October 31, 1919 G.R. No. L-14355

THE CITY OF MANILA,vs.CHINESE COMMUNITY OF MANILA, ET AL.

Facts: On Dec. 11 1916 presented a petition in the CFI of Manila praying that certain lands used by the Chinese Community as

their cemetery be expropriated for an extension of Rizal Avenue. The Comunidad de Chinos de Manila alleged that if

expropriation would take effect, it would disturb the resting places of the dead, and would require a large sum of money to

transfer the bodies; furthermore, the expropriation was unnecessary as a public improvement. Plaintiff’s theory however is that

once it has established the fact, under the law, that it has authority to expropriate land, it may expropriate any land it may

desire; that the only function of the court in such proceedings is to ascertain the value of the land in question; that neither the

court nor the owners of the land can inquire into the advisible purpose of purpose of the expropriation or ask any questions

concerning the necessities therefor; that the courts are mere appraisers of the land involved in expropriation proceedings, and,

when the value of the land is fixed by the method adopted by the law, to render a judgment in favor of the defendant for its

value.

Issue: If the City of Manila may expropriate the lands used as cemetery for extending Rizal Avenue.

Held: Under Section 2429 of Act No. 2711 (Charter of the City of Manila), the city has the authority to expropriate private lands

for public purposes. However, said charter contains no procedure by which the authority may be carried not effect, and how

eminent domain may be exercised. The Court then opines that the power of the court is not limited to determining WON a law

exists permitting the plaintiff to expropriate. The right of expropriation is not inherent in municipal corporations, and before it

can exercise such some law must exist to confer such power. When the courts determine the question, they must find only that a

law exists for such a reason, and that the right or authority being exercised is in accordance with the law. In the present case,

there are two conditions imposed upon the authority conceded to the City of Manila: 1, the land must be private, and 2,the

purpose must be public. If the court upon trial finds that neither exists or either fails, it cannot be contended that the right is

being exercised in accordance with law.

The necessity for taking property under the right of eminent domain is not a judicial question. The legislature, in providing for

the exercise of the power of eminent domain, may directly determine the necessity of appropriating private property for a

particular improvement for public use, and may select the exact location of the improvement. The questions of utility of

proposed improvement, the extent of public necessity for its construction, the expediency f constructing it, the suitableness of

its location and the necessity of taking the land for its site are all questions exclusive for the legislature to determine. The taking

of private property for any use which is not required by the necessities or convenience of the inhabitants of the state, is an

unreasonable exercise of the right of eminent domain, and beyond the power of the legislature to delegate.

WON the cemetery is private or public is immaterial. The Court opines that it is difficult to believe that even the legislature would

adopt a law providing expressly that such places under such circumstances should be violated. To disturb the mortal remains of

those endeared to us in life becomes sometimes the sad duty of the living, but except in cases of necessity or for laudable

purposes, the sanctity of the grave should be maintained. In the present case, even granting that a necessity exists for the

opening of the street in question, the record shows no proof of the necessity of opening the same through the cemetery. The

record shows that the adjoining and adjacent lands have been offered to the city free of charge, which should answer every

purpose of the plaintiff.

G.R. No. L-18841 January 27, 1969 REPUBLIC OF THE PHILIPPINES vs. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY

FACTS: The Bureau of Telecommunications set up its own Government Telephone System by utilizing its own appropriation and

equipment and by renting trunk lines of the PLDT tenable government offices to call private parties. Their subscription

agreement prohibits the public use of the service furnished the telephone subscriber for his private use.

The Bureau has extended its services to the general public since 1948, using the same trunk lines owned by, and rented from, the

PLDT, and prescribing its (the Bureau's) own schedule of rates. On 7 April 1958, the defendant Philippine Long Distance

Telephone Company, complained to the Bureau of Telecommunications that said bureau was violating the conditions under

which their Private Branch Exchange (PBX) is inter-connected with the PLDT's facilities, referring to the rented trunk lines, for the

Bureau had used the trunk lines not only for the use of government offices but even to serve private persons or the general

public, in competition with the business of the PLDT. Soon after, it disconnected the trunk lines being rented by the Bureau.

Republic commenced suit against the defendant, in the Court of First Instance of Manila, praying in its complaint for judgment

commanding the PLDT to execute a contract with plaintiff, through the Bureau, for the use of the facilities of defendant's

telephone system throughout the Philippines under such terms and conditions as the court might consider reasonable, and for a

writ of preliminary injunction against the defendant company to restrain the severance of the existing telephone connections

and/or restore those severed.

ISSUE: Whether the courts may compel PLDT to execute a contract with the Republic.

HELD: We agree with the court below that parties cannot be coerced to enter into a contract where no agreement is had

between them as to the principal terms and conditions of the contract. Freedom to stipulate such terms and conditions is of the

essence of our contractual system, and by express provision of the statute, a contract may be annulled if tainted by violence,

intimidation, or undue influence (Articles 1306, 1336, 1337, Civil Code of the Philippines). But the court a quo has apparently

overlooked that while the Republic may not compel the PLDT to celebrate a contract with it, the Republic may, in the exercise of

the sovereign power of eminent domain, require the telephone company to permit interconnection of the government

telephone system and that of the PLDT, as the needs of the government service may require, subject to the payment of just

compensation to be determined by the court. Nominally, of course, the power of eminent domain results in the taking or

appropriation of title to, and possession of, the expropriated property; but no cogent reason appears why said power may not be

availed of to impose only a burden upon the owner of condemned property, without loss of title and possession. It is

unquestionable that real property may, through expropriation, be subjected to an easement of right of way. The use of the

PLDT's lines and services to allow inter-service connection between both telephone systems is not much different. In either case

private property is subjected to a burden for public use and benefit. If, under section 6, Article XIII, of the Constitution, the State

may, in the interest of national welfare, transfer utilities to public ownership upon payment of just compensation, there is no

reason why the State may not require a public utility to render services in the general interest, provided just compensation is

paid therefor. Ultimately, the beneficiary of the interconnecting service would be the users of both telephone systems, so that

the condemnation would be for public use.

