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Constitutional Law 2 Case Digests

Inherent Powers of the State

Police Power

Edu v Ericta Digest

Facts:

1. Assailed is the validity of the Reflector

Law and Admin Order No. 2 whichimplements it. Under the law, a vehicle has

to comply with the re!irements of havin"

reflective device prior to #ein" re"istered at

the L$O.

2. $he respondent %alo on his #ehalf and

that of other motorists, filed a s!it for

certiorari and prohi#ition with preliminary

in&!nction assailin" the validity of thechallen"ed Act as an invalid e'ercise of the

police power for #ein" violative of the d!e

process cla!se. $his he followed on (ay 2),

1*+ with a manifestation wherein he so!"ht

as an alternative remedy that, in the event

that respondent -!d"e wo!ld hold said

stat!te constit!tional, Administrative Order

No. 2 of the Land $ransportation

ommissioner, now petitioner,

implementin" s!ch le"islation #e n!llified as

an !nd!e e'ercise of le"islative power.

Issue: W/N Reflector Law isunconstitutional, and w/n A! is valid

/0, #oth the law and AO 2 are valid.

t is th!s o#vio!s that the challen"ed stat!te

is a le"islation enacted !nder the police

power to promote p!#lic safety. 3hat is

dele"ated is a!thority which is non4

le"islative in character, the completeness of

the stat!te when it leaves the hands of

on"ress #ein" ass!med.

"# Police Power

t is in the a#ove sense the "reatest and most

powerf!l attri#!te of "overnment. 5the most

essential, insistent, and at least illimita#le of

powers,5 6-!stice 7olmes8 aptly pointed o!t

5to all the "reat p!#lic needs.5

ts scope, ever4e'pandin" to meet the

e'i"encies of the times, even to anticipate

the f!t!re where it co!ld #e done, provides

eno!"h room for an efficient and fle'i#leresponse to conditions and circ!mstances

th!s ass!rin" the "reatest #enefits. n the

lan"!a"e of -!stice ardo9o: 5Needs that

were narrow or parochial in the past may #e

interwoven in the present with the well4

#ein" of the nation.

!# Delegation of Legislative Power

t is a f!ndamental principle flowin" from

the doctrine of separation of powers that

on"ress may not dele"ate its le"islative

power to the two other #ranches of the

"overnment, s!#&ect to the e'ception that

local "overnments may over local affairs

participate in its e'ercise. 3hat cannot #e

dele"ated is the a!thority !nder theonstit!tion to mae laws and to alter and

repeal them; the test is the completeness of

the stat!te in all its term and provisions

when it leaves the hands of the le"islat!re.

$o determine whether or not there is an

!nd!e dele"ation of le"islative power the

in!iry m!st #e directed to the scope and

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definiteness of the meas!re enacted. $he

le"islat!re does not a#dicate its f!nctions

when it descri#es what &o# m!st #e done,

who is to do it, and what is the scope of hisa!thority. For a comple' economy, that may

indeed #e the only way in which the

le"islative process can "o forward. A

distinction has ri"htf!lly #een made #etween

dele"ation of power to mae the laws which

necessarily involves a discretion as to what

it shall #e, which constit!tionally may not #e

done, and dele"ation of a!thority or

discretion as to its e'ec!tion to e'ercised!nder and in p!rs!ance of the law, to which

no valid o#&ection call #e made. $he

onstit!tion is th!s not to #e re"arded as

denyin" the le"islat!re the necessary

reso!rces of fle'i#ility and practica#ility.

$o avoid the taint of !nlawf!l dele"ation,

there m!st #e a standard, which implies at

the very least that the le"islat!re itself

determines matters of principle and lay

down f!ndamental policy. Otherwise, the

char"e of complete a#dication may #e hard

to repel. A standard th!s defines le"islative

policy, mars its limits, its maps o!t its

#o!ndaries and specifies the p!#lic a"ency

to apply it. t indicates the circ!mstances

!nder which the le"islative command is to

#e effected. t is the criterion #y which

le"islative p!rpose may #e carried o!t.$hereafter, the e'ec!tive or administrative

office desi"nated may in p!rs!ance of the

a#ove "!idelines prom!l"ate s!pplemental

r!les and re"!lations.

$he standard may #e either e'press or

implied. f the former, the non4dele"ation

o#&ection is easily met. $he standard tho!"hdoes not have to #e spelled o!t specifically.

t co!ld #e implied from the policy and

p!rpose of the act considered as a whole. n

the Reflector Law, clearly the le"islative

o#&ective is p!#lic safety.

Er$ita%&alate 'otel/&otel vs# (it) of&anila *!+ S(RA -.

Posted by taxcasesdigest on Tuesday, July

14, 2009

Labels: constitutional law

,due

process,police power

0acts: On -!ne 1

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reasona#le and the ordinance is en&oys the

pres!mption of constit!tionality a#sent any

irre"!larity on its face. $a'ation may #e

made to implement a police power and theamo!nt, o#&ect, and instance of ta'ation is

dependent !pon the local le"islative #ody.

-!d"ment of lower co!rt reversed and

in&!nction lifted.

ER&I1A%&ALA1E '1EL 2 &1ELPERA1RS v# (I13 &A3R 0&ANILA

0acts:

$he petitioners filed a petition for

prohi#ition a"ainst Ordinance No. ?+= for

#ein" violative of the d!e process cla!se,

contendin" that said ordinance is not only

ar#itrary, !nreasona#le or oppressive #!t

also va"!e, indefinite and !ncertain, and

liewise alle"e the invasion of the ri"ht to

privacy and the "!aranty a"ainst self4

incrimination. Ordinance No. ?+= proposes

to chec the clandestine har#orin"

of transients and "!ests of these

esta#lishments #y re!irin" these transients

and "!ests to fill !p a re"istration form,

prepared for the p!rpose, in a lo##y open to

p!#lic view at all times, and #y introd!cin"

several other amendatory provisionscalc!lated to shatter the privacy that

characteri9es the re"istration of transients

and "!ests. 5(oreover, the increase in the

licensed fees was intended to disco!ra"e

5esta#lishments of the ind from operatin"

for p!rpose other than le"al5 and at the same

time, to increase 5the income of the city

"overnment.D $he lower co!rt r!led in favor

of the petitioners.

7ence, the appeal.

Issue:

3hether or not Ordinance No. ?+= is

!nconstit!tional

'eld:

No.

Rationale:

$he mantle of protection associated with the

d!e process "!aranty does not cover

petitioners. $his partic!lar manifestation of

a police power meas!re #ein" specifically

aimed to safe"!ard p!#lic morals is imm!ne

from s!ch imp!tation of n!llity restin"

p!rely on con&ect!re and !ns!pported #y

anythin" of s!#stance. $o hold otherwise

wo!ld #e to !nd!ly restrict and narrow thescope of police power which has #een

properly characteri9ed as the most essential,

insistent and the least limita#le of powers,

e'tendin" as it does 5to all the "reat p!#lic

needs.5 t wo!ld #e, to paraphrase another

leadin" decision, to destroy the very p!rpose

of the state if it co!ld #e deprived or allowed

itself to #e deprived of its competence to

promote p!#lic health, p!#lic morals, p!#licsafety and the "eneral welfare. Ne"atively

p!t, police power is that inherent and

plenary power in the tate which ena#les it

to prohi#it all that is h!rt f!ll to the comfort,

safety, and welfare of society. On the

le"islative or"ans of the "overnment,

whether national or local, primarily rest the

e'ercise of the police power, which, it

cannot #e too often emphasi9ed, is thepower to prescri#e re"!lations to promote

the health, morals, peace, "ood order, safety

and "eneral welfare of the people. n view of

the re!irements of d!e process, e!al

protection and other applica#le

constit!tional "!aranties however, the

e'ercise of s!ch police power insofar as it

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may affect the life, li#erty or property of any

person is s!#&ect to &!dicial in!iry. 3here

s!ch e'ercise of police power may #e

considered as either capricio!s, whimsical,!n&!st or !nreasona#le, a denial of d!e

process or a violation of any

other applica#le constit!tional "!aranty may

call for correction #y the co!rts. $he o!rt

reversed the &!d"ment of the lower co!rt and

lifted the in&!nction on the Ordinance in

!estion.

444

Li#erty is a #lessin", witho!t which life is a

misery, #!t li#erty sho!ld not #e made

to prevail over a!thority #eca!se then

society will fall into anarchy. Neither sho!ld

a!thority #e made to prevail over li#erty

#eca!se then the individ!al will fall into

slavery.

P'ILIPPINE ASS(IA1IN 0SER5I(E E6PR1ERS vs 1orres (aseDigest

P'ILIPPINE ASS(IA1IN 0SER5I(E E6PR1ERS, IN(# 7etitioner,vs# 'N# R89EN D# 1RRES, asSecretar) of the De7art$ent of Laor 2E$7lo)$ent, and ;SE N#

SAR&IEN1, as Ad$inistrator of theP'ILIPPINE 5ERSEASE&PL3&EN1 AD&INIS1RA1IN,

res7ondents#.# August ?, "..!#@

0A(1S: EOL0 ecretary R!#en E. $orresiss!ed Eepartment Order No. 1= eries of

1**1 temporarily s!spendin" the recr!itment

#y private employment a"encies of Filipino

domestic helpers "oin" to 7on" Gon"D. As ares!lt of the department order EOL0,

thro!"h the @O0A too over the #!siness of

deployin" 7on" Gon" #o!nd worers.

