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Legaspi vs City of Cebu

Facts: January 27, 1997 the Sangguniang Panlungsod of the City of Cebu enacted Ordinance No.
1664toauthorizethetraffic enforcers of Cebu City to immobilize any motor vehicle violating the parking
restrictions and prohibitions defined in Ordinance No. 801 (Traffic Code of Cebu City).1 The pertinent provisions
of Ordinance No. 1664 read:

Section 1. POLICY–It is the policy of the government of the City of Cebu to immobilize any motor vehicle
violating any provision of any City Ordinance on Parking Prohibitions or Restrictions, more particularly
Ordinance No. 801, otherwise known as the Traffic Code of Cebu City, as amended, in order to have a smooth
flow of vehicular traffic in all the streets in the City of Cebu at all times.

Section 2. IMMOBILIZATION OF VEHICLES–Any vehicle found violating any provision of any existing ordinance
of the City of Cebu which prohibits, regulates or restricts the parking of vehicles shall be immobilized by
clamping any tire of the said violating vehicle with the use of a denver boot vehicle immobilizer or any other
special gadget designed to immobilize motor vehicles. For this particular purpose, any traffic enforcer of the City
(regular PNP Personnel or Cebu City Traffic Law Enforcement Personnel) is hereby authorized to immobilize any
violating vehicleas hereinabove provided.

Section 3. PENALTIES–Any motor vehicle, owner or driver violating any ordinance on parking prohibitions,
regulations and/or restrictions, as may be providedunder Ordinance No. 801, as amended, or any other existing
ordinance, shall be penalized in accordance with the penalties imposed in the ordinance so violated, provided
that the vehicle immobilizer may not be removed or released without its owner or driver paying first to the City
Treasurer of Cebu City through the Traffic Violations Bureau (TVB) all the accumulated penalties for all prior
traffic law violations that remain unpaid or unsettled, plus the administrative penalty of Five Hundred Pesos
(₱500.00) for the immobilization of the said vehicle, and receipts of such payments presented to the concerned
personnel of the bureau responsible for the release of the immobilized vehicle, unless otherwise ordered
released by any of the following officers:

a) Chairman, CITOM

b) Chairman, Committee on Police, Fire and Penology

c) Asst. City Fiscal Felipe Belciña

3.1 Any person who tampers or tries to release an immobilized or clamped motor vehicle by
destroying the denver boot vehicle immobilizer or other such special gadgets, shall be liable for
its loss or destruction and shall be prosecuted for such loss or destruction under pain or
penalty under the Revised Penal Code and any other existing ordinance of the City of Cebu for
the criminal act, in addition to his/her civil liabilities under the Civil Code of the Philippines;
Provided that any such act may not be compromised nor settled amicably extrajudicially.

3.2 Any immobilized vehicle which is unattended and constitute an obstruction to the free flow
of traffic or a hazard thereof shall be towed to the city government impounding area for
safekeeping and may be released only after the provision of Section 3 hereof shall have been
fully complied with.

3.3 Any person who violates any provision of this ordinance shall, upon conviction, be
penalized with imprisonment of not less than one (1)month nor more than six (6) months or of a
fine of not less than Two Thousand Pesos(₱2,000.00)nor more than Five Thousand
Pesos(₱5,000.00), or both such imprisonment and fine at the discretion of the court.2

On July 29, 1997, Atty. Bienvenido Jaban (Jaban,Sr.) and his son Atty. Bienvenido Douglas Luke Bradbury
Jaban (Jaban,Jr.) brought suit in the RTC in Cebu City against the City of Cebu, then represented by Hon.
Alvin Garcia, its City Mayor, the Sangguniang Panlungsod of Cebu City and its Presiding Officer, Hon. Renato V.
Osmeña, and the chairman and operatives or officers of the City Traffic Operations Management
(CITOM),seeking the declaration of Ordinance No. 1644 as unconstitutional for being in violation of due process
and for being contrary to law, and damages.3 Their complaint alleged that on June 23, 1997, Jaban Sr. had
properly parked his car in a paying parking area on Manalili Street, Cebu City to get certain records and
documents fromhis office;4that upon his return after less than 10 minutes, he had found his car being
immobilized by a steel clamp, and a notice being posted on the car to the effect that it would be a criminal
offense to break the clamp;5 that he had been infuriated by the immobilization of his car because he had been
thereby rendered unable to meet an important client on that day; that his car was impounded for three days,
and was informed at the office of the CITOM that he had first to pay₱4,200.00as a fine to the City Treasurer of
Cebu City for the release of his car;6that the fine was imposed without any court hearing and without due
process of law, for he was not even told why his car had been immobilized; that he had undergone a similar
incident of clamping of his car on the early morning of November 20, 1997 while his car was parked properly in
a parking lot in front of the San Nicolas Pasil Market in Cebu City without violating any traffic regulation or
causing any obstruction; that he was compelled to pay ₱1,500.00(itemized as ₱500.00 for the clamping
and₱1,000.00for the violation) without any court hearing and final judgment; that on May 19, 1997, Jaban, Jr.
parked his car in a very secluded place where there was no sign prohibiting parking; that his car was
immobilized by CITOM operative Lito Gilbuena; and that he was compelled to pay the total sum of ₱1,400.00for
the release of his car without a court hearing and a final judgment rendered by a court of justice.7

On August 11, 1997, Valentino Legaspi (Legaspi) likewise sued in the RTC the City of Cebu,T.C. Sayson,
Ricardo Hapitan and John Does to demand the delivery of personal property, declaration of nullity of the Traffic
Code of Cebu City, and damages.8 He averred that on the morning of July 29, 1997, he had left his car
occupying a portion of the sidewalk and the street outside the gate of his house to make way for the vehicle of
the anay exterminator who had asked to be allowed to unload his materials and equipment from the front of the
residence inasmuch as his daughter’s car had been parked in the carport, with the assurance that the
unloading would not take too long;9 that while waiting for the anay exterminator to finish unloading, the phone
in his office inside the house had rung, impelling him to go into the house to answer the call; that after a short
while, his son-in-law informed him that unknown persons had clamped the front wheel of his car;10 that he
rushed outside and found a traffic citation stating that his car had been clamped by CITOM representatives
with a warning that the unauthorized removal of the clamp would subject the remover to criminal charges;11
and that in the late afternoon a group headed by Ricardo Hapitan towed the car even if it was not obstructing
the flow of traffic.12

In separate answers for the City of Cebu and its co-defendants,13 the City Attorney of Cebu presented similar
defenses, essentially stating that the traffic enforcers had only upheld the law by clamping the vehicles of the
plaintiffs;14 and that Ordinance No. 1664 enjoyed the presumption of constitutionality and validity.15

The cases were consolidated before Branch 58 of the RTC, which, after trial, rendered on January 22, 1999 its
decision declaring Ordinance No. 1664 as null and void upon the following ratiocination:

In clear and simple phrase, the essence of due process was expressed by Daniel Webster as a "law which hears
before it condemns". In another case[s], "procedural due process is that which hears before it condemns, which
proceeds upon inquiry and renders judgment only after trial." It contemplate(s)notice and opportunity to be
heard before judgment is rendered affecting ones (sic) person or property." In both procedural and substantive
due process, a hearing is always a pre-requisite, hence, the taking or deprivation of one’s life, liberty or property
must be done upon and with observance of the "due process" clause of the Constitution and the non-observance
or violation thereof is, perforce, unconstitutional.

