MMDA V.

GARIN
FACTS:
Respondent Garin was issued a traffic violation receipt and his driver’s license was confiscated for parking illegally.
Garin wrote MMDA Chairman Prospero Oreta requesting the return of his license and expressed his preference for
case to be filed in Court. Without an immediate reply from the reply from the Chairman, Garin filed a complaint for
preliminary injunction assailing among other that Sec 5(+) of
RA 7942 violates the constitutional prohibition against undue delegation of legislative authority, allowing MMDA to fix
and impose unspecified and unlimited fines and penalties. RTC rules in his favor directing MMDA to return Garin’s
driver’s license and for MMDA to desist from confiscating driver’s license without first giving the driver to opportunity to
be heard in an appropriate proceeding.

ISSUE:
Whether or not Sec 5(+) of RA 7942 which authorizes MMDA to confiscate and suspend or revoke driver’s license in
the enforcement of traffic constitutional.

RULING:
The MMDA is not vested with police power. It was concluded that MMDA is not a local government unit or a public
corporation endowed with legislative power and it has no power to enact ordinances for the welfare of the community.

Police power as an inherent attribute of sovereignty is the power vested in the legislative 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 for
subjects of the same.
There is no provision in RA 7942 that empowers MMDA or its council to “enact ordinances, approve resolutions and
appropriate funds for the general welfare of the inhabitants of Metro Manila. All its functions are administrative in
nature. It is an agency created for the purpose of laying down policies and coordinating with the various national
government agencies, P.O., NGO’s and private sector for the efficient and expeditious delivery of services.”

Hacienda Luisita Inc. (HLI) v. Presidential Agrarian Reform Council (PARC), et al., G.R. No. 171101, November
22, 2011

RESOLUTION

VELASCO, JR., J.:

I. THE FACTS

On July 5, 2011, the Supreme Court en banc voted unanimously (11-0) to DISMISS/DENY the petition filed by
HLI and AFFIRM with MODIFICATIONS the resolutions of the PARC revoking HLI’s Stock Distribution Plan (SDP) and
placing the subject lands in Hacienda Luisita under compulsory coverage of the Comprehensive Agrarian Reform
Program (CARP) of the government.

The Court however did not order outright land distribution. Voting 6-5, the Court noted that there are operative
facts that occurred in the interim and which the Court cannot validly ignore. Thus, the Court declared that the
revocation of the SDP must, by application of the operative fact principle, give way to the right of the original 6,296
qualified farmworkers-beneficiaries (FWBs) to choose whether they want to remain as HLI stockholders or [choose
actual land distribution]. It thus ordered the Department of Agrarian Reform (DAR) to “immediately schedule meetings
with the said 6,296 FWBs and explain to them the effects, consequences and legal or practical implications of their
choice, after which the FWBs will be asked to manifest, in secret voting, their choices in the ballot, signing their
signatures or placing their thumbmarks, as the case may be, over their printed names.”

The parties thereafter filed their respective motions for reconsideration of the Court decision.

II. THE ISSUES

(1) Is the operative fact doctrine available in this case?

(2) Is Sec. 31 of RA 6657 unconstitutional?
(3) Can’t the Court order that DAR’s compulsory acquisition of Hacienda Lusita cover the full 6,443 hectares allegedly
covered by RA 6657 and previously held by Tarlac Development Corporation (Tadeco), and not just the 4,915.75
hectares covered by HLI’s SDP?
(4) Is the date of the “taking” (for purposes of determining the just compensation payable to HLI) November 21, 1989,
when PARC approved HLI’s SDP?

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(5) Has the 10-year period prohibition on the transfer of awarded lands under RA 6657 lapsed on May 10, 1999 (since
Hacienda Luisita were placed under CARP coverage through the SDOA scheme on May 11, 1989), and thus the
qualified FWBs should now be allowed to sell their land interests in Hacienda Luisita to third parties, whether they
have fully paid for the lands or not?
(6) THE CRUCIAL ISSUE: Should the ruling in the July 5, 2011 Decision that the qualified FWBs be given an option to
remain as stockholders of HLI be reconsidered?

III. THE RULING

[The Court PARTIALLY GRANTED the motions for reconsideration of respondents PARC, et al. with respect
to the option granted to the original farmworkers-beneficiaries (FWBs) of Hacienda Luisita to remain with petitioner
HLI, which option the Court thereby RECALLED and SET ASIDE. It reconsidered its earlier decision that the qualified
FWBs should be given an option to remain as stockholders of HLI, and UNANIMOUSLY directed immediate land
distribution to the qualified FWBs.]

