122. What is the effect of declaration of unconstitutionality of a law? Illustrative case.
Held: Respondents are seeking a reconsideration of the Court’s 25 January 2000 decision, wherein we declared section 8 of Republic Act No. 8551 (RA 8551) to be violative of petitioners’ constitutionally mandated right to security of tenure. As a consequence of our ruling, we held that petitioners’ removal as commissioners of the National Police Commission (NAPOLCOM) and the appointment of new Commissioners in their stead were nullities and ordered the reinstatement of petitioners and the payment of full backwages to be computed from the date they were removed from office.
X x x
An unconstitutional act is not a law; it confers no rights, imposes no duties, and affords no protection (Fernandez v. Cuerva, 21 SCRA 1095 ). Therefore, the unavoidable consequence of the Court’s declaration that section 8 of RA 8551 violates the fundamental law is that all acts done pursuant to such provision shall be null and void, including the removal of petitioners and Adiong from their positions in the NAPOLCOM and the appointment of new commissioners in their stead. When a regular government employee is illegally dismissed, his position does not become vacant and the new appointment made in order to replace him is null and void ab initio (Aquino v. Civil Service Commission, 208 SCRA 240 ). Rudimentary is the precept that there can be no valid appointment to a non-vacant position (Garces v. Court of Appeals, 259 SCRA 99 ). Accordingly, Adiong’s appointment on 11 March 1998 for a term of two years, pursuant to section 8 of RA 8551, is null and void. However, he should now be permitted to enjoy the remainder of his term under RA 6975. Therefore, based on our foregoing disquisition, there should no longer be any doubt as to the proper execution of our 25 January 2000 decision – all the Commissioners appointed under RA 8551 should be removed from office, in order to give way to the reinstatement of petitioners and respondent Adiong. (Canonizado v. Aguirre, 351 SCRA 659, Feb. 15, 2001, En Banc [Gonzaga-Reyes])
- Discuss the “Void for Vagueness” Doctrine, and why is it repugnant to the Constitution. Distinguish a “perfectly vague act” from “legislation couched in imprecise language.”
Held: 1. Due process requires that the terms of a penal statute must be sufficiently explicit to inform those who are subject to it what conduct on their part will render them liable to its penalties (Connally v. General Construction Co., 269 US 385, 70 L Ed 322 46 S Ct 126 ). A criminal statute that “fails to give a person of ordinary intelligence fair notice that his contemplated conduct is forbidden by the statute,” or is so indefinite that “it encourages arbitrary and erratic arrests and convictions,” is void for vagueness (Colautti v. Franklin, 439 US 379, 58 L Ed 2d 596, 99 S Ct 675 ). The constitutional vice in a vague or indefinite statute is the injustice to the accused in placing him on trial for an offense, the nature of which he is given no fair warning (American Communications Asso. v. Douds, 339 US 382, 94 L Ed 925, 70 S Ct 674 )
We reiterated these principles in People v. Nazario (165 SCRA 186 ):
As a rule, a statute or act may be said to be vague when it lacks comprehensible standards that men “of common intelligence must necessarily guess at its meaning and differ as to its application.” It is repugnant to the Constitution in two respects: (1) it violates due process for failure to accord persons, especially the parties targeted by it, fair notice of the conduct to avoid; and (2) it leaves law enforcers unbridled discretion in carrying out its provisions and become an arbitrary flexing of the Government muscle.
We added, however, that:
X x x the act must be utterly vague on its face, that is to say, it cannot be clarified by either a saving clause or by construction. Thus, in Coates v. City of Cincinnati, the U.S. Supreme Court struck down an ordinance that had made it illegal for “three or more persons to assemble on any sidewalk and there conduct themselves in a manner annoying to persons passing by.” Clearly, the ordinance imposed no standard at all “because one may never know in advance what annoys some people but does not annoy others.”
Coates highlights what has been referred to as a “perfectly vague” act whose obscurity is evident on its face. It is to be distinguished, however, from legislation coached in imprecise language – but which nonetheless specifies a standard though defectively phrased – in which case, it may be “saved” by proper construction. X x x (People v. Dela Piedra, 350 SCRA 163, Jan. 24, 2001, 1st Div. [Kapunan])
- The doctrine has been formulated in various ways, but is commonly stated to the effect that a statute establishing a criminal offense must define the offense with sufficient definiteness that persons of ordinary intelligence can understand what conduct is prohibited by the statute. It can only be invoked against that specie of legislation that is utterly vague on its face, i.e., that which cannot be clarified either by a saving clause or by construction.
A statute or act may be said to be vague when it lacks comprehensible standards that men of common intelligence must necessarily guess at its meaning and differ in its application. In such instance, the statute is repugnant to the Constitution in two (2) respects – it violated due process for failure to accord persons, especially the parties targeted by it, fair notice of what conduct to avoid; and, it leaves law enforcers unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of the Government muscle (See People v. Nazario, No. L-44143, 31 August 1988, 165 SCRA 186, 195-196). But the doctrine does not apply as against legislations that are merely couched in imprecise language but which nonetheless specify a standard though defectively phrased; or to those that are apparently ambiguous yet fairly applicable to certain types of activities. The first may be “saved” by proper construction, while no challenge may be mounted as against the second whenever directed against such activities (Ibid.) With more reason, the doctrine cannot be invoked where the assailed statute is clear and free from ambiguity, as in this case.
The test in determining whether a criminal statute is void for uncertainty is whether the language conveys a sufficiently definite warning as to the proscribed conduct when measured by common understanding and practice (State v. Hill, 189 Kan 403, 369 P2d 365, 91 ALR 2d 750). It must be stressed, however, that the “vagueness” doctrine merely requires a reasonable degree of certainty for the statute to be upheld – not absolute precision or mathematical exactitude, as petitioner seems to suggest. Flexibility, rather than meticulous specificity, is permissible as long as the metes and bounds of the statute are clearly delineated. An act will not be held invalid merely because it might have been more explicit in its wordings or detailed in its provisions, especially where, because of the nature of the act, it would be impossible to provide all the details in advance as in all other statutes. (Joseph Ejercito Estrada v. Sandiganbayan [Third Division], G.R. No. 148560, Nov. 19, 2001, En Banc [Bellosillo])
- Does Article 13 (b) of the Labor Code defining “recruitment and placement” violate the due process clause?
Held: In support of her submission that Article 13 (b) is void for vagueness, appellant invokes People v. Panis (142 SCRA 664 ), where this Court x x x “criticized” the definition of “recruitment and placement” x x x.
Appellant further argues that the acts that constitute “recruitment and placement” suffer from overbreadth since by merely “referring” a person for employment, a person may be convicted of illegal recruitment.
These contentions cannot be sustained.
Appellant’s reliance on People v. Panis is misplaced. The issue in Panis was whether, under the proviso of Article 13(b), the crime of illegal recruitment could be committed only “whenever two or more persons are in any manner promised or offered any employment for a fee.” The Court held in the negative x x x.
X x x The Court, in Panis, merely bemoaned the lack of records that would help shed light on the meaning of the proviso. The absence of such records notwithstanding, the Court was able to arrive at a reasonable interpretation of the proviso by applying principles in criminal law and drawing from the language and intent of the law itself. Section 13(b), therefore, is not a “perfectly vague act” whose obscurity is evident on its face. If at all, the proviso therein is merely couched in imprecise language that was salvaged by proper construction. It is not void for vagueness.
