for violation of the
restrictions:
... With respect to the refusal of the FPA to allow the entry of
additional tenant into the building in question, suffice it to say that
its authority is clearly provided for in Art. VI, Sec. 14 which provides
as follows:
Sec. 14. MOVING IN OR MOVING OUT OF FORBES PARK
Anyone who wishes to move into any residential home of the village
must, before doing so, first obtain the necessary written clearance
from the office of the Association for presentation to the security
guards, and any occupant of a house within the village and who
wishes to move out of the premises he or she occupies should give
a written notification to the Association.
We therefore hold that Cariday Investment is without any right to let
its premises to more than one tenant and that in threatening to
disconnect the water service and in preventing more than one
tenant to move into the premises to enforce its rules, FPA acted
within powers under the rules that are binding on its members.
Consequently Cariday Investment is not entitled to an injunction. (p.
38, Rollo.)
In its petition for review of the Appellate Court's decision, Cariday avers that while it is
indeed bound by the restriction to construct only "one residential building" on its lot,
"nowhere in the rules and regulations is there a categorical prohibition and/ or
restriction preventing it from exercising its rights to let its residential building to two or
more tenants" (p.19, Rollo).
We find the petitioner's interpretation of the restriction unacceptable. The restriction
clearly defines not only the type and number of structures (one residential building) that
may be built on each lot, but also the number of families (a single family) that may use
it as a residence. Indeed, the restriction of "one ... residential building" per lot would
have been sufficient, without incorporating the additional restriction of "a single family,"
(p. 35, Rollo) if the purpose, as petitioner contends, were only to limit the type of
building but not its use or occupancy.
We are persuaded that the purpose of the restriction is to avoid overcrowding both in
the houses and in the subdivision which would result in pressure upon the common
facilities such as water, power and telephone connections, accelerate the deterioration
of the roads, and create problems of sanitation and security in the subdivision. As
correctly perceived by the petitioner itself, the restrictions are "for aesthetic
consideration and for the preservation of the peace, beauty, tranquility and serenity of
living at Forbes Park" (p. 306, Rollo).lwph1.t
Logic dictates that as the building rules and regulations of the FPA expressly prohibit
the construction of buildings for multiple occupancy, such as hotels, motels, and
condominiums, that prohibition may not be circumvented by building a house with the
external appearance of a single family dwelling but whose interior is designed for
multiple occupancy. It is an elementary rule of reason that what may not be done
directly, may not also be done indirectly.
However, recognizing Filipino custom and the cohesive nature of our family ties, the
concept of a single-family dwelling may embrace the extended family which includes
married children who continue to be sheltered in the family home until they are
financially able to establish homes of their own. But leasing one's house in Forbes
Park, as the petitioner has done, to two or more tenant families who are not related to
the owner, nor to each other, would be impermissible under the one single-family
restriction recorded on the title of the property.
WHEREFORE, finding no merit in the petition for review, We resolved to deny it, with
costs against the petitioner.
SO ORDERED.
Fernan, C.J., Melencio-Herrera, Feliciano, Bidin, Sarmiento, Cortes and Regalado, JJ.,
concur.
Cruz, Paras, Padilla, JJ., took no part.
Separate Opinions
GUTIERREZ, JR., J., dissenting:
I agree with the dissenting opinion penned by Justice Medialdea. The disputed
contractual commitment having been given too restrictive a meaning by the dominant
party, the Court should step in with a more liberal and reasonable interpretation.
I have no objection to the proposition that ownership restrictions which are intended to
avoid overcrowding, deterioration of roads, unsanitary conditions, ugly surroundings,
and lawless behaviour in residential areas may be enforced through the Court's
coercive powers. There is absolutely no showing, however, that two families living in
one big residence in Forbes Park would lead to any of the above unpleasant
consequences.
I believe that the zeal with which the private respondent enforces the disputed single
family restriction is intended to insure that Forbes Park real estate values remain
higher much, much higher than the values in any other residential area in the whole
country. In other words, what the Court is protecting are not sanitation, peace and
order, comfort, or aesthetic surroundings which would not in the least bit be affected by
two families sharing one big house in Forbes Park, but inflated land values and an
elitist life style. Under the disputed provision, one family could hire a battalion of
servants, drivers, yayas, gardeners, butlers, footmen, grooms, cooks, laundresses and
other lackeys without violating the single family rule. It is not overcrowding which is
sought to be avoided but something else.
Metro Manila has run out of available residential land for its huge and still exploding
population. Land use has to be rationalized. Without sacrificing their comfort and
security, the rich have to yield a little. I consider it a waste of scarce resources if
property worth several millions of pesos is limited in its use to one solitary family, no
matter how small, when it could comfortably house two or more families in the kind of
comfort and luxury which is undreamed of even to upper middle income people. The
very rich have the right to enforce their exclusive lifestyles through voluntary
compliance but when the Courts step in to validate and enforce an unreasonable
restriction, I am constrained to dissent.
I am not suggesting that affluent suburban enclaves should be allowed to deteriorate
into monotonous box-like government housing projects or, worse, into slums or
squatter colonies. My only concern is with this Court's validating restrictions whose
obvious purpose is to jack up property values to heights which are incongruous against
the grinding poverty and hand-to-mouth subsistence of the overwhelming masses of
our people.
The provisions of the Constitution on Social Justice and Human Rights (Article XIII,
Constitution) emphasize the social function of land. Congress must give the "highest"
priority to measures which enhance the right of all the people to human dignity and
reduce social, economic, and political inequalities through the equitable diffusion of
wealth and political power (id, Section 1). The State is mandated to undertake, in
cooperation with the private sector, a continuing housing program and an urban land
reform program which seek to make available at affordable cost decent housing and
basic services to underprivileged and homeless citizens, (id. Section 9). I am afraid that
the Court's decision in this Forbes Park case does not in any way help achieve these
constitutional objectives.
The present Constitution expresses the impatience of the framers with what they
perceived as an unfortunate lack of attention to the most pressing problem faced by the
country. But even under the 1935 Constitution, the Court was less than enthusiastic
when asked to enforce contractual commitments based on a laissez faire theory of
government. In Alalayan v. National Power Corporation (24 SCRA 172,181-182 [1968])
the Court ruled:

It is to be admitted of course that property rights find shelter in

specific constitutional provisions, one of which is the due process
clause. It is equally certain that our fundamental law framed at a
time of "surging unrest and dissatisfaction" (The phrase is Justice
Laurel's, appearing in his concurring opinion in Ang Tibay v. Court,
cited with approval in Antamok Goldfields Mining Co. v. Court, 70
Phil. 340 [1940]), when there was the fear expressed in many
quarters that a constitutional democracy, in view of its commitment
to the claims of property, would not be able to cope effectively with
the problems of poverty and misery that unfortunately afflict so
many of our people, is not susceptible to the indictment that the
government therein established is impotent to take the necessary
remedial measures. The framers saw to that. The welfare state
concept is not alien to the philosophy of our Constitution. (Cf
'Private property does not constitute for anyone an absolute and
unconditioned right. ...All men are equal in their right to a decent
life. ... It is not a system of justice where one man is very wealthy
and another very poor. Where such a situation exists on a national
scale, it becomes a matter of social justice. ... [In the Philippines,
while] a few have far more than they need, the vast majority lack
even the barest essentials of life. Pastoral Letter of the Catholic
Hierarchy, May 1, 1968) It is implicit in quite a few of its provisions.
It suffices to mention two.

There is the clause on the promotion of social justice to ensure the

well-being and economic security of all the people, (Art. 11, Sec. 5,
Constitution of the Philippines) as well as the pledge of protection to
labor with the specific authority to regulate the relations between
landowners and tenants and between labor and capital. (Art. XIV,
Sec. 6, Id.) This particularized reference to the rights of working
men whether in industry and agriculture certainly cannot preclude
attention to and concern for the rights of consumers, who are the
objects of solicitude in the legislation now complained of. The police
power as an attribute to promote the common weal would be diluted
considerably of its reach and effectiveness if on the mere plea that
the liberty to contract would be restricted, the statute complained of
may be characterized as a denial of due process. The right to
property cannot be pressed to such an unreasonable extreme.

I realize the difficulty in pinpointing the line where restrictions on property ownership go
beyond the constitutional bounds of reasonableness. Each case must be resolved on
its particular merits. Insofar as this petition is concerned, however, I concur the
dissenting minority. I vote to grant the petition.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-7995 May 31, 1957
LAO H. ICHONG, in his own behalf and in behalf of other alien residents,
corporations and partnerships adversely affected. by Republic Act No.
1180, petitioner,
vs.
JAIME HERNANDEZ, Secretary of Finance, and MARCELINO SARMIENTO, City
Treasurer of Manila, respondents.
Ozaeta, Lichauco and Picazo and Sycip, Quisumbing, Salazar and Associates for
petitioner.
Office of the Solicitor General Ambrosio Padilla and Solicitor Pacifico P. de Castro for
respondent Secretary of Finance.
