MACTAN Consti

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    MACTAN-CEBU INTL AIRPORT V LOZADA, G.R. 176625

    FACTS: Subject of this case is a lot (Lot No. 88) located in Lahug, Cebu City. Its

    original owner was nastacio !ei"arine when the sa#e was subject to e$"ro"riation

    "roceedings, initiated by %e"ublic, re"resented by the then Ci&il eronautics

    d#inistration (C), for the e$"ansion and i#"ro&e#ent of the Lahug ir"ort.

    !uring the "endency of the e$"ro"riation "roceedings, res"ondent 'ernardo L.Loada, Sr. acuired Lot No. 88 fro# !ei"arine. *he trial court ruled for the %e"ublic

    and ordered the latter to "ay Loada the fair #ar+et &alue of the lot. owe&er, the

    "rojected i#"ro&e#ent and e$"ansion "lan of the old Lahug ir"ort, howe&er, was

    not "ursued. *he "lainti-res"ondents initiated a co#"laint for the reco&ery of

    "ossession and recon&eyance of ownershi" the subject lot. /n the other hand, the

    "etitioners as+ed for the i##ediate dis#issal of the co#"laint. *hey s"eci0cally

    denied that the 1o&ern#ent had #ade assurances to recon&ey Lot No. 88 to

    res"ondents in the e&ent that the "ro"erty would no longer be needed for air"ort

    o"erations. 2etitioners instead asserted that the judg#ent of conde#nation was

    unconditional, and res"ondents were, therefore, not entitled to reco&er the

    e$"ro"riated "ro"erty notwithstanding nonuse or abandon#ent thereof. *he lower

    court ruled for herein "lainti-res"ondents, which decision was a3r#ed by the

    Court of ""eals. In this "etition, the "etitioners argued that the judg#ent in Ci&il

    Case No. %4884 was absolute and unconditional, gi&ing title in fee si#"le to the

    %e"ublic.

    ISSUE: 5hether or not a constructi&e trust was constituted in this case, and as

    such, the res"ondents herein are entitled to the restitution of the e$"ro"riated

    "ro"erty which was not used for a "ublic "ur"ose.

    HELD: 67S. rt. 49 of the Ci&il Code "ro&ides: If an absolute con&eyance of

    "ro"erty is #ade in order to secure the "erfor#ance of an obligation of the grantor

    toward the grantee, a trust by &irtue of law is established. If the ful0ll#ent of the

    obligation is o-ered by the grantor when it beco#es due, he #ay de#and the

    recon&eyance of the "ro"erty to hi#.;

    Constructi&e trusts are 0ctions of euity which are bound by no unyielding for#ula

    when they are used by courts as de&ices to re#edy any situation in which the

    holder of legal title #ay not in good conscience retain the bene0cial interest.

    In constructi&e trusts, the arrange#ent is te#"orary and "assi&e in which the

    trustee

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    "lainti-bene0ciary will secure a bene0t fro# his acts.

    *he rights and obligations between the constructi&e trustee and the bene0ciary, in

    this case, res"ondent =CI and "etitioners o&er Lots Nos. >4? and >@A, are

    echoed in rt. 44>A of the Ci&il Code, 5hen the conditions ha&e for their "ur"ose

    the e$tinguish#ent of an obligation to gi&e, the "arties, u"on the ful0ll#ent of saidconditions, shall return to each other what they ha&e recei&ed $ $ $ In case of the

    loss, deterioration or i#"ro&e#ent of the thing, the "ro&isions which, with res"ect

    to the debtor, are laid down in the "receding article shall be a""lied to the "arty

    who is bound to return $ $ $.

    DE OANO V REPUBLIC, G.R. 16877

    F!"#$% 2etitioners nunciacion &da. de /uano, =ario /uano, Leticia /uano rnai

    and Cielo /uano =artine (the /uanos) see+ to nullify the !ecisionB4 dated

    Se"te#ber D, @AA of the Court of ""eals (C) in C1.%. CE No. F8A@F, a3r#ing

    the /rder dated !ece#ber >, @AA@ of the %egional *rial Court (%*C), 'ranch 9F in

    Cebu City, in Ci&il Case No. C7'@AFD, a suit to co#"el the %e"ublic of the

    2hili""ines andGor the =actanCebu International ir"ort uthority (=CI) to

    recon&ey to the /uanos a "arcel of land.

