George L.

Borja Constitutional Law II

Case: MIGUEL BELUSO VS. THE MUNICIPALITY OF PANAY (CAPIZ),

G.R. no. 153974 August 7, 2006

Facts: The Sangguniang Bayan of the Municipality of Panay issued Resolution No. 95-29 authorizing the
municipal government through the mayor to initiate expropriation proceedings. A petition for expropriation
was thereafter filed on April 14, 1997 by the respondent Municipality of Panay before the Regional Trial
Court (RTC), Branch 18 of Roxas City. Petitioners filed a Motion to Dismiss alleging that the taking is not
for public use but only for the benefit of certain individuals; that it is politically motivated because
petitioners voted against the incumbent mayor and vice-mayor; and that some of the supposed
beneficiaries of the land sought to be expropriated have not actually signed a petition asking for the
property but their signatures were forged or they were misled into signing the same. The trial court denied
petitioners’ Motion to Dismiss and declared that the expropriation in this case is for "public use" and the
respondent has the lawful right to take the property upon payment of just compensation.

Petitioners then filed a Petition for Certiorari before the CA claiming that they were denied due process
when the trial court declared that the taking was for public purpose without receiving evidence on
petitioners’ claim that the Mayor of Panay was motivated by politics in expropriating their property and in
denying their Motion to Hold in Abeyance the Hearing of the Court Appointed Commissioners; and that
the trial court also committed grave abuse of discretion when it disregarded the affidavits of persons
denying that they signed a petition addressed to the municipal government of Panay. Then CA rendered
its Decision dismissing the Petition for Certiorari. It held that the petitioners were not denied due process
as they were able to file an answer to the complaint and were able to adduce their defenses therein; and
that the purpose of the taking in this case constitutes "public use".

Issue: Whether the Municipal Government of Panay exercise the power of Eminent Domain is being
exercised in accordance with the delegating law under the existence of legislative grant in favor of local
governments.

Decision: The petition is granted.

Rationale: The Court in no uncertain terms have pronounced that a local government unit cannot
authorize an expropriation of private property through a mere resolution of its lawmaking body. R.A. No.
7160 otherwise known as the Local Government Code expressly requires an ordinance for the purpose
and a resolution that merely expresses the sentiment of the municipal council will not suffice.

A resolution will not suffice for an LGU to be able to expropriate private property; and the reason for this is
settled: A municipal ordinance is different from a resolution. An ordinance is a law, but a resolution is
merely a declaration of the sentiment or opinion of a lawmaking body on a specific matter. An ordinance
possesses a general and permanent character, but a resolution is temporary in nature. Additionally, the
two are enacted differently -- a third reading is necessary for an ordinance, but not for a resolution, unless
decided otherwise by a majority of all the Sanggunian members.

If Congress intended to allow LGUs to exercise eminent domain through a mere resolution, it would have
simply adopted the language of the previous Local Government Code. But Congress did not. In a clear
divergence from the previous Local Government Code, Sec. 19 of R.A. [No.] 7160 categorically requires
that the local chief executive act pursuant to an ordinance.

As respondent’s expropriation in this case was based merely on a resolution, such expropriation is clearly
defective. While the Court is aware of the constitutional policy promoting local autonomy, the court cannot
grant judicial sanction to an LGU’s exercise of its delegated power of eminent domain in contravention of
the very law giving it such power.
George L. Borja Constitutional Law II

