Notes Doctrines Inherent Powers of The State

CONSTITUTIONAL LAW II NOTES & DOCTRINES 1
SAN BEDA COLLEGE OF LAW - MANILA

CONSTITUTIONAL LAW II NOTES & DOCTRINES
THE INHERENT POWERS OF THE STATE: o Operations of theater, cinematographs and other places of
public exhibition are subject to regulation by the municipal
POLICE POWER council in the exercise of delegated police power by the local
government. (Balacuit v. Court of First Instance of Agusan
GENERAL PRINCIPLES del Norte)
o Police Power is the power of the State to promote public o Means adopted must be reasonably necessary for the
welfare by restraining and regulating the use of liberty and accomplishment of the purpose and not unduly oppressive
property (It is the most demanding of the three fundamental upon individuals.
powers of the State.) o The determination as to what is a proper exercise of its police
Legal Maxims: power is not final or conclusive but is subject to the
1. Salus populi est suprema lex (the welfare of the people is supervision of the courts.
the supreme law) o This power can be activated at any time to change the
2. Sic utere tuo ut alienum non laedas (so use your property provisions of the contract, or even abrogate it entirely, for
so as not to injure the property of others) the promotion or protection of the general welfare.
o It could very well be synonymous with sovereign power. Public Purpose

o The police power is a grant from the people to their o The support for the poor has long been accepted exercise of
governmental agents. It is not a delegated, but a reserved, police power in the promotion of the common good.
power.
o Police power is the power inherent in the state to prescribe, Legislation based on police power
within the limits of the Constitution, reasonable regulations o Legislative act based on police power requires the
necessary to preserve the public order, health, safety, and concurrence of a lawful subject and a lawful method.
morals. (National Development Company v. Philippine Veterans
Bank)
APPLICATION OF PRINCIPLES
Definition Private Property
o Police power grants a wide panoply of instruments through o Private property cannot simply be taken by law from one
which the State, as parents patriate gives effect to a host of person and given to another without compensation and any
its regulatory powers. known public purpose.
o Its fundamental purpose is securing the general welfare, o Regulatory ordinance must be reasonable, and its provisions
JAMES BRYAN SUAREZ DEANG © 2017 (09265563619/[email protected])

comfort and convenience of the people. cannot be oppressive amounting an arbitrary interference
o It is elastic and must be responsive to various social with the business or calling subject of regulation.
conditions (Sangalang v. IAC)
Police power vs. Impairment Clause
On Franchise o The superiority of police power will apply only where the
o A franchise is not a strict sense a simple contract but rather contract is so related to the public welfare that it will be
it is more importantly, a mere privilege specially in matters considered congenitally susceptible to change by the
which are within the government’s power to regulate and legislature in the interest of the greater number.
even prohibit through the exercise of the police power.
Regulating the practice of profession
Public office not subject to police power o That the power to regulate and control the practice of
o Although public office is not property under the medicine includes the power to regulate admission to the
Constitution, Bill of Rights, Section 1, and one cannot ranks of those authorized to practice medicine. (Tablarin v.
acquire a vested right to public office, it is, nevertheless, a Gutierrez)
protected right. (Binay v. Domingo)
NATURE AND DEFINITION
Mining Agreements o On contracts: The freedom to contract is not absolute; all
o Regardless of the reservation clause, mining leases or contracts and all rights are subject to the police power of the
agreements granted by the state are subject to alterations State and not only may regulations which affect them be
through a reasonable exercise of the police power of the established by the State, but all such regulations must be
state. subject to change from time to time, as the general well-
being of the community may require, or as the circumstances
Municipal Corporations and Police Power may change, or as experience may demonstrate the
o Police power is inherent in the state but not in municipal necessity. (Goldenway Merchandizing Corporation v.
corporations. There must be a valid delegation of power by Equitable PCI Bank)
the legislature which is the repository of the inherent powers o On PAGCOR: It is a reliable source of much needed revenue
of the state. for the cash strapped Government. It provided funds for
o It is deemed inadvisable to attempt to frame any definition social impact projects and subjected gambling to “close
which shall absolutely indicate the limits of police power. scrutiny, regulation, supervision and control of the
Government” (Basco v. Pagcor)
o The term “police power” has never been, and we do not necessary to carry into effect and discharge the
believe can be, clearly and circumscribed. The definition powers and duties conferred upon the municipal
must depend upon the particular law and the particular facts council by law.
to which it is to be applied. Second, known as the police power proper,
authorizes the municipality to enact ordinances as
o Eight Distinct Branches: may be necessary and proper for the health and
1. Police for the prevention of offenses safety, prosperity, morals, peace, good order,
2. Police for the prevention of calamities comfort, and convenience of the municipality and
3. Police for the prevention of endemic diseases its inhabitants, ad for the protection of their
4. Police of charity property.
5. Police of interior communications o Two Tests of Valid Exercise of Police Power by
6. Police of public amusements Ordinances: (Fernando v. St. Scholastica’s College)
7. Police for recent intelligence
8. Police for registration We ourselves have applied the rational basis test
(People v. Pomar) mainly in analysis of equal protection challenges.
Using the rational basis examination, laws and
o Power of Taxation – The individual receives the equivalent ordinances are upheld if they rationally further a
of the tax in the form of protection and benefit he receives legitimate governmental interest. Under
from the government as such. intermediate review, governmental interest is
o Power of Eminent Domain – He receives the market value extensively examined and the availability of less
of the property taken from him. restrictive meaures is considered. Applying strict
o Police Power – The benefits he derived are only such a may scrutiny, the focus is on the presence of
arise from the maintenance of a healthy economic standard compelling, rather than substantial, governmental
of society and is often referred to as damnum absque injuria. interest and on the absence of less restrictive
o Unsightly advertisement or signs, signboards, or billboards means for achieving that interest.
which are offensive to the sight, are not disassociated from
the general welfare of the public. (Churchill v. Rafferty) Requisites under rational relationship test:
(1) The interests of the public generally, as
REGULATORY PURPOSE distinguished from those of a particular
o On gambling: The morality of gambling is not a justiciable class, require its exercise; and
issue. The legislature may prohibit gambling altogether or (2) The means employed are reasonable
allow it without limitation or it may prohibit some forms of necessary for the accomplishment of the
gambling and allow others for whatever reasons it may purpose and not unduly oppressive upon

