FUNDAMENTAL POWERS OF THE STATE

General principles
The inherent powers of the state are
a. police power
b. power of eminent domain
c. power of taxation
Similarities
1. inherent in the state (exercised without need of express grant)
2. necessary and indispensable (state cannot be effective without them)
3. methods by which the state intereferes with private property
4. presupposes equivalent compensation
5. exercised by the legislature
Distinctions
police power: Power of the
state to promote public welfare
by restraining & regulating the
use of liberty and property

power of eminent domain:

Inherent right of the state to
condemn private property to
public use upon the payment
of just compensation

power of taxation

What it regulates

Liberty and property

Property rights

Exercised by

government

May be
entitites

Noxious/noxious purposes- may be

destroyed

Wholesome used, devoted

public use or purpose

to

Wholesome used, devoted to

public use or purpose

Intangible, altruistic feeling that the

individual has contributed to the
common good

Full & fair equivalent of the

property taken

Protection
given
and/or
public
improvements
instituted by government for
the taxes paid

Nature
property
Compensation

of

Limitations:
G: Bill of rights
E: Power may prevail over specific constitutional
guarantees. Courts may annul improvident exercise of
police power

POLICE POWER
Definition: the power of promoting public welfare by
restraining and regulating the use of liberty and property
Scope/Characteristics:
a. most pervasive
b. least limitable
c. most demanding of all 3 powers
Justification: salus populi est suprema lex and sic utere tuo ut
alienum non laedas

Police power cannot be bargained away through the

medium of a treaty or a contract

exercised

Property rights
by

private

government

Taxing power may be used as an implement of police

power (Tiu v Videogram Regulatory Board)
Eminent domain may be used as an implement to
attain the police objective

RETROACTIVE EFFECT/IMPAIR VESTED RIGHTS

A law enacted in the exercise of police power to
regulate or govern certain acts or transactions may be
given retroactive effects & may reasonably impair
vested rights.
Police power legislation is applicable to existing
contracts.
Non-impairment of contracts or vested rights clauses
will have to yield to the superior and legitimate
exercise of police Power (Ortigas v CA)
Ex: Subdivision and Condominium Buyers protective
decree applies to all existing Ks
PRC v De Guzman: Exercise of the right to select a
profession or course of study (like medicine) may be
regulated pursuant to the police power of the state to
safeguard health, morals, peace, education, order, safety

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and the general welfare of the people. Necessary to protect

the public from the potentially deadly effects of
incompetence and ignorance.
Chavez v Romulo: Right to bear arms is a statutory
privilege. A PTCFC is not a property, property right, not a
vested right and may be revoked at any time.

Mining exploration permits, timber permits do not vest

the grantee any permanent or irrevocable rights
MMDA v Garin: Right to operate a motor vehicle is not a
property right, but a privilege granted by the state
Carlos Superdrug v DSWD: When conditions so demand,
property rights must bow down to police power; ex:
Expanded Senior Citizens act of 2003- 20% discount for
prescription/non-prescription/branded and not.
Who may exercise the power
G: Congress
E: delegated to the President, administrative bodies, and
lawmaking bodies of LGUs (general welfare clause, Sec. 16
of RA 7160)
Does not authorize the President to take over internal
management of a cooperative (Cam Norte Electric
Cooperative)
MMDA not empowered to enact ordinances, approve
resolutions or appropriate funds for the general welfare of
inhabitants.
Mandate: transport and traffic management, admin and
implementation of all traffic enforcement operations,
traffic engineering services and traffic educ programs
MMDA v Bel-Air: not empowered to order opening of
Neptune St.
MMDA v Garin: Not empowered to suspend or
revoke licenses without any other legislative
enactment; only power to enforce existing traffic rules
and regulations
Francisco v Fernando: Wet-flag scheme along EDSA
is valid. All cities have enacted anti-jaywalking
ordinances or traffic management codes for
pedestrian regulation.
MMDA v Viron: DOTC not the MMDA which is
authorized to implement project (designation of bus
terminals)
Limitations (Tests for valid exercise)
a. lawful subject
b. lawful means
lawful subject: The interests of the public in general as
distinguished from those of a particular class require the
exercise of the power. The activity sought to be regulated
affects the general welfare, if it does then the enjoyment of
rights therefrom may have to yield to the greater interest.