Under Ordinance No. 1664, when a vehicle is parked in a prohibited, restrycted (sic) or regulated area in the
street or along the street, the vehicle is immobilized by clamping any tire of said vehicle with the use of a denver
boot vehicle immobilizer or any other special gadget which immobilized the motor vehicle. The violating vehicle
is immobilized, thus, depriving its owner of the use thereof at the sole determination of any traffic enforcer or
regular PNP personnel or Cebu City Traffic Law Enforcement Personnel. The vehicle immobilizer cannot be
removed or released without the owner or driver paying first to the City Treasurer of Cebu through the Traffic
Violations Bureau all the accumulated penalties of all unpaid or unsettled traffic law violations, plus the
administrative penalty of ₱500.00 and, further, the immobilized vehicle shall be released only upon presentation
of the receipt of said payments and upon release order by the Chairman, CITOM, or Chairman, Committee on
Police, Fire and Penology, or Asst. City Fiscal Felipe Belcina. It should be stressed that the owner of the
immobilized vehicle shall have to undergo all these ordeals at the mercy of the Traffic Law Enforcer who, as the
Ordinance in question mandates, is the arresting officer, prosecutor, Judge and collector. Otherwise stated, the
owner of the immobilized motor vehicle is deprived of his right to the use of his/her vehicle and penalized
without a hearing by a person who is not legally or duly vested with such rights, power or authority. The
Ordinance in question is penal in nature, and it has been held;

xxxx

WHEREFORE, premised (sic) considered, judgment is hereby rendered declaring Ordinance


No.1664unconstitutional and directing the defendant City of Cebu to pay the plaintiff Valentino Legaspi the
sum of ₱110,000.00 representing the value of his car, and to all the plaintiffs, Valentino L. Legaspi, Bienvenido
P. Jaban and Bienvenido Douglas Luke Bradbury Jaban, the sum of ₱100,000.00 each or ₱300,000.00 all as
nominal damages and another ₱100,000.00 each or₱300,000.00 all as temperate or moderate damages. With
costs against defendant City of Cebu.

SO ORDERED.16 (citations omitted)

The City of Cebu and its co-defendants appealed to the CA, assigning the following errors to the RTC, namely:
(a) the RTC erred in declaring that Ordinance No. 1664 was unconstitutional;

CA promulgated its assailed decision,17overturning the RTCand declaring Ordinance No. 1664 valid, to wit:

The principal thrust of this appeal is the constitutionality of Ordinance 1664. Defendants-appellants contend
that the passage of Ordinance 1664is in accordance with the police powers exercised by the City of Cebu
through the Sangguniang Panlungsod and granted by RA 7160, otherwise known as the Local Government
Code.

Section 458 (a) The sangguniang panlungsod, as the legislative branch of the city, x x x shall x x x

(5) (v) Regulate the use of streets, avenues, alleys, sidewalks, bridges, park and other public places and approve
the construction, improvement, repair and maintenance of the same; establish bus and vehicle stops and
terminals or regulate the use of the same by privately owned vehicles which serve the public;

Regulate traffic on all streets and bridges; prohibit encroachments or obstacles thereon and, when necessary in
the interest of public welfare, authorize the removal of encroachments and illegal constructions in public
places.It then makes a general grant of the police power. The scope of the legislative authority of the local
government is set out in Section 16, to wit:

Section 16. General Welfare. –Every local government unit shall exercise the powers expressly granted, those
necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and
effective governance, and those which are essential to the promotion of the general welfare.

This provision contains what is traditionally known as the general welfare clause.

In a vital and critical way, the general welfare clause complements the more specific powers granted a local
government. It serves as a catch-all provision that ensures that the local government will be equipped to meet
any local contingency that bears upon the welfare of its constituents but has not been actually anticipated. So
varied and protean are the activities that affect the legitimate interests of the local inhabitants that it is well-
nigh impossible to say beforehand what may or may not be done specifically through law. To ensure that a local
government can react positively to the people’s needs and expectations, the general welfare clause has been
devised and interpreted to allow the local legislative council to enact such measures as the occasion requires.

Issue: Whether Ordinance No. 1664was enacted within the ambit of the legislative powers of the City of Cebu;
and

2. Whether Ordinance No. 1664complied with the requirements for validity and constitutionality, particularly
the limitations set by the Constitution and the relevant statutes.

Ruling:

petitions for review have nomerit.

A.
Tests for a valid ordinance

In City of Manila v. Laguio, Jr.,18 the Court restatesthe tests of a valid ordinance thusly:

The tests of a valid ordinance are well established. A long line of decisions has held that for an ordinance to be
valid, it must not only be within the corporate powers of the local government unit to enact and must be passed
according to the procedure prescribed by law, it must also conform to the following substantive requirements:
(1) must not contravene the Constitution or any statute; (2) must not be unfair or oppressive;(3) must not be
partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with
public policy; and (6) must not be unreasonable.19

As jurisprudence indicates, the tests are divided into the formal (i.e., whether the ordinance was enacted within
the corporate powers of the LGU, and whether it was passed in accordance with the procedure prescribed by
law), and the substantive (i.e.,involving inherent merit, like the conformity of the ordinance with the limitations
under the Constitution and the statutes, as well as with the requirements of fairness and reason, and its
consistency with public policy).

B.
Compliance of Ordinance No. 1664
with the formal requirements

Was the enactment of Ordinance No. 1664 within the corporate powers of the LGU of the City of Cebu?

The answer is in the affirmative. Indeed, with no issues being hereby raised against the formalities attendant to
the enactment of Ordinance No. 1664, we presume its full compliance with the test in that regard. Congress
enacted the LGC as the implementing law for the delegation to the various LGUs of the State’s great powers,
namely: the police power, the power of eminent domain, and the power of taxation.

police power is regarded as "the most essential, insistent and the least limitable of powers, extending as it does
‘to all the great public needs.’"20 It is unquestionably "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 subject of the same.

The first substantive requirement for a valid ordinance is the adherence to the constitutional guaranty of due
process of law. The guaranty is embedded in Article III, Section 1 of the Constitution, which ordains:

Section 1. No person shall be deprived of life, liberty or property without due process of law, nor shall any
person be denied the equal protection of the laws.4

The guaranty of due process of law is a constitutional safeguard against any arbitrariness on the part of the
Government, whether committed by the Legislature, the Executive, or the Judiciary. It is a protection essential
to every inhabitant of the country, for, as a commentator on Constitutional Law has vividly written:25

x x x. If the law itself unreasonably deprives a person of his life, liberty, or property, he is denied the protection
of due process. If the enjoyment of his rights is conditioned on an unreasonable requirement, due process is
likewise violated.

Even under strict scrutiny review, Ordinance No. 1664 met the substantive tests of validity and constitutionality
by its conformity with the limitations under the Constitution and the statutes, as well as with the requirements
of fairness and reason, and its consistency with public policy.

To us, the terms encroachment and obstacles used in Section 458 of the LGC, supra, were broad enough to
include illegally parked vehicles or whatever else obstructed the streets, alleys and sidewalks,

Considering that traffic congestions were already retarding the growth and progress in the population and
economic centers of the country, the plain objective of Ordinance No. 1664 was to serve the public interest and
advance the general welfare in the City of Cebu. Its adoption was, therefore, in order to fulfill the compelling
government purpose of immediately addressing the burgeoning traffic congestions caused by illegally parked
vehicles obstructing the streets of the City of Cebu.