X x x
That Section 13(b) encompasses what appellant apparently considers as customary and harmless acts such as “labor or employment referral” (“referring” an applicant, for employment to a prospective employer) does not render the law overbroad. Evidently, appellant misapprehends concept of overbreadth.
A statute may be said to be overbroad where it operates to inhibit the exercise of individual freedoms affirmatively guaranteed by the Constitution, such as the freedom of speech or religion. A generally worded statute, when construed to punish conduct which cannot be constitutionally punished is unconstitutionally vague to the extent that it fails to give adequate warning of the boundary between the constitutionally permissible and the constitutionally impermissible applications of the statute (Wright v. Georgia, 373 US 284, 10 L Ed 2d 349, 83 S Ct 1240 ).
In Blo Umpar Adiong v. Commission on Elections (207 SCRA 712 ), for instance, we struck down as void for overbreadth provisions prohibiting the posting of election propaganda in any place – including private vehicles – other than in the common poster areas sanctioned by the COMELEC. We held that the challenged provisions not only deprived the owner of the vehicle the use of his property but also deprived the citizen of his right to free speech and information. The prohibition in Adiong, therefore, was so broad that it covered even constitutionally guaranteed rights and, hence, void for overbreadth. In the present case, however, appellant did not even specify what constitutionally protected freedoms are embraced by the definition of “recruitment and placement” that would render the same constitutionally overbroad. (People v. Dela Piedra, 350 SCRA 163, Jan. 24, 2001, 1st Div. [Kapunan])
- Is the Plunder Law unconstitutional for being vague?
Held: As it is written, the Plunder Law contains ascertainable standards and well-defined parameters which would enable the accused to determine the nature of his violation. Section 2 is sufficiently explicit in its description of the acts, conduct and conditions required or forbidden, and prescribes the elements of the crime with reasonable certainty and particularity. X x x
As long as the law affords some comprehensible guide or rule that would inform those who are subject to it what conduct would render them liable to its penalties, its validity would be sustained. It must sufficiently guide the judge in its application; the counsel, in defending one charged with its violation; and more importantly, the accused, in identifying the realm of the proscribed conduct. Indeed, it can be understood with little difficulty that what the assailed statute punishes is the act of a public officer in amassing or accumulating ill-gotten wealth of at least P50,000,000.00 through a series or combination of acts enumerated in Sec. 1, par. (d), of the Plunder Law.
In fact, the amended Information itself closely tracks the language of the law, indicating with reasonable certainty the various elements of the offense which petitioner is alleged to have committed x x x.
We discern nothing in the foregoing that is vague or ambiguous – as there is obviously none – that will confuse petitioner in his defense. Although subject to proof, these factual assertions clearly show that the elements of the crime are easily understood and provide adequate contrast between the innocent and the prohibited acts. Upon such unequivocal assertions, petitioner is completely informed of the accusations against him as to enable him to prepare for an intelligent defense.
Petitioner, however, bewails the failure of the law to provide for the statutory definition of the terms “combination” and “series” in the key phrase “a combination or series of overt or criminal acts” found in Sec. 1, par. (d), and Sec. 2, and the word “pattern” in Sec. 4. These omissions, according to petitioner, render the Plunder Law unconstitutional for being impermissibly vague and overbroad and deny him the right to be informed of the nature and cause of the accusation against him, hence, violative of his fundamental right to due process.
The rationalization seems to us to be pure sophistry. A statute is not rendered uncertain and void merely because general terms are used therein, or because of the employment of terms without defining them (82 C.J.S. 68, P. 113; People v. Ring, 70 P.2d 281, 26 Cal. App. 2d Supp. 768); much less do we have to define every word we use. Besides, there is no positive constitutional or statutory command requiring the legislature to define each and every word in an enactment. Congress is not restricted in the form of expression of its will, and its inability to so define the words employed in a statute will not necessarily result in the vagueness or ambiguity of the law so long as the legislative will is clear, or at least, can be gathered from the whole act, which is distinctly expressed in the Plunder Law.
Moreover, it is a well-settled principle of legal hermeneutics that words of a statute will be interpreted in their natural, plain and ordinary acceptation and signification (Mustang Lumber, Inc. v. Court of Appeals, G.R. No. 104988, 18 June 1965, 257 SCRA 430, 448), unless it is evident that the legislature intended a technical or special legal meaning to those words (PLDT v. Eastern Telecommunications Phil., Inc., G.R. No. 943774, 27 August 1992, 213 SCRA 16, 26). The intention of the lawmakers – who are, ordinarily, untrained philologists and lexicographers – to use statutory phraseology in such a manner is always presumed. Thus, Webster’s New Collegiate Dictionary contains the following commonly accepted definition of the words “combination” and “series.”
Combination – the result or product of combining; the act or process of combining. To combine is to bring into such close relationship as to obscure individual characters.
Series – a number of things or events of the same class coming one after another in spatial and temporal succession.
That Congress intended the words “combination” and “series” to be understood in their popular meanings is pristinely evident from the legislative deliberations on the bill which eventually became RA 7080 or the Plunder Law x x x.
X x x
Thus when the Plunder Law speaks of “combination,” it is referring to at least two (2) acts falling under different categories or enumeration provided in Sec. 1, par. (d), e.g., raids on the public treasury in Sec. 1, par. (d), subpar. (1), and fraudulent conveyance of assets belonging to the National Government under Sec. 1, par. (d), subpar. (3).
On the other hand, to constitute a “series” there must be two (2) or more overt or criminal acts falling under the same category of enumeration found in Sec. 1, par. (d), say, misappropriation, malversation and raids on the public treasury, all of which fall under Sec. 1, par. (d), subpar. (1). Verily, had the legislature intended a technical or distinctive meaning for “combination” and “series,” it would have taken greater pains in specifically providing for it in the law.
As for “pattern,” we agree with the observations of the Sandiganbayan that this term is sufficiently defined in Sec. 4, in relation to Sec. 1, par. (d), and Sec. 2 –
x x x under Sec. 1 (d) of the law, a ‘pattern’ consists of at least a combination or series of overt or criminal acts enumerated in subsections (1) to (6) of Sec. 1 (d). Secondly, pursuant to Sec. 2 of the law, the pattern of overt or criminal acts is directed towards a common purpose or goal which is to enable the public officer to amass, accumulate or acquire ill-gotten wealth. And thirdly, there must either be an ‘overall unlawful scheme’ or ‘conspiracy’ to achieve said common goal. As commonly understood, the term ‘overall unlawful scheme’ indicates a ‘general plan of action or method’ which the principal accused and public officer and others conniving with him follow to achieve the aforesaid common goal. In the alternative, if there is no such overall scheme or where the schemes or methods used by multiple accused vary, the overt or criminal acts must form part of a conspiracy to attain a common goal.
X x x
Hence, it cannot plausibly be contended that the law does not give a fair warning and sufficient notice of what it seeks to penalize. Under the circumstances, petitioner’s reliance on the “void-for-vagueness” doctrine is manifestly misplaced.
