WALTER LUTZ, as Judicial Administrator of the Intestate of the deceased Antonio Jayme Ledesma,

plaintiff-appellant v. J. ANTONIO ARANETA, as collector of Internal Revenue, defendant-apppelle

G.R No. L-7856. December 22, 1955

REYES, J.B L., J.:

FACTS:
Appelant in this case Walter Lutz in his capacity as the Judicial Administrator of the intestate of the
deceased Antonio Jayme Ledesma, seeks to recover from the Collector of the Internal Revenue the total
sum of fourteen thousand six hundred sixty six and forty cents (P 14, 666.40) paid by the estate as taxes,
under section 3 of Commonwealth Act No. 567, also known as the Sugar Adjustment Act, for the crop
years 1948-1949 and 1949-1950. Commonwealth Act. 567 Section 2 provides for an increase of the
existing tax on the manufacture of sugar on a graduated basis, on each picul of sugar manufacturer; while
section 3 levies on the owners or persons in control of the land devoted tot he cultivation of sugarcane
and ceded to others for consideration, on lease or otherwise - "a tax equivalent to the difference between
the money value of the rental or consideration collected and the amount representing 12 per centum of
the assessed value of such land. It was alleged that such tax is unconstitutional and void, being levied for
the aid and support of the sugar industry exclusively, which in plaintiff's opinion is not a public purpose
for which a tax may be constitutionally levied. The action was dismissed by the CFI thus the plaintiff
appealed directly to the Supreme Court.

ISSUE: Whether or not the tax imposition in the Commonwealth Act No. 567 are unconstitutional.

RULING:
Yes, the Supreme Court held that the fact that sugar production is one of the greatest industry of our
nation, sugar occupying a leading position among its export products; that it gives employment to
thousands of laborers in the fields and factories; that it is a great source of the state's wealth, is one of
the important source of foreign exchange needed by our government and is thus pivotal in the plans of a
regime committed to a policy of currency stability. Its promotion, protection and advancement, therefore
redounds greatly to the general welfare. Hence it was competent for the legislature to find that the
general welfare demanded that the sugar industry be stabilized in turn; and in the wide field of its police
power, the law-making body could provide that the distribution of benefits therefrom be readjusted
among its components to enable it to resist the added strain of the increase in taxes that it had to sustain.

The subject tax is levied with a regulatory purpose, to provide means for the rehabilitation and
stabilization of the threatened sugar industry. In other words, the act is primarily a valid exercise of police
power.
 PHILIPPINE AIRLINES, INC. v. EDU
G.R. No. L- 41383, August 15, 1988

FACTS:
The Philippine Airlines (PAL) is a corporation engaged in the air transportation business under a legislative
franchise, Act No. 42739. Under its franchise, PAL is exempt from the payment of taxes.
Sometime in 1971, however, Land Transportation Commissioner Romeo F. Elevate (Elevate) issued a
regulation pursuant to Section 8, Republic Act 4136, otherwise known as the Land and Transportation and
Traffic Code, requiring all tax exempt entities, among them PAL to pay motor vehicle registration fees.
Despite PAL's protestations, Elevate refused to register PAL's motor vehicles unless the amounts imposed
under Republic Act 4136 were paid. PAL thus paid, under protest, registration fees of its motor vehicles.
After paying under protest, PAL through counsel, wrote a letter dated May 19,1971, to Land
Transportation Commissioner Romeo Edu (Edu) demanding a refund of the amounts paid. Edu denied the
request for refund. Hence, PAL filed a complaint against Edu and National Treasurer Ubaldo Carbonell
(Carbonell).

The trial court dismissed PAL's complaint. PAL appealed to the Court of Appeals which in turn certified the
case to the Supreme Court.

ISSUE:
Whether or not motor vehicle registration fees are considered as taxes.

RULING:
Yes. If the purpose is primarily revenue, or if revenue is, at least, one of the real and substantial purposes,
then the exaction is properly called a tax. Such is the case of motor vehicle registration fees. The motor
vehicle registration fees are actually taxes intended for additional revenues of the government even if one
fifth or less of the amount collected is set aside for the operating expenses of the agency administering
the program.

Product v. Fertiphil Corp.

G.R. No. 166006 March 14, 2008
REYES, R.T., J.