consider sufficient. (Lim v. Paquing) individuals.
Reason: There is nothing in the Constitution categorically In short, a combination of lawful subject
proscribing or penalizing gambling. and lawful method.
o The State may not, under the guise of police power,
o The Stabilization Fund is to be utilized for the benefit of the permanently divest owners of the beneficial use of
entire sugar industry, “and all its components, stabilization their property solely to preserve or enhance the
of domestic market including foreign market.” The industry aesthetic appearance of the community.
being of vital importance to the country’s economy and to
national interest. (Gaston v. Republic Planters Bank) o The power to regulate, however, does not include the
power to prohibit. A fortiorari, the power to regulate
o The Police Power is distinct from the Power of Eminent does not include the power to confiscate.
Domain, as follows: o When there is a taking or confiscation of private
1. Under police power, as a rule no compensation is property for public use, the State is no longer
required. exercising police power, but the power of eminent
2. Under police power, there is no transfer of ownership, domain.
but rather a destruction of property or an impairment of o A regulation that deprives any person of the
its value. profitable use of his property constitutes a taking and
3. Under police power, the taking is not for public use, but entitles him to compensation, unless the invasion of
for the conservation of the safety, morals, health, and rights is so slight as to permit the regulation to be
general welfare of the public. justified under the police power. (OSG v. Ayala Land,
4. The essence of the police power is that it continues to Inc.)
operate even if it might result in a deprivation of
individual rights and property, unlike eminent domain. o A police measure for the regulation of the conduct,
control and operation of a business should not
o The delegation of police power embodied in the Local encroach upon the legitimate and lawful exercise by
Government Code of 1991 (RA No. 7160), Section 16 the citizens of their property rights.
known as the General Welfare Clause has two branches: o The proprietors of a theater have a right to manage
First, known as the general legislative power, their property in their own way, to fix what prices of
authorizes the municipal council to enact admission they think most for their own advantage,
ordinances and make regulations not repugnant to and any person who did not approve could stay away.
law, as may be necessary ordinances and make (Balacuit v. Court of First Instance)
regulations not repugnant to law, as may be
o The police power is also distinct from taxation, as LIMITATIONS ON POLICE POWER
follows: General Limitations:
1. Police power is exercised for the promotion of 1. Constitutional Limitations specially the Bill of Rights
the public welfare by means of the regulation of 2. Territorial limitations
dangerous or potentially dangerous business, 3. Police legislation
occupations, or activities. By comparison, the a. Must have a purpose falling within the scope of the
taxing power is exercised for the purpose of police power
raising revenues. b. Must be reasonable
2. While taxation is subject to certain designated c. Must provide for means that are appropriate
constitutional limitations, the police power is 4. By its nature, police power is exercisable only restrictively,
not subject to the same constitutional limitation. restrictions being implicit in the power itself.
3. The primary purpose of the police power is the
regulation of some particular occupation, Requirement of Reasonableness
calling, or activity, even if it incidentally 1. The law must be based on reason, as distinct from being
produces revenue. The primary purpose of arbitrary or capricious
taxation is to raise revenue. 2. The scope of the term “reasonable” must be measured,
having regard to the fundamental principles of human
Police power and the power of taxation are inherent liberty as understood at the time of the formation of the
powers of the State. These powers are distinct and constitution, adopting them to modern conditions; and
have different tests for validity. Police Power is the having regard to established customs.
power of the State to enact legislation that may 3. Must be measured largely by public need
interfere with personal liberty or property in order 4. “reasonableness” is not synonymous with “expediency.”
to promote the general welfare, while the power of The former is subject to judicial inquiry, while the latter is
taxation is the power to levy taxes to be used for wholly of congressional cognizance.
public purpose. The main purpose of police power 5. Must be considered in the light of current economic
is the regulation of a behavior or conduct, while conditions
taxation is revenue generation. The “lawful 6. It depends upon the character or nature of the condition to
subjects” and “lawful means” tests are used to be remedied.
determine the validity of the law enacted under the 7. Fairly debatable test: if a court is convinced that the object
police power. The power of taxation, on the other of a regulation is one which reasonable persons could find
hand, is circumscribed by inherent and fairly debatable as to reasonableness, the regulation will be
constitutional limitations. (Planters Product, Inc. upheld.
v. Fertiphil Corporation) 8. The test is whether in its attempted regulation the law

makes efficient constitutional guaranties and conserves
War Power rights, or is destructive of inherent rights.
o The war power and the police power are similar, but the 9. The regulation must tend to some ulterior good to which the
war power is the police power raised to the highest degree. destruction of liberty is merely incidental.
Law of Necessity – the police power is coextensive with the o In the exercise of police power, property rights of
necessities of the case and the safeguards of public interest. The individuals may be subjected to restraints and burdens in
police power is the power of self-protection on the part of the order to fulfill the objectives of the government. (Social
community. It bears the same relation to the community that the Justice Society v. Atienza)
principle of self-defense bears to the individual.
Doctrine: Police power is based on public necessity o On radio and television air time: Radio and television
broadcasting companies, which are given franchises [SEE
Emergencies ON FRANCHISE, page 01], do not own the airwaves and
o The general rule is that emergency does not create power, frequencies through which they transmit broadcast signals
increase granted power, or remove or diminish the and images. They are merely given the temporary privilege
restrictions imposed upon power granted or reserved. of using them. Since a franchise is a mere privilege, the
o Emergency may furnish the occasion for the exercise of exercise of the privilege may reasonably be burdened with
police power. the performance by the grantee of some form of public
service. (Telebap v. Commission on Elections)
o Two main characteristics of Police Power
1. Flexibility – the tendency is to extend than to restrict power o On medicine: The prohibition against the use by doctors of
during changing conditions of the society. The power itself “no substitution” and/or words of similar import in their
does not expand, but is of such a nature in its original scope prescription, is a valid regulation to prevent the
as to correct new evils as they arise. Police power is of such circumvention of the law. It secures to the patient the right
elasticity that the principle of stare decisis does not apply to choose between the brand names and its generic
to its exercise. The courts cannot decide away that which equivalent since his doctor is allowed to write both the
the state itself cannot contract away. generic and the brand name in his prescription form.
2. Inalienability – the State cannot barter or bargain away the Reason: Generic is cheaper but has the same effect
right to use the police power. It cannot divest itself of the (Del Rosario v. Bengzon)
power to provide for acknowledged objects of legislation
falling within the domain of the police power.
o The public purpose of tax may legally exist even if the Reason: To protect the community from the loss of the
motive which impelled the legislature to impose the tax was services of such animals by their slaughter by improvident
to favor one industry over another. It is inherent in the owners, tempted either by greed of momentary gain, or by
power to tax that a state be free to select the subjects of desire to enjoy the luxury of animal food (US v. Toribio)
taxation, and it has been repeatedly held that “inequities
which result from a singling out of one particular class for POWER AND DISCRETION OF CONGRESS
taxation or exemption infringe no constitutional o A mere assertion by Congress that a law relates to the public
limitation.” Taxation has been made the implement of the health, safety, or welfare does not of itself bring such law
state’s police power. (Tio v. Videogram Regulatory Board) within the police power. It is the duty of the courts to
determine whether the exercise of power is really necessary
o To assure that the general welfare be promoted, which is the for the public good.
end of law, a regulatory measure may cut into the rights to o The presumption is always in favor of the validity of a law
liberty and property. Those adversely affected may under passed in the exercise of a police power.
such circumstances invoke the equal protection clause only
if they can show that the governmental act assailed, far from Questions to which judicial inquiry may extend:
being inspired by the attainment of the common weal was o Whether the law is actually within the police power
prompted by the spirit of hostility, or at the very least, o Whether the power has been exercised with the proper
discrimination that finds no support in reason. limitations
Principle: Equal protection and security shall be given to o Whether the facts of a particular case warrant the assertion
every person under circumstances, which if not identical are of the power
analogous. (Bautista v. Juinio) o Whether a law is reasonable or arbitrary
o Whether a particular law is designed to further some
Requirement of Appropriate Means governmental function or private gain
It is a general rule that in order for a police measure to be reasonable, o What are subjects of the lawful exercise of the police power
the means adopted must be reasonably necessary and appropriate for o Whether an act bears any reasonable and substantial relation
the accomplishment of the legitimate objects falling within the scope to the public purpose sought to be accomplished
of the power.
o The Court does not substitute its social and economic belief
o The true role of Constitutional Law is to effect an for the judgment of Congress, whose members are elected to
equilibrium between authority and liberty so that rights are pass laws.
exercised within the framework of the law and the laws are
enacted with due deference to rights. o Indeed, no right is absolute, and the proper regulation of a
o Whether an ordinance is effective is an issue different from profession, business or trade has always been upheld as a