X x x
Moreover, we agree with, hence we adopt, the observations of Mr. Justice Vicente V. Mendoza during the deliberations of the Court that the allegations that the Plunder Law is vague and overbroad do not justify a facial review of its validity –
The void-for-vagueness doctrine states that “a statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application violates the first essential of due process of law.” (Connally v. General Constr. Co., 269 U.S. 385, 391, 70 L. Ed. 328  cited in Ermita-Malate Hotel and Motel Operators Ass’n. v. City Mayor, 20 SCRA 849, 867 ) The overbreadth doctrine, on the other hand, decrees that “a governmental purpose may not be achieved by means which sweep unnecessarily broadly and thereby invade the area of protected freedoms.” (NAACP v. Alabama, 377 U.S. 288, 307, 12, 2 L. Ed 325, 338 ; Shelton v. Tucker, 364 U.S. 479, 5 L. Ed. 2d 231 )
A facial challenge is allowed to be made to a vague statute and to one which is overbroad because of possible “chilling effect” upon protected speech. The theory is that “[w]hen statutes regulate or proscribe speech and no readily apparent construction suggests itself as a vehicle for rehabilitating the statutes in a single prosecution, the transcendent value to all society of constitutionally protected expression is deemed to justify allowing attacks on overly broad statutes with no requirement that the person making the attack demonstrate that his own conduct could not be regulated by a statute drawn with narrow specificity.” (Gooding v. Wilson, 405 U.S. 518, 521, 31 L. Ed. 2d 408, 413  [internal quotation marks omitted]) The possible harm to society in permitting some unprotected speed to go unpunished is outweighed by the possibility that the protected speech of others may be deterred and perceived grievances left to fester because of possible inhibitory effects of overly broad statutes.
This rationale does not apply to penal statutes. Criminal statutes have general in terrorem effect resulting from their very existence, and, if facial challenge is allowed for this reason alone, the State may well be prevented from enacting laws against socially harmful conduct. In the area of criminal law, the law cannot take chances as in the area of free speech.
The overbreadth and vagueness doctrine then have special application only to free speech cases. They are inapt for testing the validity of penal statutes. As the U.S. Supreme Court put it, in an opinion by Chief Justice Rehnquist, “we have not recognized an ‘overbreadth’ doctrine outside the limited context of the First Amendment.” In Broadwick v. Oklahoma (413 U.S. 601, 612-613, 37 L Ed. 2d 830, 840-841 ), the Court ruled that “claims of facial overbreadth have been entertained in cases involving statutes which, by their terms, seek to regulate only spoken words” and, again, that “overbreadth claims, if entertained at all, have been curtailed when invoked against ordinary criminal laws that are sought to be applied to protected conduct.” For this reason, it has been held that “a facial challenge to a legislative act is the most difficult challenge to mount successfully, since the challenger must establish that no set of circumstances exists under which the Act would be valid.” (United States v. Salerno, supra.) As for the vagueness doctrine, it is said that a litigant may challenge a statute on its face only if it is vague in all its possible applications. “A plaintiff who engages in some conduct that is clearly proscribed cannot complain of the vagueness of the law as applied to the conduct of others.” (Village of Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 494-95, 71 L Ed. 2d 362, 369 )
In sum, the doctrines of strict scrutiny, overbreadth, and vagueness are analytical tools developed for testing “on their faces” statutes in free speech cases or, as they are called in American law, First Amendment cases. They cannot be made to do service when what is involved is a criminal statute. With respect to such statute, the established rule is that “one to whom application of a statute is constitutional will not be heard to attack the statute on the ground that impliedly it might also be taken as applying to other persons or other situations in which its application might be unconstitutional.” (United States v. Raines, 362 U.S. 17, 21, 4 L. Ed. 2d 524, 529 . The paradigmatic case is Yazoo & Mississippi Valley RR. v. Jackson Vinegar Co., 226 U.S. 217, 57 l. Ed. 193 ) As has been pointed out, “vagueness challenges in the First Amendment context, like overbreadth challenges typically produce facial invalidation, while statutes found to be vague as a matter of due process typically are invalidated [only] ‘as applied’ to a particular defendant.” (G. Gunther & K. Sullivan, Constitutional Law 1299 ) Consequently, there is no basis for petitioner’s claim that this Court review the Anti-Plunder Law on its face and in its entirety.
Indeed, “on its face” invalidation of statutes results in striking them down entirely on the ground that they might be applied to parties not before the Court whose activities are constitutionally protected (Id. at 1328). It constitutes a departure from the case and controversy requirement of the Constitution and permits decisions to be made without concrete factual settings and in sterile abstract contexts (Constitution, Art. VIII, Sections 1 and 5. Compare Angara v. Electoral Commission, 63 Phil. 139, 158 ). But, as the U.S. Supreme Court pointed out in Younger v. Harris (401 U.S. 37, 52-53, 27 L. Ed. 2d 669, 680 ; others omitted.)
[T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring correction of these deficiencies before the statute is put into effect, is rarely if ever an appropriate task for the judiciary. The combination of the relative remoteness of the controversy, the impact on the legislative process of the relief sought, and above all the speculative and amorphous nature of the required line-by-line analysis of detailed statutes, x x x ordinarily results in a kind of case that is wholly unsatisfactory for deciding constitutional questions, whichever way they might be decided.
For these reasons, “on its face” invalidation of statutes has been described as “manifestly strong medicine,” to be employed “sparingly and only as a last resort,” (Broadwick v. Oklahoma, 413 U.S. at 613, 37 L.Ed.2d at 841; National Endowment for the Arts v. Finley, 524 U.S. 569, 580 ) and is generally disfavored (FW/PBS, Inc. v. City of Dallas, 493 U.S. 223, 107 L.Ed.2d 603 ; Cruz v. Secretary of Environment and Natural Resources, G.R. No. 135385, 6 December 2000 [Mendoza, J., Separate Opinion]). In determining the constitutionality of a statute, therefore, its provisions which are alleged to have been violated in a case must be examined in the light of the conduct with which the defendant is charged (United States v. National Dairy Prod. Corp., 372 U.S. 29, 32-33, 9 L.Ed.2d 561, 565-6 )
In light of the foregoing disquisition, it is evident that the purported ambiguity of the Plunder Law, so tenaciously claimed and argued at length by petitioner, is more imagined than real. Ambiguity, where none exists, cannot be created by dissecting parts and words in the statute to furnish support to critics who cavil at the want of scientific precision in the law. Every provision of the law should be construed in relation and with reference to every other part. To be sure, it will take more than nitpicking to overturn the well-entrenched presumption of constitutionality and validity of the Plunder Law. A fortiori, petitioner cannot feign ignorance of what the Plunder Law is all about. Being one of the Senators who voted for its passage, petitioner must be aware that the law was extensively deliberated upon by the Senate and its appropriate committees by reason of which he even registered his affirmative vote with full knowledge of its legal implications and sound constitutional anchorage. (Joseph Ejercito Estrada v. Sandiganbayan [Third Division], G.R. No. 148560, Nov. 19, 2001, En Banc [Bellosillo])
A. THE INHERENT POWERS OF THE STATE
- Define Police Power and clarify its scope.
Held: 1. Police power is an inherent attribute of sovereignty. It has been defined as the power vested by the Constitution in the legislature to make, ordain, and establish all manner of wholesome and reasonable laws, statutes and ordinances, either with penalties or without, not repugnant to the Constitution, as they shall judge to be for the good and welfare of the commonwealth, and for the subjects of the same. The power is plenary and its scope is vast and pervasive, reaching and justifying measures for public health, public safety, public morals, and the general welfare.
It bears stressing that police power is lodged primarily in the National Legislature. It cannot be exercised by any group or body of individuals not possessing legislative power. The National Legislature, however, may delegate this power to the President and administrative boards as well as the lawmaking bodies of municipal corporations or local government units. Once delegated, the agents can exercise only such legislative powers as are conferred on them by the national lawmaking body. (Metropolitan Manila Development Authority v. Bel-Air Village Association, Inc., 328 SCRA 836, 843-844, March 27, 2000, 1st Div. [Puno])
- The scope of police power has been held to be so comprehensive as to encompass almost all matters affecting the health, safety, peace, order, morals, comfort and convenience of the community. Police power is essentially regulatory in nature and the power to issue licenses or grant business permits, if exercised for a regulatory and not revenue-raising purpose, is within the ambit of this power.