    I$$&'% 5hether abandon#ent of the "ublic use for which the subject "ro"erties

    were e$"ro"riated entitles "etitioners to reacuire the#

    R&()*+% If, for e$a#"le, land is e$"ro"riated for a "articular "ur"ose, with the

    condition that when that "ur"ose is ended or abandoned the "ro"erty shall return to

    its for#er owner, then of course, when the "ur"ose is ter#inated or abandoned, the

    for#er owner reacuires the "ro"erty so e$"ro"riated. If, u"on the contrary,

    howe&er the decree of e$"ro"riation gi&es to the entity a fee si#"le title, then, of

    course, the land beco#es the absolute "ro"erty of the e$"ro"riatorH and in that

    case the nonuser does not ha&e the e-ect of defeating the title acuired by the

    e$"ro"riation "roceedings.

    CHAPTER I - THE NON-IMPAIRMENT CLAUSE

    S'"#)* 1. N (! )/0!))*+ #' 3()+!#)* 4 "*#!"#$ $!(( 3' 0!$$'.

    1. R'!%

    1. !3)()*+, '# !(., $. NHA, D'"'/3' 18,(87

    acts:

    2etitionersJ are a#ong the landowners whose title to their res"ecti&e lots

    ha&e already been transferred to res"ondent N "ursuant to the "ro&isions of 2.!.

    No. 48A8. 5herein said "etitioners assailed the constitutionality of 2.! . No. 48A8.

    lleging that said 2.! . No. 48A8 4) it de"ri&es the# of their "ro"erty without due

    "rocess of law and without just co#"ensation and of their right to eual "rotection

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    of the lawK and @) it &iolates the constitutional "rohibition against i#"air#ent of the

    obligation of contracts.

    *he stated objecti&e of the decree, na#ely, to resol&e the land tenure

    "roble# in the gnoLe&eria area to allow the i#"le#entation of the

    co#"rehensi&e de&elo"#ent "lans for this de"ressed co##unity, "ro&ides the

    justi0cation for the e$ercise of the "olice "ower of the State. *he "olice "ower of theState has been described as the #ost essential, insistent and illi#itable of "owers.

    *he objection raised by "etitioners that 2.!. No. 48A8 i#"airs the obligations

    of contract is without #erit. *he constitutional guaranty of noni#"air#ent of

    obligations of contract is li#ited by and subject to the e$ercise of the "olice "ower

    of the State in the interest of "ublic health, safety, #orals and general welfare. 9or

    the sa#e reason, "etitioners can not co#"lain that they are being de"ri&ed of their

    "ro"erty without due "rocess of law.

    Nor can "etitioners clai# that their "ro"erties are being e$"ro"riated without

    just co#"ensation, since Sec. D of 2.!. No. 48A8 "ro&ides for just co#"ensation to

    lot owners who ha&e fully "aid their obligations to the City of =anila under their

    res"ecti&e contracts before the issuance of the decree. owe&er, in accordance with

    our decision in 7$"ort 2rocessing Mone uthority &s. on. Ceferino !ulay, etc., et al.,

    1.%. No. 9>?AD, "ril @>, 4>8F, which declared 2.!. No. 49DD unconstitutional, those

    lot owners who ha&e not yet recei&ed co#"ensation under the decree are entitled

    to a judicial deter#ination of the just co#"ensation for their lots.

    2. C('/*$ $. N(#)*+, :2 P)(. 72

    9. C $. PNB, 11: SCRA 8:2

    /n No&e#ber 4A, 4>?4, the Standard 2arts =anufacturing Cor"oration,

    hereinafter to be referred to si#"ly as S*N!%!, e$ecuted a real estate #ortgage

    in fa&or of herein defendanta""ellant 2hili""ine National 'an+, hereinafter to be

    referred to si#"ly as 2N', o&er "ro"erties co&ered by *ransfer Certi0cates of *itle

    Nos. *94A8 and *9D@A, both situated in 'aguio City, as collateral for a loan

    consideration of 29AA,AAA.AA. /n ebruary @A, 4>?D, the sa#e debtor cor"oration

    e$ecuted an a#ended real estate #ortgage to include as collateral for the increase

    of the abo&e loan to 24,AAA,AAA.AA a "ro"erty located at 2asong *a#o 7$tension

    within the =unici"ality of =a+ati (then "art of %ial 2ro&ince and now of =etro

    =anila) co&ered by *ransfer Certi0cate of *itle No. 9F. dditionally, on ebruary

    @A, 4>?D, the sa#e cor"oration e$ecuted in fa&or of 2N' a chattel #ortgage of its

    "ersonal "ro"erties listed on "ages >? to 4A8 of the %ecord on ""eal. /n "ages ?F

    of a""ellantJs brief it is stated that as of uly 4>, 4>F, the borrowed loan of

    S*N!%! totalled 2,@>?,8AD.9?, and that the said obligation was secured, as

    afore#entioned, by the #ortgages on the 'aguio and =a+ati real estates of

    S*N!%! and the chattel #ortgage on its "ersonal "ro"erties abo&e referred to.

