Facts Issue Ruling

Manotok vs. NHA WON P.D. 1669 and 1670 are No.
condtitutional and therefrore
On June 11, 1977, the President valid statutes authorizing the The challenged decrees are
of the Philippines issued Letter expropriation of the subject uniquely unfair in the
of Instruction (LOI) No. 555 property. procedures adopted and the
instituting a nationwide slum powers given to the respondent
improvement and resettlement NHA.
program (SIR). On the same
date, the President also issued The Tambunting subdivision is
LOI No. 557, adopting slum summarily proclaimed a
improvement as a national blighted area and directly
housing policy. expropriated by decree without
the slightest semblance of a
In compliance with LOI No. 555, hearing or any proceeding
the Governor of Metro Manila whatsoever. The expropriation
issued, on July 21, 1977, is instant and automatic to take
Executive Order No. 6-77 effect immediately upon the
adopting the Metropolitan signing of the decree. No
Manila Zonal Improvement deposit before taking is
Program which included the required under the decree. The
properties known as the P3,400,000.00 appropriated
Tambunting Estate and the from the general fund is not a
Sunog-Apog area in its priority deposit but constitutes an
list for a zonal improvement installment payment for the
program (ZIP) because the property, the maximum price of
findings of the representative of which is fixed so as not to
the City of Manila and the exceed P17,000,000.00. There is
National Housing Authority (NH no provision for any interests to
A) described these as blighted be paid on the unpaid
communities. installments spread out over a
period of five years. Not only
On March 18, 1978, a fire razed are the owners given absolutely
almost the entire Tambunting no opportunity to contest the
Estate. Following this calamity, expropriation, plead their side,
the President and the Metro or question the amount of
Manila Governor made public payments fixed by decree, but
announcement that the the decisions, rulings, orders, or
national government would resolutions of the NHA are
acquire the property for the fire expressly declared as beyond
victims. The President also the reach of judicial review. An
designated the NHA to appeal may be made to the
negotiate with the owners of Office of the President but the
the property for the acquisition courts are completely enjoined
of the same. This, however, did from any inquiry or
not materialize as the participation whatsoever in the
negotiations for the purchase of expropriation of the subdivision
the property failed. or its incidents.

