C. Fundamental Powers of the State

Question 1

What is police power?

Answer 1

Police power is the power of the state to promote public welfare by restraining and regulating the use of liberty and property. It is the most pervasive, the least limitable, and the most demanding of the three fundamental powers of the State

Question 2

Can the state interfere with personal liberty in order to promote the general welfare?

Answer 2

The state, in order to promote general welfare, may interfere with personal liberty, with property, and with business and occupations. Persons may be subjected to all kinds of restraint and burdens in order to secure the general comfort, health and prosperity of the state and to this fundamental aim of our Government, the rights of the individual are subordinated. (Ortigas and Co., Limited Partnership v. Feati Bank and Trust Co)

Question 3

What are the requisites for a valid exercise of police power

Answer 3

1. Lawful subject – The interests of the public generally, as distinguished from those of a particular class, require the exercise of the police power; and
2. Lawful means – The means employed are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals. (National Development Company and New Agrix, Inc. v. Philippine Veterans Bank, G.R. Nos. 84132-33, 10 Dec. 1990)

Question 4

President Rodrigo Duterte issued Proclamation No. 475 formally declaring a state of calamity in Boracay and ordering its closure for six (6) months. Due to this, Boracay residents Mark Anthony Zabal and Thiting Jacosalem filed the present petition alleging that they would suffer grave and irreparable damage as their livelihood depends on the tourist activities therein. They attacked the order on the ground that it is an invalid exercise of legislative powers. Is the order invalid?

Answer 4

Summ:
1. valid exercise of police power as form of regulation- environment and health, safety, and well-being of the people, the promotion and securing

2. the closure of Boracay, albeit temporarily, gave the island its much needed breather, and likewise afforded the government the necessary leeway in its rehabilitation program.

A: NO. That the assailed governmental measure in this case is within the scope of police power cannot be disputed. Verily, the statutes from which the said measure draws authority and the constitutional provisions which serve as its framework are primarily concerned with the environment and health, safety, and well-being of the people, the promotion and securing of which are clearly legitimate objectives of governmental efforts and regulations. The only question now is whether the temporary closure of Boracay as a tourist destination for six months is reasonably necessary under the circumstances? The answer is in the affirmative

Tourist arrivals in the island were clearly far more than Boracay could handle. Certainly, the closure of Boracay, albeit temporarily, gave the island its much needed breather, and likewise afforded the government the necessary leeway in its rehabilitation program. Note that apart from review, evaluation and amendment of relevant policies, the bulk of the rehabilitation activities involved inspection, testing, demolition, relocation, and construction. These works could not have easily been done with tourists present. The rehabilitation works in the first place were not simple, superficial or mere cosmetic but rather quite complicated, major, and permanent in character as they were intended to serve as long-term solutions to the problem. (Zabal v. Duterte, G.R. No. 238467, 12 Feb. 2019

Question 5

An Ordinance Prohibiting ShortTime Admission, Short-Time Admission Rates, and Wash-Up Rate Schemes in Hotels, Motels, Inns, Lodging Houses, Pension Houses, and Similar Establishments in the City of Manila.” The purpose of the ordinance is to prohibit motel and inn operators from offering short-time admission, as well as pro-rated or “wash-up” rates for abbreviated stays. Is the ordinance a valid exercise of police power?

Answer 5

1. RR–> reasonable relation must exist between the purposes of the measure and the means employed for its accomplishment.
2. no other alternative for the accomplishment of the purpose less intrusive of private rights can work.
3. ordinance has a lawful purpose but does not have the lawful means hence, unconstitutional. (There are still other measures such as curbing out the prostitution and drug use through active police force).

NO. A reasonable relation must exist between the purposes of the measure and the means employed for its accomplishment, for even under the guise of protecting the public interest, personal rights and those pertaining to private property will not be permitted to be arbitrarily invaded. It must also be evident that no other alternative for the accomplishment of the purpose less intrusive of private rights can work.

In the present case, there is less intrusive measures which can be employed such as curbing out the prostitution and drug use through active police force. The ordinance has a lawful purpose but does not have the lawful means hence, unconstitutional. (White Light Corporation vs. City of Manila, G.R. No. 122846, 20 Jan. 2009)

Question 6

Are the rates to be charged by utilities like MERALCO subject to State regulation?

Answer 6

YES. The regulation of rates to be charged by public utilities is founded upon the police powers of the State, and statutes prescribing rules for the control and regulation of public utilities are a valid exercise thereof.