whether it is reasonably necessary. It is its reasonableness, legitimate subject of a valid exercise of the police power of
not its effectiveness, which bears upon its constitutionality. the State particularly when their conduct affects the
If the constitutionality of a law were measured by its execution of legitimate governmental functions, the
effectiveness, then even tyrannical laws may be justified preservation of the State, public health and welfare and
whenever they happen to be effective. public morals. (Remman Enterprises, Inc. v. Professional
Regulatory Board of Real Estate Service)
o In view of the requirements of due process, equal protection
and other applicable constitutional guaranties, however, the CONSTITUTIONAL LIMITATIONS ON POLICE POWER
exercise of such police power insofar as it may affect the life, o Police power regulations cannot arbitrarily interfere with the
liberty or property of any person is subject to judicial enjoyment of rights guaranteed by the Constitution. But an
inquiry. Where such exercise of police power may be alleged invasion of constitutional rights cannot be used as an
considered as either capricious, whimsical, unjust or excuse for lightly setting aside laws enacted to further the
unreasonable, a denial of due process or a violation of any common good.
other applicable constitutional guaranty may call for o A police regulation is not rendered invalid by the fact that it
correction by the courts. (Ermita Motel Operators may affect incidentally the exercise of some constitutional
Associations, Inc. v. Manila Mayor) right.
o The rights of the individual are subordinate to the welfare of
o On leprosy: judicial notice will be taken of the fact that the general public.
leprosy is commonly believed to be an infectious disease
tending to cause one afflicted with it to be shunned and LIMITATIONS BY PARTICULAR CONSTITUTIONAL
excluded from society, and that compulsory segregation of PROVISIONS
lepers as a means of preventing the spread of the disease is 1. Due Process Clause
supported by high scientific authority. (Lorenzo v. Director o The balance between police powers and due process is more
of Health) or less a state of unstable equilibrium changing with
sociological and economic development.
o On carabaos: The police power rests upon necessity and the o The due process clause is a limitation upon an improper
right of self-protection, and if ever the invasion of private exercise of the police power of the State.
property by police regulation can be justified, we think that o The due process clause prevents an arbitrary or unreasonable
the reasonable restriction placed upon the use of carabaos by exercise of police power.
the provision of the law under discussion must be held to be
authorized as a reasonable and proper exercise of police Procedural Due Process refers to the procedure that the government
power. must follow before it deprives a person of life, liberty, or property.
Substantive Due Process completes protection envisioned by the due the police power may include the alteration or modification
process clause. It inquires whether the government has sufficient of remedies in force at the time a contract is entered into.
justification for depriving a person of life, liberty, or property. o A law passed in the legitimate exercise of the police power
will be upheld by the courts, although it incidentally destroys
o The guaranty serves as a protection against arbitrary existing contract rights.
regulation, and private corporations and partnerships are o The authority of Congress, in the exercise of its police power,
“persons” within the scope of the guarantee insofar as their cannot be limited by the provisions of private contracts.
property is concerned. (City of Manila v. Laguio)
Factors indicating the reasonableness and necessity of police power
2. Private Property Rights measures impairing private contracts:
o All property rights are held subject to reasonable police 1. If the alteration of contractual obligations is minimal, there
regulations so that the rights of the general public may be is no violation of the contract clause.
protected. 2. Existence of an emergency
3. Clear intent of a law to protect a basic interest of society, as
Public Interest now extends to: (in upholding police legislation as opposed to the special interests of individuals or groups.
valid) 4. The law merely affects contractual remedies.
o Attracting a desirable citizenship to a particular locality of a 5. The law operates exclusively upon subsequent contracts,
municipality, and assuring its permanency rather than preexisting agreements.
o Fostering pride in, and attachment to, the city 6. The law does not actually diminish rights or increase duties
o Promoting happiness and contentment under the contract.
o Stabilizing the use and value of money 7. The validates theretofore void or voidable private contracts,
o Promoting the public tranquility and good order of the city or limits private parties to the benefit of their original
o Restrictions on the uses to which real property may be put bargains.
o Limitations on the types of structures which may be erected
on premises in certain localities o The contract clause is not an absolute bar to subsequent
o Groupings in definite localities of the enterprises which may modification of a State’s own financial obligations. An
be carried on as real property impairment may be constitutional if it is reasonable and
o A determination by Congress that the community should be necessary to serve an important public purpose.
beautiful as well as healthy, spacious as well as clean, well-
balanced as well as carefully patrolled. The values o State’s exercise of police powers may prevail over
represented by the public welfare are spiritual as well as obligations imposed by private contracts. In reference to
physical, aesthetic as well as monetary Section 28 of Jones Law:

In addition to aesthetic purposes, a public need or purpose should be No franchise or right shall be granted to any
shown to sustain police regulation relating to the following: individual, firm, or corporation except under
o Housing regulations the conditions that it shall be subject to
o Regulations on outdoor advertising amendment, alteration, or repeal by the
o Buildings Congress of the United States, and that lands or
o Automobile-wrecking plants right of use and occupation of lands thus
o Public garages granted shall revert to the government by which
o Cemeteries they were respectively granted upon the
termination of the franchises and rights under
o The State may not, under the guise of police power, which they were granted or upon their
permanently divest owners of the beneficial use of their revocation or repeal. (Hospicio De San Jose De
property solely to preserve or enhance the aesthetic Barili, Cebu City v. Agrarian Reform)
appearance of the community.
5. Just Compensation Clause
3. Equal Protection Clause o Section 9, Article III of the 1987 Constitution provides:
o Police power cannot be invoked to protect one class of “Private property shall not be taken for public use without
citizens against another class, unless such interference is for just compensation.”
the real protection of society in general. o This just compensation clause is not necessarily violated
o Under its police power, the Congress may pass laws that when a police law prevents the enjoyment of certain
are not all-embracing, in a classified regulatory enactment individual rights in property, without providing
with reference to degrees of evil and to the location where compensation.
the evil is most harmful, without denying the equal Principle: Such laws are not considered as appropriating
protection of the laws. private property for public use but simply as regulating its
use and enjoyment by the owner.
4. Non-Impairment Clause Reason behind the principle: If the owner suffers injury,
o Section 10, Article III of the 1987 Constitution provides that it is damnum absque injuria (a loss or injury which does
no law impairing the obligation of contracts shall be passed. not give rise to an action for damages against the person
However, the right to contract is subject to certain limitations causing it).
which the State may lawfully impose in the exercise of its Alternative Theory: The owner is compensated for it by
police power. sharing in the general benefits which the laws are intended
o The legitimate exercise of the police power cannot constitute and calculated to secure.
an impairment of contract, and reasonable regulation under
Tests for Just Compensation o The Constitution embraces two concepts:

1. No Compensation – if the law makes an exclusive 1. Freedom to believe – absolute. Conduct remains
reference to the police power of the State, without any subject to regulation for the protection of society.
purpose to take and apply property to public use. 2. Freedom to act – must have appropriate definitions to
2. Compensation – if the law not only declares the existence preserve the enforcement of that protection.
of a nuisance created by the condition of particular o Solicitation for religious purposes may be subject to proper
property, but in addition, and as the best means of regulation by the State in the exercise of police power.
accomplishing the end in view, authorizes the same Without a doubt, a State may protect its citizens from
property to be appropriated by the public. fraudulent solicitation by requiring a stranger in the
Rule: If the law goes too far, it will be considered as taking. community, before permitting him publicly to solicit funds
for any purpose, to establish his identity and his authority to
o There is taking when private, personal, and property rights act for the cause which he purports to represent. (Centeno v.
are interfered with, injured, or impaired in a manner, by a Villalon-Pornillos)
means, or to an extent that is not reasonably necessary, to
serve a public purpose for the general welfare. 8. Other Constitutional Limitations
6. Freedoms of Speech, Press, Religion, and Assembly 1. Bill of attainder

o The State may punish those who abuse the constitutional 2. Ex post facto laws
freedom of speech by utterances inimical to public welfare, 3. Unreasonable searches and seizures
tending to corrupt public morals, incite to crime, or disturb 4. General welfare clause
the public peace.
o The freedom to assemble peaceably and to petition the SCOPE OF POLICE POWER
government, like the freedoms of speech, press, and General Scope of Police Power:
religion, is also subject to reasonable regulation to protect 1. Protection of lives, health, and property of the citizens
the general welfare. 2. Preservation of good order
Example: law imposing curfew – Its constitutionality will 3. Preservation of public morals
depend in each case on reasonableness, necessity, and 4. Restraint and punishment of crime
purpose. 5. Preservation of the general welfare of the community
6. Pursuit of public good
o Maximum tolerance is for the protection and benefit of all 7. Protection of the public health, safety and morals
rallyists and is independent of the content of the 8. Securing the public peace, good order, health, safety, morals
expressions in the rally. and general welfare
o Not every expression of opinion is a public assembly. The 9. Protection of the lives, limbs, health, comfort and quiet of all