Did Ordinance No. 1664 meet the requirements of procedural due process?
Notice and hearing are the essential requirements of procedural due process. Yet, there are many instances
under our laws in which the absence of one or both of such requirements is not necessarily a denial or
deprivation of due process.

WHEREFORE, the Court DENIES the pet1t10ns for review on certiorari for their lack of merit; AFFIRMS the
decision promulgated on June 16, 2003 by the Court of Appeals; and ORDERS the petitioners to pay the costs
of suit.

SO ORDERED

Digest*

January 27, 1997 the Sangguniang Panlungsod of the City of Cebu enacted Ordinance No. 1664 to authorize
the traffic enforcers of Cebu City to immobilize any motor vehicle violating the parking restrictions and
prohibitions defined in the Traffic Code of Cebu City.

On July 29, 1997, Atty. Bienvenido Jaban (Jaban,Sr.) and his son Atty. Bienvenido Douglas Luke Bradbury
Jaban (Jaban,Jr.) brought suit in the RTC against the City of Cebu, then represented by Hon. Alvin Garcia, its
City Mayor, the Sangguniang Panlungsod of Cebu City and its Presiding Officer, Hon. Renato V. Osme, and the
chairman and operatives or officers of the City Traffic Operations Management (CITOM),seeking the declaration
of Ordinance No. 1644 as unconstitutional for being in violation of due process and for being contrary to law,
and damages.

Their complaint alleged that on June 23, 1997, Jaban Sr. had properly parked his car in a paying parking area
on Manalili Street, Cebu City to get certain records and documents from his office and after less than 10
minutes, he had found his car being immobilized by a steel clamp. His car was impounded for three days, and
was informed at the office of the CITOM that he had first to pay P4,200.00 as a fine to the City Treasurer of
Cebu City for the release of his car but such imposition the fine was without any court hearing and without due
process of law. He was also compelled to payP1,500.00 (itemized as P500.00 for the clamping andP1,000.00 for
the violation) without any court hearing and final judgment;

That on May 19, 1997, Jaban, Jr. parked his car in a very secluded place where there was no sign prohibiting
parking; that his car was immobilized by CITOM operative and that he was compelled to pay the total sum
ofP1,400.00 for the release of his car without a court hearing and a final judgment rendered by a court of
justice.

On August 11, 1997, Valentino Legaspi (Legaspi) likewise sued in the RTC the City of Cebu, demanded the
delivery of personal property, declaration of nullity of theTraffic Code of Cebu City, and damages.

He averred that on the morning of July 29, 1997, he had left his car occupying a portion of the sidewalk and the
street outside the gate of his house to make way for the vehicle of theanayexterminator, upon returning outside,
his car was towed by the group even if it was not obstructing the flow of traffic.

The cases were consolidated. The RTC rendered its decision declaring Ordinance No. 1664 as null and void

The City of Cebu and its co-defendants appealed to the CA. The CA reversed the decision of the RTC declaring
the Ordinance No. 1664 valid.

Upon the denial of their respective motions for reconsideration the Jabans and Legaspi came to the Court via
separate petitions for review on certiorari. The appeals were consolidated.

ISSUE: Whether or not Ordinance No. 1664 is valid and constitutional.

HELD: The Court of Appeals decision is sustained.

CONSTITUTIONAL LAW - Tests for a valid ordinance


In City of Manila v. Laguio, Jr., G.R. No. 118127, April 12, 2005the Court restates the tests of a valid ordinance
thusly:

The tests of a valid ordinance are well established. A long line of decisions has held that for an ordinance to be
valid, it must not only be within the corporate powers of the local government unit to enact and must be passed
according to the procedure prescribed by law, it must also conform to the following substantive requirements:
(1) must not contravene the Constitution or any statute; (2) must not be unfair or oppressive;(3) must not be
partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with
public policy; and (6) must not be unreasonable.

As jurisprudence indicates, the tests are divided into the formal (i.e., whether the ordinance was enacted within
the corporate powers of the LGU, and whether it was passed in accordance with the procedure prescribed by
law), and the substantive (i.e., involving inherent merit, like the conformity of the ordinance with the limitations
under the Constitution and the statutes, as well as with the requirements of fairness and reason, and its
consistency with public policy).

InMetropolitan Manila Development Authorityv. Bel-Air Village Association,Inc., G.R. No. 135962, March 27,
2000the Court cogently observed that police power is lodged primarily in the National Legislature. It cannot be
exercised by any group or body of individuals not possessing legislative power. The National Legislature,
however, may delegate this power to the President and administrative boards as well as the lawmaking bodies of
municipal corporations or local government units. Once delegated, the agents can exercise only such legislative
powers as are conferred on them by the national lawmaking body. (emphasis supplied)

In the present case, delegated police power was exercised by the LGU of the City of Cebu.

The CA opined, and correctly so, that vesting cities like the City of Cebu with the legislative power to enact
traffic rules and regulations was expressly done through Section 458 of the LGC, and also generally by virtue of
the General Welfare Clause embodied in Section 16 of the LGC.

The police power granted to local government units must always be exercised with utmost observance of the
rights of the people to due process and equal protection of the law. Such power cannot be exercised
whimsically, arbitrarily or despotically as its exercise is subject to a qualification, limitation or restriction
demanded by the respect and regard due to the prescription of the fundamental law, particularly those forming
part of the Bill of Rights. Individual rights, it bears emphasis, may be adversely affected only to the extent that
may fairly be required by the legitimate demands of public interest or public welfare. Due process requires the
intrinsic validity of the law in interfering with the rights of the person to his life, liberty and property.

Judged according to the foregoing enunciation of the guaranty of due process of law, the contentions of the
petitioners cannot be sustained. Even under strict scrutiny review, Ordinance No. 1664 met the substantive
tests of validity and constitutionality by its conformity with the limitations under the Constitution and the
statutes, as well as with the requirements of fairness and reason, and its consistency with public policy.

The subject of Ordinance No. 1664 is to ensure "a smooth flow of vehicular traffic in all the streets in the City of
Cebu at all times".

To reiterate, the clamping of the illegally parked vehicles was a fair and reasonable way to enforce the ordinance
against its transgressors; otherwise, the transgressors would evade liability by simply driving away.

DENIED.

MANILA MEMORIAL PARK, INC v. SECRETARY OF DSWD


711 SCRA 302
G.R. No. 175356
December 3, 2013

TOPIC: Bill of Rights; Eminent Domain v. Police Power


FACTS: RA 7432 was passed into law (amended by RA 9257), granting senior citizens 20% discount on certain
establishments.

To implement the tax provisions of RA 9257, the Secretary of Finance and the DSWD issued its own Rules and
Regulations.

Hence, this petition.

Petitioners are not questioning the 20% discount granted to senior citizens but are only assailing the
constitutionality of the tax deduction scheme prescribed under RA 9257 and the implementing rules and
regulations issued by the DSWD and the DOF.

Petitioners posit that the tax deduction scheme contravenes Article III, Section 9 of the Constitution, which
provides that: "private property shall not be taken for public use without just compensation."

Respondents maintain that the tax deduction scheme is a legitimate exercise of the State’s police power.