City Fiscal Eugenio Angeles and Assistant City Fiscal Eulogio S. Serrano for
respondent City Treasurer.
Dionisio Reyes as Amicus Curiae.
Marcial G. Mendiola as Amicus Curiae.
Emiliano R. Navarro as Amicus Curiae.
LABRADOR, J.:
I. The case and issue, in general
This Court has before it the delicate task of passing upon the validity and
constitutionality of a legislative enactment, fundamental and far-reaching in
significance. The enactment poses questions of due process, police power and equal
protection of the laws. It also poses an important issue of fact, that is whether the
conditions which the disputed law purports to remedy really or actually exist. Admittedly
springing from a deep, militant, and positive nationalistic impulse, the law purports to
protect citizen and country from the alien retailer. Through it, and within the field of
economy it regulates, Congress attempts to translate national aspirations for economic
independence and national security, rooted in the drive and urge for national survival
and welfare, into a concrete and tangible measures designed to free the national
retailer from the competing dominance of the alien, so that the country and the nation
may be free from a supposed economic dependence and bondage. Do the facts and
circumstances justify the enactment?
II. Pertinent provisions of Republic Act No. 1180
Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." In effect it
nationalizes the retail trade business. The main provisions of the Act are: (1) a
prohibition against persons, not citizens of the Philippines, and against associations,
partnerships, or corporations the capital of which are not wholly owned by citizens of
the Philippines, from engaging directly or indirectly in the retail trade; (2) an exception
from the above prohibition in favor of aliens actually engaged in said business on May
15, 1954, who are allowed to continue to engaged therein, unless their licenses are
forfeited in accordance with the law, until their death or voluntary retirement in case of
natural persons, and for ten years after the approval of the Act or until the expiration of
term in case of juridical persons; (3) an exception therefrom in favor of citizens and
juridical entities of the United States; (4) a provision for the forfeiture of licenses (to
engage in the retail business) for violation of the laws on nationalization, control
weights and measures and labor and other laws relating to trade, commerce and
industry; (5) a prohibition against the establishment or opening by aliens actually
engaged in the retail business of additional stores or branches of retail business, (6) a
provision requiring aliens actually engaged in the retail business to present for
registration with the proper authorities a verified statement concerning their
businesses, giving, among other matters, the nature of the business, their assets and
liabilities and their offices and principal offices of judicial entities; and (7) a provision
allowing the heirs of aliens now engaged in the retail business who die, to continue
such business for a period of six months for purposes of liquidation.
III. Grounds upon which petition is based-Answer thereto
Petitioner, for and in his own behalf and on behalf of other alien residents corporations
and partnerships adversely affected by the provisions of Republic Act. No. 1180,
brought this action to obtain a judicial declaration that said Act is unconstitutional, and
to enjoin the Secretary of Finance and all other persons acting under him, particularly
city and municipal treasurers, from enforcing its provisions. Petitioner attacks the
constitutionality of the Act, contending that: (1) it denies to alien residents the equal
protection of the laws and deprives of their liberty and property without due process of
law ; (2) the subject of the Act is not expressed or comprehended in the title thereof; (3)
the Act violates international and treaty obligations of the Republic of the Philippines;
(4) the provisions of the Act against the transmission by aliens of their retail business
thru hereditary succession, and those requiring 100% Filipino capitalization for a
corporation or entity to entitle it to engage in the retail business, violate the spirit of
Sections 1 and 5, Article XIII and Section 8 of Article XIV of the Constitution.
In answer, the Solicitor-General and the Fiscal of the City of Manila contend that: (1)
the Act was passed in the valid exercise of the police power of the State, which
exercise is authorized in the Constitution in the interest of national economic survival;
(2) the Act has only one subject embraced in the title; (3) no treaty or international
obligations are infringed; (4) as regards hereditary succession, only the form is affected
but the value of the property is not impaired, and the institution of inheritance is only of
statutory origin.
IV. Preliminary consideration of legal principles involved
a. The police power.
There is no question that the Act was approved in the exercise of the police power, but
petitioner claims that its exercise in this instance is attended by a violation of the
constitutional requirements of due process and equal protection of the laws. But before
proceeding to the consideration and resolution of the ultimate issue involved, it would
be well to bear in mind certain basic and fundamental, albeit preliminary,
considerations in the determination of the ever recurrent conflict between police power
and the guarantees of due process and equal protection of the laws. What is the scope
of police power, and how are the due process and equal protection clauses related to
it? What is the province and power of the legislature, and what is the function and duty
of the courts? These consideration must be clearly and correctly understood that their
application to the facts of the case may be brought forth with clarity and the issue
accordingly resolved.
It has been said the police power is so far - reaching in scope, that it has become
almost impossible to limit its sweep. As it derives its existence from the very existence
of the State itself, it does not need to be expressed or defined in its scope; it is said to
be co-extensive with self-protection and survival, and as such it is the most positive
and active of all governmental processes, the most essential, insistent and illimitable.
Especially is it so under a modern democratic framework where the demands of
society and of nations have multiplied to almost unimaginable proportions; the field and
scope of police power has become almost boundless, just as the fields of public
interest and public welfare have become almost all-embracing and have transcended
human foresight. Otherwise stated, as we cannot foresee the needs and demands of
public interest and welfare in this constantly changing and progressive world, so we
cannot delimit beforehand the extent or scope of police power by which and through
which the State seeks to attain or achieve interest or welfare. So it is that Constitutions
do not define the scope or extent of the police power of the State; what they do is to set
forth the limitations thereof. The most important of these are the due process clause
and the equal protection clause.
b. Limitations on police power.
The basic limitations of due process and equal protection are found in the following
provisions of our Constitution:
SECTION 1.(1) No person shall be deprived of life, liberty or property without
due process of law, nor any person be denied the equal protection of the
laws. (Article III, Phil. Constitution)
These constitutional guarantees which embody the essence of individual liberty and
freedom in democracies, are not limited to citizens alone but are admittedly universal in
their application, without regard to any differences of race, of color, or of nationality.
(Yick Wo vs. Hopkins, 30, L. ed. 220, 226.)
c. The, equal protection clause.
The equal protection of the law clause is against undue favor and individual or class
privilege, as well as hostile discrimination or the oppression of inequality. It is not
intended to prohibit legislation, which is limited either in the object to which it is directed
or by territory within which is to operate. It does not demand absolute equality among
residents; it merely requires that all persons shall be treated alike, under like
circumstances and conditions both as to privileges conferred and liabilities enforced.
The equal protection clause is not infringed by legislation which applies only to those
persons falling within a specified class, if it applies alike to all persons within such
class, and reasonable grounds exists for making a distinction between those who fall
within such class and those who do not. (2 Cooley, Constitutional Limitations, 824-
825.)
d. The due process clause.
The due process clause has to do with the reasonableness of legislation enacted in
pursuance of the police power. Is there public interest, a public purpose; is public
welfare involved? Is the Act reasonably necessary for the accomplishment of the
legislature's purpose; is it not unreasonable, arbitrary or oppressive? Is there sufficient
foundation or reason in connection with the matter involved; or has there not been a
capricious use of the legislative power? Can the aims conceived be achieved by the
means used, or is it not merely an unjustified interference with private interest? These
are the questions that we ask when the due process test is applied.
The conflict, therefore, between police power and the guarantees of due process and
equal protection of the laws is more apparent than real. Properly related, the power
and the guarantees are supposed to coexist. The balancing is the essence or, shall it
be said, the indispensable means for the attainment of legitimate aspirations of any
democratic society. There can be no absolute power, whoever exercise it, for that
would be tyranny. Yet there can neither be absolute liberty, for that would mean license
and anarchy. So the State can deprive persons of life, liberty and property, provided
there is due process of law; and persons may be classified into classes and groups,
provided everyone is given the equal protection of the law. The test or standard, as
always, is reason. The police power legislation must be firmly grounded on public
interest and welfare, and a reasonable relation must exist between purposes and
means. And if distinction and classification has been made, there must be a
reasonable basis for said distinction.
e. Legislative discretion not subject to judicial review.
Now, in this matter of equitable balancing, what is the proper place and role of the
courts? It must not be overlooked, in the first place, that the legislature, which is the
constitutional repository of police power and exercises the prerogative of determining
the policy of the State, is by force of circumstances primarily the judge of necessity,
adequacy or reasonableness and wisdom, of any law promulgated in the exercise of
the police power, or of the measures adopted to implement the public policy or to
achieve public interest. On the other hand, courts, although zealous guardians of
individual liberty and right, have nevertheless evinced a reluctance to interfere with the
exercise of the legislative prerogative. They have done so early where there has been
a clear, patent or palpable arbitrary and unreasonable abuse of the legislative
prerogative. Moreover, courts are not supposed to override legitimate policy, and
courts never inquire into the wisdom of the law.
V. Economic problems sought to be remedied
With the above considerations in mind, we will now proceed to delve directly into the
issue involved. If the disputed legislation were merely a regulation, as its title indicates,
there would be no question that it falls within the legitimate scope of legislative power.