X x x
[T]he issuance of business licenses and permits by a municipality or city is essentially regulatory in nature. The authority, which devolved upon local government units to issue or grant such licenses or permits, is essentially in the exercise of the police power of the State within the contemplation of the general welfare clause of the Local Government Code. (Acebedo Optical Company, Inc. v. Court of Appeals, 329 SCRA 314, March 31, 2000, En Banc [Purisima])
- Discuss the nature of the authority of local government units to issue or grant licenses or permits.
Held: The issuance of business licenses and permits by a municipality or city is essentially regulatory in nature. The authority, which devolved upon local government units to issue or grant such licenses or permits, is essentially in the exercise of the police power of the State within the contemplation of the general welfare clause of the Local Government Code. (Acebedo Optical Company, Inc. v. Court of Appeals, 329 SCRA 314, March 31, 2000, En Banc [Purisima])
- How should laws that grant the right to exercise a part of the police power of the State be construed?
Held: Lest the idea gets lost in the shoals of our subconsciousness, let us not forget that PAGCOR is engaged in business affected with public interest. The phrase “affected with public interest” means that an industry is subject to control for the public good (Nebbia v. New York, 291 U.S. 502); it has been considered as the equivalent of “subject to the exercise of the police power.” (Bernas, The 1987 Constitution of the Republic of the Philippines, A Commentary, 1996 ed., p. 1053) Perforce, a legislative franchise to operate jai-alai is imbued with public interest and involves an exercise of police power. The familiar rule is that laws which grant the right to exercise a part of the police power of the state are to be construed strictly and any doubt must be resolved against the grant (People v. Chicago, 103 N.E. 609; Slaughter v. O’Berry, 35 S.E. 241, 48 L.R.A. 442). The legislature is regarded as the guardian of society, and therefore is not presumed to disable itself or abandon the discharge of its duty. Thus, courts do not assume that the legislature intended to part away with its power to regulate public morals (Stone v. Mississippi, 101 U.S. 814). The presumption is influenced by constitutional considerations. Constitutions are widely understood to withhold from legislatures any authority to bargain away their police power (Sutherland Statutory Construction, Vol. 3, 5th ed., p. 244) for the power to protect the public interest is beyond abnegation.
It is stressed that the case at bar does not involve a franchise to operate a public utility (such as water, transportation, communication or electricity) – the operation of which undoubtedly redounds to the benefit of the general public. What is claimed is an alleged legislative grant of a gambling franchise – a franchise to operate jai-alai. A statute which legalizes a gambling activity or business should be strictly construed and every reasonable doubt must be resolved to limit the powers and rights claimed under its authority (Aicardi v. Alabama, 22 L.Ed. 215; West Indies, Inc. v. First National Bank, 214 P.2d 144). (Del Mar v. Philippine Amusement and Gaming Corporation, 346 SCRA 485, Nov. 29, 2000, En Banc [Puno])
- Discuss why rates to be charged by public utilities like MERALCO are subject to State regulation.
Held: The regulation of rates to be charged by public utilities is founded upon the police power of the State and statutes prescribing rules for the control and regulations 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. Submission to regulation may be withdrawn by the owner by discontinuing use; but as long as the use of the property is continued, the same is subject to public regulation (Munn v. People of the State of Illinois, 94 U.S. 113, 126 ).
In regulating rates charged by public utilities, the State protects the public against arbitrary and excessive rates while maintaining the efficiency and quality of services rendered. However, the power to regulate rates does not give the State the right to prescribe rates which are so low as to deprive the public utility of a reasonable return on investment. Thus, the rates prescribed by the State must be one that yields a fair return on the public utility upon the value of the property performing the service and one that is reasonable to the public for the service rendered (IV A.F. Agbayani, Commentaries and Jurisprudence on the Commercial Laws of the Philippines 500 ). The fixing of just and reasonable rates involves a balancing of the investor and the consumer interests (Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 591). (Republic of the Philippines v. Manila Electric Company, G.R. No. 141314, Nov. 15, 2002, 3rd Div. [Puno])
- What powers of the State are involved in the implementation of the Comprehensive Agrarian Reform Law (CARL)? Discuss.
Held: The implementation of the CARL is an exercise of the State’s police power and the power of eminent domain. To the extent that the CARL prescribes retention limits to the landowners, there is an exercise of police power for the regulation of private property in accordance with the Constitution (Association of Small Landowners in the Philippines v. Secretary of Agrarian Reform, 175 SCRA 343, 373-374 ). But where, to carry out such regulation, the owners are deprived of lands they own in excess of the maximum area allowed, there is also a taking under the power of eminent domain. The taking contemplated is not a mere limitation of the use of the land. What is required is the surrender of the title to and physical possession of the said excess and all beneficial rights accruing to the owner in favor of the farmer beneficiary (Id.). The Bill of Rights provides that “[n]o person shall be deprived of life, liberty or property without due process of law.” (Section 1, Article III, 1987 Constitution) The CARL was not intended to take away property without due process of law (Development Bank of the Philippines v. Court of Appeals, 262 SCRA 245, 253 ). The exercise of the power of eminent domain requires that due process be observed in the taking of private property. (Roxas & Co., Inc. v. Court of Appeals, 321 SCRA 106, Dec. 17, 1999, En Banc [Puno])
- Does Article 263(g) of the Labor Code (vesting upon the Secretary of Labor the discretion to determine what industries are indispensable to the national interest and thereafter, assume jurisdiction over disputes in said industries) violate the workers’ constitutional right to strike?
Held: Said article does not interfere with the workers’ right to strike but merely regulates it, when in the exercise of such right, national interests will be affected. The rights granted by the Constitution are not absolute. They are still subject to control and limitation to ensure that they are not exercised arbitrarily. The interests of both the employers and the employees are intended to be protected and not one of them is given undue preference.
The Labor Code vests upon the Secretary of Labor the discretion to determine what industries are indispensable to national interest. Thus, upon the determination of the Secretary of Labor that such industry is indispensable to the national interest, it will assume jurisdiction over the labor dispute of said industry. The assumption of jurisdiction is in the nature of police power measure. This is done for the promotion of the common good considering that a prolonged strike or lockout can be inimical to the national economy. The Secretary of Labor acts to maintain industrial peace. Thus, his certification for compulsory arbitration is not intended to impede the workers’ right to strike but to obtain a speedy settlement of the dispute. (Philtread Workers Union [PTWU] v. Confesor, 269 SCRA 393, March 12, 1997)
- May solicitation for religious purposes be subject to proper regulation by the State in the exercise of police power?
Held: The constitutional inhibition of legislation on the subject of religion has a double aspect. On the one hand, it forestalls compulsion by law of the acceptance of any creed or the practice of any form of worship. Freedom of conscience and freedom to adhere to such religious organization or form of worship as the individual may choose cannot be restricted by law. On the other hand, it safeguards the free exercise of the chosen form of religion. Thus, the Constitution embraces two concepts, that is, freedom to believe and freedom to act. The first is absolute but, in the nature of things, the second cannot be. Conduct remains subject to regulation for the protection of society. The freedom to act must have appropriate definitions to preserve the enforcement of that protection. In every case, the power to regulate must be so exercised, in attaining a permissible end, as not to unduly infringe on the protected freedom.