On December 22, 1978, the In the instant petitions, there is

President issued Proclamation no showing whatsoever as to
No. 1810 declaring all sites why the properties involved
identified by the Metro Manila were singled out for
local governments and expropriation through decrees
approved by the Ministry of or what necessity impelled the
Human Settlements to be particular choices or selections.
included in the ZIP upon In expropriations through
proclamation of the President. legislation, there are, at least,
The Tambunting Estate and the debates in Congress open to the
Sunog-Apog area were among public, scrutiny by individual
the sites included. members of the legislature, and
On January 28, 1980, the very often, public hearings
President issued the challenged before the statute is enacted.
Presidential Decrees Nos. 1669 Congressional records can be
and 1670 which respectively examined. In these petitions,
declared the Tambunting Estate the decrees show no reasons
and the Sunog-Apog area whatsoever for the choice of
expropriated. the properties as housing
projects. The anonymous
Presidential Decree No. 1669, adviser who drafted the decrees
provides, among others: for the President's signature
"Section 1. The real properties cannot be questioned as to any
known as the Tambunting possible error or partiality, act
Estate' and covered by TCT Nos. of vengeance, or other personal
119059, 122450, 122459, motivations which may have led
122452 and Lots Nos. 1-A, 1-C, him to propose the direct
1-D, 1-E, 1-F and 1-H of (LRC) expropriation with its onerous
Psd-230517 (Previously covered provisions.
by TCT No. 119058) of the
Register of Deeds of Manila The Tambunting estate or at
with an area of 52,688.70 least the western half of the
square meters, more or less are subdivision fronting Rizal
hereby declared expropriated. Avenue Extension is valuable
The National Housing Authority commercial property. It is
hereinafter referred to as the located at the junction where
'Authority' is designated three main city streets converge
administrator of the National —Rizal Avenue from downtown
Government with authority to Manila, Jose Abad Santos Street
immediately take possession, from Binondo, and Aurora
control, disposition, with the Boulevard leading to Retiro
power of demolition of the Street and other points in
expropriated properties and Quezon City. The Libiran
their improvements and shall Furniture Company, alone,
evolve and implement a which fronts the entrance to
comprehensive development Jose Abad Santos Street is
plan for the condemned clearly a multi-million peso
properties." enterprise. It is a foregone
xxx xxx xxx conclusion that the favored
"Section 6. Notwithstanding any squatters allowed to buy these
provision of law or decree to choice lots would lose no time,
the contrary and for the once it is possible to do so, to
purpose of expropriating this either lease out or sell their lots
property pegged at the market to wealthy merchants even as
value determined by the City they seek other places where
Assessor pursuant to they can set up new squatter
Presidential Decree No. 76, as colonies. The public use and
amended, particularly by social justice ends stated in the
Presidential Decree No. 1533 whereas clauses of P.D. 1669
which is in force and in effect at and P.D. 1670 would not be
the time of the issuance of this served thereby.
decree. In assessing the market
value, the City Assessor shall The provision of P.D. 1669
consider existing conditions in which allows NHA, at its sole
the area notably, that no option, to put portions of the
improvement has been expropriated area to
undertaken on the land and commercial use in order to
that the land is squatted upon defray the development costs of
by resident families which its housing projects cannot
should considerably depress the stand constitutional scrutiny.
expropriation cost. Subject to The Government, for instance,
the foregoing, the just cannot expropriate the
compensation for the above flourishing Makati commercial
property should not exceed a area in order to earn money
maximum of SEVENTEEN that would finance housing
MILLION PESOS projects all over the country.
(P17,000,000.00) which shall be The leading case of Guido v.
payable to the owners within a Rural Progress Administration
period of five (5) years in five (5) (84 Phil. 847) may have been
equal installments." modified in some ways by the
provisions of the new
Presidential Decree No. 1670, Constitution on agrarian and
provides: urban land reform and on
"Section 1. The real property housing. The principle of non-
along the Estero de SunogApog appropriation of private
in Tondo, Manila formerly property for private purposes,
consisting of Lots Nos. 55-A, 55- however, remains. The
B and 55-C, Block 2918 of the legislature, according to the
subdivision plan Psd-11746, Guido case, may not take the
covered by TCT Nos. 49286, property of one citizen and
49287 and 49288, respectively, transfer it to another, even for a
of the Registry of Deeds of full compensation, when the
