Facts:

In 1997, President Ramos issued AO 372 which: (1) required all government departments
and agencies, including SUCs, GOCCs and LGUs to identify and implement measures in FY
1998 that will reduce total expenditures for the year by at least 25% of authorized regular
appropriations for non-personal services items (Section 1) and (2) ordered the withholding
of 10% of the IRA to LGUs (Section 4) . On 10 December 1998, President Estrada issued AO
43, reducing to 5% the amount of IRA to be withheld from LGU.

Issues:

1. Whether or not the president committed grave abuse of discretion in ordering all LGUS to
adopt a 25% cost reduction program in violation of the LGU'S fiscal autonomy

2. Whether Section 4 of the same issuance, which withholds 10 percent of their internal
revenue allotments, are valid exercises of the President's power of general supervision over
local governments

Held:

1. Section 1 of AO 372 does not violate local fiscal autonomy. Local fiscal autonomy does not
rule out any manner of national government intervention by way of supervision, in order to
ensure that local programs, fiscal and otherwise, are consistent with national goals.
Significantly, the President, by constitutional fiat, is the head of the economic and planning
agency of the government, primarily responsible for formulating and implementing
continuing, coordinated and integrated social and economic policies, plans and programs for
the entire country. However, under the Constitution, the formulation and the
implementation of such policies and programs are subject to "consultations with the
appropriate public agencies, various private sectors, and local government units." The
President cannot do so unilaterally.

Consequently, the Local Government Code provides:

"x x x [I]n the event the national government incurs an unmanaged public sector deficit, the
President of the Philippines is hereby authorized, upon the recommendation of [the]
Secretary of Finance, Secretary of the Interior and Local Government and Secretary of Budget
and Management, and subject to consultation with the presiding officers of both Houses of
Congress and the presidents of the liga, to make the necessary adjustments in the internal
revenue allotment of local government units but in no case shall the allotment be less than
thirty percent (30%) of the collection of national internal revenue taxes of the third fiscal
year preceding the current fiscal year x x x."
There are therefore several requisites before the President may interfere in local fiscal
matters: (1) an unmanaged public sector deficit of the national government; (2)
consultations with the presiding officers of the Senate and the House of Representatives and
the presidents of the various local leagues; and (3) the corresponding recommendation of
the secretaries of the Department of Finance, Interior and Local Government, and Budget
and Management. Furthermore, any adjustment in the allotment shall in no case be less than
thirty percent (30%) of the collection of national internal revenue taxes of the third fiscal
year preceding the current one.

Petitioner points out that respondents failed to comply with these requisites before the
issuance and the implementation of AO 372. At the very least, they did not even try to show
that the national government was suffering from an unmanageable public sector deficit.
Neither did they claim having conducted consultations with the different leagues of local
governments. Without these requisites, the President has no authority to adjust, much less
to reduce, unilaterally the LGU's internal revenue allotment.

AO 372, however, is merely directory and has been issued by the President consistent with
his power of supervision over local governments. It is intended only to advise all government
agencies and instrumentalities to undertake cost-reduction measures that will help maintain
economic stability in the country, which is facing economic difficulties. Besides, it does not
contain any sanction in case of noncompliance. Being merely an advisory, therefore, Section
1 of AO 372 is well within the powers of the President. Since it is not a mandatory imposition,
the directive cannot be characterized as an exercise of the power of control.

2. Section 4 of AO 372 cannot be upheld. A basic feature of local fiscal autonomy is

the automatic release of the shares of LGUs in the national internal revenue. This is
mandated by no less than the Constitution. The Local Government Code specifies further that
the release shall be made directly to the LGU concerned within five (5) days after every
quarter of the year and "shall not be subject to any lien or holdback that may be imposed by
the national government for whatever purpose." As a rule, the term "shall" is a word of
command that must be given a compulsory meaning. The provision is, therefore,
imperative. (Pimentel vs. Aguirre, G.R. No. 132988, July 19, 2000)

Philippine Petroleum Corporation vs

Municipality of Pililla, Rizal, GR 90776
Posted on July 13, 2017
FACTS:

 Philippine Petroleum Corporation (PPC for short) is a business enterprise engaged in the manufacture
of a petroleum product, with its refinery plant situated at Malaya, Pililla, Rizal, conducting its business
activities within the territorial jurisdiction of the Municipality of Pililla, Rizal
 Under Section 142 of the National Internal Revenue Code of 1939, manufactured oils and other fuels
are subject to specific tax.
  Respondent Municipality of Pililla, Rizal, through Municipal Council Resolution No. 25, S-1974 enacted
Municipal Tax Ordinance No. 1, S-1974 otherwise known as “The Pililla Tax Code of 1974”. Sections 9
and 10 of the said ordinance imposed a tax on business, except for those for which fixed taxes are
provided in the Local Tax Code
 The respondents then filed a complaint for the collection of business tax, storage permit fees, mayor’s
permit and sanitary inspection fees.