ISSUE: Whether the legally mandated 20% senior citizen discount is an exercise of police power or eminent
domain.

RULING: The 20% senior citizen discount is an exercise of police power.

It may not always be easy to determine whether a challenged governmental act is an exercise of police power or
eminent domain. The judicious approach, therefore, is to look at the nature and effects of the challenged
governmental act and decide on the basis thereof.

The 20% discount is intended to improve the welfare of senior citizens who, at their age, are less likely to be
gainfully employed, more prone to illnesses and other disabilities, and, thus, in need of subsidy in purchasing
basic commodities. It serves to honor senior citizens who presumably spent their lives on contributing to the
development and progress of the nation.

In turn, the subject regulation affects the pricing, and, hence, the profitability of a private establishment.

The subject regulation may be said to be similar to, but with substantial distinctions from, price control or rate
of return on investment control laws which are traditionally regarded as police power measures.

The subject regulation differs there from in that (1) the discount does not prevent the establishments from
adjusting the level of prices of their goods and services, and (2) the discount does not apply to all customers of a
given establishment but only to the class of senior citizens. Nonetheless, to the degree material to the resolution
of this case, the 20% discount may be properly viewed as belonging to the category of price regulatory measures
which affect the profitability of establishments subjected thereto. On its face, therefore, the subject regulation is
a police power measure.

Remman vs PRBRES

R.A. No. 9646, otherwise known as the "Real Estate Service Act of the Philippines" was signed into law on June
29, 2009 by President Gloria Macapagal-Arroyo. It aims to professionalize the real estate service sector under a
regulatory scheme of licensing, registration and supervision of real estate service practitioners (real estate
brokers, appraisers, assessors, consultants and salespersons) in the country. Prior to its enactment, real estate
service practitioners were under the supervision of the Department of Trade and Industry (DTI) through the
Bureau of Trade Regulation and Consumer Protection (BTRCP), in the exercise of its consumer regulation
functions. Such authority is now transferred to the Professional Regulation Commission (PRC) through the
Professional Regulatory Board of Real Estate Service (PRBRES) created under the new law.

The implementing rules and regulations (IRR) of R.A. No. 9646 were promulgated on July 21, 2010 by the PRC
and PRBRES under Resolution No. 02, Series of 2010.

On December 7, 2010, herein petitioners Remman Enterprises, Inc. (REI) and the Chamber of Real Estate and
Builders' Association (CREBA) instituted Civil Case No. 10-124776 in the Regional Trial Court of Manila,
Branch 42. Petitioners sought to declare as void and unconstitutional the following provisions of R.A. No. 9646:
SEC. 28. Exemptions from the Acts Constituting the Practice of Real Estate Service. The provisions of this Act and
its rules and regulations shall not apply to the following:
(a) Any person, natural or juridical, who shall directly perform by himself/herself the acts mentioned in Section
3 hereof with reference to his/her or its own property, except real estate developers;

xxxx

SEC. 29. Prohibition Against the Unauthorized Practice of Real Estate Service . No person shall practice or offer to
practice real estate service in the Philippines or offer himself/herself as real estate service practitioner, or use
the title, word, letter, figure or any sign tending to convey the impression that one is a real estate service
practitioner, or advertise or indicate in any manner whatsoever that one is qualified to practice the profession,
or be appointed as real property appraiser or assessor in any national government entity or local government
unit, unless he/she has satisfactorily passed the licensure examination given by the Board, except as otherwise
provided in this Act, a holder of a valid certificate of registration, and professional identification card or a valid
special/temporary permit duly issued to him/her by the Board and the Commission, and in the case of real
estate brokers and private appraisers, they have paid the required bond as hereto provided.

xxxx

SEC. 32. Corporate Practice of the Real Estate Service . (a) No partnership or corporation shall engage in the
business of real estate service unless it is duly registered with the Securities and Exchange Commission (SEC),
and the persons authorized to act for the partnership or corporation are all duly registered and licensed real
estate brokers, appraisers or consultants, as the case may be. The partnership or corporation shall regularly
submit a list of its real estate service practitioners to the Commission and to the SEC as part of its annual
reportorial requirements. There shall at least be one (1) licensed real estate broker for every twenty (20)
accredited salespersons.

(b) Divisions or departments of partnerships and corporations engaged in marketing or selling any real estate
development project in the regular course of business must be headed by full-time registered and licensed real
estate brokers.

(c) Branch offices of real estate brokers, appraisers or consultants must be manned by a duly licensed real
estate broker, appraiser or consultant as the case may be.

In case of resignation or termination from employment of a real estate service practitioner, the same shall be
reported by the employer to the Board within a period not to exceed fifteen (15) days from the date of effectivity
of the resignation or termination.

Subject to the provisions of the Labor Code, a corporation or partnership may hire the services of registered and
licensed real estate brokers, appraisers or consultants on commission basis to perform real estate services and
the latter shall be deemed independent contractors and not employees of such corporations. (Emphasis and
underscoring supplied.)
According to petitioners, the new law is constitutionally infirm because (1) it violates Article VI, Section 26 (1) of
the 1987 Philippine Constitution which mandates that "[e]very bill passed by Congress shall embrace only one
subject which shall be expressed in the title thereof"; (2) it is in direct conflict with Executive Order (E.O.) No.
648 which transferred the exclusive jurisdiction of the National Housing Authority (NHA) to regulate the real
estate trade and business to the Human Settlements Commission, now the Housing and Land Use Regulatory
Board (HLURB), which authority includes the issuance of license to sell of subdivision owners and developers
pursuant to Presidential Decree (P.D.) No. 957; (3) it violates the due process clause as it impinges on the real
estate developers' most basic ownership rights, the right to use and dispose property, which is enshrined in
Article 428 of the Civil Code; and (4) Section 28(a) of R.A. No. 9646 violates the equal protection clause as no
substantial distinctions exist between real estate developers and the exempted group mentioned since both are
property owners dealing with their own property.

After a summary hearing, the trial court denied the prayer for issuance of a writ of preliminary injunction.

On July 12, 2011, the trial court rendered its Decision[2] denying the petition. The trial court held that the
assailed provisions are relevant to the title of the law as they are intended to regulate the practice of real estate
service in the country by ensuring that those who engage in it shall either be a licensed real estate broker, or
under the latter's supervision. It likewise found no real discord between E.O. No. 648 and R.A. No. 9646 as the
latter does not render nugatory the license to sell granted by the HLURB to real estate developers, which license
would still subsist.

Issue: this appeal on the following questions of law:


1. Whether there is a justiciable controversy for this Honorable Court to adjudicate;

2. Whether [R.A. No. 9646] is unconstitutional for violating the "one title-one subject" rule under Article
VI, Section 26 (1) of the Philippine Constitution;

Ruling: The petition has no merit.