$he petitioner, @A0, the lar"est

or"ani9ation of private employment and

recr!itment a"encies d!ly licensed and

a!thori9ed #y the @O0A to en"a"e in the

#!siness of o#tainin" overseas employment

for Filipino land4#ased worers filed a

petition for prohi#ition to ann!l the

aforementioned order and to prohi#it

implementation.

ISS8ES:

1. whether or not respondents acted

with "rave a#!se of discretion andHor

in e'cess of their r!le4main"

a!thority in iss!in" said circ!lars;

2. whether or not the assailed EOL0

and @O0A circ!lars are contrary to

the onstit!tion, are !nreasona#le,

!nfair and oppressive; and

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a!thori9ed to iss!e orders and prom!l"ate

r!les and re"!lations to carry o!t the

o#&ectives and implement the provisions of

this title.

0ONE, the vest!re of !asi4le"islative

and !asi4&!dicial powers in administrative

#odies is constit!tional. t is necessitated #y

the "rowin" comple'ities of the modern

society.

$7RE, the orders and circ!lars iss!ed are

however, invalid and !nenforcea#le. $he

reason is the lac of proper p!#lication and

filin" in the Office of the National

Administrative Re"istrar as re!ired in

Article 2 of the ivil ode to wit:

Art. 2. Laws shall tae effect after fifteen

618 days followin" the completion of their

p!#lication in the Official %a9atte, !nless it

is otherwise provided;

Article of the La#or ode to wit:

Art. . R!les and Re"!lations. I $he

Eepartment of La#or and other "overnment

a"encies char"ed with the administration

and enforcement of this ode or any of its

parts shall prom!l"ate the necessary

implementin" r!les and re"!lations. !ch

r!les and re"!lations shall #ecome effective

fifteen 618 days after anno!ncement of their

adoption in newspapers of "eneral

circ!lation;

and ections oo

of the Administrative ode of 1*)+

which provide:

ec. oo, each r!le

shall #ecome effective fifteen 618 days

from the date of filin" as a#ove provided

!nless a different date is fi'ed #y law, or

specified in the r!le in cases of imminent

dan"er to p!#lic health, safety and welfare,

the e'istence of which m!st #e e'pressed in

a statement accompanyin" the r!le. $he

a"ency shall tae appropriate meas!res to

mae emer"ency r!les nown to persons

who may #e affected #y them. 6hapter 2,

>oo of the Administrative ode of

1*)+8.

;&& Pro$otion and &anage$ent vs(ourt of A77eals

Police Power

E!e to the death of one (aricris ioson in

1**1, ory #anned the deployment of

performin" artists to -apan and other

destinations. $his was rela'ed however with

the introd!ction of the 0ntertainment

nd!stry Advisory o!ncil which later

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proposed a plan to @O0A to screen and train

performin" artists seein" to "o a#road. n

p!rs!ant to the proposal @O0A and the

secretary of EOL0 so!"ht a ? step plan toreali9e the plan which incl!ded an ArtistMs

Record >oo which a performin" artist m!st

ac!ire prior to #ein" deployed a#road. $he

Federation of $alent (ana"ers of the

@hilippines assailed the validity of the said

re"!lation as it violated the ri"ht to travel,

a#rid"e e'istin" contracts and ri"hts and

deprives artists of their individ!al ri"hts.

-(( intervened to #olster the ca!se ofF0$(O@. $he lower co!rt r!led in favor of

0A.

ISS8E: 3hether or not the re"!lation #y0A is valid.

'ELD: $he r!led in favor of the lowerco!rt. $he re"!lation is a valid e'ercise of

police power. @olice power concerns

"overnment enactments which precisely

interfere with personal li#erty or property in

order to promote the "eneral welfare or the

common "ood. As the assailed Eepartment

Order en&oys a pres!med validity, it follows

that the #!rden rests !pon petitioners to

demonstrate that the said order, partic!larly,

its AR> re!irement, does not enhance the

p!#lic welfare or was e'ercised ar#itrarily or

!nreasona#ly. $he welfare of Filipino

performin" artists, partic!larly the women

was paramo!nt in the iss!ance ofEepartment Order No.

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Le"islat!re sees fit to impose, and one of the

stat!tory conditions of this license is that it

mi"ht #e revoed. Revocation of it does not

deprive the defendant of any property,imm!nity, or privile"e.

$he #asis for its iss!ance was the need for

peace and order in the society. the assailed

%!idelines do not entirely prohi#it

possession of firearms. 3hat they proscri#e

is merely the carryin" of firearms o!tside of

residence. 7owever, those who wish to carry

their firearms o!tside of their residences

may re4apply for a new @$FOR. $his is a

reasona#le re"!lation. f the carryin" of

firearms is re"!lated, necessarily, crime

incidents will #e c!rtailed.

National Develo7$ent (o$7an) and NewAgri vs# Phili77ine 5eterans 9anF

*".! S(RA !B>

0acts:

A"ri' (aretin" e'ec!ted in favor of

respondent a real estate mort"a"e over three

parcels of land.

A"ri' later on went #anr!pt. n order to

reha#ilitate the company, then @resident

(arcos iss!ed

@residential Eecree 1+1+ which mandated,

amon" others, the e'tin"!ishin" of all the

mort"a"es and

liens attachin" to the property of A"ri', and

creatin" a laims ommittee to process

claims a"ainst the

company to #e administered mainly #y

NE. Respondent thereon filed a claim

a"ainst the company

#efore the ommittee. @etitioners however

filed a petition with the R$ of alam#a,La"!na invoin"

the provision of the law which cancels all

mort"a"e liens a"ainst it. Respondent too

meas!res to

e'tra&!dicially foreclose which the

petitioners opposed #y filin" another case in

the same co!rt. $hese

cases were consolidated. $he R$ held in

favor of the respondent on the "ro!nd of

!nconstit!tionality

of the decree; mainly violation of the

separation of powers, impairment of

o#li"ation of contracts, and

violation of the e!al protection cla!se.

7ence this petition.

Issue:

s the respondent estopped from

!estionin" the constit!tionality of the law

since they first

a#ided #y it #y filin" a claim with the

ommitteeC

s @E 1+1+ !nconstit!tionalC

Ruling:

On the iss!e of estoppel, the o!rt held that

it co!ld not apply in the present case since

when

the respondent filed his claim, @resident

(arcos was the s!preme r!ler of the co!ntry

and they co!ld

not !estion his acts even #efore the co!rts

#eca!se of his a#sol!te power over all

"overnment

instit!tions when he was the @resident.

$he creation of New A"ri' as mandated #y

the decree was also r!led as !nconstit!tional

since it

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violated the prohi#ition that the >atasan"

@am#ansa 6on"ress8 shall not provide for

the formation,

or"ani9ation, or re"!lation of private

corporations !nless s!ch corporations are

owned or controlled

#y the "overnment.

@E 1+1+ was held as !nconstit!tional on the

other "ro!nds that it was an invalid e'ercise

of

police power, t had no lawf!l s!#&ect and

no lawf!l method. t violated d!e process #y

e'tin"!ishin"

all mort"a"es and liens and interests which

are property ri"hts !n&!stly taen. t also

violated the e!al

protection cla!se #y l!mpin" to"ether all

sec!red and !nsec!red creditors. t alsoimpaired the

o#li"ation of contracts, even tho!"h it only

involved p!rely private interests.

&&DA v# =arin, -B? S(RA ">?, =R"C+!C+ *!++B

0acts:$he iss!e arose from an incidentinvolvin" the respondent Eante O. %arin, a

lawyer, who was iss!ed a traffic violation

receipt 6$R8 #y ((EA and his drivers

license confiscated for parin" ille"ally

alon" %andara treet, >inondo, (anila, on

A!"!st 1**.

hortly #efore the e'piration of the $Rs

validity, the respondent addressed a letter to

then ((EA hairman @rospero Oreta

re!estin" the ret!rn of his drivers license,and e'pressin" his preference for his case to

#e filed in co!rt.

Receivin" no immediate reply, %arin filed

the ori"inal complaint with application for

preliminary in&!nction, contendin" that, in

the a#sence of any implementin" r!les and

re"!lations, ec. 6f8 of Rep. Act No. +*2?

"rants the ((EA !n#ridled discretion todeprive errin" motorists of their licenses,

pre4emptin" a &!dicial determination of the

validity of the deprivation, there#y violatin"

the d!e process cla!se of the onstit!tion.

$he respondent f!rther contended that the

provision violates the constit!tional

prohi#ition a"ainst !nd!e dele"ation of

le"islative a!thority, allowin" as it does the((EA to fi' and impose !nspecified I

and therefore !nlimited I fines and other

penalties on errin" motorists.

