G. R. No.

L-11748

BAUTISTA ANGELO, J.:

On February 2, 1953, an information for malicious mischief was filed against the accused by the city
attorney of Legaspi, Albay, before the Municipal Court of Legaspi. He pleaded not guilty. After the
prosecution has presented its evidence, he moved to quash the information on the ground that the
prosecution failed to prove all the elements of the crime charged, but the motion was denied, thereafter,
the accused presented his evidence, after which the court rendered a decision finding him guilty of the
crime of malicious mischief as defined in Article 327 of the Revised Penal Code and sentenced him to
suffer ten (10) days of arresto menor or pay a fine of P75.00, to indemnify the offended party in same
amount, with subsidiary imprisonment in case of insolvency, and to pay the costs.
From this decision, he appealed to the court of first tanoe where again he was charged with the same
offense. On November 10, 1956, he reiterated his motion to quash the information on the same ground
that it does not allege the necessary elements to constitute the crime of malicious mischief. This time
the court sustained the motion and dismissed case. The court cancelled the "bond for his provisional
release. The Government appealed.
The fundamental rule in considering a motion to the ground that the averaients of the information
sufficient to constitute the offense charged is whether the facts alleged, if hypothetically admitted,
would meet the jjtential elements of the offense as defined in the law. te above ground imports a
hypothetical admission of the alleged in the information "but challenges their sufficiency for failure to
meet the essential requisites of the as specified by substantive law."[1] However, it was held that
"Prima facie, the 'facts charged' are those deseed in the complaint, but they may be amplified or
qualified others appearing to be additional circumstances, upon admissions made by the people's
representative, which admissions could anyway be submitted by him as amendments to same
information. x x x Of course, it may be added that upon similar motions the court and the fiscal are not
required to go beyond the averments of the information, nor is the latter to be inveigled into a
premature and risky revelation of his evidence" (People v. Navarro, 75 Phil., 516, 518-519). Does the
herein information meet this test?
The information filed in the lower court reads :
"That on or about January 13, 1953, in the District of Daraga, City of Legaspi, Philippines,
and within the jurisdiction of this Honorable Court, the above-named accused moved by
resentment and anger and with intent to damage another's property did then and there
wilfully, unlawfully and feloniously shoot to death a female white pig spotted brown owned
by Julian Stabella which act of the accused caused damage and prejudice to said Julian
Marbella in the amount of P75.00 Philippino Currency." (Information, p. 31, Record;
Underlining supplied)

Analyzing the information we find that, as alleged, the accused wilfully damaged the property of one
Marbella when he shot to death a pig owned by the latter with the felonious intent of causing an injury
because of resentment and anger. In other words, the accused caused damage to the property of another,
with the'intent to cause injury, due to an evil motive, and these are precisely the elements instituting the
crime of malicious mischief (Article 327, Revised Penal Code; see Padilla, Revised Penal Code,
Annotated, Vol. II, p. 645, 1955 ed.)
Commenting on the acts committed by the accused as irged in the information and as admitted by the
solicitor General, this official said: "Certainly the deliberate act the accused Segovia in shooting to
death the female white pig owned by Julian Marbella was obviously due to malicious intent on his part.
As it has been established before the Municipal Court the accused shot not only once but four times this
female white pig with his shotgun, Caliber .22 when he saw it among the plants. There was certainly
the element of vengeance and anger with malicious intent of avenging whatever damage the pig might
have done to his plants. The proper thing which the accused should have done when he saw the pig
among his plants, was to drive it away, and after assessing the value of whatever damages the pig might
have caused to his plants, he should have filed a civil action for damages against the owner, in
accordance with the provisions of the Civil Code. But in this case he took the law in his own hands x x
x." We agree with this comment. It is obvious that the trial court erred in sustaining the motion to
quash.
The plea is advanced that the Government can no longer appeal from the decision of dismissal without
placing the accused in double jeopardy considering that he was already convicted by the Municipal
Court of Legaspi. This claim ignores the fact that he appealed from the judgment of conviction and
hence it was vacated. The rule is that when an appeal has been perfected, the judgment of the justice of
the peace or municipal court is vacated and the case is tried de novo in the court of first instance as if it
were originally Instituted therein (section 8, Rule 119). No new information need be filed in the latter
court in order that it may acquire jurisdiction to try the case (Crisostomo v. Director of Prisons, 41
Phil., 368; People v. Cu Hiok, 62 Phil., 501). If the case, on appeal by the accused, is as originally
instituted, and the motion was filed before arraignment or plea, it is obvious that the dismissal of the
case was no bar to appeal because it does not place the accused in jeopardy under Section 9, Rule 113,
of the Rules of Court, The claim is therefore without merit.
Wherefore, the order appealed from is hereby set aside, the case is reiuanded to the lower court for
hearing on No costs.
Paras, C. J., Bengzon, Montemayor, Reyes, A., Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L.,
Endencia, and Felix, JJ., concur.

[1] Moran, Comments on the Rules of Court, Vol. 2, 1957 ed., P. 762.

DISSENTING

FELIX, J.,
I only need a few words to establish my point and I fully confident of making a perfect bull's-eye hit on
ruling pronounced on jeopardy in the majority decision.
I have no quarrel with my colleagues as to the sufficiency of the information in the case at bar.
Probably the lower Court was erroneous in dismissing the information but I consider that the act of
setting aside the order appealed from and of remading the case to the lower court for hearing on the
merits, is absolutely uncalled for and improper, for in so doing we place the defendant in double
jeopardy. In the majority Decision it is stated that:
On February 2, 1953, an information for malicious mischief against the accused was filed
by the City Attorney of Legaspi, Albay, before the Municipal Court of Legaspi, wherein he
pleaded not guilty. After the prosecution had presented its evidence. he moved to quash the
information on the ground that the prosecution failed to prove all the elements of the crime
 charged, but the motion was denied. Thereafter, the accused presented his evidence, after
which the Court rendered a decision finding him guilty of the crime of malicious mischief
as defined in Article 327 of the Revised Penal Code and sentenced him to suffer ten (10)
days of arresto menor or pay a fine of P75.00, to indemnify the offended party in the same
amount, with subsidiary imprisonment in case of insolvency, and to pay the costs.

From this decision he appealed to the Court of First Instance where again he was charged
with the same offense. On November 10, 1956, he reiterated his motion to quash the
information on the same ground that it does not allege the necessary elements to constitute
the crime of malicious mischief. This time the court sustained the motion and dismissed the
case. The court cancelled the bond for his provisional release. The Government appealed.

Section 9 of Rule 113 of the Rules of Court proscribes:

SEC. 9. FORMER CONVICTION OR ACQUITTAL OR FORMER JEOPARDY.-When a
defendant shall have been convicted or acquitted, or the case against him dismissed or
otherwise terminated without the express consent of the defendant, by a court of competent
Jurisdiction, and after the defendant had pleaded to the charge, the conviction or acquittal
of the defendant or the dismissal of the case shall be a bar to another prosecution for the
offense charged, or for any attempt to commit the same or frustration thereof, or for any
offense which necessarily includes or is necessarily included in the offense charged in the
former complaint or information.

In the case at bar, the defendant pleaded not guilty of the offense in the Municipal Court of Legaspi
where the formation was filed, and both the prosecution and the accused presented evidence which,
despite the defenses interposed by the latter, caused his conviction and sentence to the penalty
aforementioned. On appeal, however, and upon motion to quash, the information, rightly or wrongly,
was dismissed and the defendant exonerated from criminal liability. Confronting the provisions of the
aforequoted Section 9 of Rule 113 of the Rules of Court with the acts established and enumerated in the
majority decision, it cannot be denied that the defendant was prosecuted and convicted of the offense
charged in a Court of competent jurisdiction and that his conviction therein after he had pleaded not
guilty to the charge and after evidence was submitted the case, constitutes, in the language of the Rules
of Court, a bar to another prosecution for the same offense though he may have been latter acquitted
thereof on appeal to the proper Court of First Instance. It is true it the defendant appealed from the
decision to the lower Court; that, for procedural purposes, the decision convicting the defendant of such
offense was vacated; and that the elevation of the case to the Court of First Instance for trial de novo
was upon the instance and on appeal of the defendant, but all this succession of events cannot be any
means obliterate nor wipe out facts that have already existed and brought to life, a metaphysical
impossibility even our Creator cannot accomplish, so that once the jefendant is acquitted or the case
dismissed in the upper iourt under the circumstances of the case at bar, he is fconerated forever and the
prosecution of his case cannot subject to further proceedings.
In the case of People vs. Doyle, 54 Phil. 862, this Court held that:
"This dismissal of a criminal case of estafa which was appealed from a Justice of the Peace
to the Court of First Instance, the former being vested with jurisdiction to try and decide, is
equivalent to an acquittal of the defendant in said case, and the filing of a new information
in which the case dismissed is included, exposes said defendant to a second conviction of
one and the same offense, and therefore constitutes double jeopardy".
In the case of People vs. Fajardo, 49 Phil. 206, the same principle was upheld:
"The Justice of the Peace having, as he had jurisdiction to entertain the complaint for estafa
filed in the case, the trial court committed an error of law in holding that it had no
jurisdiction to try the case on appeal; but its judgment, however, in dismissing the case and
releasing the accused is unappealable for the reason that he was already placed in jeopardy,
and therefore the motion for dismissal must be granted".

That We cannot disregard what has been done in the Municipal Court of Legaspi is a matter already
repeatedly decided by this Court. We see for example that in the case of People vs. Hermino, 64 Phil.
"Appellant confessed his crime after the prosecution had presented its evidence, at least in
the Municipal Court where the case originated. It cannot he stated that the appeal taken by
him to the Court of First Instance again restored the case to its original stage for the very
reason that the law requires a trial DE NOVO, that that there had been no presentation or
evidence before he confessed or admitted his crime, because a trial DE NOVO gives the
impression and necessarily implies the existence of a previous trial. The confession, in
order to constitute a mitigating circumstance, must not only be spontaneous but also be
made prior to the presentation of the evidence for the prosecution (Art. 13, Sec. 7, Revised
Penal Code)".

The same doctrine was enunciated in the case of People vs. Bawasanta, 64 Phil. 409, wherein it was
said:
"Trial de novo means a new trial in the same manner, with the same effect, and upon the
same issues as the case was tried in the lower Court, in accordance with the rules of
practice in the appellate court (Sandlin vs. State - 1910 - 3 Okla. Cr. 578; State vs. Fort -
1909 - 164 Ala. 578; Crisostomo vs. Director of Prisons, 41 Phil. 368), and it does not
mean that all the proceedings in the lower court had thereby bean wiped out so as to
preclude the ascertainment of whether the defendant voluntarily pleaded guilty in the lower
court for the purpose of determining the existence of this mitigating circumstance".

See also the cases of People vs. Sy Chay (alias Sy Kuan), 44Phil. 900 and People vs. De la
Peña, 66 Phil. 45l.

Now, if the trial de novo does not wipe out the proceedings in the inferior court and the law allows this
Court, for purpose of determining the circumstances attending the in the court of origin, to go over the
record thereof, in cases of trials de novo after appeal to the Court of Instance, under what principle of
justice or even reason and logic are We to disregard in the case at bar the fact that the defendant has
already been convicted in the inferior court? This question is unanswerable and, as stated before,
constitutes a bull's-eye hit majority decision. Said in Latin, that is "quod erat demonstrandum".
WHEREFORE, I firmly and unhesitatingly maintain that remanding of this case to the lower court for
trial on merits is equivalent or tantamount to placing the defendant in double jeopardy. So the present
appeal of the government must be necessarily dismissed, without pronouncement to costs.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 4223 August 19, 1908
NICOLAS LUNOD, ET AL., plaintiffs-appellees,
vs.
HIGINO MENESES, defendant-appellant.
T. Icasiano, for appellant.
R. Salinas, for appellee.
TORRES, J.:
On the 14th of March, 1904, Nicolas Lunod, Juan de la Vega, Evaristo Rodriguez, Fernando Marcelo,
Esteban Villena, Benito Litao, Ventura Hernandez, and Casimiro Pantanilla, residents of the town of
Bulacan, province of the same name, filed a written complaint against Higino Meneses, alleging that
they each owned and possessed farm lands, situated in the places known as Maytunas and Balot, near a
small lake named Calalaran; that the defendant is the owner of a fish-pond and a strip of land situated
in Paraanan, adjoining the said lake on one side, and the River Taliptip on the other; that from time
immemorial, and consequently for more than twenty years before 1901, there existed and still exists in
favor of the rice fields of the plaintiffs a statutory easement permitting the flow of water over the said
land in Paraanan, which easement the said plaintiffs enjoyed until the year 1901 and consisted in that
the water collected upon their lands and in the Calalaran Lake flow through Paraanan into the Taliptip
River. From that year however, the defendant, without any right or reason, converted the land in
Paraanan into a fishpond and by means of a dam and a bamboo net, prevented the free passage of the
water through said place into the Taliptip River, that in consequence the lands of the plaintiff became
flooded and damaged by the stagnant waters, there being no outlet except through the land in Paraanan;
that their plantation were destroyed, causing the loss and damages to the extent of about P1,000, which
loss and damage will continue if the obstructions to the flow of the water are allowed to remain,
preventing its passage through said land and injuring the rice plantations of the plaintiffs. They
therefore asked that judgment be entered against the defendant, declaring that the said tract of land in
Paraanan is subject to a statutory easement permitting the flow of water from the property of the
plaintiffs, and that, without prejudice to the issuing of a preliminary injunction, the defendant be
ordered to remove and destroy the obstructions that impede the passage of the waters through Paraanan,
and that in future, and forever, he abstain from closing in any manner the aforesaid tract of land; that,
upon judgment being entered, the said injunction be declared to be final and that the defendant be
sentenced to pay to the plaintiffs an indemnity of P1,000, and the costs in the proceedings; that they be
granted any other and further equitable or proper remedy in accordance with the facts alleged and
proven.
In view of the demurrer interposed by the plaintiffs to the answer of the defendant, the latter, on the
29th of August, 1904, filed an amended answer, denying each and everyone of the allegations of the
complaint, and alleged that no statutory easement existed nor could exist in favor of the lands described
in the complaint, permitting the waters to flow over the fish pond that he, together with his brothers,
owned in the sitio of Bambang, the area and boundaries of which were stated by him, and which he and
his brothers had inherited from their deceased mother.
Apolinara de Leon; that the same had been surveyed by a land surveyor in September, 1881, he also
denied that he had occupied or converted any land in the barrio of Bambang into a fishpond; therefore,
and to sentence the plaintiffs to pay the costs and corresponding damages.
Upon the evidence adduced by both parties to the suit, the court, on the 13th of March, 1907, entered
judgment declaring that the plaintiffs were entitled to a decision in their favor, and sentenced the
defendant to remove the dam placed on the east of the Paraanan passage on the side of the Taliptip
River opposite the old dam in the barrio of Bambang, as well as to remove and destroy the obstacles to
the free passage of the waters through the strip of land in Paraanan; to abstain in future, and forever,
from obstructing or closing in any manner the course of the waters through the said strip of land. The
request that the defendant be sentenced to pay an indemnity was denied, and no ruling was made as to
costs.
The defendant excepted to the above judgment and furthermore asked for a new trial which was denied
and also excepted to, and, upon approval of the bill of exceptions, the question was submitted to this
court.
Notwithstanding the defendant's denial in his amended answer, it appears to have been clearly proven
in this case that the lands owned by the plaintiffs in the aforesaid barrio, as well as the small adjoining
lake, named Calalaran, are located in places relatively higher than the sitio called Paraanan where the
land and fish pond of the defendant are situated, and which border on the Taliptip River; that during the
rainy season the rain water which falls on he land of the plaintiffs, and which flows toward the small
Calalaran Lake at flood time, has no outlet to the Taliptip River other than through the low land of
Paraanan: that the border line between Calalaran and Paraanan there has existed from time immemorial
a dam, constructed by the community for the purpose of preventing the salt waters from the Taliptip
River, at high tide, from flooding the land in Calalaran, passing through the lowlands of Paraanan; but
when rainfall was abundant, one of the residents was designated in his turn by the lieutenant or justice
of the barrio to open the sluice gate in order to let out the water that flooded the rice fields, through the
land of Paraanan to the above-mentioned river, that since 1901, the defendant constructed another dam
along the boundary of this fishpond in Paraanan, thereby impeding the outlet of the waters that flood
the fields of Calalaran, to the serious detriment of the growing crops.
According to article 530 of the Civil Code, an easement is charge imposed upon one estate for the
benefit of another estate belonging to a different owner, and the realty in favor of which the easement is
established is called the dominant estate, and the one charged with it the servient estate.
The lands of Paraanan being the lower are subject to the easement of receiving and giving passage to
the waters proceeding from the higher lands and the lake of Calalaran; this easement was not
constituted by agreement between the interested parties; it is of a statutory nature, and the law had
imposed it for the common public utility in view of the difference in the altitude of the lands in the
barrio Bambang.
Article 552 of the Civil code provides:
Lower estates must receive the waters which naturally and without the intervention of man
descend from the higher estates, as well as the stone or earth which they carry with them.
Neither may the owner of the lower estates construct works preventing this easement, nor the
one of the higher estate works increasing the burden.
Article 563 of the said code reads also:
The establishment, extent, form, and conditions of the easements of waters to which this section
refers shall be governed by the special law relating thereto in everything not provided for in this
code.
The special law cited in the Law of Waters of August 3, 1866, article 111 of which, treating of natural
easements relating to waters, provides:
Lands situated at a lower level are subject to receive the waters that flow naturally, without the
work of man, from the higher lands together with the stone or earth which they carry with them.
Hence, the owner of the lower lands can not erect works that will impede or prevent such an easement
or charge, constituted and imposed by the law upon his estate for the benefit of the higher lands
belonging to different owners; neither can the latter do anything to increase or extend the easement.
According to the provisions of law above referred to, the defendant, Meneses, had no right to construct
the works, nor the dam which blocks the passage, through his lands and the outlet to the Taliptip River,
of the waters which flood the higher lands of the plaintiffs; and having done so, to the detriment of the
easement charged on his estate, he has violated the law which protects and guarantees the respective
rights and regulates the duties of the owners of the fields in Calalaran and Paraanan.
It is true that article 388 of said code authorizes every owner to enclose his estate by means of walls,
ditches fences or any other device, but his right is limited by the easement imposed upon his estate.
The defendant Meneses might have constructed the works necessary to make and maintain a fish pond
within his own land, but he was always under the strict and necessary obligation to respect the statutory
easement of waters charged upon his property, and had no right to close the passage and outlet of the
waters flowing from the lands of the plaintiffs and the lake of Calalaran into the Taliptip River. He
could not lawfully injure the owners of the dominant estates by obstructing the outlet to the Taliptip
River of the waters flooding the upper lands belonging to the plaintiffs.
It is perhaps useful and advantageous to the plaintiffs and other owners of high lands in Calalaran, in
addition to the old dike between the lake of said place and the low lands in Paraanan, to have another
made by the defendant at the border of Paraanan adjoining the said river, for the purpose of preventing
the salt waters of the Taliptip River flooding, at high tide, not only the lowlands in Paraanan but also
the higher ones of Calalaran and its lake, since the plaintiffs can not prevent the defendant from
protecting his lands against the influx of salt water; but the defendant could never be permitted to
obstruct the flow of the waters through his lands to the Taliptip River during the heavy rains, when the
high lands in Calalaran and the lake in said place are flooded, thereby impairing the right of the owners
of the dominant estates.
For the above reasons, and accepting the findings of the court below in the judgment appealed from in
so far as they agree with the terms of this decision, we must and do hereby declare that the defendant,
Higino Meneses, as the owner of the servient estate, is obliged to give passage to and allow the flow of
the waters descending from the Calalaran Lake and from the land of the plaintiffs through his lands in
Paraanan for their discharge into the Taliptip River; and he is hereby ordered to remove any obstacle
that may obstruct the free passage of the waters whenever there may be either a small or large volume
of running water through his lands in the sitio of Paraanan for their discharge into the Taliptip River;
and in future to abstain from impeding, in any manner, the flow of the waters coming from the higher
lands. The judgment appealed from is affirmed, in so far as it agrees with decision, and reversed in
other respects, with the costs of this instance against the appellants. So ordered.
Carson, Willard and Tracey, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-19280 March 16, 1923
THE MANILA RAILROAD COMPANY, plaintiff-appellee,
vs.
ASUNCION MITCHEL, defendant-appellant.
Moises E. Gonzalez and Jose C. Abreu for plaintiff-appellant.
Fisher and DeWitt for defendant-appellant.
OSTRAND, J.:
This action was commenced February 18,1918, in the Court of First Instance of the City of Manila by
the plaintiff, a foreign corporation, for the purpose of condemning certain real estate situated in the
district of Tondo, City of Manila, adjacent to plaintiff's principal terminal station.
On February 24, 1918, the trial court entered an order authorizing the plaintiff to take possession "of
each and every one of the parcels of land set forth in the complaint herein . . ." Pursuant to this
authority, plaintiff took possession of the property of the Sy Quia estate described in its complaint (lot
No. 1 on the plan attached to the complaint), including the buildings thereon existing.
The defendant Asuncion Mitchel, Vda. de Sy Quia, was at first included in her individual capacity, and
on March 23, 1918, file a so-called demurrer on the ground that she was not the owner of any of the
property described in the complaint and therefore had been erroneously included as a party defendant.
The court treated the demurrer as a motion for a dismissal and dismissed the complaint in regard to said
defendant. Subsequently, it was stipulated that she should be included as a party defendant in her
respective capacity as administratrix of the estate of the late Pedro Sy Quia.
On April 10, 1918, a month before the defendant was made a party to the action as administratrix, the
court issued an order authorizing the expropriation and appointing commissioners to hear the parties,
inspect the premises, fix the indemnity to be paid by plaintiff, and to make a report to the court. No
exception was taken to the order by any of the defendants. On may 3, 1918, the commissioners so
appointed gave notice by its chairman that its first meeting would be held on May 15, 1918, to hear the
testimony of the heirs of Pedro Sy Quia. Asuncion Mitchel, Vda. de Sy Quia, as administratrix of the
estate of Pedro Sy Quia, represented by her counsel, Aurelio A. Torres, acknowledged receipt of the
notice on May 10, 1918.
The record does not show whether the commissioners met on the day announced, but on July 18, 1918,
Commissioner Campbell tendered his resignation, which was accepted by the court. On the 31st of the
same month plaintiff asked that Mr. E. S. Lyons be appointed a member of commission in the place of
Mr. Campbell and on August 13, 1918, the defendant, Asuncion Mitchel, in her capacity of
administratrix of the estate of Pedro Sy Quia, appeared by counsel and proposed the appointment of
Perez Muñoz to fill the vacancy.
In the meantime and on June 22, 1918, the said defendant, as administratrix of the estate of Pedro Sy
Quia, filed an answer to the complaint in which she admitted, among other things, that the plaintiff is a
foreign corporation operating a railroad on the Island of Luzon under statutory authority; that it is
chartered for the purpose of constructing and operating such railroad; that it has terminal points at the
City of Manila and municipality of Antipolo, Province of Rizal. It is further admitted that said
defendant, in her respective capacity, is the owner of the land described as lot No. 1 on the attached
plan.
The answer denies that the plaintiff is empowered by the law of the Philippine Islands to acquire lands
necessary for the construction, maintenance and operation of its lines or for terminals, sidings or proper
buildings and structures. As a special defense it is averred that the said lot No. 1 "has not been, is not
and never will be necessary to the plaintiff for the proper operation of its railroad" and it is prayed that
judgment be rendered excluding the property of Sy Quia estate from condemnation. It is further averred
in the answer that the real value of the property in question is greatly in excess of the assessed value.
Nothing further appears to have been done until February 21, 1921, when the defendant, by her then
counsel, Mr. M. Torres, filed a motion praying that the proceedings to dismissed the property seized by
the plaintiff returned, and the defendant be paid damages for the unlawful occupation of the property by
the plaintiff. The reasons advanced were that plaintiff had made no proof that it is authorized to
exercise the right of eminent domain; that it had not shown the particular use to which it is proposed to
devote the property or the necessity for its acquisition; that plaintiff is already the owner of ample land
upon which to erect whatever buildings may be required for the extension of its terminal facilities; that
it has never been shown that plaintiff has made any attempt to obtain the property by negotiating with
defendant before taking this action, or that such an attempt has failed; that the amount of money
deposited by the plaintiff, in order to obtain possession, is very much less than the true value of the
property; and that since the property has been taken by the plaintiff, under the order of the court, no use
has been made thereof. The motion was opposed by plaintiff and on March 21, 1921, it was denied
upon the ground that the issues of fact raised by it would have to be considered at the trial of the case.
To this order the defendant excepted.
On February 8, 1922, the same defendant, represented by her present counsel, filed a motion in which
the attention of the court was called to the fact that he averment of the complaint regarding the
necessity of the condemnation of the defendant's property, had been expressly denied by her answer;
that the commission appointed by the court to hear evidence had, upon defendant's opposition, declined
to proceed until the question of the right of condemnation had been decided; and the court was asked to
set the case down for hearing. This motion was opposed by plaintiff. On February 11, 1922, the
honorable P. Concepcion, judge of branch two of the Court of First Instance of Manila entered an order
overruling the opposition of plaintiff and directing that the case be set down for trial upon the issue of
the necessity for the condemnation of the land belonging to the Sy Quia estate. To this ruling the
plaintiff excepted.
The trial took place on March 13, 1922, and upon the evidence presented, the court below found as
follows:
Upon consideration of the evidence adduced by plaintiff, the court is of the opinion that there is
no real necessity on the part of the Manila Railroad Company to occupy lot No. 1 of the
property of the Sy Quia estate, because lots 9, 11 and 13 which are not built upon, may be used
for the same purposes as those to which lot No. 1 is now devoted. But even upon the assumption
that in order to furnish facilities for cargo arriving from the provinces, the building marked 'E' is
needed at the place at which it has been constructed and for the offices of some of the
departments of the company, it is clear that the very large part of lot No. 1 not occupied by any
building — that is, that part of it which fronts on Calle Antonio Rivera and part of the frontage
of Calle Azcarraba — is not needed by the company, because that part of the lot is only used for
trucks and carts which come to haul away the merchandise deposited in said building, and for
this purpose they can approach the building on the west side over completely open and
unoccupied land belonging to the railroad company.
Upon these findings the court proceeded to render judgment, dated April 6, 1922, declaring that the
railroad company has no right of condemnation as to the unoccupied part of lot No. 1, but that ". . . the
Company may make use of that right solely with respect to that part of the lot occupied by the building
thereon existing. Plaintiff is ordered to file a plan of the lot in question, excluding the land not built
upon, and the parties are directed to nominate to the court three disinterested an upright landowners to
be appointed as commissioners for the purposes prescribed by section 243 of the Code of Civil
Procedure, such commissioners to be appointed by the court on its own motion in the even that the
parties shall fail to agree upon the persons to be so appointed. . . ."
Both the plaintiff and the defendant excepted to the decision and filed motions for a new trial upon the
ground that the findings of fact were plainly and manifestly contrary to the weight of the evidence; that
the evidence did not justify the decision and that the decision was contrary to law. The motions were
denied and both parties appealed to this court.
The plaintiff makes four assignments of error of which only one, the second, need be here discussed.
The assignment reads:
The court erred in declaring that the taking by the plaintiff corporation of the portion of lot No.
1, not occupied by any building, was unnecessary and that the corporation therefore had no right
to condemn the same.
In our opinion, this assignment is well taken and must be sustained. In this jurisdiction the question of
the necessity of the taking of land by condemnation becomes a judicial question by virtue of section 28
of the Act of Congress of August 29, 1916 (the "Jones Law") which provides:
That no private property shall be damaged or taken for any purpose under this section without
just compensation, and that such authority to take and occupy land shall not authorize the
talking, use, or occupation of any land except such as is required for the actual necessary
purposes for which the franchise is granted. * * *
In this particular case the grant of the power of eminent domain contained in Act No. 1510 is also, by
its terms, limited to "lands necessary for . . . terminals, . . . stations, engine houses, water stations, and
other appropriate building and structures . . . "
It is well settled that the term necessary in this connection does not mean absolutely indispensable, but
requires only a reasonable necessity of the taking for the purpose in view. Upon this subject Lewis, in
section 601 of his work on Eminent Domain, 3d ed., citing numerous authorities says:
When the law says that private property may be taken for public use only when it is necessary
for such use, it means a reasonable, not an absolute necessity. What is a reasonable necessity is
a question of act, to be determined according to the peculiar facts of each case. No general rule
can be laid down for determining the question. A necessity has been held to be shown if it
appeared that the property sought to be condemned would conduce to some extent to the
accomplishment of the public object to which it was to be devoted. 'With the degree of
necessity, or the extent to which the property will advance the public purpose, the courts have
nothing to do.' The growth and future needs of the enterprise may be considered. But such
future needs must be founded upon facts and made reasonable clear. A large discretion is
necessarily vested in those who are vested with the power, in determining what property and
how much is necessary. To warrant a denial of the application, it should appear that what is
sought is clearly an abuse of power on the part of the petitioner. 'It may be said to be a general
rule that, unless a corporation exercising the power of eminent domain acts in bad faith or is
guilty of oppression, its discretion in the selection of land will not be interfered with.' If the
petitioner is acting in good faith and shows a reasonable necessity for the condemnation, in
view of its present an future business, the application should be granted. If the object is to
acquire lands for speculation, or to prevent competition, or for purposes collateral to those for
which the petitioner is authorized to condemn property, then the application should be refused.
In the instant case, it appears from the record that the Tondo terminal of the plaintiffs railroad is
bounded on the south by Calle Azcarraga and on the west by Calle Dagupan. On the east it is separated
from Calle Antonio Rivera by a narrow strip of land of which the property here in question forms a
part. The distance between Calle Dagupan and Calle Antonio Rivera is only some 180 meters and the
average width of the strip of land it is sought to have expropriated is about 40 meters. The object of the
taking of this strip is to have terminal extend to Calle Antonio Rivera so that the railway station may be
made easily accessible from the street and so as to provide space for additional buildings and yard
facilities.
The evidence presented by the plaintiff to show the necessity for the condemnation establishes that
there are two sets of tracks at the Tondo terminal, one for outgoing freight an another for incoming
freight; that the strip to be condemned is intended for incoming freight and that the other part of the
railroad property adjoining Calle Dagupan is used for outgoing freight; that no incoming freight can be
handled on the Calle Dagupan side because the space is too restricted; that on a portion of lot No. 1,
there is a two-story building used as a warehouse for incoming freight and also for offices for certain
departments of the company; that there is no other place in which the employees of the medical
department, the department of supplies, the department of claims and the offices of the special agent of
the railroad company can be housed or accommodated; that the part of lot No. 1 which is vacant if used
by trucks and carts which enter through Calle Antonio Rivera in order to receive freight from the
warehouse mentioned; that hundreds of trucks and carts enter daily for the purpose of receiving freight;
that there is no other place which can be utilized for the handling of incoming freight; that the space on
the north side, adjoining Calle Dagupan is fully covered by railroad tracks; that while the company
possesses some land on the other side of Calle Dagupan it cannot be used for the purpose of laying
tracks because it is too low, and also because the City Government would not permit the crossing of
Calle Dagupan with the requisite number of tracks.
With this evidence before us, we certainly cannot hold that the taking of the land in question is so
unnecessary as to call for judicial interference with the demand for condemnation.
A space of 180 meters in width for the service of the principal terminal of the Luzon Railroad System
does not seem excessive, and it would obviously be a matter of great inconvenience, not only to the
plaintiff but also to the public if the railroad company should be compelled to seek a part of its
necessary terminal space on the north side of Calle Dagupan.
The defendant-appellant makes the following assignments of error:
1. The trial court erred in failing to find upon the evidence that no necessity exists for the
condemnation of any part of defendant's property by the plaintiff corporation.
2. The trial court erred in assuming that plaintiff is vested with the power of eminent domain in
the absence of allegations and proof in its possession of such authority.
3. The trial court erred in failing to dismiss the complaint upon the ground that no showing has
been made by plaintiff that an unsuccessful effort has been made to obtain the property in
question by free arrangement.
4. The trial court erred in failing to find that plaintiff has failed to comply with the conditions
precedent to which its right, if any, to exercise the power of condemnation is subject.
5. The trial court erred in directing the appointment of a committee to appraise defendant's land.
6. The trial court erred in holding that plaintiff was entitled to condemn land within the City of
Manila in the absence of proof that the consent of the municipal authorities or of the Governor-
General has first been obtained.
7. The trial court erred in denying defendant's motion for a new trial.
8. The trial court erred in giving judgment for plaintiff.
The first of these assignments of error related to the necessity for the condemnation of the lot in
question and has already been sufficiently discussed.
Under the second assignments of error the defendant argues that the plaintiff's failure to allege and
prove that it possesses the power of eminent domain is reversible error. This contention seeks its
support in section 242 of the Code of Civil Procedure, which reads, as follows:
The complaint in condemnation proceedings shall state with certainty the right of
 condemnation, and describe the property sought to be condemned, showing the interest of each
defendant separately.
We do not think the section quoted is of necessary application to the present case where the power of
eminent domain is specially conferred upon the plaintiff by legislative acts of which this court will take
judicial notice. Section 1 of Act No. 2879 reads:
Whenever, in any existing law, mention is made of the Manila Railroad Company, such mention
shall be deemed to include and to apply to the Manila Railroad Company of the Philippine
Islands whenever necessary to confer upon the Philippine Islands whenever necessary to confer
upon the latter corporation any of the benefits, privileges and immunities conferred by such law
upon the Manila Railroad Company, or to make applicable to said Manila railroad Company of
the Philippine Island measures adopted by the Philippine Legislature for the control or
administration of the Manila Railroad Company or for the granting of financial aid thereto.
The power of eminent domain was previously granted the Manila Railroad Company by section 2 of
Act No. 1510. It is true, as stated by counsel, that this Act purports to be a "concessionary grant or
contract" conditioned upon its acceptance within sixty days by the grantee of a bond in the sum of
$300,000 and that the grant was made subject to the approval of the Secretary of War, and it is argued
that there is nothing to show that these conditions have been fulfilled. However, in view of the fact that
some eight years after its passage the act was amended by Act No. 2373 and that railroad lines were
constructed on the strength of the concession, we are justified in taking judicial notice of the fact that
Act No. 1510 was in effect at the time of the enactment of Act No. 2879 and that hence the plaintiff, by
virtue of the provisions of the section quoted from the latter act, is vested with the power of eminent
domain.
The defendants third assignment of error raises the point that the action should be dismissed because it
does not appear that the plaintiff, previously to the filing of its complaint, had unsuccessfully
endeavored by amicable agreement to obtain the land it seeks to condemn. This contention rests upon
the theory that Acts Nos. 703 and 1258, both of which provide that the power of eminent domain may
be exercised when a railroad corporation had failed to obtain the land by agreement, are applicable to
the present case. But as we have seen, the plaintiff here exercises its power under Act No. 1510, in
which the following language is used:
The grantee shall also have the right to acquire by condemnation the lands necessary for the
right of way, for harbor points and elsewhere, for sidings, stations, engine houses, water stations
and other appropriate buildings and structures for the proper and convenient construction,
operation, and maintenance of the lines of railway herein authorized; but no lands within the
boundaries of any province, city, town, or municipality shall be occupied by the grantee if the
same are in actual use for provincial, governmental, or municipal purposes nor shall any land
within the boundaries of any city, town, or municipality be so occupied without the consent of
the proper authorities of such city, town, or municipality, unless the Governor-General shall
consent to the same. The right of condemnation or eminent domain shall be exercised by the
grantee in accordance with the laws of the Philippine islands at the time being in force.
It may be observed that the paragraph quoted contains no provisions requiring the plaintiff to seek to
obtain the land by amicable agreement, nor is any such provision found elsewhere in the act. And in the
absence thereof, we know of no legal reason for holding that an effort to obtain the land by a free
agreement is a prerequisite for instituting condemnation proceedings. The last sentence of the
paragraph quoted relates to procedures and not to the existence of the right of condemnation.
It may also be noted that even where the statutes provide that the power of eminent domain may be
exercised upon failure to obtain the land by amicable agreement, it has been held by good authority that
an attempt to agree is not a condition precedent and that failure to agree is sufficiently shown by the
institution of litigation. (Doty vs. Am. Tel. & Tel. Co., 123 Tenn., 329; 130 S. W., 1053.) This would
seem to be good sense and should therefore also be good law.
The fourth and sixth assignments of error are based upon the provision in the paragraph just quoted
from Act No. 1510 to the effect that no lands within the boundaries of any city, town, or municipality
shall be occupied by virtue of condemnation proceedings without the consent of the proper authorities,
and the defendant argues that such consent is a condition precedent for the taking of such lands.
We find little merit in this contention. In the first place, the condition in questions is for the benefit of
the city, town, or municipality, as the case maybe and can hardly be taken advantage of by a third party.
In the second place, it appears from the order of the court below, dated April 10, 1918, that the City of
Manila within the boundaries of which the land here in question is situated, appeared by its Fiscal,
Angel Roco, and so far from objecting to the expropriation, agreed to the same and to the appointment
of commissioners. That the consent of the city authorities was thus sufficiently shown admits of no
doubt.
The defendant's fifth, seventh and eighth assignments of error are sufficiently covered by the discussion
of the other assignments and need not be further considered.
For the reasons stated, the order appealed from is hereby modified and it is declared that the
condemnation of all of the aforesaid lot No. 1 is necessary for the purpose for which the plaintiff's
franchise is granted and in order to provide adequate terminal facilities for its railroad, and we hold that
said plaintiff may exercise its power of eminent domain over said lot in the present proceedings. As
much of said order as relates to the appointment of commissioners is affirmed. The record will be
remanded to the court below for further proceedings. No costs will be allowed in this instance. So
ordered.
Araullo, C. J., Street, Malcolm, Avanceña, Villamor, Johns and Romualdez JJ., concur.