Manila, and formerly owned by public interest is not thereby
the Manotok Realty, Inc., with promoted. The Government still
an area of 72,428.6 square has to prove that expropriation
meters, more or less, is hereby of commercial properties in
declared expropriated. The order to lease them out also for
National Housing Authority commercial purposes would be
hereinafter referred to as the "public use" under the
'Authority' is designated Constitution.
administrator of the National
Government with authority to P.D. No. 1670 suffers from a
immediately take possession, similar infirmity. There is no
control and disposition, with showing how the President
the power of demolition of the arrived at the conclusion that
expropriated properties and the Sunog-Apog area is a
their improvements and shall blighted community. The many
evolve and implement a pictures submitted as exhibits
comprehensive development by the petitioners show a well-
plan for the condemned developed area subdivided into
properties." residential lots with either
xxx xxx xxx middle-incomeor upper class
"Section 6. Notwithstanding any homes. There are no squatters.
provision of law or decree to The provisions of the decree on
the contrary and for the the relocation of qualified
purpose of expropriating this squatter families and on the re-
property pegged at the market blocking and re-alignment of
value determined by the City existing structures to allow the
Assessor pursuant to introduction of basic facilities
Presidential Decree No. 76, as and services have no basis in
amended, particularly by fact. The area is well-developed
Presidential Decree No. 1533 with roads, drainage and sewer
which is in force and in effect at facilities, water connections to
the time of the issuance of this the Metropolitan Waterworks
decree. In assessing the market and Sewerage System, electric
value, the City Assessor shall connections to Manila Electric
consider existing conditions in Company, and telephone
the area notably, that no connections to the Philippine
improvement has been Long Distance Telephone
undertaken on the land and Company. There are many
that the land is squatted upon squatter colonies in Metro
by resident families which Manila in need of upgrading.
should considerably depress the The Government should have
expropriation cost. Subject to attended to them first. There is
the foregoing, the just no showing for a need to
compensation for the above demolish the existing valuable
property should not exceed a improvements in order to
maximum of EIGHT MILLION upgrade Sunog-Apog.
PESOS (P8,000,000.00), which
shall be payable to the owners After a careful examination of
within a period of five (5) years the questioned decrees, we find
in five equal installment/' P.D. Nos. 1669 and 1670 to be
violative of the petitioners' right
On April 4, 1980, the National to due process of law and,
Housing Authority, through its therefore, they must fail the
general-manager, wrote the test of constitutionality.
Register of Deeds of Manila,
furnishing it with a certified The decrees, do not by
copy of P.D. Nos. 1669 and 1670 themselves, provide for any
for registration, with the form of hearing or procedure by
request that the certificates of which the petitioners can
title covering the properties in question the propriety of the
question be cancelled and new expropriation of their properties
certificates of title be issued in or the reasonableness of the
the name of the Republic of the just compensation. Having
Philippines. failed to provide for a hearing,
the Government should have
However, the Register of Deeds filed an expropriation case
in her letter to NHA's general- under Rule 67 of the Revised
manager, requested the Rules of Court but it did not do
submission of the owner's copy so. Obviously, it did not deem it
of the certificates of title of the necessary because of the
properties in question to enable enactment of the questioned
her to implement the decrees which rendered, by
aforementioned decrees. their very passage, any
questions with regard to the
Subsequently, petitioner Elisa R. expropriation of the properties,
Manotok, one of the owners of moot and academic. In effect,
the properties to be the properties, under the
expropriated, received from the decrees were "automatically
NHA a letter informing her that expropriated." This became
the latter had deposited, on July more evident when the NHA
16, 1980, with the Philippine wrote the Register of Deeds and
National Bank the total amount requested her to cancel the
of P5,000,000.00 which certificate of titles of the
included the amount of petitioners, furnishing said
P3,400,000.00 representing the Register of Deeds only with
first annual installment for the copies of the decrees to support
Tambunting Estate pursuant to its request.
P.D. No. 1669; and another
P5,000,000.00 which also This is hardly the due process of
included the amount of law which the state is expected
P1,600,000.00 representing the to observe when it exercises the
first annual installment for the power of eminent domain.
Sunog-Apog area under P.D. No.
1670.