Whence, even the exercise of religion may be regulated, at some slight inconvenience, in order that the State may protect its citizens from injury. Without doubt, a State may protect its citizens from fraudulent solicitation by requiring a stranger in the community, before permitting him publicly to solicit funds for any purpose, to establish his identity and his authority to act for the cause which he purports to represent. The State is likewise free to regulate the time and manner of solicitation generally, in the interest of public safety, peace, comfort, or convenience.
It does not follow, therefore, from the constitutional guarantees of the free exercise of religion that everything which may be so called can be tolerated. It has been said that a law advancing a legitimate governmental interest is not necessarily invalid as one interfering with the “free exercise” of religion merely because it also incidentally has a detrimental effect on the adherents of one or more religion. Thus, the general regulation, in the public interest, of solicitation, which does not involve any religious test and does not unreasonably obstruct or delay the collection of funds, is not open to any constitutional objection, even though the collection be for a religious purpose. Such regulation would not constitute a prohibited previous restraint on the free exercise of religion or interpose an inadmissible obstacle to its exercise.
Even with numerous regulative laws in existence, it is surprising how many operations are carried on by persons and associations who, secreting their activities under the guise of benevolent purposes, succeed in cheating and defrauding a generous public. It is in fact amazing how profitable the fraudulent schemes and practices are to people who manipulate them. The State has authority under the exercise of its police power to determine whether or not there shall be restrictions on soliciting by unscrupulous persons or for unworthy causes or for fraudulent purposes. That solicitation of contributions under the guise of charitable and benevolent purposes is grossly abused is a matter of common knowledge. Certainly the solicitation of contributions in good faith for worthy purposes should not be denied, but somewhere should be lodged the power to determine within reasonable limits the worthy from the unworthy. The objectionable practices of unscrupulous persons are prejudicial to worthy and proper charities which naturally suffer when the confidence of the public in campaigns for the raising of money for charity is lessened or destroyed. Some regulation of public solicitation is, therefore, in the public interest.
To conclude, solicitation for religious purposes may be subject to proper regulation by the State in the exercise of police power. (Centeno v. Villalon-Pornillos, 236 SCRA 197, Sept. 1, 1994 [Regalado])
The Power of Eminent Domain
- What is Eminent Domain?
Held: 1. Eminent domain is the right or power of a sovereign state to appropriate private property to particular uses to promote public welfare. It is an indispensable attribute of sovereignty; a power grounded in the primary duty of government to serve the common need and advance the general welfare. Thus, the right of eminent domain appertains to every independent government without the necessity for constitutional recognition. The provisions found in modern constitutions of civilized countries relating to the taking of property for the public use do not by implication grant the power to the government, but limit a power which would otherwise be without limit. Thus, our own Constitution provides that “[p]rivate property shall not be taken for public use without just compensation.” (Art. III, Sec. 9). Furthermore, the due process and equal protection clauses (1987 Constitution, Art. III, Sec. 1) act as additional safeguards against the arbitrary exercise of this governmental power.
Since the exercise of the power of eminent domain affects an individual’s right to private property, a constitutionally-protected right necessary for the preservation and enhancement of personal dignity and intimately connected with the rights to life and liberty, the need for its circumspect operation cannot be overemphasized. In City of Manila v. Chinese Community of Manila we said (40 Phil. 349 [1919):
The exercise of the right of eminent domain, whether directly by the State, or by its authorized agents, is necessarily in derogation of private rights, and the rule in that case is that the authority must be strictly construed. No species of property is held by individuals with greater tenacity, and none is guarded by the Constitution and the laws more sedulously, than the right to the freehold of inhabitants. When the legislature interferes with that right, and, for greater public purposes, appropriates the land of ah individual without his consent, the plain meaning of the law should not be enlarged by doubt[ful] interpretation. (Bensley v. Mountainlake Water Co., 13 Cal., 306 and cases cited [73 Am. Dec., 576])
The statutory power of taking property from the owner without his consent is one of the most delicate exercise of governmental authority. It is to be watched with jealous scrutiny. Important as the power may be to the government, the inviolable sanctity which all free constitutions attach to the right of property of the citizens, constrains the strict observance of the substantial provisions of the law which are prescribed as modes of the exercise of the power, and to protect it from abuse x x x.
The power of eminent domain is essentially legislative in nature. It is firmly settled, however, that such power may be validly delegated to local government units, other public entities and public utilities, although the scope of this delegated legislative power is necessarily narrower than that of the delegating authority and may only be exercised in strict compliance with the terms of the delegating law. (Heirs of Alberto Suguitan v. City of Mandaluyong, 328 SCRA 137, 144-146, March 14, 2000, 3rd Div. [Gonzaga-Reyes])
- Eminent domain is a fundamental State power that is inseparable from sovereignty. It is government’s right to appropriate, in the nature of a compulsory sale to the State, private property for public use or purpose. Inherently possessed by the national legislature, the power of eminent domain may be validly delegated to local governments, other public entities and public utilities. For the taking of private property by the government to be valid, the taking must be for public purpose and there must be just compensation. (Moday v. Court of Appeals, 268 SCRA 586, February 20, 1997)
- State some limitations on the exercise of the power of Eminent Domain.
Held: The limitations on the power of eminent domain are that the use must be public, compensation must be made and due process of law must be observed. The Supreme Court, taking cognizance of such issues as the adequacy of compensation, necessity of the taking and the public use character or the purpose of the taking, has ruled that the necessity of exercising eminent domain must be genuine and of a public character. Government may not capriciously choose what private property should be taken. (Moday v. Court of Appeals, 268 SCRA 586, February 20, 1997)
- Discuss the expanded notion of public use in eminent domain proceedings.
Held: The City of Manila, acting through its legislative branch, has the express power to acquire private lands in the city and subdivide these lands into home lots for sale to bona fide tenants or occupants thereof, and to laborers and low-salaried employees of the city.
That only a few could actually benefit from the expropriation of the property does not diminish its public character. It is simply not possible to provide all at once land and shelter for all who need them.
Corollary to the expanded notion of public use, expropriation is not anymore confined to vast tracts of land and landed estates. It is therefore of no moment that the land sought to be expropriated in this case is less than half a hectare only.
Through the years, the public use requirement in eminent domain has evolved into a flexible concept, influenced by changing conditions. Public use now includes the broader notion of indirect public benefit or advantage, including in particular, urban land reform and housing. (Filstream International Incorporated v. CA, 284 SCRA 716, Jan. 23, 1998 [Francisco])
- The constitutionality of Sec. 92 of B.P. Blg. 881 (requiring radio and television station owners and operators to give to the Comelec radio and television time free of charge) was challenged on the ground, among others, that it violated the due process clause and the eminent domain provision of the Constitution by taking airtime from radio and television broadcasting stations without payment of just compensation. Petitioners claim that the primary source of revenue of radio and television stations is the sale of airtime to advertisers and that to require these stations to provide free airtime is to authorize a taking which is not “a de minimis temporary limitation or restraint upon the use of private property.” Will you sustain the challenge?
Held: All broadcasting, whether by radio or by television stations, is licensed by the government. Airwave frequencies have to be allocated as there are more individuals who want to broadcast than there are frequencies to assign. A franchise is thus a privilege subject, among other things, to amendment by Congress in accordance with the constitutional provision that “any such franchise or right granted x x x shall be subject to amendment, alteration or repeal by the Congress when the common good so requires.” (Art. XII, Sec. 11)
Indeed, provisions for Comelec Time have been made by amendment of the franchises of radio and television broadcast stations and such provisions have not been thought of as taking property without just compensation. Art. XII, Sec. 11 of the Constitution authorizes the amendment of franchises for “the common good.” What better measure can be conceived for the common good than one for free airtime for the benefit not only of candidates but even more of the public, particularly the voters, so that they will be fully informed of the issues in an election? “[I]t is the right of the viewers and listeners, not the right of the broadcasters, which is paramount.”