But it goes further and prohibits a group of residents, the aliens, from engaging therein.
The problem becomes more complex because its subject is a common, trade or
occupation, as old as society itself, which from the immemorial has always been open
to residents, irrespective of race, color or citizenship.
a. Importance of retail trade in the economy of the nation.
In a primitive economy where families produce all that they consume and consume all
that they produce, the dealer, of course, is unknown. But as group life develops and
families begin to live in communities producing more than what they consume and unmanageable factors in the retail business make control virtually impossible. The first
needing an infinite number of things they do not produce, the dealer comes into argument which brings up an issue of fact merits serious consideration. The others are
existence. As villages develop into big communities and specialization in production matters of opinion within the exclusive competence of the legislature and beyond our
begins, the dealer's importance is enhanced. Under modern conditions and standards prerogative to pass upon and decide.
of living, in which man's needs have multiplied and diversified to unlimited extents and
proportions, the retailer comes as essential as the producer, because thru him the The best evidence are the statistics on the retail trade, which put down the figures in
infinite variety of articles, goods and needed for daily life are placed within the easy black and white. Between the constitutional convention year (1935), when the fear of
reach of consumers. Retail dealers perform the functions of capillaries in the human alien domination and control of the retail trade already filled the minds of our leaders
body, thru which all the needed food and supplies are ministered to members of the with fears and misgivings, and the year of the enactment of the nationalization of the
communities comprising the nation. retail trade act (1954), official statistics unmistakably point out to the ever-increasing
dominance and control by the alien of the retail trade, as witness the following tables:
There cannot be any question about the importance of the retailer in the life of the
community. He ministers to the resident's daily needs, food in all its increasing forms,
and the various little gadgets and things needed for home and daily life. He provides Assets
his customers around his store with the rice or corn, the fish, the salt, the vinegar, the Year and Retailers No.- Per cent
spices needed for the daily cooking. He has cloths to sell, even the needle and the Pesos
Nationality Establishments Distribution
thread to sew them or darn the clothes that wear out. The retailer, therefore, from the
lowly peddler, the owner of a small sari-sari store, to the operator of a department store 1941:
or, a supermarket is so much a part of day-to-day existence.
Filipino .......... 106,671 200,323,138 55.8

b. The alien retailer's trait. Chinese ........... 15,356 118,348,692 32.9

Others ............ 1,646 40,187,090 11.2
The alien retailer must have started plying his trades in this country in the bigger
1947:
centers of population (Time there was when he was unknown in provincial towns and
villages). Slowly but gradually be invaded towns and villages; now he predominates in Filipino .......... 111,107 208,658,946 65.0
the cities and big centers of population. He even pioneers, in far away nooks where the
beginnings of community life appear, ministering to the daily needs of the residents and Chinese ........... 13,774 106,156,218 33.5
purchasing their agricultural produce for sale in the towns. It is an undeniable fact that Others ........... 354 8,761,260 .4
in many communities the alien has replaced the native retailer. He has shown in this
trade, industry without limit, and the patience and forbearance of a slave. 1948: (Census)
Filipino .......... 113,631 213,342,264 67.3
Derogatory epithets are hurled at him, but he laughs these off without murmur; insults
of ill-bred and insolent neighbors and customers are made in his face, but he heeds Chinese .......... 12,087 93,155,459 29.3
them not, and he forgets and forgives. The community takes note of him, as he Others .......... 422 10,514,675 3.3
appears to be harmless and extremely useful.
1949:
c. Alleged alien control and dominance. Filipino .......... 113,659 213,451,602 60.8
Chinese .......... 16,248 125,223,336 35.7
There is a general feeling on the part of the public, which appears to be true to fact,
about the controlling and dominant position that the alien retailer holds in the nation's Others .......... 486 12,056,365 3.3
economy. Food and other essentials, clothing, almost all articles of daily life reach the
residents mostly through him. In big cities and centers of population he has acquired 1951:
not only predominance, but apparent control over distribution of almost all kinds of Filipino ......... 119,352 224,053,620 61.0
goods, such as lumber, hardware, textiles, groceries, drugs, sugar, flour, garlic, and
scores of other goods and articles. And were it not for some national corporations like Chinese .......... 17,429 134,325,303 36.6
the Naric, the Namarco, the Facomas and the Acefa, his control over principal foods
Others .......... 347 8,614,025 2.3
and products would easily become full and complete.

Petitioner denies that there is alien predominance and control in the retail trade. In one
breath it is said that the fear is unfounded and the threat is imagined; in another, it is
charged that the law is merely the result of radicalism and pure and unabashed
nationalism. Alienage, it is said, is not an element of control; also so many
 AVERAGE
ASSETS AND GROSS SALES PER ESTABLISHMENT
Year and Retailer's
Nationality
1941:
Filipino .............................................
Chinese ..............................................
Others ...............................................
1947:
Filipino .............................................
Chinese ...........................................
Others ..............................................
1948: (Census)
Filipino .............................................
Chinese .............................................
Others ..............................................
1949:
Filipino .............................................
Chinese ..............................................
Others ..............................................
1951:
Filipino .............................................
Chinese .............................................
Others ............................................... 24
Item (Estimated Assets and Gross Sales of Retail Establishments, By Year and
Gross Sales
Assets Nationality of Owners, Benchmark: 1948 Census, issued by the Bureau of
(Pesos)
(Pesos) Census and Statistics, Department of Commerce and Industry; pp. 18-19 of
Answer.)
The above statistics do not include corporations and partnerships, while the figures on
Filipino establishments already include mere market vendors, whose capital is
1,878small..
necessarily 1,633
7,707
The above 9,691
figures reveal that in percentage distribution of assests and gross sales,
alien participation has steadily increased during the years. It is true, of course, that
Filipinos have the edge in the
24,415 number of retailers, but aliens more than make up for the
8,281
numerical gap through their assests and gross sales which average between six and
seven times those of the very many Filipino retailers. Numbers in retailers, here, do not
imply superiority; the alien invests more capital, buys and sells six to seven times
more, and gains much more. The same official report, pointing out to the known
predominance
1,878 of foreign elements
2,516 in the retail trade, remarks that the Filipino retailers
were largely engaged in minor retailer enterprises. As observed by respondents, the
native investment is thinly spread, and the Filipino retailer is practically helpless in
7,707 14,934
matters of capital, credit, price and supply.
24,749 13,919
d. Alien control and threat, subject of apprehension in Constitutional convention.
It is this domination and control, which we believe has been sufficiently shown to exist,
that is the legislature's target in the enactment of the disputed nationalization would
never have1,878been adopted. 4,111
The framers of our Constitution also believed in the
existence of this alien dominance and control when they approved a resolution
categorically
7,707 declaring among
24,398other things, that "it is the sense of the Convention that
the public interest requires the nationalization of the retail trade; . . . ." (II Aruego, The
Framing of the Philippine Constitution, 662-663, quoted on page 67 of Petitioner.) That
24,916 years ago;
was twenty-two 23,686
and the events since then have not been either pleasant or
comforting. Dean Sinco of the University of the Philippines College of Law,
commenting on the patrimony clause of the Preamble opines that the fathers of our
Constitution were merely translating the general preoccupation of Filipinos "of the
dangers from alien interests that had already brought under their control the
commercial1,878and other economic
4,069 activities of the country" (Sinco, Phil. Political Law,
10th ed., p. 114); and analyzing the concern of the members of the constitutional
convention for the economic
7,707 life of the citizens, in connection with the nationalistic
24,152
provisions of the Constitution, he says:
24,807 20,737
But there has been a general feeling that alien dominance over the economic
life of the country is not desirable and that if such a situation should remain,
political independence alone is no guarantee to national stability and
strength. Filipino private capital is not big enough to wrest from alien hands
1,877
the control of the 3,905
national economy. Moreover, it is but of recent formation
and hence, largely inexperienced, timid and hesitant. Under such conditions,
the government 33,207
7,707 as the instrumentality of the national will, has to step in and
assume the initiative, if not the leadership, in the struggle for the economic
freedom of the nation in somewhat the same way that it did in the crusade for
 political freedom. Thus . . . it (the Constitution) envisages an organized
movement for the protection of the nation not only against the possibilities of
armed invasion but also against its economic subjugation by alien interests in
the economic field. (Phil. Political Law by Sinco, 10th ed., p. 476.)
Belief in the existence of alien control and predominance is felt in other quarters.
Filipino businessmen, manufacturers and producers believe so; they fear the dangers
coming from alien control, and they express sentiments of economic independence.
Witness thereto is Resolution No. 1, approved on July 18, 1953, of the Fifth National
convention of Filipino Businessmen, and a similar resolution, approved on March 20,
1954, of the Second National Convention of Manufacturers and Producers. The man in
the street also believes, and fears, alien predominance and control; so our
newspapers, which have editorially pointed out not only to control but to alien
stranglehold. We, therefore, find alien domination and control to be a fact, a reality
proved by official statistics, and felt by all the sections and groups that compose the
Filipino community.
e. Dangers of alien control and dominance in retail.