ISSUE 1:

WON PPC whose oil products are subject to specific tax under the NIRC, is still liable to pay tax on business
unto the respondent Municipality of Pililla, Rizal

HELD 1: YES, a tax on business is distinct from a tax on the article itself.

RATIO 1: While Section 2 of P.D. 436 prohibits the imposition of local taxes on petroleum products, said decree
did not amend Sections 19 and 19 (a) of P.D. 231 as amended by P.D. 426, wherein the municipality is granted
the right to levy taxes on business of manufacturers, importers, producers of any article of commerce of
whatever kind or nature.

The exercise by local governments of the power to tax is ordained by the present Constitution. To allow the
continuous effectivity of the prohibition set forth in PC No. 26-73 (1) would be tantamount to restricting their
power to tax by mere administrative issuances. Under Section 5, Article X of the 1987 Constitution, only
guidelines and limitations that may be established by Congress can define and limit such power of local
governments.

ISSUE 2: WON PPC whose oil products are subject to specific tax under the NIRC, is still liable to pay the
storage fee unto the respondent Municipality of Pililla, Rizal

HELD 2: NO, Provincial Circular No. 6-77 enjoining all city and municipal treasurers to refrain from collecting
the so-called storage fee on flammable or combustible materials imposed in the local tax ordinance of their
respective locality frees petitioner PPC from the payment of storage permit fee.

RATIO 2: The storage permit fee being imposed by Pililla’s tax ordinance is a fee for the installation and
keeping in storage of any flammable, combustible or explosive substances. Inasmuch as said storage makes
use of tanks owned not by the municipality of Pililla, but by petitioner PPC, same is obviously not a charge for
any service rendered by the municipality as what is envisioned in Section 37 of the same Code.

ISSUE 3: WON PPC whose oil products are subject to specific tax under the NIRC, is still liable to pay the
permit fees unto the respondent Municipality of Pililla, Rizal

HELD 3: YES.

RATIO 3: Section 10 (z) (13) of Pililla’s Municipal Tax Ordinance No. 1 prescribing a permit fee is a permit fee
allowed under Section 36 of the amended Code.
ISSUE 4: WON the mayor has authority to waive payment of the mayor’s permit and sanitary inspection fees

HELD 4: NO HE DOES NOT, it is the law-making body, and not an executive like the mayor, who can make an
exemption.

RATIO 4: The trial court did not err in holding that “since the power to tax includes the power to exempt thereof
which is essentially a legislative prerogative, it follows that a municipal mayor who is an executive officer may
not unilaterally withdraw such an expression of a policy thru the enactment of a tax.”

In the absence of a clear and express exemption from the payment of said fees, the waiver cannot be
recognized. Under Section 36 of the Code, a permit fee like the mayor’s permit, shall be required before any
individual or juridical entity shall engage in any business or occupation under the provisions of the Code.

Dela Cruz vs Paras

G.R. No. L-42571-72 – 123 SCRA 569 – Political Law – Subject Shall Be
Expressed in the Title – Police Power Not Validly Exercise

Vicente De La Cruz et al were club & cabaret operators. They assail the
constitutionality of Ord. No. 84, Ser. of 1975 or the Prohibition and Closure
Ordinance of Bocaue, Bulacan. De la Cruz averred that the said Ordinance
violates their right to engage in a lawful business for the said ordinance would
close out their business. That the hospitality girls they employed are healthy
and are not allowed to go out with customers. Judge Paras however lifted the
TRO he earlier issued against Ord. 84 after due hearing declaring that Ord 84.
is constitutional for it is pursuant to RA 938 which reads “AN ACT GRANTING
MUNICIPAL OR CITY BOARDS AND COUNCILS THE POWER TO REGULATE THE
ESTABLISHMENT, MAINTENANCE AND OPERATION OF CERTAIN PLACES OF
AMUSEMENT WITHIN THEIR RESPECTIVE TERRITORIAL JURISDICTIONS”•.
Paras ruled that the prohibition is a valid exercise of police power to promote
general welfare. De la Cruz then appealed citing that they were deprived of
due process.

ISSUE: Whether or not a municipal corporation, Bocaue, Bulacan can, prohibit

the exercise of a lawful trade, the operation of night clubs, and the pursuit of a
lawful occupation, such clubs employing hostesses pursuant to Ord 84 which
is further in pursuant to RA 938.
HELD: The SC ruled against Paras. If night clubs were merely then regulated
and not prohibited, certainly the assailed ordinance would pass the test of
validity. SC had stressed reasonableness, consonant with the general powers
and purposes of municipal corporations, as well as consistency with the laws
or policy of the State. It cannot be said that such a sweeping exercise of a
lawmaking power by Bocaue could qualify under the term reasonable. The
objective of fostering public morals, a worthy and desirable end can be
attained by a measure that does not encompass too wide a field. Certainly the
ordinance on its face is characterized by overbreadth. The purpose sought to
be achieved could have been attained by reasonable restrictions rather than
by an absolute prohibition. Pursuant to the title of the Ordinance, Bocaue
should and can only regulate not prohibit the business of cabarets.