law [B.P. 880 or “Public Assembly Act of 1985] refers to persons and the protection of all property within the state,
“rally, demonstration, march, parade, procession or any including public property
other form of mass or concerted action held in a public 10. Promotion of the comfort and welfare of the society
place. It also regulates the exercise of the right to peaceful 11. Promotion of the public health, safety, morals, convenience,
assembly and petition to the extent needed to avoid a clear or general welfare, or the prevention of fraud, immorality, or
and present danger of the substantive evils Congress has the oppression
right to prevent.
o The delegation to the mayors of the power to issue rally o Today, police power is applied liberally and even indirectly
“permits” is valid because it is subject to the Reason: continuous change in economic and social
constitutionally-sound “clear and present danger” standard. conditions
(Bayan v. Ermita)
General Welfare
7. Freedom of Religion General Welfare extends to the following:
o The freedom of religion may properly be limited by o Establishment of a system of unemployment insurance taxes
Congress to times, places, and methods, provided that such o Welfare programs for needy and indigent persons
limitations are not odds with the preservation of peace and o The institution before the advent of widespread
good order, in view of existing social and economic unemployment of a scheme of public works designed to
conditions. combat such unemployment if it occurs
o Primary social interest of safety, order, and morals,
o OMA (Office of the Muslim Affairs) was created “to ensure economic interests, and nonmaterial and political interests
the integration of Muslim Filipinos into the mainstream of
Filipino society with due regard to their beliefs, customs, o On the 20% discount to senior citizens: The Court is not
traditions, and institutions.” OMA deals with the societal, oblivious of the retail side of the pharmaceutical industry and
legal, political and economic concerns of the Muslim the competitive pricing component of the business. While
community as a “national cultural community” and not as the constitution protects property rights, petitioners must
a religious group. Thus, the State must make sure that OMA accept the realities of business and the State, in the exercise
does not intrude into purely religious matters. of police power, can intervene in the operations of a business
o Only the prevention of an immediate and grave danger to the which may result in an impairment of property rights in the
security and welfare of the community can justify the process. (Carlos Superdrug Corp. v. DSWD)
infringement of religious freedom. (Islamic Da’wah Council
of the Philippines, Inc. v. Office of the Executive Secretary)
o On OFWs: To pretend that licensing or accreditation o According to Justice Malcolm: “The word ‘regulate’ as used
requirements violates the due process clause is to ignore the in Subsection (1), Section 2444 of the Administrative Code,
settled practice, under the mantle of the police power, of means and includes the power to control, to govern, and to
regulating entry to the practice of various trades or restrain; but ‘regulate’ should not be construed as
professions. Professionals leaving for abroad are required to synonymous with ‘suppress’ or ‘prohibit.’”
pass rigid written and practical exams before they are
deemed fit to practice their trade. (JMM Promotion and o On admission ticket: Insofar as movie houses and other
Management, Inc. v. Court of Appeals) places of amusement are concerned, the least doubt cannot
be entertained as to the validity of a measure prohibiting a
Physical Welfare; Public Health and Safety proprietor, lessee or operator of an amusement place to admit
Sample laws in relation to this: two or more persons with only one ticket, not only in the
o Inspection and quarantine regulations in reference to goods, interest of preventing fraud insofar as municipal taxes are
freight, animals, and livestock; concerned, but also in accordance with public health, public
o Summary seizure of mislabeled drugs; safety and the general welfare. (Samson v. Mayor of Bacolod
o Destroying spoiled foodstuff; and City)
o A ban on smoking in close and confined places, such as
theaters, public conveyances, air carriers, and restaurants. Economic Welfare
However, an absolute prohibition of smoking in streets, Police power extends to the following laws:
parks, or other public places or anywhere within the o Laws to increase the industries of the State, develop its
corporate limits of a municipality would be unreasonably resources, and add to its welfare and prosperity
broad and unconstitutional. The purpose should be to prevent o Laws enforcing a particular economic policy reasonably
fire or explosion, or to protect the health and general physical deemed to promote public welfare
well-being of other non-smoking persons in the area. o Laws to promote aesthetics directly related to the general
economy, or the preservation of natural scenic beauty to
o The promotion of public health is a fundamental obligation promote the tourist industry
of the State. The health of the people is a primordial o Laws protecting the public from financial loss
governmental concern. Basically, the National Blood
Services Act (for the improvement of Philippine blood o The control and regulation of trade in the interest of the
banking system and phasing out of commercial blood banks public welfare is of course an exercise of the police power of
to prevent infected blood donations) was enacted in the the State.
exercise of the State’s police power in order to promote and o On self-reliant and independent national economy (see RA
preserve public health and safety. (Beltran v. Secretary of No. 8762 and Article 12 of the 1987 PH Constitution): Thus,
Health) while the Constitution mandates a bias in favor of Filipino

good, services, labor and enterprises, it also recognizes the
Public Morals need for business exchange with the rest of the world on the
Police power may be used to regulate the following: bases of equality and reciprocity, frowning only on foreign
o Gambling; competition that is unfair. (Espina v. Zamora)
o Prostitution; and
o Lewdness, indecency, and obscenity. o On natural resources: The economic policy on the
exploration, development and utilization of the country’s
o The power to define crimes and prescribe their natural resources under the 1987 Philippine Constitution,
corresponding penalties is legislative in nature and inherent Article 12, Section 2 could not be any clearer. As enunciated
in the sovereign power of the state to maintain social order in the 1987 Constitution, Article 12, Section 1, the
as an aspect of police power. (People v. Siton) exploration, development and utilization of natural resources
under the new system mandated in Section 2, is geared
Void-for-Vagueness Doctrine towards a more equitable distribution of opportunities,
A statute which either forbids or requires the doing of an act in terms income and wealth; a sustained increase in the amount of
so vague that men of common intelligence must necessarily guess its goods and services produced by the nation for the benefit of
meaning and differ as to its application, violates the first essential of the people; and an expanding productivity as the key raising
due process of law. the quality of life for all, especially the underprivileged.
o In exercise police power to declare what acts constitute a o On mining leases and agreements: The State, in the exercise
crime, the legislature must inform the citizen with reasonable of its police power in this regard, may not be precluded by
precision what acts it intends to prohibit so that he may have the constitutional restriction on non-impairment of contract
a certain understandable rule of conduct and know what acts from altering, modifying and amending the mining leases or
it is his duty to avoid. agreements granted under P.D. No. 463, as amended,
pursuant to E.O. No. 211. (Miners Association of the
Public Peace, Good Order, and Comfort Philippines, Inc. v. Factoran)
The police power covers the following:
o Securing the peace, good order, dignity, protection, ad o On bouncing checks
comfort of the community The ‘check flasher’ does a great deal more than
o Promotion of domestic tranquility, and the comfort and contract a debt; he shakes the pillars of
quiet of all persons; and business; and to my mind, it is a mistaken
o Prevention of questionable conduct which, if permitted to charity of judgment to place him in the same
be committed untrammeled, would seriously disrupt the category with the honest man who is unable to
public peace. pay his debts, and for whom the constitutional
inhibition against imprisonment for debt, d. Equivalent of the term “subject to the exercise of the
except in cases of fraud was intended as a shield police power.”
and not a sword. (Lozano v. Martinez)
Three Classes of “business affected with a public interest”
Protection of Environment 1. Those carried under a public grant of privileges
Police power extends to regulations of: 2. Certain occupations regarded as exceptional, such as the
o Air and water pollution control programs keeping of hotels and taxicabs
o Restoration of land surfaces following strip, open-pit, and 3. Businesses the owners of which, by devoting them to public
other similar methods of surface mining; and use, in effect grant the public an interest in that use and
o Remedies for inadequate systems of sewage disposal subject themselves to public regulations to the extent of that
interest
o Laws pertaining to the protection of the environment were
not drafted in a vacuum. Congress passed these laws fully Modes of Regulation
aware of the perilous state of both our economic and natural 1. Prohibition. This applied when a calling is inherently
wealth. It was precisely to minimize that adverse impact of injurious or the pursuit of the calling has the effect on public
humanity’s actions on all aspects of the natural world, at the welfare. Prohibition may apply to:
same time maintaining and ensuring an environment under a. Manufacture or sale of cigarettes
which man and nature can thrive in productive and b. Radio-TV advertising of cigarettes
enjoyable harmony with each other, that these legal c. Advertising laws on the subjects of venereal diseases,
safeguards were put in place. (Province of Rizal v. prescription drugs, and the like
Executive Secretary)
2. Fixing terms, conditions, and restrictions
Conservation of Natural Resources a. To obtain a franchise, license, or permit
Police Power may be reasonably used to protect and conserve: b. To deposit certain sums of money
o Gas and oil operations c. Posting the fidelity, indemnity, or performance bonds
o Mining operations d. Establishment of an accident or insurance fund for
o Forests and forest lands employees
o Water resources e. Requiring persons engaged in particular professions to
o Fish resources make reports to government officials, or to be
fingerprinted
Prevention of Fraud f. Restricting the production and marketing of
The Police Power extends to the following: agricultural commodities to allotted quantities, in
o Laws governing the issuance and sale of securities, also order to prevent waste and secure stability of markets.