The petitioner was also

informed that she was free to
withdraw her share in the
properties upon surrender by
her of the titles pertaining to
said properties and that if
petitioner failed to avail herself
of the said offer, the NHA would
be constrained to take the
necessary legal steps to
implement the decrees.

On August 19, 1980, petitioner

Elisa R. Manotok wrote a letter
to the NHA alleging, inter alia,
that the amounts of
compensation for the
expropriation of the properties
of the petitioners as fixed in the
decrees do not constitute the
"just compensation" envisioned
in the Constitution. She
expressed veritable doubts
about the constitutionality of
the said decrees and informed
the NHA that she did not
believe that she was obliged to
withdraw the amount of
P5,000,000.00 or surrender her
titles over the properties.

In the meantime, some officials

of the NHA circulated
instructions to the tenants-
occupants of the properties in
dispute not to pay their rentals
to the petitioners for their
lease-occupancy of the
properties in view of the
passage of P.D. Nos. 1669 and
1670. Hence, the owners of the
Tambunting Estate filed a
petition to declare P.D. No.
1669 unconstitutional. The
owners of the Sunog-Apog area
also filed a similar petition
attacking the constitutionality of
P.D. No. 1670.
Manila Lodge No. 761 vs. CA WON the grant made by Act No. It is a cardinal rule of statutory
1360 is in a patrimonial or construction that courts must
On June 26, 1905 the Philippine public nature. give effect to the general
Commission enacted Act No. legislative intent that can be
1360 which authorized the City discovered from or is unraveled
of Manila to reclaim a portion of by the four corners of the
Manila Bay. The reclaimed area statute,31 and in order to
was to form part of the Luneta discover said intent, the whole
extension. The Act provided statute, and not only a
that the reclaimed area “shall particular provision thereof,
be the property of the City of should be considered.32 It is,
Manila” and that “the City of therefore, necessary to analyze
Manila is hereby authorized to all the provisions of Act No,
set aside a tract of the 1360, as amended, in order to
reclaimed land formed by the unravel the legislative intent.
Luneta extension x x x at the
north end not to exceed five Act No. 1360 which was
hundred feet by six hundred enacted by the Philippine
feet in size, for a hotel site, and Commission on June 26, 1905,
to lease the same, with the as amended by Act No. 1657
approval of the Governor enacted on May 18, 1907,
General, to a responsible authorized the “construction of
person or corporation for a such rock and timber bulkheads
term not to exceed ninety-nine or sea walls as may be
years.” necessary for the making of an
extension to the Luneta” (Sec.
Subsequently, the Philippine l[a]), and the placing of the
Commission passed on May 18, material dredged from the
1907 Act No. 1657, amending harbor of Manila “inside the
Act No. 1360, so as to authorize bulkheads constructed to
the City of Manila either to inclose the Luneta extension
lease or to sell the portion set above referred to” (Sec. l[c]). It
aside as a hotel site. likewise provided that the plan
The total area reclaimed was a of Architect D. H. Burnham as “a
little over 25 hectares. The City general outline for the
of Manila applied for the extension and improvement of
registration of the reclaimed the Luneta in the City of
area, and on January 20, 1911, Manila” be adopted; that “the
O.C.T. No. 1909 was issued in reclamation from the Bay of
the name of the City of Manila. Manila of the land included in
The title described the said projected Luneta extension
registered land as “un terreno x x x is hereby authorized and
conocido con el nombre de the land thereby reclaimed shall
Luneta Extension, situado en el be the property of the City of
distrito de la Ermita x x x.” The Manila” (Sec.3); that “the City of
registration was “subject, Manila is hereby authorized to
however, to such of the set aside a tract of the
incumbrances mentioned in reclaimed land formed by the
Article 39 of said law (Land Luneta extension authorized by
Registration Act) as may be this Act atthe north end of said
subsisting” and “sujeto a las tract, not to exceed five
disposiciones y condiciones hundred feet by six hundred
impuestas en la Ley No. 1360; y feet in size, for ahotel site, and
sujeto tambien a los contratos to lease the same with the
de venta, celebrados y approval of the Governor
otorgados por la Ciudad de General, x x x for a term not
