Police Power

13. City of Manila V Laguio

KEY TAKE-AWAY OR DOCTRINE TO REMEMBER

 To successfully invoke the exercise of police power as the rationale for the enactment of the Ordinance, and to free
it from the imputation of constitutional infirmity, not only must it appear that the interests of the public generally,
as distinguished from those of a particular class, require an interference with private rights, but the means adopted
must be reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.
It must be evident that no other alternative for the accomplishment of the purpose less intrusive of private rights
can work. A reasonable relation must exist between the purposes of the police measure and the means employed for
its accomplishment, for even under the guise of protecting the public interest, personal rights and those pertaining
to private property will not be permitted to be arbitrarily invaded.

FACTS

Private respondent Malate Tourist Development Corporation (MTDC) is a corporation engaged in the business of operating
hotels, motels, hostels and lodging houses.

MTDC prayed that the Ordinance, insofar as it includes motels and inns as among its prohibited establishments, be
declared invalid and unconstitutional.

MTDC argued that the Ordinance erroneously and improperly included in its enumeration of prohibited establishments,
motels and inns such as MTDC’s Victoria Court considering that these were not establishments for “amusement” or
“entertainment” and they were not “services or facilities for entertainment,” nor did they use women as “tools for
entertainment,” and neither did they “disturb the community,” “annoy the inhabitants” or “adversely affect the social and
moral welfare of the community.”

MTDC further advanced that the Ordinance was invalid and unconstitutional for the following reasons:
(1) The City Council has no power to prohibit the operation of motels as Section 458 (a) 4 (iv) of the Local Government
Code of 1991(the Code) grants to the City Council only the power to regulate the establishment, operation and maintenance
of hotels, motels, inns, pension houses, lodging houses andother similar establishments;
(2) The Ordinance is void as it is violative of Presidential Decree (P.D.) No. 499 which specifically declared portions of the
Ermita-Malate area as a commercial zone with certain restrictions;
(3) The Ordinance does not constitute a proper exercise of police power as the compulsory closure of the motel business
has no reasonable relation to the legitimate municipal interests sought to be protected;
(4) The Ordinance constitutes an ex post facto law by punishing the operation of Victoria Court which was a legitimate
business prior to its enactment;
(5) TheOrdinance violates MTDC’s constitutional rights in that:
(a) it is confiscatory and constitutes an invasion of plaintiff’s property rights;
(b) the City Council has no power to find as a fact that a particular thing is a nuisance per se nor does it have the
power to extrajudicially destroy it; and
(6) The Ordinance constitutes a denial of equal protection under the law as no reasonable basis exists for prohibiting the
operation of motels and inns, but not pension houses, hotels, lodging houses or other similar establishments, and for
prohibiting said business in the Ermita- Malate area but not outside of this area.

ISSUE/S STATUTES/ARTICLES INVOLVED

WON Ordinance 7783 is a valid exercise of police

power

HELD

The SC ruled that the said Ordinance is null and void. The SC noted that for an ordinance to be valid, it must not only be
within the corporate powers of the local government unit to enact and must be passed according to the procedure
prescribed by law, it must also conform to the following substantive requirements:

(1) must not contravene the Constitution or any statute;

(2) must not be unfair or oppressive;

(3) must not be partial or discriminatory;

(4) must not prohibit but may regulate trade;

(5) must be general and consistent with public policy; and

(6) must not be unreasonable.

The police power of the City Council, however broad and far-reaching, is subordinate to the constitutional limitations
thereon; and is subject to the limitation that its exercise must be reasonable and for the public good. In the case at bar, the
enactment of the Ordinance was an invalid exercise of delegated power as it is unconstitutional and repugnant to general
laws.

The police power granted to local government units must always be exercised with utmost observance of the rights of the
people to due process and equal protection of the law. Such power cannot be exercised whimsically, arbitrarily or
despotically as its exercise is subject to a qualification, limitation or restriction demanded by the respect and regard due to
the prescription of the fundamental law, particularly those forming part of the Bill of Rights. Individual rights, it bears
emphasis, may be adversely affected only to the extent that may fairly be required by the legitimate demands of public
interest or public welfare. Due process requires the intrinsic validity of the law in interfering with the rights of the person to
his life, liberty and property.