Nor indeed can there be any constitutional objection to the requirement that broadcast stations give free airtime. Even in the United States, there are responsible scholars who believe that government controls on broadcast media can constitutionally be instituted to ensure diversity of views and attention to public affairs to further the system of free expression. For this purpose, broadcast stations may be required to give free airtime to candidates in an election.
In truth, radio and television broadcasting companies, which are given franchises, do not own the airwaves and frequencies through which they transmit broadcast signals and images. They are merely given the temporary privilege of using them. Since a franchise is a mere privilege, the exercise of the privilege may reasonably be burdened with the performance by the grantee of some form of public service.
In the granting of the privilege to operate broadcast stations and thereafter supervising radio and television stations, the State spends considerable public funds in licensing and supervising such stations. It would be strange if it cannot even require the licensees to render public service by giving free airtime.
The claim that petitioner would be losing P52,380,000.00 in unrealized revenue from advertising is based on the assumption that airtime is “finished product” which, it is said, become the property of the company, like oil produced from refining or similar natural resources after undergoing a process for their production. As held in Red Lion Broadcasting Co. v. F.C.C. (395 U.S. at 394, 23 L. Ed. 2d at 391, quoting 47 U.S.C. Sec. 301), which upheld the right of a party personally attacked to reply, “licenses to broadcast do not confer ownership of designated frequencies, but only the temporary privilege of using them.” Consequently, “a license permits broadcasting, but the licensee has no constitutional right to be the one who holds the license or to monopolize a radio frequency to the exclusion of his fellow citizens. There is nothing in the First Amendment which prevents the government from requiring a licensee to share his frequency with others and to conduct himself as a proxy or fiduciary with obligations to present those views and voices which are representative of his community and which would otherwise, by necessity, be barred from the airwaves.” As radio and television broadcast stations do not own the airwaves, no private property is taken by the requirement that they provide airtime to the Comelec. (TELEBAP, Inc. v. COMELEC, 289 SCRA 337, April 21, 1998 [Mendoza])
- May eminent domain be barred by “res judicata” or “law of the case”?
Held: The principle of res judicata, which finds application in generally all cases and proceedings, cannot bar the right of the State or its agents to expropriate private property. The very nature of eminent domain, as an inherent power of the State, dictates that the right to exercise the power be absolute and unfettered even by a prior judgment or res judicata. The scope of eminent domain is plenary and, like police power, can “reach every form of property which the State might need for public use.” All separate interests of individuals in property are held of the government under this tacit agreement or implied reservation. Notwithstanding the grant to individuals, the eminent domain, the highest and most exact idea of property, remains in the government, or in the aggregate body of the people in their sovereign capacity; and they have the right to resume the possession of the property whenever the public interest requires it.” Thus, the State or its authorized agent cannot be forever barred from exercising said right by reason alone of previous non-compliance with any legal requirement.
While the principle of res judicata does not denigrate the right of the State to exercise eminent domain, it does apply to specific issues decided in a previous case. For example, a final judgment dismissing an expropriation suit on the ground that there was no prior offer precludes another suit raising the same issue; it cannot, however, bar the State or its agent from thereafter complying with this requirement, as prescribed by law, and subsequently exercising its power of eminent domain over the same property. (Municipality of Paranaque v. V.M. Realty Corporation, 292 SCRA 678, July 20, 1998 [Panganiban])
- Discuss how expropriation may be initiated, and the two stages in expropriation.
Held: Expropriation may be initiated by court action or by legislation. In both instances, just compensation is determined by the courts (EPZA v. Dulay, 149 SCRA 305 ).
The expropriation of lands consists of two stages. As explained in Municipality of Binan v. Garcia (180 SCRA 576, 583-584 , reiterated in National Power Corp. v. Jocson, 206 SCRA 520 ):
The first is concerned with the determination of the authority of the plaintiff to exercise the power of eminent domain and the propriety of its exercise in the context of the facts involved in the suit. It ends with an order, if not dismissal of the action, “of condemnation declaring that the plaintiff has a lawful right to take the property sought to be condemned, for the public use or purpose declared in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the complaint” x x x.
The second phase of the eminent domain action is concerned with the determination by the court of “the just compensation for the property sought to be taken.” This is done by the court with the assistance of not more than three (3) commissioners x x x.
It is only upon the completion of these two stages that expropriation is said to have been completed. Moreover, it is only upon payment of just compensation that title over the property passes to the government. Therefore, until the action for expropriation has been completed and terminated, ownership over the property being expropriated remains with the registered owner. Consequently, the latter can exercise all rights pertaining to an owner, including the right to dispose of his property, subject to the power of the State ultimately to acquire it through expropriation. (Republic v. Salem Investment Corporation, et. al., G.R. No. 137569, June 23, 2000, 2nd Div. [Mendoza])
- Does the two (2) stages in expropriation apply only to judicial, and not to legislative, expropriation?
Held: The De la Ramas are mistaken in arguing that the two stages of expropriation x x x only apply to judicial, and not to legislative, expropriation. Although Congress has the power to determine what land to take, it can not do so arbitrarily. Judicial determination of the propriety of the exercise of the power, for instance, in view of allegations of partiality and prejudice by those adversely affected, and the just compensation for the subject property is provided in our constitutional system.
We see no point in distinguishing between judicial and legislative expropriation as far as the two stages mentioned above are concerned. Both involve these stages and in both the process is not completed until payment of just compensation is made. The Court of Appeals was correct in saying that B.P. Blg. 340 did not effectively expropriate the land of the De la Ramas. As a matter of fact, it merely commenced the expropriation of the subject property.
X x x
The De la Ramas make much of the fact that ownership of the land was transferred to the government because the equitable and the beneficial title was already acquired by it in 1983, leaving them with only the naked title. However, as this Court held in Association of Small Landowners in the Phil., Inc. v. Secretary of Agrarian Reform (175 SCRA 343, 389 ):
The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the expropriator only upon full payment of the just compensation. Jurisprudence on this settled principle is consistent both here and in other democratic jurisdictions. X x x
(Republic v. Salem Investment Corporation, et. al., G.R. No. 137569, June 23, 2000, 2nd Div. [Mendoza])
- Is prior unsuccessful negotiation a condition precedent for the exercise of eminent domain?
Held: Citing Iron and Steel Authority v. Court of Appeals (249 SCRA 538, October 25, 1995), petitioner insists that before eminent domain may be exercised by the state, there must be a showing of prior unsuccessful negotiation with the owner of the property to be expropriated.
This contention is not correct. As pointed out by the Solicitor General the current effective law on delegated authority to exercise the power of eminent domain is found in Section 12, Book III of the Revised Administrative Code, which provides:
“SEC. 12. Power of Eminent Domain – The President shall determine when it is necessary or advantageous to exercise the power of eminent domain in behalf of the National Government, and direct the Solicitor General, whenever he deems the action advisable, to institute expropriation proceedings in the proper court.”
