Consti II: Police Power, Eminent Domain, and Taxation

X XX
That there is hardly any human activity that does not relate in one way or another so far to
public interest or public domain.
Thats why in his book, Isagani Cruz opined that practically every human activity from head to
toe is governed by police power.
For example:

we have laws prohibiting abortion;

we have also laws for regulations dealing with burial, that you cannot just bury your
loved ones at your back yard. That is not allowed. Because that is still cover by the
regulating power of the state, except perhaps if you opt for cremation.

But then again, every human activity may be regulated by the statein the name of police power.
This is rooted on the latin principle Salus populi est suprema lex which means: the welfare of the people
is the supreme law, and more than that there is also another latin principle Sic uter tuo ut alienum non
laedas, which means that you cannot exercise your right to the detriment or prejudice of the right of
others. Of course we have freedom of speech but you cannot use your freedom of speech to
maligned the reputation of others.

For example you live in a subdivision, and you are the owner of a residential house, no
doubt you are the owner thereof and you can make use of the property, but you cannot
set your property on fire if by doing such you will also destroy the houses of your
neighbors.( that principle: Sic uter tuo ut alienum non laedas applies.

Another essential characteristic of police power is that, this power cannot be bargain away with
the medium of contracts not even by x x x.
Sec. 10, art. III of the 1987 constitution provides that no law impairing the obligations of
contracts shall be passed.
But look what happen in the case of ortigas v. ca, hermoso bought properties from ortigas and
companies in 1976 and in the DOA there was an express regulation providing that the end of the
properties shall only be used for residential purposes, but hermoso lease the property to Matay, and
matay, construct a commercial building there on prompting ortigas to sue Matay and Hermoso.
Matay invoke the provision of the city ordinance of Pasig, reclassifying the property as a
commercial site. But ortigas contended that, the ordinance was only enacted in 1981 such that it cannot
be made to apply retroactively so as to alter the stipulation in the contract.
The SC disagrees with ortigas, contending that as much as the questioned ordinance was
enacted pursuance to the police power of the state deligated to the city of pasig that no doubt in can
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Consti II: Police Power, Eminent Domain, and Taxation

impair the obligations of contract. There the SC applied the superiority of the police power of the so
called non-impairment clause enshrined in the 1987 constitution.
In the case of Garin, the SC decree that in no uncertain terms that a drivers license is nothing
but a privilege, and as such it can be revoked an suspended by the state on the name of police power.
If police power can prevail over contracts, then there is no reason that police power could
not impair a mere privilege.
A similar conclusion was reach by the SC in the case of Chavez v. Romulo, when the SC
sustained the revocation of the permit to carry firearms outside residence. According to Chavez it
impairs the old right under the old regulation, cause under the old regulation, Chavez could carry his
firearms outside his residence. But, the SC disagrees holding that the permit to carry firearms just like
drivers licensed is mere privilege and such it can be revoked or suspended in the name of police
power.
In the case of Lim v. Packing, the SC sustained the revocation of the permit to operates gambling
houses. Because according to the SC, PD 761 was issued or enacted pursuant to the police power of
the state.
So those cases only strengthen the fact that indeed police power is pervasive and least
limitable. So police power therefore, cannot be bargain out of way through a contract and not even a
treaty.
In the case of Ichung v Hernandez, the SC also ruled that when there is conflict between a treaty
and a local law, our local law will prevail, because the SC resonated that, that law was enacted pursuant
to the police power of the state.
Another characteristic of police power is that, this power is dynamic, it changes with the time.
The rule that is active now is that Philippine does not allow same sex marriage, but do not be surprise if
years later congress will enact a law allowing same sex marriage all in the name of police power.
Another characteristic of police power is that this power sometimes may utilized the power of
taxation as a tool in the exercise thereof. E.g. the SIN tax law, VAT they are enacted pursuant to police
power of the state using as an implement thereof the power of taxation that explains why a higher
tax rates are imposed on cigarettes, wines, and beers presumably to discourage comsumption thereof.
Revenue raising is according to our government is incidental.
In the case of Carlos Super Drugs v. DSWD, The SC ruled that the regulation in regards to the
discount in the Senior Citizen is valid because it was enacted pursuant to the police power of the state.
There was taking there, taking insofar public is concerned but the SC certified such imposition of taking
not under the power of taxation but under police power of the state. Those are the fact that police
power sometimes may utilize the power of taxation in the implementation thereof.