Case: JULITA P. TAN vs. THE REPUBLIC OF THE PHILIPPINES

G.R. no 170740 May 25, 2007

Facts: Julita P. Tan, petitioner herein, is the registered owner of a parcel of land consisting of 7,161
square meters located at the southern bank of the Zapote River in Sitio Wawa, Pulang Lupa, Las Piñas
City. She acquired this property from the San Antonio Development Corporation (SADC). Prior to the
transfer of the property to petitioner by SADC, or on March 29, 1985, PEA wrote SADC requesting
permission to enter the latter’s property, for the purpose of construction of road. PEA also proposed to
SADC to start their negotiation for its acquisition of the latter’s property. The Public Estates Authority
(PEA) is a government-owned and controlled corporation, organized and existing pursuant to Presidential
Decree (P.D.) No. 1084. SADC replied authorizing PEA to enter the property, subject to the condition
that the latter should pay a monthly rental of P10,000.00. PEA then directed its contractor, the Philippine
National Construction Corporation, to enter the property and begin the necessary engineering works on
the Coastal Road. Then PEA requested SADC either to donate or sell the property to the government.
SADC replied by offering to sell the property to PEA. SADC’s asking price was P1,288,980.00 plus
P400,000.00 as compensation for the house and other improvements thereon that were destroyed during
the construction of the Coastal Road. PEA informed SADC it has no plan to buy the whole lot, but only the
1,131 square meter portion above sea level. PEA then asked SADC to submit proofs of ownership and
costs of the improvements which were demolished. Negotiations then ensued between the parties.
However, for the past twenty (20) years, they failed to reach an agreement. Petitioner in her desperation,
wrote PEA expressing her willingness to be compensated through a land swapping arrangement. She
proposed that PEA’s Fisherman’s Wharf be given to her in exchange for her property. The PEA Board
approved the exchange of a portion of petitioner’s lot. The parties entered into a Memorandum of
Agreement wherein PEA agreed to execute a Deed of Exchange by way of compensation for petitioner’s
property affected by the Coastal Road but withdraw later on then file a complaint of expropriation to the
court. petitioner filed with the RTC a motion to order PEA to immediately pay her just compensation
based on the zonal valuation of the BIR. Then the trial court granted the petition. Then PEA filed for
certiorari to the Court of Appeals, and it was granted.

Issue: Whether the just compensation of the taking of the property is properly applied.

Decision: The decision of CA is reversed and the RTC decision Affirmed.

Rationale: While PEA has been earning huge toll fees, it has refused to pay petitioner any compensation
for the use of her property in violation of her right as an owner.

The above circumstances clearly show that when PEA entered petitioner’s land in 1985, it was not for the
purpose of expropriating it. We stress that after its entry, PEA wrote SADC requesting to donate or sell
the land to the government. Indeed, there was no intention on the part of PEA to expropriate the subject
property. Why did it ask permission from SADC to enter the property? Thereafter, why did it request
SADC to donate or sell the land to the government? It could have simply exercised its power of eminent
domain.

Section 2, Rule 67 (on Expropriation) of the same Rules provides, among others, that 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. It bears reiterating
that in Republic v. Vda. de Castellvi, we ruled that just compensation is determined as of the date of the
taking of the property or the filing of the complaint, whichever came first.

We have made it clear that there was no taking of the property in 1985 by PEA for purposes of
expropriation. As shown by the records, PEA filed with the RTC its petition for expropriation on
September 22, 2003. The trial court, therefore, was correct in ordering respondent, through PEA, upon
the filing of its complaint for expropriation, to pay petitioner just compensation on the basis of the BIR
zonal valuation of the subject property at P20,000.00 per square meter.
George L. Borja Constitutional Law II

Case: CHEVRON PHILIPPINES, INC. vs. BASES CONVERSION DEVELOPMENT AUTHORITY

G.R. no 173863 September 15, 2010

Facts: Clark Development Corporation (CDC) issued and approved Policy Guidelines on the Movement of
Petroleum Fuel to and from the Clark Special Economic Zone (CSEZ) which the petitioner protest the
assessment for royalty fees claiming that nothing in the law authorizes CDC to impose royalty fees or any
fees based on a per unit measurement of any commodity sold within the special economic zone.
Petitioner elevated its protest before respondent Bases Conversion Development Authority (BCDA)
arguing that the royalty fees imposed had no reasonable relation to the probable expenses of regulation
and that the imposition on a per unit measurement of fuel sales was for a revenue generating purpose,
thus, akin to a "tax". The protest was however denied by BCDA. Petitioner appealed to the Office of the
President which dismissed the appeal for lack of merit and denied motion for reconsideration thereof. The
petitioner elevated the case to the CA which likewise dismissed the appeal for lack of merit and denied
the motion for reconsideration.The CA held that in imposing the challenged royalty fees, respondent CDC
was exercising its right to regulate the flow of fuel into CSEZ, which is bolstered by the fact that it
possesses exclusive right to distribute fuel within CSEZ pursuant to its Joint Venture Agreement (JVA)
with Subic Bay Metropolitan Authority (SBMA) and Coastal Subic Bay Terminal, Inc. (CSBTI). The
appellate court also found that royalty fees were assessed on fuel delivered, not on the sale, by petitioner
and that the basis of such imposition was petitioner’s delivery receipts to Nanox Philippines. The fact that
revenue is incidentally also obtained does not make the imposition a tax as long as the primary purpose
of such imposition is regulation.