But the dangers arising from alien participation in the retail trade does not seem to lie
in the predominance alone; there is a prevailing feeling that such predominance may
truly endanger the national interest. With ample capital, unity of purpose and action
and thorough organization, alien retailers and merchants can act in such complete
unison and concert on such vital matters as the fixing of prices, the determination of
the amount of goods or articles to be made available in the market, and even the
choice of the goods or articles they would or would not patronize or distribute, that
fears of dislocation of the national economy and of the complete subservience of
national economy and of the consuming public are not entirely unfounded. Nationals,
producers and consumers alike can be placed completely at their mercy. This is easily
illustrated. Suppose an article of daily use is desired to be prescribed by the aliens,
because the producer or importer does not offer them sufficient profits, or because a
new competing article offers bigger profits for its introduction. All that aliens would do is
to agree to refuse to sell the first article, eliminating it from their stocks, offering the
new one as a substitute. Hence, the producers or importers of the prescribed article, or
its consumers, find the article suddenly out of the prescribed article, or its consumers,
find the article suddenly out of circulation. Freedom of trade is thus curtailed and free
enterprise correspondingly suppressed.
We can even go farther than theoretical illustrations to show the pernicious influences
of alien domination. Grave abuses have characterized the exercise of the retail trade
by aliens. It is a fact within judicial notice, which courts of justice may not properly
overlook or ignore in the interests of truth and justice, that there exists a general feeling
on the part of the public that alien participation in the retail trade has been attended by
a pernicious and intolerable practices, the mention of a few of which would suffice for
our purposes; that at some time or other they have cornered the market of essential
commodities, like corn and rice, creating artificial scarcities to justify and enhance
profits to unreasonable proportions; that they have hoarded essential foods to the
inconvenience and prejudice of the consuming public, so much so that the Government
has had to establish the National Rice and Corn Corporation to save the public from
their continuous hoarding practices and tendencies; that they have violated price
control laws, especially on foods and essential commodities, such that the legislature
had to enact a law (Sec. 9, Republic Act No. 1168), authorizing their immediate and
automatic deportation for price control convictions; that they have secret combinations
among themselves to control prices, cheating the operation of the law of supply and
demand; that they have connived to boycott honest merchants and traders who would
not cater or yield to their demands, in unlawful restraint of freedom of trade and
enterprise. They are believed by the public to have evaded tax laws, smuggled goods
and money into and out of the land, violated import and export prohibitions, control
laws and the like, in derision and contempt of lawful authority. It is also believed that
they have engaged in corrupting public officials with fabulous bribes, indirectly causing
the prevalence of graft and corruption in the Government. As a matter of fact appeals
to unscrupulous aliens have been made both by the Government and by their own
lawful diplomatic representatives, action which impliedly admits a prevailing feeling
about the existence of many of the above practices.
The circumstances above set forth create well founded fears that worse things may
come in the future. The present dominance of the alien retailer, especially in the big
centers of population, therefore, becomes a potential source of danger on occasions of
war or other calamity. We do not have here in this country isolated groups of harmless
aliens retailing goods among nationals; what we have are well organized and powerful
groups that dominate the distribution of goods and commodities in the communities
and big centers of population. They owe no allegiance or loyalty to the State, and the
State cannot rely upon them in times of crisis or emergency. While the national holds
his life, his person and his property subject to the needs of his country, the alien may
even become the potential enemy of the State.
f. Law enacted in interest of national economic survival and security.
We are fully satisfied upon a consideration of all the facts and circumstances that the
disputed law is not the product of racial hostility, prejudice or discrimination, but the
expression of the legitimate desire and determination of the people, thru their
authorized representatives, to free the nation from the economic situation that has
unfortunately been saddled upon it rightly or wrongly, to its disadvantage. The law is
clearly in the interest of the public, nay of the national security itself, and indisputably
falls within the scope of police power, thru which and by which the State insures its
existence and security and the supreme welfare of its citizens.
VI. The Equal Protection Limitation
a. Objections to alien participation in retail trade. The next question that now poses
solution is, Does the law deny the equal protection of the laws? As pointed out above,
the mere fact of alienage is the root and cause of the distinction between the alien and
the national as a trader. The alien resident owes allegiance to the country of his birth or
his adopted country; his stay here is for personal convenience; he is attracted by the
lure of gain and profit. His aim or purpose of stay, we admit, is neither illegitimate nor
immoral, but he is naturally lacking in that spirit of loyalty and enthusiasm for this
country where he temporarily stays and makes his living, or of that spirit of regard,
sympathy and consideration for his Filipino customers as would prevent him from
taking advantage of their weakness and exploiting them. The faster he makes his pile,
the earlier can the alien go back to his beloved country and his beloved kin and
countrymen. The experience of the country is that the alien retailer has shown such
utter disregard for his customers and the people on whom he makes his profit, that it
has been found necessary to adopt the legislation, radical as it may seem.
Another objection to the alien retailer in this country is that he never really makes a
genuine contribution to national income and wealth. He undoubtedly contributes to
general distribution, but the gains and profits he makes are not invested in industries
that would help the country's economy and increase national wealth. The alien's
interest in this country being merely transient and temporary, it would indeed be ill-
advised to continue entrusting the very important function of retail distribution to his
hands.
The practices resorted to by aliens in the control of distribution, as already pointed out
above, their secret manipulations of stocks of commodities and prices, their utter
disregard of the welfare of their customers and of the ultimate happiness of the people
of the nation of which they are mere guests, which practices, manipulations and
disregard do not attend the exercise of the trade by the nationals, show the existence
of real and actual, positive and fundamental differences between an alien and a
national which fully justify the legislative classification adopted in the retail trade
measure. These differences are certainly a valid reason for the State to prefer the
national over the alien in the retail trade. We would be doing violence to fact and reality
were we to hold that no reason or ground for a legitimate distinction can be found
between one and the other.
b. Difference in alien aims and purposes sufficient basis for distinction.
The above objectionable characteristics of the exercise of the retail trade by the aliens,
which are actual and real, furnish sufficient grounds for legislative classification of retail
traders into nationals and aliens. Some may disagree with the wisdom of the
legislature's classification. To this we answer, that this is the prerogative of the law-
making power. Since the Court finds that the classification is actual, real and
reasonable, and all persons of one class are treated alike, and as it cannot be said that
the classification is patently unreasonable and unfounded, it is in duty bound to declare
that the legislature acted within its legitimate prerogative and it can not declare that the
act transcends the limit of equal protection established by the Constitution.
Broadly speaking, the power of the legislature to make distinctions and classifications
among persons is not curtailed or denied by the equal protection of the laws clause.
The legislative power admits of a wide scope of discretion, and a law can be violative
of the constitutional limitation only when the classification is without reasonable basis.
In addition to the authorities we have earlier cited, we can also refer to the case
of Linsey vs. Natural Carbonic Fas Co. (1911), 55 L. ed., 369, which clearly and
succinctly defined the application of equal protection clause to a law sought to be
voided as contrary thereto:
. . . . "1. The equal protection clause of the Fourteenth Amendment does not
take from the state the power to classify in the adoption of police laws, but
admits of the exercise of the wide scope of discretion in that regard, and
avoids what is done only when it is without any reasonable basis, and
therefore is purely arbitrary. 2. A classification having some reasonable basis
does not offend against that clause merely because it is not made with
mathematical nicety, or because in practice it results in some inequality. 3.
When the classification in such a law is called in question, if any state of facts
reasonably can be conceived that would sustain it, the existence of that state
of facts at the time the law was enacted must be assumed. 4. One who
assails the classification in such a law must carry the burden of showing that
it does not rest upon any reasonable basis but is essentially arbitrary."
c. Authorities recognizing citizenship as basis for classification.
The question as to whether or not citizenship is a legal and valid ground for
classification has already been affirmatively decided in this jurisdiction as well as in
various courts in the United States. In the case of Smith Bell & Co. vs. Natividad, 40
Phil. 136, where the validity of Act No. 2761 of the Philippine Legislature was in issue,
because of a condition therein limiting the ownership of vessels engaged in coastwise
trade to corporations formed by citizens of the Philippine Islands or the United States,
thus denying the right to aliens, it was held that the Philippine Legislature did not
violate the equal protection clause of the Philippine Bill of Rights. The legislature in
enacting the law had as ultimate purpose the encouragement of Philippine shipbuilding
and the safety for these Islands from foreign interlopers. We held that this was a valid
exercise of the police power, and all presumptions are in favor of its constitutionality. In
substance, we held that the limitation of domestic ownership of vessels engaged in
coastwise trade to citizens of the Philippines does not violate the equal protection of
the law and due process or law clauses of the Philippine Bill of Rights. In rendering
said decision we quoted with approval the concurring opinion of Justice Johnson in the
case of Gibbons vs. Ogden, 9 Wheat., I, as follows:
"Licensing acts, in fact, in legislation, are universally restraining acts; as, for
example, acts licensing gaming houses, retailers of spirituous liquors, etc.
