CBPT (2017)
Constitutional Law 2 | Atty. Renato Galeon
2017-2018, Second Semester
Pre-Midterm
THE PHILIPPINE CONSTITUTION IS
A written, enacted and rigid Constitution. WRITTEN as it is
one whose precepts are embodied in one document. It is
ENACTED as it is formally struck off at a definite time and
place following a conscious or deliberate effort taken by the
people through plebiscite. It is RIGID because it cannot be
changed by ordinary legislation but only by a more
cumbersome process of change (through initiative and
referendum)
CONSTITUTION
Definition
A body of rules and maxims in accordance with which the
powers of sovereignty are habitually exercised.
– Thomas M Cooley
A written instrument enacted by the direct action of the people
by which the fundamental powers of the government are
established, limited and defined, and by which those powers
are distributed among the several departments for their safe
and useful exercise for the benefit of the body politic.
– Justice Malcolm
Congress cannot pass a law with the end in view of amending
the Constitution. Any such law contrary to the Constitution
should be inviolated, for the Constitution is the supreme law
of the land to which all laws must conform and all person must
defer.
Purposes
(1) To prescribe a permanent framework of a system of
government
(2) To assign or allocate to the several departments their
respective powers and duties
(3) To establish certain principles on which the government is
founded
Since our Constitution is Rigid
Congress cannot amend any of the provisions by enacting law
seeking to change them. Any purported change or
amendment must strictly comply with the process outlined
under Art 17 of the 1987 Constitution
Types
▪ Written vs Unwritten (according to form)
▪ Enacted vs Evolved (according to origin)
▪ Rigid vs Flexible (according to procedure
amendment)
of
Written
The provisions are written but it is not the only description. The
provisions are embodied in a single instrument or set of
documents.
Unwritten
Does not necessarily mean that its provisions are not written.
The provisions are NOT embodied in a single instrument or
set of documents and are scattered in various sources (e.g.
judicial decisions, statutes, customs and traditions, opinions
of jurists)
Examples of countries with an unwritten Constitution:
1. England
2. New Zealand
3. Saudi Arabia
4. Australia
Enacted or Conventional
Formally adopted at a definite time and place following a
conscious effort of the body politic or a ruler. There is formal
adoption of the constitution, normally done in a plebiscite.
Evolved or Cumulative
A product of political evolution. It is not formally adopted at a
definite and place and not formally ratified by the people (e.g.
England, Ireland, Australia)
Rigid
A kind of Constitution that can be amended only by a formal
and usually difficult process.
Flexible
A kind of Constitution that can easily be amended by ordinary
legislation.
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Advantage of a Rigid Constitution
It can withstand capricious changes or those that are brought
not by legitimate needs but by passing whims and fancies.
Hence, our politicians cannot just tinker the provisions thereof
easily, in accordance with their whims and fancies.
Disadvantage of a Rigid Constitution
It will hinder progress, instead of spurring it because it is
difficult to amen if there is a legitimate need to bring about a
change.
Characteristics of a Good Written Constitution
1. Broad
2. Brief
3. Definite
(1) Broad
Should not only provide for the organizations of the
government and cover all things or persons within its territory,
but should also be comprehensive to provide for contingency.
It should not be like a history book. It should not only be an
embodiment of a past, but must be able to anticipate the
future.
(2) Brief
It should limit itself to the basic principles sought to be
implemented, leaving others to be supplemented by laws to
be enacted by Congress. Should not be a codification of laws.
(3) Definite
It should appear clear and easily understood by the ordinary
people.
Essential Parts of A Good-Written Constitution
1. Constitution of Liberty
2. Constitution of Government
3. Constitution of Sovereignty
(1) Constitution of Liberty
Refers to the part of the Constitution which sets forth the
fundamental, civil and political rights of the people and
imposes limitations in the exercise of government powers if
only to secure the enjoyment of the civil and political rights of
the people.
Article 3 – Bill of Rights
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(2) Constitution of Government
Refers to the part of the Constitution outlining the organization
of the government, enumerating the powers of the
government, laying down rules for its administration and
defining the illiterate.
Article 6 – Legislative Department
Article 7 – Executive Department
Article 8 – Judicial Department
Article 9 – Constitutional Commissions (COMELEC, CSC,
COA)
(3) Constitution of Sovereignty
Refers to the part of the Constitution which outlines the
process by which the Constitution may be amended or
revised.
Article 17 – Amendments or Revisions
Rules in Interpretation of the Provisions
1. Verba legis
2. Ratio legis et anima
3. Ut magis valeat quam pereat
(1) Verba legis
If we are to interpret the provisions of the Constitution,
ordinary words should be given ordinary meaning.
(2) Ratio legis et anima
When there is doubt or ambiguity in interpreting the provisions
of the Constitution, it should be interpreted in accordance with
the intent of the framers (spirit and purpose of the law). But if
the wordings are clear, no need to apply this principle.
(3) Ut magis valeat quam pereat
The Constitution has to be interpreted as a whole. Related
privisions of the Constitution must be interpreted altogether.
Provisions dealing with the same subject matter should be
construed as a whole, if only to effectuate the meaning
thereof. Where there is a seeming inconsistency between
some of the provisions, there should be a conscious attempt
to harmonize such conflicting provisions, if only to give
meaning to them.
In case of doubt, provisions are held to be:
▪ Self-executing, except when the contrary appears in the
context of the provision
▪ Mandatory rather than directory
▪ Prospective rather than retroactive
Doctrine of Constitutional Supremacy
The Constitution is the fundamental law of the land. All laws
enacted by Congress must conform to it. All acts, including
that of the highest officers of the land, must conform to its
mandates.
However, there are powers that the State may exercise
independently of the Constitution (powers that are not
expressly granted by the Constitution).
POWERS OF THE STATE
Three Inherent Powers
1. Police Power
power of the State to regulate liberty and property rights of
citizens for the promotion of the general welfare
2. Power of Eminent Domain
Power of the State to take away private properties for public
purpose upon payment of just compensation
3. Power of Taxation
Power of the State to demand from the members of the society
their proportionate contribution in the maintenance and
operation of the State
Common Characteristics of the 3 Inherent Powers
1. These powers are inherent in the State
2. These powers are not necessary but are indispensable
to the state
3. These powers are the means or methods by which the
State can effectively interfere with private rights
4. These powers are primarily lodged or vested in the
Congress. But by express delegation or authority, the
same can be exercised by other entities or bodies
5. The exercise of these powers presupposes payment of
just compensation
(1) Powers are inherent in the State
▪ They can be exercised by the State without them having
been expressly conferred by the Constitution
▪ The moment that a State exists, it is already vested with
these powers
▪ In fact, the provisions which may have reference to any of
the powers are far from conferring authority to the State,
but rather those provisions impose limitations in the
exercise of governmental authority
Examples:
Sec 1, Art 3 – “No person shall be deprived of life, liberty
and property without due process of law” which limits the
Police Power of the State
Sec 9, Art 3 – Private property shall not be taken for public
purpose without payment of just compensation” which
does not confer the power of eminent domain but rather
imposes limitation
Sec 28, par 3, Art 6 – “Charitable institutions, churches,
and parsonages or convents appurtent thereto, mosques,
non-profit cemeteries and all lands, buildings, and
improvement actually, directly, and exclusively used for
religious, charitable, or educational purposes shall be
exempt from taxation” which limits the power of taxation
(2) Powers are not only necessary but are indispensable
to the State
▪ Without these powers, the State may not be able to
function effectively
Examples:
o
without Police Power, the State cannot enact
Criminal Laws (RPC)
o
without Eminent Domain, the state cannot
construct roads
o
without Taxation, the State cannot provide
basic services (such as free education in public
schools, PhilHealth)
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CBPT (2017)
(3) Powers are the means or methods by which the State
can effectively interfere with private rights
▪ Police Power regulates not only property rights but also
liberty of individuals
▪ Eminent Domain involves property rights – taking of
private properties
▪ Taxation imposes a mandatory payment in favor of the
State which also involves taking of private properties
(4) Powers are primarily lodged or vested in Congress
But by express delegation or authority, the same can be
exercised by other entities or bodies
MMDA vs Garin
What was at issue therein was whether or not MMDA could
issue or promulgate regulations authorizing the enforcers
thereof to confiscate driver’s licenses. In that case, the SC
ruled that MMDA, being a government agency, has no
inherent police power because this power is primarily lodged
in the Congress.
(5) Power presupposes payment of just compensation
Differences of the 3 Inherent Power
1. Police power involves not only property rights but also
liberty of individuals; whereas the two other powers only affect
property rights of persons
2. Police Power and Power of Taxation may only be exercised
by the government; whereas the Power of Eminent Domain
can also be exercised by private entities upon delegation of
this authority (ex. National Power Corporation)
Powers
Eminent Domain
Taxation
Police Power
Payment of Just
Compensation
Payment of sum of money
Delivery of services (free
education, health services)
Altruistic
feeling
that
somehow, an individual
contributed
to
the
promotion of public welfare
POLICE POWER
Definition
Police Power regulates not only property rights but also liberty
of individuals for the promotion of the public welfare or the
public good
Characteristics
1. Most pervasive, least limitable, and the most demanding
among all the inherent powers of the State
2. Inherent, such that this power can be exercised by the
State independently of any constitutional grant
3. This power cannot be bargained away with through a
medium of a treaty or a contract
4. The power is dynamic
5. In the exercise thereof, it may utilize the other 2 inherent
powers (Eminent Domain and Taxation) as a tool thereof
(1) Most pervasive, least limitable, and most demanding
among all the inherent powers of the State
While the 2 other powers involve only property rights, the
exercise of police power involves not just property rights but
also involves liberty of individuals
3. The property taken in the exercise of Police Power has to
be destroyed because generally, it is regarded as a noxious
or hazardous property; whereas the properties taken under
the Power of Eminent Domain or Power of Taxation are
beneficial properties. Hence, the same should be converted
for a public purpose (s)
It is pervasive in the sense that practically the exercise of
police power covers and regulates almost any or every human
activity. It covers the activities of man from womb to tomb.