Issue:

a. Whether the royalty fee imposed by CDC regulatory in nature.

b. Whether the Policy Guidelines of Clark Development Corporation is valid governmental regulation

Decision: The petition is DENIED for lack of merit and the Decision of the Court of Appeals is hereby
AFFIRMED.

Rationale: In distinguishing tax and regulation as a form of police power, the determining factor is the
purpose of the implemented measure. If the purpose is primarily to raise revenue, then it will be deemed a
tax even though the measure results in some form of regulation. On the other hand, if the purpose is
primarily to regulate, then it is deemed a regulation and an exercise of the police power of the state, even
though incidentally, revenue is generated. Thus, in Gerochi v. Department of Energy, the Court stated:

The conservative and pivotal distinction between these two (2) powers rests in the purpose for which the
charge is made. If generation of revenue is the primary purpose and regulation is merely incidental, the
imposition is a tax; but if regulation is the primary purpose, the fact that revenue is incidentally raised
does not make the imposition a tax.

In the case at bar, we hold that the subject royalty fee was imposed primarily for regulatory purposes, and
not for the generation of income or profits as petitioner claims.

The need for regulation is more evident in the light of the 9/11 tragedy considering that what is being
moved from one location to another are highly combustible fuel products that could cause loss of lives
and damage to properties, hence, a set of guidelines was promulgated on 28 June 2002. It must be
emphasized also that greater security measure must be observed in the CSEZ because of the presence
of the airport which is a vital public infrastructure.

Administrative issuances have the force and effect of law. They benefit from the same presumption of
validity and constitutionality enjoyed by statutes. These two precepts place a heavy burden upon any
party assailing governmental regulations. Petitioner’s plain allegations are simply not enough to overcome
the presumption of validity and reasonableness of the subject imposition.
George L. Borja Constitutional
Law II

Case: CITY OF ILOILO vs. REMEDIOS SIAN VILLANUEVA and EUSEBIO VILLANUEVA,

G.R. No. L-12695,  March 23, 1959

Facts: The Municipal Board of Iloilo City enacted Ordinance No. 86, amending Ordinance No. 33,
wherein the following was provide: (1) tenement house (casa de vecindad), P25 annually; (2) tenement
house partly or wholly engaged in or dedicated to business in the streets of J.M. Basa, Iznart and
Aldeguer, P24 per apartment; (3) tenement house partly or wholly engaged in business in any other
streets, P12.00 per apartment. Remedios Sian Villanueva and Eusebio Villanueva, spouses, are the
owners of four apartment houses for rent situated in Iloilo City, to which the city sought to collect from the
spouses an annual license tax fee of P24 for each of their 34 apartments, or the total sum of P1,610
allegedly due during the period from the fourth quarter of 1946 to the third quarter of 1948, plus the sum
of P332 representing 20% penalty. The spouses having refused to pay the same, the City of Iloilo filed in
the municipal court action to recover the tax and penalty.

Defendant spouses answered the complaint contending that the ordinance under which the tax is sought
to be collected infringes the powers granted to the city by its Charter and that said ordinance is violative of
the constitutional provisions requiring uniformity of taxation upon the theory that it is oppressive,
unreasonable and discriminatory. Because of the issue of constitutionality raised, the case was elevated
to the Court of First Instance of Iloilo. The CFI rendered judgment upholding the legality of the ordinance
and ordering defendants to pay the taxes claimed, with interest and costs. Defendants appealed from this
decision to the Court of Appeals, but this case was elevated to this Court because it involves only
questions of law.