known as “blue sky laws”
o Laws regulating sales of personal property in general 3. Restriction to qualified professions. Police power
o Laws regulating sales of land justifies board or bar examinations, and diploma or license
o Laws to prevent false or misleading advertisements requirements. It also justifies the prohibition of a certain
o Laws relating to the manufacture and sale of food occupation or business by one who has past criminal record.
o Laws regulating and controlling weights and measures (SEE Tablarin v. Gutierrez & DECS v. San Diego)
o On receipts: Ordinance No. 532 was enacted to avoid 4. Restrictions as to place. These are justified by noise,
disputes between laundrymen and their patrons and to odors, or dangers which disturb the general welfare.
protect customers of laundries who are not able to decipher 5. Restrictions as to time. Police power justifies laws
Chinese characters from being defrauded. The convenience limiting and regulating hours of labor, as well as Sunday
of the public would also presumably be served in a laws.
community where there is a Babel of tongues by having
receipts made out in two official languages. 6. Restrictions as to price. The State may regulate a business
in any of its aspects, including the prices to be charged for
Regulation of Businesses, Occupations, and Professions the products or commodities it sells. Hence, the private
o Police power extends to any “business affected with a character of a business does not necessarily exempt it from
public interest.” the regulation of prices by State.
o The meaning of “business affected with a public interest”: The State may promote free competition by laws
a. Property becomes clothed with a public interest when aimed at monopolies, or by curbing harmful competition by
used in a manner to make it of public consequence and fixing minimum prices.
offset the community at large. When unconstitutional: When arbitrary, discriminatory, or
b. The circumstances must be such as to create a demonstrably irrelevant
peculiarly close relationship between the public and
those engaged in the business, and raise implications 7. Imposing liabilities. Police power justifies the imposition
of affirmative obligations on their part to be of liability without fault in various civil matters, as well as
reasonable in dealing with the public. It means more the creation of strict liability criminal offenses.
than that the public welfare is affected by its continuity
or by the price at which a commodity is sold or a
service rendered. REFERENCE
c. It means only that an industry, for adequate reason, is  Constitutional Law Text and Cases (Bill of Rights) by
subject to control for the public good. Miriam Defensor Santiago (2016)
THE INHERENT POWERS OF THE STATE: o In the American jurisprudence, the term “owner” when
employed in statutes relating to eminent domain to
POWER OF EMINENT DOMAIN designate the persons who are to be made parties to the
proceeding, refers, as is the rule in respect of those entitled
Section 9, Article III of the 1987 Philippine Constitution provides: to compensation, to all those who have lawful interest in the
“Private property shall not be taken for property to be condemned, including a mortgagee, a lessee
public use without just compensation.” and a vendee in possession under an executory contract.
o Expropriation or the exercise of the State’s right to eminent o The limitations on the power of eminent domain are that the
domain is proscribed by the restraints of public use and just use must be public, compensation must be made and due
compensation. It is governed by Rules of Court, Section 67 process of law must be observed.
which presents procedural guidelines for the court to ensure
that due process is observed and just compensation rightly o Eminent Domain is the government’s right to appropriate,
paid to the private owners. in the nature of a compulsory sale to the State, private
property for public use or purpose.
o The state must first establish that the exercise of eminent
domain is for a public purpose. What remains to be JUST COMPENSATION
determined is the just compensation. General Rule: In determining “just compensation” in eminent
domain, the value of the property as of the date of the filing of the
o Governed by the Rules of Court, Rule 67, the proceedings complaint is the one considered. (National Power Corporation v.
therefor consist of two stages: Court of Appeals)
a. The condemnation of the property after it is Exception: When the plaintiff takes possession before the institution
determined that its acquisition will be for a public of the condemnation proceedings, the value should be fixed as of the
purpose or public use; and time of the taking of said possession, not of filing of the complaint.
b. The determination of juts compensation to be paid for (Republic v. Philippine National Bank)
the taking of private property to be made by the court Reason for the Exception: Where property is taken ahead of the
with the assistance of not more than three filing of the condemnation proceedings, the value thereof may be
commissioners. enhanced by the public purpose for which it is taken; the entry by the
plaintiff upon the property may have depreciated its value thereby; or,
o The nature and character of the land at the time of its taking there may have been a natural increase in the value of the property
is the principal criterion to determine just compensation to from the time the complaint is filed, due to general economic
the landowner. conditions. (Republic v. Lara)
o An ejectment suit ordinarily should not prevail over the

State’s power of eminent domain. o Normally, the time of the taking coincides with the filing of
o The power of eminent domain is lodged in the legislative the complaint for expropriation.
branch of government, which may delegate its exercise to o Eminent domain is generally so described as “the highest
local government units, other public entities and public and most exact idea of property remaining in the
utilities. government” that may be acquired for some public purpose
o The basis for the exercise of eminent domain is necessity. through a method in the nature of forced purchase by the
State.
REQUISITES FOR LOCAL GOVERNMENT UNITS
The following essential requisites must concur before a local DEFINITION OF “PUBLIC USE”
government unit can exercise the power of eminent domain: o For condemnation purposes, “public use” is one which
1. An ordinance is enacted by local legislative council confers some benefit or advantage to the public; it is not
authorizing the local chief executive, in behalf of the local confined to actual use by the public. It is measured in terms
government unit, to exercise the power of eminent domain of a right of the public to use proposed facilities for which
or pursue expropriation proceedings; condemnation is sought, and, as long as public has the right
2. The power of eminent domain is exercised for public use, to use, whether exercised by one or many members of
purpose, or welfare; public, a “public advantage” or “public benefit” accrues
3. There is a payment of just compensation; sufficient to constitute a public use. (Manosca v. Court of
4. A valid and definite offer has been previously made to the Appeals)
owner of the property sought to be expropriated, but said
offer was not accepted o The Court has declared as unconstitutional the Presidential
Decrees fixing the just compensation is expropriation cases
o A municipal ordinance is different from a resolution. A to be the value given to the condemned property either by
resolution is merely a declaration of the sentiment or the owners or assessors, whichever was lower. (Export
opinion of a lawmaking body on a specific matter. An Processing Zone Authority v. Dulay)
ordinance possesses a general and permanent character. An o The rules for determining just compensation are those laid
ordinance is a law. down in the Rules of Court, Rule 67 which allows private
respondents to submit evidence on what they consider shall
o The defendants in an expropriation case are not limited to be the just compensation for their property. (Municipality
the owners of the property condemned. They include all of Talisay v. Ramirez)
other persons owning, occupying or claiming to own the
property. o Housing is a basic human need. Shortage in housing is a
matter of state concern since it directly ad significantly
affects public health, safety, the environment and in sum subdivided into small lots for resale at cost to
the general welfare. (Sumulong v. Guerrero) individuals. The other is in the transfer, through
the exercise of this power, of utilities and other
o In an expropriation case where the principal issue is the private enterprises to the government. It is
determination of just compensation, a trial before the accurate to state then that at present whatever
Commissioners is indispensable to allow the parties to may be beneficially employed for the general
present evidence on the issue of just compensation. welfare satisfies the requirement of public use.
o The determination of just compensation for a condemned
property is basically a judicial function. o The courts have the power to inquire into the legality of the
o While the court may accept the commissioners’ report and exercise of the right of eminent domain and to determine
render judgment in accordance therewith, it may not do so whether there is a genuine necessity therefor. (SEE City of
without considering whether the report is supported by Manila v. Chinese Community of Manila)
evidence.
o Intervention by the barangay is unnecessary where the
MANNER OF TAKING barangay can establish its claim by a separate and
o There is a taking when the owner is actually deprived or independent action of its own, or can obtain authority for
dispossessed of his property; when there is a practical itself from the municipality to pursue the action of eminent
destruction or a material impairment of the value of his domain.
property or when he is deprived of the ordinary use thereof.
Requisites before a writ of possession can be issued by the Court:
o There is taking in this sense when the expropriator enters 1. There must be a complaint for expropriation sufficient in
private property not only for momentary period but for a form and in substance;
more permanent duration, for the purpose of devoting the 2. A provisional determination of just compensation must be
property to a public use in such a manner as to oust the made by the trial court on the basis of judicial (not
owner and deprive him of all beneficial enjoyment thereof. legislative or executive) discretion; and
3. The deposit requirement under the Rules of Court, Rule 67,
o The owner of private property should be compensated only Section 2 must be complied with.
for what he actually loses; it is not intended that his
compensation shall extend beyond his loss or injury. (SEE POWER OF EMINENT DOMAIN
Exception to the General Rule, page 9 herein) Requisites for a valid exercise of the power of eminent domain:
1. The property taken must be private property.
PROMPT PAYMENT 2. There must be genuine necessity to take private property.
o Just compensation means not only the correct 3. The taking must be for public use.