Example:
▪
Abortion – even before a child is born, it is already
protected by the State
▪
Death – laws pertaining to the disposition of one’s
remains (burial), and succession rights
Q: Whether or not beneficial property could be taken under
police power
Police power, therefore, is wider in scope than the other
powers
Yes. Generally, property under Police Power is a hazardous
property, hence, it is to be destroyed. But where the Police
Power utilizes the other powers (Eminent Domain or Taxation)
as a tool in the exercise thereof, then in those instances,
beneficial properties could be taken by the State in the
concept of Police Power.
Carlos Superdrug vs DOJ
There was a law granting 20% discounts to senior citizens.
Then it was argued that the law was confiscatory because it
would appear that establishment will be made to subsidize
more or less 6% of the 20% discounts given to senior citizens.
In that case, the SC justified the validity of that law under
Police Power although it involves taking of a beneficial
property (profit, money) because that law was a valid exercise
of Police Power using as an implement thereof the Power of
Taxation.
4. The exercise of Power of Taxation and Power of Eminent
Domain presupposes payment of just compensation in the
form of tangible property; whereas for Police Power, just
compensation would be intangible
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(2) Inherent, such that this power can be exercised by the
State independently of any Constitutional grant
Since this is not granted by the Constitution, the basis for the
power is rooted on the Latin Maxims:
a. Salus populi suprema lex – The welfare of the
people is the supreme law of the land.
b. Sic utere tuo ut alienum non laedas – One cannot
exercise his/her rights to the detriment or prejudice
of the rights of another
(3) This power cannot be bargained away with through a
medium of a treaty or a contract
A. Treaty
Ichong vs Hernandez
A law was enacted prohibiting aliens from engaging in a retail
trade business. This law is known as the “Retail Trade
Nationalization Law”. Ichong, a Chinese, was convicted for
violating the law. He filed a case in the SC with a contention
that the said law was in violation with the Treaty of Amity
entered into by the Philippines and China.
CBPT (2017)
The SC said that the said law was not in conflict with the
Treaty of Amity between the PH and China. But if at all, such
was in conflict with that treaty, then our law should prevail
because that was enacted pursuant to the exercise of Police
Power. The SC decreed in no uncertain terms that Police
Power could not be bargained away with by a medium of a
treaty.
Note: However, the SC has now shifted in that it ruled that the
Philippines must comply with its treaty obligations.
Illustrative case:
Deutsche Bank AG Manila Branch vs Commissioner of
Internal Revenue [19:00]
In the case at bar, the State is enjoined to strictly comply with
its treaty obligations. The SC even enjoined the government
to make changes in our laws so as to ensure that we will
comply with our contractual obligations.
Note: But the fact remains that when there is a conflict
between a treaty and our local laws, our local laws should
prevail in the exercise of Police Power. Police power cannot
be bargained away with through a medium of a treaty.
B. Contract
Ortigas and Co. Ltd vs CA
Hermoso bought a parcel of land from Ortigas and in the
Contract of Sale, there was an express stipulation that the
subject matter of that sale should only be used for residential
purposes. But Mathay, who leased the lot from Hermoso,
constructed instead a commercial building thereon. He
defended its action in accordance to Resolution No. 81-10, a
zoning ordinance reclassifying the land from residential to
commercial. Ortigas, on the other hand, argued that the
resolution cannot be given a retroactive effect so as to impair
obligations of a contract created prior to the enactment of the
resolution.
SC said that Police Power, in the form of such an ordinance,
is superior compared to the contract entered into years before
its enactment. This is because Police Power cannot be
bargained away by a medium of a contract.
Insert MMDA vs Garin
Garin was a holder of a driver’s license. When it was
confiscated, he cried foul and said that it was violative of his
public right. But the high court ruled that a driver’s license is
nothing but a privilege, hence, it can be revoked by the State
all in the name of Police Power. Police Power cannot be
bargained away with through a medium of a contract.
Chavez vs Romulo
A regulation was enacted by the State cancelling the
privileges of persons to carry firearms outside their
residences. Chavez questioned the validity of the law
contending that he already had vested rights to carry his
firearms outside his residence.
SC, however, sustained the revocation of the permit to carry
a licensed firearm outside of the residence. It is a privilege and
it can be revoked and suspended by the State pursuant to the
Police Power.
Stone vs Mississipi
There was a grant of a franchise in favor of few persons for
them to operate lottery for a period of 25 years. But after 3
years, that was cancelled by the State. Such cancellation was
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questioned, but the US Supreme Court decreed that such
franchise could be cancelled all in the name of Police Power.
Oposa vs Factoran
The SC revoked the grant of concessions or timber licenses,
which were argued to be property rights, in the name of Police
Power.
Insert Lim vs Paking
240 SCRA 649
The government of City of Manila previously issued a permit
for the operation of jai alai. Later, PD 70071 was issued by
Marcos revoking the authority of the mayor to issue permits
for the operation of jai alai. Mayor Lim revoked the permit
granted to ABC corporation.
ABC argued that it was invalid because it was an impairment
of obligation of contracts but the SC disagreed. Noting again
that PD 70071 was issued pursuant to Police Power.
Note: Police Power can, therefore, impair obligations of
contracts, notwithstanding the provisions Art 10, Sec 3 of
the Constitution, stating that, “No law shall be passed
impairing the obligations of contract.”
(4) Power is dynamic
Police Power changes with time and with society.
Cybercrime Law
In the past, there is no such thing as cybercrime law. But
today, there is already a cybercrime law.
Family Code, Article 1 – on same sex marriage
Police Power is not static but dynamic. It will not be surprising
if Congress will enact a law allowing same sex marriage.
In the past, operation of vital utilities is performed by the State.
But at present, there is now a move to privatize the operation
of public utilities. That is why now, NPC and PNB are now
privatized.
(5) In the exercise thereof, it may utilize as its tool the
other powers (Eminent Domain and Taxation)
The Power of Taxation or Eminent Domain may be used as
an implement of Police Power for the attainment of a
legitimate police objective. This is the only instance when
Police Power may take a property which is not noxious and is
not destroyed.
A. Police Power using Taxation
Sin Tax Law
The Sin Tax Law is enacted pursuant to the Police Power but
using the Power of Taxation as its implement thereof. This
involves imposing higher tax in the hope of dissuading people
from smoking/drinking.
Carlos Superdrug Corp vs CA
SC justified such imposition under Police Power using the
Power of Taxation as a tool in the exercise thereof.
Lutz vs Araneta
A law was enacted imposing special tax on sugar for the
rehabilitation of the ailing sugar industry. The validity of the
law was assailed but SC held that the said special law
imposing taxes on sugar companies was enacted pursuant to
the Police Power using the Power of Taxation as its implement
thereof. The purpose of which is to rehabilitate the ailing sugar
industry.
CBPT (2017)
B. Police Power using Eminent Domain
Carlos Superdrug Corp vs CA
SC justified the taking of a beneficial property (profits) all in
the name of Police Power using Eminent Domain.
Comprehensive Agrarian Reform Program (CARP)
The State takes away private properties such as land to be
distributed to farmer beneficiaries. The act of taking a property
is under Eminent Domain; but to the extent that the CARP
would prescribe certain limitations or retention of ownership,
then there is regulation of property and liberty under Police
Power. Therefore, this law is enacted pursuant to the Police
Power using the Power of Eminent Domain as a tool thereof.
Small Landowners vs Executive of Agriculture
The exercise of the Power of the State to distribute lands to
the landless under the CARP is justified under the Police
Power, using as implement thereof the Power of Eminent
Domain.
Ortigas and Co., Ltd. vs CA
SC said that the enactment of the zoning ordinance
(reclassifying residential area to commercial) is done not
pursuant to power of eminent domain but pursuant to police
power. Because zoning ordinance will not invoke taking of
private property. It only invokes reclassification of the
utilization of property from residential to commercial.
Note: This explains why Police Power is the most pervasive
power of the State because it may use other powers in the
course of its implementation.
Philippine Press Institute vs COMELEC
There was an attempt on the part of the State, through the
SolGen to justify COMELEC’s resolution requiring
newspapers to give free print spaces to COMELEC by
invoking the Police Power of the State. However, such
invocation was not further elaborated by the SolGen.
The SC, however, said that the COMELEC’s resolution was
invalid because it would tantamount to taking of private
property without just compensation.
Telecommunications and Broadcast Attorneys of the
Philippines vs COMELEC
Issue: Validity of Sec 22 of the Omnibus Election Code,
mandating radio stations and TV networks to provide free
airtime to the COMELEC.
It was assailed as invalid as this would amount to taking of
private property without just compensation.
Held: SC sustained the validity of the law as valid exercise of
Police Power. The SC upheld the validity of a COMELEC
Resolution requiring radio stations to give free air time to
COMELEC.
Q: What’s the difference between the two cases mentioned
above when in the case of PPF, the free space (tangible) was
declared invalid while in the case of Telecommunications, the
giving of free airtime (intangible) was valid?
1. In the case of Telecomm, the air time taken was considered
valid because it was an intangible property and Sec 22 was a
valid exercise of Police Power using the Power of Eminent
Domain as a tool in the exercise thereof. Hence, there was no
payment of just compensation. But in PPF vs Comelec, the
taking of the print space is invalid because it is a tangible
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property. It would amount to taking of private property without
just compensation.