Ex: gambling is a vice and social ill; PD that revoked

all existing franchises and permits to operate all forms
of gambling facilities is valid (jai-alai)
Ex2: AO of DENR to convert all existing mining leases
and or mining agreements into production sharing
agreements are valid
Ex3: Pollution Adjudication Board v CA: ex parte
cases to cease and desist issued by PAB are valid! Ex:
prevent continuous discharge of pollutive &
untreated effluents to rivers

Lawful means: The means employed are reasonably

necessary for the accomplishment of the purpose, and is
not unduly approve on individuals
JMM Promotion and Mgmt v CA: DOLE Order 3
establishing procedures & requirements for screening
of performance artists by POEA is a valid exercise
Phil Press Inst. V COMELEC: Reso 2772 of COMELEC
which mandates newspapers of general circulation to
provide free print space of not less than page is
invalid. No national emergency or existence of
imperious public necessity
City Govt of QC V Ericta: Requiring cemetery owners
to reserve 6% of burial lots to paupers is an invalid
exercise of police power; exercise of power of eminent
domain
Requisites for proper exercise of police power [Lucena
Grand Terminal v JAC Liner]
1. interest of public generally as distinguished from
those of a particular class require the interference
from the State
2. means employed are reasonably necessary for the
attainment of the object sought and not unduly
oppressive upon individuals
Additional limitations (when exercised by delegate)
1. must be an express grant by law (sec. 16,39, of the LG
code)
2. within territorial limits (G: local govt units E: protect
water supply)
3. must not be contrary to law an activity prohibited
by law cannot be allowed under the guise of
regulation; an activity allowed by law may not be
prohibited but regulated
For municipal ordinances to be valid:
1. must not contravene the Constitution or any statute
2. must not be unfair or oppressive
3. must not be partial or discriminatory
4. must not prohibit, but may regulate trade
5. must not be unreasonable
6. must be general in application & consistent with
public police
City of Manila v Laguio: Ordinance 7783 which prohibited
the established of business providing certain forms of
entertainment in Ermita-Malate area is invalid. Local leg
bodies cannot prohibit the operation of sauna and

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massage parlors, karaoke bars, beerhouses, night clubs, etc.

without violating due process and equal protection (not
even under the guise of police power)
Authority of a municipality to issue zoning classification
is an exercise of police power. Zoning ordinance
local/mun legislation which arranges, prescribes, defines
and apportions a given poli subdivisions into specific land
uses as present and future projection of needs

POWER OF EMINENT DOMAIN/AKA

POWER OF EXPROPRIATION
See:
Art. 3(9) Private property shall not be taken for public
use without just compensation.
Art. 12(18) The State may, in the interest of national
welfare or defense, establish and
operate vital industries and, upon payment of just
compensation, transfer to public ownership
utilities and other private enterprises to be operated by the
Government.
Art. 13(4 and 9)
Section 4. 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.

To this end, the State shall encourage and undertake the

just distribution of all agricultural
lands, subject to such priorities and reasonable retention
limits as the Congress may
prescribe, taking into account ecological, developmental,
or equity considerations, and
subject to the payment of just compensation. In
determining retention limits, the State shall
respect the right of small landowners. The State shall
further provide incentives for voluntary
land-sharing.
Section 9. The State shall, by law, and for the common
good, undertake, in cooperation with
the private sector, a continuing program of urban land
reform and housing which will make
available at affordable cost, decent housing and basic
services to under-privileged and
homeless citizens in urban centers and resettlement areas.
It shall also promote adequate
employment opportunities to such citizens. In the
implementation of such program the State
shall respect the rights of small property owners.

police power:

power of eminent domain:

*Note: both have general welfare as

their object, recent trends show a
mingling of the 2 with eminent domain
used an an implement of police power
Nature of property

Power of the state to promote

public welfare by restraining &
regulating the use of liberty and
property
Noxious/noxious purpose