The Lawphil Project - Arellano Law Foundation

EN BANC
G.R. No. L-18841 January 27, 1969
REPUBLIC OF THE PHILIPPINES, Plaintiff-Appellant, vs. PHILIPPINE LONG DISTANCE
TELEPHONE COMPANY, Defendant-Appellant.
Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Antonio A. Torres and
Solicitor Camilo D. Quiason for plaintiff-appellant.
Ponce Enrile, Siguion Reyna, Montecillo and Belo for defendant-appellant.
REYES, J.B.L., J.: chanrobl es virtual law library

Direct appeals, upon a joint record on appeal, by both the plaintiff and the defendant from the
dismissal, after hearing, by the Court of First Instance of Manila, in its Civil Case No. 35805, of their
respective complaint and counterclaims, but making permanent a preliminary mandatory injunction
theretofore issued against the defendant on the interconnection of telephone facilities owned and
operated by said parties. chanroblesvirtualawlibrary chanrobl es virtual law library

The plaintiff, Republic of the Philippines, is a political entity exercising governmental powers through
its branches and instrumentalities, one of which is the Bureau of Telecommunications. That office was
created on 1 July 1947, under Executive Order No. 94, with the following powers and duties, in
addition to certain powers and duties formerly vested in the Director of Posts: chanrobl es virtual law library

SEC. 79. The Bureau of Telecommunications shall exercise the following powers and duties:
(a) To operate and maintain existing wire-telegraph and radio-telegraph offices, stations,
and facilities, and those to be established to restore the pre-war telecommunication service
under the Bureau of Posts, as well as such additional offices or stations as may hereafter be
established to provide telecommunication service in places requiring such service; chanrobles virtual law library

(b) To investigate, consolidate, negotiate for, operate and maintain wire-telephone or radio
telephone communication service throughout the Philippines by utilizing such existing
facilities in cities, towns, and provinces as may be found feasible and under such terms and
conditions or arrangements with the present owners or operators thereof as may be agreed
upon to the satisfaction of all concerned; chanrobles virtual law library

(c) To prescribe, subject to approval by the Department Head, equitable rates of charges for
messages handled by the system and/or for time calls and other services that may be
rendered by said system; chanrobles virtual law library

(d) To establish and maintain coastal stations to serve ships at sea or aircrafts and, when
public interest so requires, to engage in the international telecommunication service in
agreement with other countries desiring to establish such service with the Republic of the
Philippines; and chanrobles virtual law library

(e) To abide by all existing rules and regulations prescribed by the International
Telecommunication Convention relative to the accounting, disposition and exchange of
messages handled in the international service, and those that may hereafter be promulgated
by said convention and adhered to by the Government of the Republic of the Philippines. 1

The defendant, Philippine Long Distance Telephone Company (PLDT for short), is a public service
corporation holding a legislative franchise, Act 3426, as amended by Commonwealth Act 407, to
install, operate and maintain a telephone system throughout the Philippines and to carry on the business
of electrical transmission of messages within the Philippines and between the Philippines and the
telephone systems of other countries. 2 The RCA Communications, Inc., (which is not a party to the
present case but has contractual relations with the parties) is an American corporation authorized to
transact business in the Philippines and is the grantee, by assignment, of a legislative franchise to
operate a domestic station for the reception and transmission of long distance wireless messages (Act
2178) and to operate broadcasting and radio-telephone and radio-telegraphic communications services
(Act 3180). 3chanrobl es virtual law library

Sometime in 1933, the defendant, PLDT, and the RCA Communications, Inc., entered into an
agreement whereby telephone messages, coming from the United States and received by RCA's
domestic station, could automatically be transferred to the lines of PLDT; and vice-versa, for calls
collected by the PLDT for transmission from the Philippines to the United States. The contracting
parties agreed to divide the tolls, as follows: 25% to PLDT and 75% to RCA. The sharing was amended
in 1941 to 30% for PLDT and 70% for RCA, and again amended in 1947 to a 50-50 basis. The
arrangement was later extended to radio-telephone messages to and from European and Asiatic
countries. Their contract contained a stipulation that either party could terminate it on a 24-month
notice to the other. 4 On 2 February 1956, PLDT gave notice to RCA to terminate their contract on 2
February 1958. 5 chanrobl es virtual law library

Soon after its creation in 1947, the Bureau of Telecommunications set up its own Government
Telephone System by utilizing its own appropriation and equipment and by renting trunk lines of the
PLDT to enable government offices to call private parties. 6 Its application for the use of these trunk
lines was in the usual form of applications for telephone service, containing a statement, above the
signature of the applicant, that the latter will abide by the rules and regulations of the PLDT which are
on file with the Public Service Commission. 7 One of the many rules prohibits the public use of the
service furnished the telephone subscriber for his private use. 8 The Bureau has extended its services to
the general public since 1948, 9 using the same trunk lines owned by, and rented from, the PLDT, and
prescribing its (the Bureau's) own schedule of rates. 10 Through these trunk lines, a Government
Telephone System (GTS) subscriber could make a call to a PLDT subscriber in the same way that the
latter could make a call to the former. chanroblesvirtualawlibrary chanrobl es virtual law library

On 5 March 1958, the plaintiff, through the Director of Telecommunications, entered into an agreement
with RCA Communications, Inc., for a joint overseas telephone service whereby the Bureau would
convey radio-telephone overseas calls received by RCA's station to and from local residents. 11
Actually, they inaugurated this joint operation on 2 February 1958, under a "provisional" agreement. 12
chanrobles virtual law library

On 7 April 1958, the defendant Philippine Long Distance Telephone Company, complained to the
Bureau of Telecommunications that said bureau was violating the conditions under which their Private
Branch Exchange (PBX) is inter-connected with the PLDT's facilities, referring to the rented trunk
lines, for the Bureau had used the trunk lines not only for the use of government offices but even to
serve private persons or the general public, in competition with the business of the PLDT; and gave
notice that if said violations were not stopped by midnight of 12 April 1958, the PLDT would sever the
telephone connections. 13 When the PLDT received no reply, it disconnected the trunk lines being
rented by the Bureau at midnight on 12 April 1958. 14 The result was the isolation of the Philippines, on
telephone services, from the rest of the world, except the United States. 15 chanrobl es virtual law library

At that time, the Bureau was maintaining 5,000 telephones and had 5,000 pending applications for
telephone connection. 16 The PLDT was also maintaining 60,000 telephones and had also 20,000
pending applications. 17 Through the years, neither of them has been able to fill up the demand for
telephone service. chanroblesvirtualawlibrary chanrobl es virtual law library

The Bureau of Telecommunications had proposed to the PLDT on 8 January 1958 that both enter into
an interconnecting agreement, with the government paying (on a call basis) for all calls passing through
the interconnecting facilities from the Government Telephone System to the PLDT. 18 The PLDT
replied that it was willing to enter into an agreement on overseas telephone service to Europe and Asian
countries provided that the Bureau would submit to the jurisdiction and regulations of the Public
Service Commission and in consideration of 37 1/2% of the gross revenues. 19 In its memorandum in
lieu of oral argument in this Court dated 9 February 1964, on page 8, the defendant reduced its offer to
33 1/3 % (1/3) as its share in the overseas telephone service. The proposals were not accepted by either
party. chanroblesvirtualawlibrary chanrobl es virtual law library
On 12 April 1958, plaintiff Republic commenced suit against the defendant, Philippine Long Distance
Telephone Company, in the Court of First Instance of Manila (Civil Case No. 35805), praying in its
complaint for judgment commanding the PLDT to execute a contract with plaintiff, through the
Bureau, for the use of the facilities of defendant's telephone system throughout the Philippines under
such terms and conditions as the court might consider reasonable, and for a writ of preliminary
injunction against the defendant company to restrain the severance of the existing telephone
connections and/or restore those severed. chanroblesvirtualawlibrary chanrobl es virtual law library

Acting on the application of the plaintiff, and on the ground that the severance of telephone connections
by the defendant company would isolate the Philippines from other countries, the court a quo, on 14
April 1958, issued an order for the defendant:
(1) to forthwith reconnect and restore the seventy-eight (78) trunk lines that it has
disconnected between the facilities of the Government Telephone System, including its
overseas telephone services, and the facilities of defendant; (2) to refrain from carrying into
effect its threat to sever the existing telephone communication between the Bureau of
Telecommunications and defendant, and not to make connection over its telephone system
of telephone calls coming to the Philippines from foreign countries through the said
Bureau's telephone facilities and the radio facilities of RCA Communications, Inc.; and (3)
to accept and connect through its telephone system all such telephone calls coming to the
Philippines from foreign countries - until further order of this Court.

On 28 April 1958, the defendant company filed its answer, with counterclaims. chanrobl esvirtualawlibrarychanrobles virtual law library

It denied any obligation on its part to execute a contrary of services with the Bureau of
Telecommunications; contested the jurisdiction of the Court of First Instance to compel it to enter into
interconnecting agreements, and averred that it was justified to disconnect the trunk lines heretofore
leased to the Bureau of Telecommunications under the existing agreement because its facilities were
being used in fraud of its rights. PLDT further claimed that the Bureau was engaging in commercial
telephone operations in excess of authority, in competition with, and to the prejudice of, the PLDT,
using defendants own telephone poles, without proper accounting of revenues. chanroblesvirtualawlibrary chanrobl es virtual law library

After trial, the lower court rendered judgment that it could not compel the PLDT to enter into an
agreement with the Bureau because the parties were not in agreement; that under Executive Order 94,
establishing the Bureau of Telecommunications, said Bureau was not limited to servicing government
offices alone, nor was there any in the contract of lease of the trunk lines, since the PLDT knew, or
ought to have known, at the time that their use by the Bureau was to be public throughout the Islands,
hence the Bureau was neither guilty of fraud, abuse, or misuse of the poles of the PLDT; and, in view
of serious public prejudice that would result from the disconnection of the trunk lines, declared the
preliminary injunction permanent, although it dismissed both the complaint and the counterclaims. chanrobl esvirtualawlibrarychanrobles virtual law library

Both parties appealed. chanrobl esvirtualawlibrarychanrobles virtual law library

Taking up first the appeal of the Republic, the latter complains of the action of the trial court in
dismissing the part of its complaint seeking to compel the defendant to enter into an interconnecting
contract with it, because the parties could not agree on the terms and conditions of the interconnection,
and of its refusal to fix the terms and conditions therefor. chanrobl esvirtualawlibrarychanrobles virtual law library

We agree with the court below that parties can not be coerced to enter into a contract where no
agreement is had between them as to the principal terms and conditions of the contract. Freedom to
stipulate such terms and conditions is of the essence of our contractual system, and by express
provision of the statute, a contract may be annulled if tainted by violence, intimidation, or undue
influence (Articles 1306, 1336, 1337, Civil Code of the Philippines). But the court a quo has apparently
overlooked that while the Republic may not compel the PLDT to celebrate a contract with it, the
Republic may, in the exercise of the sovereign power of eminent domain, require the telephone
company to permit interconnection of the government telephone system and that of the PLDT, as the
needs of the government service may require, subject to the payment of just compensation to be
determined by the court. Nominally, of course, the power of eminent domain results in the taking or
appropriation of title to, and possession of, the expropriated property; but no cogent reason appears
why the said power may not be availed of to impose only a burden upon the owner of condemned
property, without loss of title and possession. It is unquestionable that real property may, through
expropriation, be subjected to an easement of right of way. The use of the PLDT's lines and services to
allow inter-service connection between both telephone systems is not much different. In either case
private property is subjected to a burden for public use and benefit. If, under section 6, Article XIII, of
the Constitution, the State may, in the interest of national welfare, transfer utilities to public ownership
upon payment of just compensation, there is no reason why the State may not require a public utility to
render services in the general interest, provided just compensation is paid therefor. Ultimately, the
beneficiary of the interconnecting service would be the users of both telephone systems, so that the
condemnation would be for public use. chanroblesvirtualawlibrary chanrobl es virtual law library

The Bureau of Telecommunications, under section 78 (b) of Executive Order No. 94, may operate and
maintain wire telephone or radio telephone communications throughout the Philippines by utilizing
existing facilities in cities, towns, and provinces under such terms and conditions or arrangement with
present owners or operators as may be agreed upon to the satisfaction of all concerned; but there is
nothing in this section that would exclude resort to condemnation proceedings where unreasonable or
unjust terms and conditions are exacted, to the extent of crippling or seriously hampering the operations
of said Bureau.chanroblesvirtualawlibrary chanrobl es virtual law library

A perusal of the complaint shows that the Republic's cause of action is predicated upon the radio
telephonic isolation of the Bureau's facilities from the outside world if the severance of interconnection
were to be carried out by the PLDT, thereby preventing the Bureau of Telecommunications from
properly discharging its functions, to the prejudice of the general public. Save for the prayer to compel
the PLDT to enter into a contract (and the prayer is no essential part of the pleading), the averments
make out a case for compulsory rendering of inter-connecting services by the telephone company upon
such terms and conditions as the court may determine to be just. And since the lower court found that
both parties "are practically at one that defendant (PLDT) is entitled to reasonable compensation from
plaintiff for the reasonable use of the former's telephone facilities" (Decision, Record on Appeal, page
224), the lower court should have proceeded to treat the case as one of condemnation of such services
independently of contract and proceeded to determine the just and reasonable compensation for the
same, instead of dismissing the petition. chanroblesvirtualawlibrary chanrobl es virtual law library

This view we have taken of the true nature of the Republic's petition necessarily results in overruling
the plea of defendant-appellant PLDT that the court of first instance had no jurisdiction to entertain the
petition and that the proper forum for the action was the Public Service Commission. That body, under
the law, has no authority to pass upon actions for the taking of private property under the sovereign
right of eminent domain. Furthermore, while the defendant telephone company is a public utility
corporation whose franchise, equipment and other properties are under the jurisdiction, supervision and
control of the Public Service Commission (Sec. 13, Public Service Act), yet the plaintiff's
telecommunications network is a public service owned by the Republic and operated by an
instrumentality of the National Government, hence exempt, under Section 14 of the Public Service Act,
from such jurisdiction, supervision and control. The Bureau of Telecommunications was created in
pursuance of a state policy reorganizing the government offices -
to meet the exigencies attendant upon the establishment of the free and independent
 Government of the Republic of the Philippines, and for the purpose of promoting
simplicity, economy and efficiency in its operation (Section 1, Republic Act No. 51) -

and the determination of state policy is not vested in the Commission (Utilities Com. vs. Bartonville
Bus Line, 290 Ill. 574; 124 N.E. 373). chanrobl esvirtualawlibrarychanrobles virtual law library

Defendant PLDT, as appellant, contends that the court below was in error in not holding that the
Bureau of Telecommunications was not empowered to engage in commercial telephone business, and
in ruling that said defendant was not justified in disconnecting the telephone trunk lines it had
previously leased to the Bureau. We find that the court a quo ruled correctly in rejecting both
assertions. chanroblesvirtualawlibrary chanrobl es virtual law library

Executive Order No. 94, Series of 1947, reorganizing the Bureau of Telecommunications, expressly
empowered the latter in its Section 79, subsection (b), to "negotiate for, operate and maintain wire
telephone or radio telephone communication service throughout the Philippines", and, in subsection (c),
"to prescribe, subject to approval by the Department Head, equitable rates of charges for messages
handled by the system and/or for time calls and other services that may be rendered by the system".
Nothing in these provisions limits the Bureau to non-commercial activities or prevents it from serving
the general public. It may be that in its original prospectuses the Bureau officials had stated that the
service would be limited to government offices: but such limitations could not block future expansion
of the system, as authorized by the terms of the Executive Order, nor could the officials of the Bureau
bind the Government not to engage in services that are authorized by law. It is a well-known rule that
erroneous application and enforcement of the law by public officers do not block subsequent correct
application of the statute (PLDT vs. Collector of Internal Revenue, 90 Phil. 676), and that the
Government is never estopped by mistake or error on the part of its agents (Pineda vs. Court of First
Instance of Tayabas, 52 Phil. 803, 807; Benguet Consolidated Mining Co. vs. Pineda, 98 Phil. 711,
724).chanroblesvirtualawlibrary chanrobl es virtual law library

The theses that the Bureau's commercial services constituted unfair competition, and that the Bureau
was guilty of fraud and abuse under its contract, are, likewise, untenable. chanroblesvirtualawlibrary chanrobl es virtual law library

First, the competition is merely hypothetical, the demand for telephone service being very much more
than the supposed competitors can supply. As previously noted, the PLDT had 20,000 pending
applications at the time, and the Bureau had another 5,000. The telephone company's inability to meet
the demands for service are notorious even now. Second, the charter of the defendant expressly
provides:
SEC. 14. The rights herein granted shall not be exclusive, and the rights and power to grant
to any corporation, association or person other than the grantee franchise for the telephone
or electrical transmission of message or signals shall not be impaired or affected by the
granting of this franchise: - (Act 3436)

And third, as the trial court correctly stated, "when the Bureau of Telecommunications subscribed to
the trunk lines, defendant knew or should have known that their use by the subscriber was more or less
public and all embracing in nature, that is, throughout the Philippines, if not abroad" (Decision, Record
on Appeal, page 216). chanrobl esvirtualawlibrarychanrobles virtual law library

The acceptance by the defendant of the payment of rentals, despite its knowledge that the plaintiff had
extended the use of the trunk lines to commercial purposes, continuously since 1948, implies assent by
the defendant to such extended use. Since this relationship has been maintained for a long time and the
public has patronized both telephone systems, and their interconnection is to the public convenience, it
is too late for the defendant to claim misuse of its facilities, and it is not now at liberty to unilaterally
sever the physical connection of the trunk lines.
..., but there is high authority for the position that, when such physical connection has been
voluntarily made, under a fair and workable arrangement and guaranteed by contract and
the continuous line has come to be patronized and established as a great public
convenience, such connection shall not in breach of the agreement be severed by one of the
parties. In that case, the public is held to have such an interest in the arrangement that its
rights must receive due consideration. This position finds approval in State ex rel. vs.
Cadwaller, 172 Ind. 619, 636, 87 N.E. 650, and is stated in the elaborate and learned
opinion of Chief Justice Myers as follows: "Such physical connection cannot be required as
of right, but if such connection is voluntarily made by contract, as is here alleged to be the
case, so that the public acquires an interest in its continuance, the act of the parties in
making such connection is equivalent to a declaration of a purpose to waive the primary
right of independence, and it imposes upon the property such a public status that it may not
be disregarded" - citing Mahan v. Mich. Tel. Co., 132 Mich. 242, 93 N.W. 629, and the
reasons upon which it is in part made to rest are referred to in the same opinion, as follows:
"Where private property is by the consent of the owner invested with a public interest or
privilege for the benefit of the public, the owner can no longer deal with it as private
property only, but must hold it subject to the right of the public in the exercise of that public
interest or privilege conferred for their benefit." Allnut v. Inglis (1810) 12 East, 527. The
doctrine of this early case is the acknowledged law. (Clinton-Dunn Tel. Co. v. Carolina Tel.
& Tel. Co., 74 S.E. 636, 638).

It is clear that the main reason for the objection of the PLDT lies in the fact that said appellant did not
expect that the Bureau's telephone system would expand with such rapidity as it has done; but this
expansion is no ground for the discontinuance of the service agreed upon. chanroblesvirtualawlibrary chanrobl es virtual law library

The last issue urged by the PLDT as appellant is its right to compensation for the use of its poles for
bearing telephone wires of the Bureau of Telecommunications. Admitting that section 19 of the PLDT
charter reserves to the Government -
the privilege without compensation of using the poles of the grantee to attach one ten-pin
cross-arm, and to install, maintain and operate wires of its telegraph system thereon;
Provided, however, That the Bureau of Posts shall have the right to place additional cross-
arms and wires on the poles of the grantee by paying a compensation, the rate of which is to
be agreed upon by the Director of Posts and the grantee; -

the defendant counterclaimed for P8,772.00 for the use of its poles by the plaintiff, contending that
what was allowed free use, under the aforequoted provision, was one ten-pin cross-arm attachment and
only for plaintiff's telegraph system, not for its telephone system; that said section could not refer to the
plaintiff's telephone system, because it did not have such telephone system when defendant acquired its
franchise. The implication of the argument is that plaintiff has to pay for the use of defendant's poles if
such use is for plaintiff's telephone system and has to pay also if it attaches more than one (1) ten-pin
cross-arm for telegraphic purposes. chanroblesvirtualawlibrary chanrobl es virtual law library

As there is no proof that the telephone wires strain the poles of the PLDT more than the telegraph
wires, nor that they cause more damage than the wires of the telegraph system, or that the Government
has attached to the poles more than one ten-pin cross-arm as permitted by the PLDT charter, we see no
point in this assignment of error. So long as the burden to be borne by the PLDT poles is not increased,
we see no reason why the reservation in favor of the telegraph wires of the government should not be
extended to its telephone lines, any time that the government decided to engage also in this kind of
communication. chanrobl esvirtualawlibrarychanrobles virtual law library

In the ultimate analysis, the true objection of the PLDT to continue the link between its network and
that of the Government is that the latter competes "parasitically" (sic) with its own telephone services.
Considering, however, that the PLDT franchise is non-exclusive; that it is well-known that defendant
PLDT is unable to adequately cope with the current demands for telephone service, as shown by the
number of pending applications therefor; and that the PLDT's right to just compensation for the
services rendered to the Government telephone system and its users is herein recognized and preserved,
the objections of defendant-appellant are without merit. To uphold the PLDT's contention is to
subordinate the needs of the general public to the right of the PLDT to derive profit from the future
expansion of its services under its non-exclusive franchise. chanrobl esvirtualawlibrarychanrobles virtual law library

WHEREFORE, the decision of the Court of First Instance, now under appeal, is affirmed, except in so
far as it dismisses the petition of the Republic of the Philippines to compel the Philippine Long
Distance Telephone Company to continue servicing the Government telephone system upon such
terms, and for a compensation, that the trial court may determine to be just, including the period
elapsed from the filing of the original complaint or petition. And for this purpose, the records are
ordered returned to the court of origin for further hearings and other proceedings not inconsistent with
this opinion. No costs. chanrobl esvirtualawlibrarychanrobles virtual law library

Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando, Capistrano, Teehankee and
Barredo, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-7012 March 26, 1913
THE ILOILO ICE AND COLD STORAGE COMPANY, plaintiff-appellee,
vs.
THE MUNICIPAL COUNCIL OF ILOILO, ET AL., defendants-appellants.
Juan de Leon, Quirico Abeto, and Crecenciano Lozano, for appellants.
Bruce, Lawrence, Ross and Block, for appellee.
TRENT, J.:
According to the pleadings, the plaintiff, upon authority granted by the defendant, constructed an ice
and cold storage plant in the city of Iloilo. Some time after the plant had been completed and was in
operation, nearby residents made complaints to the defendant that the smoke from the plant was very
injurious to their health and comfort. Thereupon the defendant appointed a committee to investigate
and report upon the matters contained in said complaints. The committee reported that the complaints
were well-founded. The defendant counsel then passed a resolution which reads in part as follows:
That after the approval by the honorable provincial board of this resolution, a period of one
month will be granted to the said entity. The Iloilo Ice and Cold Storage Company, in which to
proceed with the elevation of said smokestacks, and if not done, the municipal president will
execute the order requiring the closing or suspension of operations of said establishment.
Upon receipt of this resolution and order, the plaintiff commenced this action in the Court of First
Instance to enjoin the defendant from carrying into effect the said resolution. The fifth paragraph of the
complaint is as follows:
That the defendants intend and threaten to require compliance with said resolution
administratively and without the intervention of the court, and by force to compel the closing
and suspension of operations of the plaintiff's machinery and consequently of the entire plant,
should the plaintiff not proceed with the elevation of the smokestacks to one hundred feet,
which the plaintiff maintains it is not obliged to do and will not do.
Upon notice and after hearing, a preliminary injunction was issued. Subsequently thereto the defendant
answered, admitting paragraphs 1 and 4 and denying all the other allegations in the complaint, and as a
special defense alleged:
1. xxx xxx xxx.
2. That the factory of the plaintiff company stands in a central and populated district of the
municipality;
3. That the quantity of smoke discharged from the smokestacks of said factory is so great and so
dense that it penetrates into the dwelling houses situated near it and causes great annoyance to
the residents and prejudice to their health;
4. That the municipal board of health of the city has reported that the smoke discharged from
the smokestacks of said factory is prejudicial and injurious to the public health;
5. That the plaintiff company has no right to maintain and operate machinery in its factory under
the conditions which it is at present operating the same, without complying with the regulations
which were imposed upon it when the license for its installation was granted, because it thereby
violates the ordinances of the city now in force upon the matter.
Wherefore, the defendant prays that it be absolved from the complaint and the plaintiff be declared to
have no right to the remedy asked, and that the preliminary injunction issued in this case be set aside,
with the costs against the plaintiff.
The plaintiff demurred to this answer upon the following grounds:
1. That the facts alleged in the answer do not constitute a defense; and
2. That the answer is vague and ambiguous and contains arguments and conclusions of law
instead of facts.
This demurrer was sustained, the court saying:
The defendant will amend his answer within five days or the injunction will be permanently
granted as prayed for, with costs to the defendant.
To this order the defendant excepted and, not desiring to amend its answer, appealed to this court.
It is alleged in paragraph 1 that both the plaintiff and the defendants are corporations duly organized
under the laws of the Philippine Islands; and paragraph 4 sets forth the resolution complained of, the
dispositive part of which is inserted above. The allegations in paragraph 2, 3, 5, 6, 7, and 8, which are
specifically denied in the answer, all (except the fifth) relate to the building of the plant under authority
granted by the defendant, the cost of its construction, the legality of the resolution in question, the
power of the defendant to pass such resolution, and the damages which will result if that resolution is
carried into effect. As before stated, the allegations in paragraph 5 to the effect that the defendants
intend and are threatening to close by force and without the intervention of the courts the plaintiff's
plant is specifically denied. The issue in this case, according to the pleadings, relates to the power of
the municipal council to declare the plant of the petitioner a nuisance as operated, and the method of
abating it.
The municipal council is, under section 39 (j) of the Municipal Code, specifically empowered "to
declare and abate nuisances." A nuisance is, according to Blackstone, "Any thing that worketh hurt,
inconvenience, or damages." (3 Black. Com., 216.) They arise from pursuing particular trades or
industries in populous neighborhoods; from acts of public indecency, keeping disorderly houses, and
houses of ill fame, gambling houses, etc. (2 Bouv., 248; Miller vs. Burch, 32 Tex., 208.) Nuisances
have been divided into two classes: Nuisances per se, and nuisances per accidens. To the first belong
those which are unquestionably and under all circumstances nuisances, such as gambling houses,
houses of ill fame, etc. The number of such nuisances is necessarily limited, and by far the greater
number of nuisances are such because of particular facts and circumstances surrounding the otherwise
harmless cause of the nuisance. For this reason, it will readily be seen that whether a particular thing is
a nuisance is generally a question of fact, to be determined in the first instance before the term nuisance
can be applied to it. This is certainly true of a legitimate calling, trade, or business such as an ice plant.
Does the power delegated to a municipal council under section 39 (j) of the Municipal Code commit to
the unrestrained will of that body the absolute power of declaring anything to be a nuisance? Is the
decision of that body final despite the possibility that it may proceed from animosity or prejudice, from
partisan zeal or enmity, from favoritism and other improper influences and motives, easy of
concealment and difficult to be detected and exposed? Upon principle and authority, we think it does
not.
In Rutton vs. City of Camden, 39 N.J.L., 122, 129; 23 Am. Rep. 203, 209, the court said:
The authority to decide when a nuisance exists in an authority to find facts, to estimate their
force, and to apply rules of law to the case thus made. This is the judicial function, and it is a
function applicable to a numerous class of important interests. The use of land and buildings,
the enjoyment of water rights, the practice of many trades and occupations, and the business of
manufacturing in particular localities, all fall on some occasions, in important respects, within
its sphere. To say to a man that he shall not use his property as he pleases, under certain
conditions, is to deprive him pro tanto of the enjoyment of such property. To find conclusively
against him that a state of facts exists with respect to the use of his property, or the pursuit of his
business, which subjects him to the condemnation of the law, is to affect his rights in a vital
point. The next thing to depriving a man of his property is to circumscribe him in its use, and
the right to use property is as much under the protection of the law as the property itself, in any
other aspect, is, and the one interest can no more be taken out of the hands of the ordinary
tribunal than the other can. If a man's property cannot be taken away from him except upon trial
by jury, or by the exercise of the right of eminent domain upon compensation made, neither can
be, in any other mode, be limited in the use of it. The right to abate public nuisances, whether
we regard it as existing in the municipalities, or in the community, or in the land of the
individual, is a common law right, and is derived, in every instance of its exercise, from the
same source — that of necessity. It is akin to the right of destroying property for the public
safety, in case of the prevalence of a devastating fire or other controlling exigency. But the
necessity must be present to justify the exercise of the right, and whether present or not, must be
submitted to a jury under the guidance of a court. The finding of a sanitary committee, or of a
municipal council, or of any other body of a similar kind, can have no effect whatever for any
purpose, upon the ultimate disposition of the matter of this kind. It cannot be used as evidence
in any legal proceeding, for the end of establishing, finally, the fact of nuisance, and if can be
made testimony for any purpose, it would seem that it can be such only to show that the persons
acting in pursuance of it were devoid of that malicious spirit which sometimes aggravates a
trespass and swells the damages. I repeat that the question of nuisance can conclusively be
 decided, for all legal uses, by the established courts of law or equity alone, and that the
resolutions of officers, or of boards organized by force of municipal charters, cannot, to any
degree, control such decision.
The leading case upon this point is Yates vs. Milwaukee, (10 Wall., 497; 19 L. ed., 984). The following
quotation from this case has been cited or quoted with approval in a great number of cases. (See Notes
to this case in 19 L. ed., Notes, page 356.)
But the mere declaration by the city council of Milwaukee that a certain structure was an
encroachment or obstruction did not make structure was an encroachment or obstruction did not
make it so, nor could such declaration make it a nuisance unless it in fact had that character. It is
a doctrine not to be tolerated in this country, that a municipal corporation, without any general
laws either of the city or of the State, within which a given structure can be shown to be a
nuisance, can, by its mere declaration that it is one, subject it to removal by any person
supposed to be aggrieved, or even by the city itself. This would place every house, every
business, and all the property of the city at the uncontrolled will of the temporary local
authorities. Yet this seems to have been the view taken by counsel who defended this case in the
circuit court; for that single ordinance of the city, declaring the wharf of Yates a nuisance, and
ordering its abatement, is the only evidence in the record that it is a nuisance or an obstruction
to navigation, or in any manner injurious to the public.
In Cole vs. Kegler (64 la., 59, 61) the court said:
We do not think the general assembly intended to confer on cities and towns the power of
finally and conclusively determine, without notice or a hearing, and without the right of appeal,
that any given thing constitutes a nuisance, unless, probably, in cases of great emergency, so
strong as to justify extraordinary measures upon the ground of paramount necessity. The law
does not contemplate such an exigency, and therefore does not provide for it. If it did, it would
no longer be the undefined law of necessity. (Nelson, J., in The People vs. The Corporation of
Albay, 11 Wend., 539.)
Nuisance may be abated by an individual, but they must in fact exist, The determination of the
individual that a nuisance exists does not make it so, and if he destroys property on the that it is
a nuisance, he is responsible, unless it is established that the property destroyed constituted a
nuisance. This precise power, and no more, is conferred by the statute on cities and towns. In
Wood on Nuisances, section 740, it is said: "If the authorities of a city abate a nuisance under
authority of an ordinance of the city, they are subject to the same perils and liabilities as an
individual, if the thing in fact is not nuisance."
In Grossman vs. City of Oakland (30 Ore., 478, 483) the court said:
In our opinion this ordinance cannot be sustained as a legitimate exercise of municipal power.
The character of the city confers upon it the power to prevent and restrain nuisances, and to
"declare what shall constitute a nuisance;" but this does not authorize it to declare a particular
use of property a nuisance, unless such use comes within the common law or statutory idea of a
nuisance. (2 Wood on Nuisances (3d ed.), 977; Yates vs. Milwaukee, 77 U.S. (10 Wall.), 497;
Village of Des Plaines vs. Poyer, 123 Ill., 348; 5 Am. St. Rep., 524; 14 N.E., 677; Quintini vs.
City Board of Aldermen, 64 Miss., 483; 60 Am. Rep., 62; 1 So., 625; Chicago & Rock Islands
R.R. Co. vs. City of Joliet, 79 Ill., 44; Hutton vs. City of Camden, 39 N.J. Law, 122; 23 Am.
Rep., 203.) By this provision of the charter the city is clothed with authority to declare by
general ordinance under what circumstances and conditions certain specified acts or things
injurious to the health or dangerous to the public are to constitute and be deemed nuisances,
leaving the question of fact open for judicial determination as to whether the particular act or
 thing complained of comes within the prohibited class; but it cannot by ordinance arbitrarily
declare any particular thing a nuisance which has not heretofore been so declared by law, or
judicially determined to be such. (City of Dener vs. Mullen, 7 Colo., 345).
In Western & Atlantic R. Co. vs. Atlanta (113 Ga., 537, 551), after an extensive review of the
authorities, the court, per Lumpkin, J., said:
It is our opinion that the provisions of our code require, when a municipal corporation is
seeking to abate a nuisance such as it was alleged the floor of the union passenger station was in
this case, that the parties interested be given reasonable notice of the time and place of hearing
at which the fact whether the property complained of is or is not a nuisance shall be inquired
into and determined; that, without such notice and a judgment on the facts by the body invested
with power to abate the nuisance, it is unlawful to enter thereon and remove or destroy it as a
nuisance. If the thing, as we said, is declared by law to be a nuisance, or if it is unquestionably a
nuisance, such as a rabid dog, infected clothing, the carcass of a dead animal on a private lot,
the presence of a smallpox patient on the street, it may be abated by the municipal authorities at
once, by order, from the necessity of the case, and to meet an emergency which exists, to at
once protect the health and lives of the people.
In Everett vs. City of Council Bluffs (46 Ia., 66, 67), where the council passed an ordinance declaring
trees on certain streets to be a nuisance and ordering the marshall to abate the same, the court held:
The defendant is incorporated under a special charter, which provides that the city council has
power "to declare what shall be a nuisance, and to prevent, remove, or abate the same." This
general grant of power, however, will not authorize the council to declare anything a nuisance
which is not such at common law, or has been declared such by statute.
In Frostburg vs. Wineland (98 Md., 239, 243) the court said:
The first question, then, in the case revolves itself to this, was the summary proceeding of the
appellants in declaring the two trees in front of the appellee's property to be a nuisance and an
obstruction to the paving and curbing of the street, and directing them to be removed and
destroyed, so far final as not to be reviewable by the Courts?
This question we think was in effect settled by this court in the recent cases of New Windsor vs.
Stocksdale (95 Md., 215) and King vs. Hamil (97 Md., 103). In the latter case it is said that
equity will not lend its aid to enforce by injunction the by-laws or ordinances of a municipal
corporation, restraining an act, unless the act is shown to be a nuisance per se. . . .
It is clear, we think, both upon reason and authority, that when a municipality undertakes to
destroy private property which is not a nuisance per se, it then transcends its powers and its acts
are reviewable by a court of equity.
In C.R.I. & P.R. Co. vs. City of Joilet (79 Ill., 25, 44) the court said:
As to the ordinance of the common council of the city of Joilet, of September, 1872, declaring
the railroad a nuisance, we regard that as without effect upon the case, although the charter of
the city confers upon the common council the power to abate and remove nuisances, and to
punish the authors thereof, and to define and declare what shall be deemed nuisances. We will,
in this respect, but refer to the language of the Supreme Court of the United State in Yates vs.
Milwaukee (10 Wall., 505). (See supra.)
In the leading case of Denver vs. Mullen (7 Colo., 345, 353) where an extended review of the
authorities is made, the court said:
 The basis of authority for the action of the city in the premises is made to rest upon certain
provisions of the city charter, and certain ordinances, which are set out as exhibits in the
testimony; and the following, among other of the enumerated powers conferred by the
legislature upon the city, in said charter, is relied upon, viz: "To make regulations to secure the
general health of the inhabitants, to declare what shall be a nuisance, and to prevent and remove
the same."
The proper construction of this language is that the city is clothed with authority to declare, by
general ordinance, what shall constitute a nuisance. That is to say, the city may, by such
ordinance, define, classify and enact what things or classes of things, and under what conditions
and circumstances, such specified things are to constitute and be deemed nuisances. For
instance, the city might, under such authority, declare by ordinance that slaughter-houses within
the limits of the city, carcasses of dead animals left lying within the city, goods, boxes, and the
like, piled up or remaining for certain length of time on the sidewalks, or other things injurious
to health, or causing obstruction or danger to the public in the use of the streets and sidewalks,
should be deemed nuisances; not that the city council may, by a mere resolution or motion,
declare any particular thing a nuisance which has not theretofore been pronounced to be such by
law, or so adjudged by judicial determination. (Everett vs. Council Bluffs, 40 Iowa, 66; Yates
vs. Milwaukee, 10 Wall., 497.) No law or ordinance, under which the city council assumed to
act in respect to this ditch, has been cited which defines nuisance, or within the meaning of
which such ditch is comprehended.
xxx xxx xxx
It is only certain kinds of nuisances that may be removed or abated summarily by the acts of
individuals or by the public, such as those which affect the health, or interfere with the safety of
property or person, or are tangible obstructions to streets and highways under circumstances
presenting an emergency; such clear cases of nuisances per se, are well understood, and need
not to be further noticed here to distinguish them from the case before us. If it were admitted
that this ditch, by reason of its obstruction to the use of the public streets, at the time of the acts
complained of, was a nuisance, it must also be admitted that it was not a nuisance per se. It was
constructed for a necessary, useful and lawful purpose, was used for such purpose, and therefore
in its nature was not a nuisance, as a matter of law. Nor as a matter of fact was it a nuisance
while it was no hurt, detriment, or offense to the public, or to any private citizen. If, then, it has
become a nuisance, it is by reason of a change of circumstances brought about neither by the
ditch itself, nor its use. Indeed, the sole matter complained of, to warrant its being regarded as a
nuisance, is the absence of bridges at street crossings. The town has become populous; its
growth has extended beyond the ditch and along its line for a great distance; streets laid out
across its course have come to be traveled so much, that without bridges, the ditch, as appears
by the testimony, has become inconvenient, detrimental, and an obstruction to the full, safe and
lawful use of such streets as highways by the public. To this extent, and from these causes
outside the ditch and its use per se, has the ditch come to be a public nuisance, if, as a matter of
fact, it is such. But whether it is such or not is a fact which must first be ascertained by judicial
determination before it can be lawfully abated, either by the public or by a private person.
In Joyce vs. Woods (78 Ky., 386, 388) the court said:
There was no judicial determination that there was a nuisance, and no opportunity offered the
owner of the lot to contest that matter. Under the exercise of the police power, it may be
conceded that municipalities can declare and abate nuisances in cases of necessity, without
citation and without adjudication as to whether there is in fact a nuisance. But whenever the
action of the municipality in declaring and abating a nuisance goes so far as to fix a burden
 upon the owner of the property, he is entitled to be heard upon the question as to the existence
of the nuisance. This right to a hearing upon this question may come before or after the nuisance
is abated, as circumstances may require, but there must be an opportunity offered him to be
heard upon that matter before his property can be loaded with the cost of the removal of the
nuisance. To the extent that property is thus burdened by the action of the city council, when
there is no necessity to precipitate action without adjudication, the owner is deprived of his
property, regardless of "the law of the land." The meaning of that provision of the constitution
has generally been construed to be a law that hears before condemning, and arrives at a
judgment for the divestiture of the rights of property through what is ordinarily understood to be
judicial process — the general rules that govern society in reference, to the rights of property;
and it is only in extreme cases, where the preservation and repose of society or the protection of
the property rights of a large class of the community absolutely require a departure, that the
courts recognize any exception. In this case there is no pretense of a necessity for precipitate
action. There is no reason why appellant should not have been permitted to test the question as
to the existence of the nuisance.
In Everett vs. Marquette (53 Mich., 450, 451) the court, per Cooley, J., said:
But it is not necessary in this case to determine whether the permission given by the village
council was in due form for the purposes of a permanent appropriation, or even whether the
council had the power to consent to such an appropriation. It is undoubted that the council had
general control of the streets under the village charter; and it was a part of its duty to prevent the
creation of any public nuisance within them. It is not to be assumed that consent would have
been given to such a nuisance, and when, by formal resolution the council assumed to give
permission to complainant to make the openings and build the stairways complained of, it must
have been done in the belief that no public inconvenience would follow. If the permission was
effectual for no other purpose, it at least rebutted any presumption which might otherwise have
existed, that this partial appropriation of the street was per se a nuisance.
If the permission was a mere license, and the subsequent action of the city council is to be
regarded as a revocation of the license, it does not follow that the plaintiff has by the revocation
immediately been converted into a wrongdoer. The question will then be whether the act of the
complainant in maintaining his structures constitutes a public nuisance; and while the city
council is entitled, under its supervisory control of the public streets, to consider and pass upon
that question for the purpose of deciding upon the institution of legal proceedings for
abatement, it cannot make itself the judge. Maintaining a nuisance is a public offense; and the
fact, as in other cases of alleged criminality, is to be tried on proper accusation and in the
regular courts. The mere fact that the party makes use of some part of a public street for his
private purposes does not make out the public offense. This was decided in People vs. Carpenter
(1 Mich., 273), and has never been doubted in this State.
The city in this case proceeding in an act of destruction on an assumption that the structures
were already condemned as illegal. This was unwarranted, and it was quite right that the action
should be restrained.
The above authorities are collated in Judge Dillon's work on Municipal Corporations, fifth edition,
section 684, with the following comment by the author:
It is to secure and promote the public health, safety, and convenience that municipal
corporations are so generally and so liberally endowed with power to prevent and abate
nuisances. This authority and its summary exercise may be constitutionally conferred on the
incorporated place, and it authorizes its council to act against that which comes within the legal
 notion of a nuisance; but such power, conferred in general terms, cannot be taken to authorize
the extrajudicial condemnation and destruction of that as a nuisance which, in its nature,
situation, or use, is not such.
The questions discussed in this august array of authorities are exactly those of the present case, and the
controlling principles and the reasoning upon which they are founded are so fully and lucidly set forth
as to justify us in refraining from comment of our own. It is clear that municipal councils have, under
the code, the power to declare and abate nuisances, but it is equally clear that they do not have the
power to find as a fact that a particular thing is a nuisance when such thing is not a nuisance per se; nor
can they authorize the extrajudicial condemnation and destruction of that as a nuisance which in its
nature, situation, or use is not such. These things must be determined in the ordinary courts of law.
In the present case it is certain that the ice factory of the plaintiff is not a nuisance per se. It is a
legitimate industry, beneficial to the people, and conducive to their health and comfort. If it be in fact a
nuisance due to the manner of its operation, that question cannot de determined by a mere resolution of
the board. The petitioner is entitled to a fair and impartial hearing before a judicial tribunal.
The respondent has, we think, joined issued by its answer denying that it was intending to proceed with
the abatement of the alleged nuisance by arbitrary administrative proceedings. This is the issue of the
present case, and upon its determination depends whether the injunction should be made permanent
(but limited in its scope to prohibiting the closing of petitioner's factory by administrative action), or
whether the injunction should be dissolved, which will be done in case it be shown that the municipal
officials intend to proceed with the abatement of the alleged nuisance in an orderly and legal manner.
It is said that the plaintiff cannot be compelled to build its smokestack higher if said stack is in fact a
nuisance, for the reason that the stack was built under authority granted by the defendant, and in
accordance with the prescribed requirements. If the charter or license does not expressly subject the
business or industry to the exercise of the police power by the State, it is conceded by the great
preponderance of authority that such a reservation is implied to the extent that may be reasonably
necessary for the public welfare. (Freud, Police Power, § 361 et seq, and § 513 et seq.)
For the foregoing reasons, the order sustaining the plaintiff's demurrer to the defendant's answer is
reversed. The record will be returned to the court whence it came with instructions to proceed with the
trial of the cause in accordance with this opinion. No costs will be allowed in this instance. So ordered.
Arellano, C.J., Torres and Moreland, JJ., concur.
Johnson, J., dissents.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-5060 January 26, 1910
THE UNITED STATES, plaintiff-appellee,
vs.
LUIS TORIBIO, defendant-appellant.
Rodriguez & Del Rosario, for appellant.
Attorney-General Villamor, for appellee.
CARSON, J.:
The evidence of record fully sustains the findings of the trial court that the appellant slaughtered or
caused to be slaughtered for human consumption, the carabao described in the information, without a
permit from the municipal treasure of the municipality wherein it was slaughtered, in violation of the
provisions of sections 30 and 33 of Act No. 1147, an Act regulating the registration, branding, and
slaughter of large cattle.
It appears that in the town of Carmen, in the Province of Bohol, wherein the animal was slaughtered
there is no municipal slaughterhouse, and counsel for appellant contends that under such circumstances
the provisions of Act No. 1147 do not prohibit nor penalize the slaughter of large cattle without a
permit of the municipal treasure. Sections 30, 31, 32, and 33 of the Act are as follows:
SEC. 30. No large cattle shall be slaughtered or killed for food at the municipal slaughterhouse
except upon permit secured from the municipal treasure. Before issuing the permit for the
slaughter of large cattle for human consumption, the municipal treasurer shall require for
branded cattle the production of the original certificate of ownership and certificates of transfer
showing title in the person applying for the permit, and for unbranded cattle such evidence as
may satisfy said treasurer as to the ownership of the animals for which permit to slaughter has
been requested.
SEC. 31. No permit to slaughter has been carabaos shall be granted by the municipal treasurer
unless such animals are unfit for agricultural work or for draft purposes, and in no event shall a
permit be given to slaughter for food any animal of any kind which is not fit for human
consumption.
SEC. 32. The municipal treasurer shall keep a record of all permits for slaughter issued by him,
and such record shall show the name and residence of the owner, and the class, sex, age, brands,
knots of radiated hair commonly know as remolinos or cowlicks, and other marks of
identification of the animal for the slaughter of which permit is issued and the date on which
such permit is issued. Names of owners shall be alphabetically arranged in the record, together
with date of permit.
A copy of the record of permits granted for slaughter shall be forwarded monthly to the
provincial treasurer, who shall file and properly index the same under the name of the owner,
together with date of permit.
SEC. 33. Any person slaughtering or causing to be slaughtered for human consumption or
killing for food at the municipal slaughterhouse any large cattle except upon permit duly
secured from the municipal treasurer, shall be punished by a fine of not less than ten nor more
than five hundred pesos, Philippine currency, or by imprisonment for not less than one month
nor more than six months, or by both such fine and imprisonment, in the discretion of the court.
It is contended that the proper construction of the language of these provisions limits the prohibition
contained in section 30 and the penalty imposed in section 33 to cases (1) of slaughter of large cattle for
human consumption in a municipal slaughter without a permit duly secured from the municipal
treasurer, and (2) cases of killing of large cattle for food in a municipal slaughterhouse without a
permit duly secured from the municipal treasurer; and it is urged that the municipality of Carmen not
being provided with a municipal slaughterhouse, neither the prohibition nor the penalty is applicable to
cases of slaughter of large cattle without a permit in that municipality.
We are of opinion, however, that the prohibition contained in section 30 refers (1) to the slaughter of
large cattle for human consumption, anywhere, without a permit duly secured from the municipal
treasurer, and (2) expressly and specifically to the killing for food of large cattle at a municipal
slaughterhouse without such permit; and that the penalty provided in section 33 applies generally to the
slaughter of large cattle for human consumption, anywhere, without a permit duly secured from the
municipal treasurer, and specifically to the killing for food of large cattle at a municipal slaughterhouse
without such permit.
It may be admitted at once, that the pertinent language of those sections taken by itself and examined
apart from the context fairly admits of two constructions: one whereby the phrase "at the municipal
slaughterhouse" may be taken as limiting and restricting both the word "slaughtered" and the words
"killed for food" in section 30, and the words "slaughtering or causing to be slaughtered for human
consumption" and the words "killing for food" in section 33; and the other whereby the phrase "at the
municipal slaughterhouse" may be taken as limiting and restricting merely the words "killed for food"
and "killing for food" as used in those sections. But upon a reading of the whole Act, and keeping in
mind the manifest and expressed purpose and object of its enactment, it is very clear that the latter
construction is that which should be adopted.
The Act primarily seeks to protect the "large cattle" of the Philippine Islands against theft and to make
easy the recovery and return of such cattle to their proper owners when lost, strayed, or stolen. To this
end it provides an elaborate and compulsory system for the separate branding and registry of ownership
of all such cattle throughout the Islands, whereby owners are enabled readily and easily to establish
their title; it prohibits and invalidates all transfers of large cattle unaccompanied by certificates of
transfer issued by the proper officer in the municipality where the contract of sale is made; and it
provides also for the disposition of thieves or persons unlawfully in possession, so as to protect the
rights of the true owners. All this, manifestly, in order to make it difficult for any one but the rightful
owner of such cattle to retain them in his possession or to dispose of them to others. But the usefulness
of this elaborate and compulsory system of identification, resting as it does on the official registry of
the brands and marks on each separate animal throughout the Islands, would be largely impaired, if not
totally destroyed, if such animals were requiring proof of ownership and the production of certificates
of registry by the person slaughtering or causing them to be slaughtered, and this especially if the
animals were slaughtered privately or in a clandestine manner outside of a municipal slaughterhouse.
Hence, as it would appear, sections 30 and 33 prohibit and penalize the slaughter for human
consumption or killing for food at a municipal slaughterhouse of such animals without a permit issued
by the municipal treasurer, and section 32 provides for the keeping of detailed records of all such
permits in the office of the municipal and also of the provincial treasurer.
If, however, the construction be placed on these sections which is contended for by the appellant, it will
readily be seen that all these carefully worked out provisions for the registry and record of the brands
and marks of identification of all large cattle in the Islands would prove in large part abortion, since
thieves and persons unlawfully in possession of such cattle, and naturally would, evade the provisions
of the law by slaughtering them outside of municipal slaughterhouses, and thus enjoy the fruits of their
wrongdoing without exposing themselves to the danger of detection incident to the bringing of the
animals to the public slaughterhouse, where the brands and other identification marks might be
scrutinized and proof of ownership required.
Where the language of a statute is fairly susceptible of two or more constructions, that construction
should be adopted which will most tend to give effect to the manifest intent of the lawmaker and
promote the object for which the statute was enacted, and a construction should be rejected which
would tend to render abortive other provisions of the statute and to defeat the object which the
legislator sought to attain by its enactment. We are of opinion, therefore, that sections 30 and 33 of the
Act prohibit and penalize the slaughtering or causing to be slaughtered for human consumption of large
cattle at any place without the permit provided for in section 30.
It is not essential that an explanation be found for the express prohibition in these sections of the
"killing for food at a municipal slaughterhouse" of such animals, despite the fact that this prohibition is
clearly included in the general prohibition of the slaughter of such animals for human consumption
anywhere; but it is not improbable that the requirement for the issue of a permit in such cases was
expressly and specifically mentioned out of superabundance of precaution, and to avoid all possibility
of misunderstanding in the event that some of the municipalities should be disposed to modify or vary
the general provisions of the law by the passage of local ordinances or regulations for the control of
municipal slaughterhouse.
Similar reasoning applied to the specific provisions of section 31 of the Act leads to the same
conclusion. One of the secondary purposes of the law, as set out in that section, is to prevent the
slaughter for food of carabaos fit for agricultural and draft purposes, and of all animals unfit for human
consumption. A construction which would limit the prohibitions and penalties prescribed in the statute
to the killing of such animals in municipal slaughterhouses, leaving unprohibited and unpenalized their
slaughter outside of such establishments, so manifestly tends to defeat the purpose and object of the
legislator, that unless imperatively demanded by the language of the statute it should be rejected; and,
as we have already indicated, the language of the statute is clearly susceptible of the construction which
we have placed upon it, which tends to make effective the provisions of this as well as all the other
sections of the Act.
It appears that the defendant did in fact apply for a permit to slaughter his carabao, and that it was
denied him on the ground that the animal was not unfit "for agricultural work or for draft purposes."
Counsel for appellant contends that the statute, in so far as it undertakes to penalize the slaughter of
carabaos for human consumption as food, without first obtaining a permit which can not be procured in
the event that the animal is not unfit "for agricultural work or draft purposes," is unconstitutional and in
violation of the terms of section 5 of the Philippine Bill (Act of Congress, July 1, 1902), which
provides that "no law shall be enacted which shall deprive any person of life, liberty, or property
without due process of law."
It is not quite clear from the argument of counsel whether his contention is that this provision of the
statute constitutes a taking of property for public use in the exercise of the right of eminent domain
without providing for the compensation of the owners, or that it is an undue and unauthorized exercise
of the police power of the State. But whatever may be the basis of his contention, we are of opinion,
appropriating, with necessary modifications understood, the language of that great jurist, Chief Justice
Shaw (in the case of Com. vs. Tewksbury, 11 Met., 55, where the question involved was the
constitutionality of a statute prohibiting and penalizing the taking or carrying away by any person,
including the owner, of any stones, gravel, or sand, from any of the beaches in the town of Chesea,)
that the law in question "is not a taking of the property for public use, within the meaning of the
constitution, but is a just and legitimate exercise of the power of the legislature to regulate and restrain
such particular use of the property as would be inconsistent with or injurious to the rights of the public.
All property is acquired and held under the tacit condition that it shall not be so used as to injure the
equal rights of others or greatly impair the public rights and interest of the community."
It may be conceded that the benificial use and exclusive enjoyment of the property of all carabao
owners in these Islands is to a greater or less degree interfered with by the provisions of the statute; and
that, without inquiring what quantum of interest thus passes from the owners of such cattle, it is an
interest the deprivation of which detracts from their right and authority, and in some degree interferes
with their exclusive possession and control of their property, so that if the regulations in question were
enacted for purely private purpose, the statute, in so far as these regulations are concerned, would be a
violation of the provisions of the Philippine Bill relied on be appellant; but we are satisfied that it is not
such a taking, such an interference with the right and title of the owners, as is involved in the exercise
by the State of the right of eminent domain, so as to entitle these owners to compensation, and that it is
no more than "a just restrain of an injurious private use of the property, which the legislature had
authority to impose."
In the case of Com. vs. Alger (7 Cush., 53, 84), wherein the doctrine laid down in Com. vs. Tewksbury
(supra) was reviewed and affirmed, the same eminent jurist who wrote the former opinion, in
distinguishing the exercise of the right of eminent domain from the exercise of the sovereign police
powers of the State, said:
We think it is settled principle, growing out of the nature of well-ordered civil society, that
every holder of property, however absolute and unqualified may be his title, holds it under the
implied liability that his use of it may be so regulated that is shall not be injurious to the equal
enjoyment of others having an equal right to the enjoyment of their property, nor injurious to the
rights of the community. . . . Rights of property, like all other social and conventional rights, are
subject to such reasonable limitations in their enjoyment as shall prevent them from being
injurious, and to such reasonable restrain and regulations establish by law, as the legislature,
under the governing and controlling power vested in them by the constitution, may think
necessary and expedient.
This is very different from the right of eminent domain, the right of a government to take and
appropriate private property to public use, whenever the public exigency requires it; which can
be done only on condition of providing a reasonable compensation therefor. The power we
allude to is rather the police power, the power vested in the legislature by the constitution, to
make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and
ordinances, either with penalties or without, not repugnant to the constitution, as they shall
judge to be for the good and welfare of the commonwealth, and of the subjects of the same.
It is much easier to perceive and realize the existence and sources of this power than to mark its
boundaries or prescribe limits to its exercise.
Applying these principles, we are opinion that the restrain placed by the law on the slaughter for human
consumption of carabaos fit for agricultural work and draft purpose is not an appropriation of property
interests to a "public use," and is not, therefore, within the principle of the exercise by the State of the
right of eminent domain. It is fact a mere restriction or limitation upon a private use, which the
legislature deemed to be determental to the public welfare. And we think that an examination of the
general provisions of the statute in relation to the public interest which it seeks to safeguard and the
public necessities for which it provides, leaves no room for doubt that the limitations and restraints
imposed upon the exercise of rights of ownership by the particular provisions of the statute under
consideration were imposed not for private purposes but, strictly, in the promotion of the "general
welfare" and "the public interest" in the exercise of the sovereign police power which every State
possesses for the general public welfare and which "reaches to every species of property within the
commonwealth."
For several years prior to the enactment of the statute a virulent contagious or infectious disease had
threatened the total extinction of carabaos in these Islands, in many sections sweeping away seventy,
eighty, and in some cases as much as ninety and even one hundred per cent of these animals.
Agriculture being the principal occupation of the people, and the carabao being the work animal almost
exclusively in use in the fields as well as for draft purposes, the ravages of the disease with which they
were infected struck an almost vital blow at the material welfare of the country. large areas of
productive land lay waste for years, and the production of rice, the staple food of the inhabitants of the
Islands, fell off to such an extent that the impoverished people were compelled to spend many millions
of pesos in its importation, notwithstanding the fact that with sufficient work animals to cultivate the
fields the arable rice lands of the country could easily be made to produce a supply more that sufficient
for its own needs. The drain upon the resources of the Islands was such that famine soon began to make
itself felt, hope sank in the breast of the people, and in many provinces the energies of the breadwinners
seemed to be paralyzed by the apparently hopeless struggle for existence with which they were
confronted.
To meet these conditions, large sums of money were expended by the Government in relieving the
immediate needs of the starving people, three millions of dollars were voted by the Congress of the
United States as a relief or famine fund, public works were undertaken to furnish employment in the
provinces where the need was most pressing, and every effort made to alleviate the suffering incident to
the widespread failure of the crops throughout the Islands, due in large measure to the lack of animals
fit for agricultural work and draft purposes.
Such measures, however, could only temporarily relieve the situation, because in an agricultural
community material progress and permanent prosperity could hardly be hoped for in the absence of the
work animals upon which such a community must necessarily rely for the cultivation of the fields and
the transportation of the products of the fields to market. Accordingly efforts were made by the
Government to increase the supply of these animals by importation, but, as appears from the official
reports on this subject, hope for the future depended largely on the conservation of those animals which
had been spared from the ravages of the diseased, and their redistribution throughout the Islands where
the need for them was greatest.
At large expense, the services of experts were employed, with a view to the discovery and applications
of preventive and curative remedies, and it is hoped that these measures have proved in some degree
successful in protecting the present inadequate supply of large cattle, and that the gradual increase and
redistribution of these animals throughout the Archipelago, in response to the operation of the laws of
supply and demand, will ultimately results in practically relieving those sections which suffered most
by the loss of their work animals.
As was to be expected under such conditions, the price of carabaos rapidly increase from the three to
five fold or more, and it may fairly be presumed that even if the conservative measures now adopted
prove entirely successful, the scant supply will keep the price of these animals at a high figure until the
natural increase shall have more nearly equalized the supply to the demand.
Coincident with and probably intimately connected with this sudden rise in the price of cattle, the crime
of cattle stealing became extremely prevalent throughout the Islands, necessitating the enactment of a
special law penalizing with the severest penalties the theft of carabaos and other personal property by
roving bands; and it must be assumed from the legislative authority found that the general welfare of
the Islands necessitated the enactment of special and somewhat burdensome provisions for the
branding and registration of large cattle, and supervision and restriction of their slaughter for food. It
will hardly be questioned that the provisions of the statute touching the branding and registration of
such cattle, and prohibiting and penalizing the slaughter of diseased cattle for food were enacted in the
due and proper exercise of the police power of the State; and we are of opinion that, under all the
circumstances, the provision of the statute prohibiting and penalizing the slaughter for human
consumption of carabaos fit for work were in like manner enacted in the due and proper exercise of that
power, justified by the exigent necessities of existing conditions, and the right of the State to protect
itself against the overwhelming disaster incident to the further reduction of the supply of animals fit for
agricultural work or draft purposes.
It is, we think, a fact of common knowledge in these Islands, and disclosed by the official reports and
records of the administrative and legislative departments of the Government, that not merely the
material welfare and future prosperity of this agricultural community were threatened by the ravages of
the disease which swept away the work animals during the years prior to the enactment of the law
under consideration, but that the very life and existence of the inhabitants of these Islands as a civilized
people would be more or less imperiled by the continued destruction of large cattle by disease or
otherwise. Confronted by such conditions, there can be no doubt of the right of the Legislature to adopt
reasonable measures for the preservation of work animals, even to the extent of prohibiting and
penalizing what would, under ordinary conditions, be a perfectly legitimate and proper exercise of
rights of ownership and control of the private property of the citizen. The police power rests upon
necessity and the right of self-protection and if ever the invasion of private property by police
regulation can be justified, we think that the reasonable restriction placed upon the use of carabaos by
the provision of the law under discussion must be held to be authorized as a reasonable and proper
exercise of that power.
As stated by Mr. Justice Brown in his opinion in the case of Lawton vs. Steele (152 U.S., 133, 136):
The extent and limits of what is known as the police power have been a fruitful subject of
discussion in the appellate courts of nearly every State in the Union. It is universally conceded
to include everything essential to the public safely, health, and morals, and to justify the
destruction or abatement, by summary proceedings, of whatever may be regarded as a public
nuisance. Under this power it has been held that the State may order the destruction of a house
falling to decay or otherwise endangering the lives of passers-by; the demolition of such as are
in the path of a conflagration; the slaughter of diseased cattle; the destruction of decayed or
unwholesome food; the prohibition of wooden buildings in cities; the regulation of railways and
other means of public conveyance, and of interments in burial grounds; the restriction of
objectionable trades to certain localities; the compulsary vaccination of children; the
confinement of the insane or those afficted with contagious deceases; the restraint of vagrants,
beggars, and habitual drunkards; the suppression of obscene publications and houses of ill fame;
and the prohibition of gambling houses and places where intoxicating liquors are sold. Beyond
this, however, the State may interfere wherever the public interests demand it, and in this
particular a large discretion is necessarily vested in the legislature to determine, not only what
the interests of the public require, but what measures are necessary for the protection of such
interests. (Barbier vs. Connolly, 113 U. S., 27; Kidd vs. Pearson, 128 U. S., 1.) To justify the
State in thus interposing its authority in behalf of the public, it must appear, first, that the
interests of the public generally, as distinguished from those of a particular class, require such
interference; and, second, that the means are reasonably necessary for the accomplishment of
the purpose, and not unduly oppressive upon individuals. The legislature may not, under the
guise of protecting the public interests, arbitrarily interfere with private business, or impose
unusual and unnecessary restrictions upon lawful occupations. In other words, its determination
as to what is a proper exercise of its police powers is not final or conclusive, but is subject to the
supervision of the court.
From what has been said, we think it is clear that the enactment of the provisions of the statute under
consideration was required by "the interests of the public generally, as distinguished from those of a
particular class;" and that the prohibition of the slaughter of carabaos for human consumption, so long
as these animals are fit for agricultural work or draft purposes was a "reasonably necessary" limitation
on private ownership, to protect the community from the loss of the services of such animals by their
slaughter by improvident owners, tempted either by greed of momentary gain, or by a desire to enjoy
the luxury of animal food, even when by so doing the productive power of the community may be
measurably and dangerously affected.
Chief Justice Redfield, in Thorpe vs. Rutland & Burlington R. R. Co. (27 Vt., 140), said (p. 149) that
by this "general police power of the State, persons and property are subjected to all kinds of restraints
and burdens, in order to secure the general comfort, health, and prosperity of the State; of the perfect
right in the legislature to do which no question ever was, or, upon acknowledge and general principles,
ever can be made, so far as natural persons are concerned."
And Cooley in his "Constitutional Limitations" (6th ed., p. 738) says:
 It would be quite impossible to enumerate all the instances in which the police power is or may
be exercised, because the various cases in which the exercise by one individual of his rights
may conflict with a similar exercise by others, or may be detrimental to the public order or
safety, are infinite in number and in variety. And there are other cases where it becomes
necessary for the public authorities to interfere with the control by individuals of their property,
and even to destroy it, where the owners themselves have fully observed all their duties to their
fellows and to the State, but where, nevertheless, some controlling public necessity demands the
interference or destruction. A strong instance of this description is where it becomes necessary
to take, use, or destroy the private property of individuals to prevent the spreading of a fire, the
ravages of a pestilence, the advance of a hostile army, or any other great public calamity. Here
the individual is in no degree in fault, but his interest must yield to that "necessity" which
"knows no law." The establishment of limits within the denser portions of cities and villages
within which buildings constructed of inflammable materials shall not be erected or repaired
may also, in some cases, be equivalent to a destruction of private property; but regulations for
this purpose have been sustained notwithstanding this result. Wharf lines may also be
established for the general good, even though they prevent the owners of water-fronts from
building out on soil which constitutes private property. And, whenever the legislature deem it
necessary to the protection of a harbor to forbid the removal of stones, gravel, or sand from the
beach, they may establish regulations to that effect under penalties, and make them applicable to
the owners of the soil equally with other persons. Such regulations are only "a just restraint of
an injurious use of property, which the legislature have authority" to impose.
So a particular use of property may sometimes be forbidden, where, by a change of
circumstances, and without the fault of the power, that which was once lawful, proper, and
unobjectionable has now become a public nuisance, endangering the public health or the public
safety. Milldams are sometimes destroyed upon this grounds; and churchyards which prove, in
the advance of urban population, to be detrimental to the public health, or in danger of
becoming so, are liable to be closed against further use for cemetery purposes.
These citations from some of the highest judicial and text-book authorities in the United States clearly
indicate the wide scope and extent which has there been given to the doctrine us in our opinion that the
provision of the statute in question being a proper exercise of that power is not in violation of the terms
of section 5 of the Philippine Bill, which provide that "no law shall be enacted which shall deprive any
person of life, liberty, or property without due process of law," a provision which itself is adopted from
the Constitution of the United States, and is found in substance in the constitution of most if not all of
the States of the Union.
The judgment of conviction and the sentence imposed by the trial court should be affirmed with the
costs of this instance against the appellant. So ordered.
Arellano, C.J., Torres, Johnson, Moreland and Elliott, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION

G.R. No. L-106528 December 21, 1993

PHILIPPINE COLUMBIAN ASSOCIATION, petitioner,

vs.
THE HONORABLE DOMINGO D. PANIS as Judge, Regional Trial Court of Manila, Branch 41, THE HONORABLE RICARDO DIAZ, as Judge, Regional
Trial Court of Manila, Branch 27, the CITY OF MANILA, ANTONIO GONZALES, JR., KARLO BUTIONG, LEONARDO AQUINO, EDILBERTO LOPEZ,
ANTILANO FERRER, LEONCIA DAVILLO JAMERO, LUIS FERNANDEZ, PATRICIO DE GUZMAN, RICARDO DE LEON, VIRGILIO TORNERO, FAUSTO
FERNANDEZ, DOMINGO MEREN, EDUARDA JACINTO, MAGDALENA VELEZ, LUSITO ALMADRONES, MYRNA BARREDO EBREO, FULGENCIO
CORSINO, PEDRO VELASQUEZ, JUAN INOBAYA, NENITA ARCE, MAGNO ORTINEZ, ARMANDO PARAGAS, HIPOLITO ESTABILLO, FELICIANO
FAUSTINO, VIRGILIO EDIC, JOSE TINGZON, JOSUE MARIANO, MARIA YERO, MA. DOLORES QUIZON, ISIDERO TAGUILIG, CIRIACO MENDOZA,
JUAN ROMERO, JOSE LAGATA, FRUCTUSO PUSING, TEOFILO TERSOL, ANTONIO LACHICA, PIO RAJALES, REGINA VIERNES, JUAN ROMERO,
DOMINGO EDIC, EDUARDA GONZALES, PABLO QUIRANTE, LEONORA SANTIA, MARIA RIVERA, ELENA ARCE, LAZARO GOMEZ, PEDRO MENDOZA,
DOMINADOR ADAO, JUAN PANTERA, FRISCA MANDOT, SOCORRO SANTOS AND GLORIA JEBUNAN, respondents.

Angara, Abello, Concepcion, Regala & Cruz for petitioner.

Dennis A. Padernal for private respondents.

City Legal Officer for respondent City of Manila.

QUIASON, J.:

This is an appeal by certiorari to review: (1) the decision of the Court of Appeals in CA-G.R. SP No. 23338, which dismissed the petition for certiorari filed by
herein petitioner, assailing the orders of (a) respondent Judge Domingo D. Panis of the Regional Trial Court, Branch 41, Manila, in Civil Case No. 90-53531, and
(b) respondent Judge Ricardo D. Diaz, of the Regional Trial Court, Branch 27, Manila, in Civil Case No. 90-53346; and (2) its Resolution dated July 30, 1992,
which denied the motion for reconsideration of the decision.

Philippine Columbian Association, petitioner herein, is a non-stock, non-profit domestic corporation and is engaged in the business of providing sports and
recreational facilities for its members. Petitioner's office and facilities are located in the District of Paco, Manila, and adjacent thereto, is a parcel of land
consisting of 4,842.90 square meters owned by petitioner.

Private respondents are the actual occupants of the said parcel of land, while respondents Antonio Gonzales, Jr. and Karlo Butiong were duly-elected councilors
of the City of Manila.

In 1982, petitioner instituted ejectment proceedings against herein private respondents before the metropolitan Trial Court of Manila. Judgment was rendered
against the said occupants, ordering them to vacate the lot and pay reasonable compensation therefor. This judgment was affirmed by the Regional Trial Court,
the Court of Appeals and subsequently by the Supreme Court in G.R. No. 85262.

As a result of the favorable decision, petitioner filed before the Metropolitan Trial Court of Manila, a motion for execution of judgment, which was granted on April
9, 1990. A writ of demolition was later prayed and likewise issued by the same court on May 30, 1990.

On June 8, 1990, private respondents filed with the Regional Trial Court, Branch 27, Manila, a petition for injunction and prohibition with preliminary injunction
and restraining order against the Metropolitan Trial Court of Manila and petitioner herein (Civil Case No. 90-53346) to enjoin their ejectment from and the
demolition of their houses on the premises in question.

On June 28, 1990, the City of Manila filed a complaint docketed as Civil Case No. 90-53531 against petitioner before the Regional Trial Court, Branch 41, Manila,
for the expropriation of the 4,842.90 square meter lot subject of the ejectment proceedings in Civil Case No. 90-53346. Petitioner, in turn, filed a motion to
dismiss the complaint, alleging, inter alia, that the City of Manila had no power to expropriate private land; that the expropriation is not for public use and welfare;
that the expropriation is politically motivated; and, that the deposit of P2 million in the City of Manila representing the provisional value of the land, was insufficient
and was made under P.D. 1533, a law declared unconstitutional by the Supreme Court.

On September 14, 1990, the Regional Trial Court, Branch 41, Manila, denied petitioner's motion to dismiss and entered an order of condemnation declaring that
the expropriation proceeding was properly instituted in accordance with law. The Court also ordered the parties to submit, within five days, the names of their
respective nominees as commissioners to ascertain just compensation for the land in question.

Petitioner filed a motion for reconsideration of the order denying its motion to dismiss, and later a motion to defer compliance with the order directing the
submission of the names of nominees to be appointed commissioners. The City of Manila, however, filed an ex-parte motion for the issuance of a writ of
possession over the subject lot, mentioning the P2 million deposit with the Philippine National Bank, representing the provisional value of the land.

In separate orders dated October 5 and 8, 1990, the court issued the writ of possession, and at the same time, denied petitioner's motion to defer compliance
and motion for reconsideration.

On September 21, 1990, as a result of the expropriation proceedings, the Regional Trial Court, Branch 27, Manila, in Civil Case No. 90-53346 issued an order,
granting the writ of preliminary injunction prayed for by the private respondents. A motion for reconsideration filed by petitioner was denied.