How can we reconcile the seemingly conflicting ruling of the
Supreme Court?
What was involved in Telecommunications is a franchise to
operate the telecommunication business. Under Sec 11, Art
12 of the Constitution, the grant of any such franchise is
subject to the condition that it can be modified, altered,
repealed or suspended by the State. But one does not need
such legislative franchise to be engaged in publishing
business.
Radio broadcast, which is a franchise or a privilege, can be
regulated by the State under the Police Power, while the latter
is not.
Who can Exercise Police Power
Police Power is primarily lodged in the Congress. However, it
may be delegated to other government bodies. There has to
be delegation of power by Congress in favor of such body
because without which, then such body cannot exercise
Police Power. (e.g. Local Government Units through the LGC)
If there is a situation calling for the exercise of Police Power,
Congress has the full discretion whether to act on it or not. If
the Congress does not act on it, it cannot be compelled by
mandamus to act on that problem.
If, on the other hand, it decided to act on it, the remedies to be
pursued are also left to the sound discretion of the Congress
(e.g. if the State decided to totally ban the use of cigarettes on
the ground that it could lead to lung cancer, such prohibition
cannot be questioned
Marijuana addiction).
Absolute truth is not necessary. A semblance of proof would
suffice.
Jacobson vs Massachusetts
Jacobson was convicted for refusing to be vaccinated for
small pox. As to him, small pox vaccination is not that effective
and could only cause health complications. But the US
Supreme Court said that the ascertainment of facts attendant
to the exercise of Police Power is generally left to the sound
discretion of Congress. Such that if such action or decision by
Congress is supported by a semblance of proof, then that can
be justified.
But if the actions or remedies of the Congress have no factual
basis at all, then they can be declared invalid.
While Police Power is primarily vested in the Congress, but
due to the expanded concept of Judicial Review, there is a
chance that the action of Congress for the exercise by the
State of Police Power may be reviewed by the SC to
determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction.
Requisites for a Valid Exercise of Police Power
The exercise of Police Power necessitates that there should
be the existence of:
1. Lawful Subject
2. Employment of Lawful Means/Method
(1) Lawful Subject
It is an activity/thing that is imbued with public interest;
otherwise, such cannot be regulated by the State even in the
name of Police Power
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What cannot be a lawful subject: regulations affecting the
privacy of rights of an individual, freedom of religion, freedom
to think
Ople vs Torres
The issue was an administrative order issued by Pres. Ramos
establishing a National Computerized Identification Reference
System for the expressed purpose of facilitating transactions
with the government, particularly those providing basic
services and social security benefits.
SC declared that the order “pressures” the people to
surrender their privacy by giving information about themselves
on the pretext that it will facilitate the delivery of basic services.
The right to pursue a profession can be regulated by the State.
PRC vs De Guzman
The passers from Fatima College were not allowed to take
their oath. The SC sustained the action of PRC because the
practice of medical profession can be regulated by the State.
The health of the citizens should not be entrusted to
incompetent physicians.
Employment can also be regulated by the State
JMM Promotions vs CA
There is a law requiring an artist record book before one can
be deployed as entertainers in Japan. This was questioned by
JMM but the law was however sustained by the SC, stating
that it was geared to protecting the plight of the performers
abroad.
(2) Employment of Lawful Means/Method
The means employed must be reasonably necessary for the
accomplishment of the purpose and not unduly oppressive
upon individuals.
Ynot vs IAC
This case involes a law authorizing the outright confiscation of
carabos transported from one province to another which was
questioned by Ynot. His contention was that the means
employed were not valid because the law authorizes
confiscation without trial.
SC ruled in favor of Ynot, nullifying such a law stating that
indeed, the law imposes punishment without benefit of a
hearing. Such law thus, amounts to bill of attainder. The Court,
moreover, held that while the law has a lawful subject (the
regulation of the slaughter of carabaos), such does not have
lawful means. The means employed which is the prohibition
of transfer of carabaos from one province to another is not
reasonably necessary for the accomplishment of the purpose
because carabaos may still be slaughtered even if they are
not transferred from one province to another.
City of Manila vs Laguio
An ordinance was enacted prohibiting the operations and
establishments of motels in Malate area. The purpose
therefore was to get rid of prostitution. But nonetheless, it was
decreed as invalid by the SC because the means employed
thereby were confiscatory. The options given to the
establishment were winding up of operation, transferring to
another place or converting their business to allowable
business. All these things tantamount to taking of private
property without just compensation.
Villasencio vs Lukban
39 Phil 7988
The mayor rounded up 170 prostituted women and shipped
them out from Manila to Davao. The purpose was to solve the
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problem of prostitution. The SC held that there is no doubt that
the purpose was noble. There was in that situation the
existence of a lawful subject (problem on prostitution) yet the
method employed thereby was unjust. According to the SC,
prostituted women also have rights such as that they cannot
be shipped from one place to another.
Social Justice Society vs DSWD
GR No 157870
What was at issue is the validity of Sec 36 of RA 9165
(Dangerous Drugs Act) requiring that before a person could
run for a public office especially for Congress, one has to
undergo the Mandatory Drug Test. The purpose of the law
was no doubt valid. But according to the SC, the method
employed thereby was unlawful because the qualifications for
one aspiring for Congress were already set forth in Article 6
and such qualifications cannot be further amended by simple
legislation.
Office of the SolGen vs Ayala Land Inc
The SolGen filed a petition to restrain owners of the Ayala
malls from collecting parking fees from its customers. The
SolGen anchored his argument on the provisions of the
National Building Code requiring owners to allocate more
space as a parking area. The SolGen argued that inasmuch
as that was a requirement under the National Building Code,
then the use thereof by the customers must be provided for
free.
SC held that such would be unjust and confiscatory, it was
already unfair on the part of the mall owners requiring them to
allocate a space for parking area and restricting them to utilize
them fully to their benefit; such that providing the said area for
free will so to speak result to double whammy.
City Government of Quezon vs Ericta
There was an ordinance enacted by the City Council of
Quezon to the end that private owners of cemetery should
allocate 60% space as burial sites for paupers of that locality.
No doubt that the purpose of the law is noble but the SC said
that such ordinance would only be confiscatory. This would
amount to taking of property without payment of just
compensation.
Police Power Must Conform to Due Process and Equal
Protection
Due Process means prior notice to be heard.
Exceptions:
Property is nuisance per se
Cabrera vs Lapid
Demolition of the fishpond of Cabrera without a court order. It
was argued that it was violative of Due Process but the SC
disagreed, noting that such property is a nuisance per se.
Hence, it can be abated all in the name of Police Power.
Pollution Adjudication Board vs CA
A cease and desist order was issued by PAB even without
prior notice or hearing, which prohibits Solar Textile from
using its defective water treatment facilities, as it already
discharged untreated waters to the nearby river.
SC sustained its validity because after all, it was by way of
exception as provided in Sec 7 of PD 984 allowing PAB to
issue ex parte a Temporary Restraining Order (TRO) even the
matter could be heard or given notice. What is important is the
hearing after the issuance of the TRO.
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Nuisance per se
It is “recognized as a nuisance under any and all
circumstances, because it constitutes a direct menace to
public health or safety and, for that reason, may be abated
summarily under the undefined law of necessity.”
Garcia vs Drilon case
GR No 179267
SC said that through applying the heightened standard test,
the law was valid. SC was of the view that women are
generally weaker than men.
Nuisance per accidens
That which “depends upon certain conditions and
circumstances. Its existence being a question of fact, it cannot
be declared without due hearing thereon in a tribunal
authorized to decide whether such a thing in law constitutes a
nuisance”.
(4) Overbreadth Scrutiny Standard
Test validity of law or directive which hinges on the exercise
on the freedom of the press.
Case in point: See Knights of Rizal
Situation:
Factory situated inside a residential area
Can that be abated summarily? Is that a nuisance per se?
That is a nuisance per accidens. It is a wrong thing but at the
wrong place and time. Therefore, it requires prior notice and
hearing.
Determining the validity of the exercise of Police Power
1. Strict Scrutiny Standard
2. Rational Basis Standard
3. Heightened/Intermediate Scrutiny Standard
4. Overbreadth Scrutiny Standard
(1) Strict Scrutiny Standard
Employed to check the validity of regulations hinging on our
freedom of mind and also those that would hinge the exercise
of our political rights/processes
Point of inquiry is to inquire whether or not there is a
compelling reason for the state to come up with that legislation
and also the absence of any available less strict measures
(2) Rational Basis Standard
Normally employed to check the validity of
governmental regulations dealing with economics.
some
It is a more relaxed standard for economic legislation.
If it is shown that any of such regulation has a lawful
governmental objective, then that is already sufficient. That
will already suffice to make that law valid. After all, what is
merely required is the existence of a valid/lawful purpose or
objective.
(3) Heightened/Intermediate scrutiny standard
Employed to test the validity of a law which is based on
classifications, based on legitimacy/gender.
The point of inquiry is whether or not there are available less
strict measures that can be resorted to without necessarily
resulting to the measure that is proposed under a given
law/legislation. If it is shown that there are still other available
less strict measures, then there is a good chance that the law
may be struck down as void for being violative of substantive
due process.
This is the test employed in testing the validity of RA 9262 –
VAWC, which is based on classification on the basis of one’s
gender or sex.
7|P a g e
Chavez vs Gonzales
Issue: Validity of directive in the exercise of freedom of the
press
Gonzales ordered the radio stations not to air the Hello Garci
tape. Chavez questioned the directive of Gonzales by way of
facial challenge using the overbreadth standard. Chavez was
sustained. What was employed was this standard because
the issue was a directive dealing with the exercise of the
freedom of the press.