determination of the amount to be paid to the owner of the 4. There must be payment of just compensation.
land but also the payment of the land within a reasonable 5. The taking must comply with due process of law
time from its taking. (Manapat v. Court of Appeals)
Republic of the Philippines v. PLDT Circumstances present in the “taking” of property for purposes of
Normally, of course, the power of eminent domain:
eminent domain results in the taking or 1. The expropriator must enter a private property.
appropriation of title to, and possession of, the 2. The entrance into private property must be for more than a
expropriated property; but no cogent reason momentary period.
appears why said power may not be availed of 3. The entry into the property should under warrant or color
to impose only a burden upon the owner of the of legal authority.
condemned property, without loss of title or 4. The property must be devoted to a public use or otherwise
possession. It is unquestionable that real informally appreciated or injuriously affected.
property may, through expropriation, be 5. The utilization of the property for public use must be in
subjected to an easement of right-of-way. In the such a way to oust the owner and deprive him of all
case at bar, the easement of right-of-way is beneficial enjoyment of the property.
definitely taking under the power of eminent (National Power Corp. v. Court of Appeals)
domain.
WHO MAY EXERCISE EMINENT DOMAIN
Sumulong v. Guerrero Municipality of Paranaque v. V.M. Realty Corporation
The taking to be valid must be for The power of eminent domain is lodged in the
public use. There was a time when it was felt legislative branch of the government, which
that a literal meaning should be attached to such may delegate the exercise thereof to LGUs,
a requirement. Whatever project is undertaken other public entities and public utilities. An
must be for the public to enjoy, as in the case of LGU may therefore exercise the power to
streets or parks. Otherwise, expropriation is not expropriate private property only when
allowable. It is not anymore. As long as the authorized by Congress and subject to the
purpose of the taking is public, then the power latter’s control and restraints, imposed “through
of eminent domain comes into play. As just the law conferring the power or in other
noted, the constitution in at least two cases, to legislations.”
remove any doubt, determine what is public
use. One is the expropriation of lands to be
o Once the State decides to exercise its power of eminent Section 2 does not constitute a valid exercise of the power
domain, the power of judicial review becomes limited in of eminent domain. (Ibid.)
scope, and the courts will be left to determine the
appropriate amount of just compensation to be paid to the PUBLIC PURPOSE
affected landowners. Only when the landowners are not o With respect to the element of public use, the expropriator
given their just compensation for the taking of their should commit to use the property pursuant to the purpose
property or when there has been no agreement on the stated in the petition for expropriation filed, failing which,
amount of just compensation may the remedy of petition it should file another petition for the new purpose. If not, it
for prohibition become available. (Yusay v. Court of is then incumbent upon the expropriator to return the said
Appeals) property to its private owner, if the latter desires to acquire
the same.
o The general rule upon filing of expropriation complaint, o If public purpose or intent is not initiated or not at all
the plaintiff has the right to take or enter into possession of pursued, and is peremptorily abandoned, then the former
the real property involved if he deposits with the authorized owners, if they so desire, may seek the reversion of the
government depositary an amount equivalent to the property, subject to the return of the amount of just
assessed value of the property for purposes of taxation. An compensation received. (Mactan-Cebu International
exception to this procedure is provided by R.A. No. 8974. Airport Authority v. Lozada)
It requires the payment of 100% zonal value of the property
to be expropriated to the entitle the plaintiff to a writ of Old Concept of “Public Purpose” or “Public Use”
possession. Condemned property must actually be used by the general public
Remember: R.A. No. 8974 does not take away from the (e.g., roads, bridges, public plazas, etc.) before the taking could
courts the power to judicially determine the amount of just satisfy the constitutional requirement of public use.
compensation. The law merely sets the minimum price of New Concept
the property as the provisional value. Thus, the amount of Public advantage, convenience or benefit, which tends to contribute
just compensation must still be determined by the courts to the general welfare and to the prosperity of the whole community,
according to the standards stated in R.A. No. 8974, Section like a resort complex for tourists or housing project.
5. (Metropolitan Cebu Water District v. J. King and Sons (Province of Camarines Sur v. Court of Appeals)
Company, Inc.)
JUST COMPENSATION
WHAT CONSTITUTES TAKING o The land reform process is completed only upon payment
o The Court rejected the State’s contention that a lease on a of just compensation relate to the issue of the applicable law
year to year basis can give rise to a permanent right to on just compensation. The disposition that the seizure of the
occupy, since by express legal provision a lease made for a landholding would take effect on the payment of just

