Association of Small Landowners in the Philippines vs. Honorable Secretary of Agrarian Reform

G.R. No. 78742                        July 14, 1989

Petitioner: Association of Small Landowners in the Philippines
Respondent: Honorable Secretary of Agrarian Reform

Facts: These are consolidated cases which involve common legal, including serious challenges to the constitutionality of the several measures such as P.D. No. 27, E.O. No. 228, Presidential Proclamation No. 131, E.O. No. 229, and R.A. No. 6657.

G.R. No. 79777

The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of separation of powers, due process, equal protection and the constitutional limitation that no private property shall be taken for public use without just compensation. G.R. No. 79310

G.R. No. 79310

This petition seeks to prohibit the implementation of Proc. No. 131 and E.O. No. 229. They contend that taking must be simultaneous with payment of just compensation as it is traditionally understood, i.e., with money and in full, but no such payment is contemplated in Section 5 of the E.O. No. 229.

G.R. No. 79744

The petitioner argues that E.O. Nos. 228 and 229 are violative of the constitutional provision that no private property shall be taken without due process or just compensation.

G.R. No. 78742

Petitioners claim they cannot eject their tenants and so are unable to enjoy their right of retention because the Department of Agrarian Reform has so far not issued the implementing rules required under the above-quoted decree.

Issue:  Whether agrarian reform is an exercise of police power or eminent domain

Ruling: There are traditional distinctions between the police power and the power of eminent domain that logically preclude the application of both powers at the same time on the same subject. Property condemned under the police power is noxious or intended for a noxious purpose, such as a building on the verge of collapse, which should be demolished for the public safety, or obscene materials, which should be destroyed in the interest of public morals. The confiscation of such property is not compensable, unlike the taking of property under the power of expropriation, which requires the payment of just compensation to the owner.

The cases before us present no knotty complication insofar as the question of compensable taking is concerned. To the extent that the measures under challenge merely prescribe retention limits for landowners, there is an exercise of the police power for the regulation of private property in accordance with the Constitution. But where, to carry out such regulation, it becomes necessary to deprive such owners of whatever lands they may own in excess of the maximum area allowed, there is definitely a taking under the power of eminent domain for which payment of just compensation is imperative. The taking contemplated is not a mere limitation of the use of the land. What is required is the surrender of the title to and the physical possession of the said excess and all beneficial rights accruing to the owner in favor of the farmer-beneficiary. This is definitely an exercise not of the police power but of the power of eminent domain

Acebedo Optical Company, Inc. vs. The Honorable Court of Appeals

G.R. No. 100152          March 31, 2000

Petitioner: Acebedo Optical Company, Inc.

Respondent: The Honorable Court of Appeals

Facts: Petitioner applied with the Office of the City Mayor of Iligan for a business permit. After consideration of petitioner's application and the opposition interposed thereto by local optometrists, respondent City Mayor issued Business Permit No. 5342 subject to the following conditions: (1) Since it is a corporation, Acebedo cannot put up an optical clinic but only a commercial store; (2) It  cannot examine and/or prescribe reading and similar optical glasses for patients, because these are functions of optical clinics; (3) It cannot sell reading and similar eyeglasses without a prescription having first been made by an independent optometrist or independent optical clinic. Acebedo can only sell directly to the public, without need of a prescription, Ray-Ban and similar eyeglasses; (4) It cannot advertise optical lenses and eyeglasses, but can advertise Ray-Ban and similar glasses and frames; (5) It is allowed to grind lenses but only upon the prescription of an independent optometrist.
On December 5, 1988, private respondent Samahan ng Optometrist Sa Pilipinas (SOPI lodged a complaint against the petitioner alleging that Acebedo had violated the conditions set forth in its business permit and requesting the cancellation and/or revocation of such permit. On July 19, 1989, the City Mayor sent petitioner a Notice of Resolution and Cancellation of Business Permit effective as of said date and giving petitioner three (3) months to wind up its affairs.

Issue:  Whether the City Mayor has the authority to impose special conditions, as a valid exercise of police power, in the grant of business permits

Ruling: Police power as an inherent attribute of sovereignty is the power to prescribe regulations to promote the health, morals, peace, education, good order or safety and general welfare of the people. It is essentially regulatory in nature and the power to issue licenses or grant business permits, if exercised for a regulatory and not revenue-raising purpose, is within the ambit of this power. The authority of city mayors to issue or grant licenses and business permits is beyond cavil. However, the power to grant or issue licenses or business permits must always be exercised in accordance with law, with utmost observance of the rights of all concerned to due process and equal protection of the law.