The object of the Ordinance was, accordingly, the promotion and protection of the social and moral values of the
community. Granting for the sake of argument that the objectives of the Ordinance are within the scope of the City
Council’s police powers, the means employed for the accomplishment thereof were unreasonable and unduly oppressive.

It is readily apparent that the means employed by the Ordinance for the achievement of its purposes, the governmental
interference itself, infringes on the constitutional guarantees of a person’s fundamental right to liberty and property.

Modality employed is unlawful taking

It is an ordinance which permanently restricts the use of property that it cannot be used for any reasonable purpose goes
beyond regulation and must be recognized as a taking of the property without just compensation. It is intrusive and
violative of the private property rights of individuals.

What is crucial in judicial consideration of regulatory takings is that government regulation is a taking if it leaves no
reasonable economically viable use of property in a manner that interferes with reasonable expectations for use. When the
owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good,
that is, to leave his property economically idle, he has suffered a taking.

The Ordinance gives the owners and operators of the “prohibited” establishments three (3) months from its approval within
which to “wind up business operations or to transfer to any place outside of the Ermita-Malate area or convert said
businesses to other kinds of business allowable within the area.” The directive to “wind up business operations” amounts to
a closure of the establishment, a permanent deprivation of property, and is practically confiscatory. Unless the owner
converts his establishment to accommodate an “allowed” business, the structure which housed the previous business will
be left empty and gathering dust. It is apparent that the Ordinance leaves no reasonable economically viable use of property
in a manner that interferes with reasonable expectations for use.
The second and third options to transfer to any place outside of the Ermita-Malate area or to convert into allowed
businessesare confiscatory as well. The penalty of permanent closure in cases of subsequent violations found in Section 4
of the Ordinance is also equivalent to a “taking” of private property.

Petitioners cannot therefore order the closure of the enumerated establishments without infringing the due process clause.
These lawful establishments may be regulated, but not prevented from carrying on their business.

The Ordinance violates Equal Protection Clause

In the Court’s view, there are no substantial distinctions between motels, inns, pension houses, hotels, lodging houses or
other similar establishments. By definition, all are commercial establishments providing lodging and usually meals and
other services for the public. No reason exists for prohibiting motels and inns but not pension houses, hotels, lodging
houses or other similar establishments. The classification in the instant case is invalid as similar subjects are not similarly
treated, both as to rights conferred and obligations imposed. It is arbitrary as it does not rest on substantial distinctions
bearing a just and fair relation to the purpose of the Ordinance.

The Ordinance is repugnant to general laws; it is ultra vires

The Ordinance is in contravention of the Code (Sec 458) as the latter merely empowers local government units to regulate,
and not prohibit, the establishments enumerated in Section 1 thereof.

With respect to cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar
establishments, the only power of the City Council to legislate relative thereto is to regulate them to promote the general
welfare. The Code still withholds from cities the power to suppress and prohibit altogether the establishment, operation
and maintenance of such establishments.

Conclusion
All considered, the Ordinance invades fundamental personal and property rights and impairs personal privileges. It is
constitutionally infirm. The Ordinance contravenes statutes; it is discriminatory and unreasonable in its operation; it is not
sufficiently detailed and explicit that abuses may attend the enforcement of its sanctions. And not to be forgotten, the City
Council under the Code had no power to enact the Ordinance and is therefore ultra vires, null and void.
Police Power:
14. Roxas & Co Inc. V CA
KEY TAKE-AWAY OR DOCTRINE TO REMEMBER

 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, 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 exercise of the power of eminent domain requires that due process be observed in the taking of private
property.

FACTS

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 and Co. is a domestic corporation and is the registered owner of three haciendas, namely Hacienda
Palico, Banilad and Caylaway. The events of this case occurred during the incumbency of then President Aquino, in
the exercise of 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. Congress passed Republic Act No. 6657; the Act was signed by the President on June
10, 1988 and took effect on June 15, 1988. Before the law’s effectivity, petitioner filed with respondent DAR a
voluntary offer to sell Hacienda Caylaway pursuant to the provisions of EO No. 229. Haciendas Palico and Banilad
were later placed under compulsory acquisition by respondent DAR in accordance with the CARL.

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.

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. Despite petitioner’s application
for conversion, respondent DAR proceeded with the acquisition of the two Haciendas.

On August 24, 1993, petitioner instituted a case with respondent DAR Adjudication Board praying for the cancellation
of the CLOA’s issued by respondent DAR in the name of the farmers. 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.
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.