determinate time, as was the lease of Castellvi’s land, compensation since it is only at that point that the land
ceases upon the day fixed, without need of a demand. reform process is completed refers to property acquired
Neither can it be said that the right to eminent domain under P.D. No. 27 but which remained unpaid until the
may be exercised by simply leasing the premises to be passage of R.A. No. 6657. (Department of Agrarian Reform
expropriated. (Republic v. Castellvi) v. Gaduco)
o While the RTC is required to consider the acquisition cost
o Taking also occurs when agricultural lands are voluntarily of the land, the current value of like properties, its nature,
offered by a landowner and approved by Presidential actual use and income, the sworn valuation by the owner,
Agrarian Reform Council (PARC) for CARP coverage the tax declaration and the assessment made by the
through the stock distribution scheme. (Hacienda Luisita, government assessors to determine just compensation, it is
Inc. v. Presidential Agrarian Reform Council) equally true that these factors have been translated into a
o It was the PARC approval which should be considered as basic formula by the DAR pursuant to its rulemaking
the effective date of taking as it was only during this time power under R.A. No. 6657, Section 49. As the government
that the government officially confirmed the CARP agency principally tasked to implement the agrarian
coverage of these lands. reform program. (Land Bank of the Philippines v.
Honeycomb Farms Corporation)
o The threshold requisites for a lawful taking of private
property for public use need to be examined here: one is the Action to recover just compensation VS Action for damages
necessity of the taking and another is legal authority to o The action to recover just compensation from the State or
effect the taking. its expropriating agency differs from the action for
damages. The former, also known as inverse
o It has not been suggested that COMELEC has been granted condemnation, has the objective to recover the value of
the power of eminent domain either by the Constitution or property taken in fact by governmental defendant, even
by the legislative authority. A reasonable relationship though no formal exercise of the power of eminent domain
between that power and the enforcement and administration has been attempted by the taking agency.
of election laws by COMELEC must be shown; it is not The latter action (action for damages) seeks to vindicate a
casually to be assumed. (Philippine Press Institute, Inc. v. legal wrong through damages, which may be actual, moral,
Commission on Elections) nominal, temperate, liquidated, or exemplary. When a right
o Resolution No. 2772, Section 2 does not provide a is exercised in a manner not conformable with the norms
constitutional basis for compelling publishers, against their enshrined in Article 19 and like provisions on human
will to provide free print space for COMELEC purposes. relations in the Civil Code. (National Power Corporation
v. Heirs of Macabangkit Sangkay)
Constitutionally, “just compensation” is the satisfaction, this interim period being deemed to be by then
sum equivalent to the market value of the an equivalent to a forbearance of credit.
property, broadly described as the price fixed
by the seller in open market in the usual and o the owner’s loss, of course, is not only his property but also
ordinary course of legal action and competition, its income-generating potential. Thus, when property is
or the fair value of the property as between the taken, full compensation of its value must immediately be
one who receives and the one who desires to paid to achieve a fair exchange for the property and the
sell, it being fixed at the time of the actual potential income lost. (Apo Fruits Corporation v. Land
taking by the government. Just compensation Bank of the Philippines)
is defined as the full and fair equivalent of
the property taken from its owner by the Provisional value VS. Just compensation
expropriator. It has been repeatedly stressed
by this Court that the true measure is not the The first refers to the preliminary or provisional determination
taker’s gain but the owner’s loss. The word of the value of the property. It serves a double purpose or
“just” is used to modify the meaning of the prepayment if the property is fully expropriated, and of an
word “compensation” to convey the idea that indemnity for damages if the proceedings are dismissed. It is
the equivalent to be given for the property to not a final determination of just compensation and may not be
be taken shall be real, substantial, full and necessarily equivalent to the prevailing fair market value of the
ample. (Land Bank of the Philippines v. Orilla) property. Of course, it may be a factor to be considered in the
determination of just compensation.
o Apart from the requirement, that compensation for
expropriated land must be fair and reasonable, Just compensation, on the other hand, is the final determination
compensation, to be “just,” must also be made without of the fair market value of the property. It has been described as
delay. “the just and complete equivalent of the loss which the owner
of the thing expropriated has to suffer by reason of the
o The Court fixed the applicable interest rate at 12% per expropriation.”
annum, computed from the time the property was taken (Republic v. Cancio)
until the full amount of just compensation was paid, in order
to eliminate the issue of the constant fluctuation and o There is no provision in the CARL/CARP on the right of a
inflation of the value of the currency over time. lessee of a private agricultural land to just compensation for
Pertinent Court’s ruling in relation to delay and payment of the crops it planted and improvements it built thereon,
complete just compensation: which could be recognized separately and distinctly from
1. When the obligation is breached, and it consists in the the right of the landowner to just compensation for his land.

payment of a sum of money, i.e., a loan or forbearance of Standing crops and improvements, if they do not come with
money, the interest due should be that which may have been the land, are totally inconsequential for CARP purposes.
stipulated in writing. Furthermore, the interest due shall (Land Bank of the Philippines v. AMS Farming
itself earn legal interest from the time it is judicially Corporation)
demanded. In the absence of stipulation, the rate of interest
shall be 12% per annum to be computed from default, i.e., o The decision of the government to acquire a property
from judicial or extrajudicial demand under and subject to through eminent domain should be made known to the
the provisions of Article 1169 of the Civil Code. property owner through a formal notice (NOT through
news or television announcement) wherein a hearing or
2. When an obligation, not constituting a loan or forbearance judicial proceeding is contemplated as provided for in the
of money, is breached, an interest on the amount of Rules of Court, Rule 67. This shall be the time of reckoning
damages awarded may be imposed at the discretion of the the value of the property for the purpose of just
court at the rate of 6% per annum. No interest, however, compensation. (Manotok v. National Housing Authority)
shall be adjudged on unliquidated claims or damages except
when or until the demand can be established with o Rules of Court, Rule 67, Section 5 calls for the
reasonable certainty. Accordingly, where the demand is appointment of not more than three competent and
established with reasonable certainty, the interest shall disinterested persons as commissioners to ascertain and
begin to run from the time the claim is made judicially or report to the court the just compensation for the property
extrajudicially (Civil Code, Article 1169) but when such sought to be taken. (Municipality of Daet v. Court of
certainty cannot be so reasonably established at the time the Appeals)
demand is made, the interest shall begin to run only from
the date the judgment of the court is made (at which time ESTOPPEL AND LACHES
the quantification of damages may be deemed to have been o In the failure to prove payment in full of just compensation
reasonably ascertained). The actual base for the and due to the fact that expropriation was not
computation of legal interest shall, in any case, be on the consummated, there is the existence of estoppel and laches
amount finally adjudged. which will render the buyer’s (in good faith) title must be
recognized as valid and subsisting.
3. When the judgment of the court awarding a sum of money
becomes final and executory, the rate of legal interest,
whether the case falls under paragraph or paragraph 2, REFERENCE
above, shall be 12% per annum from such finality until its  Constitutional Law Text and Cases (Bill of Rights) by
Miriam Defensor Santiago (2016)
THE INHERENT POWERS OF THE STATE: nature (kind), object (purpose), extent (rate), coverage
(subjects) and situs (place) of taxation.
POWER OF TAXATION
o The power to tax emanates from necessity; without taxes, General Rule: The power to tax is plenary and unlimited in its range,
government cannot fulfill its mandate of promoting the acknowledging in its very nature no limits, so that the principal check
general welfare and well-being of the people. against its abuse is to be found only in the responsibility of the
o Taxes are the lifeblood of the government and should be legislature (which imposes tax) to its constituency who are to pay it.
collected without the unnecessary hindrance. Presumption of Tax Laws: In favor of its constitutionality
o The 1997 National Internal Revenue Code expressly
provides that no court shall have the authority to grant an o It is income, not capital, which is subject to income tax.
injunction to restrain the collection of any national internal (Chamber of Real Estate and Builders’ Association, Inc. v.
revenue tax, fee or charge imposed by the code. Romulo)
Exception: When in the opinion of the Court of Tax Appeal
the collection thereof may jeopardize the interest of the o Fees may be properly regarded as taxes even though they
government and/or the taxpayer. also serve as an instrument of regulation. Indeed, taxation
o In the case of collection of local taxes, there is no express may be made the implement of the state’s police power.
provision in the Local Government Code prohibiting courts
from issuing an injunction to restrain local governments It is possible for an exaction to be both tax and
from collecting taxes. However, courts shall exercise regulation. License fees are often looked to as a
extreme caution in issuing such injunctions. source of revenue as well as a means of
regulation. That is true, for example, of
Contract Clause automobile license fees. In such case, fees may
o Contract clause has never been thought as a limitation on the be properly regarded as taxes even though they
exercise of the State’s power of taxation save only where a also serve as an instrument of regulation.
tax exemption has been granted for a valid consideration. (Philippine Airlines, Inc. v. Edu)
o Not only are existing laws read into contracts in order to fix
obligations as between parties, but the reservation of o If the purpose is primarily revenue, or if revenue is, at least,
essential attributes of sovereign power is also read in one of the real and substantial purposes, then the exaction
contracts as a basic postulate of the legal order. is properly called a tax.
o The Court recognizes the well trenched principle that o Congress found the registration of vehicles a very
estoppel does not apply to government, especially on matters convenient way of raising much needed revenues. Without