In the case under consideration, the business permit granted by respondent City Mayor to petitioner was burdened with several conditions. Petitioner agrees with the holding by the Court of Appeals that respondent City Mayor acted beyond his authority in imposing such special conditions in its permit as the same have no basis in the law or ordinance. Public respondents and private respondent SOPI are one in saying that the imposition of said special conditions is well within the authority of the City Mayor as a valid exercise of police power.

The issuance of business licenses and permits by a municipality or city is essentially regulatory in nature. The authority, which devolved upon local government units to issue or grant such licenses or permits, is essentially in the exercise of the police power of the State within the contemplation of the general welfare clause of the Local Government Code.

What is sought by petitioner from respondent City Mayor is a permit to engage in the business of running an optical shop. It does not purport to seek a license to engage in the practice of optometry. The objective of the imposition of subject conditions on petitioner's business permit could be attained by requiring the optometrists in petitioner's employ to produce a valid certificate of registration as optometrist, from the Board of Examiners in Optometry. A business permit is issued primarily to regulate the conduct of business and the City Mayor cannot, through the issuance of such permit, regulate the practice of a profession. Such a function is within the exclusive domain of the administrative agency specifically empowered by law to supervise the profession, in this case the Professional Regulations Commission and the Board of Examiners in Optometry.

Metropolitan Manila Development Authority vs. Trackworks Rail Transit Advertising, Vending and Promotions, Inc.

G.R. No. 179554          December 16, 2009

Petitioner: Metropolitan Manila Development Authority

Respondent: Trackworks Rail Transit Advertising, Vending and Promotions, Inc.

Facts: In 1997, the Government, through the Department of Transportation and Communications, entered into a build-lease-transfer agreement (BLT agreement) with Metro Rail Transit Corporation, Limited (MRTC) pursuant to Republic Act No. 6957 (Build, Operate and Transfer Law), under which MRTC undertook to build MRT3 subject to the condition that MRTC would own MRT3 for 25 years, upon the expiration of which the ownership would transfer to the Government. In 1998, respondent Trackworks Rail Transit Advertising, Vending & Promotions, Inc. (Trackworks) entered into a contract for advertising services with MRTC. Trackworks thereafter installed commercial billboards, signages and other advertising media in the different parts of the MRT3.  In 2001, however, MMDA requested Trackworks to dismantle the billboards, signages and other advertising media pursuant to MMDA Regulation No. 96-009, whereby MMDA prohibited the posting, installation and display of any kind or form of billboards, signs, posters, streamers, in any part of the road, sidewalk, center island, posts, trees, parks and open space. After Trackworks refused the request of MMDA, MMDA proceeded to dismantle the former’s billboards and similar forms of advertisement.

Issue: Whether MMDA has the power to dismantle, remove or destroy the billboards, signages and other advertising media installed by Trackworks on the interior and exterior structures of the MRT3.

Ruling: That Trackworks derived its right to install its billboards, signages and other advertising media in the MRT3 from MRTC’s authority under the BLT agreement to develop commercial premises in the MRT3 structure or to obtain advertising income therefrom is no longer debatable. Under the BLT agreement, indeed, MRTC owned the MRT3 for 25 years, upon the expiration of which MRTC would transfer ownership of the MRT3 to the Government.

Considering that MRTC remained to be the owner of the MRT3 during the time material to this case, and until this date, MRTC’s entering into the contract for advertising services with Trackworks was a valid exercise of ownership by the former. In fact, in Metropolitan Manila Development Authority v. Trackworks Rail Transit Advertising, Vending & Promotions, Inc., this Court expressly recognized Trackworks’ right to install the billboards, signages and other advertising media pursuant to said contract. The latter’s right should, therefore, be respected.