$he trial co!rt rendered the assailed decision

in favor of herein respondent.

Issue:"# WN &&DA, through Sec# B*f of Re7#Act No# >.!- could validl) eercise 7olice7ower#

'ELD: @olice @ower, havin" #een lod"edprimarily in the National Le"islat!re, cannot

#e e'ercised #y any "ro!p or #ody ofindivid!als not possessin" le"islative power.

$he National Le"islat!re, however, may

dele"ate this power to the president and

administrative #oards as well as the

lawmain" #odies of m!nicipal corporations

or local "overnment !nits 6L%Us8. Once

dele"ated, the a"ents can e'ercise only s!ch

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le"islative powers as are conferred on them

#y the national lawmain" #ody.

O!r on"ress dele"ated police power to the

L%Us in the Local %overnment ode of

1**1. 1 A local "overnment is a 5political

s!#division of a nation or state which is

constit!ted #y law and has s!#stantial

control of local affairs.5 1= Local

"overnment !nits are the provinces, cities,

m!nicipalities and #aran"ays, which

e'ercise police power thro!"h their

respective le"islative #odies.

(etropolitan or (etro (anila is a #ody

composed of several local "overnment !nits.

3ith the passa"e of Rep. Act No. +*2? in

1**, (etropolitan (anila was declared as

a 5special development and administrative

re"ion5 and the administration of 5metro4

wide5 #asic services affectin" the re"ion

placed !nder 5a development a!thority5

referred to as the ((EA. $h!s:

$he ((EA is, as termed in the charter

itself, a 5development a!thority.5 t is an

a"ency created for the p!rpose of layin"

down policies and coordinatin" with the

vario!s national "overnment a"encies,

peoples or"ani9ations, non4"overnmental

or"ani9ations and the private sector for the

efficient and e'peditio!s delivery of #asic

services in the vast metropolitan area. All its

f!nctions are administrative in nat!re andthese are act!ally s!mmed !p in the charter

itself

ection of Rep. Act No. +*2?

en!merates the 5F!nctions and @owers of

the (etro (anila Eevelopment A!thority.5

$he contested cla!se in ec. 6f8 states that

the petitioner shall 5install and administer asin"le ticetin" system, fi', impose and

collect fines and penalties for all inds of

violations of traffic r!les and re"!lations,

whether movin" or non4movin" in nat!re,

and confiscate and s!spend or revoe

drivers licenses in the enforcement of s!ch

traffic laws and re"!lations, the provisions

of Rep. Act No. ?1

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any of the fo!r 6?8 tested infections or #lood

transf!sion transmissi#le diseases, namely,

malaria, syphilis, 7epatitis > and Ac!ired

mm!ne Eeficiency yndrome 6AE8 thanthose donated to @NR.

Rep!#lic Act No. ++1* or the National

>lood ervices Act of 1**? was then

enacted into law on April 2, 1**?. $he Act

sees to provide an ade!ate s!pply of safe

#lood #y promotin" vol!ntary #lood

donation and #y re"!latin" #lood #ans in

the co!ntry. One of the provisions of the

said act was the phasin" o!t of commercial#lood #ans within 2 years from its

effectivity.

@etitioners, comprisin" the ma&ority of the

>oard of Eirectors of the @hilippine

Association of >lood >ans assail the

constit!tionality of RA ++1* on the "ro!nd

amon" others that it is an improper and

!nwarranted dele"ation of le"islative power.Accordin" to petitioners, the Act was

incomplete when it was passed #y the

Le"islat!re, and the latter failed to fi' a

standard to which the ecretary of 7ealth

m!st conform in the performance of his

f!nctions. @etitioners also contend that the

two4year e'tension period that may #e

"ranted #y the ecretary of 7ealth for the

phasin" o!t of commercial #lood #ans

p!rs!ant to ection + of the Act constrained

the ecretary to le"islate, th!s constit!tin"

!nd!e dele"ation of le"islative power.

ss!e: 370$70R OR NO$ 0$ON +

OF R.A. ++1* ON$$U$0 UNEU0

E0L0%A$ON OF L0%LA$0

@O30R

7eld: n testin" whether a stat!te constit!tes

an !nd!e dele"ation of le"islative power or

not, it is !s!al to in!ire whether the stat!te

was complete in all its terms and provisionswhen it left the hands of the Le"islat!re so

that nothin" was left to the &!d"ment of the

administrative #ody or any other appointee

or dele"ate of the Le"islat!re. 0'cept as to

matters of detail that may #e left to #e filled

in #y r!les and re"!lations to #e adopted or

prom!l"ated #y e'ec!tive officers and

administrative #oards, an act of the

Le"islat!re, as a "eneral r!le, is incomplete

and hence invalid if it does not lay down any

r!le or definite standard #y which the

administrative #oard may #e "!ided in the

e'ercise of the discretionary powers

dele"ated to it.

Rep!#lic Act No. ++1* or the National

>lood ervices Act of 1**? is complete in

itself. t is clear from the provisions of the

Act that the Le"islat!re intended primarilyto safe"!ard the health of the people and has

mandated several meas!res to attain this

o#&ective. One of these is the phase o!t of

commercial #lood #ans in the co!ntry. $he

law has s!fficiently provided a definite

standard for the "!idance of the ecretary of

7ealth in carryin" o!t its provisions, that is,

the promotion of p!#lic health #y providin"

a safe and ade!ate s!pply of #lood thro!"hvol!ntary #lood donation. >y its provisions,

it has conferred the power and a!thority to

the ecretary of 7ealth as to its e'ec!tion, to

#e e'ercised !nder and in p!rs!ance of the

law.

$he ecretary of 7ealth has #een "iven,

!nder Rep!#lic Act No. ++1*, #road powers

to e'ec!te the provisions of said Act.

pecifically, ection 2< of AdministrativeOrder No. * provides that the phase4o!t

period for commercial #lood #ans shall #e

e'tended for another two years !ntil (ay

2), 1**) #ased on the res!lt of a caref!l

st!dy and review of the #lood s!pply and

demand and p!#lic safety.D $his power to

ascertain the e'istence of facts and

10

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conditions !pon which the ecretary may

effect a period of e'tension for said phase4

o!t can #e dele"ated #y on"ress. $he tr!e

distinction #etween the power to mae laws

and discretion as to its e'ec!tion is

ill!strated #y the fact that the dele"ation of

power to mae the law, which necessarily

involves a discretion as to what it shall #e,

and conferrin" an a!thority or discretion as

to its e'ec!tion, to #e e'ercised !nder and in

p!rs!ance of the law. $he first cannot #e

done; to the latter no valid o#&ection can #e

made.

White Light (or7#, vs (it) of &anila

Nove$er !!, !+"+

Police Power ot !alidly "xercised

#n$ringe%ent o$ Pri&ate 'ig(ts

On < Eec 1**2, then (ayor Lim si"ned into

law Ord +++? entitled An OrdinanceD

prohi#itin" short time admission in hotels,

motels, lod"in" ho!ses, pension ho!ses and

similar esta#lishments in the ity of (anila.

3hite Li"ht orp is an operator of mini

hotels and motels who so!"ht to have the

Ordinance #e n!llified as the said Ordinance

infrin"es on the private ri"hts of their

patrons. $he R$ r!led in favor of 3L. t

r!led that the Ordinance stries at the

personal li#erty of the individ!al "!aranteed

#y the onstit!tion. $he ity maintains that

the ordinance is valid as it is a valid e'ercise

of police power. Under the L%, the ity is

empowered to re"!late the esta#lishment,

operation and maintenance of cafes,

resta!rants, #eerho!ses, hotels, motels, inns,pension ho!ses, lod"in" ho!ses and other

similar esta#lishments, incl!din" to!rist

"!ides and transports. $he A r!led in favor

of the ity.

ISS8E: 3hether or not Ord +++? is valid.

'ELD: $he r!led that the saidordinance is n!ll and void as it indeed

infrin"es !pon individ!al li#erty. t also

violates the d!e process cla!se which serves

as a "!aranty for protection a"ainst ar#itrary

re"!lation or sei9!re. $he said ordinance

invades private ri"hts. Note that not all who

"oes into motels and hotels for wash !p rate

are really there for o#scene p!rposes only.

ome are to!rists who needed rest or to

wash !pD or to freshen !p. 7ence, the

infidelity so!"ht to #e avoided #y the said

ordinance is more or less s!#&ected only to a

limited "ro!p of people. $he reiterates

that individ!al ri"hts may #e adversely

affected only to the e'tent that may fairly #e

re!ired #y the le"itimate demands of p!#lic

interest or p!#lic welfare.

E$inent Do$ain

Association of S$all Landowners in the

Phili77ines, Inc# vs Secretar) of AgrarianRefor$

1)* +'- .4. Political Law

onstitutional Law /ill o$ 'ig(ts "ual

Protection !alid lassi$ication

"%inent o%ain Just o%pensation

$hese are fo!r consolidated cases

!estionin" the constit!tionality of the

omprehensive A"rarian Reform Act 6R.A.