of taxation. Taxes are the nation’s lifeblood through which changing the earlier denomination of registration payments
the government agencies continue to operate and with which as “fees,” their nature has become that of “taxes.”
the State discharges its functions for the welfare of its (Philippine Airlines, Inc. v. Edu)
constituents. As an exception, however, this general rule
cannot be applied if it would work injustice against an o Taxation is, of course, to be admitted that for all its
innocent party. (Commissioner of Internal Revenue v. Petron plenitude, the power to tax is not unconfined. There are
Corporation) restrictions. The Constitution sets forth such limits.
Adversely affecting as it does property rights, both the due
o A principle deeply embedded in our jurisprudence is that process and equal protection clauses may properly be
taxes being the lifeblood of the government should be invoked, as petitioner does, to invalidate in appropriate
collected promptly, without unnecessary hindrance or delay. cases a revenue measure. (Sison v. Ancheta)
(Angeles City v. Angeles Electric Corporation)
“The power to tax involves the power to destroy.”
Concept and Rationale of the Minimum Corporate Income Tax – Chief Justice Marshall
(MCIT)
o Domestic corporations owe their corporate existence and o Where the assailed tax measure is beyond the jurisdiction
their privilege to do business to the government. They also of the state, or is not for a public purpose, or, in case of a
benefit from the efforts of the government to improve the retroactive statute is so harsh and unreasonable, it is subject
financial market and to ensure a favorable business climate. to attack on due process grounds. (Sison v. Ancheta)
It is therefore fair for the government to require to make a
reasonable contribution to the public expenses. o At any rate, it is inherent in the power to tax that a state be
o This is to stop the underdeclaration of income or free to select the subjects of taxation, and it has been
overdeduction of expenses otherwise called tax shelters. repeatedly held that ‘inequalities which result from singling
o The primary purpose of any legitimate business is to earn a out of one particular class for taxation, or exemption
profit. Continued and repeated losses after operations of a infringe no constitutional limitation.’” (Lutz v. Araneta)
corporation or consistent reports of minimal net income
render its financial statements and its tax payments suspect. o Equality and uniformity in taxation means that all taxable
o This also to prevent tax evasion and tax avoidance schemes. articles or kinds of property of the same class shall be taxed
at the same rate. The taxing power has the authority to make
o Taxation is an inherent attribute of sovereignty. It is a power reasonable and natural classifications for purpose of
that is purely legislative. Essentially, this means that in the taxation. (Sison v. Ancheta)
legislature primarily lies the discretion to determine the
TAX EXEMPTIONS transaction. (Philippine Banking Corporation v.

Rule: Statutes granting tax exemptions are construed strictissimi Commissioner of Internal Revenue)
juris against the taxpayer and liberally in favor of the taxing authority.
o A claim of tax exemption must be clearly shown and based Question: May surviving or new corporations avail of the tax
on language in law too plain to be mistaken. amnesty in behalf of the corporations absorbed or dissolved?
Burden of Proof: Party claiming the exemption Answer: YES, these companies can avail of the tax amnesty for
Basis of the rule: To minimize differential treatment and foster purposes of obtaining tax clearances for the dissolved or absorbed
impartiality, fairness, and equality of treatment among taxpayers. companies.
o They must be expressed in the clearest and most
unambiguous language and not left to mere implications. o The DST is one of the taxes covered by the Tax Amnesty
Program under R.A. No. 9480.
Tax exclusion
o An exemption is an immunity or a privilege; it is the o Revenue generation has undoubtedly been a major
freedom from a charge or burden to which others are consideration in the passage of the Tax Code. However, as
subjected. borne by the legislative record, the shift from the ad
o An exclusion is the removal of otherwise taxable items valorem system to specific tax system is likewise meant to
from the reach of taxation. It is also an immunity or promote fair competition among the players in the
privilege which frees a taxpayer from a charge to which industries concerned, to ensure an equal distribution of the
others are subjected. tax burden and to simplify tax administration by classifying
cigarettes, among others, into high, medium, or low priced
Tax amnesty based on their net retail price and accordingly graduating
o It is a general pardon or the intentional overlooking by the tax rates. (Commissioner of Internal Revenue v. Fortune
State of its authority to impose penalties on persons Tobacco Corporation)
otherwise guilty of violation of a tax law.
o A tax exemption cannot be grounded upon the continued
Tax refund existence of a statute which precludes its change or repeal.
o Tax refunds or tax credits are not founded principally on Flowing from the basic precept of constitutional law that no
legislative grace but on the legal principle which underlies law is irrepealable, Congress, withdrawing a tax exemption
all quasi-contracts abhorring a person’s unjust enrichment just as efficaciously as it may grant the same under the
at the expense of another. Constitution. (Republic v. Caguioa)
o The taxpayer expects fair dealing from the government and
the latter has the duty to refund without any unreasonable
delay what it has erroneously collected. (solution indebiti)
REFERENCE

o Under the Tax Code, apparently in recognition of the
pervasive quasi-contract principle, a claim for tax refund  Constitutional Law Text and Cases (Bill of Rights) by
may be based on the following: Miriam Defensor Santiago (2016)
a. Erroneously or illegally assessed or
collected internal revenue taxes;
b. Penalties imposed without authority;
c. Any sum alleged to have been excessive or
in any manner wrongfully collected
No vested right in tax exemption

o Being a mere statutory privilege, a tax exemption may be
modified or withdrawn at will by the granting authority.
o The power to impose taxes is one so unlimited in force and
so searching in extent, it is subject only to restrictions which
rest on the discretion of the authority exercising it.
o The exercise of taxing power of local government units is

subject to the limitations enumerated in the Local
Government Code, Section 133. Under Local Government
Code, Section 133(o), local government units have no
power to tax instrumentalities of the national government
(like the MIAA). Hence, MIAA is not liable to pay real
property taxes for the NAIA Pasay properties. (Manila
International Airport Authority v. City of Pasay)
o Documentary stamp tax (DST) is a tax on documents,

instruments, loan agreements, and papers evidencing the
acceptance, assignment, sale or transfer of an obligation,
right or property incident thereto. A DST is actually an
excise tax because it is imposed on the transaction rather
than the document. Hence, in imposing the DST, the Court
considers not only the document but also the nature of the

Notes Doctrines Inherent Powers of The State

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CONSTITUTIONAL LAW II NOTES & DOCTRINES 1

SAN BEDA COLLEGE OF LAW - MANILA

o It could very well be synonymous with sovereign power. Public Purpose

JAMES BRYAN SUAREZ DEANG © 2017 (09265563619/[email protected])

JAMES BRYAN SUAREZ DEANG © 2017 (09265563619/[email protected])

JAMES BRYAN SUAREZ DEANG © 2017 (09265563619/[email protected])

JAMES BRYAN SUAREZ DEANG © 2017 (09265563619/[email protected])

JAMES BRYAN SUAREZ DEANG © 2017 (09265563619/[email protected])

Tests for Just Compensation o The Constitution embraces two concepts:

6. Freedoms of Speech, Press, Religion, and Assembly 1. Bill of attainder

JAMES BRYAN SUAREZ DEANG © 2017 (09265563619/[email protected])

JAMES BRYAN SUAREZ DEANG © 2017 (09265563619/[email protected])

JAMES BRYAN SUAREZ DEANG © 2017 (09265563619/[email protected])

JAMES BRYAN SUAREZ DEANG © 2017 (09265563619/[email protected])

JAMES BRYAN SUAREZ DEANG © 2017 (09265563619/[email protected])

JAMES BRYAN SUAREZ DEANG © 2017 (09265563619/[email protected])

JAMES BRYAN SUAREZ DEANG © 2017 (09265563619/[email protected])

JAMES BRYAN SUAREZ DEANG © 2017 (09265563619/[email protected])

TAX EXEMPTIONS transaction. (Philippine Banking Corporation v.

JAMES BRYAN SUAREZ DEANG © 2017 (09265563619/[email protected])

No vested right in tax exemption

o The exercise of taxing power of local government units is

o Documentary stamp tax (DST) is a tax on documents,

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