When Police Power is directly exercised by the Congress, its
exercise may be checked by checking if there is a lawful
subject or a lawful means.
But if exercised by a mere delegate of Congress, in addition
to the two mentioned above, it must be authorized by law
delegating it to such power, and if the exercise is done well
within the territory of that body or entity. Only after proper
delegation by Congress to exercise police power, necause it
is primarily exercised by Congress. It should only be exercised
within the jurisdiction of the agency concerned.
If the Police Power is to be exercised by LGUs, such
exercise must be authorized by law
1. There should be proper delegation of authority by
Congress through a law, because after all, this power is
primarily lodged in Congress.
2. The exercise thereof must be applied only within the
territorial jurisdiction of the LGU concerned.
3. The ordinances must cofnform to the Constitution and
other laws.
At present, there is already the Local Government Code
delegating Police Power to the LGUs.
Q: Can the LGC of Cebu City be exercised in Mandaue City?
No. It must only be made within the authority of the delegate
of Congress.
Requisites of a valid ordinance:
City of Manila vs Laguio
1. Must not contravene the Constitution or any Statute
2. Must not be unfair or oppressive
3. Must not be partial or discriminatory
4. Must not prohibit but may regulate trade
5. Must be general and consistent with public policy
6. Must not be unreasonable
Note: If police power is to be exercised by Congress, they
only have to check the validity thereof by determining the
existence of a lawful subject and lawful means. But if police
power is to be exercised by the LGUs, in addition to that, they
also have to check the validity of the ordinance as set forth in
the case of City of Manila vs Laguio.
CBPT (2017)
EMINENT DOMAIN
Eminent Domain
Definition
The State will take away private property for a public purpose
but with the payment for just compensation.
Destruction of Private
Property Due to
Necessity
Involves the taking of private
property for a public purpose
There can be a taking if it was
not done pursuant to the
power of eminent domain
This power is inherent in the State. It may be exercised by the
State independently of any Constitutional provision.
Sec 9, Art 3 – “private property cannot be taken for public use
without payment of just compensation.” This provides a
limitation to the exercise of Police Power.
The Power of Eminent Domain is coercive in the sense that
even if the property owner is not willing to part with his
property, it can be taken from him, but there has to be just
compensation.
However, just because the State has this power does not
mean that when every state needs a private property for a
public purpose, the State will at once get the property.
Methods
In PH jurisdiction, the State must:
1. Negotiate with the property owner for an amicable
settlement
2. When the property owner refuses to sell, the State may
exercise its power of Eminent Domain
Situation: If the acquisition of the private property is for
resettlement purposes, there is a need to comply with the
provisions of Section 9 and 10 of RA 7279 (UDHA) – there
is a hierarchy in the acquisition of land.
“There must first be an attempt to acquire government lands,
alienable lands of public domain, unregistered land, and lastly,
private lands.
Rule 1. The acquisition of private lands must be the last
priority
Rule 2. Resort to eminent domain must be the last recourse
Lagcao vs Labra
SC said that where the purpose of taking the property is for
urban development or housing purposes, then the authority
must strictly comply with the provisions under Sec 9 and 10
under RA 7279 (UDHA).
Sec 9 – taking of private property for urban development and
housing purposes is in the last order of priority.
Sec 10 – expropriation must be resorted thereto as a last
recourse where efforts in acquiring property had already been
pursued but failed.
City of Mandaluyong vs Francisco
SC ordained that the rights of small property owners must be
respected. Where the only property to the person does not
exceed the area of 300sqm in rural areas and 800sqm in
urban areas, then that property is exempt from the coverage
of eminent domain.
The Civil Code dictates that
the owner of the property
may demand indemnification
from those who were
benefited (not demand
justification but demand
payment from person who
benefited, any such
compensation would not be
from the government but
from private person)
Illustrative case:
American Print Works vs Lawrence
US SC held taking was done through police power and not
power of eminent domain.
What if that case will happen in the PH? Let us assume you
are a property owner of a densely populated area and that
there is a fire in your place, such that the authorities have to
demolish your house to pass through. Can you demand
payment of just compensation?
It depends. If your demand for payment is addressed to the
government, you cannot demand payment from the
government.
There is taking of property, but such taking is not pursuant to
eminent domain. Such is akin to destruction of property by
reason of necessity.
However, under 432 of the CC, owner of the property may
demand indemnity from those who may have been benefited
thereby. You cannot pay just compensation from the State but
you can demand payment from those persons whose houses
were saved by the destruction of your property.
Who can Exercise Power of Eminent Domain
▪ Primarily lodged in Congress
▪ When there is a valid delegation of authority from
Congress (there must be law empowering them to do the
same):
o
Office of the President
o
LGUs
o
Public corporations
o
Quasi-public corporations (Meralco,
PLDT, among others)
Moday vs CA
The SC held that municipalities can validly exercise the
delegated power of Eminent Domain in line with the provisions
of the Local Government Code (LGC).
Yusay vs CA
SC ordained that if Eminent Domain exercised by a local
government, it has to be done through an enactment of a local
ordinance. This cannot be done by a mere expedient
enactment of a resolution.
8|P a g e
CBPT (2017)
In order for there to be valid delegation, such exercise
must adhere to the following requirements:
1. There has to be necessity of the taking
2. What should be taken is a private property
3. Taking should be of strict Constitutional sense
4. Payment of just compensation
5. Property devoted for public purpose
6. Observance of due process
(1) There has to be necessity of the taking
If Congress is the one directly exercising this power, the
necessity of the taking is not open to judicial scrutiny unless if
there is abuse of discretion amounting to lack or excess of
jurisdiction.
If it is exercised by a mere delegate, any issue regarding to
the necessity may be under judicial scrutiny.
Chinese Community vs City of Manila
SC nullified an ordinance of the City of Manila to expropriate
a cemetery owned by the Chinese Community on the ground
that there was no necessity of the taking of such property.
(2) What should be taken is a private property
a. Property is anything that is contracted within the
commerce of man – both real and personal property
b. Service can be under the contemplation of eminent
domain
Insert PLDT vs NTC
SC said that services may be expropriated by the
State or may become the subject matter in the
exercise of the power of eminent domain.
c. Charitable institutions, church buildings, cemeteries, etc
are not exempt from being expropriated.
d. Properties already devoted for public use can still be
expropriated if done by Congress; If expropriation is
done by a delegate of Congress, it can still be
expropriated but there must be a special delegation of
authority, meaning a general law will not suffice.
Note: It needs a special grant of authority enacted by
Congress
For example, a public cemetery. Can it be expropriated
by the government? It is possible, but a general
authority pursuant to the LGC is not sufficient. It needs
a special authority in the form of a special law to be
enacted by Congress.
e. Money and promissory notes cannot be expropriated.
It is an absurd situation where the State takes your
money and in return compensates you. Similarly, the
State cannot expropriate a right to demand payment or
to collect something from another person.
Example: Gravador amounts a loan of 50 pesos. Can
the State expropriate right of Galeon to demand
payment from Gravador?
No.
9|P a g e
(3) Taking should be of strict Constitutional sense
For taking to be valid, it should comply with the requirements
set forth in Republic vs Castellvi:
1. That the expropriator must enter the property
2. The entrance must be for more than a momentary period
(not met in Castellvi case)
3. The entry must be under warrant or color of legal authority
4. The property must be for a public purpose or otherwise
informally appropriated or injuriously affected
5. The entry must be of such manner as to oust the owner
therefrom or to deprive him of the use of his property (not
obtained in case at bar)
GR: Taking, in Eminent Domain, entails actual dispossession
of property
XPN: There can still be taking if there is a (1) material
impairment of the value of the property or (2) deprivation of
the ordinary use of which the property was intended or (3)
trespassing without necessarily evicting the owner
Illustrative cases:
US vs Cosby
The US Supreme Court held that there was taking of
the property of Cosby, which is near an airport,
because he cannot construct a high rise building on
such property due to the danger of flying and landing
airplanes. Cosby was allowed to recover just
compensation.
PP vs Fajardo
The SC held that there was taking of the property of
Fajardo, which was near the national highway,
because the municipality prohibited him through an
ordinance from constructing any building that obstructs
the view of the public plaza from the national highway.
Fajardo was allowed to recover just compensation.
Situation:
If you own a parcel of land and NPC among others
constructed transition lines traversing your property, can you
demand payment of just compensation when you remain as
owner of the property?
Yes. (Explanation was cut from the recording. Sorry.)
Republic vs Salem Investment
The mere passage of law to expropriation is not akin to actual
taking.
Summary: there may be taking without dispossessing
owner of its property. Take note, not all taking of property
done by the government is compensable.
Cabrera vs Lapid
In the instanct case, it is not taking pursuant to Eminent
Domain. If you own a concrete wall on the verge of collapsing,
it can be demolished without receiving just compensation.
(4) Payment of Just Compensation
a. Taking that is not compensable – damnum absque injuria
(damage without injury but not applicable when one person
stands to suffer more than others)
CBPT (2017)
Richards vs Washington Tunnel
The US Supreme Court held that there was taking on the
house of Richards, which was near a government tunnel,
because of the smoke from the tunnel that goes into
Richard’s house as a result of an exhaust fan which was
installed in the tunnel. Although other members of the
community are also burdened by the smoke, it was
Richards who suffered the most. Richards was allowed to
recover just compensation
b. Taking under Police Power and not pursuant to
Eminent Domain
▪ Destruction by necessity under Art 432 of the Civil Code.
The aggrieved property owner can demand payment from
those who benefited and not from the State
▪ If the burden is shared equally by the members of the
community, it is not considered taking under Eminent
Domain.