Issue: Whether the Ordinance no. 86 is unconstitutional.

Decision: The decision appealed from is reversed. The complaint is dismissed.

Rationale: It is well-settled that a municipal corporation, unlike a sovereign state, is clothed with no
inherent power of taxation. "The charter or statute must plainly show an intent to confer that power or the
municipality cannot assume it. And the power when granted is to be construed strictissimi juris. Any
doubt or ambiguity arising out of the term used in granting that power must be resolved against the
municipality. Inferences, implications, deductions — all these — have no place in the interpretation of the
taxing power of a municipal corporation." And it not appearing that the power to tax owners of tenement
houses is one among those clearly and expressly granted to the City of Iloilo by its Charter, the exercise
of such power cannot be assumed and hence the ordinance in question is ultra vires insofar as its taxes a
tenement house such as those belonging to defendants.
George L. Borja Constitutional Law II

Case: HON. JEJOMAR C. BINAY and the MUNICIPALITY OF MAKATI VS. HON. EUFEMIO
DOMINGO and the COMMISSION ON AUDIT

G.R. No. 92389 September 11, 1991

Facts: Petitioner Municipality, through its Council, approved Resolution No. 60 which to confirm or to
ratify the ongoing Burial Assistance Program Qualified beneficiaries, under the Burial Assistance
Program, are bereaved families of Makati whose gross family income does not exceed two thousand
pesos (P2,000.00) a month. The beneficiaries, upon fulfillment of other requirements, would receive the
amount of five hundred pesos (P500.00) cash relief from the Municipality of Makati. Metro Manila
Commission approved the resolution. Thereafter, the municipal secretary certified a disbursement fired of
four hundred thousand pesos (P400,000.00) for the implementation of the Burial Assistance Program.
The resolution was referred to respondent Commission on Audit (COA) for its expected allowance in
audit. Based on its preliminary findings, respondent COA disapproved the resolution and disallowed in
audit the disbursement of finds for the implementation thereof. Petitioner, through its Mayor, was
constrained to file this special civil action of certiorari praying that COA Decision be set aside as null and
void.

Issue: Whether or not Resolution No. 60, of the Municipality of Makati is a valid exercise of police power
under the general welfare clause.

Decision: Petition is hereby GRANTED and the Commission on Audit's Decision No. 1159 is hereby
SET ASIDE.

Rationale: COA is not attuned to the changing of the times. Public purpose is not unconstitutional merely
because it incidentally benefits a limited number of persons. As correctly pointed out by the Office of the
Solicitor General, "the drift is towards social welfare legislation geared towards state policies to provide
adequate social services, the promotion of the general welfare , social justice, as well as human dignity
and respect for human rights.

The care for the poor is generally recognized as a public duty. The support for the poor has long been an
accepted exercise of police power in the promotion of the common good.

There is no violation of the equal protection clause in classifying paupers as subject of legislation.
Paupers may be reasonably classified. Different groups may receive varying treatment. Precious to the
hearts of our legislators, down to our local councilors, is the welfare of the paupers. Thus, statutes have
been passed giving rights and benefits to the disabled, emancipating the tenant-farmer from the bondage
of the soil, housing the urban poor, etc.

Resolution No. 60, re-enacted under Resolution No. 243, of the Municipality of Makati is a paragon of the
continuing program of our government towards social justice. The Burial Assistance Program is a relief of
pauperism, though not complete. The loss of a member of a family is a painful experience, and it is more
painful for the poor to be financially burdened by such death. Resolution No. 60 vivifies the very words of
the late President Ramon Magsaysay 'those who have less in life, should have more in law." This
decision, however must not be taken as a precedent, or as an official go-signal for municipal governments
to embark on a philanthropic orgy of inordinate dole-outs for motives political or otherwise.
George L. Borja Constitutional Law II

Case: HOMEOWNERS' ASSOCIATION OF THE PHILIPPINES, INC. and VICENTE A. RUFINO, VS.
MUNICIPAL BOARD OF THE CITY OF MANILA, ET AL.