Petitioner filed before the Court of Appeals a petition before the Court of Appeals a petition assailing the orders dated September 14, 1990, and October 5 and 8,
1990 of Branch 41 of the Regional Trial Court, and the Order dated September 21, 1990 of Branch 27 of the same court (CA-G.R. SP No. 23338). The Court of
Appeals rendered a Decision on November 31, 1992, denying the petition, and a Resolution on July 30, 1992, denying consideration thereof.

Hence, this petition.

The land subject of this case is the 4,842.90 square meter lot, which was formerly a part of the Fabie Estate. As early as November 11, 1966, the Municipal
Board of the City of Manila passed Ordinance No. 5971, seeking to expropriate the Fabie Estate. Through negotiated sales, the City of Manila acquired a total of
18,017.10 square meters of the estate, and thereafter subdivided the land into home lots and distributed the portions to the actual occupants thereof.

The remaining area of 4,842.90 square meters, more or less, was sold in 1977 by its owner, Dolores Fabie-Posadas, to petitioner. Since the time of the sale, the
lot has been occupied by private respondents. On 23, 1989, the City Council of Manila, with the approval of the Mayor, passed Ordinance No. 7704 for the
expropriation of the 4,842.90 square meter lot.

Petitioner claims that expropriation of the lot cannot prosper because:

(1) the City of Manila has no specific power to expropriate private property under the 1987 Constitution; and (2) assuming that it has such power, this was
exercised improperly and illegally in violation of the Public use requirement and petitioner's right to due process.

Petitioner argues that under the 1987 Constitution, there must be a law expressly authorizing local governments to undertake urban land reform (Art. XIII, Sec.
9).

Petitioner forgot that the Revised Charter of the City of Manila, R.A. No. 409, expressly authorizes the City of Manila to "condemn private property for public use"
(Sec. 3) and "to acquire private land . . . and subdivide the same into home lots for sale on easy terms to city residents" (Sec. 100).

The Revised Charter of the City of Manila expressly grants the City of Manila general powers over its territorial jurisdiction, including the power of eminent
domain, thus:

General powers. — The city may have a common seal and alter the same at pleasure, and may take, purchase, receive, hold, lease,
 convey, and dispose of real and personal property for the general interest of the city, condemn private property for public use , contract and
be contracted with, sue and be sued, and prosecute and defend to final judgment and execution, and exercise all the powers hereinafter
conferred (R.A. 409, Sec. 3; Emphasis supplied).

Section 100 of said Revised Charter authorizes the City of Manila to undertake urban land reform, thus:

Sec. 100. The City of Manila is authorized to acquire private lands in the city and to subdivide the same into home lots for sale on easy
terms for city residents, giving first priority to the bona fide tenants or occupants of said lands, and second priority to laborers and low-
salaried employees. For the purpose of this section, the city may raise the necessary funds by appropriations of general funds, by
securing loans or by issuing bonds, and, if necessary, may acquire the lands through expropriation proceedings in accordance with law,
with the approval of the President . . . (Emphasis supplied).

The City of Manila, acting through its legislative branch, has the express power to acquire private lands in the city and subdivide these lands into home lots for
sale to bona fide tenants or occupants thereof, and to laborers and low-salaried employees of the city. That only a few could actually benefit from the
expropriation of the property does not diminish its public use character. It is simply not possible to provide all at once land and shelter for all who need them
(Sumulong v. Guerrero, 154 SCRA 461 [1987] ).

Corollary to the expanded notion of public use, expropriation is not anymore confined to vast tracts of land and landed estates (Province of Camarines Sur v.
Court of Appeals, G.R. No. 103125, May 17, 1993; J.M. Tuason and Co., Inc. v. Land Tenure Administration, 31 SCRA 413 [1970] ). It is therefore of no moment
that the land sought to be expropriated in this case is less than half a hectare only (Pulido v. Court of Appeals, 122 SCRA 63 [1983]).

Through the years, the public use requirement in eminent domain has evolved into a flexible concept, influenced by changing conditions (Sumulong v. Guerrero,
supra; Manotok v. National Housing Authority, 150 SCRA 89 [1987]; Heirs of Juancho Ardona v. Reyes, 125 SCRA 220 [1983]). Public use now includes the
broader notion of indirect public benefit or advantage, including in particular, urban land reform and housing.

This concept is specifically recognized in the 1987 Constitution which provides that:

xxx xxx xxx

The state shall, by law, and for the common good, undertake, in cooperation with the private sector, a continuing program of urban land
reform and housing which will make available at affordable cost decent housing and basic services to underprivileged and homeless
citizens in urban centers and resettlement areas. It shall also promote adequate employment opportunities to such citizens. In the
implementation of such program the State shall respect the rights of small property owners (Art. XIII, Sec. 9; Emphasis supplied).

xxx xxx xxx

The due process requirement in the expropriation of subject lot has likewise been complied with. Although the motion to dismiss filed by petitioner was not set for
hearing as the court is required to do (National Housing Authority v. Valenzuela, 159 SCRA 396 [1988]), it never questioned the lack of hearing before the trial
and appellate courts. It is only now before us that petitioner raises the issue of due process.

Indeed, due process was afforded petitioner when it filed its motion for reconsideration of the trial court's order, denying its motion to dismiss.

The Court of Appeals, in determining whether grave abuse of discretion was committed by respondent courts, passed upon the very same issues raised by
petitioner in its motion to dismiss, which findings we uphold. Petitioner therefore cannot argue that it was denied its day in court.

The amount of P2 million representing the provisional value of the land is an amount not only fixed by the court, but accepted by both parties. The fact remains
that petitioner, albeit reluctantly, agreed to said valuation and is therefore estopped from assailing the same. It must be remembered that the valuation is merely
provisional. The parties still have the second stage in the proceedings in the proper court below to determine specifically the amount of just compensation to be
paid the landowner (Revised Rules of Court, Rule 67, Sec. 5; National Power Corporation v. Jocson, 206 SCRA 520 [1992] ).

WHEREFORE, the petition is DENIED for lack of merit.

SO ORDERED.

Cruz, Davide, Jr. and Bellosillo, JJ., concur.

The Lawphil Project - Arellano Law Foundation

Republic of the Philippines

SUPREME COURT
Manila

EN BANC
G.R. No. L-10572 December 21, 1915
FRANCIS A. CHURCHILL and STEWART TAIT, plaintiffs-appellees,
vs.
JAMES J. RAFFERTY, Collector of Internal Revenue, defendant-appellant.
Attorney-General Avanceña for appellant.
Aitken and DeSelms for appellees.