However, if there is one person who suffered more, it is
otherwise (therefore, pay just compensation).
c. Taking under Sec 17, Art 12 of the Constitution which
provides that in times of national emergency, the State may
temporarily take over privately owned public utilities or
business affected with public interest
But in Section 18, Art 12, there can be compensation which
states that, “The State may, in the interest of national welfare
or defense, establish and operate vital industries and, upon
payment of just compensation, transfer to public ownership
utilities and other private enterprises to be operated by the
Government.
In the case of Philippine press Institute, the donation of 1/2 of
print space to be used by COMELEC was invalid because it
would amount to taking under Eminent Domain without just
compensation. In Telecommunications, giving of free airtime
was valid.
(5) Public Purpose
The converted property is directly available to the general
public as a matter of right or redounds to their indirect
advantage or benefit.
Still, public use even if it is not for free and even if not
everyone can avail or make use of the property.
NHA vs Reyes
SC held that the taking of the private property for low-cost
housing is for public use even if not all have the financial
capacity to avail of such.
Abandonment by the State of the public use of the property
entitles the property owner to file a case for recovery of the
expropriated property but should return the just compensation
received with legal interest from his default. If the State uses
such property for another public purpose, the property owner
can file an injunction against the State and recover such
expropriated property. The State may then later institute
another expropriation case for such same property for the new
public use.
Note: Term should not be given a restrictive meaning. It
should trickle down to public purpose
10 | P a g e
(6) Observance of Due Process
JUST COMPENSATION
Term owner in eminent domain is given a broader meaning.
SC decreed that the term owner may also include persons
who may have actual interest in the property that is taken by
the State.
Example: If you are the owner of a commercial land and we
entered into a contract of lease and pursuant to which, I
constructed a building on the land. If your land will be
expropriated by the State, the Building will also be included.
Where that happens, the State shold include just
compensation for the land and any such payment shall be
tendered to the land owner but the payment of the building
must be given to the lessee.
Term owner is not restrictive to a situation where the payment
should only be given to the person whose name appears as
the registered owner of the property. However, take note of
the discussion in the cases of LBP vs AMS and Heirs of
Banaag.
Stages in Expropriation Cases
Stage 1: Determination of the necessity of the taking
Stage 2: Payment of the Just Compensation
Form of Just Compensation
GR: Just compensation is taken in the form of money: cash or
check
XPN: Agrarian cases. In the implementation of Agrarian
Reform Law, payment of just compensation may take in the
form of Land Bank of the Philippines Bonds
Q: Who is entitled to receive the payment of just
compensation?
The property owner.
Q: What if the State expropriates a parcel of land but there is
an improvement thereon and that improvement is owned by
another person (land lesee)?
The land owner (land lessor) will receive the payment for the
land. In our jurisdiction, owner may include the lesee. In LBP
vs AMS as cited in the book of Cruz, lessee of an agricultural
land is not entitled for the payment of just compensation
(but the way it is cited is misleading). Lessee may ask for just
compensation, but not from the government, but from the
owner.
LBP vs AMS
Facts: Parcels of land in Davao were owned by NAFCO &
APECO, and were eventually owned by TOTCO. It was
leased by AMS and was renewed with TOTCO; it was
annotated at the back of the certificates of title covering the
property.
The term was for 5 years. It was renewed by TOTCO and
AMS. However, unlike in the past, the renewed contract of
lease was no longer annotated at the back of the certificate.
The parcels of land were eventually taken in the concept of
Agrarian Reform.
LBP paid for the value of the land and the crops to the land
owner, TOTCO. AMS demanded for payment for the value of
the crops.
CBPT (2017)
Issue: WON AMS is entitled for the just compensation for the
value of the crops
Q: Can the owner change his mind after agreeing for the
taking of the property?
Held: SC said LBP could not be faulted for paying the just
compensation including that of the crops to TOTCO because
in the first place, the contract of lease was not annotated at
the back of the certificates. LBP had no knowledge of the
lease agreement. More than that, there is nothing in the
Comprehensive Agrarian Reform Law which provides that the
State also pays to the agricultural lessee. CARL provides that
the just compensation should be given to the owner. SC
emphasized that if at all AMS is entitled for the JC for the value
of the crops, then the right of action of AMS should not be as
against LBP but as against TOTCO. SC did not actually say
that AMS is not entitled payment for the crops. SC said that
the claims for just compensation should be filed by AMS
against the owner and such claims shall be decided on the
basis of the civil code provisions of lease.
In Eusebio vs Luis GR 162474, while the owner agreed for the
taking of his property, the owner is not permitted to change his
mind and his only remedy is to demand for the just
compensation. The owner is estopped.
Heirs of Banaag vs AMS
SC faulted the adjudicator of the Agrarian Reform for resolving
the issue of ownership. SC said that the adjudicator had no
authority to resolve any such dispute because such issue
would call upon the application of the Civil Code provisions of
which the adjudicator had no confidential authority to rule
upon. Again, SC did not actually say that AMS is not entitled
payment for the crops. And such issue of ownership should
be resolved by regular courts. SC said that the claims for just
compensation should be filed by AMS against the owner and
such claims shall be decided on the basis of the Civil Code
provisions of lease.
Agricultural lessee is not entitled to receive just compensation
from government for the crops but from the owner.
Summary of the 2 cases:
Lessee is entitled but claims for the value of improvement
should be against the land owner. Don’t be fooled by the
citations in the book.
Q: If the government takes away your property without
filing the necessary expropriation case, can you file a
case against the government in spite the state’s immunity
from suits?
Emiliano vs IAC
(cited in Amigable vs Cuenca)
The State may be sued without its consent. Immunity from suit
cannot be invoked to trample upon the rights of private
citizens. Direct recourse is allowed before the courts of law.
If the State takes private property without an expropriation
proceeding and without payment of just compensation, the
remedy of the property owner is to file for collection of just
compensation or recovery of the property. But cannot recover
if owner is already in estoppel.
Is there a prescriptive period in filing action?
Such action will not prescribe.
Illustrative case:
Spouses Campose vs NPC
The claim for just compensation will not prescribe. Spouses
filed a case for just compensation after 26 years and the SC
ruled that it was valid notwithstanding the provision that claims
against NPC shall be filed within 5 years from the time of
taking. The 5 year period provision only governed actions for
damages.
11 | P a g e
What is just compensation?
NPC vs Henson
It is a sum of money which a person desirous but not
compelled to sell and another person willing but not compelled
to buy a property would agree on as a price for that particular
property. Primordial consideration should be given on the
nature and the character of the property at the time of the
taking.
Rep vs Vicente Lim
Just compensation necessitate not only the payment of the
correct amount but also the timeliness of the payment of such.
Base price is the fair market value of the property.
In determining the Fair Market Value (FMV), the following are
considered:
1. Acquisition cost if acquired onerously
2. Actual value of similar properties
3. Potential use thereof
4. Actual use of the property
5. Shape, location, and size
6. Valuation as appearing in the tax declaration
How to compute just compensation if what is taken is not
the entire property?
a. If the consequential loss is greater than the
consequential benefits:
Just compensation = Fair Market Value (FMV) +
(Consequential Loss – Consequential Benefits)
b. If the consequential loss is less than the consequential
benefits:
Just compensation = Fair Market Value
Situation 1.
FMV of the portion taken – 100, 000
Due to the taking, the lot became triangular in shape and
owner suffered damages because of the decrease of the
selling price of the property – 10, 000
Just compensation = 110, 000
Situation 2.
FMV of the portion taken – 100, 000
Due to the taking, the lot became triangular in shape and
owner suffered damages because of the decrease of the
selling of the property – 10, 000
Benefits due to the increase of the selling price of the other
part of the property – 5, 000
Just compensation = 105, 000
CBPT (2017)
Situation 3.
FMV of the portion taken – 100, 000
Due to the taking, the lot became triangular in shape and
owner suffered damages because of the decrease of the
selling of the property – 10, 000
In NPC vs Dela Cruz:
1. BOC applies illegal principles
2. BOC disregarded the rules of preponderance of
evidence
3. The amount in the report is excessively high or
excessively low
Benefits due to the increase of the selling price of the other
part of the property – 25, 000
GR: The constitution of the Board of Commissioners is
mandatory
Just compensation = 100, 000
XPNS:
1.
Note: The owner should not be made to suffer more than what
he already suffered.
Who should determine just compensation?
Epza vs Dulay
Just compensation should be determined by the courts of law.
The courts of law are not bound by the official assessment of
the assessors.
If there is an expropriation case, where should the case be
filed?
Under RA 7691:
If value of property is less than 20K – filed with MTC, MTCC
If beyond 20K – RTC
Situation. Suppose City of Cebu files an expropriation case
but the value of the land involved is only 19K. Where should
the City of Cebu file the expropriation case?
Case in point:
Brgy. San Roque Talisay vs Heirs of Francisco Pastor
Expropriation cases will always be filed in the RTC regardless
of the assessed value of the property, notwithstanding RA
7691.
After all, the thrust of expropriation case is not so much on
acquiring title over the property but in utilizing private property
for a public purpose. A case of expropriation is akin to an
action that is incapable of pecuniary expropriation.
Rule 67, ROC
A 1Board of Commissioners of the 3 members will also be
constituted to determine the just compensation for
recommendation to the court. This consists of:
1. Representative of the court
2. Person to be designated by the expropriator
3. Person designated by the property owners
The Board is mandated to conduct a hearing where the parties
are heard and allowed to submit their respective manifesttions
regarding the valuation of the property.
NPC vs Dela Cruz
The purpose of the BOC is to aid the court in fixing the just
compensation. There should be a hearing to be conducted
where the parties present their evidence.
The court is not duty bound to accept the valuation of the
property as fixed by the Board especially if the valuation
of the Board is illegal, grossly excessive, ridiculous, or
very low.