No. ==+ and related laws i.e., A"rarian

Land Reform ode or R.A. No.

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Ri"hts incl!des a call for the adoption #y the

tate of an a"rarian reform pro"ram. $he

tate shall, #y law, !ndertae an a"rarian

reform pro"ram fo!nded on the ri"ht of

farmers and re"!lar farmworers, who are

landless, to own directly or collectively the

lands they till or, in the case of other

farmworers, to receive a &!st share of the

fr!its thereof. RA

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1. No. $he Association had not shown any

proof that they #elon" to a different class

e'empt from the a"rarian reform pro"ram.

Under the law, classi$icationhas #een

defined as the "ro!pin" of persons or thin"s

similar to each other in certain partic!lars

and different from each other in these same

partic!lars. $o #e valid, it m!st conform to

the followin" re!irements:

618 it m!st #e #ased on s!#stantial

distinctions;

628 it m!st #e "ermane to the p!rposes of thelaw;

6B""G !+ ;AN !++C@

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Saturda), ;anuar) C", !++. Posted) (offeeholic WritesLaels: (ase Digests,Political Law

0acts:Respondent National 7o!sin"A!thority 6N7A8 filed complaints for

the e'propriation of s!"arcane lands

#elon"in" to the petitioners. $he stated

p!#lic p!rpose of the e'propriation was the

e'pansion of the

Easmarias Resettlement @ro&ect to

accommodate the s!atters who were

relocated from the (etropolitan (anila

area. $he trial co!rt rendered &!d"ment

orderin" the e'propriation of these lots and

the payment of &!st compensation. $he

!preme o!rt affirmed the &!d"ment of the

lower co!rt.

A few years later, petitioners contended that

respondent N7A violated the stated p!#licp!rpose for the e'pansion of the

Easmarias Resettlement@ro&ect when it

failed to relocate the s!atters from

the (etro (anila area, as #orne o!t #y the

oc!lar inspection cond!cted #y the trial

co!rt which showed that most of the

e'propriated properties remain !nocc!pied.

@etitioners liewise !estion the

p!#lic nat!re of the !se #y respondent N7A

when it entered into a contract for the

constr!ction of low cost ho!sin" !nits,

which is alle"edly different from the stated

p!#lic p!rpose in

thee'propriation proceedin"s. 7ence, it is

claimed that respondent N7A has forfeited

its ri"hts and interests #y virt!e of

the e'propriation &!d"ment and the

e'propriated properties sho!ld now #e

ret!rned to herein petitioners.

Issue:3hether or not the &!d"mentof e'propriation was forfeited in the li"ht of

the fail!re of respondent N7A to !se the

e'propriated property for the intended

p!rpose #!t for a totally different p!rpose.

'eld:$he !preme o!rt held in favor of

the respondent N7A. Accordin"ly,petitioners cannot insist on a restrictive view

of the eminentdomain provision of the

onstit!tion #y contendin" that the contract

for low cost ho!sin" is a deviation from the

stated p!#lic !se. t is now settled doctrine

that the concept of p!#lic !se is no lon"er

limited to traditional p!rposes. $he term

5p!#lic !se5 has now #een held to #e

synonymo!s with 5p!#lic interest,5 5p!#lic

#enefit,5 5p!#lic welfare,5 and 5p!#lic

convenience.5 $h!s, whatever may #e

#eneficially employed for the "eneral

welfare satisfies the re!irement of p!#lic

!se.5

n addition, the e'propriation of private land

for sl!m clearance and !r#an development is

for a p!#lic p!rpose even if the developed

area is later sold to private homeowners,

commercials firms, entertainment andservice companies, and other private

concerns. (oreover, the onstit!tion itself

allows the tate to !ndertae, for

the common "ood and in cooperation with

the private sector, a contin!in" pro"ram of

!r#an land reform and ho!sin" which will

mae at afforda#le cost decent ho!sin"

and #asic services to !nderprivile"ed and

homeless citi9ens in!r#an centers and resettlementareas.

$he e'propriation of private property for the

p!rpose of sociali9ed ho!sin" for the

mar"inali9ed sector is in f!rtherance of

social &!stice.

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(it) of &andalu)ong vs# Aguilar

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co!rt denied the motion. $he ity filed a

petition for review with the !preme o!rt.

Issue:3hether the ity has e'ha!sted allmeans to ac!ire the land !nder the hands of

private persons, #!t which is within the

Areas for @riority Eevelopment 6A@E8.

'eld:@residential Eecree 6@E8 11+, theUr#an Land Reform Act, was iss!ed #y then

@resident (arcos in 1*+). $he decree

adopted as a tate policy the li#eration of

h!man comm!nities from #li"ht, con"estion

and ha9ard, and promotion of their

development and moderni9ation, the

optim!m !se of land as a national reso!rce

for p!#lic welfare. @!rs!ant to this law,

@roclamation 1)*< was iss!ed in 1*+*

declarin" the entire (etro (anila as Ur#an

Land Reform Sone for p!rposes of !r#an

land reform. $his was amended in 1*) #y

@roclamation 1*=+ and in 1*)< #y

@roclamation 22)? which identified and

specified 2? sites in (etro (anila as Areas

for @riority Eevelopment and Ur#an Land

Reform Sones. $he ac!isition of lands for

sociali9ed ho!sin" is "overned #y several

provisions in the law. @!rs!ant to ection *

of RA +2+*, Lands for sociali9ed ho!sin"

are to #e ac!ired in the followin" order: 618

"overnment lands; 628 aliena#le lands of the

p!#lic domain; 6L sites which have not yet

#een ac!ired; and 6=8 privatelyowned

lands. ection *, however, is not a sin"leprovision that can #e read separate from the

other provisions of the law. t m!st #e read

to"ether with ection 1 of RA +2+*. $h!s,

lands for sociali9ed ho!sin" !nder RA +2+*

are to #e ac!ired in several modes. Amon"

these modes are the followin": 618

comm!nity mort"a"e; 628 land swappin", 6

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the same #y comm!nity mort"a"e, land

swappin", land assem#ly or consolidation,

land #anin", donation to the "overnment,

or &oint vent!re a"reement !nder ection *

of the law.

DISDAD LA=(A,

DR1E LA=(A and

8RS8LA LA=(A,

@etitioners vs.

;8D=E =ENERSA =# LA9RA and(I13 0 (E98,

Respondents

=#R# No# "BB>-?, ctoer "C, !++-

Facts:

$he @rovince of e#! donated 21 lots to

the ity of e#!. >!t then, in late 1*=, the

21 lots, incl!din" Lot 12*, reverted to the

@rovince of e#!. onse!ently, the

province tried to ann!l the sale of Lot 12*

#y the ity of e#! to the petitioners. $his

prompted the latter to s!e the province for

specific performance and dama"es in the

then o!rt of First nstance. $he co!rt a uo

r!led in favor of petitioners and ordered

the @rovince of e#! to e'ec!te the final

deed of sale in favor of petitioners. $he

o!rt of Appeals affirmed the decision of

the trial co!rt. After ac!irin" title,

petitioners tried to tae possession of the lot

only to discover that it was

already occ!pied #y s!atters. $h!s

petitioners instit!ted e&ectment proceedin"s

a"ainst thes!atters. $he (!nicipal $rialo!rt in ities 6($8 orderin" the

s!atters to vacate the lot. On appeal, the

R$ affirmed the ($Ms decision and

iss!ed a writ of e'ec!tion and order

of demolition. 7owever, when the

demolition order was a#o!t to #e

implemented, e#! ity (ayor Alvin

%arcia wrote two letters to the ($,

re!estin" the deferment of the demolitionon the "ro!nd that the ity was still looin"

for a relocation site for the s!atters. Actin"

on the mayorMs re!est, the ($ iss!ed

two orders s!spendin" the demolition.

Unfort!nately for petitioners, d!rin" the

s!spension period, the

+angguniang Panlungsod 6@8 of e#!

ity passed a resol!tion which identified Lot

12* as a sociali9ed ho!sin" site p!rs!ant to

RA +2+*.@etitioners filed with the R$ an

action for declaration of n!llity of Ordinance

No. 1)?< for #ein" !nconstit!tional.

Issue:

3ON the Ordinance No. 1)?y virt!e of RA +1=,

on"ress conferred !pon local "overnment

!nits the power to e'propriate. Ordinance

No. 1)?< which a!thori9ed the e'propriation

of petitionersM lot was enacted #y the @of

e#! ity to provide sociali9ed ho!sin" for

the homeless and low4income residents of

the ity. 7owever, while we reco"ni9e that

ho!sin" is one of the most serio!s social

pro#lems of the co!ntry, local "overnment

!nits do not possess !n#ridled a!thority toe'ercise their power of eminent domain

in seein" sol!tions to this pro#lem. $here

are two le"al provisions which limit the

e'ercise of this power: 618 no person shall #e

deprived of life, li#erty, or property witho!t

d!e process of law, nor shall any person #e

denied the e!al protection of the laws; and

628 private property shall not #e taen for

p!#lic !se witho!t &!st compensation. $h!s,the e'ercise #y local "overnment !nits of the

power of eminent domainis not a#sol!te. n

fact, ection 1* of RA +1= itself e'plicitly

states that s!ch e'ercise m!st comply with

the provisions of the onstit!tion and

pertinent laws.