Barangay San Roque v. Heirs of Pastor, GR 138896 June 20, 2000

Facts: In 1997, Brgy. San Roque filed for an expropriation suit before the MTC of Talisay. The MTC denied the suit because

apparently under BP 129, MTCs do not have jurisdiction over expropriation cases as it is the RTCs that are lodged with the power

to try such cases. So Brgy. San Roque filed it before RTC Talisay but then Judge Pastor denied the suit arguing that the action for

eminent domain affected title to real property; hence, the value of the property to be expropriated would determine whether

the case should be filed before the MTC or the RTC. Concluding that the action should have been filed before the MTC since the

value of the subject property was less than P20,000.

ISSUE: Whether or not the RTC should take cognizance of the expropriation case.

HELD: Yes. Under Section 19 (1) of BP 129, which provides that RTCs shall exercise exclusive original jurisdiction over “all civil

actions in which the subject of the litigation is incapable of pecuniary estimation; . . . . .” The present action involves the exercise

of the right to eminent domain, and that such right is incapable of pecuniary estimation.

What are the two phases of expropriation cases?

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 of 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 described in the complaint, upon the payment of just compensation to be determined as of the date of the filing of the

complaint.” An order of dismissal, if this be ordained, would be a final one, of course, since it finally disposes of the action and

leaves nothing more to be done by the Court on the merits. So, too, would an order of condemnation be a final one, for

thereafter as the Rules expressly state, in the proceedings before the Trial Court, “no objection to the exercise of the right of

condemnation (or the propriety thereof) shall be filed or heard.”

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. The

order fixing the just compensation on the basis of the evidence before, and findings of, the commissioners would be final, too. It

would finally dispose of the second stage of the suit, and leave nothing more to be done by the Court regarding the issue. . . .

It should be stressed that the primary consideration in an expropriation suit is whether the government or any of its

instrumentalities has complied with the requisites for the taking of private property. Hence, the courts determine the authority

of the government entity, the necessity of the expropriation, and the observance of due process. In the main, the subject of an

expropriation suit is the government’s exercise of eminent domain, a matter that is incapable of pecuniary estimation.

Lagcao vs. Labra , G.R. No. 155746, October 13, 2004

Facts: On July 9, 1986, the court a quo ruled in favor of petitioners and ordered the Province of Cebu to execute the final deed of

sale in favor of petitioners. On June 11, 1992, the Court of Appeals affirmed the decision of the trial court. Pursuant to the ruling

of the appellate court, the Province of Cebu executed on June 17, 1994 a deed of absolute sale over Lot 1029 in favor of

petitioners. Thereafter, Transfer Certificate of Title (TCT) No. 129306 was issued in the name of petitioners and Crispina Lagcao.

After acquiring title, petitioners tried to take possession of the lot only to discover that it was already occupied by squatters.

Thus, on June 15, 1997, petitioners instituted ejectment proceedings against the squatters. The Municipal Trial Court in Cities

(MTCC), Branch 1, Cebu City, rendered a decision on April 1, 1998, ordering the squatters to vacate the lot. On appeal, the RTC

affirmed the MTCC’s decision and issued a writ of execution and order of demolition.

However, when the demolition order was about to be implemented, Cebu City Mayor Alvin Garcia wrote two letters4 to the

MTCC, requesting the deferment of the demolition on the ground that the City was still looking for a relocation site for the

squatters.

Issue: Is Cebu City ordinance no. 1843 violative of substantive due process

Held: Yes, Ordinance No. 1843 to be constitutionally infirm for being violative of the petitioners’ right to due process.

It should also be noted that, as early as 1998, petitioners had already obtained a favorable judgment of eviction against the

illegal occupants of their property. The judgment in this ejectment case had, in fact, already attained finality, with a writ of

execution and an order of demolition. But Mayor Garcia requested the trial court to suspend the demolition on the pretext that

the City was still searching for a relocation site for the squatters. However, instead of looking for a relocation site during the

suspension period, the city council suddenly enacted Ordinance No. 1843 for the expropriation of petitioners’ lot. It was trickery

and bad faith, pure and simple. The unconscionable manner in which the questioned ordinance was passed clearly indicated that

respondent City transgressed the Constitution, RA 7160 and RA 7279.

Republic vs. Carmen M. Vda. de Castellvi, GR No L-20620, Aug 15,1974

FACTS: After the owner of a parcel of land that has been rented and occupied by the government in 1947 refused to extend the

lease, Castellvi commenced expropriation proceedings in 1959. During the assessment of just compensation, the government

argued that it had taken the property when the contract of lease commenced and not when the proceedings begun. The owner

maintains that the disputed land was not taken when the government commenced to occupy the said land as lessee because the

essential elements of the “taking” of property under the power of eminent domain, namely (1) entrance and occupation by

condemner upon the private property for more than a momentary period, and (2) devoting it to a public use in such a way as to

oust the owner and deprive him of all beneficial enjoyment of the property, are not present.

ISSUE: Whether or not the taking of property has taken place when the condemner has entered and occupied the property as

lessee.

HELD: No, the property was deemed taken only when the expropriation proceedings commenced in 1959.

The essential elements of the taking are:

(1) Expropriator must enter a private property,

(2) for more than a momentary period,

(3) and under warrant of legal authority,

(4) devoting it to public use, or otherwise informally appropriating or injuriously affecting it in such a way as

(5) substantially to oust the owner and deprive him of all beneficial enjoyment thereof.

