Digest Author: Tim Felarca
102*. OSG contends that providing free of charge parking contributes to the
OSG v Ayala Land, Inc.
G.R. No. 177056
Petitioner/s: Office of the Solicitor General (OSG)
Respondent/s: AYALA LAND INCORPORATED, ROBINSONS LAND
CORPORATION, SHANGRI-LA PLAZA CORPORATION and SM PRIME
HOLDINGS, INC.,
DOCTRINE: Police Power - the power of promoting the public welfare by
restraining and regulating the use of liberty and property. It is usually
exerted in order to merely regulate the use and enjoyment of the
property of the owner. The power to regulate, however, does not include
the power to prohibit. A fortiori, the power to regulate does not include
the power to confiscate. Police power does not involve the taking or confiscation
of property, with the exception of a few cases where there is a necessity to confiscate
private property in order to destroy it for the purpose of protecting peace and order
and of promoting the general welfare; for instance, the confiscation of an illegally
possessed article, such as opium and firearms.
FACTS:
 A senate inquiry on the legality of the practice of shopping malls charging
parking fees resulted that such act was contrary to the National Building
Code (NBC). The said code merely requires malls to provide parking spaces
without specifying whether it is free or not, per the senate, the logical
interpretation of the code is the parking spaces are free, in line to the policy
of RA 9734 Consumer Act of the PH.
 The senate recommended for the OSG to institute the necessary action to
enjoin the collection of parking fees and enforce the penal sanction
provisions of the NBC.
 Respondents, filed for declaratory relief to the RTC, among which it sought
to uphold its clear legal right to lease parking spaces on its commercial
establishments. The OSG for their part, sought for the courts to issue a TRO
to respondent shopping malls on collecting parking fees and eventually
convert the TRO to a permanent one.
 Both cases were consolidated, RTC ruled in favor of respondent malls
upholding the sources of obligations derived from law are not presumed and
also stipulated that to compel respondents to provide free parking spaces is
an unlawful taking of property without just compensation.
 OSG appealed to the CA citing error on the RTC not finding that the
provisions on the NBC sought for free parking spaces. Respondent, among
other appeals they filed to the CA, also sought to dismiss the OSG’s appeal
on grounds that it is a question of law hence not reviewable by CA. CA ruled
in favor of respondents and dismissed the case.
 OSG appeals to SC, they argue that per Sec 803* of the National Building
code and Rule XIX of its IRR should be interpreted together with Section
aim of safeguarding life, health, property, and public welfare consistent with
the principles of sound management and control. Hence, per the SC’s
analysis, the OSG impliedly invokes the state’s inherent police power.
ISSUE/S:
Whether mandating respondent malls to provide free parking space, in accordance
to the interpretation given to the NBC, is tantamount to the proper exercise of the
State’s police power?
RULING
No, to invoke Police power to compel respondent malls to provide free
parking space to the general public is not a valid exercise of the state’s power.
Police power is the power of promoting the public welfare by restraining and
regulating the use of liberty and property. The power to regulate does not
include the power to prohibit. A regulation that deprives any person of the
profitable use of his property constitutes a taking and entitles him to compensation,
unless the invasion of rights is so slight as to permit the regulation to be justified
under the police power. A police regulation that unreasonably restricts the rights to
use business property for business purposes amounts to a taking of private property
thus the owner may recover.
In this case, if the state were to prohibit respondent malls from collecting
parking fees from the public for use of its parking facilities it is tantamount to
unreasonably taking property from respondent malls. Thus the state would be acting
beyond the bounds of police power. Therefore to mandate respondent malls to
provide free parking space is not a valid exercise of the state’s police power.
**NOTES ON HOW THE SC DECIDED THE CASE: SC held absent the express
provision of the law governing parking rules there’s no need to interpret NBC. Apply
StatCon verbal legis and the provison of the NCC wherein sources of obligations
arising from law are NOT presumed. Further, the cases cited by the OSG as its legal
basis does not conform to the facts of this case, because the controversy there were
road spaces used as parking spaces whereas in this case its private property as
parking spaces hence those cannot be applied squarely, Court affirmed the ruling of
the RTC.
*Notes on cited NBC
SECTION 803. Percentage of Site Occupancy -(a) Maximum site occupancy shall be
governed by the use, type of construction, and height of the building and the use, area,
nature, and location of the site; and subject to the provisions of the local zoning
requirements and in accordance with the rules and regulations promulgated by the
Secretary
Sec 102 Declaration of Policy - It is hereby declared to be the policy of the State to
safeguard life, health, property, and public welfare, consistent with the principles of sound
environmental management and control;
Rule XIX IRR cites no rule on parking fees just dimensions of parking space