TRENT, J.:
The judgment appealed from in this case perpetually restrains and prohibits the defendant and his
deputies from collecting and enforcing against the plaintiffs and their property the annual tax
mentioned and described in subsection (b) of section 100 of Act No. 2339, effective July 1, 1914, and
from destroying or removing any sign, signboard, or billboard, the property of the plaintiffs, for the
sole reason that such sign, signboard, or billboard is, or may be, offensive to the sight; and decrees the
cancellation of the bond given by the plaintiffs to secure the issuance of the preliminary injunction
granted soon after the commencement of this action.
This case divides itself into two parts and gives rise to two main questions; (1) that relating to the
power of the court to restrain by injunction the collection of the tax complained of, and (2) that relating
to the validity of those provisions of subsection (b) of section 100 of Act No. 2339, conferring power
upon the Collector of Internal Revenue to remove any sign, signboard, or billboard upon the ground
that the same is offensive to the sight or is otherwise a nuisance.
The first question is one of the jurisdiction and is of vital importance to the Government. The sections
of Act No. 2339, which bear directly upon the subject, are 139 and 140. The first expressly forbids the
use of an injunction to stay the collection of any internal revenue tax; the second provides a remedy for
any wrong in connection with such taxes, and this remedy was intended to be exclusive, thereby
precluding the remedy by injunction, which remedy is claimed to be constitutional. The two sections,
then, involve the right of a dissatisfied taxpayers to use an exceptional remedy to test the validity of
any tax or to determine any other question connected therewith, and the question whether the remedy
by injunction is exceptional.
Preventive remedies of the courts are extraordinary and are not the usual remedies. The origin and
history of the writ of injunction show that it has always been regarded as an extraordinary, preventive
remedy, as distinguished from the common course of the law to redress evils after they have been
consummated. No injunction issues as of course, but is granted only upon the oath of a party and when
there is no adequate remedy at law. The Government does, by section 139 and 140, take away the
preventive remedy of injunction, if it ever existed, and leaves the taxpayer, in a contest with it, the
same ordinary remedial actions which prevail between citizen and citizen. The Attorney-General, on
behalf of the defendant, contends that there is no provisions of the paramount law which prohibits such
a course. While, on the other hand, counsel for plaintiffs urge that the two sections are unconstitutional
because (a) they attempt to deprive aggrieved taxpayers of all substantial remedy for the protection of
their property, thereby, in effect, depriving them of their property without due process of law, and (b)
they attempt to diminish the jurisdiction of the courts, as conferred upon them by Acts Nos. 136 and
190, which jurisdiction was ratified and confirmed by the Act of Congress of July 1, 1902.
In the first place, it has been suggested that section 139 does not apply to the tax in question because
the section, in speaking of a "tax," means only legal taxes; and that an illegal tax (the one complained
of) is not a tax, and, therefore, does not fall within the inhibition of the section, and may be restrained
by injunction. There is no force in this suggestion. The inhibition applies to all internal revenue taxes
imposes, or authorized to be imposed, by Act No. 2339. (Snyder vs. Marks, 109 U.S., 189.) And,
furthermore, the mere fact that a tax is illegal, or that the law, by virtue of which it is imposed, is
unconstitutional, does not authorize a court of equity to restrain its collection by injunction. There must
be a further showing that there are special circumstances which bring the case under some well
recognized head of equity jurisprudence, such as that irreparable injury, multiplicity of suits, or a cloud
upon title to real estate will result, and also that there is, as we have indicated, no adequate remedy at
law. This is the settled law in the United States, even in the absence of statutory enactments such as
sections 139 and 140. (Hannewinkle vs. Mayor, etc., of Georgetown, 82 U.S., 547; Indiana Mfg. Co.
vs. Koehne, 188 U.S., 681; Ohio Tax cases, 232 U. S., 576, 587; Pittsburgh C. C. & St. L. R. Co. vs.
Board of Public Works, 172 U. S., 32; Shelton vs. Plat, 139 U.S., 591; State Railroad Tax Cases, 92 U.
S., 575.) Therefore, this branch of the case must be controlled by sections 139 and 140, unless the same
be held unconstitutional, and consequently, null and void.
The right and power of judicial tribunals to declare whether enactments of the legislature exceed
 the constitutional limitations and are invalid has always been considered a grave responsibility,
as well as a solemn duty. The courts invariably give the most careful consideration to questions
involving the interpretation and application of the Constitution, and approach constitutional
questions with great deliberation, exercising their power in this respect with the greatest
possible caution and even reluctance; and they should never declare a statute void, unless its
invalidity is, in their judgment, beyond reasonable doubt. To justify a court in pronouncing a
legislative act unconstitutional, or a provision of a state constitution to be in contravention of
the Constitution of the United States, the case must be so clear to be free from doubt, and the
conflict of the statute with the constitution must be irreconcilable, because it is but a decent
respect to the wisdom, the integrity, and the patriotism of the legislative body by which any law
is passed to presume in favor of its validity until the contrary is shown beyond reasonable
doubt. Therefore, in no doubtful case will the judiciary pronounce a legislative act to be
contrary to the constitution. To doubt the constitutionality of a law is to resolve the doubt in
favor of its validity. (6 Ruling Case Law, secs. 71, 72, and 73, and cases cited therein.)
It is also the settled law in the United States that "due process of law" does not always require, in
respect to the Government, the same process that is required between citizens, though it generally
implies and includes regular allegations, opportunity to answer, and a trial according to some well
settled course of judicial proceedings. The case with which we are dealing is in point. A citizen's
property, both real and personal, may be taken, and usually is taken, by the government in payment of
its taxes without any judicial proceedings whatever. In this country, as well as in the United States, the
officer charged with the collection of taxes is authorized to seize and sell the property of delinquent
taxpayers without applying to the courts for assistance, and the constitutionality of the law authorizing
this procedure never has been seriously questioned. (City of Philadelphia vs. [Diehl] The Collector, 5
Wall., 720; Nicholl vs. U.S., 7 Wall., 122, and cases cited.) This must necessarily be the course, because
it is upon taxation that the Government chiefly relies to obtain the means to carry on its operations, and
it is of the utmost importance that the modes adopted to enforce the collection of the taxes levied
should be summary and interfered with as little as possible. No government could exist if every
litigious man were permitted to delay the collection of its taxes. This principle of public policy must be
constantly borne in mind in determining cases such as the one under consideration.
With these principles to guide us, we will proceed to inquire whether there is any merit in the two
propositions insisted upon by counsel for the plaintiffs. Section 5 of the Philippine Bill provides: "That
no law shall be enacted in said Islands which shall deprive any person of life, liberty, or property
without due process of law, or deny to any person therein the equal protection of the law."
The origin and history of these provisions are well-known. They are found in substance in the
Constitution of the United States and in that of ever state in the Union.
Section 3224 of the Revised Statutes of the United States, effective since 1867, provides that: "No suit
for the purpose of restraining the assessment or collection of any tax shall be maintained in any court."
Section 139, with which we have been dealing, reads: "No court shall have authority to grant an
injunction to restrain the collection of any internal-revenue tax."
A comparison of these two sections show that they are essentially the same. Both expressly prohibit the
restraining of taxes by injunction. If the Supreme Court of the United States has clearly and definitely
held that the provisions of section 3224 do not violate the "due process of law" and "equal protection of
the law" clauses in the Constitution, we would be going too far to hold that section 139 violates those
same provisions in the Philippine Bill. That the Supreme Court of the United States has so held, cannot
be doubted.
In Cheatham vs. United States (92 U.S., 85,89) which involved the validity of an income tax levied by
an act of Congress prior to the one in issue in the case of Pollock vs. Farmers' Loan & Trust Co. (157
U.S., 429) the court, through Mr. Justice Miller, said: "If there existed in the courts, state or National,
any general power of impeding or controlling the collection of taxes, or relieving the hardship incident
to taxation, the very existence of the government might be placed in the power of a hostile judiciary.
(Dows vs. The City of Chicago, 11 Wall., 108.) While a free course of remonstrance and appeal is
allowed within the departments before the money is finally exacted, the General Government has
wisely made the payment of the tax claimed, whether of customs or of internal revenue, a condition
precedent to a resort to the courts by the party against whom the tax is assessed. In the internal revenue
branch it has further prescribed that no such suit shall be brought until the remedy by appeal has been
tried; and, if brought after this, it must be within six months after the decision on the appeal. We regard
this as a condition on which alone the government consents to litigate the lawfulness of the original tax.
It is not a hard condition. Few governments have conceded such a right on any condition. If the
compliance with this condition requires the party aggrieved to pay the money, he must do it."
Again, in State Railroad Tax Cases (92 U.S., 575, 613), the court said: "That there might be no
misunderstanding of the universality of this principle, it was expressly enacted, in 1867, that "no suit
for the purpose of restraining the assessment or collection of any tax shall be maintained in any court."
(Rev, Stat., sec. 3224.) And though this was intended to apply alone to taxes levied by the United
States, it shows the sense of Congress of the evils to be feared if courts of justice could, in any case,
interfere with the process of collecting taxes on which the government depends for its continued
existence. It is a wise policy. It is founded in the simple philosophy derived from the experience of
ages, that the payment of taxes has to be enforced by summary and stringent means against a reluctant
and often adverse sentiment; and to do this successfully, other instrumentalities and other modes of
procedure are necessary, than those which belong to courts of justice."
And again, in Snyder vs. Marks (109 U.S., 189), the court said: "The remedy of a suit to recover back
the tax after it is paid is provided by statute, and a suit to restrain its collection is forbidden. The
remedy so given is exclusive, and no other remedy can be substituted for it. Such has been the current
of decisions in the Circuit Courts of the United States, and we are satisfied it is a correct view of the
law."itc-a1f
In the consideration of the plaintiffs' second proposition, we will attempt to show (1) that the Philippine
courts never have had, since the American occupation, the power to restrain by injunction the collection
of any tax imposed by the Insular Government for its own purpose and benefit, and (2) that assuming
that our courts had or have such power, this power has not been diminished or curtailed by sections 139
and 140.
We will first review briefly the former and present systems of taxation. Upon the American occupation
of the Philippine, there was found a fairly complete system of taxation. This system was continued in
force by the military authorities, with but few changes, until the Civil Government assumed charge of
the subject. The principal sources of revenue under the Spanish regime were derived from customs
receipts, the so-called industrial taxes, the urbana taxes, the stamp tax, the personal cedula tax, and the
sale of the public domain. The industrial and urbana taxes constituted practically an income tax of some
5 per cent on the net income of persons engaged in industrial and commercial pursuits and on the
income of owners of improved city property. The sale of stamped paper and adhesive stamp tax. The
cedula tax was a graduated tax, ranging from nothing up to P37.50. The revenue derived from the sale
of the public domain was not considered a tax. The American authorities at once abolished the cedula
tax, but later restored it in a modified form, charging for each cedula twenty centavos, an amount which
was supposed to be just sufficient to cover the cost of issuance. The urbana tax was abolished by Act
No. 223, effective September 6, 1901.
The "Municipal Code" (Act No. 82) and the Provincial Government Act (No. 83), both enacted in
1901, authorize municipal councils and provincial boards to impose an ad valorem tax on real estate.
The Municipal Code did not apply to the city of Manila. This city was given a special charter (Act No.
183), effective August 30, 1901; Under this charter the Municipal Board of Manila is authorized and
empowered to impose taxes upon real estate and, like municipal councils, to license and regulate
certain occupations. Customs matters were completely reorganized by Act No. 355, effective at the port
of Manila on February 7, 1902, and at other ports in the Philippine Islands the day after the receipt of a
certified copy of the Act. The Internal Revenue Law of 1904 (Act No. 1189), repealed all existing laws,
ordinances, etc., imposing taxes upon the persons, objects, or occupations taxed under that act, and all
industrial taxes and stamp taxes imposed under the Spanish regime were eliminated, but the industrial
tax was continued in force until January 1, 1905. This Internal Revenue Law did not take away from
municipal councils, provincial boards, and the Municipal Board of the city of Manila the power to
impose taxes upon real estate. This Act (No. 1189), with its amendments, was repealed by Act No.
2339, an act "revising and consolidating the laws relative to internal revenue."
Section 84 of Act No. 82 provides that "No court shall entertain any suit assailing the validity of a tax
assessed under this act until the taxpayer shall have paid, under protest, the taxes assessed against
him, . . . ."
This inhibition was inserted in section 17 of Act No. 83 and applies to taxes imposed by provincial
boards. The inhibition was not inserted in the Manila Charter until the passage of Act No. 1793,
effective October 12, 1907. Act No. 355 expressly makes the payment of the exactions claimed a
condition precedent to a resort to the courts by dissatisfied importers. Section 52 of Act No. 1189
provides "That no courts shall have authority to grant an injunction restraining the collection of any
taxes imposed by virtue of the provisions of this Act, but the remedy of the taxpayer who claims that he
is unjustly assessed or taxed shall be by payment under protest of the sum claimed from him by the
Collector of Internal Revenue and by action to recover back the sum claimed to have been illegally
collected."
Sections 139 and 140 of Act No. 2339 contain, as we have indicated, the same prohibition and remedy.
The result is that the courts have been expressly forbidden, in every act creating or imposing taxes or
imposts enacted by the legislative body of the Philippines since the American occupation, to entertain
any suit assailing the validity of any tax or impost thus imposed until the tax shall have been paid under
protest. The only taxes which have not been brought within the express inhibition were those included
in that part of the old Spanish system which completely disappeared on or before January 1, 1905, and
possibly the old customs duties which disappeared in February, 1902.
Section 56 of the Organic Act (No. 136), effective June 16, 1901, provides that "Courts of First
Instance shall have original jurisdiction:
xxx xxx xxx
2. In all civil actions which involve the ... legality of any tax, impost, or assessment, . . . .
xxx xxx xxx
7. Said courts and their judges, or any of them, shall have power to issue writs of injunction,
mandamus, certiorari, prohibition, quo warranto, and habeas corpus in their respective
provinces and districts, in the manner provided in the Code of Civil Procedure.
The provisions of the Code of Civil Procedure (Act No. 190), effective October 1, 1901, which deals
with the subject of injunctions, are sections 162 to 172, inclusive. Injunctions, as here defined, are of
two kinds; preliminary and final. The former may be granted at any time after the commencement of
the action and before final judgment, and the latter at the termination of the trial as the relief or part of
the relief prayed for (sec. 162). Any judge of the Supreme Court may grant a preliminary injunction in
any action pending in that court or in any Court of First Instance. A preliminary injunction may also be
granted by a judge of the Court of First Instance in actions pending in his district in which he has
original jurisdiction (sec. 163). But such injunctions may be granted only when the complaint shows
facts entitling the plaintiff to the relief demanded (sec. 166), and before a final or permanent injunction
can be granted, it must appear upon the trial of the action that the plaintiff is entitled to have
commission or continuance of the acts complained of perpetually restrained (sec. 171). These
provisions authorize the institution in Courts of First Instance of what are known as "injunction suits,"
the sole object of which is to obtain the issuance of a final injunction. They also authorize the granting
of injunctions as aiders in ordinary civil actions. We have defined in Davesa vs. Arbes (13 Phil. Rep.,
273), an injunction to be "A "special remedy" adopted in that code (Act 190) from American practice,
and originally borrowed from English legal procedure, which was there issued by the authority and
under the seal of a court of equity, and limited, as in other cases where equitable relief is sought, to
those cases where there is no "plain, adequate, and complete remedy at law,"which will not be granted
while the rights between the parties are undetermined, except in extraordinary cases where material and
irreparable injury will be done,"which cannot be compensated in damages . . .
By paragraph 2 of section 56 of Act No. 136, supra, and the provisions of the various subsequent Acts
heretofore mentioned, the Insular Government has consented to litigate with aggrieved persons the
validity of any original tax or impost imposed by it on condition that this be done in ordinary civil
actions after the taxes or exactions shall have been paid. But it is said that paragraph 2 confers original
jurisdiction upon Courts of First Instance to hear and determine "all civil actions" which involve the
validity of any tax, impost or assessment, and that if the all-inclusive words "all" and "any" be given
their natural and unrestricted meaning, no action wherein that question is involved can arise over which
such courts do not have jurisdiction. (Barrameda vs. Moir, 25 Phil. Rep., 44.) This is true. But the term
"civil actions" had its well defined meaning at the time the paragraph was enacted. The same legislative
body which enacted paragraph 2 on June 16, 1901, had, just a few months prior to that time, defined
the only kind of action in which the legality of any tax imposed by it might be assailed. (Sec. 84, Act
82, enacted January 31, 1901, and sec. 17, Act No. 83, enacted February 6, 1901.) That kind of action
being payment of the tax under protest and an ordinary suit to recover and no other, there can be no
doubt that Courts of First Instance have jurisdiction over all such actions. The subsequent legislation on
the same subject shows clearly that the Commission, in enacting paragraph 2, supra, did not intend to
change or modify in any way section 84 of Act No. 82 and section 17 of Act No. 83, but, on the
contrary, it was intended that "civil actions," mentioned in said paragraph, should be understood to
mean, in so far as testing the legality of taxes were concerned, only those of the kind and character
provided for in the two sections above mentioned. It is also urged that the power to restrain by
injunction the collection of taxes or imposts is conferred upon Courts of First Instance by paragraph 7
of section 56, supra. This paragraph does empower those courts to grant injunctions, both preliminary
and final, in any civil action pending in their districts, provided always, that the complaint shows facts
entitling the plaintiff to the relief demanded. Injunction suits, such as the one at bar, are "civil actions,"
but of a special or extraordinary character. It cannot be said that the Commission intended to give a
broader or different meaning to the word "action," used in Chapter 9 of the Code of Civil Procedure in
connection with injunctions, than it gave to the same word found in paragraph 2 of section 56 of the
Organic Act. The Insular Government, in exercising the power conferred upon it by the Congress of the
United States, has declared that the citizens and residents of this country shall pay certain specified
taxes and imposts. The power to tax necessarily carries with it the power to collect the taxes. This being
true, the weight of authority supports the proposition that the Government may fix the conditions upon
which it will consent to litigate the validity of its original taxes. (Tennessee vs. Sneed, 96 U.S., 69.)
We must, therefore, conclude that paragraph 2 and 7 of section 56 of Act No. 136, construed in the light
of the prior and subsequent legislation to which we have referred, and the legislative and judicial
history of the same subject in the United States with which the Commission was familiar, do not
empower Courts of firs Instance to interfere by injunction with the collection of the taxes in question in
this case.1awphil.net
If we are in error as to the scope of paragraph 2 and 7, supra, and the Commission did intend to confer
the power upon the courts to restrain the collection of taxes, it does not necessarily follow that this
power or jurisdiction has been taken away by section 139 of Act No. 2339, for the reason that all agree
that an injunction will not issue in any case if there is an adequate remedy at law. The very nature of the
writ itself prevents its issuance under such circumstances. Legislation forbidding the issuing of
injunctions in such cases is unnecessary. So the only question to be here determined is whether the
remedy provided for in section 140 of Act No. 2339 is adequate. If it is, the writs which form the basis
of this appeal should not have been issued. If this is the correct view, the authority to issue injunctions
will not have been taken away by section 139, but rendered inoperative only by reason of an adequate
remedy having been made available.
The legislative body of the Philippine Islands has declared from the beginning (Act No. 82) that
payment under protest and suit to recover is an adequate remedy to test the legality of any tax or
impost, and that this remedy is exclusive. Can we say that the remedy is not adequate or that it is not
exclusive, or both? The plaintiffs in the case at bar are the first, in so far as we are aware, to question
either the adequacy or exclusiveness of this remedy. We will refer to a few cases in the United States
where statutes similar to sections 139 and 140 have been construed and applied.
In May, 1874, one Bloomstein presented a petition to the circuit court sitting in Nashville, Tennessee,
stating that his real and personal property had been assessed for state taxes in the year 1872 to the
amount of $132.60; that he tendered to the collector this amount in "funds receivable by law for such
purposes;" and that the collector refused to receive the same. He prayed for an alternative writ of
mandamus to compel the collector to receive the bills in payment for such taxes, or to show cause to
the contrary. To this petition the collector, in his answer, set up the defense that the petitioner's suit was
expressly prohibited by the Act of the General Assembly of the State of Tennessee, passed in 1873. The
petition was dismissed and the relief prayed for refused. An appeal to the supreme court of the State
resulted in the affirmance of the judgment of the lower court. The case was then carried to the Supreme
Court of the United States (Tennessee vs. Sneed, 96 U. S., 69), where the judgment was again affirmed.
The two sections of the Act of [March 21,] 1873, drawn in question in that cases, read as follows:
1. That in all cases in which an officer, charged by law with the collection of revenue due the
State, shall institute any proceeding, or take any steps for the collection of the same, alleged or
claimed to be due by said officer from any citizen, the party against whom the proceeding or
step is taken shall, if he conceives the same to be unjust or illegal, or against any statute or
clause of the Constitution of the State, pay the same under protest; and, upon his making said
payment, the officer or collector shall pay such revenue into the State Treasury, giving notice at
the time of payment to the Comptroller that the same was paid under protest; and the party
paying said revenue may, at any time within thirty days after making said payment, and not
longer thereafter, sue the said officer having collected said sum, for the recovery thereof. And
the same may be tried in any court having the jurisdiction of the amount and parties; and, if it be
determined that the same was wrongfully collected, as not being due from said party to the
State, for any reason going to the merits of the same, then the court trying the case may certify
of record that the same was wrongfully paid and ought to be refunded; and thereupon the
Comptroller shall issue his warrant for the same, which shall be paid in preference to other
claims on the Treasury.
2. That there shall be no other remedy, in any case of the collection of revenue, or attempt to
 collect revenue illegally, or attempt to collect revenue in funds only receivable by said officer
under the law, the same being other or different funds than such as the tax payer may tender, or
claim the right to pay, than that above provided; and no writ for the prevention of the collection
of any revenue claimed, or to hinder or delay the collection of the same, shall in anywise issue,
either injunction, supersedeas, prohibition, or any other writ or process whatever; but in all
cases in which, for any reason, any person shall claim that the tax so collected was wrongfully
or illegally collected, the remedy for said party shall be as above provided, and in no other
manner."
In discussing the adequacy of the remedy provided by the Tennessee Legislature, as above set forth, the
Supreme Court of the United States, in the case just cited, said: "This remedy is simple and effective. A
suit at law to recover money unlawfully exacted is as speedy, as easily tried, and less complicated than
a proceeding by mandamus. ... In revenue cases, whether arising upon its (United States) Internal
Revenue Laws or those providing for the collection of duties upon foreign imports, it (United States)
adopts the rule prescribed by the State of Tennessee. It requires the contestant to pay the amount as
fixed by the Government, and gives him power to sue the collector, and in such suit to test the legality
of the tax. There is nothing illegal or even harsh in this. It is a wise and reasonable precaution for the
security of the Government."
Thomas C. Platt commenced an action in the Circuit Court of the United States for the Eastern District
of Tennessee to restrain the collection of a license tax from the company which he represented. The
defense was that sections 1 and 2 of the Act of 1873, supra, prohibited the bringing of that suit. This
case also reached the Supreme Court of the United States. (Shelton vs. Platt, 139 U. 591.) In speaking
of the inhibitory provisions of sections 1 and 2 of the Act of 1873, the court said: "This Act has been
sanctioned and applied by the Courts of Tennessee. (Nashville vs. Smith, 86 Tenn., 213; Louisville &
N. R. Co. vs. State, 8 Heisk., 663, 804.) It is, as counsel observe, similar to the Act of Congress
forbidding suit for the purpose of restraining the assessment or collection of taxes under the Internal
Revenue Laws, in respect to which this court held that the remedy by suit to recover back the tax after
payment, provided for by the Statute, was exclusive. (Snyder vs. Marks, of this character has been
called for by the embarrassments resulting from the improvident employment of the writ of injunction
in arresting the collection of the public revenue; and, even in its absence, the strong arm of the court of
chancery ought not to be interposed in that direction except where resort to that court is grounded upon
the settled principles which govern its jurisdiction."
In Louisville & N.R. Co. vs. State (8 Heisk. [64 Tenn.], 663, 804), cited by the Supreme Court of the
United States in Shelton vs. Platt, supra, the court said: "It was urged that this statute (sections 1 and 2
of the Act of 1873, supra) is unconstitutional and void, as it deprives the citizen of the remedy by
certiorari, guaranteed by the organic law."
By the 10th section of the sixth article of the Constitution, [Tennessee] it is provided that: "The judges
or justices of inferior courts of law and equity shall have power in all civil cases to issue writs of
certiorari, to remove any cause, or the transcript of the record thereof, from any inferior jurisdiction
into such court of law, on sufficient cause, supported by oath or affirmation."
The court held the act valid as not being in conflict with these provisions of the State constitution.
In Eddy vs. The Township of Lee (73 Mich., 123), the complainants sought to enjoin the collection of
certain taxes for the year 1886. The defendants, in support of their demurrer, insisted that the remedy
by injunction had been taken away by section 107 of the Act of 1885, which section reads as follows:
"No injunction shall issue to stay proceedings for the assessment or collection of taxes under this Act."
It was claimed by the complainants that the above quoted provisions of the Act of 1885 were
unconstitutional and void as being in conflict with article 6, sec. 8, of the Constitution, which provides
that: "The circuit courts shall have original jurisdiction in all matters, civil and criminal, not excepted
in this Constitution, and not prohibited by law. ... They shall also have power to issue writs of habeas
corpus, mandamus, injunction, quo warranto, certiorari, and other writs necessary to carry into effect
their orders, judgments, and decrees."
Mr. Justice Champlin, speaking for the court, said: "I have no doubt that the Legislature has the
constitutional authority, where it has provided a plain, adequate, and complete remedy at law to recover
back taxes illegally assessed and collected, to take away the remedy by injunction to restrain their
collection."
Section 9 of the Philippine Bill reads in part as follows: "That the Supreme Court and the Courts of
First Instance of the Philippine Islands shall possess and exercise jurisdiction as heretofore provided
and such additional jurisdiction as shall hereafter be prescribed by the Government of said Islands,
subject to the power of said Government to change the practice and method of procedure."
It will be seen that this section has not taken away from the Philippine Government the power to
change the practice and method of procedure. If sections 139 and 140, considered together, and this
must always be done, are nothing more than a mode of procedure, then it would seem that the
Legislature did not exceed its constitutional authority in enacting them. Conceding for the moment that
the duly authorized procedure for the determination of the validity of any tax, impost, or assessment
was by injunction suits and that this method was available to aggrieved taxpayers prior to the passage
of Act No. 2339, may the Legislature change this method of procedure? That the Legislature has the
power to do this, there can be no doubt, provided some other adequate remedy is substituted in lieu
thereof. In speaking of the modes of enforcing rights created by contracts, the Supreme Court of the
United States, in Tennessee vs. Sneed, supra, said: "The rule seems to be that in modes of proceedings
and of forms to enforce the contract the Legislature has the control, and may enlarge, limit or alter
them, provided that it does not deny a remedy, or so embarrass it with conditions and restrictions as
seriously to impair the value of the right."
In that case the petitioner urged that the Acts of 1873 were laws impairing the obligation of the contract
contained in the charter of the Bank of Tennessee, which contract was entered into with the State in
1838. It was claimed that this was done by placing such impediments and obstructions in the way of its
enforcement, thereby so impairing the remedies as practically to render the obligation of no value. In
disposing of this contention, the court said: "If we assume that prior to 1873 the relator had authority to
prosecute his claim against the State by mandamus, and that by the statutes of that year the further use
of that form was prohibited to him, the question remains. whether an effectual remedy was left to him
or provided for him. We think the regulation of the statute gave him an abundant means of enforcing
such right as he possessed. It provided that he might pay his claim to the collector under protest, giving
notice thereof to the Comptroller of the Treasury; that at any time within thirty days thereafter he might
sue the officer making the collection; that the case should be tried by any court having jurisdiction and,
if found in favor of the plaintiff on the merits, the court should certify that the same was wrongfully
paid and ought to be refunded and the Comptroller should thereupon issue his warrant therefor, which
should be paid in preference to other claim on the Treasury."
But great stress is laid upon the fact that the plaintiffs in the case under consideration are unable to pay
the taxes assessed against them and that if the law is enforced, they will be compelled to suspend
business. This point may be best answered by quoting from the case of Youngblood vs. Sexton (32
Mich., 406), wherein Judge Cooley, speaking for the court, said: "But if this consideration is sufficient
to justify the transfer of a controversy from a court of law to a court of equity, then every controversy
where money is demanded may be made the subject of equitable cognizance. To enforce against a
dealer a promissory note may in some cases as effectually break up his business as to collect from him
a tax of equal amount. This is not what is known to the law as irreparable injury. The courts have never
recognized the consequences of the mere enforcement of a money demand as falling within that
category."
Certain specified sections of Act No. 2339 were amended by Act No. 2432, enacted December 23,
1914, effective January 1, 1915, by imposing increased and additional taxes. Act No. 2432 was
amended, were ratified by the Congress of the United States on March 4, 1915. The opposition
manifested against the taxes imposed by Acts Nos. 2339 and 2432 is a matter of local history. A great
many business men thought the taxes thus imposed were too high. If the collection of the new taxes on
signs, signboards, and billboards may be restrained, we see no well-founded reason why injunctions
cannot be granted restraining the collection of all or at least a number of the other increased taxes. The
fact that this may be done, shows the wisdom of the Legislature in denying the use of the writ of
injunction to restrain the collection of any tax imposed by the Acts. When this was done, an equitable
remedy was made available to all dissatisfied taxpayers.
The question now arises whether, the case being one of which the court below had no jurisdiction, this
court, on appeal, shall proceed to express an opinion upon the validity of provisions of subsection (b)
of section 100 of Act No. 2339, imposing the taxes complained of. As a general rule, an opinion on the
merits of a controversy ought to be declined when the court is powerless to give the relief demanded.
But it is claimed that this case is, in many particulars, exceptional. It is true that it has been argued on
the merits, and there is no reason for any suggestion or suspicion that it is not a bona fide controversy.
The legal points involved in the merits have been presented with force, clearness, and great ability by
the learned counsel of both sides. If the law assailed were still in force, we would feel that an opinion
on its validity would be justifiable, but, as the amendment became effective on January 1, 1915, we
think it advisable to proceed no further with this branch of the case.
The next question arises in connection with the supplementary complaint, the object of which is to
enjoin the Collector of Internal Revenue from removing certain billboards, the property of the plaintiffs
located upon private lands in the Province of Rizal. The plaintiffs allege that the billboards here in
question "in no sense constitute a nuisance and are not deleterious to the health, morals, or general
welfare of the community, or of any persons." The defendant denies these allegations in his answer and
claims that after due investigation made upon the complaints of the British and German Consuls, he
"decided that the billboard complained of was and still is offensive to the sight, and is otherwise a
nuisance." The plaintiffs proved by Mr. Churchill that the "billboards were quite a distance from the
road and that they were strongly built, not dangerous to the safety of the people, and contained no
advertising matter which is filthy, indecent, or deleterious to the morals of the community." The
defendant presented no testimony upon this point. In the agreed statement of facts submitted by the
parties, the plaintiffs "admit that the billboards mentioned were and still are offensive to the sight."
The pertinent provisions of subsection (b) of section 100 of Act No. 2339 read: "If after due
investigation the Collector of Internal Revenue shall decide that any sign, signboard, or billboard
displayed or exposed to public view is offensive to the sight or is otherwise a nuisance, he may by
summary order direct the removal of such sign, signboard, or billboard, and if same is not removed
within ten days after he has issued such order he my himself cause its removal, and the sign, signboard,
or billboard shall thereupon be forfeited to the Government, and the owner thereof charged with the
expenses of the removal so effected. When the sign, signboard, or billboard ordered to be removed as
herein provided shall not comply with the provisions of the general regulations of the Collector of
Internal Revenue, no rebate or refund shall be allowed for any portion of a year for which the tax may
have been paid. Otherwise, the Collector of Internal Revenue may in his discretion make a
proportionate refund of the tax for the portion of the year remaining for which the taxes were paid. An
appeal may be had from the order of the Collector of Internal Revenue to the Secretary of Finance and
Justice whose decision thereon shall be final."
The Attorney-General, on behalf of the defendant, says: "The question which the case presents under
this head for determination, resolves itself into this inquiry: Is the suppression of advertising signs
displayed or exposed to public view, which are admittedly offensive to the sight, conducive to the
public interest?"
And cunsel for the plaintiffs states the question thus: "We contend that that portion of section 100 of
Act No. 2339, empowering the Collector of Internal Revenue to remove billboards as nuisances, if
objectionable to the sight, is unconstitutional, as constituting a deprivation of property without due
process of law."
From the position taken by counsel for both sides, it is clear that our inquiry is limited to the question
whether the enactment assailed by the plaintiffs was a legitimate exercise of the police power of the
Government; for all property is held subject to that power.
As a consequence of the foregoing, all discussion and authorities cited, which go to the power of the
state to authorize administrative officers to find, as a fact, that legitimate trades, callings, and
businesses are, under certain circumstances, statutory nuisances, and whether the procedure prescribed
for this purpose is due process of law, are foreign to the issue here presented.
There can be no doubt that the exercise of the police power of the Philippine Government belongs to
the Legislature and that this power is limited only by the Acts of Congress and those fundamentals
principles which lie at the foundation of all republican forms of government. An Act of the Legislature
which is obviously and undoubtedly foreign to any of the purposes of the police power and interferes
with the ordinary enjoyment of property would, without doubt, be held to be invalid. But where the Act
is reasonably within a proper consideration of and care for the public health, safety, or comfort, it
should not be disturbed by the courts. The courts cannot substitute their own views for what is proper
in the premises for those of the Legislature. In Munn vs. Illinois (94 U.S., 113), the United States
Supreme Court states the rule thus: "If no state of circumstances could exist to justify such statute, then
we may declare this one void because in excess of the legislative power of this state; but if it could, we
must presume it did. Of the propriety of legislative interference, within the scope of the legislative
power, a legislature is the exclusive judge."
This rule very fully discussed and declared in Powell vs. Pennsylvania (127 U.S., 678) — "oleo-
margarine" case. (See also Crowley vs. Christensen, 137 U.S., 86, 87; Camfield vs. U.S., 167 U.S.,
518.) While the state may interfere wherever the public interests demand it, and in this particular a
large discretion is necessarily vested in the legislature to determine, not only what the interest of the
public require, but what measures are necessary for the protection of such interests; yet, its
determination in these matters is not final or conclusive, but is subject to the supervision of the courts.
(Lawton vs. Steele, 152 U.S., 133.) Can it be said judicially that signs, signboards, and billboards,
which are admittedly offensive to the sight, are not with the category of things which interfere with the
public safety, welfare, and comfort, and therefore beyond the reach of the police power of the
Philippine Government?
The numerous attempts which have been made to limit by definition the scope of the police power are
only interesting as illustrating its rapid extension within comparatively recent years to points heretofore
deemed entirely within the field of private liberty and property rights. Blackstone's definition of the
police power was as follows: "The due regulation and domestic order of the kingdom, whereby the
individuals of the state, like members of a well governed family, are bound to conform their general
behavior to the rules of propriety, good neigborhood, and good manners, to be decent, industrious, and
inoffensive in their respective stations." (Commentaries, vol. 4, p. 162.)
Chanceller Kent considered the police power the authority of the state "to regulate unwholesome
trades, slaughter houses, operations offensive to the senses." Chief Justice Shaw of Massachusetts
defined it as follows: "The power vested in the legislature by the constitution to make, ordain, and
establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with penalties
or without, not repugnant to the constitution, as they shall judge to be for the good and welfare of the
commonwealth, and of the subjects of the same." (Com. vs. Alger, 7 Cush., 53.)
In the case of Butchers' Union Slaughter-house, etc. Co. vs. Crescent City Live Stock Landing, etc. Co.
(111 U.S., 746), it was suggested that the public health and public morals are matters of legislative
concern of which the legislature cannot divest itself. (See State vs. Mountain Timber Co. [1913], 75
Wash., 581, where these definitions are collated.)
In Champer vs. Greencastle (138 Ind., 339), it was said: "The police power of the State, so far, has not
received a full and complete definition. It may be said, however, to be the right of the State, or state
functionary, to prescribe regulations for the good order, peace, health, protection, comfort, convenience
and morals of the community, which do not ... violate any of the provisions of the organic law."
(Quoted with approval in Hopkins vs. Richmond [Va., 1915], 86 S.E., 139.)
In Com. vs. Plymouth Coal Co. ([1911] 232 Pa., 141), it was said: "The police power of the state is
difficult of definition, but it has been held by the courts to be the right to prescribe regulations for the
good order, peace, health, protection, comfort, convenience and morals of the community, which does
not encroach on a like power vested in congress or state legislatures by the federal constitution, or does
not violate the provisions of the organic law; and it has been expressly held that the fourteenth
amendment to the federal constitution was not designed to interfere with the exercise of that power by
the state."
In People vs. Brazee ([Mich., 1914], 149 N.W., 1053), it was said: "It [the police power] has for its
object the improvement of social and economic conditioned affecting the community at large and
collectively with a view to bring about "he greatest good of the greatest number."Courts have
consistently and wisely declined to set any fixed limitations upon subjects calling for the exercise of
this power. It is elastic and is exercised from time to time as varying social conditions demand
correction."
In 8 Cyc., 863, it is said: "Police power is the name given to that inherent sovereignty which it is the
right and duty of the government or its agents to exercise whenever public policy, in a broad sense,
demands, for the benefit of society at large, regulations to guard its morals, safety, health, order or to
insure in any respect such economic conditions as an advancing civilization of a high complex
character requires." (As quoted with approval in Stettler vs. O'Hara [1914], 69 Ore, 519.)
Finally, the Supreme Court of the United States has said in Noble State Bank vs. Haskell (219 U.S.
[1911], 575: "It may be said in a general way that the police power extends to all the great public needs.
It may be put forth in aid of what is sanctioned by usage, or held by the prevailing morality or strong
and preponderant opinion to be greatly and immediately necessary to the public welfare."
This statement, recent as it is, has been quoted with approval by several courts. (Cunningham vs.
Northwestern Imp. Co. [1911], 44 Mont., 180; State vs. Mountain Timber Co. [1913], 75 Wash., 581;
McDavid vs. Bank of Bay Minette [Ala., 1915], 69 Sou., 452; Hopkins vs. City of Richmond [Va.,
1915], 86 S.E., 139; State vs. Philipps [Miss. 1915], 67 Sou., 651.)
It was said in Com. vs. Alger (7 Cush., 53, 85), per Shaw, C.J., that: "It is much easier to perceive and
realize the existence and sources of this police power than to mark its boundaries, or to prescribe limits
to its exercise." In Stone vs. Mississippi (101 U.S., 814), it was said: "Many attempts have been made
in this court and elsewhere to define the police power, but never with entire success. It is always easier
to determine whether a particular case comes within the general scope of the power, than to give an
abstract definition of the power itself, which will be in all respects accurate."
Other courts have held the same vow of efforts to evolve a satisfactory definition of the police power.
Manifestly, definitions which fail to anticipate cases properly within the scope of the police power are
deficient. It is necessary, therefore, to confine our discussion to the principle involved and determine
whether the cases as they come up are within that principle. The basic idea of civil polity in the United
States is that government should interfere with individual effort only to the extent necessary to preserve
a healthy social and economic condition of the country. State interference with the use of private
property may be exercised in three ways. First, through the power of taxation, second, through the
power of eminent domain, and third, through the police power. Buy the first method it is assumed that
the individual receives the equivalent of the tax in the form of protection and benefit he receives from
the government as such. By the second method he receives the market value of the property taken from
him. But under the third method the benefits he derived are only such as may arise from the
maintenance of a healthy economic standard of society and is often referred to as damnum absque
injuria. (Com. vs. Plymouth Coal Co. 232 Pa., 141; Bemis vs. Guirl Drainage Co., 182 Ind., 36.) There
was a time when state interference with the use of private property under the guise of the police power
was practically confined to the suppression of common nuisances. At the present day, however,
industry is organized along lines which make it possible for large combinations of capital to profit at
the expense of the socio-economic progress of the nation by controlling prices and dictating to
industrial workers wages and conditions of labor. Not only this but the universal use of mechanical
contrivances by producers and common carriers has enormously increased the toll of human life and
limb in the production and distribution of consumption goods. To the extent that these businesses affect
not only the public health, safety, and morals, but also the general social and economic life of the
nation, it has been and will continue to be necessary for the state to interfere by regulation. By so
doing, it is true that the enjoyment of private property is interfered with in no small degree and in ways
that would have been considered entirely unnecessary in years gone by. The regulation of rates charged
by common carriers, for instance, or the limitation of hours of work in industrial establishments have
only a very indirect bearing upon the public health, safety, and morals, but do bear directly upon social
and economic conditions. To permit each individual unit of society to feel that his industry will bring a
fair return; to see that his work shall be done under conditions that will not either immediately or
eventually ruin his health; to prevent the artificial inflation of prices of the things which are necessary
for his physical well being are matters which the individual is no longer capable of attending to
himself. It is within the province of the police power to render assistance to the people to the extent that
may be necessary to safeguard these rights. Hence, laws providing for the regulation of wages and
hours of labor of coal miners (Rail & River Coal Co. vs. Taylor, 234 U.S., 224); requiring payment of
employees of railroads and other industrial concerns in legal tender and requiring salaries to be paid
semimonthly (Erie R.R. Co. vs. Williams, 233 U.S., 685); providing a maximum number of hours of
labor for women (Miller vs. Wilson, U.S. Sup. Ct. [Feb. 23, 1915], Adv. Opns., p. 342); prohibiting
child labor (Sturges & Burn vs. Beauchamp, 231 U.S., 320); restricting the hours of labor in public
laundries (In re Wong Wing, 167 Cal., 109); limiting hours of labor in industrial establishment
generally (State vs. Bunting, 71 Ore., 259); Sunday Closing Laws (State vs. Nicholls [Ore., 1915], 151
Pac., 473; People vs. C. Klinck Packing Co. [N.Y., 1915], 108 N. E., 278; Hiller vs. State [Md., 1914],
92 Atl., 842; State vs. Penny, 42 Mont., 118; City of Springfield vs. Richter, 257 Ill., 578, 580; State vs.
Hondros [S.C., 1915], 84 S.E., 781); have all been upheld as a valid exercise of the police power.
Again, workmen's compensation laws have been quite generally upheld. These statutes discard the
common law theory that employers are not liable for industrial accidents and make them responsible
for all accidents resulting from trade risks, it being considered that such accidents are a legitimate
charge against production and that the employer by controlling the prices of his product may shift the
burden to the community. Laws requiring state banks to join in establishing a depositors' guarantee
fund have also been upheld by the Federal Supreme Court in Noble State Bank vs. Haskell (219 U. S.,
104), and Assaria State Bank vs. Dolley (219 U.S., 121).
Offensive noises and smells have been for a long time considered susceptible of suppression in thickly
populated districts. Barring livery stables from such locations was approved of in Reinman vs. Little
Rock (U.S. Sup. Ct. [Apr. 5, 1915], U.S. Adv. Opns., p. 511). And a municipal ordinance was recently
upheld (People vs. Ericsson, 263 Ill., 368), which prohibited the location of garages within two hundred
feet of any hospital, church, or school, or in any block used exclusively for residential purposes, unless
the consent of the majority of the property owners be obtained. Such statutes as these are usually
upheld on the theory of safeguarding the public health. But we apprehend that in point of fact they have
little bearing upon the health of the normal person, but a great deal to do with his physical comfort and
convenience and not a little to do with his peace of mind. Without entering into the realm of
psychology, we think it quite demonstrable that sight is as valuable to a human being as any of his other
senses, and that the proper ministration to this sense conduces as much to his contentment as the care
bestowed upon the senses of hearing or smell, and probably as much as both together. Objects may be
offensive to the eye as well as to the nose or ear. Man's esthetic feelings are constantly being appealed
to through his sense of sight. Large investments have been made in theaters and other forms of
amusement, in paintings and spectacular displays, the success of which depends in great part upon the
appeal made through the sense of sight. Moving picture shows could not possible without the sense of
sight. Governments have spent millions on parks and boulevards and other forms of civic beauty, the
first aim of which is to appeal to the sense of sight. Why, then, should the Government not interpose to
protect from annoyance this most valuable of man's senses as readily as to protect him from offensive
noises and smells?
The advertising industry is a legitimate one. It is at the same time a cause and an effect of the great
industrial age through which the world is now passing. Millions are spent each year in this manner to
guide the consumer to the articles which he needs. The sense of sight is the primary essential to
advertising success. Billboard advertising, as it is now conducted, is a comparatively recent form of
advertising. It is conducted out of doors and along the arteries of travel, and compels attention by the
strategic locations of the boards, which obstruct the range of vision at points where travelers are most
likely to direct their eyes. Beautiful landscapes are marred or may not be seen at all by the traveler
because of the gaudy array of posters announcing a particular kind of breakfast food, or underwear, the
coming of a circus, an incomparable soap, nostrums or medicines for the curing of all the ills to which
the flesh is heir, etc. It is quite natural for people to protest against this indiscriminate and wholesale
use of the landscape by advertisers and the intrusion of tradesmen upon their hours of leisure and
relaxation from work. Outdoor life must lose much of its charm and pleasure if this form of advertising
is permitted to continue unhampered until it converts the streets and highways into veritable canyons
through which the world must travel in going to work or in search of outdoor pleasure.
The success of billboard advertising depends not so much upon the use of private property as it does
upon the use of the channels of travel used by the general public. Suppose that the owner of private
property, who so vigorously objects to the restriction of this form of advertising, should require the
advertiser to paste his posters upon the billboards so that they would face the interior of the property
instead of the exterior. Billboard advertising would die a natural death if this were done, and its real
dependency not upon the unrestricted use of private property but upon the unrestricted use of the public
highways is at once apparent. Ostensibly located on private property, the real and sole value of the
billboard is its proximity to the public thoroughfares. Hence, we conceive that the regulation of
billboards and their restriction is not so much a regulation of private property as it is a regulation of the
use of the streets and other public thoroughfares.
We would not be understood as saying that billboard advertising is not a legitimate business any more
than we would say that a livery stable or an automobile garage is not. Even a billboard is more sightly
than piles of rubbish or an open sewer. But all these businesses are offensive to the senses under certain
conditions.
It has been urged against ministering to the sense of sight that tastes are so diversified that there is no
safe standard of legislation in this direction. We answer in the language of the Supreme Court in Noble
State Bank vs. Haskell (219 U.S., 104), and which has already been adopted by several state courts (see
supra), that "the prevailing morality or strong and preponderating opinion" demands such legislation.
The agitation against the unrestrained development of the billboard business has produced results in
nearly all the countries of Europe. (Ency. Britannica, vol. 1, pp. 237-240.) Many drastic ordinances and
state laws have been passed in the United States seeking to make the business amenable to regulation.
But their regulation in the United states is hampered by what we conceive an unwarranted restriction
upon the scope of the police power by the courts. If the police power may be exercised to encourage a
healthy social and economic condition in the country, and if the comfort and convenience of the people
are included within those subjects, everything which encroaches upon such territory is amenable to the
police power. A source of annoyance and irritation to the public does not minister to the comfort and
convenience of the public. And we are of the opinion that the prevailing sentiment is manifestly against
the erection of billboards which are offensive to the sight.
We do not consider that we are in conflict with the decision in Eubank vs. Richmond (226 U.S., 137),
where a municipal ordinance establishing a building line to which property owners must conform was
held unconstitutional. As we have pointed out, billboard advertising is not so much a use of private
property as it is a use of the public thoroughfares. It derives its value to the power solely because the
posters are exposed to the public gaze. It may well be that the state may not require private property
owners to conform to a building line, but may prescribe the conditions under which they shall make use
of the adjoining streets and highways. Nor is the law in question to be held invalid as denying equal
protection of the laws. In Keokee Coke Co. vs. Taylor (234 U.S., 224), it was said: "It is more pressed
that the act discriminates unconstitutionally against certain classes. But while there are differences of
opinion as to the degree and kind of discrimination permitted by the Fourteenth Amendment, it is
established by repeated decisions that a statute aimed at what is deemed an evil, and hitting it
presumably where experience shows it to be most felt, is not to be upset by thinking up and
enumerating other instances to which it might have been applied equally well, so far as the court can
see. That is for the legislature to judge unless the case is very clear."
But we have not overlooked the fact that we are not in harmony with the highest courts of a number of
the states in the American Union upon this point. Those courts being of the opinion that statutes which
are prompted and inspired by esthetic considerations merely, having for their sole purpose the
promotion and gratification of the esthetic sense, and not the promotion or protection of the public
safety, the public peace and good order of society, must be held invalid and contrary to constitutional
provisions holding inviolate the rights of private property. Or, in other words, the police power cannot
interfere with private property rights for purely esthetic purposes. The courts, taking this view, rest their
decisions upon the proposition that the esthetic sense is disassociated entirely from any relation to the
public health, morals, comfort, or general welfare and is, therefore, beyond the police power of the
state. But we are of the opinion, as above indicated, that unsightly advertisements or signs, signboards,
or billboards which are offensive to the sight, are not disassociated from the general welfare of the
public. This is not establishing a new principle, but carrying a well recognized principle to further
application. (Fruend on Police Power, p. 166.)
For the foregoing reasons the judgment appealed from is hereby reversed and the action dismissed
upon the merits, with costs. So ordered.
Arellano, C.J., Torres, Carson, and Araullo, JJ., concur.
DECISION ON THE MOTION FOR A REHEARING, JANUARY 24, 1916.
TRENT, J.:
Counsel for the plaintiffs call our attention to the case of Ex parte Young (209 U.S., 123); and say that
they are of the opinion that this case "is the absolutely determinative of the question of jurisdiction in
injunctions of this kind." We did not refer to this case in our former opinion because we were satisfied
that the reasoning of the case is not applicable to section 100 (b), 139 and 140 of Act No. 2339. The
principles announced in the Young case are stated as follows: "It may therefore be said that when the
penalties for disobedience are by fines so enormous and imprisonment so severe as to intimidate the
company and its officers from resorting to the courts to test the validity of the legislation, the result is
the same as if the law in terms prohibited the company from seeking judicial construction of laws
which deeply affect its rights.
It is urged that there is no principle upon which to base the claim that a person is entitled to
disobey a statute at least once, for the purpose of testing its validity without subjecting himself
to the penalties for disobedience provided by the statute in case it is valid. This is not an
accurate statement of the case. Ordinarily a law creating offenses in the nature of misdemeanors
or felonies relates to a subject over which the jurisdiction of the legislature is complete in any
event. In these case, however, of the establishment of certain rates without any hearing, the
validity of such rates necessarily depends upon whether they are high enough to permit at least
some return upon the investment (how much it is not now necessary to state), and an inquiry as
to that fact is a proper subject of judicial investigation. If it turns out that the rates are too low
for that purpose, then they are illegal. Now, to impose upon a party interested the burden of
obtaining a judicial decision of such a question (no prior hearing having ever been given) only
upon the condition that, if unsuccessful, he must suffer imprisonment and pay fines as provided
in these acts, is, in effect, to close up all approaches to the courts, and thus prevent any hearing
upon the question whether the rates as provided by the acts are not too low, and therefore
invalid. The distinction is obvious between a case where the validity of the acts depends upon
the existence of a fact which can be determined only after investigation of a very complicated
and technical character, and the ordinary case of a statute upon a subject requiring no such
investigation and over which the jurisdiction of the legislature is complete in any event.
An examination of the sections of our Internal Revenue Law and of the circumstances under which and
the purposes for which they were enacted, will show that, unlike the statutes under consideration in the
above cited case, their enactment involved no attempt on the part of the Legislature to prevent
dissatisfied taxpayers "from resorting to the courts to test the validity of the legislation;" no effort to
prevent any inquiry as to their validity. While section 139 does prevent the testing of the validity of
subsection (b) of section 100 in injunction suits instituted for the purpose of restraining the collection
of internal revenue taxes, section 140 provides a complete remedy for that purpose. And furthermore,
the validity of subsection (b) does not depend upon "the existence of a fact which can be determined
only after investigation of a very complicated and technical character," but the jurisdiction of the
Legislature over the subject with which the subsection deals "is complete in any event." The judgment
of the court in the Young case rests upon the proposition that the aggrieved parties had no adequate
remedy at law.
Neither did we overlook the case of General Oil Co. vs. Crain (209 U.S., 211), decided the same
day and citing Ex parte Young, supra. In that case the plaintiff was a Tennessee corporation,
with its principal place of business in Memphis, Tennessee. It was engaged in the manufacture
and sale of coal oil, etc. Its wells and plant were located in Pennsylvania and Ohio. Memphis
was not only its place of business, at which place it sold oil to the residents of Tennessee, but
also a distributing point to which oils were shipped from Pennsylvania and Ohio and unloaded
into various tanks for the purpose of being forwarded to the Arkansas, Louisiana, and
 Mississippi customers. Notwithstanding the fact that the company separated its oils, which were
designated to meet the requirements of the orders from those States, from the oils for sale in
Tennessee, the defendant insisted that he had a right, under the Act of the Tennessee Legislature,
approved April 21, 1899, to inspect all the oils unlocated in Memphis, whether for sale in that
State or not, and charge and collect for such inspection a regular fee of twenty-five cents per
barrel. The company, being advised that the defendant had no such right, instituted this action in
the inferior States court for the purpose of enjoining the defendant, upon the grounds stated in
the bill, from inspecting or attempting to inspect its oils. Upon trial, the preliminary injunction
which had been granted at the commencement of the action, was continued in force. Upon
appeal, the supreme court of the State of Tennessee decided that the suit was one against the
State and reversed the judgment of the Chancellor. In the Supreme Court of the United States,
where the case was reviewed upon a writ of error, the contentions of the parties were stated by
the court as follows: "It is contended by defendant in error that this court is without jurisdiction
because no matter sought to be litigated by plaintiff in error was determined by the Supreme
Court of Tennessee. The court simply held, it is paid, that, under the laws of the State, it had no
jurisdiction to entertain the suit for any purpose. And it is insisted "hat this holding involved no
Federal question, but only the powers and jurisdiction of the courts of the State of Tennessee, in
respect to which the Supreme Court of Tennessee is the final arbiter."
Opposing these contentions, plaintiff in error urges that whether a suit is one against a State
cannot depend upon the declaration of a statute, but depends upon the essential nature ofthe suit,
and that the Supreme Court recognized that the statute "aded nothing to the axiomatic principle
that the State, as a sovereign, is not subject to suit save by its own consent."And it is hence
insisted that the court by dismissing the bill gave effect to the law which was attacked. It is
further insisted that the bill undoubtedly present rights under the Constitution of the United
States and conditions which entitle plaintiff in error to an injunction for the protection of such
rights, and that a statute of the State which operates to deny such rights, or such relief, `is itself
in conflict with the Constitution of the United States."
That statute of Tennessee, which the supreme court of that State construed and held to be prohibitory of
the suit, was an act passed February 28, 1873, which provides: "That no court in the State of Tennessee
has, nor shall hereafter have, any power, jurisdiction, or authority to entertain any suit against the State,
or any officer acting by the authority of the State, with a view to reach the State, its treasury, funds or
property; and all such suits now pending, or hereafter brought, shall be dismissed as to the State, or
such officer, on motion, plea or demurrer of the law officer of the State, or counsel employed by the
State."
The Supreme Court of the United States, after reviewing many cases, said: "Necessarily, to give
adequate protection to constitutional rights a distinction must be made between valid and invalid state
laws, as determining the character of the suit against state officers. And the suit at bar illustrates the
necessity. If a suit against state officer is precluded in the national courts by the Eleventh Amendment
to the Constitution, and may be forbidden by a State to its courts, as it is contended in the case at bar
that it may be, without power of review by this court, it must be evident that an easy way is open to
prevent the enforcement of many provisions of the Constitution; and the Fourteenth Amendment, which
is directed at state action, could be nullified as to much of its operation. ... It being then the right of a
party to be protected against a law which violates a constitutional right, whether by its terms or the
manner of its enforcement, it is manifest that a decision which denies such protection gives effect to the
law, and the decision is reviewable by this court."
The court then proceeded to consider whether the law of 1899 would, if administered against the oils in
question, violate any constitutional right of the plaintiff and after finding and adjudging that the oils
were not in movement through the States, that they had reached the destination of their first shipment,
and were held there, not in necessary delay at means of transportation but for the business purposes and
profit of the company, and resting its judgment upon the taxing power of the State, affirmed the decree
of the supreme court of the State of Tennessee.
From the foregoing it will be seen that the Supreme Court of Tennessee dismissed the case for want of
jurisdiction because the suit was one against the State, which was prohibited by the Tennessee
Legislature. The Supreme Court of the United States took jurisdiction of the controversy for the reasons
above quoted and sustained the Act of 1899 as a revenue law.
The case of Tennessee vs. Sneed (96 U.S., 69), and Shelton vs. Platt (139 U.S., 591), relied upon in our
former opinion, were not cited in General Oil Co. vs. Crain, supra, because the questions presented and
the statutes under consideration were entirely different. The Act approved March 31, 1873, expressly
prohibits the courts from restraining the collection of any tax, leaving the dissatisfied taxpayer to his
exclusive remedy — payment under protest and suit to recover — while the Act approved February 28,
1873, prohibits suits against the State.
In upholding the statute which authorizes the removal of signboards or billboards upon the sole ground
that they are offensive to the sight, we recognized the fact that we are not in harmony with various state
courts in the American Union. We have just examined the decision of the Supreme Court of the State of
Illinois in the recent case (October [December], 1914) of Thomas Cusack Co. vs. City of Chicago (267
Ill., 344), wherein the court upheld the validity of a municipal ordinances, which reads as follows:
"707. Frontage consents required. It shall be unlawful for any person, firm or corporation to erect or
construct any bill-board or sign-board in any block on any public street in which one-half of the
buildings on both sides of the street are used exclusively for residence purposes, without first obtaining
the consent, in writing, of the owners or duly authorized agents of said owners owning a majority of the
frontage of the property, on both sides of the street, in the block in which such bill-board or sign-board
is to be erected, constructed or located. Such written consent shall be filed with the commissioner of
buildings before a permit shall be issued for the erection, construction or location of such bill-board or
sign-board."
The evidence which the Illinois court relied upon was the danger of fires, the fact that billboards
promote the commission of various immoral and filthy acts by disorderly persons, and the inadequate
police protection furnished to residential districts. The last objection has no virtue unless one or the
other of the other objections are valid. If the billboard industry does, in fact, promote such municipal
evils to noticeable extent, it seems a curious inconsistency that a majority of the property owners on a
given block may legalize the business. However, the decision is undoubtedly a considerable advance
over the views taken by other high courts in the United States and distinguishes several Illinois
decisions. It is an advance because it permits the suppression of billboards where they are undesirable.
The ordinance which the court approved will no doubt cause the virtual suppression of the business in
the residential districts. Hence, it is recognized that under certain circumstances billboards may be
suppressed as an unlawful use of private property. Logically, it would seem that the premise of fact
relied upon is not very solid. Objections to the billboard upon police, sanitary, and moral grounds have
been, as pointed out by counsel for Churchill and Tait, duly considered by numerous high courts in the
United States, and, with one exception, have been rejected as without foundation. The exception is the
Supreme Court of Missouri, which advances practically the same line of reasoning as has the Illinois
court in this recent case. (St. Louis Gunning Advt. Co. vs. City of St. Louis, 137 S. W., 929.) In fact, the
Illinois court, in Haller Sign Works vs. Physical Culture Training School (249 Ill., 436), "distinguished"
in the recent case, said: "There is nothing inherently dangerous to the health or safety of the public in
structures that are properly erected for advertising purposes."
If a billboard is so constructed as to offer no room for objections on sanitary or moral grounds, it would
seem that the ordinance above quoted would have to be sustained upon the very grounds which we
have advanced in sustaining our own statute.
It might be well to note that billboard legislation in the United States is attempting to eradicate a
business which has already been firmly established. This business was allowed to expand unchecked
until its very extent called attention to its objectionable features. In the Philippine Islands such
legislation has almost anticipated the business, which is not yet of such proportions that it can be said
to be fairly established. It may be that the courts in the United States have committed themselves to a
course of decisions with respect to billboard advertising, the full consequences of which were not
perceived for the reason that the development of the business has been so recent that the objectionable
features of it did not present themselves clearly to the courts nor to the people. We, in this country, have
the benefit of the experience of the people of the United States and may make our legislation
preventive rather than corrective. There are in this country, moreover, on every hand in those districts
where Spanish civilization has held sway for so many centuries, examples of architecture now
belonging to a past age, and which are attractive not only to the residents of the country but to visitors.
If the billboard industry is permitted without constraint or control to hide these historic sites from the
passerby, the country will be less attractive to the tourist and the people will suffer a district economic
loss.
The motion for a rehearing is therefore denied.
Arellano, C.J., Torres, and Carson, JJ., concur.
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 127876 December 17, 1999

ROXAS & CO., INC., petitioner,

vs.
THE HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM, SECRETARY OF AGRARIAN REFORM, DAR REGIONAL DIRECTOR
FOR REGION IV, MUNICIPAL AGRARIAN REFORM OFFICER OF NASUGBU, BATANGAS and DEPARTMENT OF AGRARIAN REFORM ADJUDICATION
BOARD, respondents.

PUNO, J.:

This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and the validity of the acquisition of these haciendas by the government under
Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988.

Petitioner Roxas & Co. is a domestic corporation and is the registered owner of three haciendas, namely, Haciendas Palico, Banilad and Caylaway, all located in
the Municipality of Nasugbu, Batangas. Hacienda Palico is 1,024 hectares in area and is registered under Transfer Certificate of Title (TCT) No. 985. This land is
covered by Tax Declaration Nos. 0465, 0466, 0468, 0470, 0234 and 0354. Hacienda Banilad is 1,050 hectares in area, registered under TCT No. 924 and
covered by Tax Declaration Nos. 0236, 0237 and 0390. Hacienda Caylaway is 867.4571 hectares in area and is registered under TCT Nos. T-44662, T-44663, T-
44664 and T-44665.

The events of this case occurred during the incumbency of then President Corazon C. Aquino. In February 1986, President Aquino issued Proclamation No. 3
promulgating a Provisional Constitution. As head of the provisional government, the President exercised legislative power "until a legislature is elected and
convened under a new Constitution." 1 In the exercise of this legislative power, the President signed on July 22, 1987, Proclamation No. 131 instituting a
Comprehensive Agrarian Reform Program and Executive Order No. 229 providing the mechanisms necessary to initially implement the program.

On July 27, 1987, the Congress of the Philippines formally convened and took over legislative power from the President. 2 This Congress passed Republic Act
No. 6657, the Comprehensive Agrarian Reform Law (CARL) of 1988. The Act was signed by the President on June 10, 1988 and took effect on June 15, 1988.

Before the law's effectivity, on May 6, 1988, petitioner filed with respondent DAR a voluntary offer to sell Hacienda Caylaway pursuant to the provisions of E.O.
No. 229. Haciendas Palico and Banilad were later placed under compulsory acquisition by respondent DAR in accordance with the CARL.

Hacienda Palico

On September 29, 1989, respondent DAR, through respondent Municipal Agrarian Reform Officer (MARO) of Nasugbu, Batangas, sent a notice entitled
"Invitation to Parties" to petitioner. The Invitation was addressed to "Jaime Pimentel, Hda. Administrator, Hda. Palico." 3 Therein, the MARO invited petitioner to a
conference on October 6, 1989 at the DAR office in Nasugbu to discuss the results of the DAR investigation of Hacienda Palico, which was "scheduled for
compulsory acquisition this year under the Comprehensive Agrarian Reform Program." 4

On October 25, 1989, the MARO completed three (3) Investigation Reports after investigation and ocular inspection of the Hacienda. In the first Report, the
MARO found that 270 hectares under Tax Declaration Nos. 465, 466, 468 and 470 were "flat to undulating (0-8% slope)" and actually occupied and cultivated by
34 tillers of sugarcane. 5 In the second Report, the MARO identified as "flat to undulating" approximately 339 hectares under Tax Declaration No. 0234 which
also had several actual occupants and tillers of sugarcane; 6 while in the third Report, the MARO found approximately 75 hectare under Tax Declaration No.
0354 as "flat to undulating" with 33 actual occupants and tillers also of sugarcane. 7

On October 27, 1989, a "Summary Investigation Report" was submitted and signed jointly by the MARO, representatives of the Barangay Agrarian Reform
Committee (BARC) and Land Bank of the Philippines (LBP), and by the Provincial Agrarian Reform Officer (PARO). The Report recommended that 333.0800
hectares of Hacienda Palico be subject to compulsory acquisition at a value of P6,807,622.20. 8 The following day, October 28, 1989, two (2) more Summary
Investigation Reports were submitted by the same officers and representatives. They recommended that 270.0876 hectares and 75.3800 hectares be placed
under compulsory acquisition at a compensation of P8,109,739.00 and P2,188,195.47, respectively. 9

On December 12, 1989, respondent DAR through then Department Secretary Miriam D. Santiago sent a "Notice of Acquisition" to petitioner. The Notice was
addressed as follows:

Roxas y Cia, Limited

Soriano Bldg., Plaza Cervantes

Manila, Metro Manila. 10

Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were subject to immediate acquisition and distribution by the government under
the CARL; that based on the DAR's valuation criteria, the government was offering compensation of P3.4 million for 333.0800 hectares; that whether this offer
was to be accepted or rejected, petitioner was to inform the Bureau of Land Acquisition and Distribution (BLAD) of the DAR; that in case of petitioner's rejection
or failure to reply within thirty days, respondent DAR shall conduct summary administrative proceedings with notice to petitioner to determine just compensation
for the land; that if petitioner accepts respondent DAR's offer, or upon deposit of the compensation with an accessible bank if it rejects the same, the DAR shall
take immediate possession of the land. 11

Almost two years later, on September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager three (3) separate Memoranda entitled
"Request to Open Trust Account." Each Memoranda requested that a trust account representing the valuation of three portions of Hacienda Palico be opened in
favor of the petitioner in view of the latter's rejection of its offered value. 12

Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR for conversion of Haciendas Palico and Banilad from agricultural to non-agricultural
lands under the provisions of the CARL. 13 On July 14, 1993, petitioner sent a letter to the DAR Regional Director reiterating its request for conversion of the two
haciendas. 14

Despite petitioner's application for conversion, respondent DAR proceeded with the acquisition of the two Haciendas. The LBP trust accounts as compensation
for Hacienda Palico were replaced by respondent DAR with cash and LBP bonds. 15 On October 22, 1993, from the mother title of TCT No. 985 of the Hacienda,
respondent DAR registered Certificate of Land Ownership Award (CLOA) No. 6654. On October 30, 1993, CLOA's were distributed to farmer beneficiaries. 16

Hacienda Banilad

On August 23, 1989, respondent DAR, through respondent MARO of Nasugbu, Batangas, sent a notice to petitioner addressed as follows:

Mr. Jaime Pimentel

Hacienda Administrator

Hacienda Banilad

Nasugbu, Batangas 17

The MARO informed Pimentel that Hacienda Banilad was subject to compulsory acquisition under the CARL; that should petitioner wish to avail of
the other schemes such as Voluntary Offer to Sell or Voluntary Land Transfer, respondent DAR was willing to provide assistance thereto. 18

On September 18, 1989, the MARO sent an "Invitation to Parties" again to Pimentel inviting the latter to attend a conference on September 21, 1989 at the
MARO Office in Nasugbu to discuss the results of the MARO's investigation over Hacienda Banilad. 19

On September 21, 1989, the same day the conference was held, the MARO submitted two (2) Reports. In his first Report, he found that approximately 709
hectares of land under Tax Declaration Nos. 0237 and 0236 were "flat to undulating (0-8% slope)." On this area were discovered 162 actual occupants and tillers
of sugarcane. 20 In the second Report, it was found that approximately 235 hectares under Tax Declaration No. 0390 were "flat to undulating," on which were 92
actual occupants and tillers of sugarcane. 21

The results of these Reports were discussed at the conference. Present in the conference were representatives of the prospective farmer beneficiaries, the
BARC, the LBP, and Jaime Pimentel on behalf of the landowner. 22 After the meeting, on the same day, September 21, 1989, a Summary Investigation Report
was submitted jointly by the MARO, representatives of the BARC, LBP, and the PARO. They recommended that after ocular inspection of the property, 234.6498
hectares under Tax Declaration No. 0390 be subject to compulsory acquisition and distribution by CLOA. 23 The following day, September 22, 1989, a second
Summary Investigation was submitted by the same officers. They recommended that 737.2590 hectares under Tax Declaration Nos. 0236 and 0237 be likewise
placed under compulsory acquisition for distribution. 24

On December 12, 1989, respondent DAR, through the Department Secretary, sent to petitioner two (2) separate "Notices of Acquisition" over Hacienda Banilad.
These Notices were sent on the same day as the Notice of Acquisition over Hacienda Palico. Unlike the Notice over Hacienda Palico, however, the Notices over
Hacienda Banilad were addressed to:

Roxas y Cia. Limited

7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.