Inherent right of the state to

condemn private property to public
use upon the payment of just
compensation

compensation

None
If property right restricted bec
continued use would be injurious to
public interest = no compensable
taking
Property rights of individuals are
subjected to the restraints and
burdens to secure the general
comfort, health and prosperity of
the state
State restricts use of property; but
none of the property interests or
bundle of rights is used by/for
benefit of public
Can be total deprivation; but if
nobody else acquires it not
compensable taking

If appropriated and applied to

public
purpose;
pay
just
compensation

End use

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INHERENT POWER
It is an inherent power of the state and need not be
granted
Art. 3(9) imposes a limit on the govts exercise of the
power, provides protection to the individual
[NPC v mabuhay]: acquisition of a right of way
[Republic v PLDT]: If a burden is imposed on the owner of
the condemned property through expropriation, even
without loss of title or possession is still subject to
expropriation]
JURISDICTION: complaint filed in RTC, court is duty
bound to determine the amount of just compensation to be
paid for property.
Plaintiff does not have a right to dismiss the complaint,
landowner would have already suffered injuries. But if the
plaintiff decides to dismiss it, it will be subject to court
approval and to certain condition
Who may exercise the power
G: Congress
E: delegated to President, Admin, Local Govt Units and
Private Enterprises performing public services (peculiar to
eminent domain!)
Lagcao v Judge Labra: loc gov units have no inherent power
of eminent domain; must be expressly delegated and the
delegated power is not equal to the pervasive and allencompassing power vested in the legislative
Jesus is Lor v Pasig: Strict construction against the agency
exercising the power. Govt failed to prove that before it
filed its complaint it made a written, definite, and valid
offer to acquire property under Sec. 19
Filstream v CA: Exercise of eminent domain is superior to
the final and executory judgment in an ejectment case
IronSteal v CA: non-incorporated entity of the governmentin absence of any special provisions its powers, duties,
assets, liabilities will revert to and be assumed by the
government
San Roque v IAC: strict construction
G: govt not estopped by acts of agents
E: strict application will defeat effectiveness of the Torrens
Title
Requisites for exercise
1. Necessity: genuine necessity of public character
2. Private property
3. Taking in the constitutional sense
4. Public use: synonymous with public interest, public
benefit, public welfare and public convenience
5. Just compensation
6. Due process

Requirement 2: Private property

Private property already devoted to public use cannot
be expropriated by a delegate under a general grant
of authority [City of Manila v Chinese Community]
G: All private property capable of ownership, (even
services) may be expropriated
E: Money and choses in action
Requirement 3: Taking in the constitutional sense
May include trespass w/o actual eviction, material
impairment of the value of the property or the
prevention of the ordinary uses for which the
property was intended ex: 3 meter easement, prohibit
a building which would impair the view
May only result in the imposition of a burden upon
the owner without loss of title or possession
Property owner need not file a claim for just
compensation with COA, may go directly to court to
demand payment
Owner can recover possession of the property from
squatters until the transfer is consummated or
expropriation case filed- even if he agreed to transfer
to the property,
Requisites of valid taking [Republic v Castelvi]
1. Expropriator must enter a private property
2. Entry must not be for more than a momentary period
3. Entry must be under warrant of color or authority
4. Property must be devoted to public use or otherwise
informally appropriated or injuriously affected
5. Utilization of property must be in such a way as to
deprive him of beneficial enjoyment
Requirement 4: Public Use
General concept: meeting public need or public exigency
New: synonymous with public interest, public benefit,
public welfare and public convenience, flexible and
evolving concept; broadened to cover uses which redound
to indirect advantage or benefit of the public
Filstream v CA: the fact that property is less than
hectare and only a few could actually benefit from
expropriation does not diminish its public character
When practiced by LGU: Sec. 19, permits it for public
use, or purpose, or welfare, or benefit of the poor and
the landless.