The act, in this instance, is distinctly of that character, and forms part of an
extensive system, the object of which is to encourage American shipping, and
place them on an equal footing with the shipping of other nations. Almost
every commercial nation reserves to its own subjects a monopoly of its
coasting trade; and a countervailing privilege in favor of American shipping is
contemplated, in the whole legislation of the United States on this subject. It
is not to give the vessel an American character, that the license is granted;
that effect has been correctly attributed to the act of her enrollment. But it is
to confer on her American privileges, as contra distinguished from foreign;
and to preserve the Government from fraud by foreigners; in surreptitiously
intruding themselves into the American commercial marine, as well as frauds
upon the revenue in the trade coastwise, that this whole system is projected."
The rule in general is as follows:
Aliens are under no special constitutional protection which forbids a
classification otherwise justified simply because the limitation of the class falls
along the lines of nationality. That would be requiring a higher degree of
protection for aliens as a class than for similar classes than for similar classes
of American citizens. Broadly speaking, the difference in status between
citizens and aliens constitutes a basis for reasonable classification in the
exercise of police power. (2 Am., Jur. 468-469.)
In Commonwealth vs. Hana, 81 N. E. 149 (Massachusetts, 1907), a statute on the
licensing of hawkers and peddlers, which provided that no one can obtain a license
unless he is, or has declared his intention, to become a citizen of the United States,
was held valid, for the following reason: It may seem wise to the legislature to limit the
business of those who are supposed to have regard for the welfare, good order and
happiness of the community, and the court cannot question this judgment and
conclusion. In Bloomfield vs. State, 99 N. E. 309 (Ohio, 1912), a statute which
prevented certain persons, among them aliens, from engaging in the traffic of liquors,
was found not to be the result of race hatred, or in hospitality, or a deliberate purpose
to discriminate, but was based on the belief that an alien cannot be sufficiently
acquainted with "our institutions and our life as to enable him to appreciate the relation
of this particular business to our entire social fabric", and was not, therefore, invalid. In
Ohio ex rel. Clarke vs. Deckebach, 274 U. S. 392, 71 L. ed. 115 (1926), the U.S.
Supreme Court had under consideration an ordinance of the city of Cincinnati
prohibiting the issuance of licenses (pools and billiard rooms) to aliens. It held that
plainly irrational discrimination against aliens is prohibited, but it does not follow that
alien race and allegiance may not bear in some instances such a relation to a
legitimate object of legislation as to be made the basis of permitted classification, and
that it could not state that the legislation is clearly wrong; and that latitude must be
allowed for the legislative appraisement of local conditions and for the legislative
choice of methods for controlling an apprehended evil. The case of State vs. Carrol,
124 N. E. 129 (Ohio, 1919) is a parallel case to the one at bar. In Asakura vs. City of
Seattle, 210 P. 30 (Washington, 1922), the business of pawn brooking was considered
as having tendencies injuring public interest, and limiting it to citizens is within the
scope of police power. A similar statute denying aliens the right to engage in
auctioneering was also sustained in Wright vs. May, L.R.A., 1915 P. 151 (Minnesota,
1914). So also in Anton vs. Van Winkle, 297 F. 340 (Oregon, 1924), the court said that
aliens are judicially known to have different interests, knowledge, attitude, psychology
and loyalty, hence the prohibitions of issuance of licenses to them for the business of
pawnbroker, pool, billiard, card room, dance hall, is not an infringement of
constitutional rights. In Templar vs. Michigan State Board of Examiners, 90 N.W. 1058
(Michigan, 1902), a law prohibiting the licensing of aliens as barbers was held void, but
the reason for the decision was the court's findings that the exercise of the business by
the aliens does not in any way affect the morals, the health, or even the convenience of
the community. In Takahashi vs. Fish and Game Commission, 92 L. ed. 1479 (1947), a
California statute banning the issuance of commercial fishing licenses to person
ineligible to citizenship was held void, because the law conflicts with Federal power
over immigration, and because there is no public interest in the mere claim of
ownership of the waters and the fish in them, so there was no adequate justification for
the discrimination. It further added that the law was the outgrowth of antagonism
toward the persons of Japanese ancestry. However, two Justices dissented on the
theory that fishing rights have been treated traditionally as natural resources. In Fraser
vs. McConway & Tarley Co., 82 Fed. 257 (Pennsylvania, 1897), a state law which
imposed a tax on every employer of foreign-born unnaturalized male persons over 21
years of age, was declared void because the court found that there was no reason for
the classification and the tax was an arbitrary deduction from the daily wage of an
employee.
d. Authorities contra explained.
It is true that some decisions of the Federal court and of the State courts in the United
States hold that the distinction between aliens and citizens is not a valid ground for
classification. But in this decision the laws declared invalid were found to be either
arbitrary, unreasonable or capricious, or were the result or product of racial antagonism
and hostility, and there was no question of public interest involved or pursued. In Yu
Cong Eng vs. Trinidad, 70 L. ed. 1059 (1925), the United States Supreme Court
declared invalid a Philippine law making unlawful the keeping of books of account in
any language other than English, Spanish or any other local dialect, but the main
reasons for the decisions are: (1) that if Chinese were driven out of business there
would be no other system of distribution, and (2) that the Chinese would fall prey to all
kinds of fraud, because they would be deprived of their right to be advised of their
business and to direct its conduct. The real reason for the decision, therefore, is the
court's belief that no public benefit would be derived from the operations of the law and
on the other hand it would deprive Chinese of something indispensable for carrying on
their business. In Yick Wo vs. Hopkins, 30 L. ed 220 (1885) an ordinance conferring
powers on officials to withhold consent in the operation of laundries both as to persons
and place, was declared invalid, but the court said that the power granted was
arbitrary, that there was no reason for the discrimination which attended the
administration and implementation of the law, and that the motive thereof was mere
racial hostility. In State vs. Montgomery, 47 A. 165 (Maine, 1900), a law prohibiting
aliens to engage as hawkers and peddlers was declared void, because the
discrimination bore no reasonable and just relation to the act in respect to which the
classification was proposed.
The case at bar is radically different, and the facts make them so. As we already have
said, aliens do not naturally possess the sympathetic consideration and regard for the
customers with whom they come in daily contact, nor the patriotic desire to help bolster
the nation's economy, except in so far as it enhances their profit, nor the loyalty and
allegiance which the national owes to the land. These limitations on the qualifications
of the aliens have been shown on many occasions and instances, especially in times of
crisis and emergency. We can do no better than borrow the language of Anton vs. Van
Winkle, 297 F. 340, 342, to drive home the reality and significance of the distinction
between the alien and the national, thus:
. . . . It may be judicially known, however, that alien coming into this country
are without the intimate knowledge of our laws, customs, and usages that our
own people have. So it is likewise known that certain classes of aliens are of
different psychology from our fellow countrymen. Furthermore, it is natural
and reasonable to suppose that the foreign born, whose allegiance is first to
their own country, and whose ideals of governmental environment and control
have been engendered and formed under entirely different regimes and
political systems, have not the same inspiration for the public weal, nor are
they as well disposed toward the United States, as those who by citizenship,
are a part of the government itself. Further enlargement, is unnecessary. I
have said enough so that obviously it cannot be affirmed with absolute
confidence that the Legislature was without plausible reason for making the
classification, and therefore appropriate discriminations against aliens as it
relates to the subject of legislation. . . . .
VII. The Due Process of Law Limitation.
a. Reasonability, the test of the limitation; determination by legislature decisive.
We now come to due process as a limitation on the exercise of the police power. It has
been stated by the highest authority in the United States that:
. . . . And the guaranty of due process, as has often been held, demands only
that the law shall not be unreasonable, arbitrary or capricious, and that the
means selected shall have a real and substantial relation to the subject
sought to be attained. . . . .
xxx xxx xxx
 So far as the requirement of due process is concerned and in the absence of
other constitutional restriction a state is free to adopt whatever economic
policy may reasonably be deemed to promote public welfare, and to enforce
that policy by legislation adapted to its purpose. The courts are without
authority either to declare such policy, or, when it is declared by the
legislature, to override it. If the laws passed are seen to have a reasonable
relation to a proper legislative purpose, and are neither arbitrary nor
discriminatory, the requirements of due process are satisfied, and judicial
determination to that effect renders a court functus officio. . . . (Nebbia vs.
New York, 78 L. ed. 940, 950, 957.)
Another authority states the principle thus:
. . . . Too much significance cannot be given to the word "reasonable" in
considering the scope of the police power in a constitutional sense, for the
test used to determine the constitutionality of the means employed by the
legislature is to inquire whether the restriction it imposes on rights secured to
individuals by the Bill of Rights are unreasonable, and not whether it imposes
any restrictions on such rights. . . .
xxx xxx xxx
. . . . A statute to be within this power must also be reasonable in its operation
upon the persons whom it affects, must not be for the annoyance of a
particular class, and must not be unduly oppressive. (11 Am. Jur. Sec. 302.,
1:1)- 1074-1075.)