In the case at bar, these elements were not present when the government entered and occupied the property under a contract

of lease. The “taking of the Castellvi property should not be reckoned from 1947 when the Republic first occupied the same

pursuant to the contract of lease, and that just compensation to be paid for the Castellvi property should not be determined on

the basis of the value of the property as of that year. Under Section 4 of Rule 67 of the Rules of Court, 16 the "just

compensation" is to be determined as of the date of the filing of the complaint. This Court has ruled that when the taking of the

property sought to be expropriated coincides with the commencement of the expropriation proceedings, or takes place

subsequent to the filing of the complaint for eminent domain, the just compensation should be determined as of the date of the

filing of the complaint. The "taking" of the Castellvi property for the purposes of determining the just compensation to be paid

must, therefore, be reckoned as of June 26, 1959 when the complaint for eminent domain was filed.

In expropriation proceedings, the owner of the land has the right to its value for the use for which it would bring the most in the

market. 17 The owner may thus show every advantage that his property possesses, present and prospective, in order that the

price it could be sold for in the market may be satisfactorily determined. 18 The owner may also show that the property is

suitable for division into village or town lots.

The decision: (1) Castellvi’s lands are declared expropriated for public use; fair market value is at P5/sq m;(3) Republic must pay

Castellvi the sum of P3,796,495.00 as just compensation for her one parcel of land that has an area of 759,299 square meters,

minus the sum of P151,859.80 that she withdrew out of the amount that was deposited in court as the provisional value of the

land, with interest at the rate of 6% per annum from July 10, 1959 until the day full payment is made or deposited in court; (4)

the Republic must pay appellee Toledo-Gozun the sum of P2,695,225.00 as the just compensation for her two parcels of land

that have a total area of 539,045 square meters, minus the sum of P107,809.00 that she withdrew out of the amount that was

deposited in court as the provisional value of her lands, with interest at the rate of 6%, per annum from July 10, 1959 until the

day full payment is made or deposited in court; (5) the attorney's lien of Atty. Alberto Cacnio is enforced; and (6) costs against

appellant.

NAPOCOR vs. Gutierrez, G.R. No. L-60077 January 18, 1991

FACTS: For the construction of its 230 KV Mexico-Limay transmission lines, Napocor''s lines have to pass the lands belonging to

respondents. Unsuccessful with its negotiations for the acquisition of the right of way easements, Napocor was constrained to

file eminent domain proceedings.

ISSUE: W/N petitoner should be made to pay simple easement fee or full compensation for the land traversed by its transmissin

lines.

HELD: In RP v. PLDT, the SC ruled that "Normally, the power of eminent domain results in the taking or appropriation of the title

to, and possession of, the expropriated property, but no cogent reason appears why said power may not be availed of to impose

only a burden upon the owner of the condemned property, without loss of title or possession. It is unquestionable that real

property may, through expropriation, be subjected to an easement of right of way." In this case, the easement of right-of-way is

definitely a taking under the power of eminent domain. Considering the nature and effect of the installation of the transmission

lines, the limitations imposed by the NPC against the use of the land (that no plant higher than 3 meters is allowed below the

lines) for an indefinite period deprives private respondents of ts ordinary use.

Association of Small Landowners vs. Secretary of Agrarian Reform,

G.R. No. 78742July 14, 1989

Facts: These are 3 cases consolidated questioning the constitutionality of the Agrarian Reform Act. Article XIII on Social Justice

and Human Rights includes a call for the adoption by the State of an agrarian reform program. The State shall, by law, undertake

an agrarian reform program founded on the right of farmers and regular farmworkers, who are landless, to own directly or

collectively the lands they till or, in the case of other farmworkers, to receive a just share of the fruits thereof. RA 3844,

Agricultural Land Reform Code, had already been enacted by Congress on August 8, 1963. This was substantially superseded

almost a decade later by PD 27, which was promulgated on Oct 21, 1972, along with martial law, to provide for the compulsory

acquisition of private lands for distribution among tenant-farmers and to specify maximum retention limits for landowners. On

July 17, 1987, Cory issued EO 228, declaring full land ownership in favor of the beneficiaries of PD 27 and providing for the

valuation of still unvalued lands covered by the decree as well as the manner of their payment. This was followed on July 22,

1987 by PP 131, instituting a comprehensive agrarian reform program (CARP), and EO 229, providing the mechanics for its

implementation. Afterwhich is the enactment of RA 6657, Comprehensive Agrarian Reform Law of 1988, which Cory signed on

June 10. This law, while considerably changing the earlier mentioned enactments, nevertheless gives them suppletory effect

insofar as they are not inconsistent with its provisions.

In considering the rentals as advance payment on the land, the executive order also deprives the petitioners of their property

rights as protected by due process. The equal protection clause is also violated because the order places the burden of solving

the agrarian problems on the owners only of agricultural lands. No similar obligation is imposed on the owners of other

properties.

The petitioners maintain that in declaring the beneficiaries under PD 27 to be the owners of the lands occupied by them, EO 228

ignored judicial prerogatives and so violated due process. Worse, the measure would not solve the agrarian problem because

even the small farmers are deprived of their lands and the retention rights guaranteed by the Constitution.

The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by petitioner Nicolas Manaay and his

wife and a 5-hectare riceland worked by four tenants and owned by petitioner Augustin Hermano, Jr. The tenants were declared

full owners of these lands by E.O. No. 228 as qualified farmers under P.D. No. 27.

They contend that President Aquino usurped legislative power when she promulgated E.O. No. 228. The said measure is invalid

also for violation of Article XIII, Section 4, of the Constitution, for failure to provide for retention limits for small landowners.

Moreover, it does not conform to Article VI, Section 25(4) and the other requisites of a valid appropriation.

Issue: WON the property taken comes into the fold of eminent domain.

Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands intended for public use upon

payment of just compensation to the owner. Obviously, there is no need to expropriate where the owner is willing to sell under

terms also acceptable to the purchaser, in which case an ordinary deed of sale may be agreed upon by the parties. It is only

where the owner is unwilling to sell, or cannot accept the price or other conditions offered by the vendee, that the power of

eminent domain will come into play to assert the paramount authority of the State over the interests of the property owner.

Private rights must then yield to the irresistible demands of the public interest on the time-honored justification, as in the case of

the police power, that the welfare of the people is the supreme law.