Justiciable Controversy

The Constitution[4] requires as a condition precedent for the exercise of judicial power the existence of an actual
controversy between litigants. An actual case or controversy involves a conflict of legal rights, an assertion of
opposite legal claims susceptible to judicial resolution. [5] The controversy must be justiciable definite and
concrete touching on the legal relations of parties having adverse legal interests, which may be resolved by a
court of law through the application of a law.[6] In other words, the pleadings must show an active antagonistic
assertion of a legal right, on the one hand, and a denial thereof on the other; that is, it must concern a real and
not a merely theoretical question or issue. There ought to be an actual and substantial controversy admitting of
specific relief through a decree conclusive in nature, as distinguished from an opinion advising what the law
would be upon a hypothetical state of facts.[7] An actual case is ripe for adjudication when the act being
challenged has a direct adverse effect on the individual challenging it.[8]

There is no question here that petitioners who are real estate developers are entities directly affected by the
prohibition on performing acts constituting practice of real estate service without first complying with the
registration and licensing requirements for brokers and agents under R.A. No. 9646. The possibility of criminal
sanctions for disobeying the mandate of the new law is likewise real

No Violation of One-Title One-Subject Rule

Section 26(1), Article VI of the Constitution states:


SEC. 26 (1). Every bill passed by the Congress shall embrace only one subject which shall be expressed in the
title thereof.
The Court has previously ruled that the one-subject requirement under the Constitution is satisfied if all the
parts of the statute are related, and are germane to the subject matter expressed in the title, or as long as they
are not inconsistent with or foreign to the general subject and title.[11] An act having a single general subject,
indicated in the title, may contain any number of provisions, no matter how diverse they may be, so long as
they are not inconsistent with or foreign to the general subject, and may be considered in furtherance of such
subject by providing for the method and means of carrying out the general object.[12]

It is also well-settled that the "one title-one subject" rule does not require the Congress to employ in the title of
the enactment language of such precision as to mirror, fully index or catalogue all the contents and the minute
details therein. The rule is sufficiently complied with if the title is comprehensive enough as to include the
general object which the statute seeks to effect.[13] Indeed, this Court has invariably adopted a liberal rather
than technical construction of the rule "so as not to cripple or impede legislation.

No Conflict Between R.A. No. 9646 and P.D. No. 957, as amended by E.O. No. 648

Petitioners argue that the assailed provisions still cannot be sustained because they conflict with P.D. No. 957
which decreed that the NHA shall have "exclusive jurisdiction to regulate the real estate trade and business."
Such jurisdiction includes the authority to issue a license to sell to real estate developers and to register real
estate dealers, brokers or salesmen upon their fulfillment of certain requirements under the law.

No Violation of Due Process

Petitioners contend that the assailed provisions of R.A. No. 9646 are unduly oppressive and infringe the
constitutional rule against deprivation of property without due process of law. They stress that real estate
developers are now burdened by law to employ licensed real estate brokers to sell, market and dispose of their
properties. Despite having invested a lot of money, time and resources in their projects, petitioners aver that
real estate developers will still have less control in managing their business and will be burdened with
additional expenses.
The contention has no basis. There is no deprivation of property as no restriction on their use and enjoyment of
property is caused by the implementation of R.A. No. 9646. If petitioners as property owners feel burdened by
the new requirement of engaging the services of only licensed real estate professionals in the sale and marketing
of their properties, such is an unavoidable consequence of a reasonable regulatory measure.

No Violation of Equal Protection Clause


Although the equal protection clause of the Constitution does not forbid classification, it is imperative that the
classification should be based on real and substantial differences having a reasonable relation to the subject of
the particular legislation.[26] If classification is germane to the purpose of the law, concerns all members of the
class, and applies equally to present and future conditions, the classification does not violate the equal
protection guarantee.[27]

R.A. No. 9646 was intended to provide institutionalized government support for the development of "a corps of
highly respected, technically competent, and disciplined real estate service practitioners, knowledgeable of
internationally accepted standards and practice of the profession.

Since every law is presumed valid, the presumption of constitutionality can be overcome only by the clearest
showing that there was indeed an infraction of the Constitution, and only when such a conclusion is reached by
the required majority may the Court pronounce, in the discharge of the duty it cannot escape, that the
challenged act must be struck down.

WHEREFORE, the petition is DENIED. The Decision dated July 12, 2011 of the Regional Trial Court of Manila,
Branch 42 in Civil Case No. 10-124776 is hereby AFFIRMED and UPHELD.

NATIONAL POWER CORPORATION, Petitioner, v. HEIRS OF MACABANGKIT SANGKAY, NAMELY: CEBU,


BATOWA-AN, ET AL., ALL SURNAMED MACABANGKIT, Respondents.

BERSAMIN, J.:

FACTS:

Pursuant to its legal mandate under Republic Act No. 6395 (An Act Revising the Charter of the National Power
Corporation), NPC undertook the Agus River Hydroelectric Power Plant Project in the 1970s to generate
electricity for Mindanao. The project included the construction of several underground tunnels to be used in
diverting the water flow from the Agus River to the hydroelectric plants.

On November 21, 1997, the respondents as the owners of land with an area of 221,573 square meters situated
in Ditucalan, Iligan City, sued NPC in the RTC for the recovery of damages and of the property, with the
alternative prayer for the payment of just compensation. They alleged that they had belatedly discovered that
one of the underground tunnels of NPC that diverted the water flow of the Agus River for the operation of the
Hydroelectric Project in Agus V, Agus VI and Agus VII traversed their land; that their discovery had occurred in
1995 after Atty. Saidali C. Gandamra, President of the Federation of Arabic Madaris School, had rejected their
offer to sell the land because of the danger the underground tunnel might pose to the proposed Arabic Language
Training Center and Muslims Skills Development Center; that such rejection had been followed by the
withdrawal by Global Asia Management and Resource Corporation from developing the land into a housing
project for the same reason; that Al-Amanah Islamic Investment Bank of the Philippines had also refused to
accept their land as collateral because of the presence of the underground tunnel; that the underground tunnel
had been constructed without their knowledge and consent; that the presence of the tunnel deprived them of
the agricultural, commercial, industrial and residential value of their land; and that their land had also become
an unsafe place for habitation because of the loud sound of the water rushing through the tunnel and the
constant shaking of the ground, forcing them and their workers to relocate to safer grounds.

In its answer with counterclaim, NPC countered that the Heirs of Macabangkit had no right to compensation
under section 3(f) of Republic Act No. 6395, under which a mere legal easement on their land was established;
that their cause of action, should they be entitled to compensation, already prescribed due to the tunnel having
been constructed in 1979; and that by reason of the tunnel being an apparent and continuous easement, any
action arising from such easement prescribed in five years.

After trial, the RTC ruled in favor of the plaintiffs (Heirs of Macabangkit).

Earlier, on August 18, 1999, the Heirs of Macabangkit filed an urgent motion for execution of judgment pending
appeal. The RTC granted the motion and issued a writ of execution, prompting NPC to assail the writ by petition
for certiorari in the CA. On September 15, 1999, the CA issued a temporary restraining order (TRO) to enjoin
the RTC from implementing its decision.The Heirs of Macabangkit elevated the ruling of the CA (G.R. No.
141447), but the Court upheld the CA on May 4, 2006.

On October 5, 2004, the CA affirmed the decision of the RTC.

ISSUE:

1) Whether the CA and the RTC erred in holding that there was an underground tunnel traversing the Heirs of
Macabangkits land constructed by NPC; and

2) Whether the Heirs of Macabangkits right to claim just compensation had prescribed under section 3(i) of
Republic Act No. 6395, or, alternatively, under Article 620 and Article 646 of the Civil Code.

HELD: We uphold the liability of NPC for payment of just compensation.