1aation

Antero Sison ;r# vs Acting 9IR(o$$issioner Ruen Ancheta et al

;"ual Protection@ 1

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differentiationD complained of conforms to

the practical dictates of &!stice and e!ityD it

is not discriminatory within the meanin" of

this cla!se and is therefore !niform.D $here

is !ite a similarity then to the standard of

e!al protection for all that is re!ired is

that the ta' applies e!ally to all persons,

firms and corporations placed in similar

sit!ation.

3hat misled ison is his fail!re to tae into

consideration the distinction #etween a ta'

rate and a ta' #ase. $here is no le"al

o#&ection to a #roader ta' #ase or ta'a#le

income #y eliminatin" all ded!cti#le items

and at the same time red!cin" the applica#le

ta' rate. $a'payers may #e classified into

different cate"ories. n the case of the "ross

income ta'ation em#odied in >@ 1

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'ELD:No. $he ta'in" power has thea!thority to mae a reasona#le and nat!ral

classification for p!rposes of ta'ation #!tthe "overnments act m!st not #e prompted

#y a spirit of hostility, or at the very least

discrimination that finds no s!pport in

reason. t s!ffices then that the laws operate

e!ally and !niformly on all persons !nder

similar circ!mstances or that all persons

m!st #e treated in the same manner, the

conditions not #ein" different #oth in the

privile"es conferred and the lia#ilities

imposed.

onse!ently, it stands to reason that

petitioners who are #!rdened #y the

"overnment #y its Rental Free9in" Laws

6then R.A. No. =

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T!otin" petitioner, the AJ=Ks!mmari9ed the

facts of this case as follows:

For the calendar year 1**, JrespondentK

seasona#ly filed its T!arterly @ercenta"e$a' Ret!rns reflectin" "ross receipts

6pertainin" to B J%ross Receipts $a'K rate8

in the total amo!nt of@1,?+?,=*1,=*

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ta'a#le "ross receipts for p!rposes of

comp!tin" the J"ross receipts ta'K.J+K

Ruling of the (A

$he A held that the 2B F3$ on a #ans

interest income did not form part of the

ta'a#le "ross receipts in comp!tin" the B

%R$, #eca!se the F3$ was not act!ally

received #y the #an #!t was directly

remitted to the "overnment. $he appellate

co!rt c!rtly said that while the $a' ode

does not specifically state any e'emption, '

' ' the stat!te m!st receive a sensi#leconstr!ction s!ch as will "ive effect to the

le"islative intention, and so as to avoid an

!n&!st or a#s!rd concl!sion.J)K

7ence, this appeal.J*K

Issue

@etitioner raises this lone iss!e for o!r

consideration:

3hether or not the 2B final withholdin"

ta' on JaK #ans interest income forms part

of the ta'a#le "ross receipts in comp!tin"

the B "ross receipts ta'.J1K

1he (ourts Ruling

$he @etition is meritorio!s.

Sole Issue:

Whether the 20 FW! For"s #art

o$ the !a%a&le 'ross Receipts

@etitioner claims that altho!"h the 2B

F3$ on respondents interest income was

not act!ally received #y respondent #eca!se

it was remitted directly to the "overnment,

the fact that the amo!nt redo!nded to the

#ans #enefit maes it part of the ta'a#le

"ross receipts in comp!tin" the B

%R$. Respondent, on the other hand,

maintains that the A correctly r!led

otherwise.

3e a"ree with petitioner. n fact, the same

iss!e has #een raised recently in (ina

/aning orporation & -,J11Kwhere this

o!rt held that the amo!nt of interest

income withheld in payment of the 2BF3$ forms part of "ross receipts in

comp!tin" for the %R$ on #ans.

!he FW! and the 'R!:

!(o )i$$erent !a%es

$he B %R$ is imposed #y ection

11*J12Kof the $a' ode,J1

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6c8 On royalties, rentals of property, real or

personal, profits from e'chan"e and all other

items treated as "ross income !nder ection

2)J1?Kof this

ode...............................................................

.....B

Pro&ided, (owe&er, $hat in case the mat!rity

period referred to in para"raph 6a8 is

shortened thr! pretermination, then the

mat!rity period shall #e reconed to end as

of the date of pretermination for p!rposes of

classifyin" the transaction as short, medi!m

or lon" term and the correct rate of ta' shall

#e applied accordin"ly.

Nothin" in this ode shall precl!de the

ommissioner from imposin" the same ta'

herein provided on persons performin"

similar #anin" activities.

$he B %R$J1Kis incl!ded !nder $itle .

Other @ercenta"e $a'es of the $a' ode andis not s!#&ect to withholdin". $he #ans and

non4#an financial intermediaries lia#le

therefor shall, !nder ection 126a8618,J1=Kfile !arterly ret!rns on the amo!nt of

"ross receipts and pay the ta'es d!e thereon

within twenty 628J1+Kdays after the end of

each ta'a#le !arter.

$he 2B F3$,J1)Kon the other hand, falls

!nder ection 2?6e8618J1*Kof $itle . $a' on

ncome. t is a ta' on passive income,

ded!cted and withheld at so!rce #y the

payor4corporation andHor person as

withholdin" a"ent p!rs!ant to ection ,J2Kand paid in the same manner and s!#&ect

to the same conditions as provided for in

ection 1.J21K

A per!sal of these provisions clearly shows

that two types of ta'es are involved in the

present controversy: 618 the %R$, which is a

percenta"e ta'; and 628 the F3$, which is an

income ta'. As a #an, petitioner is covered

#y #oth ta'es.

Apercentage tax is a national ta' meas!red

#y a certain percenta"e of the "ross sellin"

price or "ross val!e in money of "oods sold,

#artered or imported; or of the "ross receipts

or earnin"s derived #y any person en"a"ed

in the sale of services.J22Kt is not s!#&ect towithholdin".

An inco%e tax, on the other hand, is a

national ta' imposed on the net or the "ross

income reali9ed in a ta'a#le year.J2oth parties herein a"ree that

there is no actualreceipt #y the #an of the

amo!nt withheld.3hat needs to #e

determined is if there is constructi&ereceiptthereof. ince the payee 44 not the payor 44 is

the real ta'payer, the r!le on constr!ctive

receipt can #e easily rationali9ed, if not

made clearly manifest.J2K

*onstructive Receipt

+ersus ctual Receipt

Applyin" ection + of Reven!e Re"!lations6RR8 No. 1+4)?,J2=Kpetitioner contends that

there is constructi&ereceipt of the interest

on deposits and yield on deposit s!#stit!tes.J2+KRespondent, however, claims that even if

there is, it is ection ?6e8 of RR 124)J2)Kthat

nevertheless "overns the sit!ation.

ection + of RR 1+4)? states:

23
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0. +. Nat!re and $reatment of nterest on

Eeposits and /ield on Eeposit !#stit!tes.

6a8 $he interest earned on @hilippine

!rrency #an deposits and yield fromdeposit s!#stit!tes s!#&ected to the

withholdin" ta'es in accordance with these

re"!lations need not #e incl!ded in the "ross

income in comp!tin" the

depositorsHinvestors income ta' lia#ility in

accordance with the provision of ection

2*6#8,J2*K6c8J

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whose name the act of possession was

e'ec!ted has ratified the same, witho!t

pre&!dice to the &!ridical conse!ences

of negotioru% gestioin a proper case.J

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carryin" into effect the "eneral provisions of

o!r ta' laws.J?1K

n the present case, there is no !estion

a#o!t the re"!larity in the performance ofofficial d!ty. 3hat needs to #e determined is

whether RR 124) has #een repealed #y RR

1+4)?.

A repeal may #e e'press or implied. t is

e'press when there is a declaration in a

re"!lation 44 !s!ally in its repealin" cla!se 44

that another re"!lation, identified #y its

n!m#er or title, is repealed. All others areimplied repeals.J?2KAn e'ample of the latter

is a "eneral provision that predicates the

intended repeal on a s!#stantial conflict

#etween the e'istin" and the prior

re"!lations.J?

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and a later r!le will not operate as a repeal

of an earlier one, if #y any reasona#le

constr!ction, the two can #e reconciled.J1K

RR 124) imposes the %R$ only on allitems of income actuallyreceived, as

opposed to their mere accrual, while RR 1+4

)? incl!des allinterest income in comp!tin"

the %R$. RR 124) is s!perseded #y the

later r!le, #eca!se ection ?6e8 thereof is not

restated in RR 1+4)?. learly therefore, as

petitioner correctly states, this partic!lar

provision was impliedly repealed when the

later re"!lations too effect.J2K

Reconciling the !(o Regulations

%rantin" that the two re"!lations can #e

reconciled, respondents reliance on ection

?6e8 of RR 124) is misplaced and

deceptive. $he accr!al referred to therein

sho!ld not #e e!ated with the

determination of the amo!nt to #e !sed asta' #ase in comp!tin" the %R$. !ch

accr!al merely refers to an acco!ntin"

method that reco"ni9es income as earned

altho!"h not received, and e'penses as

inc!rred altho!"h not yet paid.