But for all its primacy and urgency, the power of expropriation is by no means absolute (as indeed no power is absolute). The

limitation is found in the constitutional injunction that “private property shall not be taken for public use without just

compensation” and in the abundant jurisprudence that has evolved from the interpretation of this principle. Basically, the

requirements for a proper exercise of the power are: (1) public use and (2) just compensation.

As held in Republic of the Philippines v. Castellvi, there is compensable taking when the following conditions concur: (1) the

expropriator must enter a private property; (2) the entry must be for more than a momentary period; (3) the entry must be

under warrant or color of legal authority; (4) the property must be devoted to public use or otherwise informally appropriated or

injuriously affected; and (5) the utilization of the property for public use must be in such a way as to oust the owner and deprive

him of beneficial enjoyment of the property. All these requisites are envisioned in the measures before us.

Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its taking possession of the

condemned property, as “the compensation is a public charge, the good faith of the public is pledged for its payment, and all the

resources of taxation may be employed in raising the amount.”

The medium of payment of compensation is ready money or cash. The condemnor cannot compel the owner to accept anything

but money, nor can the owner compel or require the condemnor to pay him on any other basis than the value of the property in

money at the time and in the manner prescribed by the Constitution and the statutes. When the power of eminent domain is

resorted to, there must be a standard medium of payment, binding upon both parties, and the law has fixed that standard as

money in cash.

It cannot be denied from these cases that the traditional medium for the payment of just compensation is money and no other.

And so, conformably, has just compensation been paid in the past solely in that medium. However, we do not deal here with the

traditional excercise of the power of eminent domain. This is not an ordinary expropriation where only a specific property of

relatively limited area is sought to be taken by the State from its owner for a specific and perhaps local purpose.

What we deal with here is a revolutionary kind of expropriation.

The expropriation before us affects all private agricultural lands whenever found and of whatever kind as long as they are in

excess of the maximum retention limits allowed their owners. This kind of expropriation is intended for the benefit not only of a

particular community or of a small segment of the population but of the entire Filipino nation, from all levels of our society, from

the impoverished farmer to the land-glutted owner. Its purpose does not cover only the whole territory of this country but goes

beyond in time to the foreseeable future, which it hopes to secure and edify with the vision and the sacrifice of the present

generation of Filipinos. Generations yet to come are as involved in this program as we are today, although hopefully only as

beneficiaries of a richer and more fulfilling life we will guarantee to them tomorrow through our thoughtfulness today. And,

finally, let it not be forgotten that it is no less than the Constitution itself that has ordained this revolution in the farms, calling for

“a just distribution” among the farmers of lands that have heretofore been the prison of their dreams but can now become the

key at least to their deliverance.

Such a program will involve not mere millions of pesos. The cost will be tremendous. Considering the vast areas of land subject

to expropriation under the laws before us, we estimate that hundreds of billions of pesos will be needed, far more indeed than

the amount of P50 billion initially appropriated, which is already staggering as it is by our present standards. Such amount is in

fact not even fully available at this time.

Admittedly, the compensation contemplated in the law will cause the landowners, big and small, not a little inconvenience. As

already remarked, this cannot be avoided. Nevertheless, it is devoutly hoped that these countrymen of ours, conscious as we

know they are of the need for their forebearance and even sacrifice, will not begrudge us their indispensable share in the

attainment of the ideal of agrarian reform. Otherwise, our pursuit of this elusive goal will be like the quest for the Holy Grail.

LLADOC VS. COMMISSIONER OF INTERNAL REVENUE GR NO.L-19201; 16 JUN 1965

Facts: Sometime in 1957, M.B. Estate Inc., of Bacolod City, donated 10,000.00 pesos in cash to Fr. Crispin Ruiz, the parish priest of

Victorias, Negros Occidental, and predecessor of Fr. Lladoc, for the construction of a new Catholic church in the locality. The

donated amount was spent for such purpose. On March 3, 1958, the donor M.B. Estate filed the donor's gift tax return. Under

date of April 29, 1960. Commissioner of Internal Revenue issued an assessment for the donee's gift tax against the Catholic

Parish of Victorias of which petitioner was the parish priest.

Issue: Whether or not the imposition of gift tax despite the fact the Fr. Lladoc was not the Parish priest at the time of donation,

Catholic Parish priest of Victorias did not have juridical personality as the constitutional exemption for religious purpose is valid.

Held: Yes, imposition of the gift tax was valid, under Section 22(3) Article VI of the Constitution contemplates exemption only

from payment of taxes assessed on such properties as Property taxes contra distinguished from Excise taxes The imposition of

the gift tax on the property used for religious purpose is not a violation of the Constitution. A gift tax is not a property by way of

gift inter vivos.The head of the Diocese and not the parish priest is the real party in interest in the imposition of the donee's tax

on the property donated to the church for religious purpose.

ROMEO P. GEROCHI vs. DEPARTMENT OF ENERGY (DOE)G.R. No. 159796 July 17, 2007

FACTS: Petitioners Romeo P. Gerochi, Katulong Ng Bayan(KB), and Environmentalist Consumers Network, Inc. (ECN)(petitioners),

come before this Court in this original action praying thatSection 34 of Republic Act (RA) 9136,otherwise known as the Electric

Power Industry Reform Act of 2001 (EPIRA), imposing the Universal Charge, and Rule 18 of the Rules and Regulations (IRR) which

seeks to implement the said imposition, be declared unconstitutional. Petitioners also pray that the Universal Charge imposed

upon the consumers be refunded and that a preliminary injunction and/or temporary restraining order (TRO) be issued directing

the respondents to refrain from implementing, charging, and collecting the said charge. Congress enacted the EPIRA on June 8,

2001; on June 26, 2001, it took effect. On April 5, 2002, respondent National Power Corporation-Strategic Power Utilities Group