Ermita Malate v City of Manila 20 SCRA 849 (1967)

J. Fernando

Facts:
Ermita-Malate Hotel and Motel Operators Association, and one of its members Hotel del Mar Inc.
petitioned for the prohibition of Ordinance 4670 on June 14, 1963 to be applicable in the city of Manila.
They claimed that the ordinance was beyond the powers of the Manila City Board to regulate due to
the fact that hotels were not part of its regulatory powers. They also asserted that Section 1 of
the challenged ordinance was unconstitutional and void for being unreasonable and violative of due
process insofar because it would impose P6,000.00 license fee per annum for first class motels and
P4,500.00 for second class motels; there was also the requirement that the guests would fill up a form
specifying their personal information.
There was also a provision that the premises and facilities of such hotels, motels and lodging houses
would be open for inspection from city authorites. They claimed this to be violative of due process for
being vague.
The law also classified motels into two classes and required the maintenance of certain minimum
facilities in first class motels such as a telephone in each room, a dining room or, restaurant and
laundry. The petitioners also invoked the lack of due process on this for being arbitrary.
It was also unlawful for the owner to lease any room or portion thereof more than twice every 24
hours.

There was also a prohibition for persons below 18 in the hotel.

The challenged ordinance also caused the automatic cancellation of the license of the hotels that
violated the ordinance.
The lower court declared the ordinance unconstitutional.
Hence, this appeal by the city of Manila.

Issue:

Whether Ordinance No. 4760 of the City of Manila is violative of the due process clause?

Held: No. Judgment reversed.

Ratio:
"The presumption is towards the validity of a law.” However, the Judiciary should not lightly set aside
legislative action when there is not a clear invasion of personal or property rights under the guise of
police regulation.
O'Gorman & Young v. Hartford Fire Insurance Co- Case was in the scope of police power. As
underlying questions of fact may condition the constitutionality of legislation of this character, the
resumption of constitutionality must prevail in the absence of some factual foundation of record for
overthrowing the statute." No such factual foundation being laid in the present case, the lower court
deciding the matter on the pleadings and the stipulation of facts, the presumption of validity must
prevail and the judgment against the ordinance set aside.”

There is no question but that the challenged ordinance was precisely enacted to minimize certain
practices hurtful to public morals, particularly fornication and prostitution. Moreover, the increase in
the licensed fees was intended to discourage "establishments of the kind from operating for purpose
other than legal" and at the same time, to increase "the income of the city government."
Police power is the power to prescribe regulations to promote the health, morals, peace, good order,
safety and general welfare of the people. In view of the requirements of due process, equal protection
and other applicable constitutional guaranties, however, the power must not be unreasonable or
violative of due process.

There is no controlling and precise definition of due process. It has a standard to which the
governmental action should conform in order that deprivation of life, liberty or property, in
each appropriate case, be valid. What then is the standard of due process which must exist both as a
procedural and a substantive requisite to free the challenged ordinance from legal infirmity? It is
responsiveness to the supremacy of reason, obedience to the dictates of justice. Negatively put,
arbitrariness is ruled out and unfairness avoided.

Due process is not a narrow or "technical conception with fixed content unrelated to time, place and
circumstances," decisions based on such a clause requiring a "close and perceptive inquiry into
fundamental principles of our society." Questions of due process are not to be treated narrowly or
pedantically in slavery to form or phrase.

Nothing in the petition is sufficient to prove the ordinance’s nullity for an alleged failure to meet the
due process requirement.

Cu Unjieng case: Licenses for non-useful occupations are also incidental to the police power and the
right to exact a fee may be implied from the power to license and regulate, but in fixing amount of the
license fees the municipal corporations are allowed a much wider discretion in this class of cases than
in the former, and aside from applying the well-known legal principle that municipal ordinances must
not be unreasonable, oppressive, or tyrannical, courts have, as a general rule, declined to interfere
with such discretion. Eg. Sale of liquors.
Lutz v. Araneta- Taxation may be made to supplement the state’s police power.
In one case- “much discretion is given to municipal corporations in determining the amount," here the
license fee of the operator of a massage clinic, even if it were viewed purely as a police power
measure.
On the impairment of freedom to contract by limiting duration of use to twice every 24 hours- It was
not violative of due process. 'Liberty' as understood in democracies, is not license; it is 'liberty regulated
by law.' Implied in the term is restraint by law for the good of the individual and for the greater good of
the peace and order of society and the general well-being.
Laurel- The citizen should achieve the required balance of liberty and authority in his mind through
education and personal discipline, so that there may be established the resultant equilibrium, which
means peace and order and happiness for all.
The freedom to contract no longer "retains its virtuality as a living principle, unlike in the sole case of
People v Pomar. The policy of laissez faire has to some extent given way to the assumption by the
government of the right of intervention even in contractual relations affected with public interest.
What may be stressed sufficiently is that if the liberty involved were freedom of the mind or the person,
the standard for the validity of governmental acts is much more rigorous and exacting, but where the
liberty curtailed affects at the most rights of property, the permissible scope of regulatory measure is
wider.
On the law being vague on the issue of personal information, the maintenance of establishments, and
the “full rate of payment”- Holmes- “We agree to all the generalities about not supplying criminal laws
with what they omit but there is no canon against using common sense in construing laws as saying
what they obviously mean."