The foregoing provision does not require prior unsuccessful negotiation as a condition precedent for the exercise of eminent domain. In Iron and Steel Authority v. Court of Appeals, the President chose to prescribe this condition as an additional requirement instead. In the instant case, however, no such voluntary restriction was imposed. (SMI Development Corporation v. Republic, 323 SCRA 862, Jan. 28, 2000, 3rd Div. [Panganiban])
- Discuss the nature of the right of eminent domain and the limitations thereof.
Held: The right of eminent domain is usually understood to be an ultimate right of the sovereign power to appropriate any property within its territorial sovereignty for a public purpose (Bernas, 1987 Edition, p. 276, quoting Justice Story in Charles River Bridge v. Warren Bridge). Fundamental to the independent existence of a State, it requires no recognition by the Constitution, whose provisions are taken as being merely confirmatory of its presence and as being regulatory, at most, in the due exercise of the power. In the hands of the legislature, the power is inherent, its scope matching that of taxation, even that of police power itself, in many respects. It reaches to every form of property the State needs for public use and, as an old case so puts it, all separate interests of individuals in property are held under a tacit agreement or implied reservation vesting upon the sovereign the right to resume the possession of the property whenever the public interest so requires it (US v. Certain Lands in Highlands [DY NY] 48 F Supp 306).
The ubiquitous character of eminent domain is manifest in the nature of the expropriation proceedings. Expropriation proceedings are not adversarial in the conventional sense, for the condemning authority is not required to assert any conflicting interest in the property. Thus, by filing the action, the condemnor in effect merely serves notice that it is taking title and possession of the property, and the defendant asserts title or interest in the property, not to prove a right to possession, but to prove a right to compensation for the taking (US v. Certain Lands in Highlands [DY NY] 48 F Supp 306; San Bernardino Valley Municipal Water District v. Gage Canal Co. [4th Dist] Cal App 2d 206, 37 Cal Rptr 856).
Obviously, however, the power is not without its limits: first, the taking must be for public use, and second, that just compensation must be given to the private owner of the property (Sena v. Manila Railroad Co., 42 Phil. 102). These twin proscriptions have their origin in the recognition of the necessity for achieving balance between the State interests, on the one hand, and private rights, upon the other hand, by effectively restraining the former and affording protection to the latter (Visayan Refining Co. v. Camus, 40 Phil. 550). In determining “public use,” two approaches are utilized – the first is public employment or the actual use by the public, and the second is public advantage or benefit (Thornton Development authority v. Upah [DC Colo] 640 F Supp 1071). It is also useful to view the matter as being subject to constant growth, which is to say that as society advances, its demands upon the individual so increases, and each demand is a new use to which the resources of the individual may be devoted (Visayan Refining, supra). (Republic of the Philippines v. The Hon. Court of Appeals, G.R. No. 146587, July 2, 2002, 1st Div. [Vitug])
- What is the meaning of “public use” in eminent domain proceedings? Illustrative case.
Held: This Court holds that respondent (Philippine Export Processing Zone) has the legal authority to expropriate the subject Lot 1406-B and that the same was for a valid public purpose. In Sumulong v. Guerrero (154 SCRA 461, 467-468 ), this Court has ruled that,
The “public use” requirement for a valid exercise of the power of eminent domain is a flexible and evolving concept influenced by changing conditions. In this jurisdiction, the statutory and judicial trend has been summarized as follows:
This Court has ruled that the taking to be valid must be for public use. There was a time when it was felt that a literal meaning should be attached to such a requirement. Whatever project is undertaken must be for the public to enjoy, as in the case of streets or parks. Otherwise, expropriation is not allowable. It is not anymore. As long as the purpose of the taking is public, then the power of eminent domain comes into play . . . It is accurate to state then that at present whatever may be beneficially employed for the general welfare satisfies the requirement of public use. (Heirs of Juancho Ardona v. Reyes, 125 SCRA 220  at 234-235 quoting E. Fernando, the Constitution of the Philippines 523-4 [2nd Ed. 1977])
The term “public use” has acquired a more comprehensive coverage. To the literal import of the term signifying strict use or employment by the public has been added the broader notion of indirect public benefit or advantage.
In Manosca v. Court of Appeals, this Court has also held that what ultimately emerged is a concept of public use which is just as broad as “public welfare.” (252 SCRA 412, 422 , quoting Joaquin Bernas, The Constitution of the Republic of the Philippines, Vol. 1, 1987 ed., p. 282)
Respondent PEZA expropriated the subject parcel of land pursuant to Proclamation No. 1980 x x x issued by former President Ferdinand Marcos. Meanwhile, the power of eminent domain of respondent is contained in its original charter, Presidential Decree No. 66 x x x.
Accordingly, subject Lot 1406-B was expropriated “for the construction . . . of terminal facilities, structures and approaches thereto.” The authority is broad enough to give the respondent substantial leeway in deciding for what public use the expropriated property would be utilized. Pursuant to this broad authority, respondent leased a portion of the lot to commercial banks while the rest was made a transportation terminal. Said public purposes were even reaffirmed by Republic Act No. 7916, a law amending respondent PEZA’s original charter x x x.
In Manila Railroad Co. v. Mitchel (50 Phil. 832, 837-838 ), this Court has ruled that in the exercise of eminent domain, only as much land can be taken as is necessary for the legitimate purpose of the condemnation. The term “necessary,” in this connection, does not mean absolutely indispensable but requires only a reasonable necessity of the taking for the stated purpose, growth and future needs of the enterprise. The respondent cannot attain a self-sustaining and viable ECOZONE if inevitable needs in the expansion in the surrounding areas are hampered by the mere refusal of the private landowners to part with their properties. The purpose of creating an ECOZONE and other facilities is better served if respondent directly owns the areas subject of the expansion program.
X x x. The expropriation of Lot 1406-B for the purpose of being leased to banks and for the construction of a terminal has the purpose of making banking and transportation facilities easily accessible to the persons working at the industries located in PEZA. The expropriation of adjacent areas therefore comes as a matter of necessity to bring life to the purpose of the law. In such a manner, PEZA’s goal of being a major force in the economic development of the country would be realized. Furthermore, this Court has already ruled that:
X x x [T]he Legislature may directly determine the necessity for appropriating private property for a particular improvement for public use, and it may select the exact location of the improvement. In such a case, it is well-settled that the utility of the proposed improvement, the existence of the public necessity for its construction, the expediency of constructing it, the suitableness of the location selected, are all questions exclusively for the legislature to determine, and the courts have no power to interfere or to substitute their own views for those of the representatives of the people.
In the absence of some constitutional or statutory provisions to the contrary, the necessity and expediency of exercising the right of eminent domain are questions essentially political and not judicial in their character. (City of Manila v. Chinese Community of Manila, 40 Phil. 349 )
Inasmuch as both Presidential Decree No. 66 and Republic Act No. 7916, bestow respondent with authority to develop terminal facilities and banking centers, this Court will not question the respondent’s lease of certain portions of the expropriated lot to banks, as well as the construction of terminal facilities.
Petitioner contends that respondent is bound by the representations of its Chief Civil Engineer when the latter testified before the trial court that the lot was to be devoted for the construction of government offices. Anent this issue, suffice it to say that PEZA can vary the purpose for which a condemned lot will be devoted to, provided that the same is for public use. Petitioner cannot impose or dictate on the respondent what facilities to establish for as long as the same are for public purpose. (Estate of Salud Jimenez v. PEZA, 349 SCRA 240, Jan. 16, 2001, 2nd Div. [De Leon])
- Discuss the meaning of “just compensation” in eminent domain proceedings. Does it include the payment of “interest” and, if so, how is it to be computed?