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Consti II: Police Power, Eminent Domain, and Taxation

Another case in point is the case of Lutz v. Araneta, there was special order enacted imposing
special tax on sugar producers, and the purpose of which is to rehabilitate the sugar industry. The SC
upheld the validity of the enactment of the special law not pursuant to the taxing power but pursuant
to the police power.
X X X In the instances where police power would utilize the power of taxation or power
of eminent domain then the property that may be invoke in the exercise of such power may be the
useful x x x as what is mention the case of carlos super drug.( this is an exception)x x x x
Another characteristic of police power is that it may utilize the power of eminent domain as
a tool or implement in the exercise thereof. What do you think of the taking of the private property for
the distribution of lots under the carp? That also involves the exercise of police power specially as so
far the carp regulate the property holding upto 3 hectares. So insofar as it regulates the property
holdings upto 3 hectares then there is police power there. There is regulation of properties.
So the implementation of the CARP is an example of the exercise of police power using as an
implement or a tool thereof the other power of the state.
Another example is the case of telecommunication and woodland v. COMELEC, what was the
issue therein was the validity of the omnibus election code, under those provision radio station and tv
networks are mandated to give free airtime to comelec, that law was questioned for allegedly
mandatory according to the petitioners it amounted to confiscation of property without just
compensation, but the SC disagree holding that it was a valid exercise of police power although it
involve the taking of private property.
But the case of telecommunication and woodland attorney should be differentiated with the
case of phil. Press institute vs comelec, there was a comelec resolution, mandating the press company
to provide free space to the COMELEC, it was alleged aw invalid for being confiscatory for it amount to
the taking of property without payment of just compensation. The solgen attempted to justify the taking
in the concept of police power. But the SC sided with the petitioner stating that truly the giving of free
space amounted to the taking of property in the concept of eminent domain as such it was illegal for
non-payment of just compensation.
The different between the former case and the latter is that if you operate a tv station or a radio
station you need to have a franchise because you do not own the airways or frequencies, it is owned by
the state.
A franchise is regarded as nothing but a privilege and such it can be altered, repealed or
revoked.
The rule is sometimes police power may use the power of taxation and eminent domain as
implement in the exercise or furtherance thereof.

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Consti II: Police Power, Eminent Domain, and Taxation

Essential characteristic:

Pervasive, less limitable and most demanding

This cant be bargain away by a medium of contract or treaty
Dynamic
May utilize the taxing power and power of eminent domain

Who can exercise police power?

This power is primary lodge in the Congress, but, upon proper delegation it can be exercised
by the president, other administrative bodies and even LGUs. Under the Local Government code, LGU
are now empowered to enact ordinances in furtherance of the delegated police power.
TN: when there is a given problem calling for the action. The congress has the discretion whether or not
to act on the given problem.
The inaction of congress cannot be questioned in the court of law because the exercise of police power
is discretionary in the part of the congress.
When the congress act on a given problem the remedy adapted by the congress is not open to judicial
review.
2 test to determine the validity of the exercise of police power

Existence of a lawful subject

Employment of lawful means or method

Existence of a lawful subject

e.g. freedom to think, right to privacy, freedom of religion.
But the right to profession can be regulated by the state in the name of police power
Employment of a lawful means or method
In the case of City of Manila v. MTDC, City of Manila enacted an ordinance prohibiting the
operation of Hotels and inns. It was strike down as void by the SC for being confiscatory, it amount to
taking of private property without just compensation. The subject of the ordinance is lawful, but the
method is unlawful for being confiscatory.
Therefore, it is not enough that the subject is lawful but also the employment of means and
method should also be lawful.

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Consti II: Police Power, Eminent Domain, and Taxation

There are situation when the outright imposition of penalty may be justified, when the
properties or activities is categorize as nuisance per se.
In the case of Cabrera v. Lapid, petitioner alleged that there was a violation of due process. But
the SC disagrees noting that the property owned by Cabrera is a nuisance per se. It can be abated
directly without notice.
Exception: if the property is merely a nuisance per accident it requires prior notice
But if the police power is exercised other than the congress there are additional limitation for it to
become valid.

Must have a law expressly delegating such authority

Any such exercise of police power must not be contrary to the constitution or any law of the
land.
If the delegated police power must be confined within the territorial jurisdiction of that LGU.

