II. Cases for discussion

A. Constitutional Interpretation1. Francisco vs House of Representatives (GR No. 160261, November

10, 2003)Facts: The case is a consolidation of several petitions filed before the Court for the determination of validity of the second impeachment complaint filed against Chief Justice Davide by members of the Congress.

This second impeachment complaint filed on August 5, 2003 was preceded by an impeachment complaint filed on June 2, 2003. Art XI Sec 5 of the Constitution states that “No impeachment proceedings shall be initiated against the same official more that once within a period of one year.”

Issues: 1.Whether or not the impeachment complaint initiated by the members of House of Representative is subject to judicial review.2.Whether or not the second impeachment complaint is valid.

Ruling: The Constitution has provided for an elaborate system of checks and balances to secure coordination in the workings of the various departments of the government. The judiciary, with the Supreme Court as the final arbiter, effectively checks the other departments in the exercise of its power to determine the law, and hence to declare executive and legislative acts void if violative of the Constitution. Judicial review is essential for the maintenance and enforcement of the separation of powers and the balancing of powers among the three departments.

The judiciary is the final arbiter on the question whether or not a branch of government or any of its officials has acted without jurisdiction or in excess of jurisdiction, or so capriciously as to constitute an abuse of discretion amounting to excess or lack of jurisdiction. Courts cannot evade the duty to settle matters by claiming that such matter constitutes political question as in the present case. Thus, the second impeachment complaint is subject to judicial review and does encroach upon the principle of separation of powers.

Having concluded that the initiation takes place by the act of filing of the impeachment complaint and referral to the House Committee on Justice, the initial action taken thereon, the meaning of Section 3 (5) of Article XI becomes clear. Once an impeachment complaint has been initiated in the foregoing manner, another may not be filed against the same official within a one year period following Article XI, Section 3(5) of the Constitution.

In fine, considering that the first impeachment complaint, was filed by former President Estrada against Chief Justice Hilario G. Davide, Jr., along with seven associate justices of this Court, on June 2, 2003 and referred to the House Committee on Justice on August 5, 2003, the second impeachment complaint filed by Representatives Gilberto C. Teodoro, Jr. and Felix William Fuentebella against the Chief Justice on October 23, 2003 violates the constitutional prohibition against the initiation of impeachment proceedings against the same impeachable officer within a one-year period.

Doctrine: Constitutional ConstructionFirst, verba legis, that is, wherever possible, the words used in the

Constitution must be given their ordinary meaning except where technical terms are employed. We look to the language of the document itself in our search for its meaning. We do not of course stop there, but that is where we begin. It is to be assumed that the words in which constitutional provisions are couched express the objective sought to be attained. They are to be given their ordinary meaning except where technical terms are employed in which case the significance thus attached to them prevails. As the Constitution is not primarily a lawyer's document, it being essential for the rule of law to obtain that it should ever be present in the people's consciousness, its language as much as possible should be understood in the sense they have in common use. What it says according to the text of the provision to be construed compels acceptance and negates the power of the courts to alter it, based on the postulate that the framers and the people mean what they say. Thus these are the cases where the need for construction is reduced to a minimum.

Second, where there is ambiguity, ratio legis est anima. The words of the Constitution should be interpreted in accordance with the intent of its framers. The object is to ascertain the reason which induced the framers of the Constitution to enact the particular provision and the purpose sought to be accomplished thereby, in order to construe the whole as to make the words consonant to that reason and calculated to effect that purpose.

Finally, ut magis valeat quam pereat. The Constitution is to be interpreted as a whole. It is a well-established rule in constitutional construction that no one provision of the Constitution is to be separated from all the others, to be considered alone, but that all the provisions bearing upon a particular subject are to be brought into view and to be so interpreted as to effectuate the great purposes of the instrument. Sections bearing on a particular subject should be considered and interpreted together as to effectuate the whole purpose of the Constitution and one section is not to be allowed to defeat another, if by any reasonable construction, the two can be made to stand together.

2. Manila Prince Hotel vs. GSIS, February 03, 1997 Facts: Pursuant to the privatization program of the government, GSIS decided to sell 30-51% of the Manila Hotel Corporation (MPH). Two bidders participated, MPH and Malaysian Firm Renong Berhad (RH). MPH’s bid was at P41.58/per share while RB’s bid was at P44.00/share. RB was the highest bidder hence it was logically considered as the winning bidder but is yet to be declared so. Pending declaration, MPH matches RB’s bid and invoked the Filipino First policy enshrined under par. 2, Sec. 10, Art. 12 of the 1987 Constitution, but GSIS refused to accept. In turn MPH filed a TRO to avoid the perfection/consummation of the sale to RB.RB then assailed the TRO issued in favor of MPH arguing among others that:

1. Par. 2, Sec. 10, Art. 12 of the 1987 Constitution needs an implementing law because it is merely a statement of principle and policy (not self-executing);

2. Even if said passage is self-executing, Manila Hotel does not fall under national patrimony.

ISSUE: Whether or not RB should be admitted as the highest bidder and hence be proclaimed as the legit buyer of shares.

HELD: No. MPH should be awarded the sale pursuant to Art 12 of the 1987 Const. This is in light of the Filipino First Policy.

Par. 2, Sec. 10, Art. 12 of the 1987 Constitution is self executing. The Constitution is the fundamental, paramount and supreme law of the nation, it is deemed written in every statute and contract.

From its very words the provision does not require any legislation to put it in operation.  It is per se judicially enforceable.  When our Constitution mandates that in the grant of rights, privileges, and concessions covering national economy and patrimony, the State shall give preference to qualified Filipinos, it means just that - qualified Filipinos shall be preferred.  And when our Constitution declares that a right exists in certain specified circumstances an action may be maintained to enforce such right notwithstanding the absence of any legislation on the subject; consequently, if there is no statute especially enacted to enforce such constitutional right, such right enforces itself by its own inherent potency and puissance, and from which all legislations must take their bearings. 

Manila Hotel falls under national patrimony. Patrimony in its plain and ordinary meaning pertains to heritage. When the Constitution speaks of national patrimony, it refers not only to the natural resources of the Philippines, as the Constitution could have very well used the term natural resources, but also to the cultural heritage of the Filipinos. It also refers to our intelligence in arts, sciences and letters. Therefore, we should develop not only our lands, forests, mines and other natural resources but also the mental ability or faculty of our people. Note that, for more than 8 decades (9 now) Manila Hotel has bore mute witness to the triumphs and failures, loves and frustrations of the Filipinos; its existence is impressed with public interest; its own historicity associated with our struggle for sovereignty, independence and nationhood.

B. Effect of Revolutionary Government on the Constitution 3. REPUBLIC OF THE PHILIPPINES, Petitioner, vs. SANDIGANBAYAN,

MAJOR GENERAL JOSEPHUS Q. RAMAS and ELIZABETH DIMAANO, Respondents. (G.R. No. 104768, July 21, 2003)FACTS: President Corazon C. Aquino issued Executive Order No. 1 ("EO No. 1") creating the Presidential Commission on Good Government ("PCGG"). EO No. 1 primarily tasked the PCGG to recover all ill-gotten wealth of former President Ferdinand E. Marcos, his immediate family, relatives, subordinates and close associates. EO No. 1 vested the PCGG with the power "(a) to conduct investigation as may be necessary in order to accomplish and carry out the purposes of this order" and the power "(h) to promulgate such rules and regulations as may be necessary to carry out the purpose of this order." The PCGG, through its then Chairman Jovito R. Salonga, created an AFP Anti-Graft Board ("AFP Board") tasked to investigate reports of unexplained wealth and corrupt practices by AFP personnel, whether in the active service or retired. The AFP Board investigated various reports of alleged unexplained wealth of respondent Major General Josephus Q. Ramas

("Ramas"). The Board finds that a prima facie case exists against Ramas for ill-gotten and unexplained wealth.

Ramas claims that the Sandiganbayan erred in declaring the properties confiscated from Dimaano’s( mistress of Ramas) house as illegally seized and therefore inadmissible in evidence. This issue bears a significant effect on petitioner’s case since these properties comprise most of petitioner’s evidence against private respondents. Petitioner will not have much evidence to support its case against private respondents if these properties are inadmissible in evidence.

The Constabulary raiding team served at Dimaano’s residence a search warrant captioned "Illegal Possession of Firearms and Ammunition." Dimaano was not present during the raid but Dimaano’s cousins witnessed the raid. The raiding team seized the items detailed in the seizure receipt together with other items not included in the search warrant. The raiding team seized these items: one baby armalite rifle with two magazines; 40 rounds of 5.56 ammunition; one pistol, caliber .45; communications equipment, cash consisting of P2,870,000 and US$50,000, jewelry, and land titles.

Petitioner wants the Court to take judicial notice that the raiding team conducted the search and seizure "on March 3, 1986 or five days after the successful EDSA revolution." Petitioner argues that a revolutionary government was operative at that time by virtue of Proclamation No. 1 announcing that President Aquino and Vice President Laurel were "taking power in the name and by the will of the Filipino people." Petitioner asserts that the revolutionary government effectively withheld the operation of the 1973 Constitution which guaranteed private respondents’ exclusionary right.

Moreover, petitioner argues that the exclusionary right arising from an illegal search applies only beginning 2 February 1987, the date of ratification of the 1987 Constitution. Petitioner contends that all rights under the Bill of Rights had already reverted to its embryonic stage at the time of the search. Therefore, the government may confiscate the monies and items taken from Dimaano and use the same in evidence against her since at the time of their seizure, private respondents did not enjoy any constitutional right.

ISSUES: (1) whether the revolutionary government was bound by the Bill of Rights of the 1973 Constitution during the interregnum, that is, after the actual and effective take-over of power by the revolutionary government following the cessation of resistance by loyalist forces up to 24 March 1986 (immediately before the adoption of the Provisional Constitution); and (2) whether the protection accorded to individuals under the International Covenant on Civil and Political Rights ("Covenant") and the Universal Declaration of Human Rights ("Declaration") remained in effect during the interregnum.

RULING: Petitioner is partly right in its arguments.

The EDSA Revolution took place on 23-25 February 1986. As succinctly stated in President Aquino’s Proclamation No. 3 dated 25 March 1986, the EDSA Revolution was "done in defiance of the provisions of the 1973 Constitution."41 The resulting government was indisputably a revolutionary government bound by no constitution or legal limitations except treaty obligations that the revolutionary government, as the de jure government in the Philippines, assumed under international law.

We hold that the Bill of Rights under the 1973 Constitution was not operative during the interregnum. However, we rule that the protection accorded to individuals under the Covenant and the Declaration remained in effect during the interregnum.

During the interregnum, the directives and orders of the revolutionary government were the supreme law because no constitution limited the extent and scope of such directives and orders. With the abrogation of the 1973 Constitution by the successful revolution, there was no municipal law higher than the directives and orders of the revolutionary government. Thus, during the interregnum, a person could not invoke any exclusionary right under a Bill of Rights because there was neither a constitution nor a Bill of Rights during the interregnum. As the Court explained in Letter of Associate Justice Reynato S. Puno

A revolution has been defined as "the complete overthrow of the established government in any country or state by those who were previously subject to it" or as "a sudden, radical and fundamental change in the government or political system, usually effected with violence or at least some acts of violence." In Kelsen's book, General Theory of Law and State, it is defined as that which "occurs whenever the legal order of a community is nullified and replaced by a new order . . . a way not prescribed by the first order itself."

It was through the February 1986 revolution, a relatively peaceful one, and more popularly known as the "people power revolution" that the Filipino people tore themselves away from an existing regime. This revolution also saw the unprecedented rise to power of the Aquino government.

From the natural law point of view, the right of revolution has been defined as "an inherent right of a people to cast out their rulers, change their policy or effect radical reforms in their system of government or institutions by force or a general uprising when the legal and constitutional methods of making such change have proved inadequate or are so obstructed as to be unavailable." It has been said that "the locus of positive law-making power lies with the people of the state" and from there is derived "the right of the people to abolish, to reform and to alter any existing form of government without regard to the existing constitution."

It is widely known that Mrs. Aquino’s rise to the presidency was not due to constitutional processes; in fact, it was achieved in violation of the provisions of the 1973 Constitution as a Batasang Pambansa resolution had earlier declared Mr. Marcos as the winner in the 1986 presidential election. Thus it can be said that the

organization of Mrs. Aquino’s Government which was met by little resistance and her control of the state evidenced by the appointment of the Cabinet and other key officers of the administration, the departure of the Marcos Cabinet officials, revamp of the Judiciary and the Military signaled the point where the legal system then in effect, had ceased to be obeyed by the Filipino. (Emphasis supplied)

To hold that the Bill of Rights under the 1973 Constitution remained operative during the interregnum would render void all sequestration orders issued by the Philippine Commission on Good Government ("PCGG") before the adoption of the Freedom Constitution. The sequestration orders, which direct the freezing and even the take-over of private property by mere executive issuance without judicial action, would violate the due process and search and seizure clauses of the Bill of Rights.

During the interregnum, the government in power was concededly a revolutionary government bound by no constitution. No one could validly question the sequestration orders as violative of the Bill of Rights because there was no Bill of Rights during the interregnum. However, upon the adoption of the Freedom Constitution, the sequestered companies assailed the sequestration orders as contrary to the Bill of Rights of the Freedom Constitution.