1. YES, the operative fact doctrine is applicable in this case.

[The Court maintained its stance that the operative fact doctrine is applicable in this case since, contrary to
the suggestion of the minority, the doctrine is not limited only to invalid or unconstitutional laws but also applies to
decisions made by the President or the administrative agencies that have the force and effect of laws. Prior to the
nullification or recall of said decisions, they may have produced acts and consequences that must be respected. It is
on this score that the operative fact doctrine should be applied to acts and consequences that resulted from the
implementation of the PARC Resolution approving the SDP of HLI. The majority stressed that the application of the
operative fact doctrine by the Court in its July 5, 2011 decision was in fact favorable to the FWBs because not only
were they allowed to retain the benefits and homelots they received under the stock distribution scheme, they were
also given the option to choose for themselves whether they want to remain as stockholders of HLI or not.]

2. NO, Sec. 31 of RA 6657 NOT unconstitutional.

[The Court maintained that the Court is NOT compelled to rule on the constitutionality of Sec. 31 of RA 6657,
reiterating that it was not raised at the earliest opportunity and that the resolution thereof is not the lis mota of the
case. Moreover, the issue has been rendered moot and academic since SDO is no longer one of the modes of
acquisition under RA 9700. The majority clarified that in its July 5, 2011 decision, it made no ruling in favor of the
constitutionality of Sec. 31 of RA 6657, but found nonetheless that there was no apparent grave violation of the
Constitution that may justify the resolution of the issue of constitutionality.]

3. NO, the Court CANNOT order that DAR’s compulsory acquisition of Hacienda Lusita cover the full 6,443
hectares and not just the 4,915.75 hectares covered by HLI’s SDP.

[Since what is put in issue before the Court is the propriety of the revocation of the SDP, which only involves
4,915.75 has. of agricultural land and not 6,443 has., then the Court is constrained to rule only as regards the
4,915.75 has. of agricultural land. Nonetheless, this should not prevent the DAR, under its mandate under the agrarian
reform law, from subsequently subjecting to agrarian reform other agricultural lands originally held by Tadeco that
were allegedly not transferred to HLI but were supposedly covered by RA 6657.

However since the area to be awarded to each FWB in the July 5, 2011 Decision appears too restrictive –
considering that there are roads, irrigation canals, and other portions of the land that are considered commonly-owned
by farmworkers, and these may necessarily result in the decrease of the area size that may be awarded per FWB –
the Court reconsiders its Decision and resolves to give the DAR leeway in adjusting the area that may be awarded per
FWB in case the number of actual qualified FWBs decreases. In order to ensure the proper distribution of the
agricultural lands of Hacienda Luisita per qualified FWB, and considering that matters involving strictly the
administrative implementation and enforcement of agrarian reform laws are within the jurisdiction of the DAR, it is the
latter which shall determine the area with which each qualified FWB will be awarded.

On the other hand, the majority likewise reiterated its holding that the 500-hectare portion of Hacienda Luisita
that have been validly converted to industrial use and have been acquired by intervenors Rizal Commercial Banking
Corporation (RCBC) and Luisita Industrial Park Corporation (LIPCO), as well as the separate 80.51-hectare SCTEX
lot acquired by the government, should be excluded from the coverage of the assailed PARC resolution. The Court
however ordered that the unused balance of the proceeds of the sale of the 500-hectare converted land and of the
80.51-hectare land used for the SCTEX be distributed to the FWBs.]

4. YES, the date of “taking” is November 21, 1989, when PARC approved HLI’s SDP.

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 [For the purpose of determining just compensation, the date of “taking” is November 21, 1989 (the date when
PARC approved HLI’s SDP) since this is the time that the FWBs were considered to own and possess the agricultural
lands in Hacienda Luisita. To be precise, these lands became subject of the agrarian reform coverage through the
stock distribution scheme only upon the approval of the SDP, that is, on November 21, 1989. Such approval is akin to
a notice of coverage ordinarily issued under compulsory acquisition. On the contention of the minority (Justice Sereno)
that the date of the notice of coverage [after PARC’s revocation of the SDP], that is, January 2, 2006, is determinative
of the just compensation that HLI is entitled to receive, the Court majority noted that none of the cases cited to justify
this position involved the stock distribution scheme. Thus, said cases do not squarely apply to the instant case. The
foregoing notwithstanding, it bears stressing that the DAR's land valuation is only preliminary and is not, by any
means, final and conclusive upon the landowner. The landowner can file an original action with the RTC acting as a
special agrarian court to determine just compensation. The court has the right to review with finality the determination
in the exercise of what is admittedly a judicial function.]