REMEDIAL LAW: factual findings of the RTC, when affirmed by the CA, are binding

The existence of the tunnel underneath the land of the Heirs of Macabangkit, being a factual matter, cannot
now be properly reviewed by the Court, for questions of fact are beyond the pale of a petition for review on
certiorari. Moreover,the factual findings and determinations by the RTC as the trial court are generally binding
on the Court, particularly after the CA affirmed them. Bearing these doctrines in mind, the Court should rightly
dismiss NPCs appeal.

NPC argues, however, that this appeal should not be dismissed because the Heirs of Macabangkit essentially
failed to prove the existence of the underground tunnel. It insists that the topographic survey map and the
right-of-way map presented by the Heirs of Macabangkit did not at all establish the presence of any
underground tunnel.

NPC still fails to convince.

Even assuming, for now, that the Court may review the factual findings of the CA and the RTC, for NPC to insist
that the evidence on the existence of the tunnel was not adequate and incompetent remains futile. On the
contrary, the evidence on the tunnel was substantial, for the significance of the topographic survey map and the
sketch map (as indicative of the extent and presence of the tunnel construction) to the question on the existence
of the tunnel was strong, as the CA correctly projected in its assailed decision,viz:

Among the pieces of documentary evidence presented showing the existence of the said tunnel beneath the
subject property is the topographic survey map. The topographic survey map is one conducted to know about
the location and elevation of the land and all existing structures above and underneath it. Another is the Sketch
Map which shows the location and extent of the land traversed or affected by the said tunnel.These two (2)
pieces of documentary evidence readily point the extent and presence of the tunnel construction coming from
the power cavern near the small man-made lake which is the inlet and approach tunnel, or at a distance of
about two (2) kilometers away from the land of the plaintiffs-appellees, and then traversing the entire and the
whole length of the plaintiffs-appellees property, and the outlet channel of the tunnel is another small man-
made lake.This is a sub-terrain construction, and considering that both inlet and outlet are bodies of water, the
tunnel can hardly be noticed. All constructions done were beneath the surface of the plaintiffs-appellees
property. This explains why they could never obtain any knowledge of the existence of such tunnel during the
period that the same was constructed and installed beneath their property.

The power cavern and the inlet and outlet channels established the presence of the underground tunnel, based
on the declaration in the RTC by Sacedon, a former employee of the NPC. It is worthy to note that NPC did not
deny the existence of the power cavern, and of the inlet and outlet channels adverted to and as depicted in the
topographic survey map and the sketch map. The CA cannot be faulted for crediting the testimony of Sacedon
despite the effort of NPC to discount his credit due to his not being an expert witness, simply because Sacedon
had personal knowledge based on his being NPCs principal engineer and supervisor tasked at one time to lay
out the tunnels and transmission lines specifically for the hydroelectric projects, and to supervise the
construction of the Agus 1 Hydroelectric Plant itself from 1978 until his retirement from NPC. Besides, he
declared that he personally experienced the vibrations caused by the rushing currents in the tunnel,
particularly near the outlet channel. Under any circumstances, Sacedon was a credible and competent witness.

The ocular inspection actually confirmed the existence of the tunnel underneath the land of the Heirs of
Macabangkit.

More so, the Ocular inspection conducted on July 23, 1998 further bolstered such claim of the existence and
extent of such tunnel. This was conducted by a team composed of the Honorable Presiding Judge of the
Regional Trial Court, Branch 01, Lanao del Norte, herself and the respective lawyers of both of the parties and
found that, among others, said underground tunnel was constructed beneath the subject property.

It bears noting that NPC did not raise any issue against or tender any contrary comment on the ocular
inspection report.

POLITICAL LAW: five-year prescriptive period under Section 3(i) of Republic Act No. 6395 does not apply to
claims for just compensation

Without necessarily adopting the reasoning of the CA, we uphold its conclusion that prescription did not bar the
present action to recover just compensation.

Section 3 (i) of Republic Act No. 6395, the cited law, relevantly provides:

Section 3.Powers and General Functions of the Corporation. The powers, functions, rights and activities of the
Corporation shall be the following: xxx

(i) To construct works across, or otherwise, any stream, watercourse, canal, ditch, flume, street, avenue,
highway or railway of private and public ownership, as the location of said works may require:Provided, That
said works be constructed in such a manner as not to endanger life or property; And provided, further, That the
stream, watercourse, canal ditch, flume, street, avenue, highway or railway so crossed or intersected be
restored as near as possible to their former state, or in a manner not to impair unnecessarily their usefulness.
Every person or entity whose right of way or property is lawfully crossed or intersected by said works shall not
obstruct any such crossings or intersection and shall grant the Board or its representative, the proper authority
for the execution of such work. The Corporation is hereby given the right of way to locate, construct and
maintain such works over and throughout the lands owned by the Republic of the Philippines or any of its
branches and political subdivisions. The Corporation or its representative may also enter upon private property
in the lawful performance or prosecution of its business and purposes, including the construction of the
transmission lines thereon;Provided,that the owner of such property shall be indemnified for any actual damage
caused thereby;Provided, further,That said action for damages is filed within five years after the rights of way,
transmission lines, substations, plants or other facilities shall have been established;Provided, finally, That after
said period, no suit shall be brought to question the said rights of way, transmission lines, substations, plants
or other facilities;

A cursory reading shows that Section 3(i) covers the construction of works across, or otherwise, any stream,
watercourse, canal, ditch, flume, street, avenue, highway or railway of private and public ownership, as the
location of said works may require. It is notable that Section 3(i) includes no limitation except those enumerated
after the termworks. Accordingly, we consider the term works as embracing all kinds of constructions, facilities,
and other developments that can enable or help NPC to meet its objectives of developing hydraulic power
expressly provided under paragraph (g) of Section 3.The CAs restrictive construal of Section 3(i) as exclusive of
tunnels was obviously unwarranted, for the provision applies not only to development works easily discoverable
or on the surface of the earth but also to subterranean works like tunnels. Such interpretation accords with the
fundamental guideline in statutory construction that when the law does not distinguish, so must we not.
Moreover, when the language of the statute is plain and free from ambiguity, and expresses a single, definite,
and sensible meaning, that meaning is conclusively presumed to be the meaning that the Congress intended to
convey.

Even so, we still cannot side with NPC.

We rule that the prescriptive period provided under Section 3(i) of Republic Act No. 6395 is applicable only to an
action for damages, and does not extend to an action to recover just compensation like this case. Consequently,
NPC cannot thereby bar the right of the Heirs of Macabangkit to recover just compensation for their land.

POLITICAL LAW: just compensation

The action to recover just compensation from the State or its expropriating agency differs from the action for
damages. The former, also known as inverse condemnation, has the objective to recover the value of property
taken in fact by the governmental defendant, even though no formal exercise of the power of eminent domain
has been attempted by the taking agency.Just compensation is the full and fair equivalent of the property taken
from its owner by the expropriator. The measure is not the takers gain, but the owner's loss. The word just is
used to intensify the meaning of the word compensation in order to convey the idea that the equivalent to be
rendered for the property to be taken shall be real, substantial, full, and ample. On the other hand, the latter
action seeks to vindicate a legal wrong through damages, which may be actual, moral, nominal, temperate,
liquidated, or exemplary. When a right is exercised in a manner not conformable with the norms enshrined in
Article 19 and like provisions on human relations in the Civil Code,and the exercise results to the damage of
another, a legal wrong is committed and the wrongdoer is held responsible.