Accr!al sho!ld not #e conf!sed with the

concept of constructi&e possession or receipt

as earlier disc!ssed. @etitioner correctly

points o!t that income that is

merelyaccrued44 earned, #!t not yet

received 44 does not form part of the ta'a#le

"ross receipts; income that has #een

received, al#eit constructi&ely , does.J

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especially earmared #y law or re"!lation

for some person other than the ta'payer.J)K

$o #e"in, we have to n!ance the definition

ofgross receiptsJ*Kto determine what it ise'actly. n this re"ard, we note that U cases

have pers!asive effect in o!r &!risdiction,

#eca!se @hilippine income ta' law is

patterned after its U co!nterpart.J=K

J%Kross receipts with respect to any period

means the s!m of: 6a8 $he total amo!nt

received or accr!ed d!rin" s!ch period from

the sale, e'chan"e, or other disposition of '' ' other property of a ind which wo!ld

properly #e incl!ded in the inventory of the

ta'payer if on hand at the close of the

ta'a#le year, or property held #y the

ta'payer primarily for sale to c!stomers in

the ordinary co!rse of its trade or #!siness,

and 6#8 $he "ross income, attri#!ta#le to a

trade or #!siness, re"!larly carried on #y the

ta'payer, received or accr!ed d!rin" s!chperiod ' ' '.J=1K

' ' ' J>Ky "ross earnin"s from operations '

' ' was intended all operations '''

incl!din" incidental, s!#ordinate, and

s!#sidiary operations, as well as principal

operations.J=2K

3hen we spea of the "ross earnin"s of a

person or corporation, we mean the entire

earnin"s or receipts of s!ch person or

corporation from the #!siness or operations

to which we refer.J=

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amo!nts, the interest income that had

#een wit((eldfor the "overnment #ecame

property of the financial instit!tions

!pon constructi&e possession

thereof. @ossession was indeed ac!ired,

since it was ratified #y the financial

instit!tions in whose name the act of

possession had #een e'ec!ted. $he money

indeed #elon"ed to the ta'payers; merely

holdin" it in tr!st was not eno!"h.J+K

$he "overnment s!#se!ently #ecomes the

owner of the money when the financial

instit!tions pay the F3$ to e'tin"!ish their

o#li"ation to the "overnment. As this o!rt

has held #efore, this is the consideration for

the transfer of ownership of the F3$ from

these instit!tions to the "overnment.J+=Kt is

ownership that determines whether interest

income forms part of ta'a#le "ross receipts.J++K>ein" ori"inally owned #y these financial

instit!tions as part of their interest income,

the F3$ sho!ld form part of their ta'a#le

"ross receipts.

>esides, these amo!nts wit((eldare in

payment of an income ta' lia#ility, which is

different from a percenta"e ta'

lia#ility. o%%issioner o$ #nternal 'e&enue

& Tours +pecialists, #nc. aptly held th!s:J+)K

' ' ' J%Kross receipts s!#&ect to ta' !nder

the $a' ode do not incl!de monies or

receipts entr!sted to the ta'payer which do

not #elon" to them and do not redo!nd to

the ta'payers #enefit; and it is not necessary

that there m!st #e a law or re"!lation which

wo!ld e'empt s!ch monies and receipts

within the meanin" of "ross receipts !nder

the $a' ode.J+*K

n the constr!ction and interpretation of ta'

stat!tes and of stat!tes in "eneral, the

primary consideration is to ascertain and

"ive effect to the intention of the le"islat!re.J)K3e o!"ht to imp!te to the lawmain"

#ody the intent to o#ey the constit!tional

mandate, as lon" as its enactments fairly

admit of s!ch constr!ction.J)1Kn fact, ' ' '

no ta' can #e levied witho!t e'press

a!thority of law, #!t the stat!tes are to

receive a reasona#le constr!ction with a

view to carryin" o!t their p!rpose and

intent.J)2K

Looin" a"ain into ections 2?6e8618 and

11* of the $a' ode, we find that the first

imposes an income ta'; the second, a

percenta"e ta'. $he le"islat!re clearly

intended two different ta'es. $he F3$ is a

ta' on passive income, while the %R$ is on

#!siness.J)ein" an

incident of soverei"nty, s!ch power is

coe'tensive with that to which it is an

incident.J)=K$he interest on deposits and

yield on deposit s!#stit!tes of financial

instit!tions, on the one hand, and their

#!siness as s!ch, on the other, are the two

o#&ects over which the tate has chosen to

e'tend its soverei"n power. $hose not sochosen are, !pon the so!ndest principles,

e'empt from ta'ation.J)+K

3hile co!rts will not enlar"e #y

constr!ction the "overnments power of

ta'ation,J))Kneither will they place !pon ta'

laws so loose a constr!ction as to permit

evasions, merely on the #asis of fancif!l and

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ins!#stantial distinctions.J)*K3hen the

le"islat!re imposes a ta' on income and

another on #!siness, the imposition m!st #e

respected. $he $a' ode sho!ld #e so

constr!ed, if need #e, as to avoid empty

declarations or possi#ilities of crafty ta'

evasion schemes. 3e have consistently r!led

th!s:

' ' ' JKt is !pon ta'ation that the

J"Kovernment chiefly relies to o#tain the

means to carry on its operations, and it is of

the !tmost importance that the modes

adopted to enforce the collection of the ta'es

levied sho!ld #e s!mmary and interfered

with as little as possi#le. ' ' '.J*K

Any delay in the proceedin"s of the officers,

!pon whom the d!ty is devolved of

collectin" the ta'es, may deran"e the

operations of "overnment, and there#y ca!se

serio!s detriment to the p!#lic.J*1K

No "overnment co!ld e'ist if all liti"ants

were permitted to delay the collection of its

ta'es.J*2K

A ta'in" act will #e constr!ed, and the intent

and meanin" of the le"islat!re ascertained,

from its lan"!a"e.J*uiano &

e&elop%ent /an o$ t(e P(ilippines,J*+Kwe

stressed as follows:

No process of interpretation or constr!ction

need #e resorted to where a provision of law

peremptorily calls for application.J*)K

A literal application of any part of a stat!te

is to #e re&ected if it will operate !n&!stly,lead to a#s!rd res!lts, or contradict the

evident meanin" of the stat!te taen as a

whole.J**KUnlie the A, we find that the

literal application of the aforesaid sections

of the $a' ode and its implementin"

re"!lations does not operate !n&!stly or

contradict the evident meanin" of the stat!te

taen as a whole. Neither does it lead to

a#s!rd res!lts. ndeed, o!r co!rts are not to

"ive words meanin"s that wo!ld lead to

a#s!rd or !nreasona#le conse!ences.J1K3e have repeatedly held th!s:

' ' ' JKtat!tes sho!ld receive a sensi#le

constr!ction, s!ch as will "ive effect to the

le"islative intention and so as to avoid an

!n&!st or an a#s!rd concl!sion.J11K

3hile it is tr!e that the contemporaneo!s

constr!ction placed !pon a stat!te #y

e'ec!tive officers whose d!ty is to enforce itsho!ld #e "iven "reat wei"ht #y the co!rts,

still if s!ch constr!ction is so erroneo!s, ' '

' the same m!st #e declared as n!ll and

void.J12K

t does not even matter that the $A, lie

in (ina /aning orporation,J1eca!se

of its reco"ni9ed e'pertise, its findin"s of

fact will ordinarily not #e reviewed, a#sent

any showin" of "ross error or a#!se on its

part.J1K!ch findin"s are #indin" on the

o!rt and, a#sent stron" reasons for !s to

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differently for the income derived therefrom.J12

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and e'cl!sively !sed for charita#le p!rposes.

7ence, the present petition for review with

averments that the L!n" enter of the

@hilippines is a charita#le instit!tion !nder

ection 2)6

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now admits of an e'ception, i.e., when

specific provisions of the L% a!thori9e the

L%Us to impose ta'es, fees or char"es on

the aforementioned entities. Nothin"

prevents on"ress from decreein" that even

instr!mentalities or a"encies of the

"overnment performin" "overnmental

f!nctions may #e s!#&ect to ta'.

A franchise is a privile"e conferred #y

"overnment a!thority, which does not

#elon" to citi9ens of the co!ntry "enerally as

a matter of common ri"ht. t may #e

constr!ed in two senses: the ri"ht vested in

the individ!als composin" the corporation

and the ri"ht and privile"es conferred !pon

the corporation. A franchise ta' is

!nderstood in the second sense; it is not

levied on the corporation simply for e'istin"

as a corporation #!t on its e'ercise of the

ri"hts or privile"es "ranted to it #y the

"overnment. NA@OOR is covered #y thefranchise ta' #eca!se it e'ercises a franchise

in the second sense and it is e'ercisin" its

ri"hts or privile"es !nder this franchise

within the territory of the ity.