ISSUE/S STATUTES/ARTICLES INVOLVED

Whether or not the acquisition proceedings over the

haciendas were valid and in accordance with the law.

HELD

No, for a valid implementation of the CAR Program, two notices are required first 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 and second, the Notice of Acquisition sent to the landowner under Section 16 of the CARL.
The importance of the first notice, 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.

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 SC stressed that the failure of respondent DAR to comply with the requisites of due process in the acquisition
proceedings does not give the SC the power to nullify the CLOA’s already issued to the farmer beneficiaries.
The Court said, 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.

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.
Police Power
15. LTO V City of Butuan

KEY TAKE-AWAY OR DOCTRINE TO REMEMBER

Police power and taxation, along with eminent domain, are inherent powers of sovereignty which the State might
share with local government units by delegation given under a constitutional or a statutory fiat. All these inherent
powers are for a public purpose and legislative in nature but the similarities just about end there. The basic aim of
police power is public good and welfare. Taxation, in its case, focuses on the power of government to raise revenue in
order to support its existence and carry out its legitimate objectives.

Although correlative to each other in many respects, the grant of one does not necessarily carry with it the grant of the
other. The two powers are, by tradition and jurisprudence, separate and distinct powers, varying in their respective
concepts, character, scopes and limitations. To construe the tax provisions of Section 133(1) indistinctively would
result in the repeal to that extent of LTO’s regulatory power which evidently has not been intended. If it were
otherwise, the law could have just said so in Sections 447 and 458 of Book III of the Local Government Code in the
same manner that the specific devolution of LTFRB’s power on franchising of tricycles has been provided. Repeal by
implication is not favoured

FACTS

Relying on the fiscal autonomy granted to LGU's by the Constittuion and the provisons of the Local Government
Code, the Sangguniang Panglunsod of the City of Butuan enacted an ordinance

" Regulating the Operation of Tricycles-for-Hire, providing mechanism for the issuance of Franchise,
Registration and Permit, and Imposing Penalties for Violations thereof and for other Purposes."

The ordinance provided for, among other things, the payment of franchise fees for the grant of the franchise of
tricycles-for-hire, fees for the registration of the vehicle, and fees for the issuance of a permit for the driving thereof.

The Court is asked in this instance to resolve the issue of whether under the present set up the power of the Land
Registration Office (“LTO”) to register, tricycles in particular, as well as to issue licenses for the driving thereof, has
likewise devolved to local government units.

The Regional Trial Court (Branch 2) of Butuan City held that the authority to register tricycles, the grant of the
corresponding franchise, the issuance of tricycle drivers’ license, and the collection of fees therefor had all been vested
in the Local Government Units (“LGUs”).

ISSUE/S STATUTES/ARTICLES INVOLVED

Whether under the present set up the power of the

Land Registration Office (“LTO”) to register,
tricycles in particular, as well as to issue licenses for
the driving thereof, has likewise devolved to local
government units.

HELD

WHEREFORE, the assailed decision which enjoins the Land Transportation Office from requiring the due
registration of tricycles and a license for the driving thereof is REVERSED and SET ASIDE.
The Department of Transportation and Communications (“DOTC”), through the LTO and the LTFRB, has since been
tasked with implementing laws pertaining to land transportation. The LTO is a line agency under the DOTC whose
powers and functions, pursuant to Article III, Section 4 (d) [1], of R.A. No. 4136, otherwise known as Land
Transportation and Traffic Code, as amended, deal primarily with the registration of all motor vehicles and the
licensing of drivers thereof. The LTFRB, upon the other hand, is the governing body tasked by E.O. No. 202, dated 19
June 1987, to regulate the operation of public utility or “for hire” vehicles and to grant franchises or certificates of
public convenience (“CPC”).
Finely put, registration and licensing functions are vested in the LTO while franchising and regulatory responsibilities
had been vested in the LTFRB.

The reliance made by respondents on the broad taxing power of local government units, specifically under Section
133 of the Local Government Code, is tangential. Police power and taxation, along with eminent domain, are inherent
powers of sovereignty which the State might share with local government units by delegation given under a
constitutional or a statutory fiat. All these inherent powers are for a public purpose and legislative in nature but the
similarities just about end there. The basic aim of police power is public good and welfare. Taxation, in its case,
focuses on the power of government to raise revenue in order to support its existence and carry out its legitimate
objectives.
Although correlative to each other in many respects, the grant of one does not necessarily carry with it the grant of the
other. The two powers are, by tradition and jurisprudence, separate and distinct powers, varying in their respective
concepts, character, scopes and limitations. To construe the tax provisions of Section 133(1) indistinctively would
result in the repeal to that extent of LTO’s regulatory power which evidently has not been intended. If it were
otherwise, the law could have just said so in Sections 447 and 458 of Book III of the Local Government Code in the
same manner that the specific devolution of LTFRB’s power on franchising of tricycles has been provided. Repeal by
implication is not favoured.

The power over tricycles granted under Section 458(a)(3)(VI) of the Local Government Code to LGUs is the power to
regulate their operation and to grant franchises for the operation thereof. The exclusionary clause contained in the
tax provisions of Section 133(1) of the Local Government Code must not be held to have had the effect of withdrawing
the express power of LTO to cause the registration of all motor vehicles and the issuance of licenses for the driving
thereof. These functions of the LTO are essentially regulatory in nature, exercised pursuant to the police power of the
State, whose basic objectives are to achieve road safety by insuring the road worthiness of these motor vehicles and
the competence of drivers prescribed by R.A. 4136. Not insignificant is the rule that a statute must not be construed in
isolation but must be taken in harmony with the extant body of laws.
Police Power
16. White Light Corp V. City of Manila

KEY TAKE-AWAY OR DOCTRINE TO REMEMBER

Police power, while incapable of an exact definition, has been purposely veiled in general terms to underscore its
comprehensiveness to meet all exigencies and provide enough room for an efficient and flexible response as the
conditions warrant. Police power is based upon the concept of necessity of the State and its corresponding right to
protect itself and its people. Police power has been used as justification for numerous and varied actions by the State.
These range from the regulation of dance halls, movie theaters, gas stations46 and cockpits. The awesome scope of
police power is best demonstrated by the fact that in its hundred or so years of presence in our nation’s legal system,
its use has rarely been denied.

FACTS

On December 3, 1992, City Mayor Alfredo S. Lim (Mayor Lim) signed into law the Ordinance.

On December 15, 1992, the MTDC filed a complaint for declaratory relief with prayer for a writ of preliminary
injunction and/or temporary restraining order (TRO) with the RTC of Manila, Branch 9impleading as defendant,
herein respondent City of Manila. MTDC prayed that the Ordinance, insofar as it includes motels and inns as among
its prohibited establishments, be declared invalid and unconstitutional. MTDC claimed that as owner and
operator of the Victoria Court in Malate, Manila it was authorized by Presidential Decree (P.D.) No. 259 to admit
customers on a short time basis as well as to charge customers wash up rates for stays of only three hours.

On December 21, 1992, petitioners White Light Corporation (WLC), Titanium Corporation (TC) and Sta.
Mesa Tourist and Development Corporation (STDC) filed a motion to intervene and to admit attached complaint-in-
intervention7 on the ground that the Ordinance directly affects their business interests as operators of drive-in-
hotels and motels in Manila.8 The three companies are components of the Anito Group of Companies which owns
and operates several hotels and motels in Metro Manila.

RTC ruled in favour of petioners, CA reversed.

ISSUE/S STATUTES/ARTICLES INVOLVED

WON the assailed Ordinance is an invalid exercise

of police power.

HELD

WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals is REVERSED.

The test of a valid ordinance is well established. A long line of decisions including City of Manila has held that for
an ordinance to be valid, it must not only be within the corporate powers of the local government unit to enact and
pass according to the procedure prescribed by law, it must also conform to the following substantive requirements: (1)
must not contravene the Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or
discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy;
and (6) must not be unreasonable.

Police power, while incapable of an exact definition, has been purposely veiled in general terms to underscore its
comprehensiveness to meet all exigencies and provide enough room for an efficient and flexible response as the
conditions warrant. Police power is based upon the concept of necessity of the State and its corresponding right to
protect itself and its people. Police power has been used as justification for numerous and varied actions by the State.
These range from the regulation of dance halls, movie theaters, gas stations46 and cockpits. The awesome scope of
police power is best demonstrated by the fact that in its hundred or so years of presence in our nation’s legal system,
its use has rarely been denied.

The apparent goal of the Ordinance is to minimize if not eliminate the use of the covered establishments for illicit sex,
prostitution, drug use and alike. These goals, by themselves, are unimpeachable and certainly fall within the ambit of
the police power of the State. Yet the desirability of these ends do not sanctify any and all means for their
achievement. Those means must align with the Constitution, and our emerging sophisticated analysis of its
guarantees to the people. The Bill of Rights stands as a rebuke to the seductive theory of Machiavelli, and,
sometimes even, the political majorities animated by his cynicism.
Police Power
17. Southern Drug Corporation V DSWD

KEY TAKE-AWAY OR DOCTRINE TO REMEMBER

In the exercise of police power, “property rights of private individuals are subjected to restraints and burdens in order
to secure the general comfort, health, and prosperity of the State.”

Even then, the State’s claim of police power cannot be arbitrary or unreasonable. After all, the overriding purpose of
the exercise of the power is to promote general welfare, public health and safety, among others. It is a measure, which
by sheer necessity, the State exercises, even to the point of interfering with personal liberties or property rights in
order to advance common good.

To warrant such interference, two requisites must concur: (a) the interests of the public generally, as distinguished
from those of a particular class, require the interference of the State; and (b) the means employed are reasonably
necessary to the attainment of the object sought to be accomplished and not unduly oppressive upon individuals. In
other words, the proper exercise of the police power requires the concurrence of a lawful subject and a lawful method.

FACTS

On April 23, 1992, R.A. No. 7432, entitled “An Act to Maximize the Contribution of Senior Citizens to Nation-
Building, Grant Benefits and Special Privileges and For Other Purposes,” was enacted. Under the said law, a senior
citizen, who must be at least 60 years old and has an annual income of not more than P60,000.00,4 may avail of the
privileges provided in Section 4 thereof, one of which is 20% discount on the purchase of medicines.

On February 26, 2004, then President Gloria Macapagal-Arroyo signed R.A. No. 9257, amending some provisions of
R.A. No. 7432. The new law retained the 20% discount on the purchase of medicines but removed the
Annual income ceiling thereby qualifying all senior citizens to the privileges under the law. Further, R.A. No. 9257
Modified the tax treatment of the discount granted to senior citizens, from tax credit to tax deduction from gross
income, computed based on the net cost of goods sold or services rendered.

On May 28, 2004, the DSWD issued the Implementing Rules and Regulations (IRR) of R.A. No. 9257.

The change in the tax treatment of the discount given to senior citizens did not sit well with some drugstore owners
and corporations, claiming it affected the profitability of their business.

ISSUE/S STATUTES/ARTICLES INVOLVED

WON the 20% sales discount for senior citizens and

pwds is a valid exercise of police power.

HELD

WHEREFORE, in view of the foregoing disquisition, Section 4(a) of Republic Act No. 9257 and Section 32 of Republic
Act No. 9442 are hereby declared CONSTITUTIONAL.

It is in the exercise of its police power that the Congress enacted R.A. Nos. 9257 and 9442, the laws mandating a
20% discount on purchases of medicines made by senior citizens and PWDs. It is also in further exercise of this power
that the legislature opted that the said discount be claimed as tax deduction, rather than tax credit, by covered
establishments.

To begin with, the issue of just compensation finds no relevance in the instant case as it had already been made clear
in Carlos Superdrug that the power being exercised by the State in the imposition of senior citizen discount was its
police power. Unlike in the exercise of the power of eminent domain, just compensation is not required in wielding
police power. This is precisely because there is no taking involved, but only an imposition of burden.

In the exercise of police power, “property rights of private individuals are subjected to restraints and burdens in order
to secure the general comfort, health, and prosperity of the State.” Even then, the State’s claim of police power cannot
be arbitrary or unreasonable. After all, the overriding purpose of the exercise of the power is to promote general
welfare, public health and safety, among others. It is a measure, which by sheer necessity, the State exercises, even to
the point of interfering with personal liberties or property rights in order to advance common good. To warrant such
interference, two requisites must concur: (a) the interests of the public generally, as distinguished from those of a
particular class, require the interference of the State; and (b) the means employed are reasonably necessary to the
attainment of the object sought to be accomplished and not unduly oppressive upon individuals. In other words, the
proper exercise of the police power requires the concurrence of a lawful subject and a lawful method.