The two actions are radically different in nature and purpose. The action to recover just compensation is based
on the Constitution while the action for damages is predicated on statutory enactments. Indeed, the former
arises from the exercise by the State of its power of eminent domain against private property for public use, but
the latter emanates from the transgression of a right. The fact that the owner rather than the expropriator
brings the former does not change the essential nature of the suit as an inverse condemnation, for the suit is
not based on tort, but on the constitutional prohibition against the taking of property without just
compensation. It would very well be contrary to the clear language of the Constitution to bar the recovery of just
compensation for private property taken for a public use solely on the basis of statutory prescription.

Due to the need to construct the underground tunnel, NPC should have first moved to acquire the land from the
Heirs of Macabangkit either by voluntary tender to purchase or through formal expropriation proceedings. In
either case, NPC would have been liable to pay to the owners the fair market value of the land, for Section 3(h)
of Republic Act No. 6395 expressly requires NPC to pay the fair market value of such property at the time of the
taking, thusly:

(h)To acquire, promote, hold, transfer, sell, lease, rent, mortgage, encumber and otherwise dispose of property
incident to, or necessary, convenient or proper to carry out the purposes for which the Corporation was
created:Provided, That in case a right of way is necessary for its transmission lines, easement of right of way
shall only be sought:Provided, however,That in case the property itself shall be acquired by purchase, the cost
thereof shall be the fair market value at the time of the taking of such property.

POLITICAL LAW: NPCs construction of the tunnel constituted taking of the land, and entitled owners to just
compensation

The Court held in National Power Corporation v. Ibrahim that NPC was liable to pay not merely an easement fee
but rather the full compensation for land traversed by the underground tunnels,viz:

In disregarding this procedure and failing to recognize respondents ownership of the sub-terrain portion,
petitioner took a risk and exposed itself to greater liability with the passage of time. It must be emphasized that
the acquisition of the easement is not without expense. The underground tunnels impose limitations on
respondents use of the property for an indefinite period and deprive them of its ordinary use. Based upon the
foregoing, respondents are clearly entitled to the payment of just compensation.Notwithstanding the fact that
petitioner only occupies the sub-terrain portion, it is liable to pay not merely an easement fee but rather the full
compensation for land. This is so because in this case, the nature of the easement practically deprives the
owners of its normal beneficial use. Respondents, as the owner of the property thus expropriated, are 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.

Here, like in National Power Corporation v. Ibrahim,NPC constructed a tunnel underneath the land of the Heirs
of Macabangkit without going through formal expropriation proceedings and without procuring their consent or
at least informing them beforehand of the construction. NPCs construction adversely affected the owners rights
and interests because the subterranean intervention by NPC prevented them from introducing any
developments on the surface, and from disposing of the land or any portion of it, either by sale or mortgage.

We agree with both the RTC and the CA that there was a full taking on the part of NPC, notwithstanding that
the owners were not completely and actually dispossessed. It is settled that the taking of private property for
public use, to be compensable, need not be an actual physical taking or appropriation. Indeed, the
expropriators action may be short of acquisition of title, physical possession, or occupancy but may still amount
to a taking. Compensable taking includes destruction, restriction, diminution, or interruption of the rights of
ownership or of the common and necessary use and enjoyment of the property in a lawful manner, lessening or
destroying its value. It is neither necessary that the owner be wholly deprived of the use of his property, nor
material whether the property is removed from the possession of the owner, or in any respect changes hands.

As a result, NPC should pay just compensation for the entire land. In that regard, the RTC pegged just
compensation at P500.00/square meter based on its finding on what the prevailing market value of the property
was at the time of the filing of the complaint, and the CA upheld the RTC.

POLITICAL LAW: reckoning point of just compensation on the value at the time the owners commenced these
inverse condemnation proceedings is entirely warranted.

We rule that the reckoning value is the value at the time of the filing of the complaint, as the RTC provided in its
decision. Compensation that is reckoned on the market value prevailing at the time either when NPC entered or
when it completed the tunnel, as NPC submits, would not be just, for it would compound the gross unfairness
already caused to the owners by NPCs entering without the intention of formally expropriating the land, and
without the prior knowledge and consent of the Heirs of Macabangkit. NPCs entry denied elementary due
process of law to the owners since then until the owners commenced the inverse condemnation proceedings.
The Court is more concerned with the necessity to prevent NPC from unjustly profiting from its deliberate acts
of denying due process of law to the owners. As a measure of simple justice and ordinary fairness to them,
therefore, reckoning just compensation on the value at the time the owners commenced these inverse
condemnation proceedings is entirely warranted.

In National Power Corporation v. Court of Appeals, a case that involved the similar construction of an
underground tunnel by NPC without the prior consent and knowledge of the owners, and in which we held that
the basis in fixing just compensation when the initiation of the action preceded the entry into the property was
the time of the filing of the complaint, not the time of taking, we pointed out that there was no taking when the
entry by NPC was made without intent to expropriate or was not made under warrant or color of legal authority.

CIVIL LAW: awards for rentals, moral damages, exemplary damages, and attorney's fees are deleted for
insufficiency of factual and legal bases

We also reverse and set aside the decree of the RTC for NPC to pay to the Heirs of Macabangkit the sum
equivalent to 15% of the total amount awarded, as attorneys fees, and to pay the cost. The body of the decision
did not state the factual and legal reasons why NPC was liable for attorney's fees. The terse statement found at
the end of the body of the RTCs decision,stating: xxx The contingent attorney's fee is hereby reduced from 20%
to only 15% of the total amount of the claim that may be awarded to plaintiffs, without more, did not indicate or
explain why and how the substantial liability of NPC for attorneys fees could have arisen and been determined.

In assessing attorney's fees against NPC and in favor of the respondents, the RTC casually disregarded the
fundamental distinction between the two concepts of attorneys fees the ordinary and the extraordinary.These
concepts were aptly distinguished in Traders Royal Bank Employees Union-Independent v. NLRC, thus wise:

There are two commonly accepted concepts of attorneys fees, the so-called ordinary and extraordinary. In its
ordinary concept, an attorneys fee is the reasonable compensation paid to a lawyer by his client for the legal
services he has rendered to the latter. The basis of this compensation is the fact of his employment by and his
agreement with the client.

In its extraordinary concept, an attorneys fee is an indemnity for damages ordered by the court to be paid by
the losing party in a litigation. The basis of this is any of the cases provided by law where such award can be
made, such as those authorized in Article 2208, Civil Code, and is payable not to the lawyer but to the client,
unless they have agreed that the award shall pertain to the lawyer as additional compensation or as part
thereof.

By referring to the award as contingency fees, and reducing the award from 20% to 15%, the RTC was really
referring to supposed agreement on attorneys fees between the Heirs of Macabangkit and their counsel. As
such, the concept of attorneys fees involved was the ordinary.Yet, the inclusion of the attorneys fees in the
judgment among the liabilities of NPC converted the fees to extraordinary. We have to disagree with the RTC
thereon, and we express our discomfort that the CA did not do anything to excise the clearly erroneous and
unfounded grant.