(NPC-SPUG) filed with respondent Energy Regulatory Commission (ERC) a petition for the availment from the Universal Charge of

its share for Missionary Electrification. On May 7, 2002, NPC filed another petition with ERC, praying that the proposed share

from the Universal Charge for the Environmental charge be approved for withdrawal from the Special Trust Fund (STF) managed

by respondent Power Sector Assets and Liabilities Management Group (PSALM) for the rehabilitation and management of

watershed areas. On December 20, 2002, the ERC issued an Order provisionally approving the computed amount as the share of

the NPC-SPUG from the Universal Charge for Missionary Electrification and authorizing the National Transmission Corporation

(TRANSCO) and Distribution Utilities to collect the same from its end-users on a monthly basis. On August 13, 2003, NPC-SPUG

filed a Motion for Reconsideration asking the ERC, among others,[14] to set aside the Decision. On April 2, 2003, ERC authorized

the NPC to draw up to P70,000,000.00 from PSALM for its 2003 Watershed Rehabilitation Budget subject to the availability of

funds for the Environmental Fund component of the Universal Charge. On the basis of the said ERC decisions, respondent Panay

Electric Company, Inc. (PECO) charged petitioner Romeo P. Gerochi and all other end-users with the Universal Charge as reflected

in their respective electric bills starting from the month of July 2003.

Petitioners submit that the assailed provision of law and its IRR which sought to implement the same are unconstitutional on the

following grounds:

1)The universal charge provided for under Sec. 34 of the EPIRA and sought to be implemented under Sec. 2, Rule 18 of the IRR of

the said law is a tax which is to be collected from all electric end-users and self-generating entities. The power to tax is strictly a

legislative function and as such, the delegation of saidpower to any executive or administrative agency like the ERC is

unconstitutional, giving the same unlimited authority. The assailed provision clearly provides that the Universal Charge is to be

determined, fixed and approved by the ERC, hence leaving to the latter complete discretionary legislative authority.

2)The ERC is also empowered to approve and determine where the funds collected should be used.3)The imposition of the

Universal Charge on all end-users is oppressive and confiscatory and amounts to taxation without representation as the

consumers were not given a chance to be heard and represented.

Respondent PSALM through the Office of the Government Corporate Counsel (OGCC) and Respondents Departmentof Energy

(DOE), ERC, and NPC, through the Office of the Solicitor General (OSG) contends:

1) Unlike a tax which is imposed to provide income for public purposes, the assailed Universal Charge is levied for a specific

regulatory purpose, which is to ensure the viability of the country's electric power industry.

2) It is exacted by the State in the exercise of its inherent police power. On this premise, PSALM submits that there is no undue

delegation of legislative power to the ERC since the latter merely exercises a limited authority or discretion as to the execution

and implementation of the provisions of the EPIRA.

3) Universal Charge does not possess the essential characteristics of a tax, that its imposition would redound to the benefit of the

electric power industry and not to the public, and that its rate is uniformly levied on electricity end-users, unlike a tax which is

imposed based on the individual taxpayer's ability to pay.

4) Imposition of the Universal Charge is not oppressive and confiscatory since it is an exercise of the police power of the State

and it complies with the requirements of due process.

PECO argues that it is duty-bound to collect and remit the amount pertaining to the Missionary Electrification andEnvironmental

Fund components of the Universal Charge, pursuant to Sec. 34 of the EPIRA and the Decisions in ERCCase Nos. 2002-194 and

2002-165.Otherwise, PECO could be held liable under Sec. 46[24]of the EPIRA, whichimposes fines and penalties for any

violation of its provisions or its IRR.

ISSUES

1)Whether or not, the Universal Charge imposed under Sec. 34 of the EPIRA is a tax

2)Whether or not there is undue delegation of legislative power to tax on the part of the ERC.

HELD

1) The conservative and pivotal distinction between these two powers rests in the purpose for which the charge is made. If

generation of revenue is the primary purpose and regulation is merely incidental, the imposition is a tax; but if regulation is the

primary purpose, the fact that revenue is incidentally raised does not make the imposition a tax. In exacting the assailed

Universal Charge through Sec. 34 of the EPIRA, the State's police power, particularly its regulatory dimension, is invoked. Such

can be deduced from Sec. 34 which enumerates the purposes for which the Universal Charge is imposed.

From the aforementioned purposes, it can be gleaned that the assailed Universal Charge is not a tax, but an exaction in the

exercise of the State's police power. Public welfare is surely promoted.

2) There is no undue delegation of legislative power to the ERC. The principle of separation of powers ordains that each of the

three branches of government has exclusive cognizance of and is supreme in matters falling within its own constitutionally

allocated sphere. A logical corollary to the doctrine of separation of powers is the principle of non-delegation of powers, as

expressed in the Latin maxim potestas delegatanon delegari potest (what has been delegated cannot be delegated). This is

based on the ethical principle that such delegated power constitutes not only a right but a duty to be performed by the delegate

through the instrumentality of his own judgment and not through the intervening mind of another. In the face of the increasing

complexity of modern life, delegation of legislative power to various specialized administrative agencies is allowed as an

exception to this principle. Given the volume and variety of interactions in today’s society, it is doubtful if the legislature can

promulgate laws that will deal adequately with and respond promptly to the minutiae of everyday life. Hence, the need to

delegate to administrative bodies - the principal agencies tasked to execute laws in their specialized fields - the authority to

promulgate rules and regulations to implement a given statute and effectuate its policies. All that is required for the valid

exercise of this power of subordinate legislation is that the regulation be germane to the objects and purposes of the law and

that the regulation be not in contradiction to, but inconformity with, the standards prescribed by the law. These requirements

are denominated as the completeness test and the sufficient standard test.

Under the first test, the law must be complete in all its terms and conditions when it leaves the legislature such that when it

reaches the delegate, the only thing he will have to do is to enforce it. The second test mandates adequate guidelines or

limitations in the law to determine the boundaries of the delegate's authority and prevent the delegation from running riot. The

Court finds that the EPIRA, read and appreciated in its entirety, in relation to Sec. 34 thereof, is complete in all its essential terms

and conditions, and that it contains sufficient standards.