Makati, Metro Manila. 25

Respondent DAR offered petitioner compensation of P15,108,995.52 for 729.4190 hectares and P4,428,496.00 for 234.6498 hectares. 26

On September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager a "Request to Open Trust Account" in petitioner's name as
compensation for 234.6493 hectares of Hacienda Banilad. 27 A second "Request to Open Trust Account" was sent on November 18, 1991 over 723.4130
hectares of said Hacienda. 28

On December 18, 1991, the LBP certified that the amounts of P4,428,496.40 and P21,234,468.78 in cash and LBP bonds had been earmarked as compensation
for petitioner's land in Hacienda Banilad. 29

On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad.

Hacienda Caylaway

Hacienda Caylaway was voluntarily offered for sale to the government on May 6, 1988 before the effectivity of the CARL. The Hacienda has a total area of
867.4571 hectares and is covered by four (4) titles — TCT Nos. T-44662, T-44663, T-44664 and T-44665. On January 12, 1989, respondent DAR, through the
Regional Director for Region IV, sent to petitioner two (2) separate Resolutions accepting petitioner's voluntary offer to sell Hacienda Caylaway, particularly TCT
Nos. T-44664 and T-44663. 30 The Resolutions were addressed to:

Roxas & Company, Inc.

7th Flr. Cacho-Gonzales Bldg.

Aguirre, Legaspi Village

Makati, M. M 31

On September 4, 1990, the DAR Regional Director issued two separate Memoranda to the LBP Regional Manager requesting for the valuation of the land under
TCT Nos. T-44664 and T-44663. 32 On the same day, respondent DAR, through the Regional Director, sent to petitioner a "Notice of Acquisition" over 241.6777
hectares under TCT No. T-44664 and 533.8180 hectares under TCT No. T-44663. 33 Like the Resolutions of Acceptance, the Notice of Acquisition was
addressed to petitioner at its office in Makati, Metro Manila.

Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo J. Roxas, sent a letter to the Secretary of respondent DAR withdrawing its VOS of
Hacienda Caylaway. The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from agricultural to non-
agricultural. As a result, petitioner informed respondent DAR that it was applying for conversion of Hacienda Caylaway from agricultural to other
uses. 34

In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner that a reclassification of the land would not exempt it from agrarian reform.
Respondent Secretary also denied petitioner's withdrawal of the VOS on the ground that withdrawal could only be based on specific grounds such as
unsuitability of the soil for agriculture, or if the slope of the land is over 18 degrees and that the land is undeveloped. 35

Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner filed its application for conversion of both Haciendas Palico and
Banilad. 36 On July 14, 1993, petitioner, through its President, Eduardo Roxas, reiterated its request to withdraw the VOS over Hacienda Caylaway in light of the
following:

1) Certification issued by Conrado I. Gonzales, Officer-in-Charge, Department of Agriculture, Region 4, 4th Floor, ATI (BA) Bldg., Diliman,
Quezon City dated March 1, 1993 stating that the lands subject of referenced titles "are not feasible and economically sound for further
agricultural development.

2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas approving the Zoning Ordinance reclassifying areas covered by
the referenced titles to non-agricultural which was enacted after extensive consultation with government agencies, including [the
Department of Agrarian Reform], and the requisite public hearings.

3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated March 8, 1993 approving the Zoning Ordinance enacted by
the Municipality of Nasugbu.

4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the Municipal Planning & Development, Coordinator and Deputized
Zoning Administrator addressed to Mrs. Alicia P. Logarta advising that the Municipality of Nasugbu, Batangas has no objection to the
conversion of the lands subject of referenced titles to non-agricultural. 37

On August 24, 1993 petitioner instituted Case No. N-0017-96-46 (BA) with respondent DAR Adjudication Board (DARAB) praying for the cancellation of the
CLOA's issued by respondent DAR in the name of several persons. Petitioner alleged that the Municipality of Nasugbu, where the haciendas are located, had
been declared a tourist zone, that the land is not suitable for agricultural production, and that the Sangguniang Bayan of Nasugbu had reclassified the land to
non-agricultural.

In a Resolution dated October 14, 1993, respondent DARAB held that the case involved the prejudicial question of whether the property was subject to agrarian
reform, hence, this question should be submitted to the Office of the Secretary of Agrarian Reform for determination. 38

On October 29, 1993, petitioner filed with the Court of Appeals CA-G.R. SP No. 32484. It questioned the expropriation of its properties under the CARL and the
denial of due process in the acquisition of its landholdings.

Meanwhile, the petition for conversion of the three haciendas was denied by the MARO on November 8, 1993.

Petitioner's petition was dismissed by the Court of Appeals on April 28, 1994. 39 Petitioner moved for reconsideration but the motion was denied on January 17,
1997 by respondent court. 40

Hence, this recourse. Petitioner assigns the following errors:

A. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER'S CAUSE OF ACTION IS PREMATURE
FOR FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES IN VIEW OF THE PATENT ILLEGALITY OF THE RESPONDENTS' ACTS,
THE IRREPARABLE DAMAGE CAUSED BY SAID ILLEGAL ACTS, AND THE ABSENCE OF A PLAIN, SPEEDY AND ADEQUATE
REMEDY IN THE ORDINARY COURSE OF LAW — ALL OF WHICH ARE EXCEPTIONS TO THE SAID DOCTRINE.

B. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER'S LANDHOLDINGS ARE SUBJECT TO
COVERAGE UNDER THE COMPREHENSIVE AGRARIAN REFORM LAW, IN VIEW OF THE UNDISPUTED FACT THAT PETITIONER'S
LANDHOLDINGS HAVE BEEN CONVERTED TO NON-AGRICULTURAL USES BY PRESIDENTIAL PROCLAMATION NO. 1520 WHICH
DECLARED THE MUNICIPALITY NASUGBU, BATANGAS AS A TOURIST ZONE, AND THE ZONING ORDINANCE OF THE
MUNICIPALITY OF NASUGBU RE-CLASSIFYING CERTAIN PORTIONS OF PETITIONER'S LANDHOLDINGS AS NON-
AGRICULTURAL, BOTH OF WHICH PLACE SAID LANDHOLDINGS OUTSIDE THE SCOPE OF AGRARIAN REFORM, OR AT THE
VERY LEAST ENTITLE PETITIONER TO APPLY FOR CONVERSION AS CONCEDED BY RESPONDENT DAR.

C. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO DECLARE THE PROCEEDINGS BEFORE
RESPONDENT DAR VOID FOR FAILURE TO OBSERVE DUE PROCESS, CONSIDERING THAT RESPONDENTS BLATANTLY
DISREGARDED THE PROCEDURE FOR THE ACQUISITION OF PRIVATE LANDS UNDER R.A. 6657, MORE PARTICULARLY, IN
FAILING TO GIVE DUE NOTICE TO THE PETITIONER AND TO PROPERLY IDENTIFY THE SPECIFIC AREAS SOUGHT TO BE
ACQUIRED.

D. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO RECOGNIZE THAT PETITIONER WAS BRAZENLY
AND ILLEGALLY DEPRIVED OF ITS PROPERTY WITHOUT JUST COMPENSATION, CONSIDERING THAT PETITIONER WAS NOT
PAID JUST COMPENSATION BEFORE IT WAS UNCEREMONIOUSLY STRIPPED OF ITS LANDHOLDINGS THROUGH THE
ISSUANCE OF CLOA'S TO ALLEGED FARMER BENEFICIARIES, IN VIOLATION OF R.A. 6657. 41

The assigned errors involve three (3) principal issues: (1) whether this Court can take cognizance of this petition despite petitioner's failure to exhaust
administrative remedies; (2) whether the acquisition proceedings over the three haciendas were valid and in accordance with law; and (3) assuming the
haciendas may be reclassified from agricultural to non-agricultural, whether this court has the power to rule on this issue.
 I. Exhaustion of Administrative Remedies.

In its first assigned error, petitioner claims that respondent Court of Appeals gravely erred in finding that petitioner failed to exhaust administrative remedies. As a
general rule, before a party may be allowed to invoke the jurisdiction of the courts of justice, he is expected to have exhausted all means of administrative
redress. This is not absolute, however. There are instances when judicial action may be resorted to immediately. Among these exceptions are: (1) when the
question raised is purely legal; (2) when the administrative body is in estoppel; (3) when the act complained of is patently illegal; (4) when there is urgent need for
judicial intervention; (5) when the respondent acted in disregard of due process; (6) when the respondent is a department secretary whose acts, as an alter ego
of the President, bear the implied or assumed approval of the latter; (7) when irreparable damage will be suffered; (8) when there is no other plain, speedy and
adequate remedy; (9) when strong public interest is involved; (10) when the subject of the controversy is private land; and (11) in quo warranto proceedings. 42

Petitioner rightly sought immediate redress in the courts. There was a violation of its rights and to require it to exhaust administrative remedies before the DAR
itself was not a plain, speedy and adequate remedy.

Respondent DAR issued Certificates of Land Ownership Award (CLOA's) to farmer beneficiaries over portions of petitioner's land without just compensation to
petitioner. A Certificate of Land Ownership Award (CLOA) is evidence of ownership of land by a beneficiary under R.A. 6657, the Comprehensive Agrarian
Reform Law of 1988. 43 Before this may be awarded to a farmer beneficiary, the land must first be acquired by the State from the landowner and ownership
transferred to the former. The transfer of possession and ownership of the land to the government are conditioned upon the receipt by the landowner of the
corresponding payment or deposit by the DAR of the compensation with an accessible bank. Until then, title remains with the landowner. 44 There was no receipt
by petitioner of any compensation for any of the lands acquired by the government.

The kind of compensation to be paid the landowner is also specific. The law provides that the deposit must be made only in "cash" or "LBP bonds." 45
Respondent DAR's opening of trust account deposits in petitioner' s name with the Land Bank of the Philippines does not constitute payment under the law. Trust
account deposits are not cash or LBP bonds. The replacement of the trust account with cash or LBP bonds did not ipso facto cure the lack of compensation; for
essentially, the determination of this compensation was marred by lack of due process. In fact, in the entire acquisition proceedings, respondent DAR
disregarded the basic requirements of administrative due process. Under these circumstances, the issuance of the CLOA's to farmer beneficiaries necessitated
immediate judicial action on the part of the petitioner.

II. The Validity of the Acquisition Proceedings Over the Haciendas.

Petitioner's allegation of lack of due process goes into the validity of the acquisition proceedings themselves. Before we rule on this matter, however, there is
need to lay down the procedure in the acquisition of private lands under the provisions of the law.

A. Modes of Acquisition of Land under R. A. 6657

Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL), provides for two (2) modes of acquisition of private land: compulsory and
voluntary. The procedure for the compulsory acquisition of private lands is set forth in Section 16 of R.A. 6657, viz:

Sec. 16. Procedure for Acquisition of Private Lands. — For purposes of acquisition of private lands, the following procedures shall be
followed:

a). After having identified the land, the landowners and the beneficiaries, the DAR shall send its notice to acquire
the land to the owners thereof, by personal delivery or registered mail, and post the same in a conspicuous place in
the municipal building and barangay hall of the place where the property is located. Said notice shall contain the
offer of the DAR to pay a corresponding value in accordance with the valuation set forth in Sections 17, 18, and
other pertinent provisions hereof.

b) Within thirty (30) days from the date of receipt of written notice by personal delivery or registered mail, the
landowner, his administrator or representative shall inform the DAR of his acceptance or rejection of the offer.

c) If the landowner accepts the offer of the DAR, the LBP shall pay the landowner the purchase price of the land
within thirty (30) days after he executes and delivers a deed of transfer in favor of the Government and surrenders
the Certificate of Title and other muniments of title.

d) In case of rejection or failure to reply, the DAR shall conduct summary administrative proceedings to determine
the compensation for the land requiring the landowner, the LBP and other interested parties to submit evidence as
to the just compensation for the land, within fifteen (15) days from receipt of the notice. After the expiration of the
above period, the matter is deemed submitted for decision. The DAR shall decide the case within thirty (30) days
after it is submitted for decision.

e) Upon receipt by the landowner of the corresponding payment, or, in case of rejection or no response from the
landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP
bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the
proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the
Philippines. The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries.

f) Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final
determination of just compensation.

In the compulsory acquisition of private lands, the landholding, the landowners and the farmer beneficiaries must first be identified. After identification, the DAR
shall send a Notice of Acquisition to the landowner, by personal delivery or registered mail, and post it in a conspicuous place in the municipal building and
barangay hall of the place where the property is located. Within thirty days from receipt of the Notice of Acquisition, the landowner, his administrator or
representative shall inform the DAR of his acceptance or rejection of the offer. If the landowner accepts, he executes and delivers a deed of transfer in favor of
the government and surrenders the certificate of title. Within thirty days from the execution of the deed of transfer, the Land Bank of the Philippines (LBP) pays
the owner the purchase price. If the landowner rejects the DAR's offer or fails to make a reply, the DAR conducts summary administrative proceedings to
determine just compensation for the land. The landowner, the LBP representative and other interested parties may submit evidence on just compensation within
fifteen days from notice. Within thirty days from submission, the DAR shall decide the case and inform the owner of its decision and the amount of just
compensation. Upon receipt by the owner of the corresponding payment, or, in case of rejection or lack of response from the latter, the DAR shall deposit the
compensation in cash or in LBP bonds with an accessible bank. The DAR shall immediately take possession of the land and cause the issuance of a transfer
certificate of title in the name of the Republic of the Philippines. The land shall then be redistributed to the farmer beneficiaries. Any party may question the
decision of the DAR in the regular courts for final determination of just compensation.

The DAR has made compulsory acquisition the priority mode of the land acquisition to hasten the implementation of the Comprehensive Agrarian Reform
Program (CARP). 46 Under Section 16 of the CARL, the first step in compulsory acquisition is the identification of the land, the landowners and the beneficiaries.
However, the law is silent on how the identification process must be made. To fill in this gap, the DAR issued on July 26, 1989 Administrative Order No. 12,
Series or 1989, which set the operating procedure in the identification of such lands. The procedure is as follows:

II. OPERATING PROCEDURE

A. The Municipal Agrarian Reform Officer, with the assistance of the pertinent Barangay Agrarian Reform Committee (BARC), shall:
 1. Update the masterlist of all agricultural lands covered under the CARP in his area of responsibility. The masterlist
shall include such information as required under the attached CARP Masterlist Form which shall include the name
of the landowner, landholding area, TCT/OCT number, and tax declaration number.

2. Prepare a Compulsory Acquisition Case Folder (CACF) for each title (OCT/TCT) or landholding covered under
Phase I and II of the CARP except those for which the landowners have already filed applications to avail of other
modes of land acquisition. A case folder shall contain the following duly accomplished forms:

a) CARP CA Form 1 — MARO Investigation Report

b) CARP CA Form 2 — Summary Investigation Report of Findings and Evaluation

c) CARP CA Form 3 — Applicant's Information Sheet

d) CARP CA Form 4 — Beneficiaries Undertaking

e) CARP CA Form 5 — Transmittal Report to the PARO

The MARO/BARC shall certify that all information contained in the above-mentioned forms have been examined
and verified by him and that the same are true and correct.

3. Send a Notice of Coverage and a letter of invitation to a conference/meeting to the landowner covered by the
Compulsory Case Acquisition Folder. Invitations to the said conference/meeting shall also be sent to the
prospective farmer-beneficiaries, the BARC representative(s), the Land Bank of the Philippines (LBP)
representative, and other interested parties to discuss the inputs to the valuation of the property. He shall discuss
the MARO/BARC investigation report and solicit the views, objection, agreements or suggestions of the
participants thereon. The landowner shall also be asked to indicate his retention area . The minutes of the meeting
shall be signed by all participants in the conference and shall form an integral part of the CACF.

4. Submit all completed case folders to the Provincial Agrarian Reform Officer (PARO).

B. The PARO shall:

1. Ensure that the individual case folders are forwarded to him by his MAROs.

2. Immediately upon receipt of a case folder, compute the valuation of the land in accordance with A.O. No. 6,
Series of 1988. 47 The valuation worksheet and the related CACF valuation forms shall be duly certified correct by
the PARO and all the personnel who participated in the accomplishment of these forms.

3. In all cases, the PARO may validate the report of the MARO through ocular inspection and verification of the
property. This ocular inspection and verification shall be mandatory when the computed value exceeds = 500,000
per estate.

4. Upon determination of the valuation, forward the case folder, together with the duly accomplished valuation
forms and his recommendations, to the Central Office. The LBP representative and the MARO concerned shall be
furnished a copy each of his report.

C. DAR Central Office, specifically through the Bureau of Land Acquisition and Distribution (BLAD), shall:

1. Within three days from receipt of the case folder from the PARO, review, evaluate and determine the final land
valuation of the property covered by the case folder. A summary review and evaluation report shall be prepared and
duly certified by the BLAD Director and the personnel directly participating in the review and final valuation.

2. Prepare, for the signature of the Secretary or her duly authorized representative, a Notice of Acquisition (CARP
CA Form 8) for the subject property. Serve the Notice to the landowner personally or through registered mail within
three days from its approval. The Notice shall include, among others, the area subject of compulsory acquisition,
and the amount of just compensation offered by DAR.

3. Should the landowner accept the DAR's offered value, the BLAD shall prepare and submit to the Secretary for
approval the Order of Acquisition. However, in case of rejection or non-reply, the DAR Adjudication Board (DARAB)
shall conduct a summary administrative hearing to determine just compensation, in accordance with the
procedures provided under Administrative Order No. 13, Series of 1989. Immediately upon receipt of the DARAB's
decision on just compensation, the BLAD shall prepare and submit to the Secretary for approval the required Order
of Acquisition.

4. Upon the landowner's receipt of payment, in case of acceptance, or upon deposit of payment in the designated
bank, in case of rejection or non-response, the Secretary shall immediately direct the pertinent Register of Deeds to
issue the corresponding Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. Once the
property is transferred, the DAR, through the PARO, shall take possession of the land for redistribution to qualified
beneficiaries.

Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform Officer (MARO) keep an updated master list of all agricultural lands
under the CARP in his area of responsibility containing all the required information. The MARO prepares a Compulsory Acquisition Case Folder (CACF) for each
title covered by CARP. The MARO then sends the landowner a "Notice of Coverage" and a "letter of invitation" to a "conference/meeting" over the land covered
by the CACF. He also sends invitations to the prospective farmer-beneficiaries the representatives of the Barangay Agrarian Reform Committee (BARC), the
Land Bank of the Philippines (LBP) and other interested parties to discuss the inputs to the valuation of the property and solicit views, suggestions, objections or
agreements of the parties. At the meeting, the landowner is asked to indicate his retention area.

The MARO shall make a report of the case to the Provincial Agrarian Reform Officer (PARO) who shall complete the valuation of the land. Ocular inspection and
verification of the property by the PARO shall be mandatory when the computed value of the estate exceeds P500,000.00. Upon determination of the valuation,
the PARO shall forward all papers together with his recommendation to the Central Office of the DAR. The DAR Central Office, specifically, the Bureau of Land
Acquisition and Distribution (BLAD), shall review, evaluate and determine the final land valuation of the property. The BLAD shall prepare, on the signature of the
Secretary or his duly authorized representative, a Notice of Acquisition for the subject property. 48 From this point, the provisions of Section 16 of R.A. 6657 then
apply. 49

For a valid implementation of the CAR program, two notices are required: (1) the Notice of Coverage and letter of invitation to a preliminary conference sent to
the landowner, the representatives of the BARC, LBP, farmer beneficiaries and other interested parties pursuant to DAR A.O. No. 12, Series of 1989; and (2) the
Notice of Acquisition sent to the landowner under Section 16 of the CARL.

The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to the conference, and its actual conduct cannot be understated. They
are steps designed to comply with the requirements of administrative due process. The implementation of the CARL is an exercise of the State's police power
and the power of eminent domain. To the extent that the CARL prescribes retention limits to the landowners, there is an exercise of police power for the
regulation of private property in accordance with the Constitution. 50 But where, to carry out such regulation, the owners are deprived of lands they own in
excess of the maximum area allowed, there is also a taking under the power of eminent domain. The taking contemplated is not a mere limitation of the use of
the land. What is required is the surrender of the title to and physical possession of the said excess and all beneficial rights accruing to the owner in favor of the
farmer beneficiary. 51 The Bill of Rights provides that "[n]o person shall be deprived of life, liberty or property without due process of law." 52 The CARL was not
intended to take away property without due process of law. 53 The exercise of the power of eminent domain requires that due process be observed in the taking
of private property.

DAR A.O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung, was amended in 1990 by DAR A.O. No. 9, Series of 1990 and in 1993 by
DAR A.O. No. 1, Series of 1993. The Notice of Coverage and letter of invitation to the conference meeting were expanded and amplified in said amendments.

DAR A.O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of Agricultural Lands Subject of Voluntary Offer to Sell and Compulsory
Acquisition Pursuant to R.A. 6657," requires that:

B. MARO

1. Receives the duly accomplished CARP Form Nos. 1 & 1.1 including supporting
documents.

2. Gathers basic ownership documents listed under 1.a or 1.b above and prepares
corresponding VOCF/CACF by landowner/landholding.

3. Notifies/invites the landowner and representatives of the LBP, DENR, BARC and
prospective beneficiaries of the schedule of ocular inspection of the property at least one
week in advance.

4. MARO/LAND BANK FIELD OFFICE/BARC

a) Identify the land and landowner, and determine the suitability for
agriculture and productivity of the land and jointly prepare Field
Investigation Report (CARP Form No. 2), including the Land Use Map
of the property.

b) Interview applicants and assist them in the preparation of the

Application For Potential CARP Beneficiary (CARP Form No. 3).

c) Screen prospective farmer-beneficiaries and for those found

qualified, cause the signing of the respective Application to Purchase
and Farmer's Undertaking (CARP Form No. 4).

d) Complete the Field Investigation Report based on the result of the

ocular inspection/investigation of the property and documents
submitted. See to it that Field Investigation Report is duly
accomplished and signed by all concerned.

5. MARO

a) Assists the DENR Survey Party in the conduct of a boundary/

subdivision survey delineating areas covered by OLT, retention,
subject of VOS, CA (by phases, if possible), infrastructures, etc.,
whichever is applicable.

b) Sends Notice of Coverage (CARP Form No. 5) to landowner

concerned or his duly authorized representative inviting him for a
conference.

c) Sends Invitation Letter (CARP Form No. 6) for a conference/public

hearing to prospective farmer-beneficiaries, landowner,
representatives of BARC, LBP, DENR, DA, NGO's, farmers'
organizations and other interested parties to discuss the following
matters:

Result of Field Investigation

Inputs to valuation

Issues raised

Comments/recommendations by all parties

concerned.

d) Prepares Summary of Minutes of the conference/public hearing to

be guided by CARP Form No. 7.

e) Forwards the completed VOCF/CACF to the Provincial Agrarian

Reform Office (PARO) using CARP Form No. 8 (Transmittal Memo to
PARO).

xxx xxx xxx

DAR A.O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell (VOS) and Compulsory Acquisition (CA) transactions involving lands
enumerated under Section 7 of the CARL. 54 In both VOS and CA. transactions, the MARO prepares the Voluntary Offer to Sell Case Folder (VOCF) and the
Compulsory Acquisition Case Folder (CACF), as the case may be, over a particular landholding. The MARO notifies the landowner as well as representatives of
the LBP, BARC and prospective beneficiaries of the date of the ocular inspection of the property at least one week before the scheduled date and invites them to
attend the same. The MARO, LBP or BARC conducts the ocular inspection and investigation by identifying the land and landowner, determining the suitability of
the land for agriculture and productivity, interviewing and screening prospective farmer beneficiaries. Based on its investigation, the MARO, LBP or BARC
prepares the Field Investigation Report which shall be signed by all parties concerned. In addition to the field investigation, a boundary or subdivision survey of
the land may also be conducted by a Survey Party of the Department of Environment and Natural Resources (DENR) to be assisted by the MARO. 55 This
survey shall delineate the areas covered by Operation Land Transfer (OLT), areas retained by the landowner, areas with infrastructure, and the areas subject to
VOS and CA. After the survey and field investigation, the MARO sends a "Notice of Coverage" to the landowner or his duly authorized representative inviting him
to a conference or public hearing with the farmer beneficiaries, representatives of the BARC, LBP, DENR, Department of Agriculture (DA), non-government
organizations, farmer's organizations and other interested parties. At the public hearing, the parties shall discuss the results of the field investigation, issues that
may be raised in relation thereto, inputs to the valuation of the subject landholding, and other comments and recommendations by all parties concerned. The
Minutes of the conference/public hearing shall form part of the VOCF or CACF which files shall be forwarded by the MARO to the PARO. The PARO reviews,
evaluates and validates the Field Investigation Report and other documents in the VOCF/CACF. He then forwards the records to the RARO for another review.

DAR A.O. No. 9, Series of 1990 was amended by DAR A.O. No. 1, Series of 1993. DAR A.O. No. 1, Series of 1993 provided, among others, that:

IV. OPERATING PROCEDURES:

Steps Responsible Activity Forms/

Agency/Unit Document

(requirements)

A. Identification and

Documentation

xxx xxx xxx

5 DARMO Issue Notice of Coverage CARP

to LO by personal delivery Form No. 2

with proof of service, or

registered mail with return

card, informing him that his

property is now under CARP

coverage and for LO to select

his retention area, if he desires

to avail of his right of retention;

and at the same time invites him

to join the field investigation to

be conducted on his property

which should be scheduled at

least two weeks in advance of

said notice.

A copy of said Notice shall CARP

be posted for at least one Form No. 17

week on the bulletin board of

the municipal and barangay

halls where the property is

located. LGU office concerned

notifies DAR about compliance

with posting requirements thru

return indorsement on CARP

Form No. 17.

6 DARMO Send notice to the LBP, CARP

BARC, DENR representatives Form No. 3

and prospective ARBs of the schedule of the field investigation

to be conducted on the subject

property.

7 DARMO With the participation of CARP

BARC the LO, representatives of Form No. 4

LBP the LBP, BARC, DENR Land Use

DENR and prospective ARBs, Map

Local Office conducts the investigation on

subject property to identify

the landholding, determines

its suitability and productivity;

and jointly prepares the Field

Investigation Report (FIR)

and Land Use Map. However,

the field investigation shall

proceed even if the LO, the

representatives of the DENR and

prospective ARBs are not available

provided, they were given due

notice of the time and date of

investigation to be conducted.

Similarly, if the LBP representative

is not available or could not come

on the scheduled date, the field

investigation shall also be conducted,

after which the duly accomplished

Part I of CARP Form No. 4 shall

be forwarded to the LBP

representative for validation. If he agrees

to the ocular inspection report of DAR,

he signs the FIR (Part I) and

accomplishes Part II thereof.

In the event that there is a

difference or variance between

the findings of the DAR and the

LBP as to the propriety of

covering the land under CARP,

whether in whole or in part, on

the issue of suitability to agriculture,

degree of development or slope,

and on issues affecting idle lands,

the conflict shall be resolved by

a composite team of DAR, LBP,

DENR and DA which shall jointly

conduct further investigation

thereon. The team shall submit its

report of findings which shall be

binding to both DAR and LBP,

pursuant to Joint Memorandum

Circular of the DAR, LBP, DENR

and DA dated 27 January 1992.

8 DARMO Screen prospective ARBs

BARC and causes the signing of CARP

the Application of Purchase Form No. 5

and Farmer's Undertaking

(APFU).

9 DARMO Furnishes a copy of the CARP

 duly accomplished FIR to Form No. 4

the landowner by personal

delivery with proof of

service or registered mail

will return card and posts

a copy thereof for at least

one week on the bulletin

board of the municipal

and barangay halls where

the property is located.

LGU office concerned CARP

notifies DAR about Form No. 17

compliance with posting

requirement thru return

endorsement on CARP

Form No. 17.

B. Land Survey

10 DARMO Conducts perimeter or Perimeter

And/or segregation survey or

DENR delineating areas covered Segregation

Local Office by OLT, "uncarpable Survey Plan

areas such as 18% slope

and above, unproductive/

unsuitable to agriculture,

retention, infrastructure.

In case of segregation or

subdivision survey, the

plan shall be approved

by DENR-LMS.

C. Review and Completion

of Documents

11. DARMO Forward VOCF/CACF CARP

to DARPO. Form No. 6

xxx xxx xxx.

DAR A.O. No. 1, Series of 1993, modified the identification process and increased the number of government agencies involved in the identification and
delineation of the land subject to acquisition. 56 This time, the Notice of Coverage is sent to the landowner before the conduct of the field investigation and the
sending must comply with specific requirements. Representatives of the DAR Municipal Office (DARMO) must send the Notice of Coverage to the landowner by
"personal delivery with proof of service, or by registered mail with return card," informing him that his property is under CARP coverage and that if he desires to
avail of his right of retention, he may choose which area he shall retain. The Notice of Coverage shall also invite the landowner to attend the field investigation to
be scheduled at least two weeks from notice. The field investigation is for the purpose of identifying the landholding and determining its suitability for agriculture
and its productivity. A copy of the Notice of Coverage shall be posted for at least one week on the bulletin board of the municipal and barangay halls where the
property is located. The date of the field investigation shall also be sent by the DAR Municipal Office to representatives of the LBP, BARC, DENR and
prospective farmer beneficiaries. The field investigation shall be conducted on the date set with the participation of the landowner and the various
representatives. If the landowner and other representatives are absent, the field investigation shall proceed, provided they were duly notified thereof. Should
there be a variance between the findings of the DAR and the LBP as to whether the land be placed under agrarian reform, the land's suitability to agriculture, the
degree or development of the slope, etc., the conflict shall be resolved by a composite team of the DAR, LBP, DENR and DA which shall jointly conduct further
investigation. The team's findings shall be binding on both DAR and LBP. After the field investigation, the DAR Municipal Office shall prepare the Field
Investigation Report and Land Use Map, a copy of which shall be furnished the landowner "by personal delivery with proof of service or registered mail with
return card." Another copy of the Report and Map shall likewise be posted for at least one week in the municipal or barangay halls where the property is located.

Clearly then, the notice requirements under the CARL are not confined to the Notice of Acquisition set forth in Section 16 of the law. They also include the Notice
of Coverage first laid down in DAR A.O. No. 12, Series of 1989 and subsequently amended in DAR A.O. No. 9, Series of 1990 and DAR A.O. No. 1, Series of
1993. This Notice of Coverage does not merely notify the landowner that his property shall be placed under CARP and that he is entitled to exercise his retention
right; it also notifies him, pursuant to DAR A.O. No. 9, Series of 1990, that a public hearing, shall be conducted where he and representatives of the concerned
sectors of society may attend to discuss the results of the field investigation, the land valuation and other pertinent matters. Under DAR A.O. No. 1, Series of
1993, the Notice of Coverage also informs the landowner that a field investigation of his landholding shall be conducted where he and the other representatives
may be present.

B. The Compulsory Acquisition of Haciendas Palico and Banilad

In the case at bar, respondent DAR claims that it, through MARO Leopoldo C. Lejano, sent a letter of invitation entitled "Invitation to Parties" dated September
29, 1989 to petitioner corporation, through Jaime Pimentel, the administrator of Hacienda Palico. 57 The invitation was received on the same day it was sent as
indicated by a signature and the date received at the bottom left corner of said invitation. With regard to Hacienda Banilad, respondent DAR claims that Jaime
Pimentel, administrator also of Hacienda Banilad, was notified and sent an invitation to the conference. Pimentel actually attended the conference on September
21, 1989 and signed the Minutes of the meeting on behalf of petitioner corporation. 58 The Minutes was also signed by the representatives of the BARC, the LBP
and farmer beneficiaries. 59 No letter of invitation was sent or conference meeting held with respect to Hacienda Caylaway because it was subject to a Voluntary
Offer to Sell to respondent DAR. 60

When respondent DAR, through the Municipal Agrarian Reform Officer (MARO), sent to the various parties the Notice of Coverage and invitation to the
conference, DAR A.O. No. 12, Series of 1989 was already in effect more than a month earlier. The Operating Procedure in DAR Administrative Order No. 12
does not specify how notices or letters of invitation shall be sent to the landowner, the representatives of the BARC, the LBP, the farmer beneficiaries and other
interested parties. The procedure in the sending of these notices is important to comply with the requisites of due process especially when the owner , as in this
case, is a juridical entity. Petitioner is a domestic
corporation, 61 and therefore, has a personality separate and distinct from its shareholders, officers and employees.

The Notice of Acquisition in Section 16 of the CARL is required to be sent to the landowner by "personal delivery or registered mail." Whether the landowner be a
natural or juridical person to whose address the Notice may be sent by personal delivery or registered mail , the law does not distinguish. The DAR Administrative
Orders also do not distinguish. In the proceedings before the DAR, the distinction between natural and juridical persons in the sending of notices may be found in
the Revised Rules of Procedure of the DAR Adjudication Board (DARAB). Service of pleadings before the DARAB is governed by Section 6, Rule V of the
DARAB Revised Rules of Procedure. Notices and pleadings are served on private domestic corporations or partnerships in the following manner:

Sec. 6. Service upon Private Domestic Corporation or Partnership. — If the defendant is a corporation organized under the laws of the
Philippines or a partnership duly registered, service may be made on the president, manager, secretary, cashier, agent, or any of its
directors or partners.

Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14 provides:

Sec. 13. Service upon private domestic corporation or partnership. — If the defendant is a corporation organized under the laws of the
Philippines or a partnership duly registered, service may be made on the president, manager, secretary, cashier, agent, or any of its
directors.

Summonses, pleadings and notices in cases against a private domestic corporation before the DARAB and the regular courts are served on the president,
manager, secretary, cashier, agent or any of its directors. These persons are those through whom the private domestic corporation or partnership is capable of
action. 62

Jaime Pimentel is not the president, manager, secretary, cashier or director of petitioner corporation. Is he, as administrator of the two Haciendas, considered an
agent of the corporation?

The purpose of all rules for service of process on a corporation is to make it reasonably certain that the corporation will receive prompt and proper notice in an
action against it. 63 Service must be made on a representative so integrated with the corporation as to make it a priori supposable that he will realize his
responsibilities and know what he should do with any legal papers served on him, 64 and bring home to the corporation notice of the filing of the action. 65
Petitioner's evidence does not show the official duties of Jaime Pimentel as administrator of petitioner's haciendas. The evidence does not indicate whether
Pimentel's duties is so integrated with the corporation that he would immediately realize his responsibilities and know what he should do with any legal papers
served on him. At the time the notices were sent and the preliminary conference conducted, petitioner's principal place of business was listed in respondent
DAR's records as "Soriano Bldg., Plaza Cervantes, Manila," 66 and "7th Flr. Cacho-Gonzales Bldg., 101 Aguirre St., Makati, Metro Manila." 67 Pimentel did not
hold office at the principal place of business of petitioner. Neither did he exercise his functions in Plaza Cervantes, Manila nor in Cacho-Gonzales Bldg., Makati,
Metro Manila. He performed his official functions and actually resided in the haciendas in Nasugbu, Batangas, a place over two hundred kilometers away from
Metro Manila.

Curiously, respondent DAR had information of the address of petitioner's principal place of business. The Notices of Acquisition over Haciendas Palico and
Banilad were addressed to petitioner at its offices in Manila and Makati. These Notices were sent barely three to four months after Pimentel was notified of the
preliminary conference. 68 Why respondent DAR chose to notify Pimentel instead of the officers of the corporation was not explained by the said respondent.

Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the notices and letters of invitation were validly served on petitioner through
him, there is no showing that Pimentel himself was duly authorized to attend the conference meeting with the MARO, BARC and LBP representatives and farmer
beneficiaries for purposes of compulsory acquisition of petitioner's landholdings. Even respondent DAR's evidence does not indicate this authority. On the
contrary, petitioner claims that it had no knowledge of the letter-invitation, hence, could not have given Pimentel the authority to bind it to whatever matters were
discussed or agreed upon by the parties at the preliminary conference or public hearing. Notably, one year after Pimentel was informed of the preliminary
conference, DAR A.O. No. 9, Series of 1990 was issued and this required that the Notice of Coverage must be sent "to the landowner concerned or his duly
authorized representative." 69

Assuming further that petitioner was duly notified of the CARP coverage of its haciendas, the areas found actually subject to CARP were not properly identified
before they were taken over by respondent DAR. Respondents insist that the lands were identified because they are all registered property and the technical
description in their respective titles specifies their metes and bounds. Respondents admit at the same time, however, that not all areas in the haciendas were
placed under the comprehensive agrarian reform program invariably by reason of elevation or character or use of the land. 70

The acquisition of the landholdings did not cover the entire expanse of the two haciendas, but only portions thereof. Hacienda Palico has an area of 1,024
hectares and only 688.7576 hectares were targetted for acquisition. Hacienda Banilad has an area of 1,050 hectares but only 964.0688 hectares were subject to
CARP. The haciendas are not entirely agricultural lands. In fact, the various tax declarations over the haciendas describe the landholdings as "sugarland," and
"forest, sugarland, pasture land, horticulture and woodland." 71

Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically requires that the land subject to land reform be first identified. The two
haciendas in the instant case cover vast tracts of land. Before Notices of Acquisition were sent to petitioner, however, the exact areas of the landholdings were
not properly segregated and delineated. Upon receipt of this notice, therefore, petitioner corporation had no idea which portions of its estate were subject to
compulsory acquisition, which portions it could rightfully retain, whether these retained portions were compact or contiguous, and which portions were excluded
from CARP coverage. Even respondent DAR's evidence does not show that petitioner, through its duly authorized representative, was notified of any ocular
inspection and investigation that was to be conducted by respondent DAR. Neither is there proof that petitioner was given the opportunity to at least choose and
identify its retention area in those portions to be acquired compulsorily. The right of retention and how this right is exercised, is guaranteed in Section 6 of the
CARL, viz:

Sec. 6. Retention Limits. — . . . .

The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner; Provided, however, That
in case the area selected for retention by the landowner is tenanted, the tenant shall have the option to choose whether to remain therein
or be a beneficiary in the same or another agricultural land with similar or comparable features. In case the tenant chooses to remain in
the retained area, he shall be considered a leaseholder and shall lose his right to be a beneficiary under this Act. In case the tenant
chooses to be a beneficiary in another agricultural land, he loses his right as a leaseholder to the land retained by the landowner. The
tenant must exercise this option within a period of one (1) year from the time the landowner manifests his choice of the area for retention.
Under the law, a landowner may retain not more than five hectares out of the total area of his agricultural land subject to CARP. The right to choose the area to
be retained, which shall be compact or contiguous, pertains to the landowner. If the area chosen for retention is tenanted, the tenant shall have the option to
choose whether to remain on the portion or be a beneficiary in the same or another agricultural land with similar or comparable features.

C. The Voluntary Acquisition of Hacienda Caylaway

Petitioner was also left in the dark with respect to Hacienda Caylaway, which was the subject of a Voluntary Offer to Sell (VOS). The VOS in the instant case was
made on May 6, 1988, 72 before the effectivity of R.A. 6657 on June 15, 1988. VOS transactions were first governed by DAR Administrative Order No. 19, series
of 1989, 73 and under this order, all VOS filed before June 15, 1988 shall be heard and processed in accordance with the procedure provided for in Executive
Order No. 229, thus:

III. All VOS transactions which are now pending before the DAR and for which no payment has been made shall be subject to the notice
and hearing requirements provided in Administrative Order No. 12, Series of 1989, dated 26 July 1989, Section II, Subsection A,
paragraph 3.

All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall be heard and processed in accordance with the procedure
provided for in Executive Order No. 229.

xxx xxx xxx.

Sec. 9 of E.O. 229 provides:

Sec. 9. Voluntary Offer to Sell. — The government shall purchase all agricultural lands it deems productive and suitable to farmer
cultivation voluntarily offered for sale to it at a valuation determined in accordance with Section 6. Such transaction shall be exempt from
the payment of capital gains tax and other taxes and fees.

Executive Order 229 does not contain the procedure for the identification of private land as set forth in DAR A.O. No. 12, Series of 1989. Section 5 of E.O. 229
merely reiterates the procedure of acquisition in Section 16, R.A. 6657. In other words, the E.O. is silent as to the procedure for the identification of the land, the
notice of coverage and the preliminary conference with the landowner, representatives of the BARC, the LBP and farmer beneficiaries. Does this mean that these
requirements may be dispensed with regard to VOS filed before June 15, 1988? The answer is no.

First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land, landowner and beneficiaries of the land subject to agrarian reform be
identified before the notice of acquisition should be issued. 74 Hacienda Caylaway was voluntarily offered for sale in 1989. The Hacienda has a total area of
867.4571 hectares and is covered by four (4) titles. In two separate Resolutions both dated January 12, 1989, respondent DAR, through the Regional Director,
formally accepted the VOS over the two of these four
titles. 75 The land covered by two titles has an area of 855.5257 hectares, but only 648.8544 hectares thereof fell within the coverage of R.A. 6657. 76 Petitioner
claims it does not know where these portions are located.

Respondent DAR, on the other hand, avers that surveys on the land covered by the four titles were conducted in 1989, and that petitioner, as landowner, was not
denied participation therein, The results of the survey and the land valuation summary report, however, do not indicate whether notices to attend the same were
actually sent to and received by petitioner or its duly authorized representative. 77 To reiterate, Executive Order No. 229 does not lay down the operating
procedure, much less the notice requirements, before the VOS is accepted by respondent DAR. Notice to the landowner, however, cannot be dispensed with. It
is part of administrative due process and is an essential requisite to enable the landowner himself to exercise, at the very least, his right of retention guaranteed
under the CARL.

III. The Conversion of the three Haciendas.

It is petitioner's claim that the three haciendas are not subject to agrarian reform because they have been declared for tourism, not agricultural
purposes. 78 In 1975, then President Marcos issued Proclamation No. 1520 declaring the municipality of Nasugbu, Batangas a tourist zone. Lands in Nasugbu,
including the subject haciendas, were allegedly reclassified as non-agricultural 13 years before the effectivity of R. A. No. 6657. 79 In 1993, the Regional Director
for Region IV of the Department of Agriculture certified that the haciendas are not feasible and sound for agricultural development. 80 On March 20, 1992,
pursuant to Proclamation No. 1520, the Sangguniang Bayan of Nasugbu, Batangas adopted Resolution No. 19 reclassifying certain areas of Nasugbu as non-
agricultural. 81 This Resolution approved Municipal Ordinance No. 19, Series of 1992, the Revised Zoning Ordinance of Nasugbu 82 which zoning ordinance
was based on a Land Use Plan for Planning Areas for New Development allegedly prepared by the University of the Philippines. 83 Resolution No. 19 of the
Sangguniang Bayan was approved by the Sangguniang Panlalawigan of Batangas on March 8, 1993. 84

Petitioner claims that proclamation No. 1520 was also upheld by respondent DAR in 1991 when it approved conversion of 1,827 hectares in Nasugbu into a
tourist area known as the Batulao Resort Complex, and 13.52 hectares in Barangay Caylaway as within the potential tourist belt. 85 Petitioner present evidence
before us that these areas are adjacent to the haciendas subject of this petition, hence, the haciendas should likewise be converted. Petitioner urges this Court
to take cognizance of the conversion proceedings and rule accordingly. 6

We do not agree. Respondent DAR's failure to observe due process in the acquisition of petitioner's landholdings does not ipso facto give this Court the power to
adjudicate over petitioner's application for conversion of its haciendas from agricultural to non-agricultural . The agency charged with the mandate of approving or
disapproving applications for conversion is the DAR.

At the time petitioner filed its application for conversion, the Rules of Procedure governing the processing and approval of applications for land use conversion
was the DAR A.O. No. 2, Series of 1990. Under this A.O., the application for conversion is filed with the MARO where the property is located. The MARO reviews
the application and its supporting documents and conducts field investigation and ocular inspection of the property. The findings of the MARO are subject to
review and evaluation by the Provincial Agrarian Reform Officer (PARO). The PARO may conduct further field investigation and submit a supplemental report
together with his recommendation to the Regional Agrarian Reform Officer (RARO) who shall review the same. For lands less than five hectares, the RARO shall
approve or disapprove applications for conversion. For lands exceeding five hectares, the RARO shall evaluate the PARO Report and forward the records and
his report to the Undersecretary for Legal Affairs. Applications over areas exceeding fifty hectares are approved or disapproved by the Secretary of Agrarian
Reform.

The DAR's mandate over applications for conversion was first laid down in Section 4 (j) and Section 5 (l) of Executive Order No. 129-A, Series of 1987 and
reiterated in the CARL and Memorandum Circular No. 54, Series of 1993 of the Office of the President. The DAR's jurisdiction over applications for conversion is
provided as follows:

A. The Department of Agrarian Reform (DAR) is mandated to "approve or disapprove applications for conversion,
restructuring or readjustment of agricultural lands into non-agricultural uses," pursuant to Section 4 (j) of Executive
Order No. 129-A, Series of 1987.

B. Sec. 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR, exclusive authority to approve or disapprove
applications for conversion of agricultural lands for residential, commercial, industrial and other land uses.

C. Sec. 65 of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, likewise
empowers the DAR to authorize under certain conditions, the conversion of agricultural lands.

D. Sec. 4 of Memorandum Circular No. 54, Series of 1993 of the Office of the President, provides that "action on
 applications for land use conversion on individual landholdings shall remain as the responsibility of the DAR, which
shall utilize as its primary reference, documents on the comprehensive land use plans and accompanying
ordinances passed upon and approved by the local government units concerned, together with the National Land
Use Policy, pursuant to R.A. No. 6657 and E.O. No. 129-A. 87

Applications for conversion were initially governed by DAR A.O. No. 1, Series of 1990 entitled "Revised Rules and Regulations Governing Conversion of Private
Agricultural Lands and Non-Agricultural Uses," and DAR A.O. No. 2, Series of 1990 entitled "Rules of Procedure Governing the Processing and Approval of
Applications for Land Use Conversion." These A.O.'s and other implementing guidelines, including Presidential issuances and national policies related to land
use conversion have been consolidated in DAR A.O. No. 07, Series of 1997. Under this recent issuance, the guiding principle in land use conversion is:

to preserve prime agricultural lands for food production while, at the same time, recognizing the need of the other sectors of society
(housing, industry and commerce) for land, when coinciding with the objectives of the Comprehensive Agrarian Reform Law to promote
social justice, industrialization and the optimum use of land as a national resource for public welfare. 88

"Land Use" refers to the manner of utilization of land, including its allocation, development and management. "Land Use Conversion" refers to the act or process
of changing the current use of a piece of agricultural land into some other use as approved by the DAR. 89 The conversion of agricultural land to uses other than
agricultural requires field investigation and conferences with the occupants of the land. They involve factual findings and highly technical matters within the
special training and expertise of the DAR. DAR A.O. No. 7, Series of 1997 lays down with specificity how the DAR must go about its task. This time, the field
investigation is not conducted by the MARO but by a special task force, known as the Center for Land Use Policy Planning and Implementation (CLUPPI-DAR
Central Office). The procedure is that once an application for conversion is filed, the CLUPPI prepares the Notice of Posting. The MARO only posts the notice
and thereafter issues a certificate to the fact of posting. The CLUPPI conducts the field investigation and dialogues with the applicants and the farmer
beneficiaries to ascertain the information necessary for the processing of the application. The Chairman of the CLUPPI deliberates on the merits of the
investigation report and recommends the appropriate action. This recommendation is transmitted to the Regional Director, thru the Undersecretary, or Secretary
of Agrarian Reform. Applications involving more than fifty hectares are approved or disapproved by the Secretary. The procedure does not end with the
Secretary, however. The Order provides that the decision of the Secretary may be appealed to the Office of the President or the Court of Appeals, as the case
may be, viz:

Appeal from the decision of the Undersecretary shall be made to the Secretary, and from the Secretary to the Office of the President or
the Court of Appeals as the case may be. The mode of appeal/motion for reconsideration, and the appeal fee, from Undersecretary to the
Office of the Secretary shall be the same as that of the Regional Director to the Office of the Secretary. 90

Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto itself authority to resolve a controversy the jurisdiction over which is initially
lodged with an administrative body of special competence. 91 Respondent DAR is in a better position to resolve petitioner's application for conversion, being
primarily the agency possessing the necessary expertise on the matter. The power to determine whether Haciendas Palico, Banilad and Caylaway are non-
agricultural, hence, exempt from the coverage of the CARL lies with the DAR, not with this Court.

Finally, we stress that the failure of respondent DAR to comply with the requisites of due process in the acquisition proceedings does not give this Court the
power to nullify the CLOA's already issued to the farmer beneficiaries. To assume the power is to short-circuit the administrative process, which has yet to run its
regular course. Respondent DAR must be given the chance to correct its procedural lapses in the acquisition proceedings. In Hacienda Palico alone, CLOA's
were issued to 177 farmer beneficiaries in 1993. 92 Since then until the present, these farmers have been cultivating their lands. 93 It goes against the basic
precepts of justice, fairness and equity to deprive these people, through no fault of their own, of the land they till. Anyhow, the farmer beneficiaries hold the
property in trust for the rightful owner of the land.

IN VIEW WHEREOF, the petition is granted in part and the acquisition proceedings over the three haciendas are nullified for respondent DAR's failure to observe
due process therein. In accordance with the guidelines set forth in this decision and the applicable administrative procedure, the case is hereby remanded to
respondent DAR for proper acquisition proceedings and determination of petitioner's application for conversion.

SO ORDERED.

Davide, Jr., C.J., Bellosillo, Vitug, Mendoza, Panganiban, Purisima, Buena, Gonzaga-Reyes and De Leon, Jr., JJ., concur.

Melo, J., please see concurring and dissenting opinion.

Ynares-Santiago, J., concurring and dissenting opinion.

Kapunan, J., I join in the concurring and dissenting opinion of Justice C. Y. Santiago.

Quisumbing, J., I join the in the concurring and dissenting opinion of J. Santiago.

Pardo, J., I join the concurring and dissenting opinion of J. Santiago.

Separate Opinions

MELO, J., concurring and dissenting opinion;

I concur in the ponencia of Justice Ynares-Santiago, broad and exhaustive as it is in its treatment of the issues. However, I would like to call attention to two or
three points which I believe are deserving of special emphasis.

The apparent incongruity or shortcoming in the petition is DAR's disregard of a law which settled the non-agricultural nature of the property as early as 1975.
Related to this are the inexplicable contradictions between DAR's own official issuances and its challenged actuations in this particular case.

Presidential Proclamation No. 1520 has the force and effect of law unless repealed. This law declared Nasugbu, Batangas as a tourist zone.

Considering the new and pioneering stage of the tourist industry in 1975, it can safely be assumed that Proclamation 1520 was the result of empirical study and
careful determination, not political or extraneous pressures. It cannot be disregarded by DAR or any other department of Government.

In Province of Camarines Sur, et al. vs. Court of Appeals, et al. (222 SCRA 173, 182 [1993]), we ruled that local governments need not obtain the approval of
DAR to reclassify lands from agricultural to non-agricultural use. In the present case, more than the exercise of that power, the local governments were merely
putting into effect a law when they enacted the zoning ordinances in question.

Any doubts as to the factual correctness of the zoning reclassifications are answered by the February 2, 1993 certification of the Department of Agriculture that
the subject landed estates are not feasible and economically viable for agriculture, based on the examination of their slope, terrain, depth, irrigability, fertility,
acidity, and erosion considerations.

I agree with the ponencia's rejection of respondent's argument that agriculture is not incompatible and may be enforced in an area declared by law as a tourist
zone. Agriculture may contribute to the scenic views and variety of countryside profiles but the issue in this case is not the beauty of ricefields, cornfields, or
coconut groves. May land found to be non-agricultural and declared as a tourist zone by law, be withheld from the owner's efforts to develop it as such? There
are also plots of land within Clark Field and other commercial-industrial zones capable of cultivation but this does not subject them to compulsory land reform. It
is the best use of the land for tourist purposes, free trade zones, export processing or the function to which it is dedicated that is the determining factor. Any
cultivation is temporary and voluntary.
The other point I wish to emphasize is DAR's failure to follow its own administrative orders and regulations in this case.

The contradictions between DAR administrative orders and its actions in the present case may be summarized:

1. DAR Administrative Order No. 6, Series of 1994, subscribes to Department of Justice Opinion No. 44, Series of 1990 that lands classified as non-agricultural
prior to June 15, 1988 when the CARP Law was passed are exempt from its coverage. By what right can DAR now ignore its own Guidelines in this case of land
declared as forming a tourism zone since 1975?

2. DAR Order dated January 22, 1991 granted the conversion of the adjacent and contiguous property of Group Developers and Financiers, Inc. (GDFI) into the
Batulao Tourist Resort. Why should DAR have a contradictory stance in the adjoining property of Roxas and Co., Inc. found to be similar in nature and declared
as such?

3. DAR Exemption Order, Case No. H-9999-050-97 dated May 17, 1999 only recently exempted 13.5 hectares of petitioner's property also found in Caylaway
together, and similarly situated, with the bigger parcel (Hacienda Caylaway) subject of this petition from CARL coverage. To that extent, it admits that its earlier
blanket objections are unfounded.

4. DAR Administrative Order No. 3, Series of 1996 identifies the land outside of CARP coverage as:

(a) Land found by DAR as no longer suitable for agriculture and which cannot be given appropriate valuation by the
Land Bank;

(b) Land where DAR has already issued a conversion order;

(c) Land determined as exempt under DOJ Opinions Nos. 44 and 181; or

(d) Land declared for non-agricultural use by Presidential Proclamation.

It is readily apparent that the land in this case falls under all the above categories except the second one. DAR is acting contrary to its own rules and regulations.

I should add that DAR has affirmed in a Rejoinder (August 20, 1999) the issuance and effectivity of the above administrative orders.

DAR Administrative Order No. 3, Series of 1996, Paragraph 2 of Part II, Part III and Part IV outlines the procedure for reconveyance of land where CLOAs have
been improperly issued. The procedure is administrative, detailed, simple, and speedy. Reconveyance is implemented by DAR which treats the procedure as
"enshrined . . . in Section 50 of Republic Act No. 6657" (Respondent's Rejoinder). Administrative Order No. 3, Series of 1996 shows there are no impediments to
administrative or judicial cancellations of CLOA's improperly issued over exempt property. Petitioner further submits, and this respondent does not refute, that 25
CLOAs covering 3,338 hectares of land owned by the Manila Southcoast Development Corporation also found in Nasugbu, Batangas, have been cancelled on
similar grounds as those in the case at bar.

The CLOAs in the instant case were issued over land declared as non-agricultural by a presidential proclamation and confirmed as such by actions of the
Department of Agriculture and the local government units concerned. The CLOAs were issued over adjoining lands similarly situated and of like nature as those
declared by DAR as exempt from CARP coverage. The CLOAs were surprisingly issued over property which were the subject of pending cases still undecided by
DAR. There should be no question over the CLOAs having been improperly issued, for which reason, their cancellation is warranted.

YNARES-SANTIAGO, J., concurring and dissenting opinion;

I concur in the basic premises of the majority opinion. However, I dissent in its final conclusions and the dispositive portion.

With all due respect, the majority opinion centers on procedure but unfortunately ignores the substantive merits which this procedure should unavoidably sustain.

The assailed decision of the Court of Appeals had only one basic reason for its denial of the petition, i.e., the application of the doctrine of non-exhaustion of
administrative remedies. This Court's majority ponencia correctly reverses the Court of Appeals on this issue. The ponencia now states that the issuance of
CLOA's to farmer beneficiaries deprived petitioner Roxas & Co. of its property without just compensation. It rules that the acts of the Department of Agrarian
Reform are patently illegal. It concludes that petitioner's rights were violated, and thus to require it to exhaust administrative remedies before DAR was not a
plain, speedy, and adequate remedy. Correctly, petitioner sought immediate redress from the Court of Appeals to this Court.

However, I respectfully dissent from the judgment which remands the case to the DAR. If the acts of DAR are patently illegal and the rights of Roxas & Co.
violated, the wrong decisions of DAR should be reversed and set aside. It follows that the fruits of the wrongful acts, in this case the illegally issued CLOAs, must
be declared null and void.

Petitioner Roxas & Co. Inc. is the registered owner of three (3) haciendas located in Nasugbu, Batangas, namely: Hacienda Palico comprising of an area of
1,024 hectares more or less, covered by Transfer Certificate of Title No. 985 (Petition, Annex "G"; Rollo, p. 203); Hacienda Banilad comprising an area of 1,050
hectares and covered by TCT No. 924 (Petition, Annex "I"; Rollo, p. 205); and Hacienda Caylaway comprising an area of 867.4571 hectares and covered by TCT
Nos. T-44655 (Petition, Annex "O"; Rollo, p. 216), T-44662 (Petition, Annex "P"; Rollo, p. 217), T-44663 (Petition, Annex "Q"; Rollo, p. 210) and T-44664 (Petition,
Annex "R"; Rollo, p. 221).

Sometime in 1992 and 1993, petitioner filed applications for conversion with DAR. Instead of either denying or approving the applications, DAR ignored and sat
on them for seven (7) years. In the meantime and in acts of deceptive lip-service, DAR excluded some small and scattered lots in Palico and Caylaway from
CARP coverage. The majority of the properties were parceled out to alleged farmer-beneficiaries, one at a time, even as petitioner's applications were pending
and unacted upon.

The majority ponencia cites Section 16 of Republic Act No. 6657 on the procedure for acquisition of private lands.

The ponencia cites the detailed procedures found in DAR Administrative Order No. 12, Series of 1989 for the identification of the land to be acquired. DAR did
not follow its own prescribed procedures. There was no valid issuance of a Notice of Coverage and a Notice of Acquisition.

The procedure on the evaluation and determination of land valuation, the duties of the Municipal Agrarian Reform Officer (MARO), the Barangay Agrarian Reform
Committee (BARC), Provincial Agrarian Reform Officer (PARO) and the Bureau of Land Acquisition and Distribution (BLAD), the documentation and reports on
the step-by-step process, the screening of prospective Agrarian Reform Beneficiaries (ARBs), the land survey and segregation survey plan, and other mandatory
procedures were not followed. The landowner was not properly informed of anything going on.

Equally important, there was no payment of just compensation. I agree with the ponencia that due process was not observed in the taking of petitioner's
properties. Since the DAR did not validly acquire ownership over the lands, there was no acquired property to validly convey to any beneficiary. The CLOAs were
null and void from the start.

Petitioner states that the notices of acquisition were sent by respondents by ordinary mail only, thereby disregarding the procedural requirement that notices be
served personally or by registered mail. This is not disputed by respondents, but they allege that petitioner changed its address without notifying the DAR.
Notably, the procedure prescribed speaks of only two modes of service of notices of acquisition — personal service and service by registered mail. The non-
inclusion of other modes of service can only mean that the legislature intentionally omitted them. In other words, service of a notice of acquisition other than
personally or by registered mail is not valid. Casus omissus pro omisso habendus est. The reason is obvious. Personal service and service by registered mail are
methods that ensure the receipt by the addressee, whereas service by ordinary mail affords no reliable proof of receipt.

Since it governs the extraordinary method of expropriating private property, the CARL should be strictly construed. Consequently, faithful compliance with its
provisions, especially those which relate to the procedure for acquisition of expropriated lands, should be observed. Therefore, the service by respondent DAR of
the notices of acquisition to petitioner by ordinary mail, not being in conformity with the mandate of R.A. 6657, is invalid and ineffective.

With more reason, the compulsory acquisition of portions of Hacienda Palico, for which no notices of acquisition were issued by the DAR, should be declared
invalid.

The entire ponencia, save for the last six (6) pages, deals with the mandatory procedures promulgated by law and DAR and how they have not been complied
with. There can be no debate over the procedures and their violation. However, I respectfully dissent in the conclusions reached in the last six pages. Inspite of
all the violations, the deprivation of petitioner's rights, the non-payment of just compensation, and the consequent nullity of the CLOAs, the Court is remanding
the case to the DAR for it to act on the petitioner's pending applications for conversion which have been unacted upon for seven (7) years.

Petitioner had applications for conversion pending with DAR. Instead of deciding them one way or the other, DAR sat on the applications for seven (7) years. At
that same time it rendered the applications inutile by distributing CLOAs to alleged tenants. This action is even worse than a denial of the applications because
DAR had effectively denied the application against the applicant without rendering a formal decision. This kind of action preempted any other kind of decision
except denial. Formal denial was even unnecessary. In the case of Hacienda Palico, the application was in fact denied on November 8, 1993.

There are indisputable and established factors which call for a more definite and clearer judgment.

The basic issue in this case is whether or not the disputed property is agricultural in nature and covered by CARP. That petitioner's lands are non-agricultural in
character is clearly shown by the evidence presented by petitioner, all of which were not disputed by respondents. The disputed property is definitely not subject
to CARP.

The nature of the land as non-agricultural has been resolved by the agencies with primary jurisdiction and competence to decide the issue, namely — (1) a
Presidential Proclamation in 1975; (2) Certifications from the Department of Agriculture; (3) a Zoning Ordinance of the Municipality of Nasugbu, approved by the
Province of Batangas; and (4) by clear inference and admissions, Administrative Orders and Guidelines promulgated by DAR itself.

The records show that on November 20, 1975 even before the enactment of the CARP law, the Municipality of Nasugbu, Batangas was declared a "tourist zone"
in the exercise of lawmaking power by then President Ferdinand E. Marcos under Proclamation No. 1520 ( Rollo, pp. 122-123). This Presidential Proclamation is
indubitably part of the law of the land.

On 20 March 1992 the Sangguniang Bayan of Nasugbu promulgated its Resolution No. 19, a zonification ordinance ( Rollo, pp. 124-200), pursuant to its powers
under Republic Act No. 7160, i.e., the Local Government Code of 1991. The municipal ordinance was approved by the Sangguniang Panlalawigan of Batangas
(Rollo, p. 201). Under this enactment, portions of the petitioner's properties within the municipality were re-zonified as intended and appropriate for non-
agricultural uses. These two issuances, together with Proclamation 1520, should be sufficient to determine the nature of the land as non-agricultural. But there is
more.

The records also contain a certification dated March 1, 1993 from the Director of Region IV of the Department of Agriculture that the disputed lands are no longer
economically feasible and sound for agricultural purposes (Rollo, p. 213).

DAR itself impliedly accepted and determined that the municipality of Nasugbu is non-agricultural when it affirmed the force and effect of Presidential
Proclamation 1520. In an Order dated January 22, 1991, DAR granted the conversion of the adjoining and contiguous landholdings owned by Group Developer
and Financiers, Inc. in Nasugbu pursuant to the Presidential Proclamation. The property alongside the disputed properties is now known as "Batulao Resort
Complex". As will be shown later, the conversion of various other properties in Nasugbu has been ordered by DAR, including a property disputed in this petition,
Hacienda Caylaway.

Inspite of all the above, the Court of Appeals concluded that the lands comprising petitioner's haciendas are agricultural, citing, among other things, petitioner's
acts of voluntarily offering Hacienda Caylaway for sale and applying for conversion its lands from agricultural to non-agricultural.

Respondents, on the other hand, did not only ignore the administrative and executive decisions. It also contended that the subject land should be deemed
agricultural because it is neither residential, commercial, industrial or timber. The character of a parcel of land, however, is not determined merely by a process of
elimination. The actual use which the land is capable of should be the primordial factor.

RA 6657 explicitly limits its coverage thus:

The Comprehensive Agrarian Reform Law of 1998 shall cover, regardless of tenurial arrangement and commodity produced, all public and
private agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain
suitable for agriculture.

More specifically, the following lands are covered by the Comprehensive Agrarian Reform Program:

(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No reclassification of forest or mineral
lands to agricultural lands shall be undertaken after the approval of this Act until Congress, taking into account, ecological, developmental
and equity considerations, shall have determined by law, the specific limits of the public domain;

(b) All lands of the public domain in excess of the specific limits as determined by Congress in the preceding paragraph;

(c) All other lands owned by the Government devoted to or suitable for agriculture; and

(d) All private lands devoted to or suitable for a agriculture regardless of the agricultural products raised or that can be raised thereon."
(RA 6657, Sec. 4; emphasis provided)

In Luz Farms v. Secretary of the Department of Agrarian Reform and Natalia Realty, Inc. v. Department of Agrarian Reform, this Court had occasion to rule that
agricultural lands are only those which are arable and suitable.

It is at once noticeable that the common factor that classifies land use as agricultural, whether it be public or private land, is its suitability for agriculture. In this
connection, RA 6657 defines "agriculture" as follows:

Agriculture, Agricultural Enterprises or Agricultural Activity means the cultivation of the soil, planting of crops, growing of fruit trees, raising
of livestock, poultry or fish, including the harvesting of such farm products, and other farm activities, and practices performed by a farmer
in conjunction with such farming operations done by persons whether natural or juridical. (RA 6657, sec. 3[b])

In the case at bar, petitioner has presented certifications issued by the Department of Agriculture to the effect that Haciendas Palico, Banilad and Caylaway are
not feasible and economically viable for agricultural development due to marginal productivity of the soil, based on an examination of their slope, terrain, depth,
irrigability, fertility, acidity, and erosion factors (Petition, Annex "L", Rollo, p. 213; Annex "U", Rollo, p. 228). This finding should be accorded respect considering
that it came from competent authority, said Department being the agency possessed with the necessary expertise to determine suitability of lands to agriculture.
The DAR Order dated January 22, 1991 issued by respondent itself stated that the adjacent land now known as the Batulao Resort Complex is hilly,
mountainous, and with long and narrow ridges and deep gorges. No permanent sites are planted. Cultivation is by kaingin method. This confirms the findings of
the Department of Agriculture.

Parenthetically, the foregoing finding of the Department of Agriculture also explains the validity of the reclassification of petitioner's lands by the Sangguniang
Bayan of Nasugbu, Batangas, pursuant to Section 20 of the Local Government Code of 1991. It shows that the condition imposed by respondent Secretary of
Agrarian Reform on petitioner for withdrawing its voluntary offer to sell Hacienda Caylaway, i.e., that the soil be unsuitable for agriculture, has been adequately
met. In fact, the DAR in its Order in Case No. A-9999-050-97, involving a piece of land also owned by petitioner and likewise located in Caylaway, exempted it
from the coverage of CARL (Order dated May 17, 1999; Annex "D" of Petitioner's Manifestation), on these grounds.

Furthermore, and perhaps more importantly, the subject lands are within an area declared in 1975 by Presidential Proclamation No. 1520 to be part of a tourist
zone. This determination was made when the tourism prospects of the area were still for the future. The studies which led to the land classification were relatively
freer from pressures and, therefore, more objective and open-minded. Respondent, however, contends that agriculture is not incompatible with the lands' being
part of a tourist zone since "agricultural production, by itself, is a natural asset and, if properly set, can command tremendous aesthetic value in the form of
scenic views and variety of countryside profiles." (Comment, Rollo, 579).

The contention is untenable. Tourist attractions are not limited to scenic landscapes and lush greeneries. Verily, tourism is enhanced by structures and facilities
such as hotels, resorts, rest houses, sports clubs and golf courses, all of which bind the land and render it unavailable for cultivation. As aptly described by
petitioner:

The development of resorts, golf courses, and commercial centers is inconsistent with agricultural development. True, there can be limited
agricultural production within the context of tourism development. However, such small scale farming activities will be dictated by, and
subordinate to the needs or tourism development. In fact, agricultural use of land within Nasugbu may cease entirely if deemed necessary
by the Department of Tourism (Reply, Rollo, p. 400).

The lands subject hereof, therefore, are non-agricultural. Hence, the voluntary offer to sell Hacienda Caylaway should not be deemed an admission that the land
is agricultural. Rather, the offer was made by petitioner in good faith, believing at the time that the land could still be developed for agricultural production.
Notably, the offer to sell was made as early as May 6, 1988, before the soil thereon was found by the Department of Agriculture to be unsuitable for agricultural
development (the Certifications were issued on 2 February 1993 and 1 March 1993). Petitioner's withdrawal of its voluntary offer to sell, therefore, was not borne
out of a whimsical or capricious change of heart. Quite simply, the land turned out to be outside of the coverage of the CARL, which by express provision of RA
6657, Section 4, affects only public and private agricultural lands. As earlier stated, only on May 17, 1999, DAR Secretary Horacio Morales, Jr. approved the
application for a lot in Caylaway, also owned by petitioner, and confirmed the seven (7) documentary evidences proving the Caylaway area to be non-agricultural
(DAR Order dated 17 May 1999, in Case No. A-9999-050-97, Annex "D" Manifestation).

The DAR itself has issued administrative circulars governing lands which are outside of CARP and may not be subjected to land reform. Administrative Order No.
3, Series of 1996 declares in its policy statement what landholdings are outside the coverage of CARP. The AO is explicit in providing that such non-covered
properties shall be reconveyed to the original transferors or owners.

These non-covered lands are:

a. Land, or portions thereof, found to be no longer suitable for agriculture and, therefore, could not be given
appropriate valuation by the Land Bank of the Philippines (LBP);

b. Those were a Conversion Order has already been issued by the DAR allowing the use of the landholding other
than for agricultural purposes in accordance with Section 65 of R.A. No. 6657 and Administrative Order No. 12,
Series of 1994;

c. Property determined to be exempted from CARP coverage pursuant to Department of Justice Opinion Nos. 44
and 181; or

d. Where a Presidential Proclamation has been issued declaring the subject property for certain uses other than
agricultural. (Annex "F", Manifestation dated July 23, 1999)

The properties subject of this Petition are covered by the first, third, and fourth categories of the Administrative Order. The DAR has disregarded its own
issuances which implement the law.

To make the picture clearer, I would like to summarize the law, regulations, ordinances, and official acts which show beyond question that the disputed property is
non-agricultural, namely:

(a) The Law. Proclamation 1520 dated November 20, 1975 is part of the law of the land. It declares the area in and around Nasugbu,
Batangas, as a Tourist Zone. It has not been repealed, and has in fact been used by DAR to justify conversion of other contiguous and
nearby properties of other parties.

(b) Ordinances of Local Governments. Zoning ordinance of the Sangguniang Bayan of Nasugbu, affirmed by the Sangguniang
Panlalawigan of Batangas, expressly defines the property as tourist, not agricultural. The power to classify its territory is given by law to
the local governments.

(c) Certification of the Department of Agriculture that the property is not suitable and viable for agriculture. The factual nature of the land,
its marginal productivity and non-economic feasibility for cultivation, are described in detail.

(d) Acts of DAR itself which approved conversion of contiguous or adjacent land into the Batulao Resorts Complex. DAR described at
length the non-agricultural nature of Batulao and of portion of the disputed property, particularly Hacienda Caylaway.

(e) DAR Circulars and Regulations. DAR Administrative Order No. 6, Series of 1994 subscribes to the Department of Justice opinion that
the lands classified as non-agricultural before the CARP Law, June 15, 1988, are exempt from CARP. DAR Order dated January 22, 1991
led to the Batulao Tourist Area. DAR Order in Case No. H-9999-050-97, May 17, 1999, exempted 13.5 hectares of Caylaway, similarly
situated and of the same nature as Batulao, from coverage. DAR Administrative Order No. 3, Series of 1996, if followed, would clearly
exclude subject property from coverage.