C. Amendment and revision of the constitution

4. DEFENSOR-SANTIAGO vs. COMELEC (G.R. No. 127325, March 19, 1997)FACTS: On 6 Dec 1996, Atty. Jesus S. Delfin filed with COMELEC a “Petition to Amend the Constitution to Lift Term Limits of elective Officials by People’s Initiative” The COMELEC then, upon its approval, a.) set the time and dates for signature gathering all over the country, b.) caused the necessary publication of the said petition in papers of general circulation, and c.) instructed local election registrars to assist petitioners and volunteers in establishing signing stations. On 18 Dec 1996, MD Santiago et al filed a special civil action for prohibition against the Delfin Petition. Santiago argues that 1.) the constitutional provision on people’s initiative to amend the constitution can only be implemented by law to be passed by Congress and no such law has yet been passed by Congress, 2.) RA 6735 indeed provides for three systems of initiative namely, initiative on the Constitution, on statues and on local legislation. The two latter forms of initiative were specifically provided for in Subtitles II and III thereof but no provisions were specifically made for initiatives on the Constitution. This omission indicates that the matter of people’s initiative to amend the Constitution was left to some future law – as pointed out by former Senator Arturo Tolentino.

ISSUE: Whether or not RA 6735 was intended to include initiative on amendments to the constitution and if so whether the act, as worded, adequately covers such initiative.

HELD: RA 6735 is intended to include the system of initiative on amendments to the constitution but is unfortunately inadequate to cover that system. Sec 2 of Article 17 of the Constitution provides: “Amendments to this constitution may

likewise be directly proposed by the people through initiative upon a petition of at least twelve per centum of the total number of registered voters, of which every legislative district must be represented by at least there per centum of the registered voters therein. . . The Congress shall provide for the implementation of the exercise of this right” This provision is obviously not self-executory as it needs an enabling law to be passed by Congress. Joaquin Bernas, a member of the 1986 Con-Con stated “without implementing legislation Section 2, Art 17 cannot operate. Thus, although this mode of amending the constitution is a mode of amendment which bypasses Congressional action in the last analysis is still dependent on Congressional action.” Bluntly stated, the right of the people to directly propose amendments to the Constitution through the system of inititative would remain entombed in the cold niche of the constitution until Congress provides for its implementation. The people cannot exercise such right, though constitutionally guaranteed, if Congress for whatever reason does not provide for its implementation.

***Note that this ruling has been “reversed” on November 20, 2006 when ten justices of the SC ruled that RA 6735 is adequate enough to enable such initiative. HOWEVER, this was a mere minute resolution which reads in part:

Ten (10) Members of the Court reiterate their position, as shown by their various opinions already given when the Decision herein was promulgated, that Republic Act No. 6735 is sufficient and adequate to amend the Constitution thru a people’s initiative.

Revision vs Amendment to the Constitution

On 6 Dec 1996, Atty. Jesus S. Delfin filed with COMELEC a “Petition to Amend the Constitution to Lift Term Limits of elective Officials by People’s Initiative” The COMELEC then, upon its approval, a.) set the time and dates for signature gathering all over the country, b.) caused the necessary publication of the said petition in papers of general circulation, and c.) instructed local election registrars to assist petitioners and volunteers in establishing signing stations. On 18 Dec 1996, MD Santiago et al filed a special civil action for prohibition against the Delfin Petition. Santiago argues among others that the People’s Initiative is limited to amendments to the Constitution NOT a revision thereof. The extension or the lifting of the term limits of those in power (particularly the President) constitutes revision and is therefore beyond the power of people’s initiative.

ISSUE: Whether the proposed Delfin petition constitutes amendment to the constitution or does it constitute a revision.

HELD: The Delfin proposal does not involve a mere amendment to, but a revision of, the Constitution because, in the words of Fr. Joaquin Bernas, SJ., it would involve a change from a political philosophy that rejects unlimited tenure to one that accepts unlimited tenure; and although the change might appear to be an isolated one, it can affect other provisions, such as, on synchronization of elections and on the State policy of guaranteeing equal access to opportunities for public service and prohibiting political dynasties. A revision cannot be done by initiative which, by

express provision of Section 2 of Article XVII of the Constitution, is limited to amendments. The prohibition against reelection of the President and the limits provided for all other national and local elective officials are based on the philosophy of governance, “to open up the political arena to as many as there are Filipinos qualified to handle the demands of leadership, to break the concentration of political and economic powers in the hands of a few, and to promote effective proper empowerment for participation in policy and decision-making for the common good”; hence, to remove the term limits is to negate and nullify the noble vision of the 1987 Constitution.

5. LAMBINO vs. COMELEC (G.R. No. 174153, Oct. 25, 2006)(CARPIO, J.)•Requirements for Initiative Petition•Constitutional Amendment vs. Constitutional Revision•Tests to determine whether amendment or revisionFACTS:  The Lambino Group commenced gathering signatures for an initiative petition to change the 1987 Constitution and then filed a petition with COMELEC to hold a plebiscite for ratification under Sec. 5(b) and (c) and Sec. 7 of RA 6735. The proposed changes under the petition will shift the present Bicameral-Presidential system to a Unicameral-Parliamentary form of government. COMELEC did not give it due course for lack of an enabling law governing initiative petitions to amend the Constitution, pursuant to Santiago v. Comelec ruling.

ISSUES:•Whether or not the proposed changes constitute an amendment or revision•Whether or not the initiative petition is sufficient compliance withthe constitutional requirement on direct proposal by the people

RULING: Initiative petition does not comply with Sec. 2, Art. XVII on direct proposal by people Sec. 2, Art. XVII...is the governing provision that allows a people’s initiative to propose amendments to the Constitution. While this provision does not expressly state that the petition must set forth the full text of the proposed amendments, the deliberations of the framers of our Constitution clearly show that: (a) the framers intended to adopt relevant American jurisprudence on people’s initiative; and (b) in particular, the people must first seethe full text of the proposed amendments before they sign, and that the people must sign ona petition containing such full text. The essence of amendments “directly proposed by the people through initiative upon a petition” is that the entire proposal on its face is a petition by the people. This means two essential elements must be present. 2  el ements of initiative1.First, the people must author and thus sign the entire proposal. No agent or representative can sign on their behalf.2. Second, as an initiative upon a petition, the proposal must be embodied in a petition. These essential elements are present only if the full text of the proposed amendments is first shown to the people who express their assent by signing such complete proposal in a petition. The full text of the proposed amendments may be

either written on the face of the petition, or attached to it. If so attached, the petition must state the fact of such attachment. This is an assurance that everyone of the several millions of signatories to the petition had seen the full text of the proposed amendments before – not after – signing. Moreover, “an initiative signer must be informed at the time of signing of the nature and effect of that which is proposed” and failure to do so is “deceptive and misleading” which renders the initiative void. In the case of the Lambino Group’s petition, there’s not a single word, phrase, or sentence of text of the proposed changes in the signature sheet. Neither does the signature sheet state that the text of the proposed changes is attached to it. The signature sheet merely asks a question whether the people approve a shift from the Bicameral-Presidential to the Unicameral- Parliamentary system of government. The signature sheet does not show to the people the draft of the proposed changes before they are asked to sign the signature sheet. This omission is fatal. An initiative that gathers signatures from the people without first showing to the people the full text of the proposed amendments is most likely a deception, and can operate as a gigantic fraud on the people. That’s why the Constitution requires that an initiative must be “directly proposed by the people x x x in a petition” - meaning that the people must sign on a petition that contains the full text of the proposed amendments. On so vital an issue as amending the nation’s fundamental law, the writing of the text of the proposed amendments cannot be hidden from the people under a general or special power of attorney to unnamed, faceless, and unelected individuals. The initiative violates Section 2, Article XVII of the Constitution disallowing revision through initiatives Article XVII of the Constitution speaks of three modes of amending the Constitution. The first mode is through Congress upon three-fourths vote of all its Members. The second mode is through a constitutional convention. The third mode is through a people’s initiative. Section 1 of Article XVII, referring to the first and second modes, applies to “any amendment to, or revision of, this Constitution.” In contrast, Section 2 of Article XVII, referring to the third mode, applies only to “amendments to this Constitution.” This distinction was intentional as shown by the deliberations of the Constitutional Commission. A people’s initiative to change the Constitution applies only to an amendment of the Constitution and not to its revision. In contrast, Congress or a constitutional convention can propose both amendments and revisions to the Constitution. Does the Lambino Group’s initiative constitute a revision of the Constitution? Yes. By any legal test and under any jurisdiction, a shift from a Bicameral-Presidential to a Unicameral-Parliamentary system, involving the abolition of the Office of the President and the abolition of one chamber of Congress, is beyond doubt a revision, not a mere amendment.Amendment vs. Revision Courts have long recognized the distinction between an amendment and a revision of a constitution. Revision broadly implies a change that alters a basic principle in the constitution, like altering the principle of separation of powers or the system of checks-and-balances. There is also revision if the change alters the substantial entirety of the constitution, as when the change affects substantial provisions of the constitution. On the other hand, amendment broadly

refers to a change that adds, reduces, or deletes without altering the basic principle involved. Revision generally affects several provisions of the constitution, while amendment generally affects only the specific provision being amended. Where the proposed change applies only to a specific provision of the Constitution without affecting any other section or article, the change may generally be considered an amendment and not a revision. For example, a change reducing the voting age from 18years to 15 years is an amendment and not a revision. Similarly, a change reducing Filipino ownership of mass media companies from 100% to 60% is an amendment and not a revision. Also, a change requiring a college degree as an additional qualification for election to the Presidency is an amendment and not a revision. The changes in these examples do not entail any modification of sections or articles of the Constitution other than the specific provision being amended. These changes do not also affect the structure of government or the system of checks-and-balances among or within the three branches. However, there can be no fixed rule on whether a change is an amendment or a revision. A change in a single word of one sentence of the Constitution may be a revision and not an amendment. For example, the substitution of the word “republican” with “monarchic” or “theocratic” in Section 1, Article II of the Constitution radically overhauls the entire structure of government and the fundamental ideological basis of the Constitution. Thus, each specific change will have to be examined case-by-case, depending on how it affects other provisions, as well as how it affects the structure of government, the carefully crafted system of checks-and-balances, and the underlying ideological basis of the existing Constitution. Since a revision of a constitution affects basic principles, or several provisions of a constitution, a deliberative body with recorded proceedings is best suited to undertake a revision. A revision requires harmonizing not only several provisions, but also the altered principles with those that remain unaltered. Thus, constitutions normally authorize deliberative bodies like constituent assemblies or constitutional conventions to undertake revisions. On the other hand, constitutions allow people’s initiatives, which do not have fixed and identifiable deliberative bodies or recorded proceedings, to undertake only amendments and not revisions. Tests to determine whether amendment or revision In California where the initiative clause allows amendments but not revisions to the constitution just like in our Constitution, courts have developed a two-part test: the quantitative test and the qualitative test. The quantitative test asks whether the proposed change is so extensive in its provisions as to change directly the substantial entirety of the constitution by the deletion or alteration of numerous existing provisions. The court examines only the number of provisions affected and does not consider the degree of the change. The qualitative test inquires into the qualitative effects of the proposed change in the constitution. The main inquiry is whether the change will accomplish such far reaching changes in the nature of our basic governmental plan as to amount to a revision. Whether there is an alteration in the structure of government is a proper subject of inquiry. Thus, a change in the nature of [the] basic governmental plan includes change in its fundamental framework or the fundamental powers of its

Branches. A change in the nature of the basic governmental plan also includes changes that jeopardize the traditional form of government and the system of check and balances. Under both the quantitative and qualitative tests, the Lambino Group’s initiative is a revision and not merely an amendment. Quantitatively, the Lambino Group’s proposed changes overhaul two articles - Article VI on the Legislature and Article VII on the Executive -affecting a total of 105 provisions in the entire Constitution. Qualitatively, the proposed changes alter substantially the basic plan of government, from presidential to parliamentary, and from a bicameral to a unicameral legislature. A change in the structure of government is a revision A change in the structure of government is a revision of the Constitution, as when the three great co-equal branches of government in the present Constitution are reduced into two. This alters the separation of powers in the Constitution. A shift from the present Bicameral-Presidential system to a Unicameral-Parliamentary system is a revision of the Constitution. Merging the legislative and executive branches is a radical change in the structure of government. The abolition alone of the Office of the President as the locus of Executive Power alters the separation of powers and thus constitutes a revision of the Constitution. Likewise, the abolition alone of one chamber of Congress alters the system of checks-and-balances within the legislature and constitutes a revision of the Constitution. The Lambino Group theorizes that the difference between amendment and revision is only one of procedure, not of substance. The Lambino Group posits that when a deliberative body drafts and proposes changes to the Constitution, substantive changes are called revisions because members of the deliberative body work full-time on the changes. The same substantive changes, when proposed through an initiative, are called amendments because the changes are made by ordinary people who do not make an occupation, profession, or vocation out of such endeavor. The SC, however, ruled that the express intent of the framers and the plain language of the Constitution contradict the Lambino Group’s theory. Where the intent of the framers and the language of the Constitution are clear and plainly stated, courts do not deviate from such categorical intent and language.

D. Power of Judicial Review

6. Angara vs. Electoral Commission (63 Phil 139)FACTS: In the elections of Sept. 17, 1935, petitioner Jose A. Angara and the respondents Pedro Ynsua, Miguel Castillo, and Dionisio Mayor were candidates for the position of members of the National Assembly for the first district of Tayabas.

On Oct. 7, 1935, the provincial board of canvassers proclaimed Angara as member-elect of the National Assembly and on Nov. 15, 1935, he took his oath of office.

On Dec. 3, 1935, the National Assembly passed Resolution No. 8, which in effect, fixed the last date to file election protests.

On Dec. 8, 1935, Ynsua filed before the Electoral Commission a "Motion of Protest" against Angara and praying, among other things, that Ynsua be named/declared

elected Member of the National Assembly or that the election of said position be nullified.

On Dec. 9, 1935, the Electoral Commission adopted a resolution (No. 6) stating that last day for filing of protests is on Dec. 9.  Angara contended that the Constitution confers exclusive jurisdiction upon the Electoral Commission solely as regards the merits of contested elections to the National Assembly and the Supreme Court therefore has no jurisdiction to hear the case. 

ISSUE(S): 1. Whether or not the Supreme Court has jurisdiction over the Electoral Commission and the subject matter of the controversy ?2. Whether or not EC acted without or in excess of jurisdiction in taking cognizance of the election protest?

HELD: The SC ruled in favor of Angara. The SC emphasized that in cases of conflict between the several departments and among the agencies thereof, the judiciary, with the SC as the final arbiter, is the only constitutional mechanism devised finally to resolve the conflict and allocate constitutional boundaries.

That judicial supremacy is but the power of judicial review in actual and appropriate cases and controversies, and is the power and duty to see that no one branch or agency of the government transcends the Constitution, which is the source of all authority.

That the Electoral Commission is an independent constitutional creation with specific powers and functions to execute and perform, closer for purposes of classification to the legislative than to any of the other two departments of the government.

That the Electoral Commission is the sole judge of all contests relating to the election, returns and qualifications of members of the National Assembly.

7. Mirasol vs Court of Appeals (February 1, 2001)Facts: The Mirasols are sugarland owners and planters. Philippine National Bank (PNB) financed the Mirasols' sugar production venture from 1973-1975 under a crop loan financing scheme. The Mirasols signed Credit Agreements, a Chattel Mortgage on Standing Crops, and a Real Estate Mortgage in favor of PNB. The Chattel Mortgage empowered PNB to negotiate and sell the latter's sugar and to apply the proceeds to the payment of their obligations to it.

President Marcos issued PD 579 in November, 1974 authorizing Philippine Exchange Co., Inc. (PHILEX) to purchase sugar allocated for export and authorized PNB to finance PHILEX's purchases. The decree directed that whatever profit PHILEX might realize was to be remitted to the government. Believing that the proceeds were more than enough to pay their obligations, petitioners asked PNB for an accounting of the proceeds which it ignored. Petitioners continued to avail of other loans from PNB and to make unfunded withdrawals from their accounts with said bank. PNB asked petitioners to settle their due and demandable accounts. As a result, petitioners, conveyed to PNB real properties by way of dacion en pago still leaving

an unpaid amount. PNB proceeded to extrajudicially foreclose the mortgaged properties. PNB still had a deficiency claim.

Petitioners continued to ask PNB to account for the proceeds, insisting that said proceeds, if properly liquidated, could offset their outstanding obligations. PNB remained adamant in its stance that under P.D. No. 579, there was nothing to account since under said law, all earnings from the export sales of sugar pertained to the National Government.

On August 9, 1979, the Mirasols filed a suit for accounting, specific performance, and damages against PNB.

Issues:(1) Whether or not the Trial Court has jurisdiction to declare a statute unconstitutional without notice to the Solicitor General where the parties have agreed to submit such issue for the resolution of the Trial Court.(2) Whether PD 579 and subsequent issuances thereof are unconstitutional.(3) Whether or not said PD is subject to judicial review.

Held: On the first issue. It is settled that Regional Trial Courts have the authority and jurisdiction to consider the constitutionality of a statute, presidential decree, or executive order. The Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation not only in this Court, but in all Regional Trial Courts. Furthermore, B.P. Blg. 129 grants Regional Trial Courts the authority to rule on the conformity of laws or treaties with the Constitution.

The pivotal issue, which we must address, is whether it was proper for the trial court to have exercised judicial review.

Petitioners argue that the Court of Appeals erred in finding that it was improper for the trial court to have declared P.D. No. 579 unconstitutional, since petitioners had not complied with Rule 64, Section 3, of the Rules of Court.  Petitioners contend that said Rule specifically refers only to actions for declaratory relief and not to an ordinary action for accounting, specific performance, and damages.

Petitioners’ contentions are bereft of merit. The purpose of the mandatory notice in Rule 64, Section 3 is to enable the Solicitor General to decide whether or not his intervention in the action assailing the validity of a law or treaty is necessary. To deny the Solicitor General such notice would be tantamount to depriving him of his day in court. We must stress that, contrary to petitioners’ stand, the mandatory notice requirement is not limited to actions involving declaratory relief and similar remedies. The rule itself provides that such notice is required in “any action” and not just actions involving declaratory relief. Where there is no ambiguity in the words used in the rule, there is no room for construction. In all actions assailing the validity of a statute, treaty, presidential decree, order, or proclamation, notice to the Solicitor General is mandatory.

In this case, the Solicitor General was never notified about Civil Case No. 14725. Nor did the trial court ever require him to appear in person or by a representative or to

file any pleading or memorandum on the constitutionality of the assailed decree. Hence, the Court of Appeals did not err in holding that lack of the required notice made it improper for the trial court to pass upon the constitutional validity of the questioned presidential decrees.

As regards the second issue, petitioners contend that P.D. No. 579 and its implementing issuances are void for violating the due process clause and the prohibition against the taking of private property without just compensation. Petitioners now ask this Court to exercise its power of judicial review.

Jurisprudence has laid down the following requisites for the exercise of this power: First, there must be before the Court an actual case calling for the exercise of judicial review.  Second, the question before the Court must be ripe for adjudication.  Third, the person challenging the validity of the act must have standing to challenge.  Fourth, the question of constitutionality must have been raised at the earliest opportunity, and lastly, the issue of constitutionality must be the very lis mota of the case.

As a rule, the courts will not resolve the constitutionality of a law, if the controversy can be settled on other grounds. The present case was instituted primarily for accounting and specific performance. The Court of Appeals correctly ruled that PNB’s obligation to render an accounting is an issue, which can be determined, without having to rule on the constitutionality of P.D. No. 579. In fact there is nothing in P.D. No. 579, which is applicable to PNB’s intransigence in refusing to give an accounting. The governing law should be the law on agency, it being undisputed that PNB acted as petitioners’ agent. In other words, the requisite that the constitutionality of the law in question be the very lis mota of the case is absent. Thus we cannot rule on the constitutionality of  P.D. No. 579.

8.9.10.11. WHITE LIGHT CORPORATION, TITANIUM CORPORATION and STA.

MESA TOURIST & DEVELOPMENT CORPORATION, Petitioners, vs. CITY OF MANILA, represented by DE CASTRO, MAYOR ALFREDO S. LIM, Respondent. (G.R. No. 122846 January 20, 2009)TOPIC: JUDICIAL REVIEW (pero ung buong kaso parang pang police power talaga..)Facts: On December 3, 1992, City Mayor Alfredo S. Lim signed into law Manila City Ordinance No. 7774 entitled “An Ordinance Prohibiting Short-Time Admission, Short-Time Admission Rates, and Wash-Up Rate Schemes in Hotels, Motels, Inns, Lodging Houses, Pension Houses, and Similar Establishments in the City of Manila” (the Ordinance).” The ordinance sanctions any person or corporation who will allow the admission and charging of room rates for less than 12 hours or the renting of rooms more than twice a day.

The petitioners White Light Corporation (WLC), Titanium Corporation (TC), and Sta. Mesa Tourist and Development Corporation (STDC), who own and operate several

hotels and motels in Metro Manila, filed a motion to intervene and to admit attached complaint-in-intervention on the ground that the ordinance will affect their business interests as operators. The respondents, in turn, alleged that the ordinance is a legitimate exercise of police power.

RTC declared Ordinance No. 7774 null and void as it “strikes at the personal liberty of the individual guaranteed and jealously guarded by the Constitution.” Reference was made to the provisions of the Constitution encouraging private enterprises and the incentive to needed investment, as well as the right to operate economic enterprises. Finally, from the observation that the illicit relationships the Ordinance sought to dissuade could nonetheless be consummated by simply paying for a 12-hour stay,When elevated to CA, the respondents asserted that the ordinance is a valid exercise of police power pursuant to Section 458 (4)(iv) of the Local Government Code which confers on cities the power to regulate the establishment, operation and maintenance of cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging houses and other similar establishments, including tourist guides and transports. Also, they contended that under Art III Sec 18 of Revised Manila Charter, they have the power to enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance of the prosperity and the promotion of the morality, peace, good order, comfort, convenience and general welfare of the city and its inhabitants and to fix penalties for the violation of ordinances.

Petitioners argued that the ordinance is unconstitutional and void since it violates the right to privacy and freedom of movement; it is an invalid exercise of police power; and it is unreasonable and oppressive interference in their business.CA, in turn, reversed the decision of RTC and affirmed the constitutionality of the ordinance. First, it held that the ordinance did not violate the right to privacy or the freedom of movement, as it only penalizes the owners or operators of establishments that admit individuals for short time stays. Second, the virtually limitless reach of police power is only constrained by having a lawful object obtained through a lawful method. The lawful objective of the ordinance is satisfied since it aims to curb immoral activities. There is a lawful method since the establishments are still allowed to operate. Third, the adverse effect on the establishments is justified by the well-being of its constituents in general. Hence, the petitioners appeared before the SC.

Issues: W/N Ordinance No. 7774 is subject to judicial review of the court.W/N Ordinance No. 7774 is a valid exercise of police power.

Held: Yes. The exercise of police power is subject to judicial review when life, liberty or property is affected. No. Ordinance No. 7774 cannot be considered as a valid exercise of police power, and as such, it is unconstitutional.

On the two standards of judicial review.

The general test of the validity of an ordinance on substantive due process grounds is best tested when assessed with the evolved test laid down by the U.S. Supreme Court in U.S. v. Carolene Products. The case acknowledged that the judiciary would defer to the legislature unless there is a discrimination against a "discrete and insular" minority or infringement of a "fundamental right." Consequently, two standards of judicial review were established: strict scrutiny for laws dealing with freedom of the mind or restricting the political process, and the rational basis standard of review for economic legislation.

A third standard, denominated as heightened or immediate scrutiny, was later adopted by the U.S. Supreme Court for evaluating classifications based on gender and legitimacy. Immediate scrutiny was adopted by the U.S. Supreme Court in Craig, after the Court declined to do so in Reed v. Reed. While the test may have first been articulated in equal protection analysis, it has in the United States since been applied in all substantive due process cases as well.

We ourselves have often applied the rational basis test mainly in analysis of equal protection challenges. Using the rational basis examination, laws or ordinances are upheld if they rationally further a legitimate governmental interest. Under intermediate review, governmental interest is extensively examined and the availability of less restrictive measures is considered. Applying strict scrutiny, the focus is on the presence of compelling, rather than substantial, governmental interest and on the absence of less restrictive means for achieving that interest.

In terms of judicial review of statutes or ordinances, strict scrutiny refers to the standard for determining the quality and the amount of governmental interest brought to justify the regulation of fundamental freedoms. Strict scrutiny is used today to test the validity of laws dealing with the regulation of speech, gender, or race as well as other fundamental rights as expansion from its earlier applications to equal protection. The United States Supreme Court has expanded the scope of strict scrutiny to protect fundamental rights such as suffrage, judicial access and interstate travel.

If we were to take the myopic view that an Ordinance should be analyzed strictly as to its effect only on the petitioners at bar, then it would seem that the only restraint imposed by the law which we are capacitated to act upon is the injury to property sustained by the petitioners, an injury that would warrant the application of the most deferential standard – the rational basis test. Yet as earlier stated, we

recognize the capacity of the petitioners to invoke as well the constitutional rights of their patrons – those persons who would be deprived of availing short time access or wash-up rates to the lodging establishments in question.

Viewed cynically, one might say that the infringed rights of these customers were are trivial since they seem shorn of political consequence. Concededly, these are not the sort of cherished rights that, when proscribed, would impel the people to tear up their cedulas. Still, the Bill of Rights does not shelter gravitas alone. Indeed, it is those "trivial" yet fundamental freedoms – which the people reflexively exercise any day without the impairing awareness of their constitutional consequence – that accurately reflect the degree of liberty enjoyed by the people. Liberty, as integrally incorporated as a fundamental right in the Constitution, is not a Ten Commandments-style enumeration of what may or what may not be done; but rather an atmosphere of freedom where the people do not feel labored under a Big Brother presence as they interact with each other, their society and nature, in a manner innately understood by them as inherent, without doing harm or injury to others.

On police power and judicial review.

That the Ordinance prevents the lawful uses of a wash rate depriving patrons of a product and the petitioners of lucrative business ties in with another constitutional requisite for the legitimacy of the Ordinance as a police power measure. It must appear that the interests of the public generally, as distinguished from those of a particular class, require an interference with private rights and the means must be reasonably necessary for the accomplishment of the purpose and not unduly oppressive of private rights. It must also be evident that no other alternative for the accomplishment of the purpose less intrusive of private rights can work. More importantly, a reasonable relation must exist between the purposes of the measure and the means employed for its accomplishment, for even under the guise of protecting the public interest, personal rights and those pertaining to private property will not be permitted to be arbitrarily invaded.

Lacking a concurrence of these requisites, the police measure shall be struck down as an arbitrary intrusion into private rights. As held in Morfe v. Mutuc, the exercise of police power is subject to judicial review when life, liberty or property is affected. However, this is not in any way meant to take it away from the vastness of State police power whose exercise enjoys the presumption of validity.

Similar to the Comelec resolution requiring newspapers to donate advertising space to candidates, this Ordinance is a blunt and heavy instrument. The Ordinance makes no distinction between places frequented by patrons engaged in illicit activities and patrons engaged in legitimate actions. Thus it prevents legitimate use

of places where illicit activities are rare or even unheard of. A plain reading of section 3 of the Ordinance,

SEC. 3. Pursuant to the above policy, short-time admission and rate [sic], wash-up rate or other similarly concocted terms, are hereby prohibited in hotels, motels, inns, lodging houses, pension houses and similar establishments in the City of Manila.

shows it makes no classification of places of lodging, thus deems them all susceptible to illicit patronage and subject them without exception to the unjustified prohibition.

The behavior which the Ordinance seeks to curtail is in fact already prohibited and could in fact be diminished simply by applying existing laws. Less intrusive measures such as curbing the proliferation of prostitutes and drug dealers through active police work would be more effective in easing the situation. So would the strict enforcement of existing laws and regulations penalizing prostitution and drug use. These measures would have minimal intrusion on the businesses of the petitioners and other legitimate merchants. Further, it is apparent that the Ordinance can easily be circumvented by merely paying the whole day rate without any hindrance to those engaged in illicit activities. Moreover, drug dealers and prostitutes can in fact collect "wash rates" from their clientele by charging their customers a portion of the rent for motel rooms and even apartments.

SC reiterated that individual rights may be adversely affected only to the extent that may fairly be required by the legitimate demands of public interest or public welfare. The State is a leviathan that must be restrained from needlessly intruding into the lives of its citizens. However well¬-intentioned the ordinance may be, it is in effect an arbitrary and whimsical intrusion into the rights of the establishments as well as their patrons. The ordinance needlessly restrains the operation of the businesses of the petitioners as well as restricting the rights of their patrons without sufficient justification. The ordinance rashly equates wash rates and renting out a room more than twice a day with immorality without accommodating innocuous intentions.

WHEREFORE, Ordinance No. 7774 is hereby declared UNCONSTITUTIONAL.

12.

E. National territory

13. PROF. MERLIN M. MAGALLONA, et.al vs HON. EDUARDO ERMITA, IN HIS CAPACITY AS EXECUTIVE SECRETARY,et.al  G.R. No. 187167, 16 July 2011

The conversion of internal waters into archipelagic waters will not risk the Philippines because an archipelagic State has sovereign power that extends to the waters enclosed by the archipelagic baselines, regardless of their depth or distance from the coast.

Facts: R.A. 9522 was enacted by the Congress in March 2009 to comply with the terms of the United Nations Convention on the Law of the Sea (UNCLOS III), which the Philippines ratified on February 27, 1984. Such compliance shortened one baseline, optimized the location of some base points around the Philippine archipelago and classified adjacent territories such as the Kalayaan Island Ground (KIG) and the Scarborough Shoal as “regimes of islands” whose islands generate their own applicable maritime zones. Petitioners, in their capacities as “citizens, taxpayers or legislators” assail the constitutionality of R.A. 9522 with one of their arguments contending that the law unconstitutionally “converts” internal waters into archipelagic waters, thus subjecting these waters to the right of innocent and sea lanes passage under UNCLOS III, including over flight. Petitioners have contended that these passage rights will violate the Constitution as it shall expose Philippine internal waters to nuclear and maritime pollution hazard.

ISSUE: Whether or not R.A. 9522 is unconstitutional for converting internal waters into archipelagic waters

HELD: Petition DISMISSED.The Court finds R.A. 9522 constitutional and is consistent with thePhilippine’s national interest. Aside from being a vital step in safeguarding the country’s maritime zones, the law also allows an internationally-recognized delimitation of the breadth of the Philippine’s maritime zones and continental shelf.

The Court also finds that the conversion of internal waters intoarchipelagic waters will not risk the Philippines as affirmed in the Article 49 of the UNCLOS III, an archipelagic State has sovereign power that extends to the waters enclosed by the archipelagic baselines, regardless of their depth from the coast. It is further stated that the regime of archipelagic sea lanes passage will not affect the status of its archipelagic waters or the exercise of sovereignty over waters and air space, bed and subsoil and the resources therein.

14. WILLIAM C. REAGAN, ETC., petitioner,  vs. CIR (G.R. No. L-26379      December 27, 1969)FACTS: William C. Reagan, a civilian employee of an American corporation providing technical assistance to the US Air Force in the Philippines. Petitioner imported on April 22, 1960 a tax-free 1960 Cadillac car with accessories valued at $6,443.83, including freight, insurance and other charges. More than (2) months after the 1960 Cadillac car was imported into the Philippines, petitioner requested the Base Commander, Clark Air Base, for a permit to sell the car, which was granted provided that the sale was made to a member of the US Armed Forces or a citizen of the United States employed in the U.S. military bases in the Philippines. Petitioner sold his car for $6,600.00 to a certain Willie Johnson, Jr. (Private first class), United States Marine Corps, Sangley Point, Cavite, Philippines. As a result of this transaction, the Commissioner of Internal Revenue calculated the net taxable

income of Reagan to be at P17912.34 and that his income tax would be P2797.00. Reagan paid the assessed tax but at the same time he sought for a refund because he claims that he is exempt. Reagan dispute the payment of the income tax assessed on him by respondent CIR on an amount realized by him on a sale of his automobile to a member of the US Marine Corps, the transaction having taken place at the Clark Field Air Base at Pampanga. It is his contention, seriously and earnestly expressed, that in legal contemplation the sale was made outside Philippine territory and therefore beyond our jurisdictional power to tax.

ISSUE: Whether that the Clark Air Base in legal contemplation, is a base outside the Philippines?

RULING: Nothing is better settled than that the Philippines being independent and sovereign, its authority may be exercised over its entire domain. There is no portion thereof that is beyond its power. Within its limits, its decrees are supreme, its commands paramount. Its laws govern therein, and everyone to whom it applies must submit to its terms. That is the extent of its jurisdiction, both territorial and personal. Necessarily, likewise, it has to be exclusive. If it were not thus, there is a diminution of its sovereignty.

It is to be admitted that any state may, by its consent, express or implied, submit to a restriction of its sovereign rights. There may thus be a curtailment of what otherwise is a power plenary in character. That is the concept of sovereignty as auto-limitation, which, in the succinct language of Jellinek, "is the property of a state-force due to which it has the exclusive capacity of legal self-determination and self-restriction." A state then, if it chooses to, may refrain from the exercise of what otherwise is illimitable competence.

Its laws may as to some persons found within its territory no longer control. Nor does the matter end there. It is not precluded from allowing another power to participate in the exercise of jurisdictional right over certain portions of its territory. If it does so, it by no means follows that such areas become impressed with an alien character. They retain their status as native soil. They are still subject to its authority. Its jurisdiction may be diminished, but it does not disappear. So it is with the bases under lease to the American armed forces by virtue of the military bases agreement of 1947. They are not and cannot be foreign territory.

The Clark Air Force Base is not a foreign soil or territory for purposes of income tax legislation. There is nothing in the Military Bases Agreement that lends support to such assertion. It has not become foreign soil or territory. The Philippine’s jurisdictional rights therein, certainly not excluding the power to tax, have been preserved. As to certain matters, an appropriate exemption was provided for.

WHEREFORE, the decision of the Court of Tax Appeals of May 12, 1966 denying the refund of P2,979.00 as the income tax paid by petitioner is affirmed. With costs against petitioner.

F. State Immunity15. REPUBLIC VS. VILLASOR, ET AL. (G.R. No. L-30671 November 28,

1973)

Facts: On July 7, 1969, a decision was rendered in Special Proceedings No. 2156-R infavor of respondents P.J. Kiener Co., Ltd., Gavino Unchuan, and International Construction Corporation and against petitioner confirming the arbitration award in the amount of P1,712,396.40.The award is for the satisfaction of a judgment against the Philippine Government. On June 24, 1969, respondent Honourable Guillermo Villasor issued an Order declaring the decision final and executory. Villasor directed the Sheriffs of Rizal Province, Quezon City as well as Manilato execute said decision. The Provincial Sheriff of Rizal served Notices of Garnishment with several Banks, specially on Philippine Veterans Bank and PNB. The funds of the Armed Forces of the Philippines on deposit with Philippine Veterans Bank and PNB are public funds duly appropriated and allocated for the payment of pensions of retirees, pay and allowances of military and civilian personnel and for maintenance and operations of the AFP. Petitioner, on certiorari, filed prohibition proceedings against respondent Judge Villasor for acting in excess of jurisdiction with grave abuse of discretion amounting to lack of jurisdiction in granting the issuance of a Writ of Execution against the properties of the AFP, hence the notices and garnishment are null and void.

Issue: Is the Writ of Execution issued by Judge Villasor valid?

Held: What was done by respondent Judge is not in conformity with the dictates of the Constitution .It is a fundamental postulate of constitutionalism flowing from the juristic concept of sovereignty that the state as well as its government is immune from suit unless it gives its consent. A sovereign is exempt from suit, not because of any formal conception or obsolete theory, but on the logical and practical ground that there can be no legal right as against the authority that makes the law on which the right depends. The State may not be sued without its consent. A corollary, both dictated by logic and sound sense from a basic concept is that public funds cannot be the object of a garnishment proceeding even if the consent to be sued had been previously granted and the state liability adjudged. The universal rule that where the State gives its consent to be sued by private parties either by general or special law, it may limit claimant’s action only up to the completion of proceedings anterior to the stage of execution and that the power of the Courts ends when the judgment is rendered, since the government funds and properties may not be seized under writs of execution or garnishment to satisfy such judgments, is based on obvious considerations of public policy. Disbursements of public funds must be covered by the corresponding appropriation as required by law. The functions and public services rendered by the State cannot be allowed to be paralyzed or disrupted by the diversion of public funds from their legitimate and specific objects, as appropriated by law.

16. KHOSROW MINUCHER v. CA and ARTHUR SCALZO (G.R. 142396 , February 11, 2003) Ponente: J. VitugFacts: Minucher is an Iranian national who came to study in UP in 1974 and was appointed Labor Attache for the Iranian Embassies in Tokyo and Manila; he continued to stay in the Philippines when the Shah of Iran was deposed by Khomeini, he became a refugee of the UN and he headed the Iranian National Resistance Movement in the Philippines. On the other hand, Scalzo was a special agent of the US Drugs Enforcement Agency. He conducts surveillance operations on suspected drug dealers in the Philippines believed to be the source of prohibited

drugs shipped to the US and make the actual arrest. Minucher and one Abbas Torabian were charged for a violation of Act. 6425 (Dangerous Drugs Act of 1972) before the Pasig RTC, such criminal charge was followed by a buy-bust operation conducted by the Philippine police narcotic agents to which Scalzo was a witness for the prosecution. They were acquitted. Later on, Minucher filed a complaint for damages against Scalzo. It was said that Minucher and Scalzo came to know of each other thru Jose Iñigo; they conducted some business i.e. the former sold to the latter some caviar and Persian carpets. Scalzo then represented himself as a special agent of the Drug Enforcement Administration; DOJ of US. Minucher expressed his desire to obtain a US Visa for him and his Abbas’s wife. Scalzo told him that he could help him for a$2,000 fee per visa. After a series of business transactions between the two, when Scalzo came to deliver the visas to Minucher’s house, he told the latter that he would be leaving the Philippines soon and requested him to come out of the house so he can introduce him to his cousin waiting in the cab. To his surprise, 30-40 armed Filipino soldiers came to arrest him. In his complaint for damages, he said that some of his properties were missing like Persian carpets, a painting together withhis TV and betamax sets. There was nothing left in his house. He averred that his arrest as a heroine trafficker was well publicized and that when we got arrested, he was not given any food or water for 3 days. In his defense, Scalzo asserted his diplomatic immunity as evidenced by a Diplomatic Note. He contended that it was recognized by the US Government pursuant to the Vienna Convention on Diplomatic Relations and the Philippine government itself thru its Executive Department and DFA. The courts ruled in favor of Scalzo on the ground that as a special agent of the US Drug Enforcement Administration, he was entitled to diplomatic immunity. Hence, the present recourse of Minucher.