When private property is used for a public purpose and is affected with public interest, it ceases to be juris privati only and becomes subject to regulation. The regulation is to promote the common good. As long as use of the property is continued, the same is subject to public regulation. (Republic v. Manila Electric Company)

Summ: “When private property is used for a public purpose and is affected with public interest, it ceases to be juris privati only and becomes subject to regulation.”

Question 7

Can mall owners be Mall owners and operators cannot be validly
compelled to provide free parking to their
customers?

Answer 7

Mall owners and operators cannot be validly compelled to provide free parking to their customers because requiring them to provide free parking space to their customers is beyond the scope of police powers.

It unreasonably restricts the right to use property for business purposes and amounts to confiscation of property. (OSG v. Ayala Land, Inc., 600 SCRA 617, 18 Sept. 2009) (2014 BAR)

Question 8

Requisites for the valid exercise of police power by the delegate: (Ex-Mu-Terri)

Answer 8

1. Express grant by law;
2. Must not be contrary to law; and
3. GR: Within Territorial limits of LGUs.

XPN: When exercised to protect water supply.

(Wilson v. City of Mountain Lake Terraces, 417)

Question 9

Can MMDA exercise police power?

Answer 9

NO. The MMDA cannot exercise police powers since its powers are limited to the formulation, coordination, regulation, implementation, preparation, management, monitoring, setting of policies, installing a system, and administration.

Nothing in R.A. No. 7924 granted the MMDA police power, let alone legislative power (MMDA v. Trackworks, G.R. No. 179554, 16 Dec. 2009)

Question 10

Conditions for the exercise of the Power of Eminent Domain: (T-U-C-O)

Answer 10

1. Taking of private property;
2. For public Use;
3. Just Compensation; and
4. Observance of due process.

Question 11

What is the difference bet. Power of expropriation as exercised by Congress vs. Power of expropriation as exercised by delegates?

Answer 11

Power of expropriation as exercised by Congress

As to scope: The power is pervasive and all-encompassing; It can reach every form of property which may be needed by the State for public use. In fact, it can reach even private property already dedicated to public use, or even property already devoted to religious worship. (Barlin v. Ramirez, G.R. No. L-2832, 24 Nov. 1906)

As to question of necessity: Political question

Power of expropriation as exercised by delegates

As to scope: It can only be broad as the enabling law and the conferring authorities want it to be.

As to question of necessity: Judicial question (The courts can determine whether there is genuine necessity for its exercise, as well as the value of the property)

Question 12

Requisites for a valid taking (Pri-Mo-L-Pr-U)

Answer 12

(Pri-Mo-L-Pr-U)

1. The expropriator must enter a Private property;
2. Entry must be for more than a Momentary period;
3. Entry must be under warrant or color of Legal authority;
4. Property must be devoted to public use or otherwise informally appropriated or injuriously affected; and
5. Utilization of property must be in such a way as to oust the owner and deprive him of beneficial enjoyment of the property. (Republic v. De Castellvi, G.R. No. L-20620, 15 Aug. 1974)

Question 13

What is the Nature of property taken in exprop?

Answer 13

GR: All private property capable of ownership, including services, can be taken.

XPNs: (Mo-Cho)
1. Money; and

2. Choses in action - personal right not reduced in possession but recoverable by a suit at law such as right to receive, demand or recover debt, demand or damages on a cause of action ex contractu or for a tort or omission of duty.

Question 14

Requisites before an LGU can exercise Eminent Domain : (O-Pu-J-O)

Answer 14

(O-Pu-J-O)

1. An Ordinance is enacted by the local legislative council authorizing the local chief executive, in behalf of the LGU, to exercise the power of eminent domain or pursue expropriation proceedings over a particular private property;
2. The power of eminent domain is exercised for Public use, purpose or welfare, or for the benefit of the poor and the landless;
3. There is payment of Just compensation; and
4. A valid and definite Offer has been previously made to the owner of the property sought to be expropriated, but said offer was not accepted.

(City of Manila v. Roces-Prieto)

Question 15

What is the Expansive concept of “Public Use”?

Answer 15

Public use does not necessarily mean “use by the public at large.” Whatever may be beneficially employed for the general welfare satisfies the requirement. Moreover, that only few people benefit from the expropriation does not diminish its public-use character because the notion of public use now includes the broader notion of indirect public benefit or advantage. (Manosca v. CA, G.R. No. 106440, 29 Jan. 1996

Summ: Whatever may be beneficially employed for the general welfare satisfies the requirement.