Lessons Applicable: Bet. private and public suit, easier to file public suit, Apply real party in interest test
for private suit and direct injury test for public suit, Validity test varies depending on which inherent power

Laws Applicable:

FACTS:
President Ferdinand Marcos, exercising his legislative powers, issued LOI No. 1465 which provided, among
others, for the imposition of a capital recovery component (CRC) on the domestic sale of all grades of
fertilizers which resulted in having Fertiphil paying P 10/bag sold to the Fertilizer and Perticide Authority
(FPA).
FPA remits its collection to Far East Bank and Trust Company who applies to the payment of corporate
debts of Planters Products Inc. (PPI)
After the Edsa Revolution, FPA voluntarily stopped the imposition of the P10 levy. Upon return of
democracy, Fertiphil demanded a refund but PPI refused. Fertiphil filed a complaint for collection and
damages against FPA and PPI with the RTC on the ground that LOI No. 1465 is unjust, unreaonable
oppressive, invalid and unlawful resulting to denial of due process of law.
FPA answered that it is a valid exercise of the police power of the state in ensuring the stability of the
fertilizing industry in the country and that Fertiphil did NOT sustain damages since the burden imposed
fell on the ultimate consumers.
RTC and CA favored Fertiphil holding that it is an exercise of the power of taxation ad is as such because
it is NOT for public purpose as PPI is a private corporation.
ISSUE:
1. W/N Fertiphil has locus standi
2. W/N LOI No. 1465 is an invalid exercise of the power of taxation rather the police power

Held:
1. Yes. In private suits, locus standi requires a litigant to be a "real party in interest" or party who stands
to be benefited or injured by the judgment in the suit. In public suits, there is the right of the ordinary
citizen to petition the courts to be freed from unlawful government intrusion and illegal official action
subject to the direct injury test or where there must be personal and substantial interest in the case such
that he has sustained or will sustain direct injury as a result. Being a mere procedural technicality, it has
also been held that locus standi may be waived in the public interest such as cases of transcendental
importance or with far-reaching implications whether private or public suit, Fertiphil has locus standi.

2. As a seller, it bore the ultimate burden of paying the levy which made its products more expensive and
harm its business. It is also of paramount public importance since it involves the constitutionality of a tax
law and use of taxes for public purpose.

3. Yes. Police power and the power of taxation are inherent powers of the state but distinct and have
different tests for validity. Police power is the power of the state to enact the legislation that may
interfere with personal liberty on property in order to promote general welfare. While, the power of
taxation is the power to levy taxes as to be used for public purpose. The main purpose of police power is
the regulation of a behavior or conduct, while taxation is revenue generation. The lawful subjects and
lawful means tests are used to determine the validity of a law enacted under the police power. The power
of taxation, on the other hand, is circumscribed by inherent and constitutional limitations.

In this case, it is for purpose of revenue. But it is a robbery for the State to tax the citizen and use the
funds generation for a private purpose. Public purpose does NOT only pertain to those purpose which
are traditionally viewed as essentially governmental function such as building roads and delivery of basic
services, but also includes those purposes designed to promote social justice. Thus, public money may
now be used for the relocation of illegal settlers, low-cost housing and urban or agrarian reform.

ASSOCIATION OF SMALL LANDOWNERS VS SEC. OF AGRARIAN REFORM (1989)

30 Nov 2017
[175 SCRA 343; G.R. NO. L-78742; 14 JUL 1989] Constitutional Law| Police Power| Power of Eminent
Domain

FACTS:
The following are consolidated cases:
A petition alleging the constitutionality of PD No. 27, EO 228 and 229 and RA 6657. Subjects of the petition
are a 9-hectare and 5 hectare Riceland worked by four tenants. Tenants were declared full owners by EO
228 as qualified farmers under PD 27. The petitioners now contend that President Aquino usurped the
legislature‘s power.
A petition by landowners and sugar planters in Victoria‘s Mill Negros Occidental against Proclamation 131
and EO 229. Proclamation 131 is the creation of Agrarian Reform Fund with initial fund of P50Billion.
A petition by owners of land which was placed by the DAR under the coverage of Operation Land Transfer.
A petition invoking the right of retention under PD 27 to owners of rice and corn lands not exceeding
seven hectares.

ISSUE: Whether the aforementioned EO‘s, PD, and RA were constitutional.

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

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

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

The Court declares that the content and manner of the just compensation provided for in Section 18 of
the CARP Law is not violative of the Constitution.

August 21, 2017

MMDA vs Bel-Air Village Assoc.
March 27, 2000

Puno, J.

FACTS

Petitioner MMDA is a government agency tasked with the delivery of basic services in Metro Manila.
Respondent Bel-Air Village Association, Inc. (BAVA) is a non-stock, non-profit corporation whose members
are homeowners in Bel-Air Village, a private subdivision in Makati City. Respondent BAVA is the registered
owner of Neptune Street, a road inside Bel-Air Village.

On December 30, 1995, respondent received from petitioner, through its Chairman, a notice dated
December 22, 1995 requesting respondent to open Neptune Street to public vehicular traffic starting
January 2, 1996.