National Power (or7oration vs# (it) of(aanatuan

'R. o. 16110

pril 6, 2007

0A(1S:

NA@OOR, the petitioner, is a "overnment4

owed and controlled corporation created

!nder ommonwealth Act 12. t is tased

to !ndertae the development ofhydroelectric "enerations of power and the

prod!ction of electricity from n!clear,

"eothermal, and other so!rces, as well as,

the transmission of electric power on a

nationwide #asis.D

For many years now, NA@OOR sells

electric power to the resident a#anat!an

ity, postin" a "ross income of

@1+,)1?,1)+.*= in 1**2. @!rs!ant to ec.

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ISS8ES:

618 s the NA@OOR e'cl!ded from the

covera"e of the franchise ta' simply #eca!se

its stocs are wholly owned #y the National%overnment and its charter characteri9ed is

as a non4profit or"ani9ationMC

628 s the NA@OORMs e'emption from all

forms of ta'es repealed #y the provisions of

the Local %overnment ode 6L%8C

'ELD:

618 NO. $o stress, a franchise ta' is imposed

#ased not on the ownership #!t on the

e'ercise #y the corporation of a privile"e to

do #!siness. $he ta'a#le entity is the

corporation which e'ercises the franchise,

and not the individ!al stocholders. >y

virt!e of its charter, petitioner was created as

a separate and distinct entity from the

National %overnment. t can s!e and #e s!ed

!nder its own name, and can e'ercise all the

powers of a corporation !nder the

orporation ode.

$o #e s!re, the ownership #y the National

%overnment of its entire capital stoc does

not necessarily imply that petitioner is no

en"a"e din #!siness.

628 /0. One of the most si"nificant

provisions of the L% is the removal of the

#lanet e'cl!sion of instr!mentalities and

a"encies of the National %overnment from

the covera"e of local ta'ation. Altho!"h as a

"eneral r!le, L%Us cannot impose ta'es,

fees, or char"es of any ind on the National%overnment, its a"encies and

instr!mentalities, this r!le now admits an

e'ception, i.e. when specific provisions of

the L% a!thori9e the L%Us to impose

ta'es, fees, or char"es on the

aforementioned entities. $he le"islative

p!rpose to withdraw ta' privile"es en&oyed

!nder e'istin" laws or charter is clearly

manifested #y the lan"!a"e !sed on ec. 1

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solely #eca!se he escaped from the

reservation. An application for ha#eas

corp!s was made on #ehalf #y R!#i and

other (an"!ianes of the province, alle"in"

that #y virt!e of the resol!tion of the

provincial #oard of (indoro creatin" the

reservation, they had #een ille"ally deprived

of their li#erty. n this case, the validity of

ection 21? of the Administrative ode,

which provides:

Bit( t(e prior appro&al o$ t(e epart%ent

Cead, t(e pro&incial go&ernor o$ any

pro&ince in w(ic( non=(ristian in(abitants

are $ound is aut(oriAed, w(en suc( a course

is dee%ed necessary in t(e interest o$ law

and order, to direct suc( in(abitants to tae

up t(eir (abitation on sites on unoccupied

public lands to be selected by (i% and

appro&ed by t(e pro&incial board

was challen"ed.

ISS8E: 3hether or not ection 21? of theAdministrative ode constit!tes !nd!e

dele"ation. 3hether or not the (an"!ianes

are #ein" deprived of their li#erty.

'ELD:

I#No. >y a vote of five to fo!r, the !premeo!rt s!stained the constit!tionality of this

section of the Administrative ode. Under

the doctrine of necessity, who else was in a

#etter position to determine whether or not

to e'ec!te the law #!t the provincial

"overnor. t is optional for the provincial

"overnor to e'ec!te the law as

circ!mstances may arise. t is necessary to

"ive discretion to the provincial

"overnor. $he Le"islat!re may mae

decisions of e'ec!tive departments of

s!#ordinate official thereof, to whom it has

committed the e'ec!tion of certain acts,

final on !estions of fact.

II#No. Amon" other thin"s, the term non4hristianD sho!ld not #e "iven a literal

meanin" or a reli"io!s si"nification, #!t that

it was intended to relate to de"rees of

civili9ation. $he term non4hristianD it was

said, refers not to reli"io!s #elief, #!t in a

way to "eo"raphical area, and more directly

to natives of the @hilippine slands of a low

"rade of civili9ation. n this case, the

(an"!ianes were #ein" reconcentrated in

the reservation to promote peace and to

arrest their seminomadic lifestyle. $his will

!ltimately settle them down where they can

adapt to the chan"in" times.

$he !preme o!rt held that the resol!tion

of the provincial #oard of (indoro was

neither discriminatory nor class le"islation,

and stated amon" other thin"s: . . . one

cannot hold that the li#erty of the citi9en is

!nd!ly interfered with when the de"ree of

civili9ation of the (an"!ianes is considered.

$hey are restrained for their own "ood and

the "eneral "ood of the @hilippines. Nor can

one say that d!e process of law has not #een

followed. $o "o #ac to o!r definition of d!e

process of law and e!al protection of the

laws, there e'ists a law; the law seems to #e

reasona#le; it is enforced accordin" to the

re"!lar methods of proced!re prescri#ed;

and it applies alie to all of a class.D

3not v IA( *".> "- S(RA ?B.

-. r!9

Facts:

@etitioner transported = carac#aos from

(as#ate to loilo in 1*)? and these wer

confiscated #y the station commander in

>arotac, loilo for violatin" 0.O. =2= A

which prohi#its transportation of a cara#ao

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or cara#eef from one province to another.

onfiscation will #e a res!lt of this.

$he petitioner s!ed for recovery, and the

Re"ional $rial o!rt of loilo ity iss!ed awrit of replevin !pon his filin" of a

s!persedeas #ond of @12,.. After

considerin" the merits of the case, the co!rt

s!stained the confiscation of the cara#aos

and, since they co!ld no lon"er #e prod!ced,

ordered the confiscation of the #ond. $he

co!rt also declined to r!le on the

constit!tionality of the e'ec!tive order, as

raise #y the petitioner, for lac of a!thorityand also for its pres!med validity.

$he same res!lt was decided in the trial

co!rt.

n the !preme o!rt, he then petitioned

a"ainst the constit!tionality of the 0.O. d!e

to the o!tri"ht confiscation witho!t "ivin"

the owner the ri"ht to heard #efore animpartial co!rt as "!aranteed #y due7rocess# 'e also challen"ed the impropere'ercise of le"islative power #y the former

president !nder Amendment = of the 1*+oard, an a"ency

of the %overnment char"ed with the tas of

determinin" whether the effl!ents of a

partic!lar ind!strial esta#lishment complywith or violate applica#le anti4poll!tion

stat!tory and re"!latory provisions, have

#een remara#ly for#earin" in its efforts to

enforce the applica#le standards vis4a4vis

olar. olar, on the other hand, seemed very

cas!al a#o!t its contin!ed dischar"e of

!ntreated, poll!tive effl!ents into the river.

@etitioner >oard iss!ed an e' parte Order

directin" olar immediately to cease and

desist from !tili9in" its wastewater poll!tion

so!rce installations. olar, however, with

preliminary in&!nction a"ainst the >oard,

went to the Re"ional $rial o!rt on petition

for certiorari, #!t it was dismissed !pon two

628 "ro!nds, i.e., that appeal and not

certiorari from the !estioned Order of the

>oard as well as the 3rit of 0'ec!tion was

the proper remedy, and that the >oards

s!#se!ent Order allowin" olar to operate

temporarily had rendered olars petition

moot and academic. Eissatisfied, olar went

on appeal to the o!rt of Appeals, which

reversed the Order of dismissal of the trial

co!rt and remanded the case to that co!rt for

f!rther proceedin"s. n addition, the o!rt of

Appeals declared the 3rit of 0'ec!tion n!ll

and void. At the same time, the A said that

certiorari was a proper remedy since the

Orders of petitioner >oard may res!lt in"reat and irrepara#le in&!ry to olar; and

that while the case mi"ht #e moot and

academic, 5lar"er iss!es5 demanded that the

!estion of d!e process #e settled. @etitioner

>oard moved for reconsideration, witho!t

s!ccess.