Eminent Domain
This power is important same with the power of taxation and police power.
Whenever there is a used in the part of the state to acquire private property, the first thing the
state should do is negotiate the acquisition of the private property. The state should exert effort to
acquire the property by sale; therefore the state may offer to buy the property to the private owner. If
the owner agrees to sell the property then there is no more need for the state to exercise the power of
eminent domain, after all the property owner is also willing to dispose the property.
But if the state want to utilize a certain parcel of land but the owner does not want to part with
the property or does not agree with the price, then this would be the time that the state will exercise its
power of eminent domain. The state is now justified to forcefully take the land through the exercise of
power of eminent domain.
In the case of City of Mandaluyong v. Francisco, the SC ruled that if the purpose of eminent
domain is to acquire property for residential purposes, the expropriator must strictly comply with the
provision in RA 7279 otherwise known as the Urban Development Housing Act or UDHA.
RA 7279 further mandates that when the acquisition of private property for residential purpose,
the rights of small property owner must be respected. (300sqm = small property owner)
Note: this is only applicable if the purpose of expropriation is for residential or socialized housing.
Who can exercise the Power of Eminent Domain?

Congress

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Consti II: Police Power, Eminent Domain, and Taxation

It there is valid delegation of authority, may be exercised by:

the president
LGU
Public Corporation
Quasi-public Corporation

In order to have a valid exercise of Power of Eminent Domain there is a need for strict compliance of
the following requisite:

There should be a necessity of the taking of a private property

The property should be a private property
There should be taking in a strict constitutional sense
The property taken must be used for public purposes
There should be payment for just compensation
There should be prior notice

Necessity of the taking - the taking of a private property must be impelled by necessity.
But if the congress exercise the Power of Eminent Domain the necessity of the taking is usually not
open to judicial review.
Except: if there is a grave abuse of discretion amounting to lack or excess of jurisdiction.
If the Power of Eminent Domain is exercised by a delegate of congress, the necessity of taking
is now open for judicial scrutiny.
In the case of Chinese Community v. City of Manila, the city of Manila enacted an ordinance
seeking to expropriate a portion of a private owned property for expansion purposes. The SC sustained
the action of the Trial Court in reviewing the necessity of such purported taking holding in effect that if
the Power of Eminent Domain is exercised not by the congress then it is open for judicial review.
The property taken should be a private property it could refer to real properties or movable properties
also include tangible and intangible.
money cannot be taken by the state because it would be absurd.
Private properties although being used already for public purpose or properties owned by the
church may be expropriated if it is directly done by congress or where the taking is done by a delegate,
there is a specific grounds of authority.
There should be taking in a strict constitutional sense there is already taking if there is already actual
possession of the property owner.
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Consti II: Police Power, Eminent Domain, and Taxation

Requisites:

The expropriator must enter the property such as the mere enactment or a law or an ordinance
specifying the property to be expropriated would not suffice.
That the entry must be under a legal authority
Must be use for a public purpose
The entry must be in such manner to oust the owner from the property or the beneficial use
thereof.

Note: there is already taking if a burden is already imposed on the property. Even if there is no physical
or actual possession but the property owner is already deprived of the reasonable use of property
thereby diminishing its value we can conclude that there is already taking in the concept of eminent
domain.
In people v. Fajardo, the municipality enacted ordinance prohibiting the construction of building
to obstruct the view of the municipal plaza. The SC noted that the ordinance enacted by the municipality
partake the nature of taking private property without payment of just compensation.
Although there is no actual or physical possession but there is already a burden impose on your
property, there is already taking in the concept of eminent domain.
TN: Not every taking of private property is compensable, if the taking is not pursuant to the power of
eminent domain but to the police power of the state.
Road repair is done pursuant to the police power of the state.
Damnum Absque Injuria applies only if damage equally affects all the people. But if one acquire more
damage than the others, then this principle will not apply, and that person has the right for the payment
of damages.
It was stated In the case of NHA v. Reyes, that in every eminent domain the term public
purpose is synonymous with public interest, public welfare, and public safety among others. What is
important is that the talking of private property would redound to the promotion of public interest,
public welfare, public health and public safety among others.
Sec. 9 art 3 of the 1987 constitution provides that no private property shall be taken for public
use without payment of just compensation.
It was further reinforced by the provision under article 455 of the civil code, which provide no
person shall be deprived of his property except for public purpose and always upon payment of just
compensation.
Just compensation may be paid through property, or in form of money in cash or in check.