    5hen S*N!%! failed to "ay its obligation, 2N' e$trajudicially foreclosed

    the #ortgage on the 'aguio "ro"erties as well as the chattel #ortgage on uly 4>,

    4>F, with 2N' as the highest bidder for 24,94,DA9.AA. Subseuently, on ugust 8,

    4>F, 2N' also foreclosed the #ortgage on the =a+ati "ro"erty and "urchased the

    sa#e, as highest bidder, for 24,D?D,AAA.AA.

    How about the amount needed for such redemption?

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    /n this score, 2N' insists on ". > et. se. of its brief on the a""licability to

    this case of Section @9 of 2residential !ecree No. ?>, otherwise +nown as the new

    2N' Charter which "ro&ides:

    Section @9. Right of Redemption of Foreclosed Property Right of

    Possession During Redemption PeriodO 5ithin one year fro# the registration of the

    foreclosure sale of real estate, the #ortgagor shall ha&e the right to redee# the"ro"erty by "aying all clai#s of the 'an+ against hi# on the date of the sale

    including all the costs and other e$"enses incurred by reason of the foreclosure sale

    and custody of the "ro"erty, as well as charges and accrued interests.

    'ut 2.!. ?> too+ e-ect only on =ay 8, 4>F9. 2N'Js counsel hi#self has, as

    already #entioned abo&e, ta+en the "osition that it was the old 2N' Charter,

    %e"ublic ct 4DAA, that was e$"ressly #ade "art of the contract. In other words, it

    was by &irtue of such contractual sti"ulation and not ex propio vigorethat the

    "ro&isions of the ban+Js then current charter bound the #ortgagor S*N!%!. 'ut

    "rescinding fro# "ossible legal Paw in such "ose and that all "ro&isions of the

    charter are enforceable and #ust be read into all #ortgages with the 2N' as

    integral "arts thereof, in this instant case, the Court 0nds its hands inert and

    shac+led in the face of the constitutional "roscri"tion against the i#"air#ent of

    contracts. (Sec. 44, rt. IE, New Constitution) Stated otherwise, since the contract of

    #ortgage herein was entered into under a s"eci0c law, %e"ublic ct 4DAA, e&en the

    "rinci"le that no law is una#endable nor unre"ealable cannot hold, when the

    subseuent legislati&e enact#ent, 2.!. ?>, would alter and #odify to the "rejudice

    of any of the "arties the ter#s of the contract under the aegis of the "rior law.

    Indis"utably, the a""lication of 2.!. ?> to the #ortgage herein in&ol&ed would

    &iolate the Constitution. ence, it si#"ly cannot a""ly.

    Stated otherwise, by &irtue of the "ro&ision of the #ortgage contract

    "recisely cited by 2N', na#ely, its "aragra"h (g), uoted earlier, 2N' had the

    contractually acuired o"tion to resort either to its Charter, %e"ublic ct 4DAA or to

    ct D4D9. 5hen it foreclosed the #ortgage at issue, it chose ct D4D9. *hat was an

    o"tion it freely e$ercised without the least inter&ention of a""ellee. nd it was

    e$ercised before 2.!. ?> ca#e into being. In fact, the foreclosure sales too+ "lace

    in 4>F yet. nd so, to #a+e the rede#"tion subject to a subseuent law would be

    ob&iously "rejudicial to the "arty e$ercising the right to redee#. 5ithout

    considering the date the loan was secured and the date of the #ortgage contract,

    and ta+ing into account only the dates of the foreclosures and auction sales, it is

    uite ob&ious that any change in the law go&erning rede#"tion that would #a+e it

    #ore di3cult than under the law at the ti#e of the sale cannot be gi&en retroacti&e

    e-ect. Qnder the ter#s of the #ortgage contract, the ter#s and conditions under

    which rede#"tion #ay be e$ercised are dee#ed "art and "arcel thereof whether

    the sa#e be #erely con&entional or i#"osed by law. *o alter those ter#s in a

    #anner "rejudicial to the #ortgagor or the "erson redee#ing the "ro"erty as his

    successorininterest after the foreclosures and sales would de0nitely co#e within

    the constitutional "roscri"tion against i#"air#ent of the obligations of contracts.