2.
When there is no issue/question as regards to the
valuation of the property
Agrarian cases, the constitution of BOC is left to the
parties and when the parties agreed not to form
BOC
Amount to be Deposited
Rule 67 of the Revised Rules of Court: Upon filing of the
expropriation case, the expropriator is required to deposit an
amount which is equivalent to the full assessed value of the
property as appearing in the tax declaration in order for the
court to issue a write of possession allowing the expropriator
to take actual possession of the property during the pendency
of the case.
If the expropriator is an LGU, amount to be deposited is only
15% of the assessed value of the property. When that
happens, the court may issue a writ of execution.
Law favorable to the property owner:
In RA 8974 and RA 10754, if the purpose of the expropriation
is to implement national government infrastructure project,
what needs to be done is not a deposit but payment of BIR
Zonal valuation of the property (amount equivalent to 100%
BIR zonal valuation of the property which is higher compared
to the assessed value). This amount deposited or paid is not
the just compensation.
These laws are applicable if what is expropriated is for the
purpose of national government infrastructure project.
NPC vs Pobre
The expropriator is not allowed to unilaterally withdraw
because damages may have already been caused to the
property.
When is just compensation computed?
Republic vs Castellvi
Republic wanted that the valuation be in 1947, but the court
said it should be computed in 1959, the year the complaint
was filed. (Under the old ROC, valuation should be
determined as of the date of filing of exproporation complaint).
Eslaban vs De Onorio
SC said the just compensation must be computed at the time
of the taking.
Basis: Rule 67, Section 4, ROC (as amended)
GR: Rule 67, Section 4, ROC (as amended) – Just
compensation is computed at the time of taking of the property
or at the time the complaint is filed, whichever comes first
1
Merely an aid but does not bind the court
12 | P a g e
CBPT (2017)
GR: Ownership over the property would only transfer if there
is the full payment of just compensation as adjudged by the
court.
XPNS:
▪ LGU is expropriator, valuation should be as of the
date of actual taking (even if taking is done after filing of
complaint)
Illustrative case:
City of Cebu vs Dedamo
The filing of the complaint preceded the taking of the
property but SC said that the valuation should be
computed at the time of taking, not necessarily at the
time of the filing of complaint which was done earlier the
reason for that is there is a provision under 2Section 19
of RA 7160 (LGC), which provides in essence that the
valuation taken by the local government unit should be
reckoned as of the date of actual possession.
▪ Taking do not amount in a strict constitutional sense
Entry was surreptitious
Illustrative case:
Heirs of Sancay vs NPC
NPC constructed a tunnel without the knowledge of the
owners and eventually the heirs filed a case for the
payment of just compensation. It is termed as Reversed
Condemnation Proceeding. (Normally, it should be the
State to file the expropriation complaint but in this case,
it was the owners who filed the case for the payment of
just compensation). In this case, just compensation is
computed at the time of the filing of the complaint, even
if the taking is earlier than the filing of such complaint.
This is so because the taking done by NPC is
surreptitious and without the knowledge of the owners.
SC ruled that the taking referred to under Rule 67 is that
taking which complies with the requirement in Republic
vs Castellvi.
If there is no full payment yet, the owner can still mortgage or
even dispose his property by sale because the ownership is
not yet transferred.
XPN: Agrarian Reform cases
3
What if the expropriator failed to pay the just
compensation even when the expropriation case is
already decided? Can the expropriator demand transfer
of ownership?
No.
GR: Ownership over the property would only transfer if there
is the full payment of just compensation as adjudged by the
court.
If there is no full payment yet, the owner can still mortgage or
even dispose his property by sale because the ownership is
not yet transferred.
See Salem Investment case.
Can the owner recover his property?
NHA vs Reyes
While the owner agreed for the taking of his property, the
owner is not permitted to change his mind and his only remedy
is to demand for the just compensation.
Republic vs Vicente Lim
In this more recent case, SC allowed recovery of the property.
If there were no payment of the just compensation after the
lapse of 5 years, then the owner may be allowed to recover
his property.
The rule that the valuation of the property shall be computed
at the time of taking or filing of the complaint presupposes of
course that the taking should comply with the requirements in
Republic vs Castellvi.
Note: This is different from the case of Eusebio vs Luis,
because in Eusebio, there was no actual expropriation
proceeding.
Should the court award interest? If yes, how much?
How to reconcile?
Determine the finality within 5 year period
NHA vs Reyes
The SC assessed 12% interest by a way of penalty. SC said
what should be awarded normally is 6% interest because
payment of just compensation is not forbearance of money.
Apple Fruits vs [?] and LBP vs Rivera
SC said it is 6% per annum. Pursuant to Central Bank Circular
799 series of 2013.
This award will stand as the compensatory damages.
May the court award actual damages?
Yes. See Eusebio vs Luis.
How about attorney’s fees?
Yes.
When shall the title be transferred to the expropriator?
2
It is a substantive law which should prevail
13 | P a g e
In the case of Reyes – within that 5 year period, the only
remedy is to demand the payment of just compensation or file
motion of writ of execution to enforce judgment
In the case of Lim – if no payment within 5 years from the
finality of decision, then recovery is allowed.
Therefore, if there is an expropriation proceeding and the
State fails to pay the just compensation after 5 years from the
time of the finality of the expropriation case, the property
owner can file a recovery of the expropriated property but he
should return the just compensation received with legal
interest from his default. Prior to such 5 year period, he can
only ask for payment of just compensation through a writ of
execution of judgment and not recovery of the property.
When does the 5 year period start?
Situation:
Feb 14 – date of filing
Nov 1 – decision
Nov 5 – lawyers received the decision
CBPT (2017)
The 5 year period should be reckoned on the date the decision
attained finality.
If your ground for recovery is non-utilization for public
purpose, for which it was expropriated, then you don’t
have to wait for 5 years before you can file the said action.
Cases like this, decisions of the court attain finality after the
period of 15 days from receipt of the parties of such decision.
If no appeal within 15 days from receipt, then the decision
attains finality.
The 5 year period starts on November 20 which is 15 days
after November 5 when the parties received the decision.
What if the property is no longer utilized for which it was
expropriated?
Situation 1.
Land was expropriated for the construction of a road. A road
was constructed in 2017 but in 2026 the government has
decided to just abandon the road.
MCIAA vs CA
This involves the property of Chiongbian. SC said that if the
property expropriated is acquired with no conditions attached
to it, then the owner cannot revoer the property. It is only when
such taking has with it reacquisition conditions when the
property would no longer be utilized for public purpose, that
the owner can recover it.
MCIA vs Lozada4
SC came up with another ruling, where it allowed recovery of
an expropriated property on the ground of non-utilization
thereof for public purpose to which it was expropriated.
The case of Chiongbian and Lozada has the same
circumstances but the SC came up with different rulings. In
Chiongbian, SC found no condition, hence, there was no
reservation. In Lozada, however, SC allowed expropriation on
the supposition that the airport would continue to be in
operations.
Final Ruling:
Every expropriation case has this built-in condition that the
property should be devoted for the very same purpose for
which it was expropriated as stated in the complaint. Such
that: if the property was not utilized in the said purpose, then
recovery may be allowed with or without the express
condition. The State shall have to institute a separate
expropriation case for that new purpose.
TAXATION
Power of Taxation
The state is able to demand from the member of society their
proportionate share or contribution in the maintenance of the
government.
The power by which sovereign, through its lawmaking body,
raises revenue to defray the necessary expenses of the
government.
Enforced proportional contributions from persons and
property levied by the state by virtue of its sovereignty, for the
support of the government and for all public needs.
Attributes of Taxation
a. Enforced contribution (will not depend on the will of the
person)
b. Personal contribution (base on one’s ability to pay – the
bigger your income, the bigger your income tax)
c. It is a pecuniary burden payable in money, but such a tax
is not necessarily confined to those payable in money.
d. Imposed on persons and property
e. Imposed by the State
f. Normally exercised by the lawmaking body of the State
concerned
g. It is levied for public purpose as taxation itself involves a
burden to provide revenue for public purposes of a
general nature.
Purpose
▪ Taxes are the lifeblood of the government and so should
be collected without unnecessary hindrance. Despite the
natural reluctance to surrender part of one’s hard-earned
income to the taxing authorities, every person who is able
must contribute his share in the running of the
government. The government for its part, is expected to
respond in the form of tangible and intangible benefits
intended to improve the lives of the people and enhance
their moral and material values. This symbiotic
relationship is the rationale of taxation and should dispel
the erroneous notion that it is an arbitrary method by those
in the seat of power.
(1) revenue and
(2) non-revenue purposes
Situation 2.
Land is expropriated for land expansion.
Nov 1, 2016 – decision
Nov 20, 2016 – became final
Nov 22, 2016 – just compensation was fully paid
(1)
But even before the lapse of the 5 year period reckoned from
the finality of the decision (just after the lapse of 2 years), the
government decided not to make use of the property for the
purpose for which it ws expropriated.
Revenue Purposes of Taxation
The purpose of taxation is to provide funds or property
with which the State promotes the general welfare and
protection of its citizens. Raising the revenues is the
principal object of taxation.
(2)
Non-Revenue Purposes of Taxation
(a) Regulation – taxes may also be imposed for a
regulatory purpose as for example, in the
promotion, rehabilitation, and stabilization of
industry which is affected with public interest. This
is when taxation is an implement in the exercise
of Police Power.
Q: Can the owner recover the property after the lapse of
just 2 years or must he wait for the lapse of 5 years?
A. Yes. He can file an action for recovery and need not wait
for the lapse of 5 years.
In the case of Lim, the 5 year period would only govern if the
ground of your recovery is non-payment of just compensation.