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Consti II: Police Power, Eminent Domain, and Taxation

The general rule is that payment of just compensation may be paid by money in cash or in
check. Except when the talking of the private property is in the implementation of the CARP, it may be
paid through LBP funds.
Who is entitled to receive the payment of just compensation?
No doubt the property owner is entitled to the payment of just compensation. But in the
eminent domain that term order of the property is already stretched to include a lessee of property or
the vendee in the contract of sale.
What is the remedy if the state fails to pay just compensation?
File a case for payment of just compensation; go directly to the courts of law notwithstanding
the provision under act 57 as amended by PD 1445. When the state or government takes away private
property without payment of just compensation and the property owner sues for the payment of just
compensation, that action can be filed directly in the court.
Note: in the case of Sps Campos v. NPC, the SC simply ruled that any such action would not
prescribe especially if the taking of the property or utilization of the public is that with tolerance of the
property owner and more so if its registered in the TCT.
When the state takes away property without just compensation, and no expropriation
proceeding, the property owner cannot demand recovery of the property because the government and
public utilities cannot be prevented in performing their function, but the remedy would be is to demand
payment of just compensation.
Fair market value as referring to as 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.
To determine just compensation the following factors must be considered:

Acquisition cost of the property

Actual value of similar property
Actual use of the property concerned or its potential use
Shape
Location
Size

Paramount consideration should be given on the nature and character of the property at the time of the
taking.
Who shall determine the just compensation?

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Consti II: Police Power, Eminent Domain, and Taxation

In the case of Dulay, the SC ruled that, the determination of the fair market value of the property should
be undertaken by the courts.
Before what court should the case be filed?
The SC said that an action for expropriation must be filed with the RTC notwithstanding the
assessed value of the subject property. The reason is that because that action for expropriation is
considered as an action capable of pecuniary estimation. The rule now is that expropriation complaint
must be filed before the RTC regardless of the assessed value of the subject property, as was ruled in the
case of Brgy. San Roque, Talisay v. Heirs of Pastol.
TN: the expropriator or the government is required to make a deposit the amount of which should be
equivalent to the full assessed value of the property as appearing in the Tax declaration. The moment
this is done the court would issue a writ or order of possession allowing the expropriator to take actual
possession of the property during the pendency of the case.
TN: the amount deposited is not yet the just compensation, it is merely a requirement only to allow the
expropriator to take actual possession of property during the pendency of the case. But where the
expropriator is the LGU the amount be deposited is only 15% of the assessed value of the property.
Exception: if the expropriation is for the implementation of a national govt infrastructure project, then
pursuant to RA 8974 what needs to be done is not just a deposit, but payment of BIR zonal valuation of
the property. As soon as this is done the court will issue a writ of possession allowing the expropriator to
occupy the properties during the pendency of the case.
In the case of NAPOCOR v. Co, the SC ruled that insofar as the national govt infrastructure
project is concerned RA 8974 effectively amends sec. 2 of rules 67 of the 1987 rules of court.
In NAPOCOR v. Pobre, the SC ruled that the expropriator does not have an unbidden right in
causing the unilateral withdrawal of an expropriation complaint. Normally, in expropriation proceedings
the expropriator is already allowed to take actual possession of property during the pendency of the
case. Thats why it cannot just withdraw at any time the expropriator wants to, there may be already a
damage that may be caused on the property.
If the court finds out that there is the necessity on the expropriation of the property, the court
this time may now issue an order of expropriation.
TN: what is to be issued is an order of expropriation and not a decision, which means that an order of
expropriation is not the end of the case. It is nothing but an order wherein the court determines that
indeed the taking of the property or private property is justified.
In determining just compensation the court is mandated under rules 67 of the rules of court to
constitute what is known as the board of commissioners. Normally, composed of 3 members:

Appointed by the expropriator

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Consti II: Police Power, Eminent Domain, and Taxation

Appointed by the property owner

Appointed by the court and normally will act as the chairman

The primary duty of this board of commissioner is to determine the just compensation of the
property sought to be expropriated. Before the commissioners commence the performance of their
functions, they are mandated to take their respected oaths of offices.
In determining the just compensation, they can conduct actual inspection or ocular inspection on
the property and more than that they are mandated to conduct a hearing. Where the parties may be
heard and allowed to present evidence to prove their respective contentions regarding the valuation of
property.
Instances when the court is justified in not constituting a board of commissioners

When there is no issue regarding the valuation of the property but on the necessity of the
taking
In agrarian cases, because this is left on the discretion on the agrarian court or left to the
sound discretion of the parties.

TN: the court is not duty bound to accept the recommendation of the board of commissioners. (Findings
only persuasive)
If it appears to the court that the BOC applied an illegal principle in the appreciation of evidences or
where the BOC disregarded the preponderance of evidence or where the value fixed by the BOC is
excessive, the courts may disregard its recommendation.
What is the reckoning point in computing the just compensation?
The rule is just compensation is determine on the date of the filing of the expropriation
complaint or the date of the actual possession whichever comes first.
Exception: if the expropriating agency is an LGU it should be determine on the actual possession
of property. (City of Cebu v. Sps. Dedamo)
Sec 19 of RA 7160 expressly provides that, if the expropriating agency is LGU just compensation
is determined on the date of the actual possession of the property.
Is the court justified in imposing an interest on the amount to be paid for as just compensation?
Should legal interest be imposed on the amount payable as just compensation? If that is allowed how
much would the legal interest be?
Central bank issued memorandum circular 799, fixing the legal interest on forbearance of
money to just 6% per anum.
When does the delivery of the title over the property is passed on the expropriator?
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Consti II: Police Power, Eminent Domain, and Taxation