    :. L;!* $. M!#)*';,1:6 SCRA 929

    5. R#' $. E$#'3!*,9 P)(. 68

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    F!"#$% /n @A ugust 4>4, %oyal L. %utter sold to 2lacido . 7steban @ "arcels of

    land situated in the City of =anila. *o secure the "ay#ent of said balance of 2,8AA,

    a 0rst #ortgage o&er the sa#e "arcels of land has been constituted in fa&or of

    %utter. *he deed of sale ha&ing been registered, a new title was issued in fa&or of

    2lacido . 7steban with the #ortgage duly annotated on the bac+ thereof. 7steban

    failed to "ay the two install#ents as agreed u"on, as well as the interest that hadaccrued thereon, and so on @ ugust 4>>, %utter instituted an action in the Court

    of irst Instance (CI) =anila to reco&er the balance due, the interest due thereon,

    and the attorneyJs fees sti"ulated in the contract. *he co#"laint also contains a

    "rayer for the sale of the "ro"erties #ortgaged in accordance with law. 7steban

    ad#itted a&er#ents of the co#"laint but set u" defense on the #oratoriu# clause

    e#bodied in % D@ (a""ro&ed @? uly 4>8), allowing a war su-erer 8 years fro#

    the settle#ent of his clai# by the 2hili""ine 5ar !a#age Co##ission. fter a

    #otion for su##ary judg#ent has been "resented by 7steban, and the reuisite

    e&idence sub#itted co&ering the rele&ant facts, the court rendered judg#ent

    dis#issing the co#"laint holding that the obligation which %utter see+s to enforce is

    not yet de#andable under the #oratoriu# law. %utter 0led a #otion for

    reconsideration wherein he raised for the 0rst ti#e the constitutionality of the

    #oratoriu# law, but the #otion was denied. %utter a""ealed.

    I$$&'% 5hether %e"ublic ct D@ is unconstitutional for being &iolati&e of the

    constitutional "ro&ision forbidding the i#"air#ent of the obligation of contracts.

    H'(% Statutes declaring a #oratoriu# on the enforce#ent of #onetary obligations

    are not of recent enact#ent. *hese #oratoriu# laws are not new. =oratoriu# laws

    ha&e been ado"ted during ti#es of 0nancial distress, es"ecially when incident to,

    or caused by, a war. *he =oratoriu# Law is a &alid e$ercise by the State of its

    "olice "ower, being an e#ergency #easure. lthough conceding that the

    obligations of the contract were i#"aired, the i#"air#ent was within the "olice

    "ower of the State as that "ower was called into e$ercise by the "ublic econo#ic

    e#ergency which the legislature had found to e$ist. Not only is the constitutional

    "ro&ision (contract clause) uali0ed by the #easure of control which the State

    retains o&er re#edial "rocesses, but the State also continues to "ossess authority

    to safeguard the &ital interest of its "eo"le. It does not #atter that legislation

    a""ro"riate to that end has the result of #odifying or abrogating contracts already

    in e-ect. Not only are e$isting laws read into contracts in order to 0$ obligations as

    between the "arties, but the reser&ation of essential attributes of so&ereign "ower

    is also read into contracts as a "ostulate of the legal order. *he "olicy of "rotecting

    contracts against i#"air#ent "resu""oses the #aintenance of a go&ern#ent by

    &irtue of which contractual relations are worth while, a go&ern#ent which retains

    adeuate authority to secure the "eace and good order of society. So#e of these

    laws, howe&er, ha&e also been declared &oid as to contracts #ade before their

    "assage where the sus"ension of re#edies "rescribed is inde0nite or unreasonable

    in duration. *he true test, therefore, of the constitutionality of a #oratoriu# statute

    lies in the deter#ination of the "eriod of sus"ension of the re#edy. It is reuired

    that such sus"ension be de0nite and reasonable, otherwise it would be &iolati&e of

    the constitution. erein, obligations had been "ending since 4>9 as a result of the

    issuance of 7$ecuti&e /rders @9 and D@ and at "resent their enforce#ent is still

    inhibited because of the enact#ent of %e"ublic ct D@ and would continue to be

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    unenforceable during the 8year "eriod granted to "rewar debtors to a-ord the# an

    o""ortunity to rehabilitate the#sel&es, which in "lain language #eans that the

    creditors would ha&e to obser&e a &igil of at least 4@ years before they could e-ect