An award of attorneys fees has always been the exception rather than the rule. To start with, attorneys fees are
not awarded every time a party prevails in a suit. Nor should an adverse decision ipso facto justify an award of
attorney's fees to the winning party. The policy of the Court is that no premium should be placed on the right to
litigate.Too, such fees, as part of damages, are assessed only in the instances specified in Art. 2208,Civil Code.
Indeed,attorneys fees are in the nature of actual damages.But even when a claimant is compelled to litigate with
third persons or to incur expenses to protect his rights, attorney's fees may still be withheld where no sufficient
showing of bad faith could be reflected in a party's persistence in a suit other than an erroneous conviction of
the righteousness of his cause. And,lastly, the trial court must make express findings of fact and law that bring
the suit within the exception. What this demands is that the factual, legal or equitable justification for the
award must be set forth not only in the fallo but also in the text of the decision, or else, the award should be
thrown out for being speculative and conjectural.

CIVIL LAW: attorneys fees under quantum meruit principle are fixed at 10% of the judgment award; quantum
meruit; guidelines in determining the proper attorneys fees

Based on the pending motions of Atty. Macarupung Dibaratun and Atty. Manuel D. Ballelos to assert their
respective rights to attorneys fees, both contending that they represented the Heirs of Macabangkit in this case,
a conflict would ensue from the finality of the judgment against NPC.
Both Atty. Dibaratun and Atty. Ballelos posited that their entitlement to attorney's fees was contingent. Yet, a
contract for a contingent fees is an agreement in writing by which the fees, usually a fixed percentage of what
may be recovered in the action, are made to depend upon the success in the effort to enforce or defend a
supposed right. Contingent fees depend upon an express contract, without which the attorney can only recover
on the basis of quantum meruit.With neither Atty. Dibaratun nor Atty. Ballelos presenting a written agreement
bearing upon their supposed contingent fees, the only way to determine their right to appropriate attorney's fees
is to apply the principle of quantum meruit.

Quantum meruit literally meaning as much as he deserves is used as basis for determining an attorney's
professional fees in the absence of an express agreement. The recovery of attorneys fees on the basis of
quantum meruit is a device that prevents an unscrupulous client from running away with the fruits of the legal
services of counsel without paying for it and also avoids unjust enrichment on the part of the attorney himself.
An attorney must show that he is entitled to reasonable compensation for the effort in pursuing the clients
cause, taking into account certain factors in fixing the amount of legal fees.
Rule 20.01 of the Code of Professional Responsibility lists the guidelines for determining the proper amount of
attorney fees, to wit:
Rule 20.1 A lawyer shall be guided by the following factors in determining his fees:
a) The time spent and the extent of the services rendered or required;
b) The novelty and difficult of the questions involved;
c) The important of the subject matter;
d) The skill demanded;
e) The probability of losing other employment as a result of acceptance of the proffered case;
f) The customary charges for similar services and the schedule of fees of the IBP chapter to which he belongs;
g) The amount involved in the controversy and the benefits resulting to the client from the service;
h) The contingency or certainty of compensation;
i) The character of the employment, whether occasional or established; and
j) The professional standing of the lawyer.

In the event of a dispute as to the amount of fees between the attorney and his client, and the intervention of
the courts is sought, the determination requires that there be evidence to prove the amount of fees and the
extent and value of the services rendered, taking into account the facts determinative thereof.Ordinarily,
therefore, the determination of the attorneys fees on quantum meruit is remanded to the lower court for the
purpose. However, it will be just and equitable to now assess and fix the attorneys fees of both attorneys in
order that the resolution of a comparatively simple controversy, as Justice Regalado put it in Traders Royal
Bank Employees Union-Independent v. NLRC, would not be needlessly prolonged, by taking into due
consideration the accepted guidelines and so much of the pertinent data as are extant in the records.

In fairness and justice, the Court accords full recognition to Atty. Dibaratun as the counsel de parte of the Heirs
of Macabangkit who discharged his responsibility in the prosecution of the clients cause to its successful end. It
is he, not Atty. Ballelos, who was entitled to the full amount of attorneys fees that the clients ought to pay to
their attorney. Given the amount and quality of his legal work, his diligence and the time he expended in
ensuring the success of his prosecution of the clients cause, he deserves the recognition, notwithstanding that
some of the clients might appear to have retained Atty. Ballelos after the rendition of a favorable judgment.

Atty. Ballelos may claim only from Cebu, Batowa-an, Sayana, Nasser, Manta and Edgar, the only parties who
engaged him. The Court considers his work in the case as very minimal. His compensation under the quantum
meruit principle is fixed at P5,000.00, and only the Heirs of Macabangkit earlier named are liable to him.

WHEREFORE, the Court AFFIRMS the decision promulgated on October 5, 2004 by the Court of Appeals,
subject to the following MODIFICATIONS, to wit:

Republic VS Hon. Samson- TatadG . R . N o . 1 8 7 6 7 7 A p r i l 1 7 , 2013Ponente: Sereno, CJ.


FACTS:
O n 1 3 J u l y 2 0 0 1 , p e t i t i o n e r , r e p r e s e n t e d b y t h e D e p a r t m e n t o f P u b l i c Works and Highways
(DPWH), filed a Complaint against several defendants,including private respondents, for the expropriation of
several parcels of landaffected by the construction of the EDSA-Quezon Avenue Flyover. During thep e n d e n c y
of the proceedings, petitioner received a letter dated from the r e p o r t i n g t h a t t h e
subject property was government land. Petitioner was t h e r e f o r e p r o m p t e d
to file an Amended Complaint seeking to limit thecoverage of the
area conforming to the findings, and thereafter filed
aM a n i f e s t a t i o n a n d M o t i o n t o h a v e t h e s u b j e c t p r o p e r t y
d e c l a r e d o r considered of uncertain ownership or subject to conflicting claims. RTC
inter alia
admitted the Amended Complaint and declared the property a subject of c o n f l i c t i n g c l a i m s . P r i v a t e
respondents interposed objections, saying that p e t i t i o n e r w a s b a r r e d f r o m
p r e s e n t i n g t h e e v i d e n c e , a s i t c o n s t i t u t e d a collateral attack on the validity of their TCT No.
RT-11603. RTC rendered ano r d e r i n f a v o u r o f t h e p r i v a t e r e s p o n d e n t s . A
s u b s e q u e n t p e t i t i o n f o r certiorari was denied in the appellate court. Hence, this petition.
ISSUE:
CAN THE COURT IN THE SAME EXPROPRIATION PROCEEDING BE GIVENAUTHORITY TO ADJUDICATE ON
THE OWNERSHIP OF A PROPERTY?
HELD:
YES.
petitioner may be allowed to present evidence to assert its ownershipo v e r t h e s u b j e c t p r o p e r t y , b u t f o r
t h e s o l e p u r p o s e o f d e t e r m i n i n g w h o i s entitled to just compensation.

That the court is empowered to entertain thec o n f l i c t i n g c l a i m s o f


o w n e r s h i p o f t h e c o n d e m n e d o r s o u g h t t o b e condemned
property and adjudge the rightful owner thereof, in the sameexpropriation case, is evident
f r o m S e c t i o n 9 o f t h e R e v i s e d R u l e 6 9 , w h i c h provide
inter alia
t h a t “ c o u r t m a y o r d e r a n y s u m o r s u m s a w a r d e d a s compensation X X X
or the benefit of the persons
a d j u d g e d i n t h e s a m e proceeding to be entitled thereto.
” (Emphasis Supplied)