First Test- Although Sec. 34 of the EPIRA merely provides that within one (1) year from the effectivity thereof, aUniversal Charge

to be determined, fixed and approved by the ERC, shall be imposed on all electricity end-users, andtherefore, does not state the

specific amount to be paid as Universal Charge, the amount nevertheless is made certain bythe legislative parameters provided

in the law itself. Moreover, contrary to the petitioners contention, the ERC does notenjoy a wide latitude of discretion in the

determination of the Universal Charge. Thus, the law is complete and passesthe first test for valid delegation of legislative power.

Second Test - Provisions of the EPIRA such as, among others, to ensure the total electrification of the country and thequality,

reliability, security and affordability of the supply of electric power [59]and watershed rehabilitation and management[60] meet

the requirements for valid delegation, as they provide the limitations on the ERCs power to formulate the IRR. These are

sufficient standards.

From the foregoing disquisitions, we therefore hold that there is no undue delegation of legislative power to theERC.

Petitioners failed to pursue in their Memorandum the contention in the Complaint that the imposition of theUniversal Charge on

all end-users is oppressive and confiscatory, and amounts to taxation withoutrepresentation. Hence, such contention is deemed

waived or abandoned.

Moreover, the determination of whether or not a tax is excessive, oppressive or confiscatory is an issue which essentially involves

questions of fact, and thus, this Court is precluded from reviewing the same.

Finally, every law has in its favor the presumption of constitutionality, and to justify its nullification, there must be a clear and

unequivocal breach of the Constitution and not one that is doubtful, speculative, or argumentative. Indubitably, petitioners failed

to overcome this presumption in favor of the EPIRA. We find no clear violation of the Constitution which would warrant a

pronouncement that Sec. 34 of the EPIRA and Rule18 of its IRR are unconstitutional and void. WHEREFORE, the instant case is

hereby DISMISSED for lack of merit.

G.R. No. L-10448 August 30, 1957

IN THE MATTER OF A PETITION FOR DECLARATORY JUDGMENT REGARDING THE VALIDITY OF MUNICIPAL ORDINANCE NO.

3659 OF THE CITY OF MANILA. PHYSICAL THERAPY ORGANIZATION OF THE PHILIPPINES, INC., petitioner-appellant,

vs.

THE MUNICIPAL BOARD OF THE CITY OF MANILA and ARSENIO H. LACSON, as Mayor of the City of Manila, respondents-

appellees.

Mariano M. de Joya for appellant.

City Fiscal Eugenio Angeles and Assistant Fiscal Arsenio Nañawa for appellees.

MONTEMAYOR, J.:

The petitioner-appellant, an association of registered massagists and licensed operators of massage clinics in the City of Manila

and other parts of the country, filed an action in the Court of First Instance of Manila for declaratory judgment regarding the

validity of Municipal Ordinance No. 3659, promulgated by the Municipal Board and approved by the City Mayor. To stop the City

from enforcing said ordinance, the petitioner secured an injunction upon filing of a bond in the sum of P1,000.00. A hearing was

held, but the parties without introducing any evidence submitted the case for decision on the pleadings, although they

submitted written memoranda. Thereafter, the trial court dismissed the petition and later dissolved the writ of injunction

previously issued.

The petitioner appealed said order of dismissal directly to this Court. In support of its appeal, petitioner-appellant contends

among other things that the trial court erred in holding that the Ordinance in question has not restricted the practice of

massotherapy in massage clinics to hygienic and aesthetic massage, that the Ordinance is valid as it does not regulate the

practice of massage, that the Municipal Board of Manila has the power to enact the Ordinance in question by virtue of Section

18, Subsection (kk), Republic Act 409, and that permit fee of P100.00 is moderate and not unreasonable. Inasmuch as the

appellant assails and discuss certain provisions regarding the ordinance in question, and it is necessary to pass upon the same,

for purposes of ready reference, we are reproducing said ordinance in toto.

ORDINANCE No. 3659

AN ORDINANCE REGULATING THE OPERATION OF MASSAGE CLINICS IN THE CITY OF MANILA AND PROVIDING

PENALTIES FOR VIOLATIONS THEREOF.

Be it ordained by the Municipal Board of the City of Manila, that:

Section 1. Definition. — For the purpose of this Ordinance the following words and phrases shall be taken in the sense

hereinbelow indicated:

(a) Massage clinic shall include any place or establishment used in the practice of hygienic and aesthetic massage;

(b) Hygienic and aesthetic massage shall include any system of manipulation of treatment of the superficial parts of the

human body of hygienic and aesthetic purposes by rubbing, stroking, kneading, or tapping with the hand or an

instrument;

(c) Massagist shall include any person who shall have passed the required examination and shall have been issued a

massagist certificate by the Committee of Examiners of Massagist, or by the Director of Health or his authorized

representative;

(d) Attendant or helper shall include any person employed by a duly qualified massagist in any message clinic to assist

the latter in the practice of hygienic and aesthethic massage;

(e) Operator shall include the owner, manager, administrator, or any person who operates or is responsible for the

operation of a message clinic.

SEC. 2. Permit Fees. — No person shall engage in the operation of a massage clinic or in the occupation of attendant or

helper therein without first having obtained a permit therefor from the Mayor. For every permit granted under the

provisions of this Ordinance, there shall be paid to the City Treasurer the following annual fees:

(a) Operator of a massage P100.00

(b) Attendant or helper 5.00

Said permit, which shall be renewed every year, may be revoked by the Mayor at any time for the violation of this

Ordinance.

SEC. 3. Building requirement. — (a) In each massage clinic, there shall be separate rooms for the male and female

customers. Rooms where massage operations are performed shall be provided with sliding curtains only instead of

swinging doors. The clinic shall be properly ventilated, well lighted and maintained under sanitary conditions at all

times while the establishment is open for business and shall be provided with the necessary toilet and washing

facilities.