In the case of Lawton vs. Steele, 38 L. ed. 385, 388. it was also held:
. . . . To justify the state in thus interposing its authority in behalf of the public,
it must appear, first, that the interests of the public generally, as distinguished
from those of a particular class, require such interference; and second, that
the means are reasonably necessary for the accomplishment of the purpose,
and not unduly oppressive upon individuals. . . .
Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395, fixes this
test of constitutionality:
In determining whether a given act of the Legislature, passed in the exercise
of the police power to regulate the operation of a business, is or is not
constitutional, one of the first questions to be considered by the court is
whether the power as exercised has a sufficient foundation in reason in
connection with the matter involved, or is an arbitrary, oppressive, and
capricious use of that power, without substantial relation to the health, safety,
morals, comfort, and general welfare of the public.
b. Petitioner's argument considered.
Petitioner's main argument is that retail is a common, ordinary occupation, one of those
privileges long ago recognized as essential to the orderly pursuant of happiness by
free men; that it is a gainful and honest occupation and therefore beyond the power of
the legislature to prohibit and penalized. This arguments overlooks fact and reality and
rests on an incorrect assumption and premise, i.e., that in this country where the
occupation is engaged in by petitioner, it has been so engaged by him, by the alien in
an honest creditable and unimpeachable manner, without harm or injury to the citizens
and without ultimate danger to their economic peace, tranquility and welfare. But the
Legislature has found, as we have also found and indicated, that the privilege has been
so grossly abused by the alien, thru the illegitimate use of pernicious designs and
practices, that he now enjoys a monopolistic control of the occupation and threatens a
deadly stranglehold on the nation's economy endangering the national security in times
of crisis and emergency.
The real question at issue, therefore, is not that posed by petitioner, which overlooks
and ignores the facts and circumstances, but this, Is the exclusion in the future of
aliens from the retail trade unreasonable. Arbitrary capricious, taking into account the
illegitimate and pernicious form and manner in which the aliens have heretofore
engaged therein? As thus correctly stated the answer is clear. The law in question is
deemed absolutely necessary to bring about the desired legislative objective, i.e., to
free national economy from alien control and dominance. It is not necessarily
unreasonable because it affects private rights and privileges (11 Am. Jur. pp. 1080-
1081.) The test of reasonableness of a law is the appropriateness or adequacy under
all circumstances of the means adopted to carry out its purpose into effect (Id.) Judged
by this test, disputed legislation, which is not merely reasonable but actually necessary,
must be considered not to have infringed the constitutional limitation of
reasonableness.
The necessity of the law in question is explained in the explanatory note that
accompanied the bill, which later was enacted into law:
This bill proposes to regulate the retail business. Its purpose is to prevent
persons who are not citizens of the Philippines from having a strangle hold
upon our economic life. If the persons who control this vital artery of our
economic life are the ones who owe no allegiance to this Republic, who have
no profound devotion to our free institutions, and who have no permanent
stake in our people's welfare, we are not really the masters of our destiny. All
aspects of our life, even our national security, will be at the mercy of other
people.
In seeking to accomplish the foregoing purpose, we do not propose to
deprive persons who are not citizens of the Philippines of their means of
livelihood. While this bill seeks to take away from the hands of persons who
are not citizens of the Philippines a power that can be wielded to paralyze all
aspects of our national life and endanger our national security it respects
existing rights.
The approval of this bill is necessary for our national survival.
If political independence is a legitimate aspiration of a people, then economic
independence is none the less legitimate. Freedom and liberty are not real and positive
if the people are subject to the economic control and domination of others, especially if
not of their own race or country. The removal and eradication of the shackles of foreign
economic control and domination, is one of the noblest motives that a national
legislature may pursue. It is impossible to conceive that legislation that seeks to bring it
about can infringe the constitutional limitation of due process. The attainment of a
legitimate aspiration of a people can never be beyond the limits of legislative authority.
c. Law expressly held by Constitutional Convention to be within the sphere of
legislative action.
The framers of the Constitution could not have intended to impose the constitutional
restrictions of due process on the attainment of such a noble motive as freedom from
economic control and domination, thru the exercise of the police power. The fathers of
the Constitution must have given to the legislature full authority and power to enact
legislation that would promote the supreme happiness of the people, their freedom and
liberty. On the precise issue now before us, they expressly made their voice clear; they
adopted a resolution expressing their belief that the legislation in question is within the
scope of the legislative power. Thus they declared the their Resolution:
That it is the sense of the Convention that the public interest requires the
nationalization of retail trade; but it abstain from approving the amendment
introduced by the Delegate for Manila, Mr. Araneta, and others on this matter
because it is convinced that the National Assembly is authorized to
promulgate a law which limits to Filipino and American citizens the privilege
to engage in the retail trade. (11 Aruego, The Framing of the Philippine
Constitution, quoted on pages 66 and 67 of the Memorandum for the
Petitioner.)
It would do well to refer to the nationalistic tendency manifested in various provisions of
the Constitution. Thus in the preamble, a principle objective is the conservation of the
patrimony of the nation and as corollary the provision limiting to citizens of the
Philippines the exploitation, development and utilization of its natural resources. And in
Section 8 of Article XIV, it is provided that "no franchise, certificate, or any other form of
authorization for the operation of the public utility shall be granted except to citizens of
the Philippines." The nationalization of the retail trade is only a continuance of the
nationalistic protective policy laid down as a primary objective of the Constitution. Can
it be said that a law imbued with the same purpose and spirit underlying many of the
provisions of the Constitution is unreasonable, invalid and unconstitutional?
The seriousness of the Legislature's concern for the plight of the nationals as
manifested in the approval of the radical measures is, therefore, fully justified. It would
have been recreant to its duties towards the country and its people would it view the
sorry plight of the nationals with the complacency and refuse or neglect to adopt a
remedy commensurate with the demands of public interest and national survival. As
the repository of the sovereign power of legislation, the Legislature was in duty bound
to face the problem and meet, through adequate measures, the danger and threat that
alien domination of retail trade poses to national economy.
d. Provisions of law not unreasonable.
A cursory study of the provisions of the law immediately reveals how tolerant, how
reasonable the Legislature has been. The law is made prospective and recognizes the
right and privilege of those already engaged in the occupation to continue therein
during the rest of their lives; and similar recognition of the right to continue is accorded
associations of aliens. The right or privilege is denied to those only upon conviction of
certain offenses. In the deliberations of the Court on this case, attention was called to
the fact that the privilege should not have been denied to children and heirs of aliens
now engaged in the retail trade. Such provision would defeat the law itself, its aims and
purposes. Beside, the exercise of legislative discretion is not subject to judicial review.
It is well settled that the Court will not inquire into the motives of the Legislature, nor
pass upon general matters of legislative judgment. The Legislature is primarily the
judge of the necessity of an enactment or of any of its provisions, and every
presumption is in favor of its validity, and though the Court may hold views inconsistent
with the wisdom of the law, it may not annul the legislation if not palpably in excess of
the legislative power. Furthermore, the test of the validity of a law attacked as a
violation of due process, is not its reasonableness, but its unreasonableness, and we
find the provisions are not unreasonable. These principles also answer various other
arguments raised against the law, some of which are: that the law does not promote
general welfare; that thousands of aliens would be thrown out of employment; that
prices will increase because of the elimination of competition; that there is no need for
the legislation; that adequate replacement is problematical; that there may be general
breakdown; that there would be repercussions from foreigners; etc. Many of these
arguments are directed against the supposed wisdom of the law which lies solely within
the legislative prerogative; they do not import invalidity.
VIII. Alleged defect in the title of the law
A subordinate ground or reason for the alleged invalidity of the law is the claim that the
title thereof is misleading or deceptive, as it conceals the real purpose of the bill which
is to nationalize the retail business and prohibit aliens from engaging therein. The
constitutional provision which is claimed to be violated in Section 21 (1) of Article VI,
which reads:
No bill which may be enacted in the law shall embrace more than one subject
which shall be expressed in the title of the bill.
What the above provision prohibits is duplicity, that is, if its title completely fails to
appraise the legislators or the public of the nature, scope and consequences of the law
or its operation (I Sutherland, Statutory Construction, Sec. 1707, p. 297.) A cursory
consideration of the title and the provisions of the bill fails to show the presence of
duplicity. It is true that the term "regulate" does not and may not readily and at first
glance convey the idea of "nationalization" and "prohibition", which terms express the
two main purposes and objectives of the law. But "regulate" is a broader term than
either prohibition or nationalization. Both of these have always been included within the
term regulation.
Under the title of an act to "regulate", the sale of intoxicating liquors, the
Legislature may prohibit the sale of intoxicating liquors. (Sweet vs. City of
Wabash, 41 Ind., 7; quoted in page 41 of Answer.)