It is futile for MMDA to simply invoke its legal mandate to justify the dismantling of Trackworks’ billboards, signages and other advertising media. MMDA simply had no power on its own to dismantle, remove, or destroy the billboards, signages and other advertising media installed on the MRT3 structure by Trackworks.  In Metropolitan Manila Development Authority v. Bel-Air Village Association, Inc., Metropolitan Manila Development Authority v. Viron Transportation Co., Inc., and Metropolitan Manila Development Authority v. Garin, the Court had the occasion to rule that MMDA’s powers were limited to the formulation, coordination, regulation, implementation, preparation, management, monitoring, setting of policies, installing a system, and administration. Nothing in Republic Act No. 7924 granted MMDA police power, let alone legislative power. 

The Court also agrees with the CA’s ruling that MMDA Regulation No. 96-009 and MMC Memorandum Circular No. 88-09 did not apply to Trackworks’ billboards, signages and other advertising media. The prohibition against posting, installation and display of billboards, signages and other advertising media applied only to public areas, but MRT3, being private property pursuant to the BLT agreement between the Government and MRTC, was not one of the areas as to which the prohibition applied.

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White Light Corporation vs City of Manila

G.R. No. 122846          January 20, 2009

Petitioner: White Light Corporation, Titanium Corporation and Sta. Mesa Tourist & Development Corporation

Respondent: City of Manila

Facts: On December 3, 1992, City Mayor Alfredo S. Lim signed into a law Manila City Ordinance No. 7774 entitled “An Ordinance Prohibiting Short-Time Admission, Short-Time Admission Rates, and Wash-Up Rate Schemes in Hotels, Motels, Inns, Lodging Houses, Pension Houses, and Similar Establishments in the City of Manila.” On December 15, 1992, the Malate Tourist and Development Corporation (MTDC) filed a complaint for declaratory relief with prayer for a writ of preliminary injunction and/or temporary restraining order (TRO) impleading as defendant, herein respondent City of Manila represented by Mayor Lim with the prayer that the Ordinance be declared invalid and unconstitutional.

On December 21, 1992, petitioners White Light Corporation (WLC), Titanium Corporation (TC) and Sta. Mesa Tourist and Development Corporation (STDC) filed a motion to intervene and to admit attached complaint-in-intervention on the ground that the Ordinance directly affects their business interests as operators of drive-in-hotels and motels in Manila. The RTC issued a TRO directing the City to cease and desist from enforcing the Ordinance. The City alleges that the Ordinance is a legitimate exercise of police power. On October 20, 1993, the RTC rendered a decision declaring the Ordinance null and void. On a petition for review on certiorari, the Court of Appeals reversed the decision of the RTC and affirmed the constitutionality of the Ordinance.

Issue: Whether Manila City Ordinance No. 7774 is a valid exercise of police power

Ruling: Police power, while incapable of an exact definition, has been purposely veiled in general terms to underscore its comprehensiveness to meet all exigencies and provide enough room for an efficient and flexible response as the conditions warrant. Police power is based upon the concept of necessity of the State and its corresponding right to protect itself and its people. Police power has been used as justification for numerous and varied actions by the State. The apparent goal of the Ordinance is to minimize if not eliminate the use of the covered establishments for illicit sex, prostitution, drug use and alike. These goals, by themselves, are unimpeachable and certainly fall within the ambit of the police power of the State. Yet the desirability of these ends do not sanctify any and all means for their achievement. Those means must align with the Constitution, and our emerging sophisticated analysis of its guarantees to the people. 
That the Ordinance prevents the lawful uses of a wash rate depriving patrons of a product and the petitioners of lucrative business ties in with another constitutional requisite for the legitimacy of the Ordinance as a police power measure. It must appear that the interests of the public generally, as distinguished from those of a particular class, require an interference with private rights and the means must be reasonably necessary for the accomplishment of the purpose and not unduly oppressive of private rights. It must also be evident that no other alternative for the accomplishment of the purpose less intrusive of private rights can work. More importantly, a reasonable relation must exist between the purposes of the measure and the means employed for its accomplishment, for even under the guise of protecting the public interest, personal rights and those pertaining to private property will not be permitted to be arbitrarily invaded. Lacking a concurrence of these requisites, the police measure shall be struck down as an arbitrary intrusion into private rights. As held in Morfe v. Mutuc, the exercise of police power is subject to judicial review when life, liberty or property is affected. However, this is not in any way meant to take it away from the vastness of State police power whose exercise enjoys the presumption of validity. Ordinance No. 7774 is hereby declared UNCONSTITUTIONAL.

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