Requirement 1: Necessity

When exercised by legislature- political question;

Exercised by delegate- justiciable question
RTC has the power to inquire into the legality of the
exercise of the right of eminent domain and
determine whether there is genuine necessity
Foundation of right: genuine necessity of public
character, govt must not capriciously or arbitrarily
choose which private property will be expropriatred
[Lagcao v Judge Labra]

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Must be passed through an ordinance! Not a

resolution
Lagcao v Labra: condemnation in an irrational or
piecemeal fashion not contemplated by the court

Requirement 5: Just Compensation

Full and fair equivalent:
G: Market value- sum of money which a person,
desirous but not compelled to buy, and an owner,
willing but not compelled to sell would agree on a
price to be given & received therefor
E: only a portion, owner not restricted to actual
market value Total = (Market value + consequential
damages) consequential benefits

Must be paid within a reasonable time from taking

Judicial prerogative: PD which sanctions the assessment

to be determined by the assessor/executive/city assessor
is unconstitutional
RTC as special agrarian court: original and exclusive
jurisdiction over
1. petitions for determination of just compensation
2. prosecution of criminal offenses under RA 6657
(Republic v DAR)
Commissioners
G: Expropriation where principal issue is determination of
payment of just compensation- Trial before commissioners
is indispensable
E: agrarian reform cases discretionary
But RTC not bound by their findings; may substitute its
own estimate of the value for the property
1. commissioners applied illegal principles on evidence
2. disregarded clear preponderance of evidence
3. amount is either grossly inadequate or excessive
Form of compensation: NOT in a trust account
1. money/cash
2. in agrarian reform, payment partly in bonds (Assoc of
Agrarian Reform)
3. Land Bank bonds
When?
There must be payment before the title to the
expropriated property is transferred!
The rejecting landowner may withdraw the deposit in
the trust pending determination of valuation of the
property- because owner is merely exercising right to
seek just compensation (otherwise penalizing him)
Without prompt payment; cannot be considered just
Would be depriving him of land while govt decides
WON to expropriate or return to landowner when
rendered useless by force majeur

Reckoning point of valuation of property

G: date of filing of the complaint for eminent domain
E: actual taking w/ increase in value of the land then
filing? Date of actual taking
But! [Esteban v De Onorio- declared value of prop
determined either as of the date of the taking or filingwhichever comes first]
Local govt unit: market value at time of taking of the
property; thats when the real measure of loss may be
fairly adjudged
Principle criterion: Character of land at the time of taking
Entitlement of owner to interest:
G: once value of property is fixed by court, amt shall earn
interest at the legal rate until full payment is effect (6%)
E: if there is delay = forbearance of money/goods (12%)
Who is entitled? Present lawful interest in the property to
be condemned
Ex:owner, mortgagee, lessee, vendee in possession under
an executory contract
When does title pass?
G: expropriation- after payment; landowner may still
dispose of the same before payment of just compensation
E: agrarian reform even before payment
Right of owner in case of non-payment
G: does not entitle owner to recover possession of the
expropriated lots, only payment
E: where the govt fails to pay within 5 years from finality
of judgment, the owners shall have the right to recover
possession of their property
Due process of law: defendants must have the
opportunity to be heard where they can question the
propriety of the expropriation or reasonableness of
compensation (Filstream v CA)
Writ of possession:
Ministerial
1. filing of a complaint sufficient in form & substance
2. deposit made by the government of the amt
equivalent to 15% of the FMV
Determination of whether its for a public purpose is not a
condition precedent
Hearing to determine compliance with requirements for
socialized housing (RA 7279 done even after writ of
possession)
No plaintiffs matter of right to dismiss the complaint!
Right to dismiss is subject to court approval and to certain
conditions
Right to re-purchase or re-acquire
G: fee simple; no right! In rem proceeding, the paramount
title is in the public under a new and independent title
(diff from an unpaid seller)

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E: if done for a particular purpose with a condition that

after the purpose is ended or abandoned, property will

revert/can re-acquire

Art. 12(18)
Section 18. The State may, in the interest of national welfare
or defense, establish and
operate vital industries and, upon payment of just
compensation, transfer to public ownership
utilities and other private enterprises to be operated by the
Government.