Actions Filed:
1. BAVA – applied for injunction; trial court issued temporary restraining order but after due hearing,
trial court denied the issuance of a preliminary injunction.
2. BAVA – appealed to CA which issued preliminary injunction and later ruled that MMDA has no
authority to order the opening of Neptune Street, a private subdivision road and cause the demolition of
its perimeter walls. It held that the authority is lodged in the City Council of Makati by ordinance.
MMDA – filed motion for reconsideration but was denied by CA; hence the current recourse.

ISSUES

1. 1. Has the MMDA the mandate to open Neptune Street to public traffic pursuant to its
regulatory and police powers?
2. Is the passage of an ordinance a condition precedent before the MMDA may order the opening
of subdivision roads to public traffic?

HELD

The MMDA is, as termed in the charter itself, "development authority." All its functions are administrative
in nature.

The powers of the MMDA are limited to the following acts: formulation, coordination, regulation,
implementation, preparation, management, monitoring, setting of policies, installation of a system and
administration. There is no syllable in R.A. No. 7924 that grants the MMDA police power, let alone
legislative power.

The MMDA has no power to enact ordinances for the welfare of the community. It is the local government
units, acting through their respective legislative councils that possess legislative power and police power.
In the case at bar, the Sangguniang Panlungsod of Makati City did not pass any ordinance or resolution
ordering the opening of Neptune Street, hence, its proposed opening by petitioner MMDA is illegal and
the respondent Court of Appeals did not err in so ruling.

The MMDA was created to put some order in the metropolitan transportation system but unfortunately
the powers granted by its charter are limited. Its good intentions cannot justify the opening for public use
of a private street in a private subdivision without any legal warrant. The promotion of the general welfare
is not antithetical to the preservation of the rule of law.

DISPOSITION

IN VIEW WHEREOF, the petition is denied. The Decision and Resolution of the Court of Appeals
are affirmed.
 MMDA V. GARIN

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

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

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

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

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

Issue:

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

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

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

Metropolitan or Metro Manila is a body composed of several local government units. With the passage of
Rep. Act No. 7924 in 1995, Metropolitan Manila was declared as a "special development and
administrative region" and the administration of "metro-wide" basic services affecting the region placed
under "a development authority" referred to as the MMDA. Thus: The MMDA is, as termed in the charter
itself, a "development authority." It is an agency created for the purpose of laying down policies and
coordinating with the various national government agencies, people's organizations, non-governmental
organizations and the private sector for the efficient and expeditious delivery of basic services in the vast
metropolitan area. All its functions are administrative in nature and these are actually summed up in the
charter itself
* Section 5 of Rep. Act No. 7924 enumerates the "Functions and Powers of the Metro Manila Development
Authority." The contested clause in Sec. 5(f) states that the petitioner shall "install and administer a single
ticketing system, fix, impose and collect fines and penalties for all kinds of violations of traffic rules and
regulations, whether moving or non-moving in nature, and confiscate and suspend or revoke drivers'
licenses in the enforcement of such traffic laws and regulations, the provisions of Rep. Act No. 4136 and
P.D. No. 1605 to the contrary notwithstanding," and that "(f)or this purpose, the Authority shall enforce
all traffic laws and regulations in Metro Manila, through its traffic operation center, and may deputize
members of the PNP, traffic enforcers of local government units, duly licensed security guards, or
members of non-governmental organizations to whom may be delegated certain authority, subject to
such conditions and requirements as the Authority may impose."

Metropolitan Manila Development Authority vs. Trackworks Rail Transit Advertising, Vending and
Promotions, Inc.
G.R. No. 179554 December 16, 2009

Petitioner: Metropolitan Manila Development Authority

Respondent: Trackworks Rail Transit Advertising, Vending and Promotions, Inc.

Facts: In 1997, the Government, through the Department of Transportation and Communications,
entered into a build-lease-transfer agreement (BLT agreement) with Metro Rail Transit Corporation,
Limited (MRTC) pursuant to Republic Act No. 6957 (Build, Operate and Transfer Law), under which MRTC
undertook to build MRT3 subject to the condition that MRTC would own MRT3 for 25 years, upon the
expiration of which the ownership would transfer to the Government. In 1998, respondent Trackworks
Rail Transit Advertising, Vending & Promotions, Inc. (Trackworks) entered into a contract for advertising
services with MRTC. Trackworks thereafter installed commercial billboards, signages and other advertising
media in the different parts of the MRT3. In 2001, however, MMDA requested Trackworks to dismantle
the billboards, signages and other advertising media pursuant to MMDA Regulation No. 96-009, whereby
MMDA prohibited the posting, installation and display of any kind or form of billboards, signs, posters,
streamers, in any part of the road, sidewalk, center island, posts, trees, parks and open space. After
Trackworks refused the request of MMDA, MMDA proceeded to dismantle the former’s billboards and
similar forms of advertisement.