WHITE LIIGHT CORP VS CITY OF MANILA

G.R. No. 122846 – 576 SCRA 416 – Political Law – Constitutional Law – Police
Power – Not Validly Exercised – Infringement of Private Rights

On 3 Dec 1992, then Mayor Lim signed into law Ord 7774 entitled “An
Ordinance prohibiting short time admission in hotels, motels, lodging houses,
pension houses and similar establishments in the City of Manila”. White Light
Corp is an operator of mini hotels and motels who sought to have the
Ordinance be nullified as the said Ordinance infringes on the private rights of
their patrons. The RTC ruled in favor of WLC. It ruled that the Ordinance strikes
at the personal liberty of the individual guaranteed by the Constitution. The
City maintains that the ordinance is valid as it is a valid exercise of police
power. Under the LGC, the City is empowered to regulate the establishment,
operation and maintenance of cafes, restaurants, beerhouses, hotels, motels,
inns, pension houses, lodging houses and other similar establishments,
including tourist guides and transports. The CA ruled in favor of the City.

ISSUE: Whether or not Ord 7774 is valid.

HELD: The SC ruled that the said ordinance is null and void as it indeed
infringes upon individual liberty. It also violates the due process clause which
serves as a guaranty for protection against arbitrary regulation or seizure. The
said ordinance invades private rights. Note that not all who goes into motels
and hotels for wash up rate are really there for obscene purposes only. Some
are tourists who needed rest or to “wash up” or to freshen up. Hence, the
infidelity sought to be avoided by the said ordinance is more or less subjected
only to a limited group of people. The SC reiterates that individual rights may
be adversely affected only to the extent that may fairly be required by the
legitimate demands of public interest or public welfare.

LUCENA GRAND CENTRAL TERMINAL, INC. v. JAC LINER, INC. 452 SCRA
174 (2005)

Two ordinances were enacted by the Sangguniang Panlungsod of Lucena with the
objective of alleviating the traffic congestion said to have been caused by the existence of
various bus and jeepney terminals within the city. City Ordinance 1631 grants franchise
to the Lucena Grand Central Terminal, Inc. to construct, finance, establish, operate and
maintain common bus- jeepney terminal facility in the City of Lucena. City Ordinance
1778, on the other hand, strips out all the temporary terminals in the City of Lucena the
right to operate which as a result favors only the Lucena Grand Central Terminal, Inc. The
Regional Trial Court of Lucena declared City Ordinance 1631 as a valid excercise of police
power while declaring City Ordinance 1778 as null and void for being invalid. Petitioner
Lucena Grand Central Terminal, Inc. filed its Motion for Reconsideration which was
denied. Lucena then elevated it via petition for review under Rule 45 before the Court.
The Court referred the petition to the Court of Appeals (CA) with which it
has concurrent jurisdiction. The CA dismissed the petition and affirmed
the challenged orders of the trial court. Its motion for reconsideration having been denied
by the CA, Lucena now comes to the Court via petition for review to assail the Decision
and Resolution of the CA.

ISSUE:

Whether or not the means employed by the Lucena Sannguniang Panlungsod to attain its
professed objective were reasonably necessary and not duly oppressive upon individuals.
HELD:

With the aim of localizing the source of traffic congestion in the city to a single location,
the subject ordinances prohibit the operation of all bus and jeepney terminals within
Lucena, including those already existing, and allow the operation of only one common
terminal located outside the city proper, the franchise for which was granted to Lucena.
The common carriers plying routes to and from Lucena City are thus compelled to close
down their existing terminals and use the facilities of Lucena. The true role of
Constitutional Law is to effect an equilibrium between authority and liberty so that rights
are exercised within the framework of the law and the laws are enacted with due deference
to rights. A due deference to the rights of the individual thus requires a
more careful formulation of solutions to societal problems. From the memorandum filed
before the Court by Lucena, it is gathered that the Sangguniang Panlungsod had identified
the cause of traffic congestion to be the indiscriminate loading and unloading of
passengers by buses on the streets of the city proper, hence, the conclusion that the
terminals contributed to the proliferation of buses obstructing traffic on the city
streets. Bus terminals per se do not, however, impede or help impede the flow of traffic.
How the outright proscription against the existence of all terminals, apart from that
franchised to Lucena, can be considered as reasonably necessary to solve the traffic
problem, the Court has not been enlightened. If terminals lack adequate space such that
bus drivers are compelled to load and unload passengers on the streets instead of inside
the terminals, then reasonable specifications for the size of terminals could be instituted,
with permits to operate the same denied those which are unable to meet the
specifications. In the subject ordinances, however, the scope of the proscription against
the maintenance of terminals is so broad that even entities which might be able to provide
facilities better than the franchised terminal are barred from operating at all. The Court
is not unaware of the resolutions of various barangays in Lucena City supporting the
establishment of a common terminal, and similar expressions of support from the private
sector, copies of which were submitted to this Court by Lucena Grand Central Terminal,
Inc. The weight of popular opinion, however, must be balanced with that of an individual‘s
rights.

Balacuit v CFI G.R. No. L-38429 June 30, 1988

Facts:

Petitioners, theater owners, assailed the constitutionality of Ordinance

No. 640 passed by the Municipal Board of the City of Butuan on April 21,
1969. This called for a reduction to ½ of the ticket price given to minors
from 7-12 years old. There was a fine from 200-600 pesos or a 2-6
month imprisonment

The complaint was issued in the trial court. A TRO was then issued to
prevent the law from being enforced. The respondent court entered its
decision declaring the law valid.
Petitioners attack the validity and constitutionality of Ordinance No. 640
on the grounds that it is ultra vires and an invalid exercise of police
power. Petitioners contend that Ordinance No. 640 is not within the
power of’ the Municipal Board to enact as provided for in Section 15(n)
of Republic Act No. 523 where it states that the Muncipal board can only
fix license fees for theaters and not admission rates.

The respondent attempts to justify the enactment of the ordinance by

invoking the general welfare clause embodied in Section 15 (nn) of the
cited law.

Issue:

W/N Ordinance 640 – prohibiting payment on theater tickets for children

below seven (7) is constitutional?

Ruling:

NO, because it infringes theater owners’ right to property.

There is nothing pernicious in demanding equal price for both children

and adults. The petitioners are merely conducting their legitimate
businesses. The object of every business entrepreneur is to make a
profit out of his venture. There is nothing immoral or injurious in charging
the same price for both children and adults. In fact, no person is under
compulsion to purchase a ticket. It is a totally voluntary act on the part of
the purchaser if he buys a ticket to such performances.

Such ticket represents a right, Positive or conditional, as the case may

be, according to the terms of the original contract of sale. This right is
clearly a right of property. The ticket which represents that right is
also, necessarily, a species of property. As such, the owner thereof, in
the absence of any condition to the contrary in the contract by which he
obtained it, has the clear right to dispose of it, to sell it to whom he
pleases and at such price as he can obtain. So that an act prohibiting
the sale of tickets to theaters or other places of amusement at more
than the regular price was held invalid as conflicting with the state
constitution securing the right of property.

CITY OF MANILA VS. CHINESE

COMMUNITY OF MANILA, digested
Posted by Pius Morados on November 7, 2011

40 Phil. 349 (Constitutional Law – Eminent Domain)

FACTS: Plaintiff sought to expropriate a part of a private cemetery devoted for public use to make an extension of
Rizal Avenue. Defendants contend that expropriation is not necessary because it will disturb the remains of the dead.
Moreover, adjoining and adjacent lots were offered to the city free of charge for the planned public improvement.

ISSUE: Whether or not a private property devoted for public use can still be expropriated.

HELD: Yes, private property devoted for public use is still subject to expropriation, provided this is done directly by
the national legislature or under a specific grant of authority to the delegate. In addition, there must be a necessity for
the expropriation. In the case at bar, evidence shows that there is no proof of the need of converting the cemetery.

Municipality of Paranaque v VM Realty G.R. No. 127820.

July 20, 1998
J. Panganiban

Petition for review on certiorari

Facts:
Under a city council resolution, the Municipality of Parañaque filed on September 20, 1993, a
Complaint for expropriation against Private Respondent V.M. Realty Corporation over two parcels of
land of 10,000 square meters. The city previously negotiated for the sale of the property but VM didn’t
accept.
The trial court issued an Order dated February 4, 1994, authorizing petitioner to take possession of
the subject property upon deposit with its clerk of court of an amount equivalent to 15 percent of its
fair market value based on its current tax declaration.