4
This is the controlling decision
14 | P a g e
(b)
Promotion of General Welfare – If objective and
methods are alike constitutionally valid, no reason
CBPT (2017)
is seen why the state may not levy taxes to raise
funds for their prosecution and attainment.
Taxation may be made to implement the State’s
police Power)
(c)
(d)
(e)
Reduction of Social Inequality – this is done
through the system of progressive taxation where
the objective is to prevent the undue
concentration of wealth in the hands of few
individuals
Promote Economic Growth – In the real of tax
exemptions and reliefs, the purpose of taxation
(the power to tax being the power also not to tax)
is to grant incentives or exemptions in order to
encourage investments and thereby promote the
country’s economic growth.
Protectionism – in some important sectors of the
economy, taxes sometimes provide protection to
local industries like protective tariff and customs
duties
Essential Characteristics
1. Inherent in the State
The power to tax, an inherent prerogative, has to be
availed of to assure the performance of vital state
functions
2.
3.
4.
Legislative in character
Taxing power is peculiarly and exclusively legislative in
character and remains undiminished in the legislative; it
is primarily vested in Congress
Subject to inherent and constitutional limitations
The power to tax is an attribute of the sovereignty. It is
the strongest of all powers of the government. The
Constitution sets forth such limits.
Pervasive
Cases in point:
Mccolough vs Maryland
Justice Marshall declared that the power to tax is so
pervasive that it includes the power to destroy.
Panhandle vs Mississippi
US Justice Holmes decreed that the power to tax does not
involve the power to destroy.
Q. Which of the two propositions is correct?
Both are correct. Power to tax has power to destroy when it is
imposed as an implement in the exercise of Police Power.
(That is the reason why exorbitant taxes are imposed in the
sale of cigarettes).
But if taxation is exercised on its own and not as a tool of
police power, it does not include the power to destroy.
Sometimes the exercise of Police Power
15 | P a g e
Distinguish Collection of Money done pursuant to Police
Power and pursuant to Taxation
Follow the doctrine in the case of Gerochi.
Gerochi vs DOE
Where the primary purpose is regulation and raising of
revenue is nothing but secondary thereto, any such imposition
is done pursuant to police power.
Where primary purpose is to raise revenue and regulation is
secondary thereto, any such imposition is done pursuant to
taxation.
Angeles City Foundation Case
Angeles City Foundation complained on the requirement that
it should pay building permit for the construction of one of its
building. It argued that since it is exempt from property taxes,
it should be exempt also from payment of building permit. C
disagreed. Building permit is not imposed pursuant to power
of taxation but rather to police power.
Limitations of the Taxing Power of the State
1. Inherent Limitations
2. Constitutional Limitations
(A) Inherent Limitations
(1) Public purpose
Planters Product Inc vs Fertiphil
Tax imposition for the State distribution of fertilizer. Fertiphil
paid the capital contribution component in favor of PPI which
is also a private corporation. Eventually, it was questioned by
Fertphil and SC sustained.
SC ruled that the power of taxation was not exercised for the
public purpose noting that the tax collected thereby was
granted for a public corporation.
(2) Inherently legislative
What has been delegated to Congress may not be further
delegated – potestas delegata non delegari potest.
Otherwise, delegation of what has already been delegated is
an abdication of the duty conferred to them.
XPNS.
i. Delegation of power to the President
Sec 28 par 2, Art 6 – Congress may, by law, authorize the
President to fix within specified limits and subject to such
limitations and restrictions, it may impose tariff rates, import
and export quotas, etc.
ii. Delegation of authority to administrative bodies like
Bureau of Internal Revenue (BIR)
What is delegated to BIR is only the power to administer or
implement tax laws. BIR cannot on its own enact tax laws.
It can issue rules and regulations in furtherance or to guide
in the implementation of tax laws enacted by Congress.
The promulgation of these rules is justified under the power
of subordinate legislation.
CBPT (2017)
Q. How about the local government units? Is this a
delegated power?
No. While Police Power or Eminent Domain as exercised by
LGUs are delegated authority from Congress, the Power to
Tax as exercised by LGU is expressly conferred upon under
Sec 5 Art 10 of the 1987 Constitution.
(3) Property Tax Exemption of Properties owned by the
National Government and its Political Subdivisions
IMIAA vs CA
SC ruled that the properties owned by the national
government and its political subdivisions are not subject to
property taxes. It is explicitly provided by Sec 234, Paragraph
(a), RA 7160 – which exempts the property of the national
government and its political subdivision from the imposition of
property taxes.
MCIAA vs Marcos
25:15
The City Government of Cebu demanded payment of income
tax from MCIAA. MCIAA refused, alleging it was exempt from
the payment of taxes under its charter but the City
Government argued that any such tax exemption was already
withdrawn by the enactment by the Local Government Code
of 1991.
SC sustained the legal posturing of the City Government of
Cebu. SC said that MCIAA is a government owned or
controlled corporation. Tax exemption given to it is already
withdrawn.
MIAA vs CA
SC said that MIAA is not a government owned or controlled
corporation, rather it is an instrumentality of the government.
SC ruled that the properties registered ostensibly under MIAA
are still properties of the national government and that they
are still lands under public domain, applying Art 20 of the Civil
Code. Hence, the State is exempt from property taxes.
MCIAA vs City of Lapu Lapu
GR No 181756
The City Government of Lapu Lapu City filed a case against
MCIAA for collection of real property taxes. Naturally, MCIAA
invoked the ruling of MIAA. In the case of MIAA, it was
mentioned therein, although casually, that MIAA just like
MCIAA is an instrumentality of the government.
The City Government of Lapu Lapu invoked the earlier ruling
in the case of MCIAA vs Marcos. On the other hand, MCIAA
invoked the subsequent ruling in the case of MIAA vs CA.
Who won in the case of MCIAA vs Lapu Lapu?
SC upheld its ruling in the case of MIAA vs CA. SC finally
decreed that MCIAA is an instrumentality of the government.
Hence, its properties are actually, directly, and exclusively
used for its operation exempt from the imposition of property
taxes.
While its properties and political subdivisions are exempt from
property tax, any such tax exemption is wanting in application
where such benefits of such properties are however
transferred to a taxable person.
Properties owned by MCIAA leased out to private
corporations to be used as their hangars are not exempt from
the payment of property taxes.
16 | P a g e
The rule is now settled that the properties of MCIAA are
exempt from the payment of property tax.
(4) Power of Taxation Adheres to the Principle of
International Comity
All States are equal, regardless of their financial status. There
is equality among sovereigns.
Properties of foreign states insider our territory or within our
territorial jurisdiction are beyond the taxing power of the
Philippines. That explains why properties being utilized by
foreign embassies are exempt from the imposition of property
taxes. In like manner, our consular offices in other states are
also exempt from the imposition of property taxes.
(5) It is territorial
Taxing power of the State may only be exercised within its
territorial jurisdiction.
Properties owned by Filipinos abroad may not be imposed
with property tax by the Philippine Government, although real
properties are owned by Filipinos. It may only be enforced
within its territorial jurisdiction.
XPN.
Sec 23 par 8 of the International Revenue Code – Income
derived abroad by permanent resident Filipinos are taxable.
Example: Pacquiao’s winnings in Nevada are taxable
(B) Constitutional Limitations
Sec 1, Art 3 – Due Process and Equal Protection Clause
No person shall be deprived of life, liberty, or property without
due process of law, nor shall any person be denied the equal
protection of the laws.
That explains why even if Congress has the Power of
Taxation, it cannot enact a law imposing an income tax with
80% of your income. Any such law will be struck down as
unjust – it will amount to taking of property in violation of due
process.
Instance where prior hearing by Congress is not required:
Fixing of tax rate
But where the tax rate is dependent on the value of a property,
hearing is required. Hearing is required in the form of
assessment. That explains why the government may issue
real property tax assessment for the payment of real property
tax. It has to comply with due process, after all the tax rate is
dependent on the value of the property. It explains why the
property owner should be notified, so that he may want to
contest the valuation or assessment.
Similarly, Power of Taxation is subservient to the Equal
Protection Clause. It basically means that all persons or things
belonging to the same class must be subject to the same tax
rate or tax obligation or even tax relief.
However, while we have equal protection clause, it does not
follow that the law is not allowed to be make a distinction.
Classification may still be allowed. Any such classification
may be valid if:
1. It is founded on substantial differences
2. Any such classification must not be limited to any
existing conditions only
3. Must be germane to the purpose of law
4. Any such person or things belonging to the same class
must be subject to the same rights or obligations
CBPT (2017)
Example: Congress enacting a law imposing a tax on the
distribution of cigarettes. A lower tax rate is imposed on locally
manufactured cigarette whereas a higher tax rate is imposed
on imported cigarettes. Ostensibly, there is a discrimination
between local vis a vis imported cigarettes. Is the law invalid?
No. There is a substantial difference between the two. The
classification is germane to the law which is to protect our local
manufacturers.
In other words, equal protection admits classification if such
classification meets the requirements enumerated.
Sec 5, Art 3 – Prohibition Against Infringement of
Religious Freedom
No law shall be made respecting an establishment of religion,
or prohibiting the free exercise thereof. The free exercise and
enjoyment of religious profession and worship, without
discrimination or preference, shall forever be allowed. No
religious test shall be required for the exercise of civil or
political rights.
modified, or even subsequently revoked by the granting
authority.
While a tax exemption is given for free, it can be withdrawn by
the state anytime, with or without a cause. But where the tax
exemption is given onerously, it cannot be withdrawn by the
state without running afoul the non-impairment clause.
Take note:
General Principle: Tax exemption must be construed strictly
against the tax payer.