Question 16

What is the Concept of Vicarious Benefit in Public Purpose?

Answer 16

This abandons the traditional concept that number of actual beneficiaries determines public purpose. Public use now includes the broader notion of indirect public advantage, i.e., conversion of a slum area into a model housing community, urban land reform and housing. There is a vicarious advantage to the society. (Filstream International Incorporated v. CA, G.R. No. 125218, 23 Jan. 1998)

Question 17

Q: The Republic, through the Office of the Solicitor-General, instituted a complaint for expropriation of a piece of land in Taguig, alleging that the National Historical Institute declared said land as a national historical landmark, because it was the site of the birth of Felix Manalo, the founder of Iglesia ni Cristo. The Republic filed an action to expropriate the land. Petitioners argued that the expropriation was not for a public purpose. Is their argument correct?

Answer 17

Summ: places invested with unusual historical interest is a public use for which the power of eminent domain may be authorized.

2. that only a few would actually benefit from the expropriation of property does not necessarily diminish the essence and character of public use.

A: NO. Public use should not be restricted to the traditional uses. It has been held that places invested with unusual historical interest is a public use for which the power of eminent domain may be authorized. The purpose in setting up the marker is essentially to recognize the distinctive contribution of the late Felix Manalo to the culture of the Philippines, rather than to commemorate his founding and leadership of the Iglesia ni Cristo.

The practical reality that greater benefit may be derived by members of the Iglesia ni Cristo than by most others could well be true but such a peculiar advantage still remains to be merely incidental and secondary in nature. Indeed, that only a few would actually benefit from the expropriation of property does not necessarily diminish the essence and character of public use. (Manosca v. CA, G.R. No. 106440, 29 Jan. 1996)

Question 18

What is Just Compensation?

Answer 18

It is the full and fair equivalent of the property taken from the private owner (owner’s loss) by the expropriator.

It is usually the fair market value (FMV) of the property and must include

consequential damages (damages to the other interest of the owner attributed to the expropriation)
minus

consequential benefits (increase in the value of other interests attributed to new use of the former property).

Question 19

What is Fair Market Value?

Answer 19

The price that may be agreed upon by parties who are willing but are not compelled to enter into a contract of sale. (City of Manila v. Estrada, G.R. No. 7749, 09 Sept. 1913)

Question 20

What is the Period to determine just compensation?

Answer 20

GR: Just compensation must be reckoned from the time of taking or filing of the complaint, whichever came first. (NTC vs. Oroville Dev’t. Corp, G.R. No. 223366, 01 Aug. 2017)

XPN: At the time the inverse condemnations proceedings were instituted.

(Case of NPC vs. Macabangkit Sangcay)

Question 21

Give the essence of NPC vs. Heirs of
Makabangkit Sangkay.

Answer 21

NAPOCOR should have instituted eminent domain proceedings before it occupied respondent spouses’ property. Because it failed to comply with this duty, respondent spouses were constrained to file the instant Complaint for just compensation before the trial court. From the 1970s until the present, they were deprived of just compensation, while NAPOCOR continuously burdened their property with its transmission lines.

This Court cannot allow petitioner to profit from its failure to comply with the mandate of the law.

We therefore rule that, to adequately compensate respondent spouses from the decades of burden on their property, NAPOCOR should be made to pay the value of the property at the time of the filing of the instant Complaint when respondent spouses made a judicial demand for just compensation.

Question 22

What is Consequential Damages?

Answer 22

Consist of injuries directly caused on the residue of the private property taken by reason of expropriation. Where, for example, the expropriator takes only part of a parcel of land, leaving the remainder with an odd shape or area as to be virtually unusable, the owner can claim consequential damages. (Cruz and Cruz, 2015)

Summ: directly on the residue

Question 23

DPWH paid the spouses amounting to P685,000 which was the fair market value of the land and building. RTC issued a Writ of Possession in favor of the Republic but ordered the Republic to pay an additional amount corresponding to the capital gains tax paid by the spouses. The Republic, represented by DPWH contested the decision of the RTC adding the capital gains tax as consequential damages on the part of the Spouse Salvador. Is the decision of the RTC correct?

Answer 23

Summ: the concept of consequential damages

NO. Just compensation is defined as the full and fair equivalent of the property sought to be expropriated. The measure is not the taker’s gain but the owner’s loss.