According to the respondent, the complaint failed to state a cause of action because it was filed
pursuant to a resolution and not to an ordinance as required by RA 7160 (the Local Government
Code); and (b) the cause of action, if any, was barred by a prior judgment or res judicata. Petitioner
claimed that res judicata was not applicable.
The trial court dismissed the case. The petitioner’s MFR was denied. The CA affirmed.
Issues:
1. WON a resolution duly approved by the municipal council has the same force and effect of an
ordinance and will not deprive an expropriation case of a valid cause of action.
2. WON the principle of res judicata as a ground for dismissal of case is not applicable when public
interest is primarily involved.

Held: No to 1st Yes to 2nd. Petition dismissed.

Ratio:
1. Petitioner contends that a resolution approved by the municipal council for the purpose of initiating
an expropriation case “substantially complies with the requirements of the law” because the terms
“ordinance” and “resolution” are synonymous for “the purpose of bestowing authority [on] the local
government unit through its chief executive to initiate the expropriation proceedings in court in the
exercise of the power of eminent domain.
To strengthen this point, the petitioner cited Article 36, Rule VI of the Rules and Regulations
Implementing the Local Government Code, which provides: “If the LGU fails to acquire a private
property for public use, purpose, or welfare through purchase, the LGU may expropriate said property
through a resolution of the Sanggunian authorizing its chief executive to initiate expropriation
proceedings.”
Court-No. The power of eminent domain is lodged in the legislative branch of government, which may
delegate the exercise thereof to LGUs, other public entities and public utilities. An LGU may therefore
exercise the power to expropriate private property only when authorized by Congress and subject to
the latter’s control and restraints, imposed “through the law conferring the power or in other
legislations.
Sec 19, RA 7160
A local government unit may, through its chief executive and acting pursuant to an ordinance, exercise
the power of eminent domain for public use, or purpose, or welfare for the benefit of the poor and the
landless, upon payment of just compensation, pursuant to the provisions of the Constitution and
pertinent laws.
Thus, the following essential requisites must concur before an LGU can exercise the power of eminent
domain:
1. An ordinance is enacted by the local legislative council authorizing the local chief executive, in
behalf of the LGU, to exercise the power of eminent domain or pursue expropriation proceedings over
a particular private property.
2. The power of eminent domain is exercised for public use, purpose or welfare, or for the benefit of
the poor and the landless.
3. There is payment of just compensation, as required under Section 9, Article III of the Constitution,
and other pertinent laws.
4. A valid and definite offer has been previously made to the owner of the property sought to be
expropriated, but said offer was not accepted.
In the case at bar, the local chief executive sought to exercise the power of eminent domain pursuant
to a resolution of the municipal council. Thus, there was no compliance with the first requisite that the
mayor be authorized through an ordinance.
We are not convinced by petitioner’s insistence that the terms “resolution” and “ordinance” are
synonymous. A municipal ordinance is different from a resolution. An ordinance is a law, but a
resolution is merely a declaration of the sentiment or opinion of a lawmaking body on a specific matter.
An ordinance possesses a general and permanent character, but a resolution is temporary in nature.
If Congress intended to allow LGUs to exercise eminent domain through a mere resolution, it would
have simply adopted the language of the previous Local Government Code. But Congress did not. In
a clear divergence from the previous Local Government Code, Section 19 of RA 7160 categorically
requires that the local chief executive act pursuant to an ordinance.
Moreover, the power of eminent domain necessarily involves a derogation of a fundamental or private
right of the people.[35] Accordingly, the manifest change in the legislative language -- from “resolution”
under BP 337 to “ordinance” under RA 7160 -- demands a strict construction.

When the legislature interferes with that right and, for greater public purposes, appropriates the land
of an individual without his consent, the plain meaning of the law should not be enlarged by doubtful
interpretation.
Petitioner relies on Article 36, Rule VI of the Implementing Rules, which requires only a resolution to
authorize an LGU to exercise eminent domain. It is axiomatic that the clear letter of the law is
controlling and cannot be amended by a mere administrative rule issued for its implementation.
Strictly speaking, the power of eminent domain delegated to an LGU is in reality not eminent but
“inferior” domain, since it must conform to the limits imposed by the delegation, and thus partakes only
of a share in eminent domain.
2. As correctly found by the Court of Appeals and the trial court, all the requisites for the application of
res judicata are present in this case. There is a previous final judgment on the merits in a prior
expropriation case involving identical interests, subject matter and cause of action, which has been
rendered by a court having jurisdiction over it.
Be that as it may, the Court holds that the principle of res judicata, which finds application in generally
all cases and proceedings, cannot bar the right of the State or its agent to expropriate private property.

Eminent Domain can reach every form of property which the State might need for public use whenever
they need it.