5. NO, the 10-year period prohibition on the transfer of awarded lands under RA 6657 has NOT lapsed on May
10, 1999; thus, the qualified FWBs should NOT yet be allowed to sell their land interests in Hacienda Luisita to
third parties.

[Under RA 6657 and DAO 1, the awarded lands may only be transferred or conveyed after 10 years from
the issuance and registration of the emancipation patent (EP) or certificate of land ownership award (CLOA).
Considering that the EPs or CLOAs have not yet been issued to the qualified FWBs in the instant case, the 10-year
prohibitive period has not even started. Significantly, the reckoning point is the issuance of the EP or CLOA, and not
the placing of the agricultural lands under CARP coverage. Moreover, should the FWBs be immediately allowed the
option to sell or convey their interest in the subject lands, then all efforts at agrarian reform would be rendered
nugatory, since, at the end of the day, these lands will just be transferred to persons not entitled to land distribution
under CARP.]

6. YES, the ruling in the July 5, 2011 Decision that the qualified FWBs be given an option to remain as
stockholders of HLI should be reconsidered.

[The Court reconsidered its earlier decision that the qualified FWBs should be given an option to remain as
stockholders of HLI, inasmuch as these qualified FWBs will never gain control [over the subject lands] given the
present proportion of shareholdings in HLI. The Court noted that the share of the FWBs in the HLI capital stock is [just]
33.296%. Thus, even if all the holders of this 33.296% unanimously vote to remain as HLI stockholders, which is
unlikely, control will never be in the hands of the FWBs. Control means the majority of [sic] 50% plus at least one
share of the common shares and other voting shares. Applying the formula to the HLI stockholdings, the number of
shares that will constitute the majority is 295,112,101 shares (590,554,220 total HLI capital shares divided by 2 plus
one [1] HLI share). The 118,391,976.85 shares subject to the SDP approved by PARC substantially fall short of the
295,112,101 shares needed by the FWBs to acquire control over HLI.]

MACTAN CEBU INTERNATIONAL AIRPORT AUTHORITY v. FERDINAND J. MARCOS, GR No. 120082, 1996-09-
11

Facts:

Petitioner Mactan Cebu International Airport Authority (MCIAA)

Since the time of its creation,... enjoyed the privilege of exemption from payment of realty taxes in accordance with
Section 14 of its Charter

Office of the Treasurer of the City of Cebu, demanded payment for realty taxes on several parcels of land belonging to
the petitioner

Petitioner objected to such demand for payment as baseless and unjustified, claiming in its favor the aforecited
Section 14 of RA 6958 which exempts it from payment of realty taxes. It was also asserted that it is an instrumentality
of the government performing... governmental functions, citing Section 133 of the Local Government Code of 1991
which puts limitations on the taxing powers of local government units

Section 133. Common Limitations on the Taxing Powers of Local Government Units. -- Unless otherwise provided
herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy
of the... following:

Taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities, and local
government units. (underscoring supplied)

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Respondent City refused to cancel and set aside petitioner's realty tax account, insisting that the MCIAA is a
government-controlled corporation whose tax exemption privilege has been withdrawn by virtue of Sections 193 and
234 of the Local Government Code... petitioner... was compelled to pay its tax account "under protest" and thereafter
filed a Petition for Declaratory Relief with the Regional Trial Court of Cebu

MCIAA basically contended that the taxing powers of local government units do not extend to the levy of taxes or fees
of any kind on an instrumentality of the national government. Petitioner insisted that while it is indeed a government-
owned corporation, it... nonetheless stands on the same footing as an agency or instrumentality of the national
government by the very nature of its powers and functions.

trial court dismissed the petition... infer and state that the tax exemption provided for in RA 6958 creating petitioner
had been expressly repealed by the provisions of the New Local Government Code of 1991.

So that petitioner in this case has to pay the assessed realty tax of its properties effective after January 1, 1992 until
the present.

Issues:

respondent City of Cebu has no power nor authority to impose realty taxes upon it... whether the petitioner is a
"taxable person."