Manila a favor del Army and exceeding ninety-nine years;”
Navy Club y la Manila Lodge No. that “should the Municipal
761, Benevolent and Protective Board x x x deem it advisable it
Order of Elks, fechados is hereby authorized to
respectivamente, en 29 de advertise for sale to sell said
Diciembre de 1908 y 16 de tract of land x x x;” “that said
Enero de 1909.”1 tract shall be used for hotel
purposes as herein prescribed,
On July 13, 1911 the City of and shall not be devoted to any
Manila, affirming a prior sale other purpose or object
dated January 16, 1909, whatever;” “that should the
conveyed 5,543.07 square grantee x x x fail to maintain on
meters of the reclaimed area to said tract a first-class hotel x x x
the Manila Lodge No. 761, then the title to said tract of
Benevolent and Protective land sold, conveyed, and
Order of Elks of the U.S.A. transferred to the grantee shall
(BPOE, for short) on the basis of revert to the City of Manila, and
which TCT No. 21952 was issued said City of Manila shall
to the latter over the “parcela thereupon become entitled to
de terreno que es parte de la the immediate possession of
Luneta Extension, Situada en el said tract of land” (Sec. 5); that
Distrito de la Ermita x x x.” At the construction of the rock and
the back of this title was timber bulkheads or sea wall
annotated document 4608/T- “shall be paid for out of the
1635, which in part reads as funds of the City of Manila, but
follows: “que la citada Ciudad the area to be reclaimed by said
de Manila tendra derecho a su proposed Luneta extension shall
opcion, de recomprar la be filled, without cost to the
expresada propiedad para fines City of Manila, with material
publicos solamente, en dredged from Manila Bay at the
cualquier tiempo despues de expense of the Insular
cincuenta anos desde el 13 de Government” (Sec. 6); and that
Julio de 1911, previo pago a la “the City of Manila is hereby
entidad compradora, o a sus authorized to borrow from the
sucesores del precio de la venta Insular Government x x x the
de la misma propiedad, mas el sum of three hundred thousand
valor que entonces tengan las pesos, to be expended in the
mejoras.” construction of the Luneta
extension provided for by
For the remainder of the Luneta paragraph (a) of section one
Extension, that is, after hereof”(Sec. 7).
segregating therefrom the
portion sold to the Manila The grant made by Act No. 1360
Lodge No. 761, BPOE, a new of the reclaimed land to the City
Certificate of Title No. 21963 of Manila is a grant of a “public”
was issued on July 17, 1911 to nature, the same having been
the City of Manila. Manila Lodge made to a local political
No. 761, BPOE, subsequently subdivision. Such grants have
sold the said 5,543.07 square always been strictly construed
meters to the Elks Club, Inc., to against the grantee.33 One
which was issued TCT No. compelling reason given for the
67488.4 The registered owner, strict interpretation of a public
“The Elks Club, Inc.,” was later grant is that there is in such
changed by court order to grant a gratuitous donation of,
“Manila Lodge No. 761, public money or resources
Benevolent and Protective which results in an unfair
Order of Elks, Inc.” advantage to the grantee and
for that reason, the grant
In January 1963 the BPOE should be narrowly restricted in
petitioned the Court of First favor of the public.34 This
Instance of Manila, Branch IV, reason for strict interpretation
for the cancellation of the right obtains relative to the aforesaid
of the City of Manila to grant, for although the City of
repurchase the property. This Manila was to pay for the
petition was granted on construction of such work and
February 15, 1963. timber bulkheads or sea walls as
On November 19, 1963 the may be necessary for the
BPOE sold for the sum of making of the Luneta extension,
P4,700,000 the land together the area to be reclaimed would
with all the improvements be filled at the expense of the
thereon to the Tarlac Insular Government and
Development Corporation (TDC, without cost to the City of
for short) which paid Manila, withmaterial dredged
P1,700,000 as down payment from Manila Bay. Hence, the
and mortgaged to the vendor letter of the statute should be
the same realty to secure the narrowed to exclude matters
payment of the balance to be which if included would defeat
paid in quarterly installments.5 the policy of the legislation.
At the time of the sale, there The reclaimed area, an
was no annotation of any extension to the Luneta, is
subsisting lien on the title to the declared to be property of the
property. On December 12, City of Manila. Property,