The compensation, to be just, must be fair not only to the owner but also to the taker.

Consequential damages are only awarded if as a result of the expropriation, the remaining property of the owner suffers from an impairment or decrease in value.

In this case, no evidence was submitted to prove any impairment or decrease in value of the subject property as a result of the expropriation.

More significantly, given that the payment of capital gains tax on the transfer· of the subject property has no effect on the increase or decrease in value of the remaining property, it can hardly be considered as consequential damages that may be awarded to respondents. (Republic v. Sps. Salvador, G.R. No. 205428, 07 June 2017)

Question 24

What is the concept of Consequential Benefits?

Answer 24

Where the expropriator takes only part of a parcel of land and the remainder, as a result of the expropriation, is placed in a better location (such as fronting a street where it used to be an interior lot), the owner will enjoy consequential benefits which should be deducted from the consequential damages. (Cruz, 2015)

Question 25

What is the form of payment of just compensation? Give the xpn

Answer 25

GR: Compensation has to be paid in money.

XPN:In cases involving CARP, compensation may be in bonds or stocks, for it has been held as a nontraditional exercise of the power of eminent domain.

It is not an ordinary expropriation where only a specific property of relatively limited area is sought to be taken by the State from its owner for a specific and perhaps local purpose. It is rather a revolutionary kind of expropriation. (Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. No. 78742, 17 July 1989)

Summ: bonds or stocks

Question 26

What is the amount of interest to be used for the payment of just compensation?

Answer 26

01 July 2013 onwards and until full payment,
the interest rate to be used in computing for just compensation shall be 6% per annum pursuant to Bangko Sentral ng Pilipinas Circular No. 799

Question 27

Can the right to recover cannot be defeated by statutory prescription.

Answer 27

The right to recover just compensation is enshrined in no less than our Bill of Rights, which states in clear and categorical language that “private property shall not be taken for public use without just compensation”. This constitutional mandate cannot be defeated by statutory prescription. (NPC v. Sps. Saludares)

Question 28

Who determines JC?

Answer 28

The final determination of just compensation is a judicial function. The Regional Trial Court, sitting as Special Agrarian Court has the original and exclusive jurisdiction over such and not appellate. (Land Bank vs. Eugenio Dalauta)

Question 29

What is the effect of delay of JC?

Answer 29

GR: Non-payment of just compensation by the government does not entitle private owners to recover possession of the property because expropriation is an in rem proceeding and not an ordinary sale. It only entitles them to demand payment of the fair market value of the property.

XPNs:

1. When there is a deliberate refusal to pay just compensation; and
2. When the government fails to pay compensation within 5 years from the finality of the judgment in the expropriation proceedings. This is in connection with the principle that the government cannot keep the property and dishonor the judgment. (Republic v. Lim, G.R. No. 161656, 29 June 2005)

SUMM: demand FMV
1. DELIBERATE REFUSAL TO PAY
2. if govt fails to pay comp within 5 yrs

Question 30

Abandonment of intended use and right of
repurchase.

The lot was transferred and registered in the name of the Government.

The projected improvement and expansion plan of the old Lahug Airport, however, was not pursued.

Thus, the landowners initiated a complaint for the recovery of possession and reconveyance of ownership of the lands based on the compromised agreement they entered into with the ATO. Do the former owners have the right to redeem the property?

Answer 30

Summ:
1. the expropriator should commit to use the property pursuant to the purpose stated in the petition for expropriation filed, failing which, it should file another petition for the new purpose.
2. it is then incumbent upon the expropriator to return the said property to its private owner, if the latter desires to reacquire the same.

A: YES. It is well settled that the taking of private property by the Government’s power of eminent domain is subject to two mandatory requirements:

(1) that it is for a particular public purpose; and

(2) that just compensation be paid to the property owner. These requirements partake of the nature of implied conditions that should be complied with to enable the condemnation or to keep the property expropriated.

More particularly, with respect to the element of public use, the expropriator should commit to use the property pursuant to the purpose stated in the petition for expropriation filed, failing which, it should file another petition for the new purpose.

If not, it is then incumbent upon the expropriator to return the said property to its private owner, if the latter desires to reacquire the same. Accordingly, the private property owner would be denied due process of law, and the judgment would violate the property owner’s right to justice, fairness, and equity. (MIAA and Air Transportation Office v. Lozada, G.R. No. 176625, 25 Feb. 2010)