XPN. Tax exemption is given in favor of a government
instrumentality. In such case, tax exemption should be
liberally construed in favor of a government instrumentality.
Sec 20 Art 3 – Prohibition Against Imprisonment for NonPayment of Poll Tax
No person shall be imprisoned for debt or non-payment of a
poll tax.
American Bible Society vs City Government of Manila
SC said that the American Bible Society is not liable for the
payment of tax in respect to its distribution of religious articles.
It also cannot be required to secure a mayor’s permit before it
can engage in that kind of activity.
Sec 10, Art 3 – Prohibition Against Impairment of
Obligations of Contracts
No law impairing the obligation of contracts shall be passed.
Casanova vs Hord
Mining concession was granted to Casanova subject to
restrictions. Taxes were imposed thereon. But during the
American regime, additional taxes were supposedly imposed
on Casanova.
SC said that any such additional tax imposition would be
considered invalid because it would impair the obligations and
contracts. The grant of concession in favor of Casanova was
for an onerous donation. Tax exemption given to him was with
a reciprocal concession to be performed by Casanova.
In other words, SC considered the additional tax imposition as
violative of Sec 10 Art 3. The tax exemption was not given to
Casanova for free or gratuitously; it was for an onerous
condition.
Conversely, if the tax exemption is given by the State in favor
of a person for free or gratuitously, then any tax exemption
can be withdrawn by the State with or without a cause.
Case in point:
Insert PAGCOR vs BIR
Under its charter, PAGCOR was granted tax exemption.
Congress enacted a law withdrawing the tax exemption that
was previously granted to PAGCOR. PAGCOR argued that
the subsequent law was invalid because it would impair
obligations and contracts.
SC disagreed. The tax exemption previously given to
PAGCOR was granted gratuitously. As such, it can be
withdrawn by the State anytime, with or without cause. More
so, PAGCOR operates under a legislative franchise. Under
Sec 11, Art 12 – a franchise given by the State may be altered,
17 | P a g e
Sec 28, par 1, Art 6 – Uniformity and Equity in Taxation
The rule of taxation shall be uniform and equitable. The
Congress shall evolve a progressive system of taxation.
Sec 28, par 3 Art 6 – Prohibition Against Taxation of real
Property Actually, Directly, and Exclusively Used For
Religious, Charitable and Educational Purposes [50:30]
Charitable institutions, churches, and parsonages or convents
appurtenant thereto, mosques, non-profit cemeteries, and all
lands, buildings, and improvements, actually, directly, and
exclusively used for religious, charitable, or educational
purposes shall be exempt from taxation.
Tax exemption is based on the use and utilization of the
property.
Such that if the property is directly and exclusively used for
religious purposes among others, that property even if not
owned by the Church, is exempt from payment of real property
tax. Example: If I own a parcel of land and I allow the church
to use the lot thereon for the construction of its building, that
land will be exempt from tax, even if it is not owned by the
church
Remember, however, that in order for tax exemption may be
granted, it is imperative that the lot in question must be
actually, directly, and exclusively used for religious, charitable,
and educational purposes.
Insert Lung Center vs Quezon City Government
Lung Center owns a land where portions of which were leased
to private practitioners for their clinics, and a bigger portion of
the property was leased for private corporations.
The SC said that what should be exempt from the imposition
from property tax is only those portions that are actually,
directly, and exclusively used for charitable purposes. In other
words, the portions of the property of Lung Center which were
leased to private corporations and practicing doctors are to be
imposed with property taxes.
Abra Valley College vs Aquino
The premises that were leased out to Northern Marketing
Corporation was considered taxable, whereas the premises
CBPT (2017)
occupied by the school director was exempt from the
imposition of real property tax.
Exemption is only for property tax.
It does not cover income tax or donor’s tax exemption.
Q. Is the income of the church or charitable institutions
taxable?
A. If we apply Sec 28, it would readily appear that the income
of the church among others is taxable. But under Sec 30 of
National International Revenue Code grants income tax
exemption. Provided that no part of its net income or asset
shall be given to or redound to the benefit of any of its
member, stockholders, or organizer. In other words, while Sec
28, par 3 Art 6 grants real property tax exemption, the church
and charitable institutions among others still enjoy income tax
exemption, but any such exemption is not granted by the
Constitution but by Sec 30 of NIRC.
Further, a proviso on the last paragraph states that:
Income derived by the church and charitable institution
among others for profit or any income derived from its,
property real or personal, is taxable regardless of the use
and the disposition of the income thereof.
Such that, if the Church owns two parcels of land, one is
where the Church is situated, and the other is leased to a
private corporation like Jollibee, the land leased out to Jollibee
is liable for the payment of property tax. Likewise, the income
that the Church derived by rentals of Jollibee is taxable
regardless of the use and utilization thereof.
Even if such income is utilized for the repair and maintenance
of the Church building, that income is already taxable. The
proviso is very clear.
Q: How about donor’s tax?
Yes, exempted as provided by NIRC, Section 101. Provided,
not more than 30% of the amount that has been donated shall
be used for administration purposes.
Note: Income tax and donor’s tax exemptions are still enjoyed
by religious sectors, although these are not provided for by the
Constitution but by NIRC.
Sec 28 par 4, Art 6 – Grant of Tax Exemption
No law granting any tax exemption shall be passed without
the concurrence of a majority of all the Members of the
Congress.
Majority = total membership of Congress and Senate divided
by one half + one
Sec 29 par 2, Art 6 -- Prohibits disbursement of public
funds for sectarian purposes
“No public money or property shall be appropriated, applied,
paid, or employed, directly or indirectly, for the use, benefit, or
support of any sect, church, denomination, sectarian
institution, or system of religion, or of any priest, preacher,
minister, or other religious teacher, or dignitary as such,
except when such priest, preacher, minister, or dignitary is
assigned to the armed forces, or to any penal institution, or
government orphanage or leprosarium.”
Q. How can we justify the disbursement of public funds of the
City of Cebu for the Sinulog celebration?
18 | P a g e
Sinulog seized to become a purely religious activity. It has
become a vehicle for promoting Cebu for tourism purposes.
Q. How about a priest elected as a public official, is he allowed
to receive public funds from the government?
What is prohibited is the disbursement of public funds in favor
of a religious minister in his capacity as such. A priest elected
as mayor can receive his salary. Payment of salary is by
reason of him being an elected public official.
Take note also: If a priest is assigned in the AFP he can be
paid with government funds. In like manner, if a priest is
assigned in a penal institution, he can be paid with public
money. Likewise, if he is assigned from government
orphanage or leprosarium.
Sec 29 par 3, Art 6
All money collected on any tax levied for a special purpose
shall be treated as a special fund and paid out for such
purpose only. If the purpose for which a special fund was
created has been fulfilled or abandoned, the balance, if any,
shall be transferred to the general funds of the Government.
If the purpose of the special fund for which it has been created
has been fulfilled or abandoned, the balance if any shall be
transferred to the general funds of the national treasury. Such
that if a special tax is collected for the rehabilitation of the
sugarcane industry, that should only be utilized for that
purpose. It should not be diverted to be utilized for the coconut
industry. If there is an excess, it shall be transferred to the
general funds of the government.
Sec 4 par 3, Art 14 – Prohibition Against Taxation of
Revenues and Assets of Non-Stock, Non-Profit
Educational Institutions
All revenues and assets of non-stock, non-profit educational
institutions used actually, directly, and exclusively for
educational purposes shall be exempt from taxes and duties.
Upon the dissolution or cessation of the corporate existence
of such institutions, their assets shall be disposed of in the
manner provided by law.
Proprietary educational institutions, including those
cooperatively owned, may likewise be entitled to such
exemptions, and subject to the limitations provided by law,
including restrictions on dividends and provisions for
reinvestment.”
Sec 4 par 4 Art 14
Subject to conditions prescribed by law, all grants,
endowments, donations, or contributions used actually,
directly, and exclusively for educational purposes shall be
exempt from tax. [08:08]
Sec 27 par 2, Art 6
A tax law enacted by Congress may be partially vetoed by the
President.
When the rule is that the President may either approve or
disapprove in its entirety, one of the exceptions is in respect
to tax laws where the President may validly exercise a line
item veto or partial veto.
CBPT (2017)
DOUBLE TAXATION
There is double taxation when additional taxes are laid on:
(1) the same subject
(2) by the same jurisdiction
(3) during the same taxing period
(4) for the same purpose
Punzalan vs Municipal Board of Manila
Issue therein was whether or not the imposition of income tax
by the Government of Manila was prohibited for being a
double taxation.
SC said that it may be true that the petitioners therein where
required to pay occupational taxes by the local government
and by the national government, but there was no double
taxation. The impositions therein were made by two different
taxing jurisdictions.
SC held there is no law expressly prohibiting double taxation.
Remedy of the Taxpayer
How can you possibly attack the validity or impositions which
may amount to double taxation when there is no law expressly
prohibiting its imposition?
Invoke due process and equal protection clause – Sec 1 Art
3. You may argue that it is confiscatory, thereby violating due
process. You may also argue that such imposition is also
violative of equal protection if that is only imposed on a
particular class and the same is not imposed on other
subjects.
That is the only way to attack the validity of such imposition
because there is no law expressly imposing double taxation.
Case in point:
Swedish Match Phils Inc vs City Treasurer of Manila
The City Treasurer wanted to collect taxes on the petitioner
based on Sec 14 and the other tax imposition under Sec 21
on the same Tax Ordinance.
SC ruled that the impositions to be made would already be
amounting to double taxation. Hence, SC declared the
impositions as invalid because it would be oppressive. This
case validates that while no law expressly prohibits double
taxation, any such imposition may still be attacked by invoking
Sec 1 Art 3.
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