Within the meaning of the Constitution requiring that the subject of every act
of the Legislature shall be stated in the tale, the title to regulate the sale of
intoxicating liquors, etc." sufficiently expresses the subject of an
act prohibiting the sale of such liquors to minors and to persons in the habit of
getting intoxicated; such matters being properly included within the subject of
regulating the sale. (Williams vs. State, 48 Ind. 306, 308, quoted in p. 42 of
Answer.)
 The word "regulate" is of broad import, and necessarily implies some degree
of restraint and prohibition of acts usually done in connection with the thing to
be regulated. While word regulate does not ordinarily convey meaning of
prohibit, there is no absolute reason why it should not have such meaning
when used in delegating police power in connection with a thing the best or
only efficacious regulation of which involves suppression. (State vs. Morton,
162 So. 718, 182 La. 887, quoted in p. 42 of Answer.)
The general rule is for the use of general terms in the title of a bill; it has also been said
that the title need not be an index to the entire contents of the law (I Sutherland,
Statutory Construction, See. 4803, p. 345.) The above rule was followed the title of the
Act in question adopted the more general term "regulate" instead of "nationalize" or
"prohibit". Furthermore, the law also contains other rules for the regulation of the retail
trade which may not be included in the terms "nationalization" or "prohibition"; so were
the title changed from "regulate" to "nationalize" or "prohibit", there would have been
many provisions not falling within the scope of the title which would have made the Act
invalid. The use of the term "regulate", therefore, is in accord with the principle
governing the drafting of statutes, under which a simple or general term should be
adopted in the title, which would include all other provisions found in the body of the
Act.
One purpose of the constitutional directive that the subject of a bill should be embraced
in its title is to apprise the legislators of the purposes, the nature and scope of its
provisions, and prevent the enactment into law of matters which have received the
notice, action and study of the legislators or of the public. In the case at bar it cannot
be claimed that the legislators have been appraised of the nature of the law, especially
the nationalization and the prohibition provisions. The legislators took active interest in
the discussion of the law, and a great many of the persons affected by the prohibitions
in the law conducted a campaign against its approval. It cannot be claimed, therefore,
that the reasons for declaring the law invalid ever existed. The objection must
therefore, be overruled.
IX. Alleged violation of international treaties and obligations
Another subordinate argument against the validity of the law is the supposed violation
thereby of the Charter of the United Nations and of the Declaration of the Human
Rights adopted by the United Nations General Assembly. We find no merit in the
Nations Charter imposes no strict or legal obligations regarding the rights and freedom
of their subjects (Hans Kelsen, The Law of the United Nations, 1951 ed. pp. 29-32),
and the Declaration of Human Rights contains nothing more than a mere
recommendation or a common standard of achievement for all peoples and all nations
(Id. p. 39.) That such is the import of the United Nations Charter aid of the Declaration
of Human Rights can be inferred the fact that members of the United Nations
Organizations, such as Norway and Denmark, prohibit foreigners from engaging in
retail trade, and in most nations of the world laws against foreigners engaged in
domestic trade are adopted.
The Treaty of Amity between the Republic of the Philippines and the Republic of China
of April 18, 1947 is also claimed to be violated by the law in question. All that the treaty
guarantees is equality of treatment to the Chinese nationals "upon the same terms as
the nationals of any other country." But the nationals of China are not discriminating
against because nationals of all other countries, except those of the United States, who
are granted special rights by the Constitution, are all prohibited from engaging in the
retail trade. But even supposing that the law infringes upon the said treaty, the treaty is
always subject to qualification or amendment by a subsequent law (U. S. vs.
Thompson, 258, Fed. 257, 260), and the same may never curtail or restrict the scope
of the police power of the State (plaston vs. Pennsylvania, 58 L. ed. 539.)
X. Conclusion
Resuming what we have set forth above we hold that the disputed law was enacted to
remedy a real actual threat and danger to national economy posed by alien dominance
and control of the retail business and free citizens and country from dominance and
control; that the enactment clearly falls within the scope of the police power of the
State, thru which and by which it protects its own personality and insures its security
and future; that the law does not violate the equal protection clause of the Constitution
because sufficient grounds exist for the distinction between alien and citizen in the
exercise of the occupation regulated, nor the due process of law clause, because the
law is prospective in operation and recognizes the privilege of aliens already engaged
in the occupation and reasonably protects their privilege; that the wisdom and efficacy
of the law to carry out its objectives appear to us to be plainly evident as a matter of
fact it seems not only appropriate but actually necessary and that in any case such
matter falls within the prerogative of the Legislature, with whose power and discretion
the Judicial department of the Government may not interfere; that the provisions of the
law are clearly embraced in the title, and this suffers from no duplicity and has not
misled the legislators or the segment of the population affected; and that it cannot be
said to be void for supposed conflict with treaty obligations because no treaty has
actually been entered into on the subject and the police power may not be curtailed or
surrendered by any treaty or any other conventional agreement.
Some members of the Court are of the opinion that the radical effects of the law could
have been made less harsh in its impact on the aliens. Thus it is stated that the more
time should have been given in the law for the liquidation of existing businesses when
the time comes for them to close. Our legal duty, however, is merely to determine if the
law falls within the scope of legislative authority and does not transcend the limitations
of due process and equal protection guaranteed in the Constitution. Remedies against
the harshness of the law should be addressed to the Legislature; they are beyond our
power and jurisdiction.
The petition is hereby denied, with costs against petitioner.
Korematsu v US
Brief Fact Summary. During World War II, a military commander ordered all persons
of Japanese descent to evacuate the West Coast. The Petitioner, Korematsu
(Petitioner), a United States citizen of Japanese descent, was convicted for failing to
comply with the order.
Synopsis of Rule of Law. Legal restrictions that curtail the civil rights of a single racial
group are subject to the most rigid scrutiny. But, pressing public necessity may
sometimes justify such restrictions.
Facts. President of the United States Franklin Roosevelt (President Roosevelt) issued
an executive order authorizing military commanders to prescribe military areas from
which any or all persons may be excluded. Thereupon, a military commander ordered
all persons of Japanese descent, whether or not they were United States citizens, to
leave their homes on the West Coast and to report to Assembly Centers. The
Petitioner, a United States citizen of unchallenged loyalty, but of Japanese descent,
was convicted under a federal law making it an offense to fail to comply with such
military orders.
Issue. Was it within the power of Congress and the Executive to exclude persons of
Japanese ancestry from the West Coast at the time that they were excluded?
Held. Yes. At the time the exclusion was ordered, it was justified.
Justice Hugo Black stated that although the exclusion order imposed hardships upon a
large number of American citizens, hardships are part of war. When, under conditions
of warfare, our shores are threatened by hostile forces, the power to protect them must
be commensurate with the threatened danger.
Dissent.
Justice Frank Murphy (J. Murphy) argued that the exclusion at issue here goes over
the brink of constitutional power and falls into the abyss of racism. Although we must
extend great deference to the judgments of the military, it is essential that there be
definite limits to military discretion. Moreover, the military order is not reasonably
related to the dangers it seeks to prevent.
Justice Robert Jackson (J. Jackson) stated he would not distort the United States
Constitution (Constitution) to approve everything the military may deem expedient.
Plessy v Ferguson
Brief Fact Summary. A Louisiana statute required railroad companies to provide
separate, but equal accommodations for its Black and White passengers. The Plaintiff,
Plessy (Plaintiff), was prosecuted under the statute after he refused to leave the
section of a train reserved for whites.
Synopsis of Rule of Law. A law, which authorizes or requires the separation of the
two races on public conveyances, is consistent with the Fourteenth Amendment of the
United States Constitution (Constitution) unless the law is unreasonable.
Facts. A Louisiana statute required railroad companies to provide separate, but equal
accommodations for its Black and White passengers. An exception was made for
nurses attending to the children of the other race. Plaintiff, who was seven-eighths
white, was prosecuted under the statute after he refused to leave the section of a train
reserved for whites. The alleged purpose of the statute was to preserve public peace
and good order and to promote the comfort of the people.
Issue. Was the statute requiring separate, but equal accommodations on railroad
transportation consistent with the Equal Protection Clause of the Fourteenth
Amendment of the Constitution?
Held. Yes. The State Supreme Court is affirmed.
Justice Henry Brown (J. Brown) stated that although the Fourteenth Amendment of the
Constitution was designed to enforce the equality between the races, it was not
intended to abolish distinctions based on color, or to enforce a commingling of the
races in a way unsatisfactory to either. Laws requiring the separation of the races do
not imply the inferiority of either. If the law stamps the colored race with a badge of
inferiority, it is because the colored race chooses to put that construction upon it.
Therefore, the statute constitutes a valid exercise of the States police powers.
The Fourteenth Amendment of the Constitution does, however, require that the
exercise of a States police powers be reasonable. Laws enacted in good faith, for the
promotion of the public good and not for the annoyance or oppression of another race
are reasonable. As such, the statute was reasonable.
Dissent. Justice John Harlan (J. Harlan) said that everyone knows that the purpose of
the statute was to exclude the colored people from coaches occupied by whites. The
Constitution is color-blind. It neither knows nor tolerates classes among citizens.