(b) In every clinic there shall be no private rooms or separated compartment except those assigned for toilet, lavatories,

dressing room, office or kitchen.

(c) Every massage clinic shall "provided with only one entrance and it shall have no direct or indirect communication

whatsoever with any dwelling place, house or building.

SEC. 4. Regulations for the operation of massage clinics. — (a) It shall be unlawful for any operator massagist, attendant

or helper to use, or allow the use of, a massage clinic as a place of assignation or permit the commission therein of any

incident or immoral act. Massage clinics shall be used only for hygienic and aesthetic massage.

(b) Massage clinics shall open at eight o'clock a.m. and shall close at eleven o'clock p.m.

(c) While engaged in the actual performance of their duties, massagists, attendants and helpers in a massage clinic shall

be as properly and sufficiently clad as to avoid suspicion of intent to commit an indecent or immoral act;

(d) Attendants or helpers may render service to any individual customer only for hygienic and aesthetic purposes under

the order, direction, supervision, control and responsibility of a qualified massagist.

SEC. 5. Qualifications — No person who has previously been convicted by final judgment of competent court of any

violation of the provisions of paragraphs 3 and 5 of Art. 202 and Arts. 335, 336, 340 and 342 of the Revised Penal Code,

or Secs. 819 of the City of Manila, or who is suffering from any venereal or communicable disease shall engage in the

occupation of massagist, attendant or helper in any massage clinic. Applicants for Mayor's permit shall attach to their

application a police clearance and health certificate duly issued by the City Health Officers as well as a massagist

certificate duly issued by the Committee or Examiners for Massagists or by the Director of Health or his authorized

representatives, in case of massagists.

SEC. 6. Duty of operator of massage clinic. — No operator of massage clinic shall allow such clinic to operate without a

duly qualified massagist nor allow, any man or woman to act as massagist, attendant or helper therein without the

Mayor's permit provided for in the preceding sections. He shall submit whenever required by the Mayor or his

authorized representative the persons acting as massagists, attendants or helpers in his clinic. He shall place the

massage clinic open to inspection at all times by the police, health officers, and other law enforcement agencies of the

government, shall be held liable for anything which may happen with the premises of the massage clinic.

SEC. 7. Penalty. — Any person violating any of the provisions of this Ordinance shall upon conviction, be punished by a

fine of not less than fifty pesos nor more than two hundred pesos or by imprisonment for not less than six days nor

more than six months, or both such fine and imprisonment, at the discretion of the court.

SEC. 8. Repealing Clause. — All ordinances or parts of ordinances, which are inconsistent herewith, are hereby

repealed.

SEC. 9. Effectivity. — This Ordinance shall take effect upon its approval.

Enacted, August 27, 1954.

Approved, September 7, 1954.

The main contention of the appellant in its appeal and the principal ground of its petition for declaratory judgment is that the

City of Manila is without authority to regulate the operation of massagists and the operation of massage clinics within its

jurisdiction; that whereas under the Old City Charter, particularly, Section 2444 (e) of the Revised Administrative Code, the

Municipal Board was expressly granted the power to regulate and fix the license fee for the occupation of massagists, under the

New Charter of Manila, Republic Act 409, said power has been withdrawn or omitted and that now the Director of Health,

pursuant to authority conferred by Section 938 of the Revised Administrative Code and Executive Order No. 317, series of 1941,

as amended by Executive Order No. 392, series, 1951, is the one who exercises supervision over the practice of massage and

over massage clinics in the Philippines; that the Director of Health has issued Administrative Order No. 10, dated May 5, 1953,

prescribing "rules and regulations governing the examination for admission to the practice of massage, and the operation of

massage clinics, offices, or establishments in the Philippines", which order was approved by the Secretary of Health and duly

published in the Official Gazette; that Section 1 (a) of Ordinance No. 3659 has restricted the practice of massage to only hygienic

and aesthetic massage prohibits or does not allow qualified massagists to practice therapeutic massage in their massage clinics.

Appellant also contends that the license fee of P100.00 for operator in Section 2 of the Ordinance is unreasonable, nay,

unconscionable.

If we can ascertain the intention of the Manila Municipal Board in promulgating the Ordinance in question, much of the

objection of appellant to its legality may be solved. It would appear to us that the purpose of the Ordinance is not to regulate

the practice of massage, much less to restrict the practice of licensed and qualified massagists of therapeutic massage in the

Philippines. The end sought to be attained in the Ordinance is to prevent the commission of immorality and the practice of

prostitution in an establishment masquerading as a massage clinic where the operators thereof offer to massage or manipulate

superficial parts of the bodies of customers for hygienic and aesthetic purposes. This intention can readily be understood by the

building requirements in Section 3 of the Ordinance, requiring that there be separate rooms for male and female customers;

that instead of said rooms being separated by permanent partitions and swinging doors, there should only be sliding curtains

between them; that there should be "no private rooms or separated compartments, except those assigned for toilet, lavatories,

dressing room, office or kitchen"; that every massage clinic should be provided with only one entrance and shall have no direct

or indirect communication whatsoever with any dwelling place, house or building; and that no operator, massagists, attendant

or helper will be allowed "to use or allow the use of a massage clinic as a place of assignation or permit the commission therein

of any immoral or incident act", and in fixing the operating hours of such clinic between 8:00 a.m. and 11:00 p.m. This intention

of the Ordinance was correctly ascertained by Judge Hermogenes Concepcion, presiding in the trial court, in his order of

dismissal where he said: "What the Ordinance tries to avoid is that the massage clinic run by an operator who may not be a

masseur or massagista may be used as cover for the running or maintaining a house of prostitution."

Ordinance No. 3659, particularly, Sections 1 to 4, should be considered as limited to massage clinics used in the practice of

hygienic and aesthetic massage. We do not believe that Municipal Board of the City of Manila and the Mayor wanted or

intended to regulate the practice of massage in general or restrict the same to hygienic and aesthetic only.