1963 TCT No. 73444 was issued however, is either of public
to TDC over the subject land still ownership or of private
described as “UNA PARCELA DE ownership. We hold that it is of
TERRENO, que es parte de la public dominion, intended for
Luneta Extension, situada en el public use.
Distrito de Ermita x x x.”
Firstly, if the reclaimed area was
In June 1964 the City of Manila granted to the City of Manila as
filed with the Court of First its patrimonial property, the
Instance of Manila a petition for City could, by virtue of its
the reannotation of its right to ownership, dispose of the
repurchase; the court, after whole reclaimed area without
hearing, issued an order, dated need ofauthorization to do so
November 19, 1964, directing from the lawmaking body. Act
the Register of Deeds of the City No. 1360, as amended,
of Manila to reannotate intoto however, provides by necessary
the entry regarding the right of implication, that the City of
the City of Manila to repurchase Manila could not dispose of the
the property after fifty years. reclaimed area without being
From this order TDC and BPOE authorized by the lawmaking
appealed to this Court which on body. If the reclaimed area
July 31, 1968 affirmed in G.R. were patrimonial property of
Nos. L-24557 and L-24469 the the City, the latter could dispose
trial “court’s order of of it without need of the
reannotation, but reserved to authorization provided by the
TDC the right to bring another statute, and the authorization
action for the clarification of its to set aside x x x lease x x x or
rights. sell x x x given by the statute
would indeed be superfluous.
As a consequence of such
reservation, TDC filed on April To so construe the statute as to
28, 1971 against the City of render the term “authorize,”
Manila and the Manila Lodge which is repeatedly used by the
No. 761, BPOE, a complaint, statute, superfluous would
docketed as Civil Case No. violate the elementary rule of
83009 of the Court of First legal hermeneutics that effect
Instance of Manila, containing must be given to every word,
three causes of action and clause, and sentence of the
praying— statute and that a statute
“a) On the first cause of action, should be so interpreted that no
that the plaintiff TDC be part thereof becomes
declared to have purchased the inoperative or superfluous.37
parcel of land now in question
with the buildings and To authorize means to
improvements thereon from empower, to give a right to
the defendant BPOE for value act.38 Act No. 1360
and in good faith, and furthermore qualifies the verb
accordingly ordering the “authorize” with the adverb
cancellation of Entry No. “hereby,” which means “by
4608/T-1635 on Transfer means of this statue or section.”
Certificate of Title No. 73444 in Hence without the
the name of the Plaintiff; authorization expressly given by
“b) On the second cause of Act No. 1360, the City of Manila
action, ordering the defendant could not lease or sell even the
City of Manila to pay the northern portion; much less
plaintiff TDC damages in the could it dispose of the whole
sum of not less than one reclaimed area. Consequently,
hundred thousand pesos the reclaimed area was granted
(P100,000.00); to the City of Manila, not as its
“c) On the third cause of action, patrimonial property. At most,
reserving to the plaintiff TDC only the northern portion
the right to recover from the reserved as a hotal site could be
defendant BPOE the amounts said to be patrimonial property,
mentioned in par. XVI of the for, by express statutory
complaint in accordance with provision it could be disposed
Art. 1555 of the Civil Code, in of, and the titlethereto would
the remote event that the final revert to the City should the
judgment in this case should be grantee fail to comply with the
that the parcel of land now in terms provided by the statute.
question is a public park; and
“(d) For costs, and for such Secondly, the reclaimed area is
other and further relief as an “extension to the Luneta in
theCourt may deem just and the City of Manila.”40 If the
equitable.” reclaimed area is an extension
of the Luneta, then it is of the
same nature or character as the
old Luneta. Anent this matter, it
has been said that a power to
extend (or continue an act or
business) cannot authorize a
transaction that is totally
distinct.41 It is not disputed
that the old Luneta is a public
park or plaza and it is so
considered by Section 859 of
the Revised Ordinances of the
City of Manila.42 Hence the
“extension to the Luneta” must
be also a public park or plaza
and for public use.