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.
In Republic vs De Knecht, the Court ruled that the power of the State or its agent to exercise eminent
domain is not diminished by the mere fact that a prior final judgment over the property to be
expropriated has become the law of the case as to the parties. The State or its authorized agent may
still subsequently exercise its right to expropriate the same property, once all legal requirements are
complied with.
 MASIKIP vs PASIG G.R. No. 136349
January 23, 2006 Power of Eminent
Domain, Expropriation, Genuine Necessity
NOVEMBER 3, 2017

FACTS:

Petitioner Lourdes Dela Paz Masikip is the registered owner of a parcel of land located at Pag-
Asa, Caniogan, Pasig City, Metro Manila. The City of Pasig notified petitioner of its intention to
expropriate a 1,500 square meter portion of her property to be used for the “sports development
and recreational activities” of the residents of Barangay Caniogan. This was pursuant to
Ordinance No. 42, Series of 1993 enacted by the then Sangguniang Bayan of Pasig.

Petitioner replied stating that the intended expropriation of her property is unconstitutional,
invalid, and oppressive.

Respondent reiterated that the purpose of the expropriation of petitioner’s property is “to provide
sports and recreational facilities to its poor residents” and subsequently filed with the trial court a
complaint for expropriation,

ISSUE:

Was the City of Pasig able to establish “genuine necessity”?

RULING:

The Court holds that respondent City of Pasig has failed to establish that there is a genuine
necessity to expropriate petitioner’s property. A scrutiny of the records shows that the
Certification issued by the Caniogan Barangay Council, the basis for the passage of Ordinance
No. 42 s. 1993 authorizing the expropriation, indicates that the intended beneficiary is the
Melendres Compound Homeowners Association, a private, non-profit organization, not the
residents of Caniogan. Petitioner’s lot is the nearest vacant space available. The purpose is,
therefore, not clearly and categorically public. The necessity has not been shown, especially
considering that there exists an alternative facility for sports development and community
recreation in the area, which is the Rainforest Park, available to all residents of Pasig City,
including those of Caniogan.

Constitution attaches to the property of the individual requires not only that the purpose for the
taking of private property be specified. The genuine necessity for the taking, which must be of a
public character, must also be shown to exist.

ANUNCIACION VDA. DE OUANO, MARIO P. OUANO, LETICIA

OUANO ARNAIZ, and CIELO OUANO MARTINEZ,Petitioners, v. THE
REPUBLIC OF THE PHILIPPINES, THE MACTAN-CEBU
INTERNATIONAL AIRPORT AUTHORITY, and THE REGISTER OF
DEEDS FOR THE CITY OF CEBU, Respondents.

FACTS:

In 1949, the National Airport Corporation (NAC), MCIAA’s predecessor agency,

pursued a program to expand the Lahug Airport in Cebu City. Through its team
of negotiators, NAC met and negotiated with the owners of the properties
situated around the airport.

The landowners claim the government negotiating team, as a sweetener, assured

them that they could repurchase their respective lands should the Lahug Airport
expansion project do not push through or once the Lahug Airport closes or its
operations transferred to Mactan-Cebu Airport.

On February 8, 1996, Ricardo L. Inocian and four others (all children of Isabel
Limbaga who originally owned six [6] of the lots expropriated); and Aletha Suico
Magat and seven others, successors-in-interest of Santiago Suico, the original
owner of two (2) of the condemned lots (collectively, the Inocians), filed before
the RTC in Cebu City a complaint for reconveyance of real properties and
damages against MCIAA. The RT rendered a decision directing MCIAA to
reconvey the lands.

Soon after the MCIAA jettisoned the Lahug Airport expansion project, informal
settlers entered and occupied Lot No. 763-A which, before its expropriation,
belonged to the Ouanos.

Soon after the MCIAA jettisoned the Lahug Airport expansion project, informal
settlers entered and occupied Lot No. 763-A which, before its expropriation,
belonged to the Ouanos. The Ouanos then formally asked to be allowed to
exercise their right to repurchase the aforementioned lot, but the MCIAA ignored
the demand.

The RTC dismissed the Ouanos’ complaint for reconveyance. The CA denied their
appeal.

ISSUE: Whether or not the testimonial evidence of the petitioners

proving the promises, assurances and representations by the airport
officials and lawyers are inadmissbale under the Statute of Frauds.

HELD:

The petition is meritorious.

CIVIL LAW: Condominium and Subdivision

Under the rule on the Statute of Frauds, as expressed in Article 1403 of the Civil
Code, a contract for the sale or acquisition of real property shall be unenforceable
unless the same or some note of the contract be in writing and subscribed by the
party charged. Subject to defined exceptions, evidence of the agreement cannot
be received without the writing, or secondary evidence of its contents.

MCIAA’s invocation of the Statute of Frauds is misplaced primarily because the

statute applies only to executory and not to completed, executed, or partially
consummated contracts.

Petition is GRANTED.

AMOS P. FRANCIA JR., et. al. v. MUNICIPALITY OF MERCAUAYAN

G.R. No. 170432, 24 March 2008, First Division, (Corona, J.)