    a liuidation of their in&est#ent dating as far bac+ as 4>4. *his "eriod see#s to be

    unreasonable, if not o""ressi&e. 5hile the "ur"ose of Congress is "lausible, and

    should be co##ended, the relief accorded wor+s injustice to creditors who are"ractically left at the #ercy of the debtors. *heir ho"e to e-ect collection beco#es

    e$tre#ely re#ote, #ore so if the credits are unsecured. nd the injustice is #ore

    "atent when, under the law, the debtor is not e&en reuired to "ay interest during

    the o"eration of the relief. *hus, the Court declared that the continued o"eration

    and enforce#ent of %e"ublic ct D@ at the "resent ti#e is unreasonable and

    o""ressi&e, and should not be "rolonged a #inute longer, and the sa#e should be

    declared null and &oid and without e-ect. *his also holds true as regards 7$ecuti&e

    /rders @9 and D@, considering that said /rders contain no li#itation whatsoe&er in

    "oint of ti#e as regards the sus"ension of the enforce#ent and e-ecti&ity of

    #onetary obligations. *his "ronounce#ent is #ost es"ecially needed in &iew of the

    re&i&al clause e#bodied in said ct if and when it is declared unconstitutional or

    in&alid.

    6. I(&$) $. CAR, 17 SCRA 25

    2etitioners, charged with 'atas 2a#bansa 'ilang @@ ('2 @@ for short), "o"ularly

    +nown as the 'ouncing Chec+ Law, assail the lawJs constitutionality.

    '2 @@ "unishes a "erson who #a+es or draws and issues any chec+ on account or

    for &alue, +nowing at the ti#e of issue that he does not ha&e su3cient funds in or

    credit with the draweeban+ for the "ay#ent of said chec+ in full u"on "resent#ent,

    which chec+ is subseuently dishonored by the drawee ban+ for insu3ciency of

    funds or credit or would ha&e been dishonored for the sa#e reason had not the

    drawer, without any &alid reason, ordered the ban+ to sto" "ay#ent. *he "enalty

    "rescribed for the o-ense is i#"rison#ent of not less than DA days nor #ore than

    one year or a 0ne or not less than the a#ount of the chec+ nor #ore than double

    said a#ount, but in no case to e$ceed 2@AA,AAA.AA, or both such 0ne and

    i#"rison#ent at the discretion of the court.

    *he statute li+ewise i#"oses the sa#e "enalty on any "erson who, ha&ing

    su3cient funds in or credit with the drawee ban+ when he #a+es or draws and

    issues a chec+, shall fail to +ee" su3cient funds or to #aintain a credit to co&er the

    full a#ount of the chec+ if "resented within a "eriod of ninety (>A) days fro# the

    date a""earing thereon, for which reason it is dishonored by the drawee ban+.

    n essential ele#ent of the o-ense is +nowledge on the "art of the #a+er or

    drawer of the chec+ of the insu3ciency of his funds in or credit with the ban+ to

    co&er the chec+ u"on its "resent#ent. Since this in&ol&es a state of #ind di3cult to

    establish, the statute itself creates a"ri#a facie "resu#"tion of such +nowledge

    where "ay#ent of the chec+ is refused by thedrawee because of insu3cient funds

    in or credit with such ban+ when "resented within ninety (>A) days fro# the date of

    the chec+. *o #itigate the harshness of the law in its a""lication, the statute

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    "ro&ides that such "resu#"tion shall not arise if within 0&e (9) ban+ing days fro#

    recei"t of the notice of dishonor, the #a+er or drawer #a+es arrange#ents for

    "ay#ent of the chec+ by the ban+ or "ays the holder the a#ount of the chec+.

    nother "ro&ision of the statute, also in the nature of a rule of e&idence, "ro&ides

    that the introduction in e&idence of the un"aid and dishonored chec+ withthe drawee ban+Js refusal to "ay sta#"ed or written thereon or attached thereto,

    gi&ing the reason therefor, shall constitute "ri#afacie "roof of the #a+ing or

    issuance of said chec+, and the due "resent#ent to the drawee for "ay#ent and

    the dishonor thereof ... for the reason written, sta#"ed or attached by

    the drawee on such dishonored chec+.

    *he "resu#"tions being #erely "ri#a facie, it is o"en to the accused of course to

    "resent "roof to the contrary to o&erco#e the said "resu#"tions.

    ISSUE%5hether or not (5GN) '2 @@ &iolates the constitutional "ro&ision forbidding

    i#"rison#ent for debt.