Ar"!in" that that the e' parte Order and the

3rit of 0'ec!tion were iss!ed in accordance

with law and were not violative of the

re!irements of d!e process; and the e'

parte Order and the 3rit of 0'ec!tion are

not the proper s!#&ects of a petition for

certiorari, Oscar A. @asc!a and haremon

lio L. >orre for petitioner ased the

!preme o!rt to review the Eecision and

Resol!tion prom!l"ated #y the o!rt of

Appeals entitled 5olar $e'tile Finishin"

orporation v. @oll!tion Ad&!dication

>oard,5 which reversed an order of the

Re"ional $rial o!rt. n addition, petitioner

>oard claims that !nder @.E. No. *)?,

ection +6a8, it has le"al a!thority to iss!e

e' parte orders to s!spend the operations of

an esta#lishment when there is prima facie

evidence that s!ch esta#lishment is

dischar"in" effl!ents or wastewater, the

poll!tion level of which e'ceeds thema'im!m permissi#le standards set #y the

N@ 6now, the >oard8. @etitioner >oard

contends that the reports #efore it

concernin" the effl!ent dischar"es of olar

into the River provided prima facie evidence

of violation #y olar of ection of the

1*)2 0ffl!ent ode. olar, on the other

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hand, contends that !nder the >oards own

r!les and re"!lations, an e' parte order may

iss!e only if the effl!ents dischar"ed pose an

5immediate threat to life, p!#lic health,

safety or welfare, or to animal and plant

life.5 n the instant case, accordin" to olar,

the inspection reports #efore the >oard made

no findin" that olars wastewater

dischar"ed posed s!ch a threat.

ISS8E:3hether or not the o!rt ofAppeals erred in reversin" the trial co!rt on

the "ro!nd that olar had #een denied d!e

process #y the >oard.

'ELD:$he o!rt fo!nd that the Order and3rit of 0'ec!tion were entirely within the

lawf!l a!thority of petitioner >oard. 0'

parte cease and desist orders are permitted

#y law and re"!lations in sit!ations lie

here. $he relevant poll!tion control stat!te

and implementin" re"!lations were enactedand prom!l"ated in the e'ercise of that

pervasive, soverei"n power to protect the

safety, health, and "eneral welfare and

comfort of the p!#lic, as well as the

protection of plant and animal life,

commonly desi"nated as the police power. t

is a constit!tional commonplace that the

ordinary re!irements of proced!ral d!e

process yield to the necessities of protectin"

vital p!#lic interests lie those here

involved, thro!"h the e'ercise of police

power. 7ence, the trial co!rt did not err

when it dismissed olars petition for

certiorari. t follows that the proper remedy

was an appeal from the trial co!rt to the

o!rt of Appeals, as olar did in fact appeal.

$he o!rt "ave d!e co!rse on the @etition

for Review and the Eecision of the o!rt of

Appeals and its Resol!tion were set aside.

$he Order of petitioner >oard and the 3rit

of 0'ec!tion, as well as the decision of the

trial co!rt were reinstated, witho!t pre&!dice

to the ri"ht of olar to contest the

correctness of the #asis of the >oards Order

and 3rit of 0'ec!tion at a p!#lic hearin"

#efore the >oard.

Non v# Da$es

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Issue:

3hether the school e'cl!des st!dents

#eca!se of failin" "rades when the ca!se for

the action taen a"ainst them relates to

possi#le #reaches of discipline.

'eld:

$he contract #etween the school and the

st!dent is not an ordinary contract. t is

im#!ed with p!#lic interest, considerin" the

hi"h priority "iven #y the onstit!tion toed!cation and the "rant to the tate of

s!pervisory and re"!latory powers over all

ed!cational instit!tions. $he a!thority for

schools to ref!se enrollment to a st!dent on

the "ro!nd that his contract, which has a

term of one semester, has already e'pired,

cannot #e &!stified. till, instit!tions

discretion on the admission and enrollment

of st!dents as a ma&or component of theacademic freedom "!aranteed to instit!tions

of hi"her learnin". $he ri"ht of an instit!tion

of hi"her learnin" to set academic standards,

however, cannot #e !tili9ed to discriminate

a"ainst st!dents who e'ercise their

constit!tional ri"hts to speech and assem#ly,

forotherwise there will #e a violation of their

ri"ht to e!al protection. $h!s, an instit!tion

of learnin" has a contract!al o#li"ation to

afford its st!dents a fair opport!nity to

complete the co!rse they see to p!rs!e.

7owever, when a st!dent commits a serio!s

#reach of discipline or fails to maintain the

re!ired academic standard, he forfeits his

contract!al ri"ht; and the co!rt sho!ld not

review the discretion of !niversity

a!thorities. 0'cl!din" st!dents #eca!seof

failin" "rades when the ca!se for the action

taen a"ainst them !ndenia#ly related to

possi#le #reaches of discipline not only is a

denial of d!e process #!t also constit!tes a

violation of the #asic tenets of fair play.

F!rther, the fail!res in one or two s!#&ects

#y some cannot #e considered mared

academic deficiency. Neither can the

academic deficiency #e "a!"ed from the

academic standards of the school d!e to

ins!fficiency of information. 7erein, the

st!dents co!ld have #een s!#&ectedto disciplinary proceedin"s in connection

with the mass actions, #!t the penalty that

co!ld have #een imposed m!st #e

commens!rate to the offense committed and

it m!st #e imposed only after the

re!irements of proced!ral d!e process have

#een complied with 6@ara"raph 1?, (an!al

of Re"!lations for @rivate chools8. >!t this

matter of disciplinary proceedin"s and the

imposition of administrative sanctions have

#ecome moot and academic; as the st!dents

have #een ref!sed readmission or re4

enrollment and have #een effectively

e'cl!ded from for ? semesters, have already

#een more than s!fficiently penali9ed

for any #reach of discipline they mi"ht have

committed when they led and participated in

the mass actions that res!lted in the

disr!ption of classes. $o still s!#&ect them to

disciplinary proceedin"s wo!ld serve no

!sef!l p!rpose and wo!ld only f!rther

a""ravate the strained relations #etween the

st!dents and the officials of the school

which necessarily res!lted from the heated

le"al #attle.

Eual Protection

(entral 9anF E$7lo)ees Association v#9angFo Sentral ng Pili7inas%R No 1?)2)@!no, -.

Facts:RA +=< Q otherwise nown as the Newentral >an Act too effect -!ly < 1**

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>an of the @hilippines 6esta#lished 1*?*8#y the >an"o entral n" @ilipinas. On -!ne) 21, petitioner entral >an 6now >@80mployees Association nc. filed a petition

a"ainst the 0'ec!tive ecretary of the Officeof the @resident to restrain >@ fromimplementin" the last proviso in ection 16i8, Article of RA +=< which pertains toesta#lishment of a 7!man reso!rcemana"ement system and a compensationstr!ct!re as part of the a!thority of the(onetary >oard. 0mployees whosepositions fall !nder % 1* and #elow shall#e in accordance with the rates in the salary

standardi9ation act. @etitioner contends thatthe classifications is not reasona#le,ar#itrary and violates the e!al protectioncla!se. $he said proviso has #een pre&!dicialto some 2**? ran4 and Qfile >@employees. Respondent on the other handcontends that the provision does not violatethe e!al protection cla!se, provided that itis constr!ed to"ether with other provisionsof the same law s!ch as the fiscal andadministrative a!tonomyD of the >an"oentral and the mandate of its monetary#oard. $he olicitor %eneral, as co!nsel ofthe 0'ec!tive ecretary defends theprovision, that the classification ofemployees is #ased on real and act!aldifferentiation and it adheres to the policy ofRA +=< to esta#lish professionalism ande'cellence within the >@ s!#&ect to

prevailin" laws and policies of the"overnment.Dss!e: 3hether or not the contended provisoif RA +=< violates the e!al protection of

laws, hence !nconstit!tional.

7eld: /es the proviso is !nconstit!tional asit operate on the salary "rade or the officeremployee stat!s, it distin"!ishes #etweeneconomic class and stat!s with the hi"hersalary "rade recipients are of "reater #enefita#ove the law than those of mandated #y thealary tandardi9ation Act. Officers of the>@ receive hi"her wa"es that those of ran4

and4file employees #eca!se the former arenot covered #y the salary standardi9ation actas provided #y the proviso.

=#R# No# "+BC>" Nove$er "", "..C

1he Phili77ine ;udges Association, etc#,7etitionersvs 'on# Pete Prado, etc#, res7ondents@onente: r!9

0acts:$he petitioners are mem#ers of the mowerco!rts who feel that their official f!nctionsas &!d"es will #e pre&!diced #y the ection

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mem#ers of each 7o!se. >oth the enrolled#ill and the le"islative &o!rnals certify thatthe meas!re was d!ly enacted i.e., inaccordance with Article , ec. 2=628 of the

onstit!tion. 3e are #o!nd #y s!ch officialass!rances from a coordinate department ofthe "overnment, to which we owe, at thevery least, a #ecomin" co!rtesy.

6

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RA$O:$he e!al protection cla!se does notdemand a#sol!te e!ality amon" residents.

t merely re!ires that all persons shall #etreated alie, !nder lie circ!mstances andconditions #oth as to privile"es conferredand lia#ilities enforced.

$he classification is act!al, real andreasona#le, and all persons of one class aretreated alie.

$he difference in stat!s #etween citi9ens andaliens constit!tes a #asis for reasona#leclassification in the e'ercise of policepower.

Official statistics point o!t to the ever4increasin" dominance and control #y alienof the retail trade. t is this

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