Before a local government unit may enter into the possession of the property sought to be expropriated, it
must (1) file a complaint for expropriation sufficient in form and substance in the proper court and (2)
deposit with the said court at least 15% of the property's fair market value based on its current tax
declaration. The law does not make the determination of a public purpose a condition precedent to the
issuance of a writ of possession.

A Complaint for expropriation was filed by respondent Municipality of Meycauayan, Bulacan against the
property of petitioners Amos Francia, Cecilia Francia and Benjamin Francia. The Municipality of
Meycauayan seeks to use the said property in order to establish a common public terminal for all public
utility vehicles. The Regional Trial Court (RTC) ruled that the expropriation was for public purpose and
issued an Order of Expropriation.

On appeal, the Court of Appeals partially granted the petition. It nullified the Order of Expropriation except
with regard to the writ of possession. It upheld the decision of the RTC that in issuance of writ of
possession, prior determination of the existence of public purpose is necessary.

ISSUE:

Whether or not prior determination of existence of public purpose is necessary before the issuance of writ
of possession

HELD:

Petition denied.

Section 19 of Republic Act 7160 provides:

Section 19. Eminent Domain. ― A local government unit may, through its chief executive and acting
pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose, or welfare for
the benefit of the poor and the landless, upon payment of just compensation, pursuant to the provisions of
the Constitution and pertinent laws; Provided, however, That the power of eminent domain may not be
exercised unless a valid and definite offer has been previously made to the owner, and that such offer
was not accepted; Provided, further, That the local government unit may immediately take possession of
the property upon the filing of the expropriation proceedings and upon making a deposit with the proper
court of at least fifteen percent (15%) of the fair market value of the property based on the current tax
declaration of the property to be expropriated; Provided, finally, That, the amount to be paid for the
expropriated property shall be determined by the proper court, based on the fair market value at the time
of the taking of the property.

Before a local government unit may enter into the possession of the property sought to be expropriated, it
must (1) file a complaint for expropriation sufficient in form and substance in the proper court and (2)
deposit with the said court at least 15% of the property's fair market value based on its current tax
declaration. The law does not make the determination of a public purpose a condition precedent to the
issuance of a writ of possession.

Republic v. Lim, G.R. 161656, June 29, 2005

Fact: On September 5, 1938, the Republic of the Philippines (Republic) instituted a
special civil action for expropriation with the Court of First Instance (CFI) of Cebu,
involving Lots of the Banilad Friar Land Estate, Lahug, Cebu City, for the purpose of
establishing a military reservation for the Philippine Army. After depositing ₱9,500.00
with the Philippine National Bank, the Republic took possession of the lots. Thereafter,
the CFI rendered its Decision ordering the Republic to pay the Denzons the sum of
₱4,062.10 as just compensation. In 1950, Jose Galeos, one of the heirs of the Denzons,
filed with the National Airports Corporation a claim for rentals for the two lots, but it
“denied knowledge of the matter.” Another heir, Nestor Belocura, brought the claim to
the Office of then President Carlos Garcia who wrote the Civil Aeronautics
Administration and the Secretary of National Defense to expedite action on said claim.
in 1962, the CFI promulgated its Decision in favor of Valdehueza and Panerio, holding
that they are the owners and have retained their right as such over Lots 932 and 939
because of the Republic’s failure to pay the amount of ₱4,062.10, adjudged in the
expropriation proceedings. In view of “the differences in money value from 1940 up to
the present,” the court adjusted the market value at ₱16,248.40, to be paid with 6%
interest per annum from April 5, 1948, date of entry in the expropriation proceedings,
until full payment.

Meanwhile, in 1964, Valdehueza and Panerio mortgaged and foreclosed Lot 932 to
Vicente Lim for failure to pay. in 1992, respondent filed a complaint for quieting of title
with the (RTC) seeking an absolute and exclusive possession of the property. in 2001,
the RTC rendered a decision in favor of respondent. Petitioners elevated the case to the
CA but the Ruling of the RTC was upheld and affirmed.

Issue: Whether the owner of the expropriated land is entitled for the repossession of his
property when party condemning refuses to pay the compensation which has been
assessed or agreed upon?

Held: Yes, while the prevailing doctrine is that “the non-payment of just compensation
does not entitle the private landowner to recover possession of the expropriated lots,26
however, in cases where the government failed to pay just compensation within five (5)
years from the finality of the judgment in the expropriation proceedings, the owners
concerned shall have the right to recover possession of their property. This is in
consonance with the principle that “the government cannot keep the property and
dishonor the judgment.” To be sure, the five-year period limitation will encourage the
government to pay just compensation punctually. This is in keeping with justice and
equity. After all, it is the duty of the government, whenever it takes property from
private persons against their will, to facilitate the payment of just compensation which
the court defined as not only the correct determination of the amount to be paid to the
property owner but also the payment of the property within a reasonable time. Without
prompt payment, compensation cannot be considered “just.”