Brown v Board of Education
Brief Fact Summary. Black children were denied admission to schools attended by
white children under laws that permitted or required segregation by race. The children
sued.
Synopsis of Rule of Law. Separate but equal educational facilities are inherently
unequal.
Facts. The Plaintiffs, various black children (Plaintiffs), were denied admission to
schools attended by white children under laws that permitted or required segregation
by race. Plaintiffs sued, seeking admission to public schools in their communities on a
nonsegregated basis.
Issue. Do separate but equal laws in the area of public education deprive black
children of the equal protection of the laws guaranteed by the Fourteenth Amendment
of the United States Constitution (Constitution)?
Held. Yes.
Chief Justice Earl Warren (J. Warren) stated that even if the tangible factors of
segregated schools are equal, to separate black children from others of similar age and
qualifications solely on the basis of race, generates a feeling of inferiority with respect
to their status in the community and may affect their hearts and minds in a way unlikely
to ever be undone.
University of California v Bakke
Brief Fact Summary. The Respondent, Bakke (Respondent), a white applicant to the
University of California, Davis Medical School, sued the University, alleging his denial
of admission on racial grounds was a violation of the Equal Protection Clause of the
Fourteenth Amendment of the United States Constitution (Constitution).
Synopsis of Rule of Law. Although race may be a factor in determining admission to
public educational institutions, it may not be a sole determining factor.
Facts. The University of California, Davis Medical School reserved 16 spots out of the
100 in any given class for disadvantaged minorities. The Respondent, when
compared to students admitted under the special admissions program, had more
favorable objective indicia of performance, while his race was the only distinguishing
characteristic. The Respondent sued, alleging that the special admissions program
denied him equal protection of laws under the Fourteenth Amendment of the
Constitution.
Issue.
Is the special admissions program of the University of California constitutional?
Can race be considered as a factor in the admissions process?
Gratz v Bollinger
Synopsis of Rule of Law. Admission criteria based on race must be narrowly tailored
to achieve a compelling interest. Race may be considered in an individual assessment,
but not as a sole or contributing factor for admission.
Facts. The University of Michigan receives a high volume of applicants each year to its
College of Literature, Science and the Arts (LSA). To help with admission decisions,
the University implements a point system. This point system is out of 100 points. A
student that is from an underrepresented group automatically receives 20 points
towards his or her over all score. The groups of students typically come from African-
American, Hispanic, and Native American backgrounds. A student with extraordinary
artistic talent only receives 5 points under the admission system. Also every student
that is from an underrepresented group, and is otherwise qualified, is typically accepted
into the school. A group of white students, that were determined qualified by the
University, where denied admission.
Issue. Whether a Schools admission policy to automatically grant 20 out of 100 points
to students of a minority ethnicity is a violation of the Equal Protection Clause of the
Constitution.
Held. Yes. Firstly, the Supreme Court has only upheld racial plans at a school or town
where previous racial discrimination was being
remedied. In previous cases, one of the Justices of the Supreme Court stated that
each applicant should be individually assessed. Each students admission should be
based on the students ability to contribute to the unique setting of higher education. An
admission system that grants points for certain characteristics such as race is not an
individual assessment. When applicants are being chosen for a program and part of
the reasoning is based on race, any discrimination made is a violation of the Equal
Protection Clause of the 14th Amendment. Since the White students are being
discriminated based on race, they are a suspect class which deserves strict scrutiny
review. Unless the school can show the system is narrowly tailored to achieve a
compelling interest of diversity, the admission system will be considered
unconstitutional. Here the system is not narrowly tailored. Simply
Grutter v Bollinger
Brief Fact Summary.
When Barbara Grutter (Plaintiff), a white Michigan resident with a 3.8 grade average
and 161 LSAT score, was denied admission to the University of Michigan Law School
(Defendant), she sued the latter in federal district court, alleging racial discrimination
against her in violation of the Fourteenth Amendment on the basis of the law schools
(Defendant) direct consideration of race as a factor in the admissions process
Synopsis of Rule of Law.
Diversity is a compelling interest that can justify the narrowly tailored use of race when
public universities select applicants for admission.
Facts.
The University of Michigan Law School (Defendant) receives more than 3,500
applications each year for a class of 350 students. The Law Schools (Defendant)
admissions committee tried to achieve diversity in the student body by requiring
admissions officials to evaluate each applicant based on all the information in the file,
including a personal statement, letters of recommendation, a students essay, GPA
score, LSAT score, as well as so-called soft variables. Plus, the admissions policy
specifically stressed the Law Schools (Defendant) longstanding commitment to racial
and ethical diversity. In this regard, the official admission policy noted that by enrolling
a critical mass of underrepresented minority students, Defendant sought to ensure
their ability to make unique contributions to the character of the Law School. When
Barbara Grutter (Plaintiff), a white Michigan resident with a 3.8 grade average and 161
LSAT score, applied for admission but was denied, she sued the Law School
(Defendant) in federal district court, claiming racial discrimination against her in
violation of the Fourteenth Amendment. Following a 15-day bench trial, the district
court upheld Plaintiffs claim. The court of appeals reversed. Plaintiff appealed
Issue.
Is diversity a compelling interest that can justify the narrowly tailored use of race when
public universities select applicants for admission?
Held.
(OConnor, J.) Yes. Diversity is a compelling interest that can justify the narrowly
tailored use of race when public universities select applicants for admission. In this
case, the Law Schools (Defendant) admissions program bears the hallmarks of a
narrowly tailored plan. Truly individualized consideration demands that race be used in
a flexible, non-mechanical way. It follows from this mandate that universities cannot
establish quotas for members of certain racial groups or put members of those groups
on separate admission tracks. Universities also cannot insulate applicants who belong
to certain racial or ethnic groups from the competition for admission. However, as was
done here, universities can consider race or ethnicity more flexibly as a plus factor in
the context of individualized consideration of each and every applicant. The Law
Schools (Defendant) goal of attaining a critical mass of underrepresented minority
students does not transform its program into a quota. The evidence indicated that the
Defendant engaged in a highly individualized, holistic review of each applicants file,
giving serious consideration to all the ways an applicant might contribute to a diverse
educational environment. In addition, evidence showed that the Defendant gives
substantial weight to diversity factors besides race by frequently accepting nonminority
applicants with grades and test scores lower than underrepresented minority
applicants. There was no Law School (Defendant) policy, either de facto or de jure, of
automatic acceptance or rejection based on any single soft variable. Narrow tailoring
does not require exhaustion of every conceivable race-neutral alternative. It also does
not require a university to choose between maintaining a reputation for excellence or
fulfilling a commitment to provide educational opportunities to members of all racial
groups. Affirmed
Bradwell v Illinois
Brief Fact Summary. Mrs. Myra Bradwell brought suit challenging Illinois denial of her
right to practice law under the Fourteenth Amendment to the United States
Constitution.
Historically women had no legal existence, and were incapable of making binding
contracts without her husbands consent. This played heavily in the Supreme Court of
Illinois decision. The paramount destiny of women is to fulfill the noble and benign
offices of wife and mother.
Goesart v Cleary
Facts: A Michigan state law provided that no women could obtain a bartenders license
unless she was the wife or daughter of the male owner.
Procedural Posture: Challenged under equal protection.
Issue: Whether the law violates equal protection; i.e. whether women have a
constitutionally protected right to choose to bea bartender.
Holding: No.
Reasoning: [Frankfurter] Michigan could ban all women from being bartenders if it
wished. The Constitution does not require legislatures to reflect sociological insight, or
shifting social standards, any more than it requires them to keep abreast of the latest
scientific standards. Since there may be a reasonable and valid desire in the legislature
to protect female bartenders, the court can not second-guess the legislature and
decide that the real purpose here was for male bartenders to monopolize the industry.

Synopsis of Rule of Law. Separate spheres ideology allowed Illinois to prohibit

women from practicing law. Womens admission to the bar is not protected by the
Fourteenth Amendment is a matter reserved to the states.

Facts. Mrs. Myra Bradwell was denied an application to practice law in the Illinois
Supreme Court. Her petition included the requisite certificate attesting to her good
character and qualifications. The United States Supreme Court affirmed.

Issue. Does the Fourteenth Amendment to the United States Constitution provide that
one of the privileges and immunities of women as citizens is to engage in any
profession?

Held. The admission to the bar is a matter reserved to the states and Bradwells right
to practice law is not protected by the Fourteenth Amendment.

Concurrence. Justice Bradley. The Illinois Supreme Court requires a certificate from
the court of some county of his good moral character, and is otherwise left to the
discretion of the court. The court found itself bound by two limitations: to promote the
proper administration of justice not to admit any class of persons not intended by the
legislature to be admitted, even though not expressly excluded by statute.
Historically the right to engage in every profession has not been one of the established
fundamental privilege and immunities of the sex. The law has always recognized a
wide difference in the respective spheres and destinies of man and woman. The
harmony of interests and views that belong to the family institution is repugnant to the
idea of a woman adopting a distinct and independent career from her husband.