As earlier shown, DAR has, in this case, violated its own circulars, rules and regulations.

In addition to the DAR circulars and orders which DAR itself has not observed, the petitioner has submitted a municipal map of Nasugbu, Batangas (Annex "E",
Manifestation dated July 23, 1999). The geographical location of Palico, Banilad, and Caylaway in relation to the GDFI property, now Batulao Tourist Resort,
shows that the properties subject of this case are equally, if not more so, appropriate for conversion as the GDFI resort.

Petitioner's application for the conversion of its lands from agricultural to non-agricultural was meant to stop the DAR from proceeding with the compulsory
acquisition of the lands and to seek a clear and authoritative declaration that said lands are outside of the coverage of the CARL and can not be subjected to
agrarian reform.

Petitioner assails respondent's refusal to convert its lands to non-agricultural use and to recognize Presidential Proclamation No. 1520, stating that respondent
DAR has not been consistent in its treatment of applications of this nature. It points out that in the other case involving adjoining lands in Nasugbu, Batangas,
respondent DAR ordered the conversion of the lands upon application of Group Developers and Financiers, Inc. Respondent DAR, in that case, issued an Order
dated January 22, 1991 denying the motion for reconsideration filed by the farmers thereon and finding that:

In fine, on November 27, 1975, or before the movants filed their instant motion for reconsideration, then President Ferdinand E. Marcos
issued Proclamation No. 1520, declaring the municipalities of Maragondon and Ternate in the province of Cavite and the municipality of
Nasugbu in the province of Batangas as tourist zone. Precisely, the landholdings in question are included in such proclamation. Up to now,
this office is not aware that said issuance has been repealed or amended (Petition, Annex "W"; Rollo, p. 238).

The DAR Orders submitted by petitioner, and admitted by DAR in its Rejoinder (Rejoinder of DAR dated August 20, 1999), show that DAR has been inconsistent
to the extent of being arbitrary.

Apart from the DAR Orders approving the conversion of the adjoining property now called Batulao Resort Complex and the DAR Order declaring parcels of the
Caylaway property as not covered by CARL, a major Administrative Order of DAR may also be mentioned.

The Department of Justice in DOJ Opinion No. 44 dated March 16, 1990 (Annex "A" of Petitioner's Manifestation) stated that DAR was given authority to approve
land conversions only after June 15, 1988 when RA 6657, the CARP Law, became effective. Following the DOJ Opinion, DAR issued its AO No. 06, Series of
1994 providing for the Guidelines on Exemption Orders (Annex "B", Id.). The DAR Guidelines state that lands already classified as non-agricultural before the
enactment of CARL are exempt from its coverage. Significantly, the disputed properties in this case were classified as tourist zone by no less than a Presidential
Proclamation as early as 1975, long before 1988.

The above, petitioner maintains, constitute unequal protection of the laws. Indeed, the Constitution guarantees that "(n)o person shall be deprived of life, liberty
or property without due process of law, nor shall any person be denied the equal protection of the laws" (Constitution, Art. III, Sec. 1). Respondent DAR,
therefore, has no alternative but to abide by the declaration in Presidential Proclamation 1520, just as it did in the case of Group Developers and Financiers, Inc.,
and to treat petitioners' properties in the same way it did the lands of Group Developers, i.e., as part of a tourist zone not suitable for agriculture.

On the issue of non-payment of just compensation which results in a taking of property in violation of the Constitution, petitioner argues that the opening of a trust
account in its favor did not operate as payment of the compensation within the meaning of Section 16 (e) of RA 6657. In Land Bank of the Philippines v. Court of
Appeals (249 SCRA 149, at 157 [1995]), this Court struck down as null and void DAR Administrative Circular No. 9, Series of 1990, which provides for the
opening of trust accounts in lieu of the deposit in cash or in bonds contemplated in Section 16 (e) of RA 6657.

It is very explicit therefrom (Section 16 [e]) that the deposit must be made only in "cash" or in "LBP bonds." Nowhere does it appear nor
can it be inferred that the deposit can be made in any other form. If it were the intention to include a "trust account" among the valid
modes of deposit, that should have been made express, or at least, qualifying words ought to have appeared from which it can be fairly
deduced that a "trust account" is allowed. In sum, there is no ambiguity in Section 16(e) of RA 6657 to warrant an expanded construction
of the term "deposit."

xxx xxx xxx

In the present suit, the DAR clearly overstepped the limits of its powers to enact rules and regulations when it issued Administrative
Circular No. 9. There is no basis in allowing the opening of a trust account in behalf of the landowner as compensation for his property
because, as heretofore discussed, section 16(e) of RA 6657 is very specific that the deposit must be made only in "cash" or in "LBP
bonds." In the same vein, petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54 because these implementing regulations cannot
outweigh the clear provision of the law. Respondent court therefore did not commit any error in striking down Administrative Circular No. 9
for being null and void.

There being no valid payment of just compensation, title to petitioner's landholdings cannot be validly transferred to the Government. A close scrutiny of the
procedure laid down in Section 16 of RA 6657 shows the clear legislative intent that there must first be payment of the fair value of the land subject to agrarian
reform, either directly to the affected landowner or by deposit of cash or LBP bonds in the DAR-designated bank, before the DAR can take possession of the land
and request the register of deeds to issue a transfer certificate of title in the name of the Republic of the Philippines. This is only proper inasmuch as title to
private property can only be acquired by the government after payment of just compensation In Association of Small Landowners in the Philippines v. Secretary
of Agrarian Reform (175 SCRA 343, 391 [1989]), this Court held:

The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government on receipt of the landowner
of the corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank. Until then,
title also remains with the landowner. No outright change of ownership is contemplated either.

Necessarily, the issuance of the CLOAs by respondent DAR on October 30, 1993 and their distribution to farmer-beneficiaries were illegal inasmuch as no valid
payment of compensation for the lands was as yet effected. By law, Certificates of Land Ownership Award are issued only to the beneficiaries after the DAR
takes actual possession of the land (RA 6657, Sec. 24), which in turn should only be after the receipt by the landowner of payment or, in case of rejection or no
response from the landowner, after the deposit of the compensation for the land in cash or in LBP bonds (RA 6657, Sec. 16[e]).

Respondents argue that the Land Bank ruling should not be made to apply to the compulsory acquisition of petitioner's landholdings in 1993, because it occurred
prior to the promulgation of the said decision (October 6, 1995). This is untenable. Laws may be given retroactive effect on constitutional considerations, where
the prospective application would result in a violation of a constitutional right. In the case at bar, the expropriation of petitioner's lands was effected without a valid
payment of just compensation, thus violating the Constitutional mandate that "(p)rivate property shall not be taken for public use without just compensation"
(Constitution, Art. III, Sec. 9). Hence, to deprive petitioner of the benefit of the Land Bank ruling on the mere expedient that it came later than the actual
expropriation would be repugnant to petitioner's fundamental rights.

The controlling last two (2) pages of the ponencia state:

Finally, we stress that the failure of respondent DAR to comply with the requisites of due process in the acquisition proceedings does not
give this Court the power to nullify the CLOA's already issued to the farmer beneficiaries. To assume the power is to short-circuit the
administrative process, which has yet to run its regular course. Respondent DAR must be given the chance to correct its procedural
lapses in the acquisition proceedings. In Hacienda Palico alone, CLOA's were issued to 177 farmer beneficiaries in 1993. Since then until
the present, these farmers have been cultivating their lands. It goes against the basic precepts of justice, fairness and equity to deprive
these people, through no fault of their own, of the land they till. Anyhow, the farmer beneficiaries hold the property in trust for the rightful
owner of the land.

I disagree with the view that this Court cannot nullify illegally issued CLOA's but must ask the DAR to first reverse and correct itself.

Given the established facts, there was no valid transfer of petitioner's title to the Government. This being so, there was also no valid title to transfer to third
persons; no basis for the issuance of CLOAs.

Equally important, CLOAs do not have the nature of Torrens Title. Administrative cancellation of title is sufficient to invalidate them.

The Court of Appeals said so in its Resolution in this case. It stated:

Contrary to the petitioner's argument that issuance of CLOAs to the beneficiaries prior to the deposit of the offered price constitutes
 violation of due process, it must be stressed that the mere issuance of the CLOAs does not vest in the farmer/grantee ownership of the
land described therein.

At most the certificate merely evidences the government's recognition of the grantee as the party qualified to avail of the statutory
mechanisms for the acquisition of ownership of the land. Thus failure on the part of the farmer/grantee to comply with his obligations is a
ground for forfeiture of his certificate of transfer. Moreover, where there is a finding that the property is indeed not covered by CARP, then
reversion to the landowner shall consequently be made, despite issuance of CLOAs to the beneficiaries . (Resolution dated January 17,
1997, p. 6)

DAR Administrative Order 03, Series of 1996 (issued on August 8, 1996; Annex "F" of Petitioner's Manifestation) outlines the procedure for the reconveyance to
landowners of properties found to be outside the coverage of CARP. DAR itself acknowledges that they can administratively cancel CLOAs if found to be
erroneous. From the detailed provisions of the Administrative Order, it is apparent that there are no impediments to the administrative cancellation of CLOAs
improperly issued over exempt properties. The procedure is followed all over the country. The DAR Order spells out that CLOAs are not Torrens Titles. More so if
they affect land which is not covered by the law under which they were issued. In its Rejoinder, respondent DAR states:

3.2. And, finally, on the authority of DAR/DARAB to cancel erroneously issued Emancipation Patents (EPs) or Certificate of
Landownership Awards (CLOAs), same is enshrined, it is respectfully submitted, in Section 50 of Republic Act No. 6657.

In its Supplemental Manifestation, petitioner points out, and this has not been disputed by respondents, that DAR has also administratively cancelled twenty five
(25) CLOAs covering Nasugbu properties owned by the Manila Southcoast Development Corporation near subject Roxas landholdings. These lands were found
not suitable for agricultural purposes because of soil and topographical characteristics similar to those of the disputed properties in this case.

The former DAR Secretary, Benjamin T. Leong, issued DAR Order dated January 22, 1991 approving the development of property adjacent and contiguous to
the subject properties of this case into the Batulao Tourist Resort. Petitioner points out that Secretary Leong, in this Order, has decided that the land —

1. Is, as contended by the petitioner GDFI "hilly, mountainous, and characterized by poor soil condition and nomadic method of cultivation,
hence not suitable to agriculture."

2. Has as contiguous properties two haciendas of Roxas y Cia and found by Agrarian Reform Team Leader Benito Viray to be "generally
rolling, hilly and mountainous and strudded (sic) with long and narrow ridges and deep gorges. Ravines are steep grade ending in low dry
creeks."

3. Is found in an. area where "it is quite difficult to provide statistics on rice and corn yields because there are no permanent sites planted.
Cultivation is by Kaingin Method."

4. Is contiguous to Roxas Properties in the same area where "the people entered the property surreptitiously and were difficult to stop
because of the wide area of the two haciendas and that the principal crop of the area is sugar . . .." (emphasis supplied).

I agree with petitioner that under DAR AO No. 03, Series of 1996, and unlike lands covered by Torrens Titles, the properties falling under improperly issued
CLOAs are cancelled by mere administrative procedure which the Supreme Court can declare in cases properly and adversarially submitted for its decision. If
CLOAs can under the DAR's own order be cancelled administratively, with more reason can the courts, especially the Supreme Court, do so when the matter is
clearly in issue.

With due respect, there is no factual basis for the allegation in the motion for intervention that farmers have been cultivating the disputed property.

The property has been officially certified as not fit for agriculture based on slope, terrain, depth, irrigability, fertility, acidity, and erosion. DAR, in its Order dated
January 22, 1991, stated that "it is quite difficult to provide statistics on rice and corn yields (in the adjacent property) because there are no permanent sites
planted. Cultivation is by kaingin method." Any allegations of cultivation, feasible and viable, are therefore falsehoods.

The DAR Order on the adjacent and contiguous GDFI property states that "(T)he people entered the property surreptitiously and were difficult to stop . . .."

The observations of Court of Appeals Justices Verzola and Magtolis in this regard, found in their dissenting opinion (Rollo, p. 116), are relevant:

2.9 The enhanced value of land in Nasugbu, Batangas, has attracted unscrupulous individuals who distort the spirit of the Agrarian Reform
Program in order to turn out quick profits. Petitioner has submitted copies of CLOAs that have been issued to persons other than those
who were identified in the Emancipation Patent Survey Profile as legitimate Agrarian Reform beneficiaries for particular portions of
petitioner's lands. These persons to whom the CLOAs were awarded, according to petitioner, are not and have never been workers in
petitioner's lands. Petitioners say they are not even from Batangas but come all the way from Tarlac. DAR itself is not unaware of the
mischief in the implementation of the CARL in some areas of the country, including Nasugbu. In fact, DAR published a "WARNING TO
THE PUBLIC" which appeared in the Philippine Daily Inquirer of April 15, 1994 regarding this malpractice.

2.10 Agrarian Reform does not mean taking the agricultural property of one and giving it to another and for the latter to unduly benefit
therefrom by subsequently "converting" the same property into non-agricultural purposes.

2.11 The law should not be interpreted to grant power to the State, thru the DAR, to choose who should benefit from multi-million peso
deals involving lands awarded to supposed agrarian reform beneficiaries who then apply for conversion, and thereafter sell the lands as
non-agricultural land.

Respondents, in trying to make light of this problem, merely emphasize that CLOAs are not titles. They state that "rampant selling of rights", should this occur,
could be remedied by the cancellation or recall by DAR.

In the recent case of "Hon. Carlos O. Fortich, et. al. vs. Hon. Renato C. Corona, et. al." (G.R. No. 131457, April 24, 1998), this Court found the CLOAs given to
the respondent farmers to be improperly issued and declared them invalid. Herein petitioner Roxas and Co., Inc. has presented a stronger case than petitioners
in the aforementioned case. The procedural problems especially the need for referral to the Court of Appeals are not present. The instant petition questions the
Court of Appeals decision which acted on the administrative decisions. The disputed properties in the present case have been declared non-agricultural not so
much because of local government action but by Presidential Proclamation. They were found to be non-agricultural by the Department of Agriculture, and through
unmistakable implication, by DAR itself. The zonification by the municipal government, approved by the provincial government, is not the only basis.

On a final note, it may not be amiss to stress that laws which have for their object the preservation and maintenance of social justice are not only meant to favor
the poor and underprivileged. They apply with equal force to those who, notwithstanding their more comfortable position in life, are equally deserving of
protection from the courts. Social justice is not a license to trample on the rights of the rich in the guise of defending the poor, where no act of injustice or abuse
is being committed against them. As we held in Land Bank (supra.):

It has been declared that the duty of the court to protect the weak and the underprivileged should not be carried out to such an extent as
to deny justice to the landowner whenever truth and justice happen to be on his side. As eloquently stated by Justice Isagani Cruz:

. . . social justice — or any justice for that matter — is for the deserving, whether he be a millionaire in his mansion
or a pauper in his hovel. It is true that, in case of reasonable doubt, we are called upon to tilt the balance in favor of
the poor simply because they are poor, to whom the Constitution fittingly extends its sympathy and compassion.
 But never is it justified to prefer the poor simply because they are poor, or to eject the rich simply because they are
rich, for justice must always be served, for poor and rich alike, according to the mandate of the law.

IN THE LIGHT OF THE FOREGOING, I vote to grant the petition for certiorari; and to declare Haciendas Palico, Banilad and Caylaway, all situated in Nasugbu,
Batangas, to be non-agricultural and outside the scope of Republic Act No. 6657. I further vote to declare the Certificates of Land Ownership Award issued by
respondent Department of Agrarian Reform null and void and to enjoin respondents from proceeding with the compulsory acquisition of the lands within the
subject properties. I finally vote to DENY the motion for intervention.

Footnotes

1 Art. II, Section 1, Proclamation No. 3.

2 Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform, 175 SCRA 343, 366 [1989].

3 Annex "2" to Comment, Rollo, p. 309.

4 Id.

5 Annex "3" to Comment, Rollo, pp. 310-314.

6 Annex "4" to Comment, Rollo, pp. 315-315C. Unlike Annexes "3" and "5," the list of actual occupants was not attached to the MARO Report.

7 Annex "5" to Comment, Rollo, pp. 316-316E.

8 Annex "7" to Comment, Rollo, p. 317.

9 Annexes "7" and "8" to Comment, Rollo, pp. 317, 319.

10 Annex "1" to Comment, Rollo, p. 308.

11 Id.
12 Annexes "9," "10" and "11" to Comment, Rollo, pp. 320-322.

13 Annexes "K" and "N" to Petition, Rollo, pp. 211-212, 215.

14 Petition, p. 20, Rollo, p. 30.

15 Annexes "16," "17," "18," and "19" to Comment, Rollo, pp. 327-330.

16 Annex "20" to Comment, Rollo, p. 331.

17 Annex "30" to Comment, Rollo, p. 360.

18 Id.

19 Annex "29" to Comment, Rollo, p. 359.

20 Annex "23" to Comment, Rollo, pp. 337-344.

21 Annex "24" to Comment, Rollo, pp. 346-354.

22 Minutes of the Conference/Meeting, Annex "27" to Comment, Rollo, p. 357.

23 Annex "26" to Comment, Rollo, p. 356.

24 Annex "25" to Comment, Rollo, p. 355.

25 Annexes "21" and "22" to Comment, Rollo, pp. 332, 333.

26 Id.

27 Annex "34" to Comment, Rollo, p. 364.

28 Annex "35" to Comment, Rollo, p. 365.

29 Annexes "37" and "38" to Comment, Rollo, pp. 367368.

30 Annexes "42" and "43" to Comment, Rollo, pp. 372-374. In its Comment before this Court, respondent DAR states that valuation of the land under
TCT No. T-44662 had not been completed, while the land under TCT No. T-44665 was not distributed due to errors in the qualifications of the farmer
beneficiaries — Comment, p. 16, Rollo, p. 587.

31 Id.

32 Annexes "44" and "45" to Comment, Rollo, pp. 374, 375.

33 Annexes "46" and "47" to Comment, Rollo, pp. 376, 377.

34 Annex "S" to Petition, Rollo, pp. 223-224.

35 Petition, p. 24, Rollo, p. 34.

36 Annexes "K" and "N" to Petition, Rollo, pp. 211-212, 215.

37 Annex "V" to Petition, Rollo, pp. 229-230.

38 Petition, p, 27, Rollo, p, 37.

39 The CA decision was penned by Justice Gloria C. Paras and concurred in by Justices Sera

Republic of the Philippines

SUPREME COURT
Manila
 FIRST DIVISION
G.R. No. L-43938 April 15, 1988
REPUBLIC OF THE PHILIPPINES (DIRECTOR OF FOREST DEVELOPMENT), petitioner,
vs.
HON. COURT OF APPEALS (THIRD DIVISION) and JOSE Y. DE LA ROSA, respondents.
G.R. No. L-44081 April 15, 1988
BENGUET CONSOLIDATED, INC., petitioner,
vs.
HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORIA, BENJAMIN and
EDUARDO, all surnamed DE LA ROSA, represented by their father JOSE Y. DE LA
ROSA, respondents.
G.R. No. L-44092 April 15, 1988
ATOK-BIG WEDGE MINING COMPANY, petitioner,
vs.
HON. COURT OF APPEALS, JOSE Y. DE LA ROSA, VICTORlA, BENJAMIN and
EDUARDO, all surnamed DE LA ROSA, represented by their father, JOSE Y. DE LA
ROSA, respondents.

CRUZ, J.:
The Regalian doctrine reserves to the State all natural wealth that may be found in the bowels of the earth even if the land where the discovery is made be
private. 1 In the cases at bar, which have been consolidated because they pose a common issue, this doctrine was not correctly applied.

These cases arose from the application for registration of a parcel of land filed on February 11, 1965, by Jose de la Rosa on his own behalf and on behalf of his
three children, Victoria, Benjamin and Eduardo. The land, situated in Tuding, Itogon, Benguet Province, was divided into 9 lots and covered by plan Psu-225009.
According to the application, Lots 1-5 were sold to Jose de la Rosa and Lots 6-9 to his children by Mamaya Balbalio and Jaime Alberto, respectively, in 1964. 2

The application was separately opposed by Benguet Consolidated, Inc. as to Lots 1-5, Atok Big Wedge Corporation, as to Portions of Lots 1-5 and all of Lots 6-9,
and by the Republic of the Philippines, through the Bureau of Forestry Development, as to lots 1-9. 3

In support of the application, both Balbalio and Alberto testified that they had acquired the subject land by virtue of prescription Balbalio claimed to have received
Lots 1-5 from her father shortly after the Liberation. She testified she was born in the land, which was possessed by her parents under claim of ownership. 4
Alberto said he received Lots 6-9 in 1961 from his mother, Bella Alberto, who declared that the land was planted by Jaime and his predecessors-in-interest to
bananas, avocado, nangka and camote, and was enclosed with a barbed-wire fence. She was corroborated by Felix Marcos, 67 years old at the time, who
recalled the earlier possession of the land by Alberto's father. 5 Balbalio presented her tax declaration in 1956 and the realty tax receipts from that year to 1964,
6 Alberto his tax declaration in 1961 and the realty tax receipts from that year to 1964. 7

Benguet opposed on the ground that the June Bug mineral claim covering Lots 1-5 was sold to it on September 22, 1934, by the successors-in-interest of James
Kelly, who located the claim in September 1909 and recorded it on October 14, 1909. From the date of its purchase, Benguet had been in actual, continuous and
exclusive possession of the land in concept of owner, as evidenced by its construction of adits, its affidavits of annual assessment, its geological mappings,
geological samplings and trench side cuts, and its payment of taxes on the land. 8

For its part, Atok alleged that a portion of Lots 1-5 and all of Lots 6-9 were covered by the Emma and Fredia mineral claims located by Harrison and Reynolds on
December 25, 1930, and recorded on January 2, 1931, in the office of the mining recorder of Baguio. These claims were purchased from these locators on
November 2, 1931, by Atok, which has since then been in open, continuous and exclusive possession of the said lots as evidenced by its annual assessment
work on the claims, such as the boring of tunnels, and its payment of annual taxes thereon. 9

The location of the mineral claims was made in accordance with Section 21 of the Philippine Bill of 1902 which provided that:

SEC. 21. All valuable mineral deposits in public lands in the philippine Islands both surveyed and unsurveyed are hereby declared to be
free and open to exploration, occupation and purchase and the land in which they are found to occupation and purchase by the citizens of
the United States, or of said islands.

The Bureau of Forestry Development also interposed its objection, arguing that the land sought to be registered was covered by the Central Cordillera Forest
Reserve under Proclamation No. 217 dated February 16, 1929. Moreover, by reason of its nature, it was not subject to alienation under the Constitutions of 1935
and 1973. 10

The trial court * denied the application, holding that the applicants had failed to prove their claim of possession and ownership of the land sought to be registered.
11 The applicants appealed to the respondent court, * which reversed the trial court and recognized the claims of the applicant, but subject to the rights of
Benguet and Atok respecting their mining claims. 12 In other words, the Court of Appeals affirmed the surface rights of the de la Rosas over the land while at the
same time reserving the sub-surface rights of Benguet and Atok by virtue of their mining claims.

Both Benguet and Atok have appealed to this Court, invoking their superior right of ownership. The Republic has filed its own petition for review and reiterates its
argument that neither the private respondents nor the two mining companies have any valid claim to the land because it is not alienable and registerable.

It is true that the subject property was considered forest land and included in the Central Cordillera Forest Reserve, but this did not impair the rights already
vested in Benguet and Atok at that time. The Court of Appeals correctly declared that:
 There is no question that the 9 lots applied for are within the June Bug mineral claims of Benguet and the "Fredia and Emma" mineral
claims of Atok. The June Bug mineral claim of plaintiff Benguet was one of the 16 mining claims of James E. Kelly, American and mining
locator. He filed his declaration of the location of the June Bug mineral and the same was recorded in the Mining Recorder's Office on
October 14, 1909. All of the Kelly claims ha subsequently been acquired by Benguet Consolidated, Inc. Benguet's evidence is that it had
made improvements on the June Bug mineral claim consisting of mine tunnels prior to 1935. It had submitted the required affidavit of
annual assessment. After World War II, Benguet introduced improvements on mineral claim June Bug, and also conducted geological
mappings, geological sampling and trench side cuts. In 1948, Benguet redeclared the "June Bug" for taxation and had religiously paid the
taxes.

The Emma and Fredia claims were two of the several claims of Harrison registered in 1931, and which Atok representatives acquired.
Portions of Lots 1 to 5 and all of Lots 6 to 9 are within the Emma and Fredia mineral claims of Atok Big Wedge Mining Company.

The June Bug mineral claim of Benguet and the Fredia and Emma mineral claims of Atok having been perfected prior to the approval of
the Constitution of the Philippines of 1935, they were removed from the public domain and had become private properties of Benguet and
Atok.

It is not disputed that the location of the mining claim under consideration was perfected prior to November 15,
1935, when the Government of the Commonwealth was inaugurated; and according to the laws existing at that
time, as construed and applied by this court in McDaniel v. Apacible and Cuisia (42 Phil. 749), a valid location of a
mining claim segregated the area from the public domain. Said the court in that case: The moment the locator
discovered a valuable mineral deposit on the lands located, and perfected his location in accordance with law, the
power of the United States Government to deprive him of the exclusive right to the possession and enjoyment of
the located claim was gone, the lands had become mineral lands and they were exempted from lands that could be
granted to any other person. The reservations of public lands cannot be made so as to include prior mineral
perfected locations; and, of course, if a valid mining location is made upon public lands afterwards included in a
reservation, such inclusion or reservation does not affect the validity of the former location. By such location and
perfection, the land located is segregated from the public domain even as against the Government. (Union Oil Co.
v. Smith, 249 U.S. 337; Van Mess v. Roonet, 160 Cal. 131; 27 Cyc. 546).

"The legal effect of a valid location of a mining claim is not only to segregate the area from the public domain, but to
grant to the locator the beneficial ownership of the claim and the right to a patent therefor upon compliance with the
terms and conditions prescribed by law. Where there is a valid location of a mining claim, the area becomes
segregated from the public domain and the property of the locator." (St. Louis Mining & Milling Co. v. Montana
Mining Co., 171 U.S. 650; 655; 43 Law ed., 320, 322.) "When a location of a mining claim is perfected it has the
effect of a grant by the United States of the right of present and exclusive possession, with the right to the exclusive
enjoyment of all the surface ground as well as of all the minerals within the lines of the claim , except as limited by
the extralateral right of adjoining locators; and this is the locator's right before as well as after the issuance of the
patent. While a lode locator acquires a vested property right by virtue of his location made in compliance with the
mining laws, the fee remains in the government until patent issues."(18 R.C.L. 1152) (Gold Creek Mining
Corporation v. Hon. Eulogio Rodriguez, Sec. of Agriculture and Commerce, and Quirico Abadilla, Director of the
Bureau of Mines, 66 Phil. 259, 265-266)

It is of no importance whether Benguet and Atok had secured a patent for as held in the Gold Creek Mining Corp. Case, for all physical
purposes of ownership, the owner is not required to secure a patent as long as he complies with the provisions of the mining laws; his
possessory right, for all practical purposes of ownership, is as good as though secured by patent.

We agree likewise with the oppositors that having complied with all the requirements of the mining laws, the claims were removed from
the public domain, and not even the government of the Philippines can take away this right from them. The reason is obvious. Having
become the private properties of the oppositors, they cannot be deprived thereof without due process of law. 13

Such rights were not affected either by the stricture in the Commonwealth Constitution against the alienation of all lands of the public domain except those
agricultural in nature for this was made subject to existing rights. Thus, in its Article XIII, Section 1, it was categorically provided that:

SEC. 1. All agricultural, timber and mineral lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces
of potential energy and other natural resources of the Philipppines belong to the State, and their disposition, exploitation, development, or
utilization shall be limited to citizens of the Philippines or to corporations or associations at least 60% of the capital of which is owned by
such citizens, subject to any existing right, grant, lease or concession at the time of the inauguration of the government established under
this Constitution. Natural resources with the exception of public agricultural lands, shall not be alienated, and no license, concession, or
lease for the exploitation, development or utilization of any of the natural resources shall be granted for a period exceeding 25 years,
except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water power, in which case
beneficial use may be the measure and the limit of the grant.

Implementing this provision, Act No. 4268, approved on November 8, 1935, declared:

Any provision of existing laws, executive order, proclamation to the contrary notwithstanding, all locations of mining claim made prior to
February 8, 1935 within lands set apart as forest reserve under Sec. 1826 of the Revised Administrative Code which would be valid and
subsisting location except to the existence of said reserve are hereby declared to be valid and subsisting locations as of the date of their
respective locations.

The perfection of the mining claim converted the property to mineral land and under the laws then in force removed it from the public domain. 14 By such act, the
locators acquired exclusive rights over the land, against even the government, without need of any further act such as the purchase of the land or the obtention
of a patent over it. 15 As the land had become the private property of the locators, they had the right to transfer the same, as they did, to Benguet and Atok.

It is true, as the Court of Appeals observed, that such private property was subject to the "vicissitudes of ownership," or even to forfeiture by non-user or
abandonment or, as the private respondents aver, by acquisitive prescription. However, the method invoked by the de la Rosas is not available in the case at bar,
for two reasons.

First, the trial court found that the evidence of open, continuous, adverse and exclusive possession submitted by the applicants was insufficient to support their
claim of ownership. They themselves had acquired the land only in 1964 and applied for its registration in 1965, relying on the earlier alleged possession of their
predecessors-in-interest. 16 The trial judge, who had the opportunity to consider the evidence first-hand and observe the demeanor of the witnesses and test
their credibility was not convinced. We defer to his judgment in the absence of a showing that it was reached with grave abuse of discretion or without sufficient
basis. 17

Second, even if it be assumed that the predecessors-in-interest of the de la Rosas had really been in possession of the subject property, their possession was
not in the concept of owner of the mining claim but of the property as agricultural land, which it was not. The property was mineral land, and they were claiming it
as agricultural land. They were not disputing the lights of the mining locators nor were they seeking to oust them as such and to replace them in the mining of the
land. In fact, Balbalio testified that she was aware of the diggings being undertaken "down below" 18 but she did not mind, much less protest, the same although
she claimed to be the owner of the said land.

The Court of Appeals justified this by saying there is "no conflict of interest" between the owners of the surface rights and the owners of the sub-surface rights.
This is rather doctrine, for it is a well-known principle that the owner of piece of land has rights not only to its surface but also to everything underneath and the
airspace above it up to a reasonable height. 19 Under the aforesaid ruling, the land is classified as mineral underneath and agricultural on the surface, subject to
separate claims of title. This is also difficult to understand, especially in its practical application.

Under the theory of the respondent court, the surface owner will be planting on the land while the mining locator will be boring tunnels underneath. The farmer
cannot dig a well because he may interfere with the operations below and the miner cannot blast a tunnel lest he destroy the crops above. How deep can the
farmer, and how high can the miner, go without encroaching on each other's rights? Where is the dividing line between the surface and the sub-surface rights?

The Court feels that the rights over the land are indivisible and that the land itself cannot be half agricultural and half mineral. The classification must be
categorical; the land must be either completely mineral or completely agricultural. In the instant case, as already observed, the land which was originally
classified as forest land ceased to be so and became mineral — and completely mineral — once the mining claims were perfected. 20 As long as mining
operations were being undertaken thereon, or underneath, it did not cease to be so and become agricultural, even if only partly so, because it was enclosed with
a fence and was cultivated by those who were unlawfully occupying the surface.

What must have misled the respondent court is Commonwealth Act No. 137, providing as follows:

Sec. 3. All mineral lands of the public domain and minerals belong to the State, and their disposition, exploitation, development or
utilization, shall be limited to citizens of the Philippines, or to corporations, or associations, at least 60% of the capital of which is owned by
such citizens, subject to any existing right, grant, lease or concession at the time of the inauguration of government established under the
Constitution.

SEC. 4. The ownership of, and the right to the use of land for agricultural, industrial, commercial, residential, or for any purpose other than
mining does not include the ownership of, nor the right to extract or utilize, the minerals which may be found on or under the surface.

SEC. 5. The ownership of, and the right to extract and utilize, the minerals included within all areas for which public agricultural land
patents are granted are excluded and excepted from all such patents.

SEC. 6. The ownership of, and the right to extract and utilize, the minerals included within all areas for which Torrens titles are granted are
excluded and excepted from all such titles.

This is an application of the Regalian doctrine which, as its name implies, is intended for the benefit of the State, not of private persons. The rule simply reserves
to the State all minerals that may be found in public and even private land devoted to "agricultural, industrial, commercial, residential or (for) any purpose other
than mining." Thus, if a person is the owner of agricultural land in which minerals are discovered, his ownership of such land does not give him the right to extract
or utilize the said minerals without the permission of the State to which such minerals belong.

The flaw in the reasoning of the respondent court is in supposing that the rights over the land could be used for both mining and non-mining purposes
simultaneously. The correct interpretation is that once minerals are discovered in the land, whatever the use to which it is being devoted at the time, such use
may be discontinued by the State to enable it to extract the minerals therein in the exercise of its sovereign prerogative. The land is thus converted to mineral
land and may not be used by any private party, including the registered owner thereof, for any other purpose that will impede the mining operations to be
undertaken therein, For the loss sustained by such owner, he is of course entitled to just compensation under the Mining Laws or in appropriate expropriation
proceedings. 21

Our holding is that Benguet and Atok have exclusive rights to the property in question by virtue of their respective mining claims which they validly acquired
before the Constitution of 1935 prohibited the alienation of all lands of the public domain except agricultural lands, subject to vested rights existing at the time of
its adoption. The land was not and could not have been transferred to the private respondents by virtue of acquisitive prescription, nor could its use be shared
simultaneously by them and the mining companies for agricultural and mineral purposes.

WHEREFORE, the decision of the respondent court dated April 30, 1976, is SET ASIDE and that of the trial court dated March 11, 1969, is REINSTATED,
without any pronouncement as to costs.

SO ORDERED.

Teehankee, C.J., Narvasa, Gancayco and Griño-Aquino, JJ., concur.

Footnotes

1 Sec. 4, Commonwealth Act No. 137.

2 Original Records, Land Registration Case No. 146, pp. 1-4.

3 Ibid., pp. 33, 68, 241.

4 TSN, May 5, 1966, p. 61.

5 TSN, May 3, 1967, pp. 89-115.

6 Original Records, Exhs. "J," p. 24, "K," p. 26.

7 Original Record, Exhs. "I," p. 22, "K," p. 26.

8 Exhs. "8 (a-e)," "9 (a-e)," "9 (f-g)," "7," and "11."

9 Exh. "5," Atok; Exh. "6," Atok, Rollo (G.R. No. 44081), Annex "B," pp. 76-82.

10 Original Records, Land Registration Case No. 146, p, 291.

* Judge Feliciano Belmonte, CFI of Baguio, Benguet.

11 Ibid., p. 325.

** Leuterio J., ponente, with Vasquez and Escolin, JJ.

12 Rollo (GR No. 43938), pp. 38-51.

13 Ibid., pp. 40-42.

14 McDaniel v. Apacible, 42 Phil. 749; Salacot Mining Co. v. Rodriguez, 67 Phil. 97; Salacot Mining v. Apacible, 67 Phil. 110; Benguet, Inc.
v. Republic, 143 SCRA 466.

15 The respondents may claim, however, that inasmuch as a patent has not been issued to the petitioner, he has acquired no property
right in said mineral claims. But the Supreme Court of the United States, in the cases of Union Oil Co. v. Smith (249 U.S. 337), and St.
Louis Mining & Milling Co. v. Montana Mining Co. (171 U.S. 650), held that even without a patent, the possessory right of a locator after
discovery of minerals upon the claim is a property right in the fullest sense, unaffected by the fact that the paramount title to the land is in
the United State. McDaniel v. Apacible, supra; Salacot Mining Co. v. Rodriguez, supra.

16 Original Records, pp. 1-4.

17 Tan Hong v. Hon. Parades, G.R. No. 78627, Jan. 29, 1988; Pio Padilla v. CA, G.R. No. 75577, Jan. 29, 1988; Verdant Acres v.
Ponciano Hernandez, G.R. No. 51352, Jan. 29, 1988; People v. Ancheta, 148 SCRA 178; People v. Delavin, 148 SCRA 257; People v.
Alcantara, 151 SCRA 326.

18 TSN, Oct. 18, 1966, p. 79.

19 Article 437, new Civil Code.

20 Sec. 1, Presidential Legislative Act No. 4268.

21 Consolidated Mines Administrative Order, May 17, 1975, Secs. 10 & 11, as amended by Mines Adrministrative Order No. MRD-15.