    HELD%No.

    *he gra&a#en of the o-ense "unished by '2 @@ is the act of #a+ing and issuing a

    worthless chec+ or a chec+ that is dishonored u"on its "resentation for "ay#ent. It

    is not the non"ay#ent of an obligation which the law "unishes. *he law is not

    intended or designed to coerce a debtor to "ay his debt. *he thrust of the law is to

    "rohibit, under "ain of "enal sanctions, the #a+ing of worthless chec+s and "utting

    the# in circulation. 'ecause of its deleterious e-ects on the "ublic interest, the

    "ractice is "roscribed by the law. *he law "unishes the act not as an o-ense against

    "ro"erty, but an o-ense against "ublic order.

    *he e-ects of the issuance of a worthless chec+ transcends the "ri&ate interests of

    the "arties directly in&ol&ed in the transaction and touches the interests of the

    co##unity at large. *he #ischief it creates is not only a wrong to the "ayee or

    holder, but also an injury to the "ublic. *he har#ful "ractice of "utting &alueless

    co##ercial "a"ers in circulation, #ulti"lied a thousand fold, can &ery wen "ollute

    the channels of trade and co##erce, injure the ban+ing syste# and e&entually hurt

    the welfare of society and the "ublic interest.

    *he enact#ent of '2 @@ is a declaration by the legislature that, as a #atter of "ublic

    "olicy, the #a+ing and issuance of a worthless chec+ is dee#ed "ublic nuisance to

    be abated by the i#"osition of "enal sanctions.

    ISSUE% 5GN '2 @@ i#"airs the freedo# to contract.

    HELD%No. *he freedo# of contract which is constitutionally "rotected is freedo# to

    enter into lawful contracts. Contracts which contra&ene "ublic "olicy are not

    lawful. 'esides, we #ust bear in #ind that chec+s can not be categoried as #ere

    contracts. It is a co##ercial instru#ent which, in this #ode# day and age, has

    beco#e a con&enient substitute for #oneyK it for#s "art of the ban+ing syste# and

    therefore not entirely free fro# the regulatory "ower of the state.

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    7. O#)+!$ $. F'!#) B!*

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    and #ust be res"onsi&e to &arious social conditionsK it is not con0ned within narrow

    circu#scri"tions of "recedents resting on "ast conditionsK it #ust follow the legal

    "rogress of a de#ocratic way of life. 2ublic welfare when clashing with the

    indi&idual right to "ro"erty should "re&ail through the stateJs e$ercise of its "olice

    "ower. erein, the #unici"ality of =andaluyong e$ercised "olice "ower to safeguard

    or "ro#ote the health, safety, "eace, good order and general welfare of the "eo"lein the locality. 7!S, a #ain tra3c artery which runs through se&eral cities and

    #unici"alities in the =etro =anila area, su""orts an endless strea# of tra3c and

    the resulting acti&ity, noise and "ollution are hardly conduci&e to the health, safety

    or welfare of the residents in its route.

    a&ing been e$"ressly granted the "ower to ado"t oning and subdi&ision

    ordinances or regulations, the =unici"al Council of =andaluyong was reasonably

    justi0ed under the circu#stances in "assing the subject resolution. *he #oti&es

    behind the "assage of the uestioned resolution being reasonable, and it being a

    legiti#ate res"onse to a felt "ublic need, not whi#sical or o""ressi&e, the non

    i#"air#ent of contracts clause of the Constitution will not bar the #unici"alityJs

    "ro"er e$ercise of the "ower. urther, laws and reser&ation of essential attributes of

    so&ereign "ower are read into contracts agreed u"on by the "arties. Not only are

    e$isting laws read into contracts in order to 0$ obligations as between the "arties,

    but the reser&ation of essential attributes of so&ereign "ower is also read into

    contracts as a "ostulate of the legal order. *he "olicy of "rotecting contracts against

    i#"air#ents "resu""oses the #aintenance of a go&ern#ent by &irtue of which

    contractual relations are worthwhile, a go&ern#ent which retains adeuate

    authority to secure the "eace and good order of society. *he law for#s "art of, and

    is read into, e&ery contract, unless clearly e$cluded therefro# in those cases where

    such e$clusion is allowed.

    8. G!*;* $. I*$)'#, 129 SCRA 719

    . D'( R$!) $. D' ($ S!*#$, M!" 21, 168

    1. A3'((! $. NLRC, 152 SCRA 1:

    11. PVBEU $. PVB, 18 SCRA 1: