FUNDAMENTAL POWER OF THE STATE

CASE DIGEST / NOTES ON CONSTITUTIONAL LAW II

FUNDAMENTAL POWER OF THE STATE

POLICE POWER

Philippine Association of Service Exporters v Drilon     163 SCRA 386 (1988)

Facts: The Department of Labor and Employment issued Admin. Order no. 1, s. 1988, “GUIDELINES GOVERNING THE TEMPORARY SUSPENSION OF DEPLOYMENT OF FILIPINO DOMESTIC AND HOUSEHOLD WORKERS," which petitioner assails as violation of right to travel thereby files petition for certiorari and prohibition contending such order is discriminating and an invalid exercise of law making power with police power as legislative and not executive in character.

Issue: Whether or not the issuance of assailed order valid exercise of police power of the State.

Held: The court held that the order is in the nature of the police power measure and its validity is established on the principle that police power is the state authority to enact legislation that may interfere with personal liberty or property in order to promote the general welfare."  As defined, it consists of (1) an imposition of restraint upon liberty or property, (2) in order to foster the common good. Its scope extends to meet the exigencies of time and constitutes an implied limitation on the Bill of Rights which must not be exercised arbitrarily or unreasonably. As a general rule, all official acts enjoy the presumption of validity and constitutionality and clear and convincing evidence must be proved to show the contrary. The petitioner has shown no satisfactory reason why the contested measure should be nullified. There is no question that Department Order No. 1 applies only to "female contract workers,"  but it does not thereby make an undue discrimination between the sexes. It is well-settled that "equality before the law" under the Constitution ¹⁵does not import a perfect Identity of rights among all men and women. It admits of classifications, provided that (1) such classifications rest on substantial distinctions; (2) they are germane to the purposes of the law; (3) they are not confined to existing conditions; and (4) they apply equally to all members of the same class. The issuance of the said order is neither discriminating nor an abuse of the police power of the State since the government could not unreasonably make a ban to all employment without justified cause. Although the court understands the grave implications of the questioned Order on the business of recruitment, the concern of the Government is not necessarily to maintain profits of business firms. In the ordinary sequence of events, it is profits that suffer as a result of Government regulation since he interest of the State is to provide a decent living to its citizens.

Ichong v Hernandez 101 PHIL 1155 (1957) 

Facts: RA 1180 “An Act to Regulate The Retail Business” prohibits foreigners and foreign owned corporations to engage in the retail business/trade in the Philippines. Petitioner assails the Act contending it violates the Treaty of Amity between the Philippines and China and is unconstitutional.

Issue: Whether or not RA 1180 a valid exercise of police power of the State.

Held: The court held that RA 1180 is a valid exercise of the police power of the State since such sovereign power of the State could not be bargained through any Treaty or contract especially when the intent of such legislation is to remedy a real and actual danger to the national economy due to the increasing dominance and control of aliens in the retail trade in the country.

Lutz v Araneta   98 PHIL 148 (1955)

Facts: Walter Lutz, as the Judicial Administrator of the IntestateEstate of Antonio Jayme Ledesma, seeks to recover from J. Antonio Araneta, the Collector of Internal Revenue, the sum of money paid by the estate as taxes, pursuant to the Sugar Adjustment Act. Under Section 3 of said Act, taxes are levied on the owners or persons in control of the lands devoted to the cultivation of sugar cane. Furthermore, Section 6 states all the collections made under said Act shall be for aid and support of the sugar industry exclusively. Lutz contends that such purpose is not a matter of public concern hence making the tax levied for that cause unconstitutional and void. The Court of First Instance dismissed his petition, thus this appeal before the Supreme Court.

Issue: Whether or Not the tax levied under the Sugar Adjustment Act ( Commonwealth Act 567) is unconstitutional.

Held: The tax levied under the Sugar Adjustment Act is constitutional. The tax under said Act is levied with a regulatory purpose, to provide means for the rehabilitation and stabilization of the threatened sugar industry. Since sugar production is one of the great industries of our nation, its promotion, protection, and advancement, therefore redounds greatly to the general welfare. Hence, said objectives of the Act is a public concern and is therefore constitutional. It follows that the Legislature may determine within reasonable bounds what is necessary for its protection and expedient for its promotion. If objectives and methods are alike constitutionally valid, no reason is seen why the state may not levy taxes to raise funds for their prosecution and attainment. Taxation may be made with the implement of the state’s police power. In addition, it is only rational that the taxes be obtained from those that will directly benefit from it. Therefore, the tax levied under the Sugar Adjustment Act is held to be constitutional.

Association of Small Landowners v Secretary of DAR    175 SCRA 343 (1989)

Lozano v Martinez   146 SCRA 232 (1986)

“constitutionality of BP 22”

Facts: The petition arose from the case involving prosecution of offenses in violation of BP 22 “Bouncing Check Law” which is being assailed as unconstitutional and in violation of the constitutional guarantee against imprisonment for debt.

Issue: Whether or not BP 22 is unconstitutional.

Held: The enactment of BP 22 is a declaration by the legislature that, as a matter of public policy, the making and issuance of a worthless check is deemed public nuisance to be abated by the imposition of penal sanctions. The effects of the issuance of a worthless check transcends the private interests of the parties directly involved in the transaction and touches the interests of the community at large. The mischief it creates is not only a wrong to the payee or holder, but also an injury to the public. The harmful practice of putting valueless commercial papers in circulation can pollute the channels of trade and commerce, injure the banking system and eventually hurt the welfare of society and the public interest. The court ruled that the intent of the statute is to stop the practice of issuing worthless checks which are rejected and dishonored for payment, the very act which the statute aims to punish. The act does not provide prosecution and imprisonment for debt thus BP 22 is constitutional and a valid exercise of the legislative department through its police power.

DECS v San Diego    180 SCRA 533   (December 21, 1989)

Facts: The respondent failed to pass the National Medical Admission Test (NMAT) 3 times and he was denied admission to take the test for another time by the petitioner under its rule that a student is allowed only to take the NMAT 3 times and after 3 consecutive failures a student shall not be allowed to take NMAT the 4^th time. Respondent invoke his constitutional rights on academic freedom and quality education in his petition for mandamus before the court. Respondent judge rendered decision citing the admission rule of the petitioner as an arbitrary exercise of police power, depriving respondent of his right to pursue medical education thus this petition for review before the higher court.

Issue: Whether or not the admission rule implemented by petitioner an arbitrary exercise of police power.

Held: The court held that  police power is validly exercised if (a) the interests of the public generally, as distinguished from those of a particular class, require the interference of the State, and (b) the means employed are reasonably necessary to the attainment of the object sought to be accomplished and not unduly oppressive upon individuals. ^The proper exercise of the police power requires the concurrence of a lawful subject and a lawful method. The subject of the challenged regulation is certainly within the ambit of the police power. It is the right and indeed the responsibility of the State to insure that the medical profession is not infiltrated by incompetents to whom patients may unwarily entrust their lives and health. The method employed by the challenged regulation is not irrelevant to the purpose of the law nor is it arbitrary or oppressive. The three-flunk rule is intended to insulate the medical schools and ultimately the medical profession from the intrusion of those not qualified to be doctors. The State needs to implement decisive steps to regulate system of education by directing students to the course where he is best suited through initial tests and evaluation. The decision of the respondent judge was reversed.

Ynot v Intermediate Appellate Court   148 SCRA 659 (1987)  

F:            Petitioners' 6 carabaos were confiscated by the police for having been transported from Masbate to Iloilo in violation of EO 626-A.  He brought an action for replevin, challenging the consitutionality of the EO.  The trial court sustained the confiscation of the animals and declined to rule on the validity of the law on the ground that it lacked authority to do so.  Its decision was affirmed by the IAC.  Hence this petition for review.

HELD:  (1)  Under the provision granting the SC jurisdiction to "review, revise, reverse, modify or affirm on appeal or certiorari, as the law or rules of court may provide final judgments of lower courts" in all cases involving the constitutionality of certain measures, lower courts can pass upon the validity of a statute in the first instance.

            (2)  There is no doubt that by banning the slaughter of these animals (except where there at least 7 yrs. old if male and 11 yrs old if female upon the issuance of the necessary permit) the EO will be conserving those still fit for farm work or breeding and preventing their improvident depletion.  We do not see, however, how the prohibition of the interprovincial transport of carabaos can prevent their indiscriminate slaughter, considering that they can be killed any where, w/ no less difficulty in on province than in another.  Obviously, retaining the carabao in one province will not prevent their slaughter there, any more than moving them to another province will make it easier to kill them there.  As for the carabeef, the prohibition is made to apply to it as otherwise, so says the EO, it could be easily circumsbcribed by simply killing the animal.  Perhaps so.  However, if the movement of the live animals for the purpose of preventing their slaughter cannot be prohibited, it should follow that there is no reason either to prohibit their transfer as, not to be flippant, dead meat. 

            (3)  In the instant case, the carabaos were arbitrarily confiscated by the police station commander, were returned to the petitioner only after he had filed a complaint for recovery and given a supersedeas bond w/c was ordered confiscated upon his failure to produce the carabaos when ordered by the trial court.  The EO defined the prohibition, convicted the petitioner and immediately imposed punishment, w/c was carried out forthright.  The measures struck him at once and pounced upon the petitioner w/o giving him a chance to be heard, thus denying him elementary fair play. 

            (4)  It is there authorized that the seized prop. shall "be distributed to charitable institutions and other similar institutions as the Chairman of the National Meat Inspection Commission may see fit, in the case of carabeef, and to deserving farmers through dispersal as the Director of Animal Industry may see fit in the case of carabaos."  The phrase may see fit is an extremely generous and dangerous condition, if condition it is.  It is laden w/ perilous opportunities for partiality and abuse, and even corruption.  One searches in vain for the usual standard and the reasonable guidelines, or better still, the limitations that the said officers must observe when they make their distribution.

POWER OF EMINENT DOMAIN

City of Manila v Chinese Community   40 PHIL 349 (1919)

“expropriation of Chinese cemetery”

Facts: The City of Manila wants to expropriate a land owned by the Chinese community as cemetery for the purpose of extending

Rizal Avenue

for public use. The respondents contend that the land already acquires a quasi-public character and many dead bodies are already buried there. They stress that there is no necessity of taking the land for public purpose since such is under Torrens title and the expropriation will disturb the resting place of the dead. The plaintiff contends that under the Charter of City of Manila, they may condemn private lands for public purpose, such being an exclusive function of the legislature and the only function of the court is to assess the value of the land expropriated.

Issue: Whether or not the court can inquire into the necessity of expropriation.

Held: The court ruled that the power of judicial review on expropriation is not limited to the inquiry of the existence of law that grants a municipal corporation to expropriate private lands for public purpose. The court has the responsibility to (1) ensure that a law or authority exists for the exercise of the right of eminent domain, and (2) that the right or authority is being exercised in accordance with the law. There are two conditions imposed upon the authority conceded to the City of Manila: (1) the land must be private; and, (2) the purpose must be public. The taking of land in the exercise of power of eminent domain of the state is not a judicial question but the court is bound to interfere to prevent an abuse of the discretion delegated by the legislature. The very foundation of the right to exercise eminent domain is a genuine necessity, and that necessity must be of a public character. The ascertainment of the necessity must precede or accompany, and not follow, the taking of the land. The court ruled that the cemetery is a public property and it found no great necessity to allow the expropriation of the land by the City of Manila thus thereby affirmed the decision of the lower court.

Sumulong v Guerrero   154 SCRA 461 (1987)

“expropriation – requisites for expropriation met but denied petitioners with due process of hearing”

Facts: Petitioner files motion for reconsideration on the lower court decision allowing expropriation of their parcel of land in favor to the National Housing Authority without due process of law. They assail the constitutionality of PD 1224 (Policy on Expropriation of Private Property for Socialized Housing Upon Payment of Just Compensation) allowing the taking of properties regardless of size and no matter how small the area to be expropriated, social housing being the purpose of condemnation is not really for public purpose, and violation of procedural due process as immediate taking of possession of property without due process of hearing.

Issue: Whether or not due process of law was observed in the expropriation process.

Held: The court ruled that the purpose of expropriation for socialized housing project is a valid justification for public purpose since housing is a basic need. The size of the area to be expropriated is not subject to question as long as it satisfied the public purpose of expropriation. However, the court held that the petitioners were denied of due process of law for being deprived of the conduct of hearing and notice upon its order for the immediate possession and taking of the land by NHA.

In order to justify expropriation the following requisites must be satisfied:

1. public use/purpose
2. just compensation

Although the court issued the immediate possession of the land with just compensation to the petitioners and meeting the requisite for public use, the petitioners were denied with the due process of expropriation proceeding which is a basic and fundamental right of the petitioner.

EPZA v Dulay   149 SCRA 305 (1987)

“appointment of commissioners to determine just compensation in expropriation”

Facts: A land reserve was provided for the Export Processing Zone which some portion of the land is privately owned by the respondents. Petitioner offered to purchase the land but both parties did not come to an agreement in terms of the assessed value of the property. Petitioner files an expropriation case which the court decided in favor of them and issued a writ of possession for the immediate possession of land subject to just compensation. Respondents however are not amenable to the amount and thus the court appointed commissioners to determine the appropriate property value. Petitioner now questions the appointment of commissioners to determine the value of property while invoking PD No. 1533 that indicates the determination of just compensation is based on the declared value indicated by the land owner and the assessor whichever is lower and there is no need to appoint commissioners for the purpose of assessing the property value.

Issue: Whether or not the court erred in appointing commissioners to the case at bar

Held: The court ruled that PD No. 1533 only serves as a guiding principle providing some considerations in the determination of just compensation in expropriation proceedings. It does not substitute the discretion vested upon the court to exercise in determining the fair and just compensation in expropriating property. The appointment of commissioners is one way the court may determine the fair and just compensation in dispute for judicial evaluation.

National Power Corporation v Judge Jocson   206 SCRA 520 (1992)

“expropriation case – amt. for just compensation in dispute – judge held in abeyance the write of possession order due to petitioner while increasing outright provisional value of land without hearing.”

Facts: The petitioner files a special civil action for certiorari to annul the order issued by respondent judge in violation of deprivation of the right of the petitioner for due process. The petitioner filed 7 eminent domain cases in the acquisition of right of way easement over 7 parcels of land in relation to the necessity of building towers and transmission line for the common good with the offer of corresponding compensation to landowners affected with the expropriation process. However, both parties did not come to an agreement on just compensation thereby prompting petitioner to bring the eminent domain case. Respondent judge found existing paramount public interest for the expropriation and thereby issued an order determining the provisional market value of the subject areas based on tax declaration of the properties. The petitioner, in compliance to the order of respondent judge, deposited corresponding amount of the assessed value of said lands in the amount of P23,180,828.00 with the Philippine National Bank. Respondents land owners filed motion for reconsideration asserting that the assessed value is way too low and that just compensation due them is estimated as P29,970,000.00. Immediately the following day, respondent judge increased the provisional value to that stated in the motion for reconsideration and ordered petitioner to deposit the differential amount within 24 hours from receipt of order while holding in abeyance the writ of possession order pending compliance to said order which the petitioner immediately complied. Thereafter, respondent judge ordered petitioner to pay in full amount the defendants for their expropriated property. Petitioner assailed such order to be in violation of due process and abuse of discretion on the part of the respondent judge hence this petition.

Issue: Whether or not the respondent judge acted in grave abuse of discretion and whether or not the petitioner was deprived of due process of law.

Held: The court ruled that PD No. 42 provides that upon filing in court complaints on eminent domain proceeding and after due notice to the defendants, plaintiff will have the right to take possession of the real property upon deposit of the amount of the assessed value with PNB to be held by the bank subject to orders and final disposition of the court. The respondent judge failed to observe this procedure by failure to issue the writ of possession to the petitioner despite its effort to deposit the amount in compliance to the mandate of law. Furthermore, the respondent judge erred in increasing the provisional value of properties without holding any hearing for both parties. The instant petition was granted by the court setting aside the temporary restraining order and directing respondent judge to cease and desist from enforcing his orders.

There are 2 stages in the action of expropriation:

1. Determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit.

2. Eminent domain action is concerned with the determination by the Court of the "just compensation for the property sought to be taken." This is done by the Court with the assistance of not more than three (3) commissioners whose findings are deemed to be final.

Read Rule 67, Revised Rules of Court

RULE 67

EXPROPRIATION

Section 1. The complaint. 
 

The right of eminent domain shall be exercised by the filing of a verified complaint which shall state with certainty the right and purpose of expropriation, describe the real or personal property sought to be expropriated, and join as defendants all persons owning or claiming to own, or occupying, any part thereof or interest therein, showing, so far as practicable, the separate interest of each defendant. If the title to any property sought to be expropriated appears to be in the Republic of the Philippines, although occupied by private individuals, or if the title is otherwise obscure or doubtful so that the plaintiff cannot with accuracy or certainty specify who are the real owners, averment to that effect shall be made in the complaint.

Sec. 2. Entry of plaintiff upon depositing value with authorized government depositary. 
 

Upon the filing of the complaint or at any time thereafter and after due notice to the defendant, the plaintiff shall have the right to take or enter upon the possession of the real property involved if he deposits with the authorized government depositary an amount equivalent to the assessed value of the property for purposes of taxation to be held by such bank subject to the orders of the court. Such deposit shall be in money, unless in lieu thereof the court authorizes the deposit of a certificate of deposit of a government bank of the Republic of the Philippines payable on demand to the authorized government depositary.

If personal property is involved, its value shall be provisionally ascertained and the amount to be deposited shall be promptly fixed by the court.

After such deposit is made the court shall order the sheriff or other proper officer to forthwith place the plaintiff in possession of the property involved and promptly submit a report thereof to the court with service of copies to the parties.

Sec. 3. Defenses and objections. 
 

If a defendant has no objection or defense to the action or the taking of his property, he may file and serve a notice of appearance and a manifestation to that effect, specifically designating or identifying the property in which he claims to be interested, within the time stated in the summons. Thereafter, he shall be entitled to notice of all proceedings affecting the same.

If a defendant has any objection to the filing of or the allegations in the complaint, or any objection or defense to the taking of his property, he shall serve his answer within the time stated in the summons. The answer shall specifically designate or identify the property in which he claims to have an interest, state the nature and extent of the interest claimed, and adduce all his objections and defenses to the taking of his property. No counterclaim, cross-claim or third-party complaint shall be alleged or allowed in the answer or any subsequent pleading.

A defendant waives all defenses and objections not so alleged but the court, in the interest of justice, may permit amendments to the answer to be made not later than ten (10) days from the filing thereof. However, at the trial of the issue of just compensation, whether or not a defendant has previously appeared or answered, he may present evidence as to the amount of the compensation to be paid for his property, and he may share in the distribution of the award.

Sec. 4. Order of expropriation. 
 

If the objections to and the defenses against the right of the plaintiff to expropriate the property are overruled, or when no party appears to defend as required by this Rule, the court may issue an order of expropriation declaring that the plaintiff has a lawful right to take the property sought to be expropriated, for the public use or purpose described in the complaint, upon the payment of just compensation to be determined as of the date of the taking of the property or the filing of the complaint, whichever came first.

A final order sustaining the right to expropriate the property may be appealed by any party aggrieved thereby. Such appeal, however, shall not prevent the court from determining the just compensation to be paid.

After the rendition of such an order, the plaintiff shall not be permitted to dismiss or discontinue the proceeding except on such terms as the court deems just and equitable.

Sec. 5. Ascertainment of compensation. 
 

Upon the rendition of the order of expropriation, the court shall appoint not more than three (3) competent and disinterested persons as commissioners to ascertain and report to the court the just compensation for the property sought to be taken. The order of appointment shall designate the time and place of the first session of the hearing to be held by the commissioners and specify the time within which their report shall be submitted to the court.

Copies of the order shall be served on the parties. Objections to the appointment of any of the commissioners shall be filed with the court within ten (10) days from service, and shall be resolved within thirty (30) days after all the commissioners shall have received copies of the objections.

Sec. 6. Proceedings by commissioners. 
 

Before entering upon the performance of their duties, the commissioners shall take and subscribe an oath that they will faithfully perform their duties as commissioners, which oath shall be filed in court with the other proceedings in the case. Evidence may be introduced by either party before the commissioners who are authorized to administer oaths on hearings before them, and the commissioners shall, unless the parties consent to the contrary, after due notice to the parties to attend, view and examine the property sought to be expropriated and its surroundings, and may measure the same, after which either party may, by himself or counsel, argue the case. The commissioners shall assess the consequential damages to the property not taken and deduct from such consequential damages the consequential benefits to be derived by the owner from the public use or purpose of the property taken, the operation of its franchise by the corporation or the carrying on of the business of the corporation or person taking the property. But in no case shall the consequential benefits assessed exceed the consequential damages assessed, or the owner be deprived of the actual value of his property so taken.

Sec. 7. Report by commissioners and judgment thereupon. 
 

The court may order the commissioners to report when any particular portion of the real estate shall have been passed upon by them, and may render judgment upon such partial report, and direct the commissioners to proceed with their work as to subsequent portions of the property sought to be expropriated, and may from time to time so deal with such property. The commissioners shall make a full and accurate report to the court of all their proceedings, and such proceedings shall not be effectual until the court shall have accepted their report and rendered judgment in accordance with their recommendations. Except as otherwise expressly ordered by the court, such report shall be filed within sixty (60) days from the date the commissioners were notified of their appointment, which time may be extended in the discretion of the court. Upon the filing of such report, the clerk of the court shall serve copies thereof on all interested parties, with notice that they are allowed ten (10) days within which to file objections to the findings of the report, if they so desire.

Sec. 8. Action upon commissioners’ report. 
 

Upon the expiration of the period of ten (10) days referred to in the preceding section, or even before the expiration of such period but after all the interested parties have filed their objections to the report or their statement of agreement therewith, the court may, after hearing, accept the report and render judgment in accordance therewith; or, for cause shown, it may recommit the same to the commissioners for further report of facts; or it may set aside the report and appoint new commissioners; or it may accept the report in part and reject it in part; and it may make such order or render such judgment as shall secure to the plaintiff the property essential to the exercise of his right of expropriation, and to the defendant just compensation for the property so taken.

Sec. 9. Uncertain ownership; conflicting claims. 
 

If the ownership of the property taken is uncertain, or there are conflicting claims to any part thereof, the court may order any sum or sums awarded as compensation for the property to be paid to the court for the benefit of the person adjudged in the same proceeding to be entitled thereto. But the judgment shall require the payment of the sum or sums awarded to either the defendant or the court before the plaintiff can enter upon the property, or retain it for the public use or purpose if entry has already been made.

Sec. 10. Rights of plaintiff after judgment and payment. 
 

Upon payment by the plaintiff to the defendant of the compensation fixed by the judgment, with legal interest thereon from the taking of the possession of the property, or after tender to him of the amount so fixed and payment of the costs, the plaintiff shall have the right to enter upon the property expropriated and to appropriate it for the public use or purpose defined in the judgment, or to retain it should he have taken immediate possession thereof under the provisions of section 2 hereof. If the defendant and his counsel absent themselves from the court, or decline to receive the amount tendered, the same shall be ordered to be deposited in court and such deposit shall have the same effect as actual payment thereof to the defendant or the person ultimately adjudged entitled thereto.

Sec. 11. Entry not delayed by appeal; effect of reversal. 
 

The right of the plaintiff to enter upon the property of the defendant and appropriate the same for public use or purpose shall not be delayed by an appeal from the judgment. But if the appellate court determines that plaintiff has no right of expropriation, judgment shall be rendered ordering the Regional Trial Court to forthwith enforce the restoration to the defendant of the possession of the property, and to determine the damages which the defendant sustained and may recover by reason of the possession taken by the plaintiff.

Sec. 12. Costs, by whom paid. 
 

The fees of the commissioners shall be taxed as a part of the costs of the proceedings. All costs, except those of rival claimants litigating their claims, shall be paid by the plaintiff, unless an appeal is taken by the owner of the property and the judgment is affirmed, in which event the costs of the appeal shall be paid by the owner.

Sec. 13. Recording judgment, and its effect. 
 

The judgment entered in expropriation proceedings shall state definitely, by an adequate description, the particular property or interest therein expropriated, and the nature of the public use or purpose for which it is expropriated. When real estate is expropriated, a certified copy of such judgment shall be recorded in the registry of deeds of the place in which the property is situated, and its effect shall be to vest in the plaintiff the title to the real estate so described for such public use or purpose.

Sec. 14. Power of guardian in such proceedings. 
 

The guardian or guardian ad litem of a minor or of a person judicially declared to be incompetent may, with the approval of the court first had, do and perform on behalf of his ward any act, matter, or thing respecting the expropriation for public use or purpose of property belonging to such minor or person judicially declared to be incompetent, which such minor or person judicially declared to be incompetent could do in such proceedings if he were of age or competent.