G.R. No. L-23979           August 30, 1968

Facts: This is an action, against the Municipal Board and the Mayor of the City of Manila, for a
declaratory relief. It was brought by the Homeowners' Association of the Philippines, Inc. and its
President, Vicente A. Rufino, to nullify Municipal Ordinance No. 4841 of the City of Manila, approved on
December 31, 1963, to take effect on January 1, 1964. Which is an ordinance regulating rentals of lots
and building for residential purposes. After appropriate proceedings, the Court of First Instance of Manila
rendered judgment declaring said ordinance "ultra vires, unconstitutional, illegal and void ab initio without
pronouncement as to costs. The lower court struck down the questioned ordinance upon the ground that
the power to "declare a state of emergency ... exclusively pertains to Congress"; that "there is no longer
any state of emergency" which may justify the regulation of house rentals; that said ordinance
disconstitutes an unreasonable and unjustified limitation on the use of private properties and arbitrarily
encroaches on the constitutional rights of property owners"; that the power of the City of Manila to
"regulate the business of ... letting or subletting of lands and buildings" does not include the authority to
prohibit what is forbidden in said ordinance; and that the same cannot be deemed sanctioned by the
general welfare clause in the City Charter. Hence, this appeal by the Mayor of Manila Said Ordinance.

Issue: Whether or not ordinance 4841 is unconstitutional

Decision: the decision appealed from should be as it is hereby affirmed, with costs against the appellant.

Rationale: The practical reason for the requirement that a statute passed to meet a given emergency,
should limit the period of its effectivity, is that, otherwise, a new and different law would be necessary to
repeal it, and said period would, accordingly, be "unlimited, indefinite, negative and uncertain", so that
"that which was intended to meet a temporary emergency may become a permanent law", 9 because
"Congress might not enact the repeal, and, even if it would, the repeal might not meet with the approval of
the President, and the Congress might not be able to override the veto". In line with the basic philosophy
underlying the authority to affect individual rights, this Court felt that Commonwealth Act No. 671,
otherwise known as the Emergency Powers Act, was meant to be and "became inoperative when
Congress met in regular session on May 25, 1946," and that Executive Orders Nos. 62, 192, 225 and 226
— promulgated subsequently thereto — "were issued without authority of law", because, otherwise, said
emergency regulations would purport to be in force for an indefinite and unlimited period of time, and,
hence, would be unconstitutional.

The same considerations impelled the Court to invalidate Executive Order Nos. 545 and 546, issued on
November 10, 1952. Indeed, otherwise "the result would be obvious unconstitutionality", by making
permanent a law intended to afford a relief for a temporary emergency, the length of which should be
"fixed in the law itself and not dependent upon the arbitrary or elastic will of either Congress or the
President".

We have not overlooked the fact that the cases adverted to refer particularly to the constitutional provision
authorizing Congress, "in times of war or other national emergency", to delegate to the President, "for a
limited period", and subject to specified "restrictions", the power "to promulgate rules and regulations to
carry out a declared national policy". We are inclined to believe, however, that in providing that the
lifetime of the authority given must be "for a limited period", the framers of our Charter were influenced by
the fact that powers were being delegated to the Executive, as much as by the circumstance that, since
the cause for the grant of power was temporary, so should the grant be, for the effect cannot remain in
existence upon the removal of its cause. In fact, Congress has, in actual practice, accepted this limitation
upon its exercise of police power to meet a condition of emergency. Thus, Commonwealth Act No. 499
regulated the transfer of vessels and of shipping facilities, effective until adjournment of the next regular
session of the National Assembly. This was followed by Commonwealth Act No. 689 which penalized
speculation on rents of buildings destined for dwelling purposes, but only "for a period of two (2) years
after its approval." This Act was amended by Republic Act No. 66 which, inter alia, extended its period of
effectivity to "four (4) years after it approval."

Needless to say, the powers of municipal corporations delegated thereto by the National Government
cannot escape the inherent limitations to which the latter — as the source of said powers — is subject.
Then, again, since our law on municipal corporations is, in principle, patterned after that of the United
States, the rule therein, to the effect that "in a proper case, emergency legislation, limited in time, may be
enacted under the police power" of a municipal corporation, should be considered a part of our legal
system.