Thirdly, the reclaimed area was

formerly a part of the Manila
Bay. A bay is nothing more than
an inlet of the sea. Pursuant to
Article 1 of the Law of Waters of
1866, bays, roadsteads, coast
sea, inlets and shores are parts
of the national domain open to
public use. These are also
property of public ownership
devoted to public use,
according to Article 339 of the
Civil Code of Spain.

When the shore or part of the

bay is reclaimed, it does not
lose its character of being
property for public use,
according to Government of the
Philippine Islands vs.
Cabangis.44The predecessor of
the claimants in this case was
the owner of a big tract of land
including the lots in question.
From 1896 said land began to
wear away due to the action of
the waters of Manila Bay. In
1901 the lots in question
became completely submerged
in water in ordinary tides. It
remained in such a state until
1912 when the Government
undertook the dredging of the
Vitas estuary and dumped the
sand and silt from estuary on
the low lands completely
submerged in water, thereby
gradually forming the lots in
question. Tomas Cabangis took
possession thereof as soon as
they were reclaimed; hence, the
claimants, his successors in
interest, claimed that the lots
belonged to them. The trial
court found for the claimants
and the Government appealed.
This Court held that when the
lots became a part of the shore.
As they remained in that
condition until reclaimed by the
filling done by the Government,
they belonged to the public
domain for public use.45Hence,
a part of the shore, and for that
purpose, a part of the bay, did
not lose its character of being
for public use after it was
reclaimed.

Fourthly, Act 1360, as amended,

authorized the lease or sale of
the northern portion of the
reclaimed area as a hotel site.
The subject property is not that
northern portion authorized to
be leased or sold; the subject
property is the southern
portion. Hence, applying the
rule of expresio unius est
exlusio alterius, the City of
Manila was not authorized to
sell the subject property. The
application of this principle of
statutory construction becomes
the more imperative in the case
at bar inasmuch as not only
must the public grant of the
reclaimed area to the City of
Manila be, as above stated,
strictly construed against the
City of Manila, but also because
a grant of power to a municipal
corporation, as happens in this
case where the city is
authorized to lease or sell the
northern portion of the Luneta
extension, is strictly limited to
such as are expressly or
impliedly authorized or
necessarily incidental to the
objectives of the corporation.

Fifthly, Article 344 of the Civil

Code of Spain provides that
“property of public use, in
provinces and in towns,
comprises the provincial and
town roads, the squares,
streets, fountains, and public
waters, the promenades, and
public works of general service
paid for by such towns or
provinces.” A park or plaza,
such as the extension to the
Luneta, is undoubtedly
comprised in said article.

It is not necessary, therefore,

that a plaza be already
constructed or laid out as a
plaza in order that it be
considered properly for public
use. It is sufficient that it be
intended to be such. In the case
at bar, it has been shown that
the intention of the lawmaking
bodyin giving to the City of
Manila the extension to the
Luneta was not a grant to it of
patrimonial property but a grant
for public use as a plaza.
We have demonstrated ad
satietaten that the Luneta
 extension was intended to be
property of the City of Manila
for public use. But this Court
has already said, in Ignacio vs.
The Director of Lands,49that it
is only the executive and
possibly the legislative
department that has the
authority and the power to
make the declaration that said
property is no longer required
for public use, and until such
declaration is made the
property must continue to form
part of the public domain. In the
case at bar, there has been no
such explicit or unequivocal
declaration. It should be noted,
furthermore, anent this matter,
that courts are undoubtedly not
primarily called upon, and are
not in a position, to determine
whether any public land is still
needed for the purposes
specified in Article 4 of the Law
of Waters.
CIR vs. CA WON RMC 37-93 is merely an Let us first distinguish between
interpretative ruling of the BIR. two kinds of administrative
Fortune Tobacco Corporation issuances - a legislative rule and
("Fortune Tobacco") is engaged an interpretative rule.
in the manufacture of different
brands of cigarettes. In Misamis Oriental Association
of Coco Traders, Inc., vs.
On various dates, the Philippine Department of Finance
Patent Office issued to the Secretary, [11] the Court
corporation separate expressed:
certificates of trademark
registration over "Champion," "x x x a legislative rule is in the
"Hope," and "More" cigarettes. nature of subordinate
In a letter, dated 06 January legislation, designed to
1987, of then Commissioner of implement a primary legislation
Internal Revenue Bienvenido A. by providing the details thereof.
Tan, Jr., to Deputy Minister In the same way that laws must
Ramon Diaz of the Presidential have the benefit of public
Commission on Good hearing, it is generally required
Government, "the initial that before a legislative rule is
position of the Commission was adopted there must be hearing.
to classify 'Champion,' 'Hope,' In this connection, the
and 'More' as foreign brands Administrative Code of 1987
since they were listed in the provides:
World Tobacco Directory as
belonging to foreign companies. "Public Participation. - If not
otherwise required by law, an
However, Fortune Tobacco agency shall, as far as
changed the names of 'Hope' to practicable, publish or circulate
Hope Luxury' and 'More' to notices of proposed rules and
'Premium More,' thereby afford interested parties the
removing the said brands from opportunity to submit their
the foreign brand category. views prior to the adoption of
Proof was also submitted to the any rule.
Bureau (of Internal Revenue
['BIR']) that 'Champion' was an "(2) In the fixing of rates, no
original Fortune Tobacco rule or final order shall be valid
Corporation register and unless the proposed rates shall
therefore a local brand."[3] Ad have been published in a
Valorem taxes were imposed on newspaper of general
these brands. circulation at least two (2)
weeks before the first hearing
A bill, which later became thereon.
Republic Act ("RA") No. 7654,
[6] was enacted, on 10 June "(3) In case of opposition, the
1993, by the legislature and rules on contested cases shall
signed into law, on 14 June be observed.
1993, by the President of the
Philippines. The new law "In addition such rule must be
became effective on 03 July published. On the other hand,
1993. It amended Section 142(c) interpretative rules are
(1) of the National Internal designed to provide guidelines
Revenue Code ("NIRC") to read; to the law which the
as follows: administrative agency is in
charge of enforcing." [12]
"SEC. 142. Cigars and Cigarettes.
- It should be understandable
that when an administrative
"x x x x x x x x x. rule is merely interpretative in
nature, its applicability needs
"(c) Cigarettes packed by nothing further than its bare
machine. - There shall be levied, issuance for it gives no real
assessed and collected on consequence more than what
cigarettes packed by machine a the law itself has already
tax at the rates prescribed prescribed. When, upon the
below based on the other hand, the administrative
constructive manufacturer's rule goes beyond merely
wholesale price or the actual providing for the means that
manufacturer's wholesale price, can facilitate or render least
whichever is higher: cumbersome the
implementation of the law but
"(1) On locally manufactured substantially adds to or
cigarettes which are currently increases the burden of those
classified and taxed at fifty-five governed, it behooves the
percent (55%) or the agency to accord at least to
exportation of which is not those directly affected a chance
authorized by contract or to be heard, and thereafter to
otherwise, fifty-five (55%) be duly informed, before that
provided that the minimum tax new issuance is given the force
shall not be less than Five Pesos and effect of law.
(P5.00) per pack.
A reading of RMC 37-93,
"(2). On other locally particularly considering the
manufactured cigarettes, forty- circumstances under which it
five percent (45%) provided that has been issued, convinces us
the minimum tax shall not be that the circular cannot be
less than Three Pesos (P3.00) viewed simply as a corrective
per pack. measure (revoking in the
process the previous holdings of
"x x x x x x x x x. past Commissioners) or merely
as construing Section 142(c)(1)
"When the registered of the NIRC, as amended, but
manufacturer's wholesale price has, in fact and most
or the actual manufacturer's importantly, been made in
wholesale price whichever is order to place "Hope Luxury,"
higher of existing brands of "Premium More" and
cigarettes, including the "Champion" within the
amounts intended to cover the classification of locally
taxes, of cigarettes packed in manufactured cigarettes
twenties does not exceed Four bearing foreign brands and to
Pesos and eighty centavos thereby have them covered by
(P4.80) per pack, the rate shall RA 7654. Specifically, the new
be twenty percent (20%)."[7] law would have its amendatory
(Italics supplied.) provisions applied to locally
manufactured cigarettes which
About a month after the at the time of its effectivity
enactment and two (2) days were not so classified as bearing
before the effectivity of RA foreign brands. Prior to the
7654, Revenue Memorandum issuance of the questioned
Circular No. 37-93 ("RMC 37- circular, "Hope Luxury,"
93"), was issued by the BIR. "Premium More," and
"Champion" cigarettes were in
On 02 July 1993, at about 17:50 the category of locally
hours, BIR Deputy manufactured cigarettes not
Commissioner Victor A. bearing foreign brand subject to
Deoferio, Jr., sent via telefax a 45% ad valorem tax. Hence,
copy of RMC 37-93 to Fortune without RMC 37-93, the
Tobacco but it was addressed to enactment of RA 7654, would
no one in particular. On 15 July have had no new tax rate
1993, Fortune Tobacco consequence on private
received, by ordinary mail, a respondent's products.
certified xerox copy of RMC 37- Evidently, in order to place
93. "Hope Luxury," "Premium
More," and "Champion"
In a letter, dated 19 July 1993, cigarettes within the scope of
addressed to the appellate the amendatory law and subject
division of the BIR, Fortune them to an increased tax rate,
Tobacco, requested for a the now disputed RMC 37-93
review, reconsideration and had to be issued. In so doing,
recall of RMC 37-93. The the BIR not simply interpreted
request was denied on 29 July the law; verily, it legislated
1993. The following day, or on under its quasi-legislative
30 July 1993, the CIR assessed authority. The due observance
Fortune Tobacco for ad valorem of the requirements of notice,
tax deficiency amounting to of hearing, and of publication
P9,598,334.00. should not have been then
ignored.
On 03 August 1993, Fortune
Tobacco filed a petition for Nothing on record could tell us
review with the CTA. that it was either impossible or
impracticable for the BIR to
observe and comply with the
above requirements before
giving effect to its questioned
circular.