Held: 1. The constitutional limitation of “just compensation” is considered to be the sum equivalent to the market value of the property, broadly described to be the price fixed by the seller in open market in the usual and ordinary course of legal action and competition or the fair value of the property as between one who receives, and one who desires to sell, it fixed at the time of the actual taking by the government (Manila Railway Co. v. Fabie, 17 Phil. 206). Thus, if property is taken for public use before compensation is deposited with the court having jurisdiction over the case, the final compensation must include interests on its just value to be computed from the time the property is taken to the time when compensation is actually paid or deposited with the court (Philippine Railway Co. v. Solon, 13 Phil. 34). In fine, between the taking of the property and the actual payment, legal interests accrue in order to place the owner in a position as good as (but not better than) the position he was in before the taking occurred (Commissioner of Public Highways v. Burgos, 96 SCRA 831). (Republic of the Philippines v. The Hon. Court of Appeals, G.R. No. 146587, July 2, 2002, 1st Div. [Vitug])
- We have ruled that the concept of just compensation embraces not only the correct determination of the amount to be paid to the owners of the land, but also the payment of the land within a reasonable time from its taking. Without prompt payment, compensation cannot be considered “just” inasmuch as the property owner is made to suffer the consequences of being immediately deprived of his land while being made to wait for a decade or more before actually receiving the amount necessary to cope with his loss (Land Bank of the Philippines v. Court of Appeals, 258 SCRA 404, 408-409  quoting Municipality of Makati v. Court of Appeals, 190 SCRA 207, 213 ). Payment of just compensation should follow as a matter of right immediately after the order of expropriation is issued. Any delay in payment must be counted from said order. However, the delay to constitute a violation of due process must be unreasonable and inexcusable; it must be deliberately done by a party in order to defeat the ends of justice.
We find that respondent capriciously evaded its duty of giving what is due to petitioner. In the case at bar, the expropriation order was issued by the trial court in 1991. The compromise agreement between the parties was approved by the trial court in 1993. However, from 1993 up to the present, respondent has failed in its obligation to pay petitioner to the prejudice of the latter. Respondent cause damage to petitioner in making the latter to expect that it had a good title to the property to be swapped with Lot 1406-B; and meanwhile, respondent has been reaping benefits from the lease or rental income of the said expropriated lot. We cannot tolerate this oppressive exercise of the power of eminent domain by respondent. As we have ruled in Cosculluela v. Court of Appeals (164 SCRA 393, 401 ):
In the present case, the irrigation project was completed and has been in operation since 1976. The project is benefiting the farmers specifically and the community in general. Obviously, petitioner’s land cannot be returned to him. However, it is high time that the petitioner be paid what has been due him eleven years ago. It is arbitrary and capricious for a government agency to initiate expropriation proceedings, seize a person’s property, allow the judgment of the court to become final and executory and then refuse to pay on the ground that there was no appropriations for the property earlier taken and profitably used. We condemn in the strongest possible terms the cavalier attitude of government officials who adopt such a despotic and irresponsible stance.
(Estate of Salud Jimenez v. PEZA, 349 SCRA 240, Jan. 16, 2001, 2nd Div. [De Leon])
- When may the property owner be entitled to the return of the expropriated property in eminent domain cases?
Held: 1. In insisting on the return of the expropriated property, respondents would exhort on the pronouncement in Provincial Government of Sorsogon v. Vda. De Villaroya (153 SCRA 291) where the unpaid landowners were allowed the alternative remedy of recovery of the property there in question. It might be borne in mind that the case involved the municipal government of Sorsogon, to which the power of eminent domain is not inherent, but merely delegated and of limited application. The grant of the power of eminent domain to local governments under Republic Act No. 7160 (See Local Government Code of 1991) cannot be understood as being the pervasive and all-encompassing power vested in the legislative branch of government. For local governments to be able to wield the power, it must, by enabling law, be delegated to it by the national legislature, but even then, this delegated power of eminent domain is not, strictly speaking, a power of eminent, but only of inferior, domain or only as broad or confined as the real authority would want it to be (City of Manila v. Chinese Cemetery of Manila, 40 Phil. 349).
Thus, in Valdehueza v. Republic (17 SCRA 107) where the private landowners had remained unpaid ten years after the termination of the expropriation proceedings, this Court ruled –
“The points in dispute are whether such payment can still be made and, if so, in what amount. Said lots have been the subject of expropriation proceedings. By final and executory judgment in said proceedings, they were condemned for public use, as part of an airport, and ordered sold to the government. X x x It follows that both by virtue of the judgment, long final, in the expropriation suit, as well as the annotations upon their title certificates, plaintiffs are not entitled to recover possession of their expropriated lots – which are still devoted to the public use for which they were expropriated – but only to demand the fair market value of the same.
Said relief may be granted under plaintiffs’ prayer for: ‘such other remedies, which may be deemed just and equitable under the premises’.” (At p. 112)
The Court proceeded to reiterate its pronouncement in Alfonso v. Pasay City (106 Phil. 1017) where the recovery of possession of property taken for public use prayed for by the unpaid landowner was denied even while no requisite expropriation proceedings were first instituted. The landowner was merely given the relief of recovering compensation for his property computed at its market value at the time it was taken and appropriated by the State.
The judgment rendered by the Bulacan RTC in 1979 on the expropriation proceedings provides not only for the payment of just compensation to herein respondents but likewise adjudges the property condemned in favor of petitioner over which parties, as well as their privies, are bound (Mines v. Canal Authority of the State [Fla] 467 So2d 989, 10 FLW 230). Petitioner has occupied, utilized and, for all intents and purposes, exercised dominion over the property pursuant to the judgment. The exercise of such rights vested to it as the condemnee indeed has amounted to at least a partial compliance or satisfaction of the 1979 judgment, thereby preempting any claim of bar by prescription on grounds of non-execution. In arguing for the return of their property on the basis of non-payment, respondents ignore the fact that the right of the expropriatory authority is far from that of an unpaid seller in ordinary sales, to which the remedy of rescission might perhaps apply. An in rem proceeding, condemnation acts upon the property (Cadorette v. US CCA [Mass] 988 F2d 215). After condemnation, the paramount title is in the public under a new and independent title (Ibid.); thus, by giving notice to all claimants to a disputed title, condemnation proceedings provide a judicial process for securing better title against all the world than may be obtained by voluntary conveyance (Ibid.). (Republic of the Philippines v. The Hon. Court of Appeals, G.R. No. 146587, July 2, 2002, 1st Div. [Vitug])
- Though the respondent has committed a misdeed to petitioner, we cannot, however, grant the petitioner’s prayer for the return of the expropriated Lot No. 1406-B. The Order of expropriation dated July 11, 1991, has long become final and executory. Petitioner cited Provincial Government of Sorsogon v. Rosa E. Vda. De Villaroya (153 SCRA 291, 302 ) to support its contention that it is entitled to a return of the lot where this Court ruled that “under ordinary circumstances, immediate return to the owners of the unpaid property is the obvious remedy.” However, the said statement was not the ruling in that case. As in other cases where there was no prompt payment by the government, this Court declared in Sorsogon that “the Provincial Government of Sorsogon is expected to immediately pay as directed. Should any further delay be encountered, the trial court is directed to seize any patrimonial property or cash savings of the province in the amount necessary to implement this decision.” However, this Court also stressed and declared in that case that “in cases where land is taken for public use, public interest, however, must be considered.” (Estate of Salud Jimenez v. PEZA, 349 SCRA 240, Jan. 16, 2001, 2nd Div. [De Leon])