Art. 12(17)
Section 17. In times of national emergency, when the public
interest so requires, the State
may, during the emergency and under reasonable terms
prescribed by it, temporarily take
over or direct the operation of any privately-owned public
utility or business affected with
public interest.
Welfare of public is paramount consideration
Temporary takeover- exercising police power (not
eminent domain!)
Extends to operation of business, not the ownership
No need to compensate owner
Emergency powers of the government
Reposed in CONGRESS not the President (must be
delegated)

Art. 13(4)
Section 4. 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.
To this end, the State shall encourage and undertake the just
distribution of all agricultural
lands, subject to such priorities and reasonable retention
limits as the Congress may
prescribe, taking into account ecological, developmental, or
equity considerations, and
subject to the payment of just compensation. In determining
retention limits, the State shall
respect the right of small landowners. The State shall further
provide incentives for voluntary
land-sharing.

Art. 13(9)
Section 9. The State shall, by law, and for the common good,
undertake, in cooperation with
the private sector, a continuing program of urban land reform
and housing which will make
available at affordable cost, decent housing and basic services
to under-privileged and
homeless citizens in urban centers and resettlement areas. It
shall also promote adequate
employment opportunities to such citizens. In the
implementation of such program the State
shall respect the rights of small property owners.

comprehensive agrarian reform law

exercise of the police power of the state
police power: eminent domain as an instrument to
accomplish police objective, prescribed retention
limits for landowners
eminent domain: where to carry out the regulation,
owners are deprived of lands they own in excess of
the amount allowed
RA 7279 (urban devt and housing act)
Filstream v CA: restrictions in Art 19, LGCMANDATORY
a. order in which lands are acquired (privately
owned is last,6th)
b. other modes of acquisition exhausted
c. parcels owned by small prop owners are exempt
i.
not more than 300sqm in highly urbanized
cities, not more than 800 sqm in urban areas
ii.
do not own other residential property

POWER OF TAXATION
Power of taxation: purpose is generation of revenue and
regulation is incidental
If regulation is primary purpose (police power), fact that
revenue collected does not make it a tax
Who may exercise?
G: legislature
E: local legislative bodies (Art. 10(5)) and the President
when delegated tariff powers (Art. 6(28.2)
Limitations
1. Due process of law: should not be confiscatory
2. Legislature determines the nature, object, extent,
coverage and situs of tax (however courts can strike it
down)

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3.
4.
5.

6.

Equal protection clause: Taxes should be uniform

and equitable (Art. 6.28)
Public purpose (if for a special purpose, treated as a
special fund and paid out for such purpose only,
when fulfilled balance goes to govt funds)
Double taxation: additional taxes on the same subject
by same taxing jurisdiction, same period. Same
purpose- no consti prohinition but cannot a violation
of equal protection clause
Tax exemptions: Art. 6(28) no law granting tax
exemption shall be passed without the concurrence of
a majority of ALL members of congress. If granted
gratuitously, may be revoked at will.

Art. 6(28)
(3) Charitable institutions, churches and personages or
convents appurtenant thereto,
mosques, non-profit cemeteries, and all lands, buildings,
and improvements, actually,
directly, and exclusively used for religious, charitable, or
educational purposes shall be
exempt from taxation.

Art. 14(4)
(3) All revenues and assets of non-stock, non-profit
educational institutions used actually,
directly, and exclusively for educational purposes shall be
exempt from taxes and duties.
Upon the dissolution or cessation of the corporate
existence of such institutions, their assets
shall be disposed of in the manner provided by law.
Proprietary educational institutions, including those
cooperatively owned, may likewise be
entitled to such exemptions, subject to the limitations
provided by law, including restrictions
on dividends and provisions for reinvestment.
Art 14(4)
(4) Subject to conditions prescribed by law, all grants,
endowments, donations, or
contributions used actually, directly, and exclusively for
educational purposes shall be
exempt from tax.

License fee v Tax

License fee
police measure
Limited to cost of permit and reasonable regulation (except if
non-useful occupation)
Privilege of doing something, may be revoked when public
interest requires

Tax
Revenue measure
Non-useful- amt of tax may be unlimited provided it is not
confiscatory- occupational therapy
Imposed on persons or property for revenue

Kinds of license fee

1. for useful occupations or enterprises
2. for non-useful occ: discourage non-useful enterprises, physical therapy, price may be exorbitant
Supremacy of NL govt over local govt:
When local govts: strictly construed against them, tax never presumed and must be clear language imposing the law

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