Issue: Whether MMDA has the power to dismantle, remove or destroy the billboards, signages and other
advertising media installed by Trackworks on the interior and exterior structures of the MRT3.

Ruling: That Trackworks derived its right to install its billboards, signages and other advertising media in
the MRT3 from MRTC’s authority under the BLT agreement to develop commercial premises in the MRT3
structure or to obtain advertising income therefrom is no longer debatable. Under the BLT agreement,
indeed, MRTC owned the MRT3 for 25 years, upon the expiration of which MRTC would transfer
ownership of the MRT3 to the Government.
Considering that MRTC remained to be the owner of the MRT3 during the time material to this case, and
until this date, MRTC’s entering into the contract for advertising services with Trackworks was a valid
exercise of ownership by the former. In fact, in Metropolitan Manila Development Authority v. Trackworks
Rail Transit Advertising, Vending & Promotions, Inc., this Court expressly recognized Trackworks’ right to
install the billboards, signages and other advertising media pursuant to said contract. The latter’s right
should, therefore, be respected.
It is futile for MMDA to simply invoke its legal mandate to justify the dismantling of Trackworks’ billboards,
signages and other advertising media. MMDA simply had no power on its own to dismantle, remove, or
destroy the billboards, signages and other advertising media installed on the MRT3 structure by
Trackworks. In Metropolitan Manila Development Authority v. Bel-Air Village Association, Inc.,
Metropolitan Manila Development Authority v. Viron Transportation Co., Inc., and Metropolitan Manila
Development Authority v. Garin, the Court had the occasion to rule that MMDA’s powers were limited to
the formulation, coordination, regulation, implementation, preparation, management, monitoring,
setting of policies, installing a system, and administration. Nothing in Republic Act No. 7924 granted
MMDA police power, let alone legislative power.

The Court also agrees with the CA’s ruling that MMDA Regulation No. 96-009 and MMC Memorandum
Circular No. 88-09 did not apply to Trackworks’ billboards, signages and other advertising media. The
prohibition against posting, installation and display of billboards, signages and other advertising media
applied only to public areas, but MRT3, being private property pursuant to the BLT agreement between
the Government and MRTC, was not one of the areas as to which the prohibition applied.

SOCIAL JUSTICE SOCIETY VS ATIENZA (2008)

26 Nov 2017
[545 scra 92; G.R. No. 156052; February 13, 2008] Constitutional Law| Police Power

FACTS:

Petitioners Social Justice Society (SJS) et.al. filed a petition against Hon. Jose L. Atienza, Jr., then mayor of
the City of Manila, to enforce Ordinance No. 8027, reclassifying the Oil Depot in Pandacan Terminal, from
industrial to commercial area and to cease and desist from operating their businesses from the date of
effectivity of the ordinance.

Oil companies, Chevron, Shell, Petron as well as DOE sought to intervene and asked for the nullification
of said ordinance. The oil companies assert that they have a legal interest in this case because the
implementation of Ordinance No. 8027 will directly affect their business and property rights. They allege
that they stand to lose billions of pesos if forced to relocate.

On the other hand, the Committee on Housing, Resettlement and Urban Development of the City of
Manila who recommended the approval of the ordinance cited:

The depot facilities contained 313.5 million liters of highly flammable and highly volatile products which
include petroleum gas, liquefied petroleum gas, aviation fuel, diesel, gasoline, kerosene and fuel oil among
others;
The depot is open to attack through land, water or air;
It is situated in a densely populated place and near Malacañang Palace and
In case of an explosion or conflagration in the depot, the fire could spread to the neighboring
communities.

ISSUE:
Whether the enactment of the ordinance a legitimate exercise of Police Power.

HELD:

Yes. The ordinance was intended to safeguard the rights to life, security and safety of all the inhabitants
of Manila and not just of a particular class.
In the exercise of police power, property rights of individuals may be subjected to restraints and burdens
in order to fulfill the objectives of the government. Otherwise stated, the government may enact
legislation that may interfere with personal liberty, property, lawful businesses and occupations to
promote the general welfare.However, the interference must be reasonable and not arbitrary. And to
forestall arbitrariness, the methods or means used to protect public health, morals, safety or welfare must
have a reasonable relation to the end in view.

Essentially, the oil companies are fighting for their right to property. They allege that they stand to lose
billions of pesos if forced to relocate. However, based on the hierarchy of constitutionally protected rights,
the right to life enjoys precedence over the right to property. The reason is obvious: life is irreplaceable,
property is not. When the state or LGU’s exercise of police power clashes with a few individuals’ right to
property, the former should prevail.

SC reiterated the enforcement of Ordinance No. 8027.