Issue: WON Scalzo is entitled to diplomatic immunity

Held: Yes. The Convention lists the classes of heads of diplomatic missions to include (a) ambassadors or nuncios accredited to the heads of state, (b) envoys, ministers or  Internuncios accredited to the heads of states; and (c) charges d' affairs accredited to the ministers of foreign affairs. Comprising the "staff of the (diplomatic) mission" are the diplomatic staff, the administrative staff and the technical and service staff. Only the heads of missions, as well as members of the diplomatic staff, excluding the members of the administrative, technical and service staff of the mission, are accorded diplomatic rank. Even while the Vienna Convention on Diplomatic Relations provides for immunity to the members of diplomatic missions, it does so, nevertheless, with an understanding that the same be restrictively applied.

The main yardstick in ascertaining whether a person is a diplomat entitled to immunity is the determination of whether or not he performs duties of diplomatic nature.

Scalzo was an Assistant Attaché of the US diplomatic mission. An attaché belongs to a category of officers in the diplomatic establishment who may be in charge of its cultural, press, administrative or financial affairs. There could also be a class of attaches belonging to certain ministries or departments of the government, other than the foreign ministry or department, who are detailed by their respective ministries or departments with the embassies such as the military, naval, air, commercial, agricultural, labor, science, and customs attaches, or the like.

Attaches assist a chief of mission in his duties and are administratively under him, but their main function is to observe, analyze and interpret trends and developments in their respective fields in the host country and submit reports to their own ministries or departments in the home government. These officials are not generally regarded as members of the diplomatic mission, nor are they normally designated as having diplomatic rank. Vesting a person with diplomatic immunity is a prerogative of the executive branch of the government. The government of the United States itself, which Scalzo claims to be acting for, has formulated its standards for recognition of a diplomatic agent. The State Department policy is to only concede diplomatic status to a person who possesses an acknowledged diplomatic title and "performs duties of diplomatic nature." Supplementary criteria for accreditation are the possession of a valid diplomatic passport or, from States which do not issue such passports, a diplomatic note formally representing the intention to assign the person to diplomatic duties, the holding of a non-immigrant visa, being over twenty-one years of age, and performing diplomatic functions on an essentially full-time basis. Diplomatic missions are requested to provide the most accurate and descriptive job title to that which currently applies to the duties performed. The Office of the Protocol would then assign each individual to the appropriate functional category.

17. SEAFDEC VS. NLRC (241 SCRA 580)FACTS: Two labor cases were filed by the herein private respondents against the petitioner, Southeast Asian Fisheries Development Center (SEAFDEC), before the National Labor Relations Commission (NLRC), Regional Arbitration Branch, Iloilo City. In these cases, the private respondents claim having been wrongfully terminated from their employment by the petitioner.

The petitioner, who claims to be an international inter-government organization composed of various Southeast Asian countries, filed a Motion to Dismiss, challenged the jurisdiction of the public respondent in taking cognizance of the above cases.

The private respondents, as well as respondent labor arbiter, allege that the petitioner is not immune from suit and assuming that if, indeed, it is an international organization, it has, however, impliedly, if not expressly, waived its immunity by belatedly raising the issue of jurisdiction.

ISSUE: Whether or not the petitioner is immune from suit?

HELD: The Court ruled for the petitioner. It is beyond question that petitioner SEAFDEC is an international agency enjoying diplomatic immunity. It has already been held in Southeast Asian Fisheries Development Center-Aquaculture Department vs. National Labor Relations Commission (G.R. No. 86773, 206 SCRA 283/1992). Petitioner Southeast Asian Fisheries Development Center-Aquaculture Department (SEAFDEC-AQD) is an international agency beyond the jurisdiction of public respondent NLRC.

Being an intergovernmental organization, SEAFDEC including its Departments (AQD), enjoys functional independence and freedom from control of the state in whose territory its office is located. One of the basic immunities of an international organization is immunity from local jurisdiction, i.e., that it is immune from the legal

writs and processes issued by the tribunals of the country where it is found. The obvious reason for this is that the subjection of such an organization to the authority of the local courts would afford a convenient medium thru which the host government may interfere in their operations or even influence or control its policies and decisions of the organization; besides, such objection to local jurisdiction would impair the capacity of such body to discharge its responsibilities impartially on behalf of its member-states.

18. NIA vs. Court of Appeals (September 18, 1992)Facts: Sometime in 1967, petitioner National Irrigation Administration (NIA for brevity) constructed an irrigation canal on the property of Isabel and Virginia Tecson which passed through the private respondents’ landholdings as said irrigation canal traverses the Cinco-Cinco Creek which abuts said landholding. The irrigation canal has two (2) outlets which provide private respondents’ landholdings with water coming from said canal and at the same time serve to drain the excess water of said landholdings.

On February 13, 1975, private respondents filed a complaint for the abatement of nuisance with damages against petitioners NIA and/or the Administrator of the National Irrigation Administration alleging that the two (2) outlets constructed on both sides of the irrigation canal were not provided with gates to regulate the flow of water from the canal to their landholdings which resulted to the inundation of said landholdings causing the former to sustain damages consisting in the destruction of the planted palay crops and also prevented them from planting on their landholdings.

RTC ruled in favor of the private respondents. CA affirms.

NIA then filed a petition before the SC contendin that NIA is immune from suit for quasi-delict or tort.

Issue: Whether or not NIA is immune from suit.

Held: NATIONAL IRRIGATION ADMINISTRATION; BEING A CORPORATE BODY PERFORMING PROPRIETARY FUNCTIONS IS NOT IMMUNE FROM SUIT. — As correctly ruled by the court below, the NIA "is not immune from suit, by virtue of the express provision of P.D. No. 552." A reading of Section 2, sub-paragraph (f) of P.D. No. 552, amending Republic Act No. 3601 shows the granting to NIA the power "to exercise all the powers of a corporation under the Corporation Law, insofar as they are not inconsistent with the provisions of this Act." Paragraph 4 of said law also provide that petitioner NIA may sue and be sued in court for all kind of actions, whether contractual or quasi-contractual, in the recovery of compensation and damages as in the instant case considering that private respondents’ action is based on damages caused by the negligence of petitioners. This Court had previously held that "the National Irrigation Administration is a government agency with a juridical personality separate and distinct from the government. It is not a mere agency of the government but a corporate body performing proprietary functions" as it has its own assets and liabilities as well as its own corporate powers to be exercised by a Board of Directors.

19.20.21.22. UNITED STATES OF AMERICA, CAPT. JAMES E. GALLOWAY,

WILLIAM I. COLLINS and ROBERT GOHIER,petitioners,  vs.HON. V. M. RUIZ, Presiding Judge of Branch XV, Court of First Instance of Rizal and ELIGIO DE GUZMAN & CO., INC., respondents. (G.R. No. L-35645 May 22, 1985)Facts: At times material to this case, the United States of America had a naval base in Subic, Zambales. The base was one of those provided in the Military Bases Agreement between the Philippines and the United States.

Sometime in May, 1972, the United States invited the submission of bids for the following projects

1. Repair offender system, Alava Wharf at the U.S. Naval Station Subic Bay, Philippines.

x x x

Eligio de Guzman & Co., Inc. responded to the invitation and submitted bids. A request to confirm a price proposal confirms the acceptance of a bid pursuant to defendant United States' bidding practices. Later the herein respondents were informed by the petitioners that the company did not qualify to receive an award for the projects because of its previous unsatisfactory performance rating on a repair contract for the sea wall at the boat landings of the U.S. Naval Station in Subic Bay. The letter further said that the projects had been awarded to third parties. The respondent then instituted an action for specific performance and/or damages.

The defendants entered their special appearance for the purpose only of questioning the jurisdiction of this court over the subject matter of the complaint and the persons of defendants, the subject matter of the complaint being acts and omissions of the individual defendants as agents of defendant United States of America, a foreign sovereign which has not given her consent to this suit or any other suit for the causes of action asserted in the complaint.

Subsequently the defendants filed a motion to dismiss the complaint which included an opposition to the issuance of the writ of preliminary injunction.

Issue: W/N there is a need for the consent to be sued from the US for the prosecution of the action for specific performance in this case.

Ruling: Yes. The projects in this are an integral part of the naval base which is indisputably a governmental function. Hence, state immunity is an available defense.

The traditional rule of State immunity exempts a State from being sued in the courts of another State without its consent or waiver. This rule is a necessary consequence of the principles of independence and equality of States. However, the rules of International Law are not petrified; they are constantly developing and evolving. And because the activities of states have multiplied, it has been necessary to distinguish them-between sovereign and governmental acts (jure imperii) and private, commercial and proprietary acts (jure gestionis). The result is that State immunity now extends only to acts jure imperil The restrictive application of State immunity is now the rule in the United States, the United Kingdom and other states in western Europe.

The respondent judge, however contends that “it is the Court's considered opinion that entering into a contract for the repair of wharves or shoreline is certainly not a governmental function altho it may partake of a public nature or character” as the basis for its denial of the petition before him.

The restrictive application of State immunity is proper only when the proceedings arise out of commercial transactions of the foreign sovereign, its commercial activities or economic affairs. Stated differently, a State may be said to have descended to the level of an individual and can thus be deemed to have tacitly given its consent to be sued only when it enters into business contracts. It does not apply where the contract relates to the exercise of its sovereign functions. In this case the projects are an integral part of the naval base which is devoted to the defense of both the United States and the Philippines, indisputably a function of the government of the highest order; they are not utilized for nor dedicated to commercial or business purposes.

WHEREFORE, the petition is granted; the questioned orders of the respondent judge are set aside and Civil Case No. is dismissed. Costs against the private respondent.

MAKASIAR, J., dissenting:

When the U.S. Government, through its agency at Subic Bay, confirmed the acceptance of a bid of a private company for the repair of wharves or shoreline in the Subic Bay area, it is deemed to have entered into a contract and thus waived the mantle of sovereign immunity from suit and descended to the level of the ordinary citizen. Its consent to be sued, therefore, is implied from its act of entering into a contract

Justice and fairness dictate that a foreign government that commits a breach of its contractual obligation in the case at bar by the unilateral cancellation of the award for the project by the United States government, through its agency at Subic Bay should not be allowed to take undue advantage of a party who may have legitimate claims against it by seeking refuge behind the shield of non-suability. A contrary view would render a Filipino citizen, as in the instant case, helpless and without

redress in his own country for violation of his rights committed by the agents of the foreign government professing to act in its name.

Constant resort by a foreign state or its agents to the doctrine of State immunity in this jurisdiction impinges unduly upon our sovereignty and dignity as a nation. Its application will particularly discourage Filipino or domestic contractors from transacting business and entering into contracts with United States authorities or facilities in the Philippines whether naval, air or ground forces-because the difficulty, if not impossibility, of enforcing a validly executed contract and of seeking judicial remedy in our own courts for breaches of contractual obligation committed by agents of the United States government, always, looms large, thereby hampering the growth of Filipino enterprises and creating a virtual monopoly in our own country by United States contractors of contracts for services or supplies with the various U.S. offices and agencies operating in the Philippines.

The sanctity of upholding agreements freely entered into by the parties cannot be over emphasized. Whether the parties are nations or private individuals, it is to be reasonably assumed and expected that the undertakings in the contract will be complied with in good faith.

23. Sanders vs Veridiano

Facts: Petitioners Sanders and Moreau were the special services director and commanding officer of the Subic Naval Base respectively while respondents Rossi and Wyer were American citizens with permanent residence in the Philippines.

The respondents were advised that their employment had been converted from permanent full-time to permanent part-time. Their reaction was to protest this conversion and to institute grievance proceedings conformably with the rules of US Department of Defense. The result was a recommendation from the hearing officer who conducted the proceedings for the reinstatement of the private respondents to permanent full-time status plus backwages. The report on the hearing contained the observation that “Special Services management practices an autocratic form of supervision.” Sanders disagreed with the report and rejected the recommendation with statements regarding the respondents’ attitude.

Thereafter, respondents filed a case for damages against the petitioners in their private or personal capacity.

Issues: Whether or not the act complained of has been done in personal capacity?

Ruling: Given the official character of the above-described letters, we have to conclude that the petitioners were, legally speaking, being sued as officers of the United States government. As they have acted on behalf of that government, and within the scope of their authority, it is that government, and not the petitioners personally, that is responsible for their acts. Assuming that the trial can proceed and it is proved that the claimants have a right to the payment of damages, such

award will have to be satisfied not by the petitioners in their personal capacities but by the United States government as their principal. This will require that government to perform an affirmative act to satisfy the judgment, viz, the appropriation of the necessary amount to cover the damages awarded, thus making the action a suit against that government without its consent.

 In the case of foreign states, the rule is derived from the principle of the sovereign equality of states which wisely admonishes that par in parem non habet imperium and that a contrary attitude would "unduly vex the peace of nations." 17 Our adherence to this precept is formally expressed in Article II, Section 2, of our Constitution, where we reiterate from our previous charters that the Philippines "adopts the generally accepted principles of international law as part of the law of the land.

G. Police Power24.

25.ORTIGAS & CO. LTD., petitioner, vs. THE CA and ISMAEL G. MATHAY III, respondents. G.R. No. 126102, December 4, 2000)FACTS: Ortigas & Company sold to Emilia Hermoso, a parcel of land known as Lot 1, Block 21, Psd-66759, with an area of 1,508 square meters, located in Greenhills Subdivision IV, San Juan, Metro Manila, and covered by Transfer Certificate of Title No. 0737. The contract of sale provided that the lot:

1. …(1) be used exclusively…for residential purposes only, and not more than one single-family residential building will be constructed thereon,…

6. The BUYER shall not erect…any sign or billboard on the roof…for advertising purposes…

11. No single-family residential building shall be erected…until the building plans, specification…have been approved by the SELLER…

14....restrictions shall run with the land and shall be construed as real covenants until December 31, 2025 when they shall cease and terminate…

Metropolitan Manila Commission (now Metropolitan Manila Development Authority) enacted MMC Ordinance No. 81-01, also known as the Comprehensive Zoning Area for the National Capital Region. The ordinance reclassified as a commercial area a portion of Ortigas Avenue from Madison to Roosevelt Streets of Greenhills Subdivision where the lot is located.

Respondent Ismael Mathay III leased the lot from Emilia Hermoso and J.P. Hermoso Realty Corp.. He constructed a single story commercial building for Greenhills Autohaus, Inc., a car sales company.

Petitioner filed a complaint against Emilia Hermoso with the Regional Trial Court of Pasig, Branch 261. Docketed as Civil Case No. 64931, the complaint sought the demolition of the said commercial structure for having violated the terms and conditions of the Deed of Sale. Complainant prayed for the issuance of a temporary restraining order and a writ of preliminary injunction to prohibit petitioner from

constructing the commercial building and/or engaging in commercial activity on the lot. Ortigas and Company averred that inasmuch as the restrictions on the use of the lot were duly annotated on the title it issued to Emilia Hermoso, said restrictions must prevail over the ordinance, specially since these restrictions were agreed upon before the passage of MMC Ordinance No. 81-01.

ISSUE: Whether or not the zoning ordinance may impair contracts entered prior to its effectivity?

RULING: In general, we agree that laws are to be construed as having only prospective operation. Lex prospicit, non respicit. Equally settled, only laws existing at the time of the execution of a contract are applicable thereto and not later statutes, unless the latter are specifically intended to have retroactive effect.7 A later law which enlarges, abridges, or in any manner changes the intent of the parties to the contract necessarily impairs the contract itself8and cannot be given retroactive effect without violating the constitutional prohibition against impairment of contracts.

But, the foregoing principles do admit of certain exceptions. One involves police power. A law enacted in the exercise of police power to regulate or govern certain activities or transactions could be given retroactive effect and may reasonably impair vested rights or contracts. Police power legislation is applicable not only to future contracts, but equally to those already in existence.10 Nonimpairment of contracts or vested rights clauses will have to yield to the superior and legitimate exercise by the State of police power to promote the health, morals, peace, education, good order, safety, and general welfare of the people.11 Moreover, statutes in exercise of valid police power must be read into every contract.12 Noteworthy, in Sangalang vs. Intermediate Appellate Court,13 we already upheld MMC Ordinance No. 81-01 as a legitimate police power measure.

Following our ruling in Ortigas & Co., Ltd. vs. Feati Bank & Trust Co., 94 SCRA 533 (1979), the contractual stipulations annotated on the Torrens Title, on which Ortigas relies, must yield to the ordinance. When that stretch of Ortigas Avenue from Roosevelt Street to Madison Street was reclassified as a commercial zone by the Metropolitan Manila Commission in March 1981, the restrictions in the contract of sale between Ortigas and Hermoso, limiting all construction on the disputed lot to single-family residential buildings, were deemed extinguished by the retroactive operation of the zoning ordinance and could no longer be enforced. While our legal system upholds the sanctity of contract so that a contract is deemed law between the contracting parties,17nonetheless, stipulations in a contract cannot contravene "law, morals, good customs, public order, or public policy." Otherwise such stipulations would be deemed null and void.

26. PRC VS. ARLENE DE GUZMAN, ET AL., June 21, 2004Facts: After the Professional Regulations Commission (PRC) released the names of successful examinees in the Medical Licensure Examination, the Board of Medicines observed that the grades of the 79 Fatima College of Medicine successful

examinees were unusually and exceptionally high in the two (2) most difficult subjects of the exam, i.e., Biochemistry and Obstetrics and Gynecology.

The Board then issued Resolution No. 19 withholding the registration as physicians of all the examinees from Fatima College of Medicine. Compared with other examines from other schools, the results of those from Fatima were not only incredibly high but unusually clustered close to each other. The NBI Investigation found that the “Fatima examinees gained early access to the test questions.”

On July 5, 1993, the respondents-examinees filed a petition for mandamus before the RTC of Manila to compel the PRC to give them their licenses to practice medicine. Meanwhile on July 21, 1993, the Board of medicine issued Resolution No. 21 charging the respondents of immorality, dishonest conduct, fraud and deceit and recommended that the test results of the Fatima Examinees be nullified.

On December 19, 1994, the RTC of Manila promulgated its decision ordering the PRC to allow the respondents to take the physician’s oath and to register them as physicians. The same was appealed by the PRC to the Court of Appeals which sustained the RTC decision.

Hence, this petition.

Held: It must be stressed that the power to regulate the practice of a profession or pursuit of an occupation cannot be exercised by the State in an arbitrary, despotic or oppressive manner. However, the regulating body has the right to grant or forbid such privilege in accordance with certain conditions.

But like all rights and freedoms guaranteed by the Constitution, their exercise may be regulated pursuant to the police power of the State to safeguard health, morals, peace, education, order, safety, and general welfare of the people. As such, mandamus will not lie to compel the Board of Medicine to issue licenses for the respondents to practice medicine.

RA 2382 which prescribes the requirements for admission to the practice of medicine, the qualifications of the candidates for the board examination, the scope and conduct of the examinations, the grounds for the denying of the issuance of a physician’s license, or revoking a license that has been issued. It is therefore clear that the examinee must prove that he has fully complied with all the conditions and requirements imposed by law and the licensing authority to be granted the privilege to practice medicine. In short, he shall have all the qualifications and none of the disqualifications. The petition is therefore granted.

27. FRANCISCO I. CHAVEZ, vs.HON. ALBERTO G. ROMULO, IN HIS CAPACITY AS EXECUTIVE SECRETARY;DIRECTOR GENERAL HERMOGENES E. EBDANE, JR., IN HIS CAPACITY AS THECHIEF OF THE PNP, et al  (G.R. No. 157036. June 9, 2004)Facts: Petition for prohibition and injunction seeking to enjoin the implementation of the “Guidelines in the Implementation of the Ban on the Carrying of Firearms Outside of Residence” (Guidelines) issued by respondent Hermogenes E. Ebdane,

Jr., Chief of the Philippine National Police (PNP).Petitioner Francisco I. Chavez, a licensed gun owner to whom a PTCFOR has been issued, requested the DILG to reconsider the implementation of the assailed Guidelines. However, his request was denied. Thus, he filed the present petition impleading public respondents Ebdane, as Chief of PNP; Alberto G. Romulo, as Executive Secretary; and Gerry L. Barias, as Chief of the PNP-Firearms and Explosives Division.

 Issues: 1.whether respondent Ebdane is authorized to issue the assailed Guidelines;2.whether the issuance of the assailed Guidelines is a valid exercise of police power?

Ruling: 1 . A u t h o r i t y o f   t h e P N P C h i e f  It is true that under our constitutional system, the powers of government are distributed among three coordinate and substantially independent departments: the legislative, the executive and the judiciary. Each has exclusive cognizance of the matters within its jurisdiction and is supreme within its own sphere. The power to make laws – the legislative power – is vested in Congress. Any attempt to abdicate the power is unconstitutional and void, on the principle that “delegata potestas non potest delegari” – “delegated power may not be delegated.”The rule which forbids the delegation of legislative power, however, is not absolute and inflexible. It admits of exceptions. An exception sanctioned by immemorial practice permits the legislative body to delegate its licensing power to certain persons, municipal corporations, towns, boards, councils, commissions, commissioners, auditors, bureaus and directors. Such licensing power includes the power to promulgate necessary rules and regulations. Act No. 1780 delegated upon the Governor-General (now the President) the authority (1) to approve or disapprove applications of any person for a license to deal in firearms or to possess the same for personal protection, hunting and other lawful purposes; and (2) to revoke such license any time. Further, it authorized him to issue regulations which he may deem necessary for the proper enforcement of the Act. By virtue of Republic Act No. 6975, the PNP absorbed the Philippine Constabulary (PC). Consequently, the PNP Chief succeeded the Chief of the Constabulary and, therefore, assumed the latter’s licensing authority. Section 24 thereof specifies, as one of PNP’s powers, the issuance of licenses for the possession of firearms and explosives in accordance with law. This is in conjunction with the PNP Chief’s “power to issue detailed implementing policies and instructions” on such “matters as may be necessary to effectively carry out the functions, powers and duties” of the PNP.

2 . P o l i c e P o w e r  At any rate, assuming that petitioner’s PTCFOR constitutes a property right protected by theConstitution, the same cannot be considered as absolute as to be placed beyond the reach of the State’s police power. All property in the state is held

subject to its general regulations, necessary to the common good and general welfare.

The Court laid down the test to determine the validity of a police measure, thus: (1)The interests of the public generally, as distinguished from those of a particular class, require the exercise of the police power; and(2)The means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.

It is apparent from the assailed Guidelines that the basis for its issuance was the need for peace and order in the society. Owing to the proliferation of crimes, particularly those committed by the New People’s Army (NPA), which tends to disturb the peace of the community, President Arroyo deemed it best to impose a nationwide gun ban. Undeniably, the motivating factor in the issuance of the assailed Guidelines is the interest of the public in general. The only question that can then arise is whether the means employed are appropriate and reasonably necessary for the accomplishment of the purpose and are not unduly oppressive. In the instant case, the assailed Guidelines do not entirely prohibit possession of firearms. What they proscribe is merely the carrying of firearms outside of residence. However, those who wish to carry their firearms outside of their residences may re-apply for a new PTCFOR. This is a reasonable regulation. If the carrying of firearms is regulated, necessarily, crime incidents will be curtailed. Criminals carry their weapon to hunt for their victims; they do not wait in the comfort of their homes. With the revocation of all PTCFOR, it would be difficult for criminals to roam around with their guns. On the other hand, it would be easier for the PNP to apprehend them. The petition is hereby DISMISSED

28. Camarines Norte Electric vs. Torres (February 27,1998)FACTS: Petitioner CANORECO is an electric cooperative organized under the provisions of P.D. No. 269, otherwise known as the National Electrification Administration Decree, as amended by P.D. No. 1645 seek to (a) annul and set aside Memorandum Order No. 409 of the Office of the President dated 3 December 1996 constituting an Ad Hoc Committee to take over and manage the affairs of the  Camarines Norte Electric Cooperative, Inc., (hereafter CANORECO) “until such time as a general membership meeting can be called to decide the serious issues affecting the said cooperative and normalcy in operations is restored"; and (b) prohibit the respondents from performing acts or continuing proceedings pursuant to the Memorandum Order.

Memorandum Order No. 409 purpose was to efficiently and effectively address the worsening intra-cooperative dispute problem of the Camarines Norte Electric Cooperative, Inc. (CANORECO) and in order not to prejudice and endanger the interest of the people who rely on the said cooperative for their supply of electricity, an AD HOC Committee is hereby constituted to take over and manage the affairs of CANORECO until such time as a general membership meeting can be called to decide the serious issues affecting the said cooperative and normalcy in operations

is restored.  Further, if and when warranted, the present Board of Directors may be called upon by the Committee for advisory services without prejudice to the receipt of their per diems as may be authorized by existing rules and regulations.

ISSUE(S): May the Office of the President validly constitute an ad hoc committee to take over and manage the affairs of an electric cooperative? 

HELD: Neither can police power be invoked to clothe with validity the assailed Memorandum Order No. 409.  Police power is the power inherent in a government to enact laws, within constitutional limits, to promote the order, safety, health, morals, and general welfare of society. It is lodged primarily in the legislature.  By virtue of a valid delegation of legislative power, it may also be exercised by the President and administrative boards, as well as the lawmaking bodies on all municipal levels, including the barangay. Delegation of legislative powers to the President is permitted in Sections 23(2) and 28(2) of Article VI of the Constitution. The pertinent laws on cooperatives, namely, R.A. No. 6938, R.A. No. 6939, and P.D. No. 269 as amended by P.D. No. 1645 do not provide for the President or any other administrative body to take over the internal management of a cooperative.

 The Supreme Court does not hesitate to rule that Memorandum Order No. 409 has no constitutional and statutory basis.  It violates the basic underlying principle enshrined in Article 4(2) of R.A. No. 6938 that cooperatives are democratic organizations and that their affairs shall be administered by persons elected or appointed in a manner agreed upon by the members.  Likewise, it runs counter to the policy set forth in Section 1 of R.A. No. 6939 that the State shall, except as provided in said Act, maintain a policy of non-interference in the management and operation of cooperatives.

29. Ynot vs IAC (March 20, 1987)Facts: There had been an existing law which prohibited the slaughtering of carabaos (EO 626). To strengthen the law, Marcos issued EO 626-A which not only banned the movement of carabaos from interprovinces but as well as the movement of carabeef. On 13 Jan 1984, Ynot was caught transporting 6 carabaos from Masbate to Iloilo. He was then charged in violation of EO 626-A. Ynot averred EO 626-A as unconstitutional for it violated his right to be heard or his right to due process. He said that the authority provided by EO 626-A to outrightly confiscate carabaos even without being heard is unconstitutional. The lower court ruled against Ynot ruling that the EO is a valid exercise of police power in order to promote general welfare so as to curb down the indiscriminate slaughter of carabaos.

ISSUE: Whether or not the law is a valid exercise of police power

HELD: The SC ruled that the EO is not valid as it indeed violates due process. EO 626-A ctreated a presumption based on the judgment of the executive. The movement of carabaos from one area to the other does not mean a subsequent slaughter of the same would ensue. Ynot should be given to defend himself and explain why the carabaos are being transferred before they can be confiscated. The SC  found that the challenged measure is an invalid exercise of the police power because the method employed to conserve the carabaos is not reasonably

necessary to the purpose of the law and, worse, is unduly oppressive. Due process is violated because the owner of the property confiscated is denied the right to be heard in his defense and is immediately condemned and punished. The conferment on the administrative authorities of the power to adjudge the guilt of the supposed offender is a clear encroachment on judicial functions and militates against the doctrine of separation of powers. There is, finally, also an invalid delegation of legislative powers to the officers mentioned therein who are granted unlimited discretion in the distribution of the properties arbitrarily taken.

30.

H. Power of Eminent Domain31.32.33. MARINA Z. REYES; ALFREDO A. FRANCISCO; petitioners, vs.

NATIONAL HOUSING AUTHORITY, respondent. (G.R. No. 147511, January 20, 2003)Facts: National Housing Authority filed several expropriation complaints on the sugarland owned by the petitioners Reyes. The land is located in Dasmarinas, Cavite. The purpose of the expropriation is for the expansion of the Dasmarinas Resettlement Project to accommodate the squatters who were relocated from Manila. The trial court rendered judgment ordering the expropriation of these lots with payment of just compensation. It was affirmed by the Supreme Court. 

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

NHA: In its Answer, respondent NHA averred that it had already paid a substantial amount to herein petitioners and that the expropriation judgment could not be executed in view of several issues raised by respondent NHA before the expropriation court concerning capital gains tax, registration fees and other expenses for the transfer of title to respondent NHA 

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

The Court of Appeals affirmed the decision. 

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

Ruling: Petitioners cannot insist on a restrictive view of the eminent domain provision of the Constitution by contending that the contract for low cost housing is a deviation from the stated public use. It is now settled doctrine that the concept of public use is no longer limited to traditional purposes. Here, as elsewhere, the idea that "public use" is strictly limited to clear cases of "use by the public" has been abandoned. The term "public use" has now been held to be synonymous with "public interest," "public benefit," "public welfare," and "public convenience."8 The rationale for this new approach is well explained in the case of Heirs of Juancho Ardona, et al. vs. Reyes, et al.,9 to wit:

"The restrictive view of public use may be appropriate for a nation which circumscribes the scope of government activities and public concerns and which possesses big and correctly located public lands that obviate the need to take private property for public purposes. Neither circumstance applies to the Philippines. We have never been a laissez faire State. And the necessities which impel the exertion of sovereign power are all too often found in areas of scarce public land or limited government resources.

x xx           x xx           x xxThe taking to be valid must be for public use. There was a time when it was

felt that a literal meaning should be attached to such a requirement. Whatever project is undertaken must be for the public to enjoy, as in the case of streets or parks. Otherwise, expropriation is not allowable. It is not anymore. As long as the purpose of the taking is public, then the power of eminent domain comes into play. As just noted, the constitution in at least two cases, to remove any doubt, determines what is public use. One is the expropriation of lands to be subdivided into small lots for resale at cost to individuals. The other is in the transfer, through the exercise of this power, of utilities and other private enterprise to the government. It is accurate to state then that at present whatever may be beneficially employed for the general welfare satisfies the requirement of public use."

The act of respondent NHA in entering into a contract with a real estate developer for the construction of low cost housing on the expropriated lots to be sold to qualified low income beneficiaries cannot be taken to mean as a deviation from the stated public purpose of their taking. Jurisprudence has it that the expropriation of private land for slum clearance and urban development is for a public purpose even if the developed area is later sold to private homeowners, commercials firms, entertainment and service companies, and other private concerns.

Moreover, the Constitution itself allows the State to undertake, for the common good and in cooperation with the private sector, a continuing program of urban land reform and housing which will make at affordable cost decent housing and basic services to underprivileged and homeless citizens in urban centers and resettlement areas. The expropriation of private property for the purpose of socialized housing for the marginalized sector is in furtherance of the social justice provision under Section 1, Article XIII of the Constitution

We likewise do not subscribe to petitioners' contention that the stated public purpose was abandoned when respondent NHA failed to occupy the expropriated lots by relocating squatters from the Metro Manila area. The expropriation judgment

declared that respondent NHA has a lawful right to take petitioners properties "for the public use or purpose of expanding the Dasmariñas Resettlement Project." The taking here is absolute, without any condition, restriction or qualification. It was held in Fery vs. Municipality of Cabanatuan that:

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

Petitioners further aver that the continued failure of respondent NHA to pay just compensation for a long period of time justifies the forfeiture of its rights and interests over the expropriated lots. They demand the return of the expropriated lots. Respondent NHA justifies the delay to pay just compensation by reason of the failure of petitioners to pay the capital gains tax and to surrender the owners' duplicate certificates of title.

In several court decisions, it was ruled that non-payment of just compensation does not entitle the private landowners to recover possession of their expropriated lots. The judgment rendered by the Bulacan RTC in 1979 on the expropriation proceedings provides:

In arguing for the return of their property on the basis of non-payment, respondents ignore the fact that the right of the expropriating authority is far from that of an unpaid seller in ordinary sales, to which the remedy of rescission might perhaps apply. An in rem proceeding, condemnation acts upon the property. After condemnation, the paramount title is in the public under a new and independent title; thus, by giving notice to all claimants to a disputed title, condemnation proceedings provide a judicial process for securing better title against all the world than may be obtained by voluntary conveyance."

With respect to the amount of the just compensation still due and demandable from respondent NHA, the lower courts erred in not awarding interest computed from the time the property is actually taken to the time when compensation is actually paid or deposited in court.

We, however, likewise find the refusal of respondent NHA to pay just compensation, allegedly for failure of petitioners to pay capital gains tax and surrender the owners' duplicate certificates of title, to be unfounded and unjustified.

First, under the expropriation judgment the payment of just compensation is not subject to any condition. Second, it is a recognized rule that although the right to enter upon and appropriate the land to public use is completed prior to payment, title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation.

WHEREFORE, the appealed judgment is modified as follows:1. Ordering respondent National Housing Authority to pay petitioners the

amount of P1,218,574.35 with legal interest thereon at 12% per annum computed from the taking of the expropriated properties in 1997 until the amount due shall have been fully paid;

2. Ordering petitioners to pay the capital gains tax; and3. Ordering petitioners to surrender to respondent National Housing Authority

the owners' duplicate certificates of title of the expropriated properties upon full payment of just compensation.

SO ORDERED.

34. Lagcao vs LabraFacts: In 1964, the Province of Cebu donated 210 lots to the City of Cebu. One of these lots was Lot 1029, situated in Capitol Hills, Cebu City, with an area of 4,048 square meters.In 1965, petitioners purchased Lot 1029 on installment basis. But then, in late 1965, the 210 lots, including Lot 1029, reverted to the Province of Cebu.[2] Consequently, the province tried to annul the sale of Lot 1029 by the City of Cebu to the petitioners. This prompted the latter to sue the province for specific performance and damages in the then Court of First Instance. On July 9, 1986, the court a quo ruled in favor of petitioners and ordered the Province of Cebu to execute the final deed of sale in favor of petitioners. On June 11, 1992, the Court of Appeals affirmed the decision of the trial court. Pursuant to the ruling of the appellate court, the Province of Cebu executed on June 17, 1994 a deed of absolute sale over Lot 1029 in favor of petitioners. Thereafter, Transfer Certificate of Title (TCT) No. 129306 was issued in the name of petitioners and Crispina Lagcao. When the petitioners tried to take possession of the lot, it was discovered that the same was occupied by informal settlers. An ejectment suit was filed after which, writ of execution and order of demolition were issued. The Mayor requested for the deferment of demolition on the ground that the City was still looking for relocation site, which was granted by the court. During the suspension, the SP of Cebu City issued an ordinance expropriating the subject lot for purpose of benefiting the homeless.

Issue: Whether or not the ordinance expropriating the subject lot was valid.

Ruling: There are two legal provisions which limit the exercise of this power: (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;[12] and (2) private property shall not be taken for public use without just compensation.[13]  Thus, the exercise by local government units of the power of eminent domain is not absolute. In fact, Section 19 of RA 7160 itself explicitly states that such exercise must comply with the provisions of the Constitution and pertinent laws.         The exercise of the power of eminent domain drastically affects a landowner’s right to private property, which is as much a constitutionally-protected right necessary for the preservation and enhancement of personal dignity and intimately connected with the rights to life and liberty.[14]  Whether directly exercised by the State or by its authorized agents, the exercise of eminent domain is necessarily in derogation of private rights.[15]  For this reason, the need for a painstaking scrutiny cannot be overemphasized.         The due process clause cannot be trampled upon each time an ordinance orders the expropriation of a private individual’s  property.  The  courts  cannot  even adopt  a hands-off policy simply because public use or public purpose is invoked by an ordinance, or just compensation has been fixed and determined.  In De Knecht vs. Bautista,[16] we said:             It is obvious then that a land-owner is covered by the mantle of protection due process affords.  It is a mandate of reason.  It frowns on arbitrariness, it is the antithesis of any governmental act that smacks of whim or caprice.  It negates state

power to act in an oppressive manner.  It is, as had been stressed so often, the embodiment of the sporting idea of fair play.  In that sense, it stands as a guaranty of justice.  That is the standard that must be met by any governmental agency in the exercise of whatever competence is entrusted to it. As was so emphatically stressed by the present Chief Justice, “Acts of Congress, as well as those of the Executive, can deny due process only under pain of nullity. xxx                               The foundation of the right to exercise eminent domain is genuine necessity and that necessity must be of public character.[17] Government may not capriciously or arbitrarily choose which private property should be expropriated.  In this case, there was no showing at all why petitioners’ property was singled out for expropriation by the city ordinance or what necessity impelled the particular choice or selection. Ordinance No. 1843 stated no reason for the choice of petitioners’ property as the site of a socialized housing project. Condemnation of private lands in an irrational or piecemeal fashion or the random expropriation of small lots to accommodate no more than a few tenants or squatters is certainly not the condemnation for public use contemplated by the Constitution. This is depriving a citizen of his property for the convenience of a few without perceptible benefit to the public.  It should also be noted that, as early as 1998, petitioners had already obtained a favorable judgment of eviction against the illegal occupants of their property. The judgment in this ejectment case had, in fact, already attained finality, with a writ of execution and an order of demolition. But Mayor Garcia requested the trial court to suspend the demolition on the pretext that the City was still searching for a relocation site for the squatters.  However, instead of looking for a relocation site during the suspension period, the city council suddenly enacted Ordinance No. 1843 for the expropriation of petitioners’ lot. It was trickery and bad faith, pure and simple. The unconscionable manner in which the questioned ordinance was passed clearly indicated that respondent City transgressed the Constitution, RA 7160 and RA 7279. 

35. EXPORT PROCESSING ZONE AUTHORITY vs. HON. CEFERINO E. DULAY,in his capacity as the Presiding Judge, Courtof First Instance of Cebu, Branch XVI, Lapu-Lapu City, and SAN ANTONIO DEVELOPMENT CORPORATION

FACTS: O n   J a n u a r y   1 5 ,   1 9 7 9 ,   t h e   P r e s i d e n t   o f   t h e  P h i l i p p i n e s , i s s u e d Proclamation No. 1811, reserving a certain parcel of land of the public domain situated in the City of Lapu-Lapu, Island of Mactan, Cebu for the establishment of an export processing zone by petitioner Export Processing Zone Authority(EPZA).Not all the reserved area, however, was public land. The proclamation included, among others, four (4) parcels of owned and registered in the name of t h e   S a n   A n t p o n i o   D e v e l o p m e n t   C o r p o r a t i o n .   E P Z A ,  t h e r e f o r e ,   o ff e r e d   t o purchase   the  pa rce l s   o f   l and   in  accco rdance  w i th   the va lua t i on   se t f o r th i n Section 92, Presidential Decree (P.D.) No. 464, as amended. The parties failed to reach an agreement regarding the sale of

the property. EPZA then filed with Court of First Instance a complaint for expropriation, through which, a writ of possession authorizing the petitioner to take immediate possession of the premises was issued. At the pre-trial conference, parties have agreed that the only issue to be resolved is the just compensation for the properties. Hearing on the merits was then set.  Therea f te r ,   the  cour t   i s sued  an  o rder ,   dec la r ing  EPZA  as  hav ing   the lawful right to take the properties sought to be condemned upon the payment of just compensation to be determined as of the filing of the complaint and a p p o i n t i n g   c o m m i s s i o n e r s   t o   a s c e r t a i n   a n d   r e p o r t   t o   t h e  c o u r t t h e   j u s t compensation for the properties sought to be expropriated. The consolidated report of the three commissioners recommended the amount of P15.00 per square meter as the fair and reasonable value of just compensation for the properties. EPZA filed an Objection to Commissioner's Report on the grounds that P.D. No. 1533 has superseded Sections 5 to 8 of Rule 67 of the Rules of Court on the ascertainment of just compensation through commissioners; and that the compensation must not exceed the maximum amount set by P.D. No. 1533The trial court denied the motion, as a result of which, the petitioner flied this present petition enjoining the trial court from enforcing the order and from further proceeding with the hearing of the expropriation case.

ISSUE: Whether or not the there is still a need to appoint commissioners even a f te r the effec t i v i ty o f P .D . No . 1533 wh ich a l ready p rov ided f o r a mode in determining just compensation.

HELD: Yes. The Court declares the provision of the P.D. 1533 on just compensation unconstitutional and void as the method of ascertaining just compensationunder   the   sa id  dec ree   cons t i tu tes   impermi ss ib le  enc roachment   on   jud i c i a l prerogatives. It tends to render the Court inutile on a matter which, under the Constitution, is reserved to it for final determination. Thus ,  a l though   in  an  exprop r ia t i on  p roceed ing ,   the  cour t   techn i ca l l y would still have the power to determine the just compensation for the property, following the applicable decree, its task would be relegated to simply stating the lower value of the property as declared either by the owner or the assessor. The strict application of the decree during proceedings would be nothing short of am e r e   f o r m a l i t y   o r   c h a r a d e   a s   t h e   c o u r t   h a s   o n l y   t o  c h o o s e   b e t w e e n   t h e valuation of the owner and that of the assessor and its choice is always limitedt o   t h e   l o w e r   o f   t h e   t w o .   T h e   c o u r t   c a n n o t  e x e r c i s e   i t s   d i s c r e t i o n   o r independence in determining what is just or fair. The trial court correctly stated that the valuation in the decree may onlys e r v e   a s   a   g u i d i n g   p r i n c i p l e   o r   o n e   o f   t h e   f a c t o r s  i n   d e t e r m i n i n g   j u s t compensation but it may not substitute the court's own judgment as to what amount should be awarded and how to arrive at such amount. A return to the earlier well-established doctrine is more in keeping with the principle that the  j u d i c i a r y   s h o u l d   l i v e   u p   t o   i t s   m i s s i o n   " b y   v i t a l i z i n g  

a n d   n o t   d e n i g r a t i n g constitutional rights." The basic unfairness of the decree is readily apparent. Just compensation means the value of the property at the time of the taking. It means a fair and full equivalent for the loss sustained. In this particular case, the tax declarations presented by EPZA as basis for just compensation were made by the city assessor long before martial law, when land was not only much cheaper but when assessed values of properties were stated in figures constituting only a fraction of their true market value. The private respondent was not even the owner of the properties at the time. To get the value of the lots on the basis of documents which are out of date and at p r i ces  be low   the  acqu i s i t i on   cos t   o f  p resent   owne rs  wou ld  be  a rb i t ra ry   andconfiscatory

36.37.38. REPUBLIC vs. LIM (GR no. 161656, June 29, 2005)

FACTS: In 1938, the Republic instituted a special civil action for expropriation of a land in Lahug, Cebu City for the purpose of establishing a military reservation for the Philippine Army. The said lots were registered in the name of Gervasia and Eulalia Denzon. The Republic deposited P9,500 in the PNB then took possession of the lots. Thereafter, onMay 1940, the CFI rendered its Decision ordering the Republic to pay the Denzons the sum of P4,062.10 as just compensation. The Denzons appealed to the CA but it was dismissed on March 11, 1948. An entry of judgment was made on April 5, 1948. In 1950, one of the heirs of the Denzons, filed with the National Airports Corporation a claim for rentals for the two lots, but it "denied knowledge of the matter." On September 6, 1961, Lt. Cabal rejected the claim but expressed willingness to pay the appraised value of the lots within a reasonable time. For failure of the Republic to pay for the lots, on September 20, 1961, the Denzons· successors-in-interest, Valdehueza and Panerio, filed with the same CFI an action for recovery of possession with damages against the Republic and AFP officers in possession of the property. On November 1961, Titles of the said lots were issued in the names of Valdehueza and Panerio with the annotation "subject to the priority of the National Airports Corporation to acquire said parcels of land, Lots 932 and939 upon previous payment of a reasonable market value". On July 1962, the CFI promulgated its Decision in favor of Valdehueza and Panerio, holding that they are the owners and have retained their right as such over lots because of the Republic’s failure to pay the amount of P4,062.10, adjudged in the expropriation proceedings. However, in view of the annotation on their land titles, they were ordered to execute a deed of sale in favor of the Republic. They appealed the CFI·s decision to the SC. The latter held that Valdehueza and Panerio are still the registered owners of Lots 932 and 939, there having been no payment of just compensation by the Republic. SC still ruled that they are not entitled to recover possession of the lots but may only demand the payment of their fair market value. Meanwhile, in 1964, Valdehueza and Panerio mortgaged Lot 932 to Vicente Lim, herein respondent, as security for their loans. For their failure to pay Lim despite demand, he had the mortgage

foreclosed in 1976. The lot title was issued in his name. On 1992, respondent Lim filed a complaint for quieting of title with the RTC against the petitioners herein. On 2001, the RTC rendered a decision in favor of Lim, declaring that he is the absolute and exclusive owner of the lot with all the rights of an absolute owner including the right to possession. Petitioners elevated the case to the CA. In its Decision dated September 18, 2003, it sustained the RTC Decision saying: ´... This is contrary to the rules of fair play because the concept of just compensation embraces not only the correct determination of the amount to be paid to the owners of the land, but also the payment for the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered just"...µPetitioner, through the OSG, filed with the SC a petition for review alleging that they remain as the owner of Lot 932.

ISSUE:Whether the Republic has retained ownership of Lot 932 despite its failure to pay respondents predecessors-in-interest the just compensation therefore pursuant to the judgment of the CFI rendered as early as May 14, 1940.

RULING: In summation, while the prevailing doctrine is that “the non-payment of just compensation does not entitle the private landowner to recover possession of the expropriated lots, however, in cases where the government failed to pay just compensation within five (5) years from the finality of the judgment in the expropriation proceedings, the owners concerned shall have the right to recover possession of their property.  This is in consonance with the principle that “the government cannot keep the property and dishonor the judgment.” To be sure, the five-year period limitation will encourage the government to pay just compensation punctually.  This is in keeping with justice and equity.  After all, it is the duty of the government, whenever it takes property from private persons against their will, to facilitate the payment of just compensation.  In Cosculluela v. Court of Appeals, we defined just compensation as not only the correct determination of the amount to be paid to the property owner but also the payment of the property within a reasonable time.  Without prompt payment, compensation cannot be considered “just.”

39. AMOS P. FRANCIA JR., et. al. v. MUNICIPALITY OF MERCAUAYAN (G.R. No. 170432, 24 March 2008)FACTS: A Complaint for expropriation was filed by respondent Municipality of Meycauayan, Bulacan against the property of petitioners Amos Francia, Cecilia Francia and Benjamin Francia. The Municipality of Meycauayan seeks to use the said property in order to establish a common public terminal for all public utility vehicles. The Regional Trial Court (RTC) ruled that the expropriation was for public purpose and issued an Order of Expropriation.

On appeal, the Court of Appeals partially granted the petition. It nullified the Order of Expropriation except with regard to the writ of possession. It upheld the decision of the RTC that in issuance of writ of possession, prior determination of the existence of public purpose is necessary.

ISSUE: Whether or not prior determination of existence of public purpose is necessary before the issuance of writ of possession?

HELD: Section 19 of Republic Act 7160 provides: Section 19. Eminent Domain. ― A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of the Constitution and pertinent laws; Provided, however, That the power of eminent domain may not be exercised unless a valid and definite offer has been previously made to the owner, and that such offer was not accepted; Provided, further, That the local government unit may immediately take possession of the property upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least fifteen percent (15%) of the fair market value of the property based on the current tax declaration of the property to be expropriated; Provided, finally, That, the amount to be paid for the expropriated property shall be determined by the proper court, based on the fair market value at the time of the taking of the property.

Before a local government unit may enter into the possession of the property sought to be expropriated, it must (1) file a complaint for expropriation sufficient in form and substance in the proper court and (2) deposit with the said court at least 15% of the property's fair market value based on its current tax declaration. The law does not make the determination of a public purpose a condition precedent to the issuance of a writ of possession.

40. AGAN VS PIATCO (May 5, 2003)Facts: On October 5, 1994, AEDC submitted an unsolicited proposal to the Government through the DOTC/MIAA for the development of NAIA International Passenger Terminal III (NAIA IPT III).

DOTC constituted the Prequalification Bids and Awards Committee (PBAC) for the implementation of the project and submitted with its endorsement proposal to the NEDA, which approved the project.

On June 7, 14, and 21, 1996, DOTC/MIAA caused the publication in two daily newspapers of an invitation for competitive or comparative proposals on AEDC’s unsolicited proposal, in accordance with Sec. 4-A of RA 6957, as amended.  

On September 20, 1996, the consortium composed of People’s Air Cargo and Warehousing Co., Inc. (Paircargo), Phil. Air and Grounds Services, Inc. (PAGS) and Security Bank Corp. (Security Bank) (collectively, Paircargo Consortium) submitted their competitive proposal to the PBAC.  PBAC awarded the project to Paircargo Consortium. Because of that, it was incorporated into Philippine International Airport Terminals Co., Inc.

AEDC subsequently protested the alleged undue preference given to PIATCO and reiterated its objections as regards the prequalification of PIATCO.

On July 12, 1997, the Government and PIATCO signed the “Concession Agreement for the Build-Operate-and-Transfer Arrangement of the NAIA Passenger Terminal III”

(1997 Concession Agreement).  The Government granted PIATCO the franchise to operate and maintain the said terminal during the concession period and to collect the fees, rentals and other charges in accordance with the rates or schedules stipulated in the 1997 Concession Agreement.  The Agreement provided that the concession period shall be for twenty-five (25) years commencing from the in-service date, and may be renewed at the option of the Government for a period not exceeding twenty-five (25) years.  At the end of the concession period, PIATCO shall transfer the development facility to MIAA.

Meanwhile, the MIAA which is charged with the maintenance and operation of the NAIA Terminals I and II, had existing concession contracts with various service providers to offer international airline airport services, such as in-flight catering, passenger handling, ramp and ground support, aircraft maintenance and provisions, cargo handling and warehousing, and other services, to several international airlines at the NAIA.

On September 17, 2002, the workers of the international airline service providers, claiming that they would lose their job upon the implementation of the questioned agreements, filed a petition for prohibition. Several employees of MIAA likewise filed a petition assailing the legality of the various agreements.

During the pendency of the cases, PGMA, on her speech, stated that she will not “honor (PIATCO) contracts which the Executive Branch’s legal offices have concluded (as) null and void.”

Issue: (1) Whether or not the State can temporarily take over a business affected with public interest.(2) Whether or not PIATCO has a right for just compensation

Held: PIATCO cannot, by mere contractual stipulation, contravene the Constitutional provision on temporary government takeover and obligate the government to pay “reasonable cost for the use of the Terminal and/or Terminal Complex.”

Article XII, Section 17 of the 1987 Constitution provides:Section 17. In times of national emergency, when the public interest so requires, the State may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately owned public utility or business affected with public interest.

The above provision pertains to the right of the State in times of national emergency, and in the exercise of its police power, to temporarily take over the operation of any business affected with public interest. The duration of the emergency itself is the determining factor as to how long the temporary takeover by the government would last. The temporary takeover by the government extends only to the operation of the business and not to the ownership thereof. As such the government is not required to compensate the private entity-owner of the said business as there is no transfer of ownership, whether permanent or temporary. The private entity-owner affected by the temporary takeover cannot, likewise, claim just compensation for the use of the said business and its properties as the temporary

takeover by the government is in exercise of its police power and not of its power of eminent domain.

Article XII, section 17 of the 1987 Constitution envisions a situation wherein the exigencies of the times necessitate the government to “temporarily take over or direct the operation of any privately owned public utility or business affected with public interest.” It is the welfare and interest of the public which is the paramount consideration in determining whether or not to temporarily take over a particular business. Clearly, the State in effecting the temporary takeover is exercising its police power. Police power is the “most essential, insistent, and illimitable of powers.” Its exercise therefore must not be unreasonably hampered nor its exercise be a source of obligation by the government in the absence of damage due to arbitrariness of its exercise. Thus, requiring the government to pay reasonable compensation for the reasonable use of the property pursuant to the operation of the business contravenes the Constitution.

I. Power of Taxation

41.