GR: The title is only transferred if there is only full payment of the just compensation. (Republic
v. Salen Investment)
Exception: in agrarian cases, the title over the property shall already be transferred to the
farmer beneficiary even if there is as yet no payment of just compensation.
When there is already a decision ordering payment of just compensation, and the expropriator
in violation of the order of the court did not pay the just compensation, what is then the remedy of the
unpaid property owner? Can the property owner demand for the recovery of his property?
When there is no payment of just compensation, the property owner may opt demand payment
for just compensation within 5 years reckon from finality of the decision. So within 5 years reckon from
the decision, the property owner may demand for the satisfaction of the judgment award as by filing a
motion for the issuance of the writ execution in the same case, and need not institute a separate
proceedings. But if there is no payment after 5 years reckon from the finality of judgment, then on that
situation the property owner may now want to file a case for recovery of the expropriated properties.
If the ground for recovery of the private property is not because of non-payment of just
compensation, but because it is no longer used for public purposes, the property owner may not wait
for the five year period to file a case for recovery. For as long as it could be determine with finality that
the property may no longer be used for public purpose for which it was previously expropriated.

Taxation
It refers to the power of the state to demand from each member their proportionate
contribution on the maintenance and operation of the government.
Attribute of tax:

It is an enforced contribution doesnt depend on the will of the individual. It is imposed by the
state and non-payment of tax may be penalized as tax evasion. (non-payment would result to
criminal liability)
Proportional contribution- depends on the ability to pay
Pecuniary in character should be paid in form of money
Imposed on person and properties
Imposed by the state exercising jurisdiction over a person or a thing subject matter of the
imposition
Taxing power is normally exercised by the lawmaking body of the state.
Imposed for the public purpose

Nature and Characteristic of tax

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Consti II: Police Power, Eminent Domain, and Taxation

Can be used as an implement in the exercise of the police power of the state
Its exercised is primarily lodged in congress, although it can be delegated to the president or the
LGU
This is subject to constitutional limitation.

Power to tax have the power to destroy used as a tool or implement in the exercised of police
power
Power to tax does not include the power to destroy purely on the nature or the exercise of the
taxing power of the state.
Purpose of tax:

Raised revenue
Regulate business (police power)
Promotion of public power (non-revenue purpose)
Reduce social inequalities
Economic development
To protect local producer or investor

How to distinguish its purpose:

If primary purpose is to raise revenue ( taxation)

If the purpose is regulation and raising revenue is merely incidental (police power)

Limitation of the taxing power of the state:

Inherent limitation of the taxing power of the state

Issued only for the public purpose

Taxing power can only be exercised by congress
Exception: delegation to the president; exercised by the LGUs based on Sec. 5, art, 10 1987
constitution; BIR
Properties owned by the government may never be taxed except if the beneficial used is
transferred to a taxable person or entities
International comity = sovereignty among equals e.g. we cannot tax the U.S. embassy in the
Philippines
Only in our territorial jurisdiction income of non-resident Filipino derived from within or
outside the Philippines are not taxable, but if a resident Filipino even if income is derived abroad
is taxable

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Consti II: Police Power, Eminent Domain, and Taxation

Constitutional limitation of the taxing power of the state (note: refer to the codals)
Sec. 1, article 3 no person shall be derived of property or liberty without due process of law
Sec. 5, article 3
Sec. 10 article 3
Sec. 20 article 3 no person shall be imprisoned of non-payment of ctc
Sec. 28 (1) article 6 = uniform and equitable
Sec. 28 (3) article 6 merely grants property tax exemptions, provided that the property should
be used directly, exclusively for education, religious and charitable purposes ( premise on the
use of and utilization of property not ownership
Sec. 30 NIRC- the income of the church, educational and the charitable institution is exempt
from income tax
Sec. 101 NIRC- donation to the church is exempt from donors tax

Sec. 28 (4) article 6 concurrence of the majority of all the members of congress
Sec. 29 (2) article 6 - Note: appropriation for sectarian purpose is not allowed
Sec. 29 (3) article 6
Sec. 4 (3) article 14
Sec. 4 (4) article 14
Sec. 2 article 8 in conjunction with sec. 5 article 8

There is no particular

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