Ruling:

Considering its task "not merely to efficiently operate and manage the Mactan-Cebu International Airport, but more
importantly, to carry out the Government... policies of promoting and developing the Central Visayas and Mindanao
regions as centers of international trade and tourism, and accelerating the development of the means of transportation
and communication in the country,"... and that it is an attached... agency of the Department of Transportation and
Communication (DOTC),... the petitioner "may stand in [sic] the same footing as an agency or instrumentality of the
national government." Hence, its tax exemption privilege under Section 14 of its Charter

"cannot be considered withdrawn with the passage of the Local Government Code of 1991 (hereinafter LGC) because
Section 133 thereof specifically states that the `taxing powers of local government units shall not extend to the levy of
taxes or fees or charges of any kind on the... national government, its agencies and instrumentalities.'"

There can be no question that under Section 14 of R.A. No. 6958 the petitioner is exempt from the payment of realty
taxes imposed by the National Government or any of its political subdivisions, agencies, and instrumentalities.
Nevertheless, since taxation is the rule and... exemption therefrom the exception, the exemption may thus be
withdrawn at the pleasure of the taxing authority. The only exception to this rule is where the exemption was granted
to private parties based on material consideration of a mutual nature, which then becomes... contractual and is thus
covered by the non-impairment clause of the Constitution.

we conclude that as a general rule, as laid down in Section 133, the taxing powers of local government units cannot
extend to the levy of, inter alia, "taxes, fees and charges of any kind on the National

Government, its agencies and instrumentalities, and local government units"; however, pursuant to Section 232,
provinces, cities, and municipalities in the Metropolitan Manila Area may impose the real property tax except on, inter
alia, "real property owned by the Republic of... the Philippines or any of its political subdivisions except when the
beneficial use thereof has been granted, for consideration or otherwise, to a taxable person," as provided in item (a) of
the first paragraph of Section 234.

upon the effectivity of the LGC, exemptions from payment of real property taxes granted to natural or juridical persons,
including government-owned or controlled corporations, except as provided in the said section,... and the petitioner is,
undoubtedly, a government-owned corporation, it necessarily follows that its exemption from such tax granted it in
Section 14 of its Charter, R.A. No. 6958, has been withdrawn.

In short, the petitioner can no longer invoke the general rule in Section 133 that the taxing powers of the local
government units cannot extend to the levy of:

(o) taxes, fees or charges of any kind on the National Government, its agencies or instrumentalities, and local
government units.

the petitioner cannot claim that it was never a "taxable person" under its Charter. It was only exempted from the
payment of real property taxes. The grant of the privilege only in respect of this tax is conclusive proof of the
legislative intent to... make it a taxable person subject to all taxes, except real property tax.

Finally, even if the petitioner was originally not a taxable person for purposes of real property tax, in light of the
foregoing disquisitions, it had already become, even if it be conceded to be an "agency" or "instrumentality" of the

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Government, a taxable person for such... purpose in view of the withdrawal in the last paragraph of Section 234 of
exemptions from the payment of real property taxes, which, as earlier adverted to, applies to the petitioner.

Accordingly, the position taken by the petitioner is untenable.

nothing can prevent

Congress from decreeing that even instrumentalities or agencies of the Government performing governmental
functions may be subject to tax. Where it is done precisely to fulfill a constitutional mandate and national policy, no
one can doubt its wisdom.

Republic vs. Sandoval 220 SCRA 124

Sunday, January 25, 2009 Posted by Coffeeholic Writes
Labels: Case Digests, Political Law

Facts: Farmer-rallyists marched to Malacanang calling for a genuine land reform program. There was a marchers-
police confrontation which resulted in the death of 12 rallyists and scores were wounded. As a result, then Pres.
Aquino issued AO 11 creating the Citizens Mendiola Commission for the purpose of conducting an investigation. The
most significant recommendation of the Commission was for the heirs of the deceased and wounded victims to
be compensated by the government. Based on such recommendation, the victims of Mendiola massacre filed an
action for damages against the Republic and the military/police officers involved in the incident.
Issues:
(1) Whether or not there is a valid waiver of immunity
(2) Whether or not the State is liable for damages
Held: The Court held that there was no valid waiver of immunity asclaimed by the petitioners. The recommendation
made by the Commission to indemnify the heirs of the deceased and the victims does not in any way mean
that liability attaches to the State. AO 11 merely states the purpose of the creation of the Commission and, therefore,
whatever is the finding of the Commission only serves as the basis for a cause of action in the event any party decides
to litigate the same. Thus, the recommendation of the Commission does not in any way bind the State.

The State cannot be made liable because the military/police officers who allegedly were responsible for the death and
injuries suffered by the marchers acted beyond the scope of their authority. It is a settled rule that the State as a
person can commit no wrong. The military and police officers who were responsible for the atrocities can be held
personally liable for damages as they exceeded their authority, hence, the actscannot be considered official.