As to the authority of the City Board to enact the Ordinance in question, the City Fiscal, in representation of the appellees, calls

our attention to Section 18 of the New Charter of the City of Manila, Act No. 409, which gives legislative powers to the Municipal

Board to enact all ordinances it may deem necessary and proper for the promotion of the morality, peace, good order, comfort,

convenience and general welfare of the City and its inhabitants. This is generally referred to as the General Welfare Clause, a

delegation in statutory form of the police power, under which municipal corporations, are authorized to enact ordinances to

provide for the health and safety, and promote the morality, peace and general welfare of its inhabitants. We agree with the

City Fiscal.

As regards the permit fee of P100.00, it will be seen that said fee is made payable not by the masseur or massagist, but by the

operator of a massage clinic who may not be a massagist himself. Compared to permit fees required in other operations,

P100.00 may appear to be too large and rather unreasonable. However, much discretion is given to municipal corporations in

determining the amount of said fee without considering it as a tax for revenue purposes:

The amount of the fee or charge is properly considered in determining whether it is a tax or an exercise of the police

power. The amount may be so large as to itself show that the purpose was to raise revenue and not to regulate, but in

regard to this matter there is a marked distinction between license fees imposed upon useful and beneficial

occupations which the sovereign wishes to regulate but not restrict, and those which are inimical and dangerous to

public health, morals or safety. In the latter case the fee may be very large without necessarily being a tax. (Cooley on

Taxation, Vol. IV, pp. 3516-17; underlining supplied.)

Evidently, the Manila Municipal Board considered the practice of hygienic and aesthetic massage not as a useful and beneficial

occupation which will promote and is conducive to public morals, and consequently, imposed the said permit fee for its

regulation.

In conclusion, we find and hold that the Ordinance in question as we interpret it and as intended by the appellees is valid. We

deem it unnecessary to discuss and pass upon the other points raised in the appeal. The order appealed from is hereby affirmed.

No costs.

Paras, C.J., Bengzon, Padilla, Reyes, A., Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Endencia and Felix, JJ., concur.

MIAA v. Court of Appeals

G.R. No. 155650, July 20, 2006

Facts: The Manila International Airport Authority (MIAA) operates the Ninoy Aquino International Airport (NAIA) Complex in

Parañaque City under Executive Order No. 903 (MIAA Charter), as amended. As such operator, it administers the land,

improvements and equipment within the NAIA Complex. In March 1997, the Office of the Government Corporate Counsel

(OGCC) issued Opinion No. 061 to the effect that the Local Government Code of 1991 (LGC) withdrew the exemption from real

estate tax granted to MIAA under Section 21 of its Charter.

Thus, MIAA paid some of the real estate tax already due. In June 2001, it received Final Notices of Real Estate Tax Delinquency

from the City of Parañaque for the taxable years 1992 to 2001. The City Treasurer subsequently issued notices of levy and

warrants of levy on the airport lands and buildings.

At the instance of MIAA, the OGCC issued Opinion No. 147 clarifying Opinion No. 061, pointing out that Sec. 206 of the LGC

requires persons exempt from real estate tax to show proof of exemption. According to the OGCC, Sec. 21 of the MIAA Charter is

the proof that MIAA is exempt from real estate tax. MIAA, thus, filed a petition with the Court of Appeals seeking to restrain the

City of Parañaque from imposing real estate tax on, levying against, and auctioning for public sale the airport lands and buildings,

but this was dismissed for having been filed out of time.

Hence, MIAA filed this petition for review, pointing out that it is exempt from real estate tax under Sec. 21 of its charter and Sec.

234 of the LGC. It invokes the principle that the government cannot tax itself as a justification for exemption, since the airport

lands and buildings, being devoted to public use and public service, are owned by the Republic of the Philippines. On the other

hand, the City of Parañaque invokes Sec. 193 of the LGC, which expressly withdrew the tax exemption privileges of government-

owned and controlled corporations (GOCC) upon the effectivity of the LGC.

It asserts that an international airport is not among the exceptions mentioned in the said law. Meanwhile, the City of Parañaque

posted and published notices announcing the public auction sale of the airport lands and buildings. In the afternoon before the

scheduled public auction, MIAA applied with the Court for the issuance of a TRO to restrain the auction sale. The Court issued a

TRO on the day of the auction sale, however, the same was received only by the City of Parañaque three hours after the sale.

Issue: Whether or not the airport lands and buildings of MIAA are exempt from real estate tax

Held: The Petition is GRANTED.

The airport lands and buildings of MIAA are exempt from real estate tax imposed by local governments. Sec. 243(a) of the LGC

exempts from real estate tax any real property owned by the Republic of the Philippines. This exemption should be read in

relation with Sec. 133(o) of the LGC, which provides that the exercise of the taxing powers of local governments shall not extend

to the levy of taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities.

These provisions recognize the basic principle that local governments cannot tax the national government, which historically

merely delegated to local governments the power to tax.

The rule is that a tax is never presumed and there must be clear language in the law imposing the tax. This rule applies with

greater force when local governments seek to tax national government instrumentalities. Moreover, a tax exemption is construed

liberally in favor of national government

instrumentalities.

MIAA is not a GOCC, but an instrumentality of the government.

The Republic remains the beneficial owner of the properties. MIAA itself is owned solely by the Republic. At any time, the

President can transfer back to the Republic title to the airport lands and buildings without the Republic paying MIAA any

consideration. As long as the airport lands and buildings are reserved for public use, their ownership remains with the State.

Unless the President issues a proclamation withdrawing these properties from public use, they remain properties of public

dominion. As such, they are inalienable, hence, they are not subject to levy on execution or foreclosure sale, and they are

exempt from real estate tax.

However, portions of the airport lands and buildings that MIAA leases to private entities are not exempt from real estate tax. In

such a case, MIAA has granted the beneficial use of such portions for a consideration to a taxable person.